ORION IXL BERHAD 200101019222 (554979-T)

ORION IXL BERHAD 200101019222 (554979-T)

Level 5, Block B, Dataran PHB, Saujana Resort Section U2, 40150 Shah Alam, Selangor Darul Ehsan

T : (603) 7890 0638 F : (603) 7890 3163 E : info@orionixl.com.my

www.orionixl.com.my

ANNUAL

REPORT

2020

Corporate Information ...................................................................................... 2

Corporate Structure ......................................................................................... 3

Profile of Directors ..................................................................................... 4 – 6

Profile of Key Management ............................................................................... 7

Management Discussion and Analysis ..................................................... 8 – 11

Sustainability Statement ...........................................................................12 - 18

Audit Committee Report ........................................................................ 19 – 21

Corporate Governance Overview Statement .......................................... 22 – 29

Additional Compliance Information ................................................................. 30

Statement on Risk Management and Internal Control ............................. 31 - 33

Directors’ Responsibility Statement.................................................................. 34

Financial Statements ........................................................................... 35 – 137

Analysis of Shareholdings .................................................................. 138 – 139

Analysis of Warrant A Holdings .......................................................... 140 – 141

Contents

2

CORPORATE INFORMATION BOARD OF DIRECTORS

Yahya bin RazaliNon-Independent Non-Executive Chairman

Mohamad Shaharul bin Mohamad ShariffExecutive Director / Group Chief Executive Director

Abdul Rani bin Achmed AbdullahExecutive Director

Rahimi bin RamliIndependent Non-Executive Director

Adnan bin ZainolIndependent Non-Executive Director

AUDIT COMMITTEE

Rahimi bin Ramli (Chairman) Yahya bin Razali Adnan bin Zainol

NOMINATION COMMITTEE

Adnan bin Zainol (Chairman) Yahya bin Razali Rahimi bin Ramli

REMUNERATION COMMITTEE

Yahya bin Razali (Chairman) Rahimi bin RamliAdnan bin Zainol

COMPANY SECRETARY

Chen Wee Sam (SSM PC No. 202008002853) (LS 0009709) Hew Chee Hau (SSM PC No. 201908001291) (MIA 21967)

REGISTERED OFFICE

No. 2-1, Jalan Sri Hartamas 8 Sri Hartamas 50480 Kuala Lumpur Wilayah Persekutuan Kuala Lumpur Tel : (603) 6201 1120Fax : (603) 6201 3121

HEAD/MANAGEMENT OFFICE

Level 5, Block B, Dataran PHBSaujana Resort Section U240150 Shah Alam Selangor Darul EhsanTel : (603) 7890 0638Fax : (603) 7890 3163Email : info@orionixl.com.my

SHARE REGISTRAR

ShareWorks Sdn. Bhd.No. 2-1, Jalan Sri Hartamas 8

Sri Hartamas50480 Kuala Lumpur Wilayah Persekutuan Kuala Lumpur Tel : (603) 6201 1120Fax : (603) 6201 3121

AUDITORS

Messrs Al Jafree Salihin Kuzaimi PLT (LLP0006652-LCA & AF 1522) No. 555, Jalan Samudra Utara 1 Taman Samudra 68100 Batu Caves Selangor Darul Ehsan Tel : (603) 6185 9970 Fax: (603) 6184 2524

PRINCIPAL BANKER

RHB Bank Berhad1G & 2M, Jalan SS 21/58 Damansara Utama 47400 Petaling Jaya Selangor Darul EhsanTel : (603) 9206 8118

STOCK EXCHANGE LISTING

ACE Market ofBursa Malaysia Securities BerhadStock Name : ORION Stock Code : 0079

CORPORATE WEBSITEwww.orionixl.com.my

Corporate InformatIon

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ANNUAL REPORT 2020

Corporate Structure

Company Structure

Management Structure

ORION

Cworks Systems Inc

Ganda Integrasi Sdn. Bhd. ASAP Sdn. Bhd. Cworks Sdn. Bhd.

Sukaniaga Sdn. Bhd.

51%

17%

%

51%

100%

%

51%

19.98%

% 51%

Board of Directors

Group CEO

CFO CTO COO

Cworks Systems Inc

Cworks Sdn. Bhd. ASAP Sdn. Bhd. Ganda Integrasi Sdn. Bhd.

Sukaniaga Sdn. Bhd.

100%

%

51%

Corporate Structure

4

PROFILE OF DIRECTORS

YAHYA BIN RAZALI Non-Independent Non-Executive Chairman Malaysian, aged 65, Male

Yahya bin Razali was appointed an Independent Non-Executive Director of Orion IXL Berhad (“Orion” or “the Company”) on 3 August 2016. He was re-designated as Non-Independent Non-Executive Director on 3 August 2017 and assumed his present position as the Non-Independent Non-Executive Chairman on 29 October 2019. He is the Chairman of Remuneration Committee and a member of both Audit Committee and Nomination Committee.

He obtained his Bachelor of Science (Finance) from Southern Illinois University and Master of Business Administration from Berkeley, United States of America in 1982 and 1984 respectively.

He worked with the Ministry of Culture, Youth and Sports of Malaysia from 1977 to 1979. In 1984, he joined the United State Leasing Corporation, San Francisco, United States of America as a Financial Analyst. In 1986, he worked as a Consultant with Alexander Proudfoot Productivity Consultant Pte Ltd in Singapore. He also held the position of Investment Manager and Executive Director for Selangor Foundation and Grand United Holdings Berhad respectively from 1988 to 1993. He was the Fund Manager cum Associate Director for Spectrum Asset Management Sdn. Bhd., a licensed fund management company. He is also a Certified Financial Planner.

Currently, he is the Independent Non-Executive Director for UZMA Berhad, a company listed on the Main Market of Bursa Malaysia Securities Berhad.

MOHAMAD SHAHARUL BIN MOHAMAD SHARIFF Executive Director / Group Chief Executive Officer Malaysian, aged 51, Male

Mohamad Shaharul bin Mohamad Shariff was appointed an Executive Director of the Company on 18 September 2017 and Group Chief Executive Officer on 7 November 2017.

From 2000 to 2003, he was the Head of Executive Chairman’s Office for Chase Perdana Berhad and Sitt Tatt Berhad. He assisted the Executive Chairman to manage both companies and successfully centralized various functions of both companies including Administration, Finance and Accounts, Human Resource and Support Services.

He joined Asiankom Communication (M) Sdn. Bhd. as the Chief Executive Officer from 2004 to 2012 and improved its business performance and revenue from RM2 million in 2004 to RM14 million in 2012.

In year 2012, he was appointed a Chief Executive Officer of ASAP Sdn. Bhd. (“ASAP”), a company primarily involved in designing, developing and implementing web based solutions and has cultivated a healthy culture of research and development that has since seen the development of ASAP’s primary software solution namely, ASAP’s Asset & Facility Management Software Solution which essentially falls within the Computerized Maintenance and Management System or “CMMS” market space. In 2015, ASAP was nominated for the regional MSC – APICTA ICT Awards. He had lead ASAP in expanding its business to other part of Asian countries and developing management information system and other in-house operation applications to suit the market demand and meet customer requirements.

He holds a higher Diploma in Chartered Institute of Marketing, London Informatics College, Kuala Lumpur. He was awarded Pingat Jasa Kebaktian (PJK) from Yamtuan Besar of Negeri Sembilan.

He does not hold any directorship in any other public companies and listed issuers.

profile of dIrectorS

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ANNUAL REPORT 2020

ABDUL RANI BIN ACHMED ABDULLAHExecutive Director Malaysian, aged 54, Male

Abdul Rani Bin Achmed Abdullah was appointed an Executive Director of the Company on 1 August 2001. He obtained his Bachelor of Electrical Engineering from Purdue University, United States of America in 1988 and a Master of Science in Engineering Business Management from Warwick University, United Kingdom in 2001. He started his career in 1989 as a Wireline Engineer for Schlumberger Overseas SA until 1991. He joined Racal Survey (M) Sdn. Bhd. as a Survey Engineer responsible for regional work from 1992 to 1995. In 1996, he operated his family-owned trading business. He then joined PROPEL-Johnson Controls Sdn. Bhd. (“PJC”) in 1997. Before leaving PJC in 2000, he was the Head of Special Projects and MIS responsible mainly for the design, development, implementation and operation of information technology systems. He was also the Johnson Controls Inc’s Computerised Maintenance Management Systems (“CMMS”) resource person for its Asia operations.

He is a director of several private limited companies.

He does not hold any directorship in any other public companies and listed issuers.

RAHIMI BIN RAMLIIndependent Non-Executive Director Malaysian, aged 50, Male

Rahimi Bin Ramli was appointed to the Board of the Company on 3 August 2016. Currently, he is the Chairman of Audit Committee and member of both Nomination Committee and Remuneration Committee.

He graduated from Middlesex University, United Kingdom in 1993 with BA (Hons) in Accounting and Finance. In 1995, he passed Association of Chartered Certified Accountants (ACCA)’s examination and admitted as Fellow of ACCA (FCCA) since year 2000.

He is a Chartered Accountant registered with Malaysian Institute of Accountants (MIA). He is also an Associate Member of both Chartered Tax Institute of Malaysia (CTIM) and The Institute of Internal Auditors Malaysia.

He began his career with KPMG, Kuala Lumpur Office in 1996 and gained invaluable financial experiences in both private sector and public practice accounting firms, including privately owned entities, public listed corporations as well as government owned companies. On 2 January 2020, he was appointed as Chief Financial Officer for TH Plantations Berhad (“THP”) to oversee all accounting and treasury operations, financial reporting, cash management, taxation and all finance-related activities of the THP.

He was the Executive Director of KHR Tax Services (Alor Setar) Sdn. Bhd. from 2003 to 2017 and Independent Non-Executive Director of SCH Group Berhad from 2013 to 2017.

Currently, he does not hold any directorship in any other public companies and listed issuers.

Profile of Directors

(cont’d)

6

ADNAN BIN ZAINOLIndependent Non-Executive Director Malaysian, aged 66, Male

Adnan Bin Zainol was appointed to the Board of the Company on 30 June 2020. Currently, he is the Chairman of Nomination Committee and a member of both Audit Committee and Remuneration Committee.

He graduated in 1978 with a Bachelor of Economics (Honours) from the Universiti Malaya. He started his career with Malayan Banking Bhd. (“Maybank”) as an operation officer and later as a credit/securities officer in the KL Main Office. After 5 years with Maybank, he left in 1983 to join CIMB as a credit/marketing officer in the Corporate Banking Department where he rose to the rank of Senior Manager in 1994. From 2000 until he left CIMB in 2004, he was heading its Credit Administration Section. He was previously an Independent Non-Executive Director of Orion from 2007 to 2018. He is currently the Independent Non-Executive Chairman of QES Group Berhad.

Notes:

Family Relationship with any Director and/or Major Shareholder

None of the Directors has any family relationship with any Director and/or major shareholder of the Company.

Conflict of Interest

None of the Directors has any conflict of interest with the Company.

Conviction for Offences

Other than traffic offences, if any, the Directors have not been convicted of any offences within the past five (5) years and have not been imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2020.

Attendance of Board Meetings

Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on page 27 of this Annual Report.

Profile of Directors

(cont’d)

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ANNUAL REPORT 2020

PROFILE OF KEY MANAGEMENT

ABDUL RANI BIN ACHMED ABDULLAHExecutive Director Malaysian, aged 54, Male

The details of En. Abdul Rani bin Achmed Abdullah are disclosed in the Profile of Directors section of this Annual Report.

MOHAMAD SHAHARUL BIN MOHAMAD SHARIFFExecutive Director / Group Chief Executive Officer Malaysian, aged 51, Male

The details of En. Mohamad Shaharul bin Mohamad Shariff are disclosed in the Profile of Directors section of this Annual Report.

Notes:

Family Relationship with any Director and/or Major Shareholder

None of the Key Management has any family relationship with any Director and/or major shareholder of the Company.

Conflict of Interest

None of the Key Management has any conflict of interest with the Company.

Conviction for Offences

Other than traffic offences, if any, the Key Management has not been convicted of any offences within the past five (5) years and have not been imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2020.

profile of key management

8

MANAGEMENT DISCUSSION AND ANALYSIS

OVERVIEW OF GROUP’S BUSINESS AND OPERATIONS Orion IXL Berhad (“Orion” or “the Company”) and its subsidiaries (“the Group”) are established technology and business solutions providers in Malaysia. The Group is principally involved in the provision of Computerised Maintenance Management Systems (“CMMS”). To complement its core CMMS business, the Group also provides other information technology (“IT”) services such as systems integration, support services and training. Additionally, the Group is also involved in managing moveable and immovable assets over their life cycles for asset owners. This includes asset maintenance, asset movement and asset audit. During the last financial year, the Group decided to diversify into developing financial technology (“fintech”) solution, specialising in Financial Transaction Management Systems (“FTMS”), big data analysis, Artificial Intelligence (“AI”) and blockchain technology. This initiative is to provide the Group with recurring income stream on a long-term basis, adding to the project-based revenue. Moving forward, the Group will focus its efforts on developing its fintech business, given its first-mover advantage in the fintech space. Malaysia remains the key market for the Group’s services and its clientele ranges from various industries such as Banking and Financial Services, Education, Energy and Utilities, Healthcare, Oil and Gas, Property Development and Construction, Hospitality, Consultancy, Information and Communications Technology (“ICT”), Government Agencies, Mass Rapid Transport and Local Authorities among many others. As a public listed company, the Group’s long-term business objectives are to generate sustainable earnings supported by positive cash flows, maintain a positive and healthy financial position and endeavour to pay stable dividend yield to our shareholders. The Group strives to achieve these objectives by actively seeking good revenue and earnings growth investment opportunities coupled with our commitment to provide quality solutions and services through internal development and continuous improvement.

REVIEW OF FINANCIAL RESULTS AND FINANCIAL CONDITION Analysis of Financial Results and Financial Condition For the financial year ended 30 June 2020, the Group registered a revenue of RM8.70 million as compared to the preceding 12-month period ended 30 June 2019 of RM5.70 million. The increase in revenue was mainly due to higher sales contribution from our new business in medical technology and supplies. Despite the Group having higher revenue, the Group suffered a loss after tax of RM3.9 million as compared to for financial year ended 30 June 2020 with a profit after tax of RM1.6 million, which represented a drop of 343.8%. This was mainly due to the one-off impairment of trade and other receivables amounting to RM3.9 million and provision for allowance of LAD of 0.7 million.

ManageMent DisCussion and analySIS

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ANNUAL REPORT 2020

Equity attributable to the owners of the Company as at 30 June 2020 stood at RM100.74 million, a reduction of RM3.293 million. The deterioration was mainly due to the operating losses suffered by the Company during the financial year. The Group has no borrowings for the financial year under review. There was no payment of dividend during the financial year under review.

REVIEW OF OPERATING ACTIVITIES CMMS Segment Since the acquisition of ASAP Sdn. Bhd. in 2017, the Group has enhanced and launched the new generation of CMMS which is web based from the previous client-server base. The new CMMS system now caters for more features and easy implementation for multiple sites. This will now enable the Group to serve wider customer and market segments including cross border installations. The Group will also upgrade current customers to the new enhanced system to ensure existing customers enjoy the new features and continue with the maintenance contract. Joint Development The Group has, on 22 May, 2020, entered into a Memorandum of Understanding to commence exclusive discussion with Enrich in relation to a proposed collaboration to jointly:- i. Explore mining targets and develop mining operation at Gossan Hill area, District of Jeli,

Kelantan; and

ii. Manage the Senor Alluvia Gold Mining operations at District of Jeli, Kelantan.

ANTICIPATED OR KNOWN RISKS

The following are the key anticipated or known risks that the Group is exposed to that may have a material effect on its operations, performance, financial condition and liquidity. The Group’s plans and strategies to mitigate these risks have also been disclosed below: - (i) Business risks

The Group is principally involved in the provision of technology and business solutions. It is subject to risks inherent in the IT industry. These include, amongst others, changes in IT infrastructure, changes in laws and regulations applicable to the Group’s businesses, availability of skilled personnel, introduction of new technological products and services as well as growth slowdown in certain segments of the IT industry in the countries in which the Group operates. There can be no assurance that any material changes to these factors will not have a material adverse effect on the business operations of the Group.

Management Discussion and Analysis

(cont’d)

10

Nevertheless, the Group has been taking effective measures to mitigate the aforementioned risks such as prudent financial management and efficient operating procedures. Furthermore, the Group has constantly been keeping abreast of economic and regulatory changes in the relevant countries.

(ii) Foreign exchange risks

The Group’s business operations are in Malaysia and United States of America. As such, the Group is exposed to foreign exchange risks in the event of repatriation of profits from other countries back to Malaysia. There is no assurance that any foreign exchange fluctuation will not have an adverse impact on the Group’s earnings. Although the Group does not actively hedge its foreign currency exposure, the Group will continue to assess the need to utilise financial instruments to hedge its currency exposure, taking into consideration factors such as foreign currency, exposure period and transaction costs.

(iii) Rapid technological changes / product changes

The ability of the Group to keep pace with rapid technological development in the IT industry may affect its earnings. The technology industry is characterised by rapid technological changes due to changing market trends, evolving industry standards, new technologies and emerging competition. The Group’s performance is dependent on its ability to enhance existing software products and services to respond to the constantly changing technological environment. There is no assurance that the Group’s products and services will achieve market acceptance or able to compete with competitors. Such circumstances may affect the financial performance of the Group. The Group seeks to limit these risks through its continuous investment in research and development (“R&D”) activities in order to remain technologically relevant and meet market’s expectations.

(iv) Competition risks

The Group continues to face competition from existing and new competitors who may be capable of offering similar solutions. Whilst the Group strives to remain competitive, there can be no assurance that any changes in the competitive environment would not have any material and adverse impact on the Group’s business and financial performance. Nevertheless, the Group strives to maintain its competitive edge by ensuring the quality of its solutions and services through stringent quality assurance procedures. The Group also continuously places importance on improving its solutions and services by investing in R&D activities, as mentioned earlier.

Management Discussion and Analysis

(cont’d)

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ANNUAL REPORT 2020

FORWARD-LOOKING STATEMENT The Group’s Prospects The Malaysian economy, in recent years, has successfully transformed from an exporter of raw materials into a diversified economy. Malaysia’s gross domestic product (“GDP”) growth rate was expected to trend around 4.4% to 4.5% in 2020, with services sector being the major contributor to the economy, accounting for more than half of Malaysia’s GDP. The Covid-19 pandemic has changed the prospects of the Malaysian economy negatively. For the Group, post-pandemic, we are bullish for our business prospects as digital dependence will resulting businesses in nearly all industries will rapidly placing more focus on adopting technology-based solutions in managing their assets and facilities to bolster production, increase speed and efficiency and cut down on costs so as to improve their overall business performance and profitability. Moving forward, the increased awareness among the business users on the importance of technology and the benefits it brought about are the major drivers of our business. The CMMS market in Malaysia is expected to be soft, mainly attributable to the slowdown in new construction and infrastructure projects. However, with the current business presence in the government sector and its ongoing effort in marketing its IT solutions for analytics and business optimisation, it is expected that the Group will gain increased access to the network for future business opportunities and to achieve sustainable growth. The Group’s CMMS business remains optimistic as the Group has been in the process of bidding for a few major projects. Currently, the Group has also taken its micro-financing fintech solution into the traditional banking sector and is looking at penetrating into other industries where the core big data analysis and AI engine may be applicable, in order to increase its market presence. At the same time, the Group is also on the lookout of opportunities for collaboration and expansion into the overseas market by actively exploring the possibility of deploying its automated platform and alternative credit-scoring engine targeting micro-financing market in other countries. These business moves are expected to sustain growth towards the Group’s prospects for the coming years and the Group believes that the successful implementation of fintech projects will increase the market confidence over the Group’s fintech solutions which in turn may open up many more business opportunities for the Group domestically or internationally. Dividend The Board will reassess the payment of dividends when the Group returns to profitability and when its growth funding needs are less pressing. The Group wish to thank all staff and Management for their relentless effort and commitment to the company. The Group appreciates and acknowledges shareholders for having a strong believe and support towards the Group’s business and endeavours.

Management Discussion and Analysis

(cont’d)

12

SUSTAINABILITY STATEMENT OUR APPROACH Sustainability has always been a pillar of the Group’s culture as we strived to achieve continuing growth and profitability in a safe, caring and sustainable environment. We recognise that sustainability practices are fast gaining importance as a criterion in investors’ investment decisions. In line with Bursa Malaysia Securities Berhad’s Sustainability Reporting Guide, the Group’s sustainability practices are to ensure that economic, environmental and social risks and opportunities are tied in with our governance framework and social responsibilities. This also enables our corporate success and behaviour to be judged and measured by the public. In this respect, as a responsible corporate citizen, our mission is to ensure high standards of governance across our business to promote responsible business practices, manage environmental impacts, and meet the social needs of the community in which we operate.

OUR APPROACH ON SUSTAINABILITY

Embrace Sustainability in Organisation Culture

Strengthen the Core

Build Regional Global Connectivity

Foster a High Performance Organisation

Orion IXL Berhad (“Orion”)’s continued success in maintaining a sustainable business and generating long-term shareholder value is influenced by several internal and external factors. Each material factor presents unique risks and opportunities to our organisation, and is a key consideration in our approach to strategies formulation and execution as it substantially influences the assessments and decisions of our stakeholders. We regularly review these factors to assess their impacts on our business model over the near, medium and long term. OUR VALUE PILLARS

Products & Services quality Management Human resources

ECONOMIC: Sustaining our economy

Delivering sustainable returns to our shareholders Delivering quality products and services to achieve customers’ satisfaction

sustainaBilitY Statement

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ANNUAL REPORT 2020

ENVIRONMENT: Conserving our environment

Protecting and preserving the environment SOCIAL: Building a resilient workforce

Ensuring a positive workplace for our employees

Serving our community

Contributing to the well-being of the community around us OUR SCOPE This Statement covers Orion and its subsidiaries. Information disclosed in this Statement encompasses our core activities related to Computerised Maintenance Management System (“CMMS”) and Financial Transaction Management System (“FTMS”) businesses. This report covers data which had been compiled internally from 1 July 2019 to 30 June 2020. Corporate Governance Sustainability is embedded in our organisational approach and is led from the top. The Board of Directors (“Board”) plays a vital guidance and oversight role in advancing sustainability across the organisation with the assistance from the Senior Management to oversee the implementation of the organisation’s sustainability approaches and ensures that key targets are being met. The Board also acknowledges that risk management and internal control are integral to our corporate governance and that it is responsible for establishing a sound risk management framework and internal control system as well as to ensure their adequacy and effectiveness. The review of the adequacy and effectiveness of the risk management framework and the system of internal control is delegated by the Board to our Audit Committee. Asides, the Group’s performance is also tracked with the assistance of Nomination Committee and Remuneration Committee.

Board of Directors

Oversees the Group’s sustainability initiatives, and endorses the proposed sustainability initiatives and material sustainability matters related to the Group

Review the Company’s processes for producing timely and accurate financial data, its

internal controls and independence of the

Company’s external and internal auditors, as well as

oversees all risk management activities within the Group

Assists the Board in developing and establishing competitive

remuneration policies and packages

Oversees matters related to the proposing suitable new

candidates for appointment to fill the seats of Board and

Senior Management

Sustainability Statement

(cont’d)

14

The responsibility of the Board to promote and embed sustainability in the Group includes overseeing the following:

• Stakeholders engagement; • Materiality assessment and identification of sustainability risks and opportunities relevant

to us; and • Management of material sustainability risks and opportunities.

Ethical Business Practices The Board recognises the importance of ethical business conduct across the operations to maintain our stakeholders’ trust. Code of Business Conduct and Ethics is established to achieve a standard of ethical behaviour based on trustworthiness and values that can be accepted and uphold a spirit of responsibility. Our Whistle-Blowing Policy, uploaded on our website, provides all stakeholders a direct channel for reporting instances of misconduct that contradict to our Code of Business Conduct and Ethics and/or other non-compliance offences. Good governance is the bedrock of our business, led by ethical business practices and integrity. We have embedded the highest standards of governance in our business not only by complying with the law but through processes and directives that continue to reinforce the principles. MATERIAL SUSTAINABILITY MATTERS Economic Shareholders Our shareholders are the ultimate owners of the Company and as such, they are entitled to timely and quality information on the Group’s financial performance and position. Apart from the Annual General Meeting where shareholders are encouraged to ask questions to the Board and Executive Management on business operations, and the financial performance and position of the Group, the Group’s corporate website at www.orionixl.com.my also provides a link on investor relations where quarterly and annual financial statements, announcements, financial information, annual reports, circulars/statements to shareholders and other pertinent information are uploaded on a timely basis when available. Customers & Services The Group is committed to see that not only our shareholders’ interests are taken of but also those of our customers and suppliers. In this regard, the Group values its customers as they are a major reason for its profitability. Our marketing and sales representatives schedule regular meetings, both formal and informal, with our customers to build a strong and conducive relationship. The objective of this is to promote a culture of open communication, trust and reliability. Our Group recognises that customers’ satisfaction is one of the key factors underlying the long term sustainability of our Group’s operations. It is the fundamental policy of our Group that all final products and software launched into the market must not contain any hazardous element,

Sustainability Statement

(cont’d)

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ANNUAL REPORT 2020

and must be of high quality to ensure customers’ satisfaction. We uphold the belief that customers rights should be preserved at all times and are on continuous endeavours to create value-for-money for our customers, saving our customers money, improving their bottom line and enhancing their overall operational and management variables. We also wish to be a responsive and reliable partner to our customers within their respective markets. As part of the sustainability move, the Group has in December 2018 acquired a total of 20% equity interest of Sukaniaga Sdn. Bhd. (“Sukaniaga”). Pursuant to the Technical Services Agreement signed with Sukaniaga, for a contract period of 15 years from 11 October 2018 to 10 October 2033, the Group is entitled to 85% of the fees earned by Sukaniaga for the provision of all services to be rendered by Sukaniaga to MyAngkasa Holdings Sdn. Bhd. for the development, operation and maintenance of the MyAzZahra system, an online loan application system portal which provides online digital end-to-end solutions from the stage of the loan application to the loan approval process, including its operation and maintenance. With the said move, the Group expects to gain increased access to the network of cooperatives in Malaysia and capitalise on this network for future business opportunities to bring more value to the Group. Other than this, our business present reach of its CMMS segment, the number of the Malaysia government’s department is already using our CMMS solution. This reach with the government could prove useful for marketing IT solutions in future. Apart from this, the Group is also currently marketing our IT solutions for analytics and business optimisation in the oil and gas industry. To achieve sustainability in the run, the Group opined that other diversification shall also be ventured into to enhance its financial performance and in turn its’ shareholders’ value. Suppliers To our suppliers, we are committed to enhance our processes and engaging with our suppliers to identify and manage risks, underpinned by values of integrity and transparency. We look to create value, by looking for opportunities to collaborate and to share best practices with our suppliers. Hence, our suppliers are filtered through careful selection ensuring only the one with specific criteria met are engaged. Regulatory Compliance Our Group believes that strict compliance with all relevant laws and regulations is a requisite to promote an ethical and responsible society. To this end, our Group strives to comply with all the relevant laws and regulations applicable to our business operations. Recognising the fact that tax is an important source of income for the government to finance the nation development activities and that everyone will stand to benefit as the nation and economy progress further, our Group places great emphasis in ensuring compliance with the applicable tax regulations and prompt settlement of our tax liabilities. Our Group’s commitment to proper compliance with laws and regulations has proven to be favourable and value-enhancing for our shareholders and stakeholders.

Sustainability Statement

(cont’d)

16

MATERIAL SUSTAINABILITY MATTERS Environment Although we generally do not generate any major environmental concerns, the Group is conscious of complying with all applicable environmental laws, guidelines and regulations. Energy & Water Saving Initiatives Headquartered in a certified green building by the Green Building Index Accreditation Panel in Shah Alam, Selangor, Orion is aware of the impact of our business on the environment and has taken active steps to reduce our carbon footprint on the environment. Action has also been taken to reduce the overall energy consumed by lighting. Where lighting in and around our office facilities and corridors need to be replaced, we have converted them to LED. The process is on-going and on stages. Furthermore, Management will be initiating the provision of reminders to switch off lighting, air-conditioner and computer when not in use. Water is a limited resource, and as the world continues to advance and the global population continues to grow, an increasing strain is being placed on the supply of clean water. Water conservation is therefore an area that our Group is working hard on, both improving the efficiency with which we use our water, as well as working to educate our employees and the public about the need to conserve it. Waste Management Paper recycling initiatives are already in progress by encouraging the employees to prioritise electronic means to share and store documents, and to reduce printing or photocopying, otherwise, to use double-sided printing. Additionally, other materials such as furnishing and fixture are recycled or reused where possible. Waste segregation has been done by placing different bins in and around our office area. Waste segregation is planned to be fully implemented in the coming years throughout the Group where recycling stations will be set up in convenient locations. Social Employees In Orion, employees are our greatest assets. We are made up of people with vast experience and industry background. Building capability is key, hence we proactively provide opportunities for growth and development for talent in the organisation through targeted development plans and succession planning. Ensuring our long term sustainability, we continuously invest time and effort in recruiting (internal and external), upskilling, engaging and rewarding talents/employees of the organisation accordingly. We will continue to focus on human capital development to nurture our employees to their full potential. The Group also recognises that the Industrial Revolution 4.0 will place pressure in organisations to continuously upskill and reskill our workforce, to stay relevant and productive, so that they can execute their roles and responsibilities efficiently. Employees are encouraged to

Sustainability Statement

(cont’d)

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ANNUAL REPORT 2020

attend internal or external training or pursue professional development to enhance their knowledge and skill for career enhancement and personal development, in the field of operational, financial, human resource management, technical skills, and others. For critical and leadership roles, succession planning is vital to our long-term performance as part of our Group’s sustainability move. Our Nomination Committee will review the Group’s human resources plan including the succession management framework and activities, human resources initiatives such as jobs and salary review, and the annual manpower budget. The succession planning across the Group is implemented by stages and training programmes are designed specifically for management staff. The Group recognised that the safety and well-being of its employees is the foundation of its success. Hence, we strive to provide a safe and healthy environment for our employees and to ensure safe practices in all aspects of our business operations. In addition to the day-to-day motivation measures, it is the Group’s tradition to have Hari Raya Aidilfitri, Chinese New Year, Deepavali, and Christmas & New Year celebrations and its represented a big part of our culture to foster stronger relationships amongst the staff across generations, as well as business associates to mingle around and celebrate the year past, while celebrating the festival. Employees benefits during Covid-19 Pandemic: We are looking at enhancing well-being program and healthcare benefits. In particular, we plan to enhance mental health services and stress or resilience for the employees over the next six months. We are supporting our employees to alleviate anxiety through virtual interactions such as:

Offering new virtual solutions that make it easy to implement and support employees to work-from-home

Increasing access to video-conferencing to allow for virtual meetings to keep employees connected around the world

Offering flexible work hours to allow employees to tend to child or elder-care responsibilities

By taking positive actions around health and well-being, we are putting people first, and that’s an investment that’s likely to build employee loyalty, raise engagement and enhance productivity. We are likely to include telecommuting as an essential work arrangement option for the remainder of this year. We are also considering broadening the current programs such as enhancing virtual care or helping our employees to set up an ergonomic workstation at home.

Sustainability Statement

(cont’d)

18

Community Our Group strongly believes in giving back to society and hence Orion had always devoted to philanthropy. We are deeply rooted in the community we operate and hence we actively engage in community outreach programmes and activities. We are proud of having the privilege to serve various segments of the community towards providing for social empowerment and helping to make a positive difference for people across all walks of life. We have from time to time made donations to various charitable organisation, helping the less fortunate members of our community is our way of giving back to society. Social activity during Covid-19 Pandemic: Today, the value of being a good corporate citizen goes beyond the pride and satisfaction of providing simple altruistic support for worthy goals. Strong and consistent Corporate Social Responsibility policies have become a cornerstone of our identify. We made donations to the charity sector that is supporting Covid-19 relief efforts, “Our staff also generously donated personal funds to charities. Whenever possible matched their donations to double the funding and the impact.” OUR COMMITMENT As a responsible corporate citizen, the Group shall endeavour to undertake sustainable and responsible practices to add value to sustainable business growth, environmental stewardship and social responsibility.

Rewarding our shareholder

Sustaining long term value

Advancing our business

Investing in our human

resources

Contributing to society

Dividends

Investment in our resources to

ensure long-term benefits to

our various stakeholders

Reinvestment and

diversification

Competitive remuneration, compensation,

benefits and trainings

Continued upliftment of our society’s well-being

through taxes and donations

Sustainability Statement

(cont’d)

19

ANNUAL REPORT 2020

AUDIT COMMITTEE REPORT

MEMBERS OF AUDIT COMMITTEE AND MEETINGS

The Audit Committee (“AC” or the “Committee”) of Orion IXL Berhad (“Orion” or the “Company”) comprises three (3) Non-Executive Directors, majority of whom are Independent Non-Executive Directors.

Encik Rahimi bin Ramli meets the requirement of Rule 15.09 (1)(c)(i) of ACE Market Listing Requirements as he is a Chartered Accountant and a member of the Malaysian Institute of Accountants. All members of the AC are financially literate with sufficient financial experience and ability to assist in discharging the fiduciary duties of the Board of Directors (“Board”).

The members of the AC and details of their attendance at the six (6) meetings held during the financial year ended 30 June 2020 (“FY2020”) are as follows:

Name of Directors Number of AC Meetings Attended by Members

Encik Rahimi bin Ramli (Chairman) Independent Non-Executive Director

5/6

Encik Yahya bin Razali (Member)Non-Independent Non-Executive Director

6/6

Encik Adnan Bin Zainol (Member)Independent Non-Executive Director(Appointed on 30 June 2020)

-

Encik Ahmad Ruslan Zahari bin Zakaria (Member)Independent Non-Executive Director(Resigned on 15 May 2020)

3/5

TERMS OF REFERENCE

The Terms of Reference of the AC can be accessed from the Company’s website at www.orionixl.com.my

MEETINGS AND MINUTES

The AC will meet at least four (4) times a year with additional meetings to be held, if necessary. If need arises, meetings will be attended by the Management, Advisers, Internal and/or External Auditors. During FY2020, the AC convened six (6) meetings and the record of attendance is shown above.

The meetings are pre-scheduled and are organised just before the Board meetings. Issues were deliberated during AC meetings before arriving at any decisions, conclusions or recommendations to be brought to the attention of the Board. The minutes of each AC meeting were properly minuted by the Company Secretary and tabled to the AC for adoption at the following quarterly AC meeting and subsequently all the minutes of AC meetings are presented to the Board for notation. The Chairman of the AC reported the AC’s recommendations to the Board for its consideration, approval and implementation as well as highlighted to the Board significant matters and resolutions deliberated by the AC at the Board meeting held immediately subsequent to the relevant AC meeting.

auDit CoMMittee report

20

SUMMARY OF ACTIVITIES

In accordance with the approved Terms of Reference of the AC, the AC carried out the following activities during FY2020:

1. Reviewed the unaudited quarterly results and annual audited financial statements of the Group and the Company. Discussion focused particularly on any change in accounting policies and practices, significant adjustments arising from the audit and compliance with accounting standards and other legal requirements where explanations, clarifications and corrective action taken for significant variances are reported by the Management to the AC before recommending to the Board for approval and release of the announcements to Bursa Malaysia Securities Berhad;

2. Reviewed with the External Auditors the audit planning memorandum of the Group for FY2020;

3. Reviewed and discussed with the External Auditors the nature and scope of the audit plan and ensure that the audit plan is comprehensive;

4. Recommended the re-appointment of the External Auditors and audit fee to the Board, after taking into consideration the technical competency, suitability, independence and objectivity of the External Auditors and cost effectiveness of the audit;

5. Reviewed the External Auditors’ report on the status of the audit for FY2020;

6. Considered the findings arising from the statutory audit activities conducted by the External Auditors and Management’s responses thereto;

7. Reviewed with the Internal Auditors, the Internal Audit Plan to ensure the adequacy of the scope, functions and resources and that it has the necessary authority to carry out its work;

8. Reviewed the internal audit reports which outlined the recommendations towards remediating areas of weakness, improving internal controls and ensuring the implementation of the management action plans to address issues found;

9. reviewed the audit fees and non-audit fees payable to the external auditors based on the approved audit plan and non-audit services for the Group and the Company and recommended the same to the Board for approval;

10. conducted two (2) private meetings with the External Auditors, without the presence of the Executive Directors and Management, to give the external auditors the opportunity to raise any matters of concern and, arising therefrom, directed Management to take further action on such matters;

11. Reviewed and approved the internal audit plan and scope of work for the Group and the Company to ensure adequacy of resources and competencies of the Internal Auditors to carry out the internal audit on all significant businesses and support functions based on identification and evaluation of the respective risks and control environment;

12. Reviewed the internal audit reports comprising audit findings, recommendations and Management responses for the Group and the Company;

13. Reviewed the reports prepared by the Internal Auditors relating to the follow-up audits on all major areas of concern and recurring issues and risk areas to assess the extent to which the Management has made progress in implementing the agreed action plans arising from the prior internal audit reviews;

Audit Committee Report

(cont’d)

21

ANNUAL REPORT 2020

14. Reviewed the performance, independence, objectivity and suitability of Internal Auditors before recommending their re-appointment to the Board for approval;

15. Reviewed if there are any transactions with related parties and/or involving conflicts of interest entered by the Group. The AC noted that none of the Directors had entered into any related party transactions during FY2020;

16. Reviewed and evaluated risk considerations in relation to business investment proposals, corporate exercises and adequacy of action plans taken by the Management to mitigate risks identified;

17. Reviewed the annual Corporate Governance Overview Statement, Corporate Governance Report, Statement on Risk Management and Internal Control, Management Discussion and Analysis, Sustainability Statement and AC Report to be published in the Annual Report;

18. Tabled the approved Minutes of the AC meetings to the Board for notation on a quarterly basis; and

19. Reported to the Board on significant matters and resolutions deliberated by the AC.

INTERNAL AUDIT FUNCTION

The internal audit services for FY2020 was provided by Eco Asia Advisory Sdn. Bhd. (“Eco Asia”), an outsourced Internal Auditors. Eco Asia is independent of management and operations. All the internal auditors carried out their functions according to the standards set by recognised professional bodies.

Eco Asia provides independent and objective assessment on the adequacy and effectiveness of the governance, risk management and internal control processes within the Group. Through Eco Asia, the Company undertakes regular and systematic reviews of the risk management and internal controls system so as to provide reasonable assurance that such internal controls system continues to operate adequately and effectively in the Group.

During FY2020, Eco Asia had conducted a comprehensive internal audit on the Human Resources Management of the Company and its subsidiary and follow-up internal audit review on Sales, Accounts Receivables, Collection and Credit Control functions of the Group.

The total cost incurred for the internal audit function of the Group for FY2020 was RM16,419-40.

Audit Committee Report

(cont’d)

22

CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors (“Board”) of Orion IXL Berhad (“Orion” or “the Company”) presents this statement to provide shareholders and investors with an overview of the corporate governance (“CG”) practices of the Company under the leadership of the Board during the financial year ended 30 June 2020 (“FY2020”). This overview takes guidance from the key CG principles as set out in the Malaysian Code on Corporate Governance (“the Code”).

This statement is prepared in compliance with ACE Market Listing Requirements (“AMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and it is to be read together with the CG Report 2020 of the Company (“CG Report”) which is available on the Company website at www.orionixl.com.my.

The Board is pleased to set out below the CG Overview Statement that describes the manner in which the Group has applied the practices of the Code during the FY2020.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

i. Board Responsibilities

The Board is always mindful of its responsibilities to the Company’s shareholders and various stakeholders for creating and delivering sustainable value and long-term success through its leadership and management of the Company’s businesses, in pursuing the commercial and regulatory objectives and goals of the Company.

To this end, the Board determines the strategic objectives and policies of the Group for delivery of such long-term value. It ensures effective leadership through oversight on management and robust monitoring of the activities, performance, conformance capabilities and control in the organisation. In setting the strategic direction, the Board also ensures that there is an appropriate balance between promoting long-term growth and delivering short-term objectives.

In order to ensure orderly and effective discharge of the functions and responsibilities of the Board, the Board delegates specific powers and responsibilities to the Group Chief Executive Officer (“GCEO”)and the following Board Committees:-

• Audit Committee (“AC”)• Nomination Committee (“NC”)• Remuneration Committee (“RC”)

The Board Committees are guided and operate within clearly defined Terms of Reference (“TOR”) and their written TORs are made available on the Company’s website at www.orionixl.com.my.

The Board members have full access to the two (2) Company Secretaries who provide advisory services to the Board, particularly on corporate administrative and governance issues including compliance to the relevant rules/procedures, laws and regulatory requirements.

The Company Secretaries are also advising the Board of their obligations and adherence to matters pertaining to disclosure of interest in securities, disclosure of any conflict of interest in a transaction involving the Company, prohibitions on dealing in securities and restrictions on disclosure of price-sensitive information.

The duties of the Company Secretaries, amongst others, including attending all Board and Board Committee Meetings, ensuring that the proceedings of Board and Board Committees Meetings and decisions made thereof are accurately and sufficiently recorded and properly kept for the purposes of meeting statutory obligations as well as obligations arising from AMLR of Bursa Securities or other regulatory requirements, communicating the decisions of the Board for Management’s attention and

Corporate governanCe overvIew Statement

23

ANNUAL REPORT 2020

further action, ensuring all corporate governance procedures of Directors are in accordance with the relevant legislations and properly executed.

ii. Board Composition

The Group is currently led and managed by an experienced Board with a wide range of business, legal, finance, accounting, economics, technical background, skills and experience necessary for the effective stewardship of the Group.

The Board currently has five (5) members, comprising one (1) Non-Independent Non-Executive Director, two (2) Executive Directors (one (1) of whom is also a GCEO) and two (2) Independent Non-Executive Directors. This composition ensures that at least two (2) of the Board members are Independent Non-Executive Directors which is in compliance with Rule 15.02 of the AMLR of Bursa Securities.

There is a clear separation of functions between the Board, Executive Directors and GCEO in order to maintain a balance of control, power and authority within the Group. The Non-Executive Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board. 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 Executive Directors and GCEO of the Company.

The Independent Non-Executive Directors are actively involved in various Board Committees and contribute to areas such as performance monitoring and enhancement of corporate governance and internal controls. They ensure that views, considerations, judgment and discretion exercised by the Board in decision-making remain objective and independent whilst ensuring the interests of other parties such as minority shareholders are adequately addressed and protected and their views are being given due consideration. This provides effective checks and balances in the functioning of the Board and reflects the Company’s commitment to uphold excellent corporate governance.

The Board does not have any boardroom diversity policies in terms of gender as it believes that every candidate for the Board should be given fair and equal treatment. The Board believes that candidature to the Board should be based on a candidate’s merits, capability, experience, skill-sets and integrity. However, in line with the Code, the Board will consider further diversity of gender of the Board in due course.

iii. Board Charter

The Board is guided by its Board Charter which provides reference in relation to the roles and responsibilities of the Board and Management. The Board Charter is subject to periodic review and will be updated as and when necessary to ensure it remains consistent with the Group’s policies and procedures, the Board’s overall responsibilities as well as changes to legislation and regulations.

The Board Charter is available on the Company’s website at www.orionixl.com.my.

iv. Code of Ethics

The Group has in place a Code of Ethics for Directors and employees based on four elements which are sincerity, integrity, corporate and fiduciary responsibilities. In discharging their duties, the Board has at all times observe the codes as defined in the Code of Ethics.

The Code of Ethics is available on the Company’s website at www.orionixl.com.my.

Corporate Governance Overview Statement

(cont’d)

24

v. Whistle-blowing Policy

The Board has established a Whistle-blowing Policy, available for viewing on the Company’s website at www.orionixl.com.my

The Board is committed to promote and maintain high standard of integrity, openness and accountability in the conduct of its businesses and operations. It aspires to conduct its affairs in an ethical, responsible and transparent manner. An important aspect of accountability and transparency is the existence of a mechanism to enable employees of the Group to voice their concerns in a responsible and effective manner.

The Company provides avenue for all employees and members of the public to disclose any improper conduct in accordance with the procedures as provided for under this policy to provide protection for employees and members of the public who report such allegation. This is also to provide protection for the whistleblower from reprisal as a direct consequence of making a disclosure and to safeguard such person’s confidentiality.

The AC has the overall responsibility in overseeing the implementation and monitoring of the Whistle-Blowing Policy and ensuring its effective administration.

vi. Nomination Committee

The NC comprises exclusively of three (3) Non-Executive Directors, a majority of whom are Independent Directors.

The meeting attendance of the NC Members is as follows:-

Name No. of Meetings AttendedEncik Adnan bin Zainol (Chairman)(Appointed on 23 July 2020)

-

Encik Ahmad Ruslan Zahari bin Zakaria (Chairman)(Resigned on 15 May 2020)

-

Encik Yahya bin Razali (Member) 1/1Encik Rahimi bin Ramli (Member) 1/1

The main responsibilities of the Nomination Committee are as follows:-

Nominate new nominees for appointment to the Board and Board Committees for the Board’s consideration.

Review and recommend to the Board the appointment of any Executive Directors and Senior Management within the Group.

Evaluates and determines the training needs for each of the Directors in order to enhance the skills of the Directors and aid them in the discharge of their duties as Directors.

Annually review the Board’s required mix of skills, experience and other qualities, including core competencies, which the Independent Non-Executive Directors should bring to the Board.

Annually review and assess the effectiveness of the Board and Board Committees and performance of the Directors of the Company both individually and collectively.

Annually review and assess independence of the Independent Non-Executive Directors.

Corporate Governance Overview Statement

(cont’d)

25

ANNUAL REPORT 2020

Annually review the term of office and performance of the Audit Committee and each of its members to determine whether such Audit Committee and its members have carried out their duties in accordance with their terms of reference.

The activities undertaken by the NC are listed below:-

Assessed and evaluated the independence of the Independent Non-Executive Directors.

Annual assessment and rating of the performance of each Independent Non-Executive Director against diverse key performance indicators.

Annual assessment and rating of the performance of the Executive Directors against the criteria as set out in the evaluation forms.

Annual assessment and rating of the performance of Board Committees against the criteria as set out in the evaluation form.

Reviewed the structure, size and composition of the Board.

Reviewed and recommended to the Board the re-election of Encik Yahya bin Razali, Encik Rahimi bin Ramli and Encik Adnan bin Zainol, who will be retiring at the forthcoming Eighteenth Annual General Meeting (“AGM”).

The Board is satisfied with its current mix of qualifications, skills, experiences, expertise and strength in discharging its duties effectively.

vii. Remuneration

The Company does not have any formal remuneration policy. Notwithstanding that, RC is guided by the TOR of RC to recommend the structure and level of remuneration for the Executive Directors and Non-Executive Directors.

The Board, through the RC ensures that the level of remuneration offered for Executive Directors are sufficient to attract, retain and motivate the Executive Directors of the quality required to run the Group successfully. Executive Directors’ remuneration is structured so as to link rewards to their corporate and individual performance.

Non-Executive Directors of the Company are paid a basic fee as ordinary remuneration and will be paid a sum based on their responsibilities in the Board and the Board Committees, their attendance and/or special skills and expertise they bring to the Board. The fee is fixed in sum and not by a commission or percentage of profits or turnover.

For FY2020, the RC had performed its duty to assess annually the remuneration package, fees and benefits of the Directors. The proposed fees and benefits of the Directors are reviewed and recommended by the RC to the Board for deliberation which comprises the following:-

Directors’ Fees These fees are payable to Non-Executive Directors and are recommended by the Board for the approval of the shareholders at AGM.

Meeting Allowance This allowance is payable only to the Directors (save for the Director who is also the GCEO) for attendance of the Board and Board Committees meetings. The meeting allowance, if any, will be recommended by the Board for shareholders’ approval at the AGM.

Corporate Governance Overview Statement

(cont’d)

26

The RC members and their meeting attendance are as follows:-

Name No. of Meetings AttendedEncik Yahya bin Razali (Chairman)(Appointed 23 July 2020)

-

Encik Ahmad Sharmin bin Zahari (Chairman)(Resigned on 23 July 2020)

1/1

Encik Rahimi bin Ramli 1/1Encik Adnan bin Zainol(Appointed on 30 June 2020)

-

Encik Ahmad Ruslan Zahari bin Zakaria(Resigned on 15 May 2020)

-

Each individual Director abstains from deliberation and voting on all matters pertaining to their own respective remuneration. Details of the remuneration of Directors of the Company during the financial year ended 30 June 2020 are shown below:

The Company

Name of Directors FeesRM

SalariesRM

Meeting AllowanceRM

TotalRM

Yahya Bin Razali 120,000 - 2,000 122,000Rahimi Bin Ramli 34,500 - 1,000 35,500Ahmad Sharmin Bin Zahari(1) 36,000 - 2,000 38,000Ahamd Ruslan Zahari Bin Zakaria(2) 31,500 - 1,000 32,500Abdul Rani Bin Achmed Abdullah - 33,000 2,000 35,000Mohamad Shaharul Bin Mohamad Shariff - 138,000 - 138,000

Total 222,000 171,000 8,000 401,000

The Group

Name of Directors FeesRM

SalariesRM

Meeting AllowanceRM

TotalRM

Yahya Bin Razali 120,000 2,000 122,000Rahimi Bin Ramli 34,500 1,000 35,500Ahmad Sharmin Bin Zahari(1) 36,000 2,000 38,000Ahamd Ruslan Zahari Bin Zakaria(2) 31,500 - 1,000 32,500Abdul Rani Bin Achmed Abdullah - 33,000 2,000 35,000Mohamad Shaharul Bin Mohamad Shariff - 276,000 - 276,000

Total 222,000 309,000 8,000 539,000

Notes: (1) Resigned as Non-Independent Non-Executive Director on 23 July 2020. (2) Resigned as Independent Non-Executive Director on 15 May 2020.

viii. Independence of Independent Director

The Board has adopted the best practices for assessing the independence of Independent Directors annually and the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Independent Director who has served for a cumulative term of nine (9) years is subject to the annual approval of the shareholders to continue to act in office as Independent Director. In line with the practice 4.2 of the Code, the Board, through the NC, has assessed the independence of each Independent Director annually. Taking into consideration interests disclosed by each Independent

Corporate Governance Overview Statement

(cont’d)

27

ANNUAL REPORT 2020

Director and having regard to the criteria for assessing the independence of Directors under the annual Board assessment and the AMLR, the Board is satisfied with the level of independence demonstrated by all the Independent Non-Executive Directors and their ability to act in the best interests of the Company during deliberations at Board meetings.

None of the Independent Non-Executive Directors of the Company has served the Board for more than (9) years.

ix. Commitment of the Board Members

During FY2020, the Board met six (6) times. The meeting attendance of the Directors is as follows:

Name of Directors No. of Meetings AttendedEncik Yahya bin Razali (Chairman) 6/6Encik Abdul Rani bin Achmed Abdullah 6/6Encik Mohamad Shaharul bin Mohamad Shariff 6/6Encik Rahimi bin Ramli 5/6Encik Ahmad Ruslan Zahari bin Zakaria(Resigned on 15 May 2020)

3/5

Encik Ahmad Sharmin bin Zahari(Resigned on 23 July 2020)

5/6

Encik Adnan bin Zainol(Appointed on 30 June 2020)

-

The Board is satisfied that all Directors have been devoting sufficient time to discharge their responsibilities adequately.

x. Directors’ Training

The Board acknowledges that continuous education is vital for the Board members to gain insight into the state of economy, technological advances, regulatory updates and management strategies to enhance the Board’s skills and knowledge in discharging its responsibilities. In addition to the Mandatory Accreditation Programme as required by Bursa Securities, the Directors are encouraged to attend relevant seminars and training programmes to equip themselves with the knowledge to effectively discharge their duties as Directors. The NC will assess the training needs of the Directors and ensure Directors have access to continuing education programmes.

During the FY2020, all Directors of the Company have attended the in-house briefing session conducted by the Company Secretary of the Company on the Anti-Bribery and Corruption Policy.

The Directors have also been briefed on the relevant changes arising from the implementation of the amendments to the AMLR of Bursa Securities and changes in the accounting standards at the Board and Board Committees meetings.

Besides the above briefing, the Directors have also attended the following seminars during the FY2020 to further enhance their knowledge and skills:-

Name of Directors Seminar Attended Rahimi bin Ramli KPMG webinar series - Crises AGM

KPMG webinar series - Penjana Tax after Pandemic

Abdul Rani bin Achmed Abdullah Doctorate in Engineering program

Corporate Governance Overview Statement

(cont’d)

Director and having regard to the criteria for assessing the independence of Directors under the annual Board assessment and the AMLR, the Board is satisfied with the level of independence demonstrated by all the Independent Non-Executive Directors and their ability to act in the best interests of the Company during deliberations at Board meetings.

None of the Independent Non-Executive Directors of the Company has served the Board for more than (9) years.

ix. Commitment of the Board Members

During FY2020, the Board met six (6) times. The meeting attendance of the Directors is as follows:

Name of Directors No. of Meetings AttendedEncik Yahya bin Razali (Chairman) 6/6Encik Abdul Rani bin Achmed Abdullah 6/6Encik Mohamad Shaharul bin Mohamad Shariff 6/6Encik Rahimi bin Ramli 5/6Encik Ahmad Ruslan Zahari bin Zakaria(Resigned on 15 May 2020)

3/5

Encik Ahmad Sharmin bin Zahari(Resigned on 23 July 2020)

5/6

Encik Adnan bin Zainol(Appointed on 30 June 2020)

-

The Board is satisfied that all Directors have been devoting sufficient time to discharge their responsibilities adequately.

x. Directors’ Training

The Board acknowledges that continuous education is vital for the Board members to gain insight into the state of economy, technological advances, regulatory updates and management strategies to enhance the Board’s skills and knowledge in discharging its responsibilities. In addition to the Mandatory Accreditation Programme as required by Bursa Securities, the Directors are encouraged to attend relevant seminars and training programmes to equip themselves with the knowledge to effectively discharge their duties as Directors. The NC will assess the training needs of the Directors and ensure Directors have access to continuing education programmes.

During the FY2020, all Directors of the Company have attended the in-house briefing session conducted by the Company Secretary of the Company on the Anti-Bribery and Corruption Policy.

The Directors have also been briefed on the relevant changes arising from the implementation of the amendments to the AMLR of Bursa Securities and changes in the accounting standards at the Board and Board Committees meetings.

Besides the above briefing, the Directors have also attended the following seminars during the FY2020 to further enhance their knowledge and skills:-

Name of Directors Seminar Attended Rahimi bin Ramli KPMG webinar series - Crises AGM

KPMG webinar series - Penjana Tax after Pandemic

Abdul Rani bin Achmed Abdullah Doctorate in Engineering program

28

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

i. Audit Committee

The AC is chaired by an Independent Non-Executive Director who is distinct from the Chairman of the Board.

Practice 8.2 of the Code requires the AC to have a policy that requires a former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the Audit Committee. The TOR of the AC has been updated accordingly in order for the AC to formalise such policy.

As a matter of practice, the AC has recommended to the NC not to consider any former key audit partner as a candidate for Board Directorship/Audit Committeeship to solidify the AC’s stand on such Policy.

The Board is assisted by the AC to oversee both internal and external audit functions, risk management and internal control system, financial reporting processes and the Group’s financial statements. The AC members, all of whom are financially literate, reviewed the Company and the Group’s unaudited quarterly results and audited financial statements, prior to recommending them for approval by the Board for announcements and issuance to the shareholders and stakeholders.

The AC would on an annual basis, reviews and monitors the appointment/re-appointment, performance, competency, suitability, objectivity and independence of the External Auditors. The AC sets policy and procedures on the provision of non-audit services by the External Auditors.

During the financial year ended 30 June 2020, the External Auditors has maintained their independence in accordance with their firm’s requirements and with the terms of relevant professional and regulatory requirements and they have reviewed the non-audit services provided to the Group during the financial year and are not aware of any non-audit services that have compromised their independence as External Auditors of the Group. The External Auditors also reaffirmed their independence at the completion of the audit.

The details of the key activities carried out by the AC during FY2020 are set out in the AC Report of this Annual Report.

ii. Risk Management and Internal Control Framework

The Board firmly believes in maintaining a sound risk management framework and internal controls system with a view to safeguard shareholders’ investment and the assets of the Group.

The AC assists the Board to ensure effectiveness of the Group’s internal control systems. The internal audit function is outsourced to a third party professional services firm, which is independent of the activities and operations of the Group.

The Board performs reviews on an annual basis covering not only financial, but operational and compliance controls and risk management systems, in all material aspects. Management is responsible for implementing the processes for identifying, evaluating, monitoring and reporting of risks and internal control, taking appropriate and timely corrective actions as needed, and for providing assurance to the Board that the processes have been carried out.

The Board recognises that identification, evaluation and management of significant risks faced by the Company are an on-going process. The improvement of the system of internal controls is also an on-going process and the Board maintains continuing commitment to strengthen the Company’s internal control environment and processes.

Corporate Governance Overview Statement

(cont’d)

29

ANNUAL REPORT 2020

The risk management framework and internal audit functions are disclosed in the Statement on Risk Management and Internal Control of this Annual Report.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

i. Communication with Stakeholders

The Company is committed to upholding high standards of transparency and promotion of investor confidence through the provision of comprehensive, accurate and quality information on a timely and even basis. Orion is in place good corporate disclosure policies and communication channels to ensure thorough and timely dissemination of material and reliable information to the public.

Quarterly results, announcements, annual reports, audited financial statements, corporate updates and circulars which are accessible from Bursa Securities’ website serve as the primary means of dissemination of information so that shareholders are constantly kept abreast of the Group’s progress and development.

ii. Conduct of General Meetings

The AGM is the principal forum for dialogue with shareholders. The Company values feedback from its shareholders and therefore, encourages shareholders to attend and participate in the AGM to raise questions pertaining to issues in the Annual Report, corporate developments in the Group, the resolutions being proposed and the business of the Group at the AGM.

In order to encourage shareholders’ participation at the AGM, the Company sends out the Notice of AGM earlier or at least 28 days to allow sufficient time for shareholders to make arrangements to attend either in person, by corporate representative, proxy or attorney.

All Directors, Management and External Auditors were present in person to respond to the shareholders’ queries and feedback at the Seventeenth AGM held on 29 November 2019. All the resolutions were put to vote by way of poll.

This CG Overview Statement was approved by the Board of the Company on 30 October 2020.

Corporate Governance Overview Statement

(cont’d)

30

ADDITIONAL COMPLIANCE INFORMATION

1. UTILISATION OF PROCEEDS

The Company proposed to undertake a private placement of 179,686,900 new ordinary shares, representing up to 30% of the total number of issued shares in the Company (“Private Placement”).

Bursa Malaysia Securities Berhad had vide its letter dated 25 March 2019 approved the listing of and quotation for up to 179,686,900 new ordinary shares in the Company to be issued pursuant to the said Private Placement.

The gross proceeds received from the Private Placement amounted to RM18.655 million and the status of the utilisation of the proceeds raised as at 30 June 2020 is as follows:

Details of Utilisation Proposed Utilisation (RM’000)

ActualUtilisation(RM’000)

BalanceUnutilised(RM’000)

Acquisition of 10% equity interest in Sukaniaga Sdn. Bhd.

10,000 10,000 -

Development of the myAzZahra system

7,705 7,705 -

Expenses in relation to the Private Placement

950 950 -

Total 18,655 18,655 -

2. AUDIT AND NON-AUDIT FEES

The audit fee and non-audit fees paid or payable by the Company and the Group to the External Auditors for the financial year ended 30 June 2020 are as follows:-

Group(RM’000)

Company(RM’000)

Audit fees 168 115

Non-audit fees 32 20

Total 200 135

3. MATERIAL CONTRACTS

There were no material contracts entered into by the Company and its subsidiaries involving the interests of directors, chief executive who is not a director or major shareholders either still subsisting at the end of the financial year ended 30 June 2020 or entered into since the end of the previous financial year.

aDDitional CoMplianCe InformatIon

31

ANNUAL REPORT 2020

Statement on Risk Management and Internal Control

A. INTRODUCTION

The Board of Directors (“Board”) of Orion IXL Berhad (“Orion”) is committed to improve the Group’s risk management system and maintain a sound system of internal control of the Group.Pursuant to Rule 15.26(b) of the ACE Market Listing Requirements (“AMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and as guided by the Bursa Securities’ Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“the Guidelines”) and the recommendations of the Malaysian Code of Corporate Governance, the Board is pleased to include a statement on the state of the Group’s system of risk management and internal control in this annual report.

B. BOARD’S RESPONSIBILITIES

The Board acknowledges its overall responsibilities for maintaining a sound system of internal control that would provide reasonable assurance in ensuring the effectiveness and efficiency of operations and risk management, reliability of reporting as well as compliance with applicable laws, rules and regulations. The Board is ultimately responsible for the Group’s system of internal control including the establishment of appropriate control environment and framework as well as processes for reviewing its adequacy and integrity.

The Board recognises the importance of sound internal controls and risk management in safeguarding the assets of the Group. The Board through its Audit Committee had established an on-going process for identifying, evaluating, monitoring and managing any significant risks through internal controls in order to attain a reasonable assurance that its business objectives are met. These controls are regularly reviewed by the Board and subject to continuous improvements.

In view of the limitations that are inherent in any system of internal control, such system is designed to manage rather than eliminate the risk of failure to achieve corporate objectives. As such, the system could provide reasonable but not absolute assurance against material misstatement, operational failures, fraud or loss.

The Board is of the view that the risk management and internal controls system of the Group are in place during the financial year and up to the date of issuance of the annual report, subject to regular reviews. They are adequate and effective in safeguarding the shareholders’ investment, stakeholders’ interest and the Group’s assets.

C. RISK MANAGEMENT SYSTEM

The Board is aware that a sound system of risk management is critical for the Group’s sustainability and enhancement of shareholder value. Risk management should be embedded in the operations of the Group and form part of its culture. This system should be capable of responding quickly to evolving risks to the business arising from factors within the Group and changes in the business environment. It includes procedures for identifying, reporting, managing and monitoring on any significant risk continuously.

Audit Committee is assisted by the Group Chief Executive Officer and Management of the Group to ensure the adequacy and effectiveness of risk management system.

The duties and responsibilities of Audit Committee risk management and internal control are as follows:

Review the risk profile of the Group and plans to manage and/or mitigate business risks as identified from time to time;

Review the sufficiency and effectiveness of the Group’s overall risk management system; and

stateMents on risk ManageMent and Internal control

32

F. REVIEW OF THIS STATEMENT BY EXTERNAL AUDITORS

Pursuant to Rule 15.23 of the AMLR, the External Auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the Annual Report for the financial year ended 30 June 2020.

G. MANAGEMENT ASSURANCE

The Executive Director and Group Chief Executive Officer, representing the Management, have given reasonable assurance to the Board that the Group’s risk management and internal control systems are adequate and effective, in all material aspects, based on the risk management and internal controls adopted by the Group and similar assurance given by the respective heads of operations.

H. CONCLUSION

The Board is of the view that the existing risk management and internal control system in place for the financial year under review is sound and adequate to safeguard the shareholders’ investment, the Group’s assets and other stakeholders’ interest. However, the Board is also cognisant of the fact that the Group's system of risk management and internal control practices must continuously evolve to meet the changing and challenging business environment. Therefore, the Board is committed to continuously strengthen the Group's systems of internal control and risk management framework.

This Statement was approved by the Board on 30 October 2020.

Assess the effectiveness or the system of internal controls i.e. the risks, control environment and compliance requirements based on the results of the External and Internal Auditors.

The functions of the Audit Committee to ensure risk management and proper internal controls are in place with an adequate awareness and understanding of risks by the Management and to safeguard shareholders’ interest and the Company’s assets.

D. INTERNAL CONTROL SYSTEM

Key internal controls in place for the Group are as follows:

The Group has an appropriate organisational structure for planning, executing, controlling and monitoring, amongst others, the business operations and financial of the Group in order to achieve the Group’s business objectives;

Clearly defined terms of reference, authorities and responsibilities of the various Board committees including Audit Committee, Remuneration Committee and Nomination Committee;

To ensure the uniformity and consistency of practices and controls within the Group. Internal Standard Operating Procedures have been formalised and documented for the key business processes and subject to regular review and improvement;

The Group Chief Executive Officer acts as the channel of communication between the Board and the Management. The Executive Directors are empowered to manage the business of the Group and to implement the Board’s directives and policies;

The Audit Committee evaluate the adequacy and effectiveness of the internal control system through the internal audit function and reports received from the Internal Auditors;

The Audit Committee and Board receive and review the reporting of accounting and legal developments from the Management;

An annual budget and cash flow projection is prepared by Management and tabled to the Audit Committee and Board for approval. Periodic monitoring is being carried out to measure the actual performance against budget to identify significant variances and devise remedial action plans;

Investment options are at the deliberation of the Board; The Management ensures an effective system of financial reporting to the Audit Committee and

Board based on quarterly results; The Management ensures the completeness and accuracy of the records of the Group; and The Management with the assistance from Internal Auditors, in identify the risks area and

implement appropriate measures to manage and control these risks and also review the adequacy and integrity of the internal control system.

E. INTERNAL AUDIT FUNCTION

The Company had appointed an independent professional firm to assist the Board and Audit Committee in providing independent assessment on the adequacy, efficiency and effectiveness of the internal controls system and risk management system of the Group.

The Internal Auditors report directly to the Audit Committee and its role are to independently review the system of internal controls as established by the Group, the adequacy and integrity of such internal control system.

Internal audit has been carried out for the financial year ended 30 June 2020 based on the approved audit plan to review the Group’s Human Resources Management. The findings of the internal audit together with recommendations were presented to the Audit Committee.

Based on the internal audit review conducted, none of the weaknesses noted have resulted in any material losses, contingencies or uncertainties that would require separate disclosure in this annual report.

Statements on Risk Management and Internal Control

(cont’d)

33

ANNUAL REPORT 2020

F. REVIEW OF THIS STATEMENT BY EXTERNAL AUDITORS

Pursuant to Rule 15.23 of the AMLR, the External Auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the Annual Report for the financial year ended 30 June 2020.

G. MANAGEMENT ASSURANCE

The Executive Director and Group Chief Executive Officer, representing the Management, have given reasonable assurance to the Board that the Group’s risk management and internal control systems are adequate and effective, in all material aspects, based on the risk management and internal controls adopted by the Group and similar assurance given by the respective heads of operations.

H. CONCLUSION

The Board is of the view that the existing risk management and internal control system in place for the financial year under review is sound and adequate to safeguard the shareholders’ investment, the Group’s assets and other stakeholders’ interest. However, the Board is also cognisant of the fact that the Group's system of risk management and internal control practices must continuously evolve to meet the changing and challenging business environment. Therefore, the Board is committed to continuously strengthen the Group's systems of internal control and risk management framework.

This Statement was approved by the Board on 30 October 2020.

Statements on Risk Management and Internal Control

(cont’d)

34

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors are required by the Companies Act 2016 to ensure that the financial statements for each financial year are prepared in accordance with the applicable approved accounting standards and the requirements of the Companies Act 2016,which give a true and fair view of the state of affairs of the Company and its subsidiaries (“Group”) at the end of the financial year, and the results and cash flows of the Group and of the Company for the financial year.

In preparing the financial statements, the Directors ensured that the Management has:

a. adopted appropriate accounting policies and applied them consistently; b. made judgments and estimates that are reasonable and prudent; and c. prepared the financial statements on a going concern basis.

The Board has an overall responsibility for taking such steps that are reasonably open to them to safeguard the assets of the Group and of the Company, and to prevent and detect fraud and other irregularities.

DireCtors’ responsiBilitY Statement

Directors’ Report ................................................................................... 36 – 41

Statement by Directors .................................................................................. 42

Statutory Declaration ..................................................................................... 42

Independent Auditors’ Report ................................................................ 43 – 49

Statement of Financial Position .............................................................. 50 – 51

Statement of Profit or Loss and Other Comprehensive Income ....................................................................... 52

Statement of Changes In Equity .............................................................. 53 - 54

Statement of Cash Flows ....................................................................... 55 – 57

Notes to the Financial Statements ....................................................... 58 – 137

FINANCIAL STATEMENTS

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Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

DIRECTORS' REPORT

PRINCIPAL ACTIVITIES

FINANCIAL RESULTS

Group CompanyRM RM

Loss for the year (3,955,562) (2,355,694)

Loss for the year attributable to:

Owners of the parent (3,954,965) (2,355,694) Non-controlling interests (597) -

(3,955,562) (2,355,694)

RESERVES AND PROVISIONS

DIVIDENDS

The directors hereby submit their report together with the audited financial statements of the Group and ofthe Company for the financial year ended 30 June 2020.

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

The Company is principally engaged in the provision of computerised maintenance management systemsand other information technology service such as systems integration, support services and training. Theprincipal activities of the subsidiaries are set out in Note 7 to the financial statements.

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

The directors do not recommend the payment of any dividend in respect of the current financial year.

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DireCtors’ report

37

ANNUAL REPORT 2020Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

DIRECTORS' REPORT

DIRECTORS

Abdul Rani bin Achmed Abdullah**Rahimi bin RamliYahya bin Razali**Mohamad Shaharul bin Mohamad ShariffAdnan bin Zainol (Appointed on 30.06.2020)Ahmad Ruslan Zahari bin Zakaria (Resigned on 15.05.2020)Ahmad Sharmin bin Zahari (Resigned on 23.07.2020)

** These directors are also the directors of certain subsidiaries of the Company.

Chua Choon YangPrabuddha Kumar Pronob Chakravertty (Resigned on 30.12.2019)

DIRECTORS' INTERESTS

As at As at1.7.2019 Acquired Disposed 30.6.2020

The Company

Direct interestAbdul Rani bin Achmed Abdullah 85,072 - - 85,072 Mohamad Shaharul bin Mohamad Shariff 40,929,000 - - 40,929,000

Deemed interest *Abdul Rani bin Achmed Abdullah 23,076,082 - - 23,076,082

The interests and deemed interests in the shares and warrants of the Group and the Company and of itsrelated corporations of those who were Directors at financial year end (including the interests of thespouses or children of the Directors who themselves are not Directors of the Company) as recorded in the

The names of the directors of the Company in office since the beginning of the financial year to the date ofthis report are:

The names of the directors of the subsidiaries in office since the beginning of the financialyear to the date of this report (not including those directors listed above) are:

Number of ordinary shares

2

Directors’ Report

(cont’d)

38

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

DIRECTORS' REPORT

DIRECTORS' INTERESTS (CONT'D)

As at As at1.7.2019 Acquired Disposed 30.6.2020

The Company

Direct interestMohamad Shaharul bin Mohamad Shariff 6,811,000 - - 6,811,000

Deemed interest *Abdul Rani bin Achmed Abdullah 2,631,741 - - 2,631,741

* Deemed interest held through Winnova Resources Sdn. Bhd.

DIRECTORS' BENEFITS

ISSUES OF SHARES

WARRANTS

There were no arrangements during and at the end of the financial year which had the object of enablingDirectors of the Group and the Company to acquire benefits by means of the acquisition of shares in ordebentures of the Company or any other body corporate.

On 2 August 2017, the Company issued 232,927,485 5-year free detachable Warrants 2017/2022 pursuantto a renounceable rights issue of one (1) free warrants for every two (2) right shares of RM0.10 each heldin the Company, at an exercise price of RM0.17. The Warrants are constituted by the Deed Poll dated 9June 2017. Any Warrants 2017/2022 not exercised by the date of maturity will lapse thereafter and ceaseto be valid for purpose. The salient terms of warrant are disclosed in Note 15(a).

During the financial year, the Company increased shares by receiving paid up ordinary shares capitalamounting to RM799,350 by way of issuance of 21,900,000 ordinary shares through private placement forcash.

None of the other directors in office at the end of the financial year had any interest in shares in theCompany or its related corporations during the financial year.

Number of warrants 2017/2022

Since the end of the previous financial period, no director of the Group and the Company has received norbecome entitled to receive any benefit (other than those fees and other benefits included in the aggregateamount of remuneration received or due and receivables by directors as shown in Note 21 to the financialstatements) by reason of a contract made by the Group and the Company or a related corporation with thedirector or with a firm of which the director is a member, or with a company in which the director has asubstantial financial interest.

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Directors’ Report

(cont’d)

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ANNUAL REPORT 2020Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

DIRECTORS' REPORT

WARRANTS (CONT'D)

The movement of the Warrants 2017/2022 since last financial year end is as follow:

As at As at1.7.2019 Issued Exercised 30.6.2020

Warrants 232,927,458 - - 232,927,458

No options were granted to any person to take up unissued shares of the Company during the financial year.

INDEMNITY AND INSURANCE FOR DIRECTORS AND AUDITORS

OTHER STATUTORY INFORMATION

(a)

(i)

(ii)

(b)

(i)

(ii)

Number of Warrants 2017/2022

At the date of this report, the directors are not aware of any circumstances which would render:

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for expected credit losses and satisfied themselves that no known bad debtshas been written off and that adequate allowance of expected credit loss had been made; and

it necessary to write off any bad debts and the amount of the allowance of expected credit lossesin the financial statements of the Group and the Company inadequate to any substantial extent;and

The ordinary shares issued from the exercise of Warrants 2017/2022 shall rank pari passu in all respectswith the existing issued ordinary shares of the Company except that they shall not be entitled to anydividends, rights, allotments and/or other distributions, the entitlement date of which prior to the date ofallotment of the new shares arising from the exercise of Warrants 2017/2022.

OPTIONS

There were no indemnity given to or insurance effected for, during or since the end of the year, for anyDirector, officer and auditors of the Company in accordance with section 289 of the Companies Act, 2016.

Before the statements of comprehensive income and statements of financial position of the Group andthe Company were made out, the directors took reasonable steps:

the values attributed to the current assets in the financial statements of the Group and theCompany misleading.

to ensure that any current assets which were unlikely to realise their value as shown in theaccounting records in the ordinary course of business had been written down to an amount whichthey might be expected so to realise.

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Directors’ Report

(cont’d)

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Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

DIRECTORS' REPORT

OTHER STATUTORY INFORMATION (CONT'D)

(c)

(d)

(e) As at the date of this report, there does not exist:

(i)

(ii)

(f) In the opinion of the directors:

(i)

(ii)

SUBSEQUENT EVENTS

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

no item, transaction or event of a material and unusual nature has arisen in the interval betweenthe end of the financial year and the date of this report which is likely to affect substantially theresults of the operations of the Group and the Company for the financial year in which this reportis made.

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

any charge on the assets of the Group and the Company which has arisen since the end of thefinancial year which secures the liabilities of any other person; or

no contingent liability or other liability has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year which will ormay affect the ability of the Group and the Company to meet their obligations as and when theyfall due; and

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

Details of subsequent events are disclosed in Note 33 to the financial statements.

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Directors’ Report

(cont’d)

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ANNUAL REPORT 2020Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

DIRECTORS' REPORT

AUDITORS AND AUDITORS' REMUNERATION

Abdul Rani bin Achmed Abdullah Yahya bin RazaliDirector Director

Selangor Darul Ehsan

Date : 30 October 2020

Details of auditors’ remuneration are disclosed in Note 23 to the financial statements.

Signed on behalf of the Board in accordance with a resolution of the directors dated 30 October 2020.

The auditors, Messrs. Al Jafree Salihin Kuzaimi PLT , have indicated their willingness to accept re-appointment.

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Directors’ Report

(cont’d)

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Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENT BY DIRECTORPURSUANT TO SECTION 251(2) OF THE COMPANIES ACT, 2016

Abdul Rani bin Achmed Abdullah Yahya bin RazaliDirector Director

Selangor Darul Ehsan

Date : 30 October 2020

STATUTORY DECLARATIONPURSUANT TO SECTION 251(1)(b) OF THE COMPANIES ACT, 2016

Subscribed and solemnly declared by the )abovenamed Abdul Rani bin Achmed Abdullah )at Kelana Jaya in Selangor Darul Ehsan )on 30 October 2020 ) Abdul Rani bin Achmed Abdullah

Before me,

Signed on behalf of the Board in accordance with a resolution of the directors dated 30 October 2020.

We, Abdul Rani bin Achmed Abdullah and Yahya bin Razali, being two of the directors of Orion IXL Berhad, do hereby state that in the opinion of the directors, the financial statements are drawn up inaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standardsand the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of thefinancial position of the Group and of the Company as at 30 June 2020 and of their financial performanceand cash flows for the year then ended.

I, Abdul Rani bin Achmed Abdullah, being the director primarily responsible for the financialmanagement of Orion IXL Berhad, do solemnly and sincerely declare that to the best of my knowledgeand belief, the financial statements are correct, and I make this solemn declaration conscientiouslybelieving the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

7

stateMent BY dIrector purSuant to SectIon 251(2) of tHe companIeS act, 2016

statutorY declaratIon purSuant to SectIon 251(B) of tHe companIeS act, 2016

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENT BY DIRECTORPURSUANT TO SECTION 251(2) OF THE COMPANIES ACT, 2016

Abdul Rani bin Achmed Abdullah Yahya bin RazaliDirector Director

Selangor Darul Ehsan

Date : 30 October 2020

STATUTORY DECLARATIONPURSUANT TO SECTION 251(1)(b) OF THE COMPANIES ACT, 2016

Subscribed and solemnly declared by the )abovenamed Abdul Rani bin Achmed Abdullah )at Kelana Jaya in Selangor Darul Ehsan )on 30 October 2020 ) Abdul Rani bin Achmed Abdullah

Before me,

Signed on behalf of the Board in accordance with a resolution of the directors dated 30 October 2020.

We, Abdul Rani bin Achmed Abdullah and Yahya bin Razali, being two of the directors of Orion IXL Berhad, do hereby state that in the opinion of the directors, the financial statements are drawn up inaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standardsand the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of thefinancial position of the Group and of the Company as at 30 June 2020 and of their financial performanceand cash flows for the year then ended.

I, Abdul Rani bin Achmed Abdullah, being the director primarily responsible for the financialmanagement of Orion IXL Berhad, do solemnly and sincerely declare that to the best of my knowledgeand belief, the financial statements are correct, and I make this solemn declaration conscientiouslybelieving the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

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ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T)

Report on the audit of the financial statements

Opinion

Basis for opinion

Independence and other ethical responsibilities

Key Audit Matters

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD

(Incorporated in Malaysia)

In our opinion, the accompanying financial statements give a true and fair view of the financial positionof the Group and the Company as at 30 June 2020, and of their financial performance and their cashflows for the year then ended in accordance with Malaysian Financial Reporting Standards,International Financial Reporting Standards and the requirements of the Companies Act 2016 in

We have audited the financial statements of Orion IXL Berhad, which comprise the statements offinancial position as at 30 June 2020 of the Group and the Company, and statements of profit or lossand other comprehensive income, statements of changes in equity and statements of cash flows of theGroup and the Company for the year then ended, and notes to the financial statements, including asummary of significant accounting policies, as set out on pages 50 to 137.

We conducted our audit in accordance with approved standards on auditing in Malaysia andInternational Standards on Auditing. Our responsibilities under those standards are further described inthe Auditors’ responsibilities for the audit of the financial statements section of our report. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

We are independent of the Group and the Company in accordance with the By-Laws (on ProfessionalEthics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and theInternational Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants(“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key audit matters are those matters that, in our professional judgement, were of most significance inour audit of the financial statements of the Group and the Company for the current year. These matterswere addressed in the context of our audit of the financial statements of the Group and the Company asa whole, and in forming our opinion thereon, and we do not provide a separate opinion on thesematters. For each matter below, our description of how our audit addressed the matter is provided inthat context.

8

inDepenDent auDitors’ report

to tHe memBerS of orIon Ixl BerHad

44

Registration No. 200101019222 (554979-T)

Key Audit Matters (cont'd.)

•

•

•

• We have assessed the adequacy of the keyassumptions disclosure in the Group's financialstatement.

Key Audit Matters

1) Impairment of goodwill and intangible

How our audit addressed the key audit matters

Our procedures included, amongst others:

(Incorporated in Malaysia)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD (CONT'D)

As at 30 June 2020, the Group haveintangible assets which consists of goodwilland intangible assets amounting toRM79,591,956 which represents 66% ofGroup's total assets. The goodwill and theintangible assets were amounting toRM70,198,098 and RM9,393,858respectively.

In view of the significant balances, theinherent uncertainties and the level ofjudgement required by us in evaluating theGroup's assumptions included within thediscounted cash flows, our professional viewthat the impairment of goodwill andintangible assets is a key audit matter.

The Group conducted an impairmentassessment on all of its cash-generating units("CGU") to identify if the recoverable amountis less than the carrying amount, whichindicating that the goodwill and intangibleassets may be impaired. The Group determinethe recoverable amount of CGUs using thevalue in use model involving cash flowsprojections and key assumptions from themanagement which include revenue growth,long term growth rate and discount rate.

We have identified the key assumptions andassessed the reasonableness of the key assumptionsby obtaining the supporting documents for theunderlying key assumptions;

We have tested the mathematical accuracy of thediscounted cash flow in determining the recoverableamount and compare it against the carrying amountof the goodwill and intangible assets; and

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of thefinancial statements section of our report, including in relation to these matters. Accordingly, our auditincluded the performance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures, including the proceduresperformed to address the matters below, provide the basis of our audit opinion on the accompanyingfinancial statements.

We have obtained the discounted cash flow from themanagement to assessed the impairment of thegoodwill and intangible assets;

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Independent Auditors’ Report

To The Members of Orion ixL berhad (cont’d)

45

ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T)

Key Audit Matters (cont'd.)

•

•

•

• We have assessed the adequacy of the keyassumptions disclosure in the Group's financialstatement.

How our audit addressed the key audit matters

Our procedures included, amongst others:

1) Impairment of goodwill and intangibleassets (cont'd)

During the year, there were no impairmentcharged to profit or loss of the Group inrespects of the CGU where its recoverableamount is higher than the carrying amountduring the year.

In view of the significant balances, theinherent uncertainties and the level ofjudgement required by us in evaluating theGroup's assumptions included within thediscounted cash flows, our professional viewthat the impairment of financial asset carriedat amortised cost is a key audit matter.

The Group conducted an impairmentassessment on all of its cash-generating units("CGU") to identify if the recoverable amountis less than the carrying amount, whichindicating that the goodwill and intangibleassets may be impaired. The Group determinethe recoverable amount of CGUs using thevalue in use model involving cash flowsprojections and key assumptions from themanagement which include revenue growth,long term growth rate and discount rate.

We have obtained the discounted cash flow from themanagement to assessed the impairment of thegoodwill and intangible assets;

We have identified the key assumptions andassessed the reasonableness of the key assumptionsby obtaining the supporting documents for theunderlying key assumptions;

We have tested the mathematical accuracy of thediscounted cash flow in determining the recoverableamount and compare it against the carrying amountof the goodwill and intangible assets; and

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD (CONT'D)

(Incorporated in Malaysia)

Key Audit Matters

2) Impairment of financial assets carried atamortised cost

During the year, the Group disposed theirshares in investment in an associates and theGroup also has lost the significant influenceover the associates which resulted theinvestment in an associates to be a financialasset carried at amortised cost whichamounting to RM9,999,980. The balancerepresents 8% of Group's total assets.

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Independent Auditors’ Report

To The Members of Orion ixL berhad (cont’d)

46

Registration No. 200101019222 (554979-T)

Key Audit Matters (cont'd.)

Information other than the financial statements and auditors’ report thereon

Responsibilities of the directors for the financial statements

If, based on the work we have performed on the other information that we obtained prior to the date ofthis auditors’ report, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.

When we read the Annual Report 2020, if we conclude that there is a material misstatement therein, weare required to communicate the matter to the directors of the Company and take appropriate action.

The directors of the Company are responsible for the preparation of financial statements of the Groupand the Company that give a true and fair view in accordance with Malaysian Financial ReportingStandards, International Financial Reporting Standards and the requirements of the Companies Act2016 in Malaysia. The directors are also responsible for such internal control as the directors determineis necessary to enable the preparation of financial statements of the Group and the Company that arefree from material misstatement, whether due to fraud or error.

The directors of the Group and the Company are responsible for the other information. The otherinformation comprises the Directors’ Report, but does not include the financial statements of the Groupand of the Company and our auditors’ report thereon, which we obtained prior to the date of thisauditors’ report, and the Annual Report 2020, which is expected to be made available to us after thedate of this auditors’ report.Our opinion on the financial statements of the Group and the Company does not cover the otherinformation and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and the Company, ourresponsibility is to read the other information identified above and, in doing so, consider whether theother information is materially inconsistent with the financial statements of the Group and theCompany or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Key Audit Matters How our audit addressed the key audit matters

2) Impairment of financial assets carried atamortised cost (cont'd)

During the year, there were no impairmentcharged to profit or loss of the Group inrespects of the CGU where its recoverableamount is higher than the carrying amountduring the year.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD (CONT'D)

(Incorporated in Malaysia)

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Independent Auditors’ Report

To The Members of Orion ixL berhad (cont’d)

47

ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T)

Responsibilities of the directors for the financial statements (cont'd)

Auditors’ responsibilities for the audit of the financial statements

•

•

•

In preparing the financial statements of the Group and the Company, the directors are responsible forassessing the Group’s and the Company’s ability to continue as a going concern, disclosing, asapplicable, matters related to going concern and using the going concern basis of accounting unless thedirectors either intend to liquidate the Group and the Company or to cease operations, or have norealistic alternative but to do so.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD (CONT'D)

(Incorporated in Malaysia)

Our objectives are to obtain reasonable assurance about whether the financial statements of the Groupand the Company as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with approved standards on auditing inMalaysia and International Standards on Auditing will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and InternationalStandards on Auditing, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements of the Group andthe Company, whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Group’s and the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the directors.

12

Independent Auditors’ Report

To The Members of Orion ixL berhad (cont’d)

48

Registration No. 200101019222 (554979-T)

Auditors’ responsibilities for the audit of the financial statements (cont'd.)

•

•

•

Report on Other Legal and Regulatory Requirements

We also provide the directors with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, related

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that thesubsidiaries of which we have not acted as auditors, are disclosed in Note 7 to the financial statements.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD (CONT'D)

We communicate with the directors regarding, among other matters, the planned scope and timing ofthe audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.

Evaluate the overall presentation, structure and content of the financial statements of the Group andthe Company, including the disclosures, and whether the financial statements of the Group and ofthe Company represent the underlying transactions and events in a manner that achieves fair

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the financial statements of the Group.We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

(Incorporated in Malaysia)

From the matters communicated with the directors, we determine those matters that were of mostsignificance in the audit of the financial statements of the Group and the Company for the current yearand are therefore the key audit matters. We describe these matters in our auditors’ report unless law orregulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s and the Company’s ability to continue asa going concern. If we conclude that a material uncertainty exists, we are required to draw attentionin our auditors’ report to the related disclosures in the financial statements of the Group and of theCompany or, if such disclosures are inadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditors’ report. However, future events orconditions may cause the Group and the Company to cease to continue as a going concern.

13

Independent Auditors’ Report

To The Members of Orion ixL berhad (cont’d)

49

ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T)

Other matters

AL JAFREE SALIHIN KUZAIMI PLT SIRI BIN SANYUTAF: 1522 No. 03078/07/2021 JCHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT

Dated : 30 October 2020

Selangor, Malaysia

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORION IXL BERHAD (CONT'D)

(Incorporated in Malaysia)

The financial statements of the Group and the Company for the year ended 30 June 2019 were auditedby another auditors whom have expressed an unmodified opinion on 31 October 2019.

This report is made solely to the members of the Company, as a body, in accordance with Section 266of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility toany other person for the content of this report.

14

Independent Auditors’ Report

To The Members of Orion ixL berhad (cont’d)

50

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2020

Note2020 2019 2020 2019RM RM RM RM

Assets

Non-Current Assets Property, plant and equipment 4 1,743,809 2,165,165 1,722,646 2,153,216 Right-of-use assets 5 700,212 - 694,589 - Intangible assets 6 9,393,858 5,040,713 - - Investments in subsidiaries 7 - - 73,020,000 73,020,000 Investments in associates 8 - 9,717,406 - - Other investments 9 10,082,649 77,893 82,669 77,893 Goodwill 10 70,198,098 70,198,098 - -

92,118,626 87,199,275 75,519,904 75,251,109

Current assetsTrade and other receivables 11 23,724,678 27,384,530 32,241,438 33,348,887 Contract assets 12 3,658,638 2,908,935 - - Cash and bank balances 13 381,576 895,136 296,948 855,731

27,764,892 31,188,601 32,538,386 34,204,618

Total assets 119,883,518 118,387,876 108,058,290 109,455,727

Equity and liabilities

Equity attributable to owners of the CompanyShare capital 14 113,303,390 112,504,040 113,303,390 112,504,040 Reserves 15 21,175,131 21,194,625 21,548,940 21,544,164 Accumulated losses (33,756,546) (29,705,399) (39,091,875) (36,722,752) Equity attributable to owners of the Company 100,721,975 103,993,266 95,760,455 97,325,452 Non-controlling interests (484,211) (483,614) - - Total equity 100,237,764 103,509,652 95,760,455 97,325,452

Group Company

15

stateMents of fInancIal poSItIon aS at 30 June 2020

51

ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2020 (CONT'D)

Note 2020 2019 2020 2019RM'000 RM'000 RM'000 RM'000

Equity and liabilities (cont'd)

Current liabilities

Trade and other payables 16 7,603,750 4,268,159 1,356,993 1,915,630 Provisions and contingent consideration payable 17 11,310,065 10,610,065 10,214,645 10,214,645 Lease liability 18 154,805 - 149,063 -

19,068,620 14,878,224 11,720,701 12,130,275

Net current assets 8,696,272 16,310,377 20,817,685 22,074,343

Non-current liabilitiesLease liability 18 577,134 - 577,134 -

577,134 - 577,134 - Total liabilities 19,645,754 14,878,224 12,297,835 12,130,275

Total equity and liabilities 119,883,518 118,387,876 108,058,290 109,455,727

The accompanying accounting policies and explanatory information form an integral part of thefinancial statements.

Group Company

16

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2020 (CONT'D)

Note 2020 2019 2020 2019RM'000 RM'000 RM'000 RM'000

Equity and liabilities (cont'd)

Current liabilities

Trade and other payables 16 7,603,750 4,268,159 1,356,993 1,915,630 Provisions and contingent consideration payable 17 11,310,065 10,610,065 10,214,645 10,214,645 Lease liability 18 154,805 - 149,063 -

19,068,620 14,878,224 11,720,701 12,130,275

Net current assets 8,696,272 16,310,377 20,817,685 22,074,343

Non-current liabilitiesLease liability 18 577,134 - 577,134 -

577,134 - 577,134 - Total liabilities 19,645,754 14,878,224 12,297,835 12,130,275

Total equity and liabilities 119,883,518 118,387,876 108,058,290 109,455,727

The accompanying accounting policies and explanatory information form an integral part of thefinancial statements.

Group Company

16

Statements of Financial Position

As At 30 June 2020 (cont’d)

52

Registration No. 200101019222 (554979-T)

ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Note 2020 2019 2020 2019RM RM RM RM'000

Revenue 19 8,653,024 5,697,371 - 1,100,000 Other operating income 20 25,600 2,237,767 7,300 59,695 Purchase and other direct costs (4,179,632) (1,352,029) - (719,216) Directors remuneration 21 (912,233) (804,233) (420,024) (576,771) Depreciation of property, plant and equipment (485,311) (193,500) (478,050) (182,459) Depreciation of right of use assets (199,770) - (177,281) - Amortisation of intangible assets (617,055) (610,108) - (62,527) Staff costs 22 (754,599) (657,366) (382,769) (563,657) Other operating expenses 23 (6,064,457) (2,668,635) (1,110,534) (1,512,449) (Loss)/profit from operations (4,534,433) 1,649,267 (2,561,358) (2,457,384) Interest income 264,979 280,724 264,979 280,724 Finance costs 24 (61,395) - (59,315) - Share of results of associates 375,287 (292,594) - - (Loss)/profit before tax (3,955,562) 1,637,397 (2,355,694) (2,176,660) Income tax expense 25 - (111) - - (Loss)/profit for the year (3,955,562) 1,637,286 (2,355,694) (2,176,660)

Other comprehensive income:Foreign currency translation (24,270) (15,149) - - Fair value changes on other investments 4,776 (26,778) 4,776 (26,778) Total comprehensive (loss)/income for the year (3,975,056) 1,595,359 (2,350,918) (2,203,438)

(Loss)/profit attributable to:Owners of the parent (3,954,965) 1,646,538 (2,355,694) (2,176,660) Non-controlling interests (597) (9,252) - - (3,955,562) 1,637,286 (2,355,694) (2,176,660)

Total comprehensive (loss)/profit attributable to:Owners of the parent (3,974,459) 1,604,611 (2,350,918) (2,203,438) Non-controlling interests (597) (9,252) - - (3,975,056) 1,595,359 (2,350,918) (2,203,438)

(Loss)/profit per share attributable to owners of the parent (sen per share):

Basic/diluted 26 (0.55) 0.27

The accompanying accounting policies and explanatory information form an integral part of the financialstatements.

Group Company

17

Registration No. 200101019222 (554979-T)

ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Note 2020 2019 2020 2019RM RM RM RM'000

Revenue 19 8,653,024 5,697,371 - 1,100,000 Other operating income 20 25,600 2,237,767 7,300 59,695 Purchase and other direct costs (4,179,632) (1,352,029) - (719,216) Directors remuneration 21 (912,233) (804,233) (420,024) (576,771) Depreciation of property, plant and equipment (485,311) (193,500) (478,050) (182,459) Depreciation of right of use assets (199,770) - (177,281) - Amortisation of intangible assets (617,055) (610,108) - (62,527) Staff costs 22 (754,599) (657,366) (382,769) (563,657) Other operating expenses 23 (6,064,457) (2,668,635) (1,110,534) (1,512,449) (Loss)/profit from operations (4,534,433) 1,649,267 (2,561,358) (2,457,384) Interest income 264,979 280,724 264,979 280,724 Finance costs 24 (61,395) - (59,315) - Share of results of associates 375,287 (292,594) - - (Loss)/profit before tax (3,955,562) 1,637,397 (2,355,694) (2,176,660) Income tax expense 25 - (111) - - (Loss)/profit for the year (3,955,562) 1,637,286 (2,355,694) (2,176,660)

Other comprehensive income:Foreign currency translation (24,270) (15,149) - - Fair value changes on other investments 4,776 (26,778) 4,776 (26,778) Total comprehensive (loss)/income for the year (3,975,056) 1,595,359 (2,350,918) (2,203,438)

(Loss)/profit attributable to:Owners of the parent (3,954,965) 1,646,538 (2,355,694) (2,176,660) Non-controlling interests (597) (9,252) - - (3,955,562) 1,637,286 (2,355,694) (2,176,660)

Total comprehensive (loss)/profit attributable to:Owners of the parent (3,974,459) 1,604,611 (2,350,918) (2,203,438) Non-controlling interests (597) (9,252) - - (3,975,056) 1,595,359 (2,350,918) (2,203,438)

(Loss)/profit per share attributable to owners of the parent (sen per share):

Basic/diluted 26 (0.55) 0.27

The accompanying accounting policies and explanatory information form an integral part of the financialstatements.

Group Company

17

stateMents of profit or loss and compreHenSIve Income for tHe fInancIal year 30 June 2020

53

ANNUAL REPORT 2020

Regi

strat

ion

No. 2

0010

1019

222 (

5549

79-T

)

ORI

ON

IXL

BERH

AD

(Inc

orpo

rate

d in

Mal

aysia

)

STAT

EMEN

TS O

F CH

ANG

ES IN

EQ

UITY

FOR

THE

FINA

NCIA

L YE

AR E

NDED

31 D

ECEM

BER

2019

Non-

Shar

eW

arra

ntEx

chan

ge

Fair

valu

eAc

cum

ulat

edco

ntro

lling

Tota

lca

pita

lre

serv

ere

serv

ere

serv

elo

sses

Tota

lin

tere

stseq

uity

RMRM

RMRM

RMRM

RMRM

Gro

up

At 1

July

2018

95,63

7,906

21

,569,0

85

(334

,390)

36

,029

(3

1,351

,937)

85

,556,6

93

(474

,362)

85,08

2,331

Tran

sacti

on w

ith ow

ners

- Priv

ate pl

acem

ent

17,85

6,300

-

-

-

-

17,85

6,300

-

17

,856,3

00

- Sha

re is

suan

ce ex

pens

e(9

90,16

6)

(9

90,16

6)

-

(9

90,16

6)

To

tal tr

ansa

ction

with

owne

rs16

,866,1

34

-

-

-

-

16

,866,1

34

-

16,86

6,134

Recla

ssifi

catio

n adj

ustm

ent r

elatin

g to

the

disp

osal

of bo

nd in

vestm

ent

des

igna

ted at

FVO

CI-

-

-

(3

4,172

)

-

(3

4,172

)

-

(34,1

72)

Total

comp

rehe

nsiv

e inc

ome/

(lo

ss) f

or th

e yea

r-

-

(1

5,149

)

(2

6,778

)

1,646

,538

1,604

,611

(9,25

2)

1,595

,359

At 30

June

2019

/ 1 Ju

ly 20

1911

2,504

,040

21

,569,0

85

(349

,539)

(2

4,921

)

(29,7

05,39

9)

103,9

93,26

6

(483

,614)

103,5

09,65

2

Effe

cts of

adop

tion o

f MFR

S 16

-

-

-

-

(1

3,489

)

(13,4

89)

-

(1

3,489

)

11

2,504

,040

21

,569,0

85

(349

,539)

(2

4,921

)

(29,7

18,88

8)

103,9

79,77

7

(483

,614)

103,4

96,16

3

Tran

sacti

on w

ith ow

ners

- Priv

ate pl

acem

ent

799,3

50

-

-

-

-

79

9,350

-

79

9,350

Total

tran

sacti

on w

ith ow

ners

Reve

rsal o

f sha

re of

resu

lt fr

om di

spos

al of

asso

ciates

-

-

-

-

(8

2,693

)

(82,6

93)

-

(8

2,693

)

To

tal co

mpre

hens

ive l

oss f

or th

e yea

r-

-

(2

4,270

)

4,7

76

(3

,954,9

65)

(3,97

4,459

)

(5

97)

(3,97

5,056

)

At 30

June

2020

113,3

03,39

0

21,56

9,085

(3

73,80

9)

(20,1

45)

(3

3,756

,546)

10

0,721

,975

(4

84,21

1)

10

0,237

,764

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18

stateMents of cHange equIty

for tHe fInancIal year 30 June 2020

54

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Share Warrant Fair value Accumulated Totalcapital reserve reserve losses equity

RM RM RM RM RMCompany

At 1 July 2018 95,637,906 21,569,085 36,029 (34,546,092) 82,696,928

Transaction with owners- Private placement 17,856,300 - - - 17,856,300 - Share issuance expense (990,166) - - - (990,166) Total transaction with owners 16,866,134 - - - 16,866,134

Reclassification adjustment relating to the disposal of bond investment designated at FVOCI - - (34,172) - (34,172) Total comprehensive income/ (loss) for the year - - (26,778) (2,176,660) (2,203,438) At 30 June 2019/ 1 July 2019 112,504,040 21,569,085 (24,921) (36,722,752) 97,325,452

Effects of adoption of MFRS 16 - - - (13,429) (13,429) 112,504,040 21,569,085 (24,921) (36,736,181) 97,312,023

Transaction with owners- Private placement 799,350 - - - 799,350 Total transaction with owners

Total comprehensive loss for the year - - 4,776 (2,355,694) (2,350,918) At 30 June 2020 113,303,390 21,569,085 (20,145) (39,091,875) 95,760,455

------------------ Attributable to owners of the Company ------------------------------------------- Non-distributable --------------------------

19

Statements of Change Equity

For The Financial Year 30 June 2020 (cont’d)

55

ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

2020 2019 2020 2019RM RM RM RM

Operating activities

(Loss)/profit before taxation (3,955,562) 1,637,397 (2,355,694) (2,176,660)

Adjustments for:Allowance for impairment losses on

trade and other receivables 3,901,846 222,902 - - Reversal of impairment losses on

trade receivables (1,500) (1,432,617) - - Amortisation of intangible assets 617,055 610,108 - 62,527 Finance costs on right-of-use assets 61,395 - 59,315 - Depreciation of property, plant

and equipment 485,311 193,500 478,050 182,459 Depreciation of right-of-use assets 199,770 - 177,281 - Gain on disposal of investment in bond - (58,605) - (58,605) Interest income (264,979) (280,724) (264,979) (280,724) Provision/(reversal) of liquidated

ascertained damages 700,000 (700,000) - - Share of results of associates (375,287) 292,594 - - Total adjustments 5,323,611 (1,152,842) 449,667 (94,343)

Operating cash flows beforechanges in working capital 1,368,049 484,555 (1,906,027) (2,271,003)

Group Company

20

stateMents of caSH flowS

for tHe fInancIal year 30 June 2020

56

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020 (CONT'D)

2020 2019 2020 2019RM RM RM RM

Operating activities (cont'd)

Changes in working capital:Contract assets 749,703 (960,407) - (1,208,477) Trade and other receivables (3,659,852) (3,048,666) (1,107,449) (1,094,143) Trade and other payables 5,330,599 (223,249) 1,031,344 (12,541,637) Deferred income - (41,357) - (41,357) Total changes in working capital 1,670,747 (4,273,679) (76,105) (14,885,614)

Cash flows from/(used in) operations 3,038,796 (3,789,124) (1,982,132) (17,156,617) Taxes paid - (111) - - Net cash flows from operating

activities 3,038,796 (3,789,235) (1,982,132) (17,156,617)

Investing activities

Addition to intangible assets (4,970,200) (3,347,128) - - Increase in investment in associate - (10,010,000) - - Proceeds from disposal of shares in associate 10,000 - - - Interest received 264,979 280,724 264,979 280,724 Net outflow on acquisition of subsidiary - (9,999) - (20,000) Proceeds from disposal of

investment in bond fund - 1,481,291 - 1,481,291 Purchase of property, plant and

equipment (62,985) (2,211,740) (47,480) (2,208,271) Receipt from finance lease receivable - 91,836 - - Net cash flows (used in)/ from investing

activities (4,758,206) (13,725,016) 217,499 (466,256)

Group Company

21

Statements of Cash Flows

For The Financial Year 30 June 2020 (cont’d)

57

ANNUAL REPORT 2020

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020 (CONT'D)

2020 2019 2020 2019RM RM RM RM

Financing activities

Proceeds from issuance of shares by wayof private placement , net of share issueexpenses 799,350 16,866,134 799,350 16,866,134

Advances from directors 406,500 17,162 406,500 - Interest paid - (91,836) - - Net cash flows generated from

financing activities 1,205,850 16,791,460 1,205,850 16,866,134

Net decrease in cash and cash equivalents (513,560) (722,791) (558,783) (756,739)

Effect of exchange rate changes on cash and cash equivalents - (15,222) - -

Cash and cash equivalents at 1 July 895,136 1,633,149 855,731 1,612,470 Cash and cash equivalents at 30 June (Note 13) 381,576 895,136 296,948 855,731

The accompanying accounting policies and explanatory information form an integral part of the financialstatements.

Group Company

22

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020 (CONT'D)

2020 2019 2020 2019RM RM RM RM

Financing activities

Proceeds from issuance of shares by wayof private placement , net of share issueexpenses 799,350 16,866,134 799,350 16,866,134

Advances from directors 406,500 17,162 406,500 - Interest paid - (91,836) - - Net cash flows generated from

financing activities 1,205,850 16,791,460 1,205,850 16,866,134

Net decrease in cash and cash equivalents (513,560) (722,791) (558,783) (756,739)

Effect of exchange rate changes on cash and cash equivalents - (15,222) - -

Cash and cash equivalents at 1 July 895,136 1,633,149 855,731 1,612,470 Cash and cash equivalents at 30 June (Note 13) 381,576 895,136 296,948 855,731

The accompanying accounting policies and explanatory information form an integral part of the financialstatements.

Group Company

22

Statements of Cash Flows

For The Financial Year 30 June 2020 (cont’d)

58

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

1. CORPORATE INFORMATION

Sri Hartamas,

2. BASIS OF PREPARATION

2.1 Basis of preparation

Section U2, 50480 Kuala Lumpur,40510 Shah Alam, Selangor Wilayah Persekutuan, Malaysia

The Company is principally engaged in the provision of computerised maintenance managementsystems and other information technology service such as systems integration, support services andtraining. The principal activities of the subsidiaries are set out in Note 7 to the financial statements.

The consolidated financial statements of the Company as at and for the financial year ended 30 June2020 comprise the Company and its subsidiaries (together referred to as the “Group” and individuallyreferred to as “Group entities”).

ORION IXL BERHAD is a public limited liability company, incorporated and domiciled in Malaysiaand is listed on the ACE of Bursa Malaysia Securities Berhad. The addresses of the principal place ofbusiness and registered office of the Company are as follows:

Principal place of business Registered office

Level 5, Block B, No.2-1, Jalan Sri Hartamas 8, Dataran PHB Saujana Resort,

The financial statements of the Group and of the Company have been prepared in accordancewith Malaysian Financial Reporting Standards ("MFRS"), International Financial ReportingStandards ("IFRS") and the requirements of the Companies Act 2016 in Malaysia.

The financial statements have been prepared on the historical cost basis except as disclosed inthe accounting policies below.

The financial statements are presented in Ringgit Malaysia ("RM"), except when otherwiseindicated.

23

notes to the fInancIal StatementS 30 June 2020

59

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

2.2 Changes in accounting policies

Effective for annual periodsDescriptions beginning on or after

MFRS 9 Prepayment Features with Negative Compensation(Amendments to MFRS 9) 1 January 2019

MFRS 16 Leases 1 January 2019MFRS 128 Long-term lnterests in Associates and Joint Venture

(Amendments to MFRS 128) 1 January 2019Annual Improvements to MFRS Standards 2015 - 2017 cycle 1 January 2019MFRS 119 Plan Amendment, Curtailment or Settlement

(Amendments to MFRS 119) 1 January 2019IC Interpretation 23: Uncertainty over Income Tax Treatments 1 January 2019

MFRS 16 Leases

MFRS 16 has replaced MFRS 117 Leases, IC Interpretation 4 Determining whether anArrangement contains a Lease, IC Interpretation 115 Operating Lease-Incentives and ICInterpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of aLease. MFRS 16 sets out the principles for the recognition, measurement, presentation anddisclosure of leases and requires lessees to account for all leases under a single on-balancesheet model similar to the accounting for finance leases under MFRS 117.

At the commencement date of a lease, a lessee will recognise a liability to make lease paymentsand an asset representing the right to use the underlying asset during the lease term. Subject tocertain exceptions, the right-of-use asset is initially measured at cost and subsequentlymeasured at cost, less accumulated depreciation and impairment losses, adjusted for anyremeasurement of the lease liability. The lease liability is initially measured at present value ofthe lease payments that are not paid at that date. Subsequently, the lease liability is adjusted forinterest and lease payments, as well as the impact of lease modifications.

The accounting policies adopted are consistent with those of the previous financial year exceptas follows:

On 1 July 2019, the Group and the Company adopted the following new and amended MFRSand Interpretations Committee (“IC”) Interpretations and Annual Improvement to MFRSmandatory for annual financial periods beginning on or after 1 July 2019.

The adoption of the above new and amended MFRS, IC interpretations and AnnualImprovements to MFRS did not have any material effect on the financial performance orposition of the Group and the Company except as discussed below:

24

60

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

2.2 Changes in accounting policies (cont'd)

MFRS 16 Leases (cont'd)

2.3 Basis of measurement

2.4 Functional and presentation currency

2.5 Use of estimates and judgements

Classification of cash flows has also been affected as operating lease payments under MFRS117 are presented as operating cash flows, whereas under MFRS 16, the lease payments will besplit into a principal (which will be presented as financing cash flows) and an interest portion(which will be presented as operating cash flows).

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS117. Lessors will continue to classify all leases using the same classification principle as inMFRS 117 and distinguish between two types of leases: operating and finance leases. MFRS 16also requires lessees and lessors to make more extensive disclosures than under MFRS 117.

The Group adopted MFRS 16 using the modified retrospective approach and the Group alsoelected to use the recognition exemptions for lease contracts that, at the commencement date,have a lease term of 12 months or less and do not contain apurchase option (short-term leases),and lease contracts for which the underlying asset is of low value (low-value assets). TheGroup has leases of certain office equipment (i.e., printing and photocopying machines) that areconsidered of low value.

The impact of MFRS 16 to the Group and the Company are as disclosed in Note 5 and 18.

The financial statements have been prepared on the historical cost basis other than as disclosedin Notes 3 to the financial statements.

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’sfunctional currency. All financial information is presented in RM unless otherwise stated.

The preparation of the financial statements in conformity with MFRS requires management tomake judgements, estimates and assumptions that affect the application of accounting policiesand the reported amounts of assets, liabilities, income and expenses. Actual results may differfrom these estimates.

25

61

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

2.5 Use of estimates and judgements (cont'd)

(i)

(ii)

An impairment loss is recognised for the amount by which the asset's or cash- generatingunit's carrying amount exceed its recoverable amount. To determine the recoverableamount, management estimates expected future cash flows from each cash generatingunits and determines a suitable interest rate in order to calculate the present value ofthose cash flows.

In the process of measuring expected future cash flow, management makes assumptionsabout future operating results. These assumptions relate to future events andcircumstance. The actual results may vary, and may cause significant adjustments to theGroup's and Company's assets within the next financial year.

In most cases, determining the applicable discount rate involves estimating theappropriate adjustment to market risk and the appropriate adjustment to asset- specificrisk factors.

Impairment on receivables

The Group and the Company assess at each reporting date whether there is any objectiveevidence that a financial asset is impaired. To determine whether there is objectiveevidence of impairment, the Group and the Company consider factors such as theprobability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cashflows are estimated based on historical loss experience for assets with similar credit riskcharacteristics.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognised in the period in which the estimates are revised and in anyfuture periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applyingaccounting policies that have significant effect on the amounts recognised in the financialstatements other than those disclosed below:

Impairment of intangible assets

26

62

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

2.5 Use of estimates and judgements (Cont'd.)

(iii)

(iv)

(v)

3. SIGNIFICANT ACCOUNTING POLICIES

(i) financial instruments;(ii) revenue recognition; and(iii) impairment losses of financial instruments

The accounting policies set out below have been applied consistently to the periods presented in thesefinancial statements and have been applied consistently by Group entities, unless otherwise stated.

Arising from the adoption of MFRS 15, Revenue from Contracts with Customers and MFRS 9,Financial Instruments , there are changes to the accounting policies of:

as compared to those adopted in previous financial statements. No significant financial impact onadoptions of MFRS 15 and MFRS 9 on the Group's and the Company's financial statements.

Contract's revenue recognition

The Group recognises project development revenue and expenses in profit or loss byusing the stage of completion method. The stage of completion is determined byproportion of contract costs incurred for work performed to date to the estimated totalcontract costs. Significant judgement is required in determining the stage of completion,the extent of the estimated total revenue and costs, as well as recoverability of the projectdevelopment. In making the judgement, the Group evaluates based on past experience,external economic factors and directors' judgement. Impairment of goodwill on consolidation

Goodwill is tested for impairment annually and at other times when such indicators exist.This requires an estimation of the higher of value-in-use and fair value less cost to sell ofthe cash-generating units to which goodwill is allocated.

Impairment of an associate

The Group performed impairment test on the carrying amount of associates at the end ofeach reporting period or when there are indications of impairment. The recoverableamount of the associate is assessed by value-in-use which is based on estimated futurediscounted cash flow.

27

63

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

3.1 Basis of consolidation

(i) Subsidiaries

(ii) Business combination

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus•

•

Subsidiaries are entities, including structured entities, controlled by the Company. Thefinancial statements of subsidiaries are included in the consolidated financial statementsfrom the date that control commences until the date that control ceases. The Group controls an entity when it is exposed, or has rights, to variable returns from itsinvolvement with the entity and has the ability to affect those returns through its powerover the entity. Potential voting rights are considered when assessing control only whensuch rights are substantive. The Group also considers it has de facto power over aninvestee when, despite not having the majority of voting rights, it has the current abilityto direct the activities of the investee that significantly affect the investee’s return.

Investments in subsidiaries are measured in the Company’s statement of financialposition at cost less any impairment losses, unless the investment is classified as held forsale or distribution. The cost of investment includes transaction costs.

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

Business combinations are accounted for using the acquisition method from theacquisition date, which is the date on which control is transferred to the Group.

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:

if the business combination is achieved in stages, the fair value of the existing equityinterest in the acquiree; lessthe net recognised amount (generally fair value) of the identifiable assets acquiredand liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profitor loss.

For each business combination, the Group elects whether it measures the non- controllinginterests in the acquiree either at fair value or at the proportionate share of the acquiree’sidentifiable net assets at the acquisition date.

28

64

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.1 Basis of consolidation (Cont'd.)

(iii) Loss of control

(iv) Associates

(v) Transactions eliminated on consolidation

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilitiesof the former subsidiary, any non-controlling interests and the other components ofequity related to the former subsidiary from the consolidated statement of financialposition. Any surplus or deficit arising on the loss of control is recognised in profit orloss. If the Group retains any interest in the former subsidiary, then such interest ismeasured at fair value at the date that control is lost. Subsequently, it is accounted for asan equity accounted investee or as a financial asset depending on the level of influenceretained.

Associates are entities, including unincorporated entities, in which the Group hassignificant influence, but not control, over the financial and operating policies.

Investments in associates are accounted for in the consolidated financial statements usingthe equity method less any impairment losses, unless it is classified as held for sale ordistribution. The cost of the investment includes transaction costs. The consolidatedfinancial statements include the Group's share of the profit or loss and othercomprehensive income of the associates, after adjustments if any, to align the accountingpolicies with those of the Group, from the date that significant influence commencesuntil the date that significant influence ceases.

When the Group's share of losses exceeds its interest in an associate, the carrying amountof that interest including any long-term investments is reduced to zero, and therecognition of further losses is discontinued except to the extent that the Group has anobligation or has made payments on behalf of the associate.

Intra-group balances and transactions, and any unrealised income and expenses arisingfrom intra-group transactions, are eliminated in preparing the consolidated financialstatements.

Unrealised profits and losses arising from transactions with equity-accounted associatesare eliminated against the investment to the extent of the Group’s interest in theinvestees. Unrealised losses are eliminated in the same way as unrealised gains, but onlyto the extent that there is no evidence of an impairment.

29

65

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.1 Basis of consolidation (Cont'd.)

(vi) Non-controlling interests

(vii) Goodwill on consolidation

3.2 Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies ofGroup entities at exchange rates at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the end of thereporting period are retranslated to the functional currency at the exchange rate at thatdate.

Non-controlling interests at the end of the reporting period, being the equity in asubsidiary not attributable directly or indirectly to the equity holders of the Company, arepresented in the consolidated statement of financial position and statement of changes inequity within equity, separately from equity attributable to the owners of the Company.Non-controlling interests in the results of the Group is presented in the consolidatedstatement of profit or loss and other comprehensive income as an allocation of the profitor loss and the comprehensive income for the year between non-controlling interests andthe owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficitbalance.

Goodwill is measured at cost less accumulated impairment losses, if any. The carryingvalue of goodwill is reviewed for impairment annually or more frequently if events orchanges in circumstances indicate that the carrying amount may be impaired. Theimpairment value of goodwill is recognised immediately in profit or loss. An impairmentloss 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 considerationtransferred in the business combination, the amount of non- controlling interestsrecognised 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 thedate of acquisition is recorded as goodwill.

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

30

66

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.2 Foreign currency (Cont'd.)

(i) Foreign currency transactions (Cont'd.)

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

Non-monetary assets and liabilities denominated in foreign currencies are not retranslatedat the end of the reporting date, except for those that are measured at fair value areretranslated to the functional currency at the exchange rate at the date that the fair valuewas determined.

Foreign currency differences arising on retranslation are recognised in profit or loss,except for differences arising on the retranslation of equity instruments where they aremeasured at fair value through other comprehensive income or a financial instrumentdesignated as a cash flow hedge, which are recognised in other comprehensive income.

In the consolidated financial statements, when settlement of a monetary item receivablefrom or payable to a foreign operation is neither planned nor likely to occur in theforeseeable future, foreign exchange gains or losses arising from such a monetary itemare considered to form part of a net investment in a foreign operation and are recognisedin other comprehensive income, and are presented in the foreign currency translationreserve (“FCTR”) in equity.

The assets and liabilities of operations denominated in functional currencies other thanRM, including goodwill and fair value adjustments arising on acquisition, are translatedto RM at exchange rates at the end of the reporting period. The income and expenses offoreign operations, excluding foreign operations in hyperinflationary economies, aretranslated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income andaccumulated in the FCTR in equity. However, if the operation is a non- wholly ownedsubsidiary, then the relevant proportionate share of the translation difference is allocatedto the non-controlling interests. When a foreign operation is disposed of such thatcontrol, significant influence or joint control is lost, the cumulative amount in the FCTRrelated to that foreign operation is reclassified to profit or loss as part of the gain or losson disposal.

31

67

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.2 Foreign currency (Cont'd.)

(ii)

3.3 Financial instruments

(i) Recognition and initial measurement

An embedded derivative is recognised separately from the host contract where the hostcontract is not a financial asset, and accounted for separately if, and only if, thederivative is not closely related to the economic characteristics and risks of the hostcontract and the host contract is not measured at fair value through profit or loss. Thehost contract, in the event an embedded derivative is recognised separately, is accountedfor in accordance with policy applicable to the nature of the host contract.

Financial instrument was recognised initially, at its fair value plus or minus, in the caseof a financial instrument not at fair value through profit or loss, transaction costs thatwere directly attributable to the acquisition or issue of the financial instrument.

Operations denominated in functional currencies other than Ringgit Malaysia(Cont'd.)

When the Group disposes of only part of its interest in a subsidiary that includes aforeign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in anassociate or joint venture that includes a foreign operation while retaining significantinfluence or joint control, the relevant proportion of the cumulative amount is reclassifiedto profit or loss.

Unless specifically disclosed below, the Group and the Company generally applied thefollowing accounting policies retrospectively. Nevertheless, as permitted by MFRS 9,Financial Instruments , the Group and the Company have elected not to restate thecomparatives.

A financial asset or financial liability is recognised in the statement of financial positionwhen, and only when, the Group and the Company becomes a party to the contractualprovisions of the instrument.

A financial asset (unless it is a trade receivable without significant financing component)or a financial liability is initially measured at fair value plus or minus, for an item not atfair value through profit or loss, transaction costs that are directly attributable to itsacquisition or issuance. A trade receivable without a significant financing component isinitially measured at the transaction price.

32

68

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(ii) Financial instrument categories and subsequent measurement

Financial assets

(a) Amortised cost

Categories of financial assets are determined on initial recognition and are notreclassified subsequent to their initial recognition unless the Group and the Companychanges its business model for managing financial assets in which case all affectedfinancial assets are reclassified on the first day of the first reporting period following thechange of the business model.

Amortised cost category comprises financial assets that are held within a businessmodel whose objective is to hold assets to collect contractual cash flows and itscontractual terms give rise on specified dates to cash flows that are solely paymentsof principal and interest on the principal amount outstanding. The financial assetsare not designated as fair value through profit or loss. Subsequent to initialrecognition, these financial assets are measured at amortised cost using the effectiveinterest method. The amortised cost is reduced by impairment losses. Interestincome, foreign exchange gains and losses and impairment are recognised in profitor loss. Any gain or loss on derecognition is recognised in profit or loss.

Interest income is recognised by applying effective interest rate to the gross carryingamount except for credit impaired financial assets where the effective interest rate isapplied to the amortised cost.

33

69

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(ii) Financial instrument categories and subsequent measurement (Cont'd)

Financial assets (Cont'd.)

(b)

(i)

(i)

Fair value through other comprehensive income

Debt investments

Fair value through other comprehensive income category comprises debtinvestment where it is held within a business model whose objective isachieved by both collecting contractual cash flows and selling the debtinvestment, and its contractual terms give rise on specified dates to cash flowsthat are solely payments of principal and interest on the principal amountoutstanding. The debt investment is not designated as at fair value throughprofit or loss. Interest income calculated using the effective interest method,foreign exchange gains and losses and impairment are recognised in profit orloss. Other net gains and losses are recognised in other comprehensive income.On derecognition, gains and losses accumulated in other comprehensive incomeare reclassified to profit or loss.

Interest income is recognised by applying effective interest rate to the grosscarrying amount except for credit impaired financial assets where the effectiveinterest rate is applied to the amortised cost.

Equity investments

This category comprises investment in equity that is not held for trading, andthe Group and the Company irrevocably elect to present subsequent changes inthe investment’s fair value in other comprehensive income. This election ismade on an investment-by- investment basis. Dividends are recognised asincome in profit or loss unless the dividend clearly represents a recovery of partof the cost of investment. Other net gains or losses are recognised in othercomprehensive income. On derecognition, gains and losses accumulated inother comprehensive income are not reclassified to profit or loss.

34

70

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(ii) Financial instrument categories and subsequent measurement (Cont'd)

Financial assets (Cont'd.)

(c)

Financial liabilities

The categories of financial liabilities at initial recognition are as follows:

(a)

Fair value through profit or loss

All financial assets not measured at amortised cost or fair value through othercomprehensive income as described above are measured at fair value through profitor loss. This includes derivative financial assets (except for a derivative that is adesignated and effective hedging instrument). On initial recognition, the Group orthe Company may irrevocably designate a financial asset that otherwise meets therequirements to be measured at amortised cost or at fair value through othercomprehensive income as at fair value through profit or loss if doing so eliminates orsignificantly reduces an accounting mismatch that would otherwise arise.

All financial assets, except for those measured at fair value through profit or loss andequity investments measured at fair value through other comprehensive income, aresubject to impairment assessment.

Financial assets categorised as fair value through profit or loss are subsequentlymeasured at their fair value. Net gains or losses, including any interest or dividendincome, are recognised in the profit or loss.

Fair value through profit or loss

Fair value through profit or loss category comprises financial liabilities that arederivatives (except for a derivative that is a financial guarantee contract or adesignated and effective hedging instrument), contingent consideration in a businesscombination and financial liabilities that are specifically designated into thiscategory upon initial recognition.

On initial recognition, the Group or the Company may irrevocably designate afinancial liability that otherwise meets the requirements to be measured at amortisedcost as at fair value through profit or loss:

35

71

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(ii) Financial instrument categories and subsequent measurement (Cont'd.)

Financial liabilities (Cont'd.)

(a)

(a)

(b)

(c)

(b) Amortised cost

Other financial liabilities not categorised as fair value through profit or loss aresubsequently measured at amortised cost using the effective interest method.

Interest expense and foreign exchange gains and losses are recognised in the profitor loss. Any gains or losses on derecognition are also recognised in the profit or loss.

Fair value through profit or loss (Cont'd.)

if doing so eliminates or significantly reduces an accounting mismatch thatwould otherwise arise;

a group of financial liabilities or assets and financial liabilities is managed andits performance is evaluated on a fair value basis, in accordance with adocumented risk management or investment strategy, and information about thegroup is provided internally on that basis to the Group’s key managementpersonnel; or

if a contract contains one or more embedded derivatives and the hostis not a financial asset within the scope of MFRS 9, where the embeddedderivative significantly modifies the cash flows and separation is notprohibited.

Financial liabilities categorised as fair value through profit or loss are subsequentlymeasured at their fair value with gains or losses, including any interest expense arerecognised in the profit or loss.

For financial liabilities where it is designated as fair value through profit or lossupon initial recognition, the Group and the Company recognise the amount ofchange in fair value of the financial liability that is attributable to change in creditrisk in the other comprehensive income and remaining amount of the change in fairvalue in the profit or loss, unless the treatment of the effects of changes in theliability’s credit risk would create or enlarge an accounting mismatch.

36

72

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(ii) Financial instrument categories and subsequent measurement (Cont'd.)

Financial liabilities (Cont'd.)

(iii) Regular way purchase or sale of financial assets

Trade date accounting refers to:

(a)

(b)

Settlement date accounting refers to:

(a)

(b)

Generally, the Group and the Company applies settlement date accounting unlessotherwise stated for the specific class of asset.

A regular way purchase or sale of financial assets is recognised and derecognised, asapplicable, using trade date or settlement date accounting in the current year.

the recognition of an asset to be received and the liability to pay for it on the tradedate, and

derecognition of an asset that is sold, recognition of any gain or loss on disposal andthe recognition of a receivable from the buyer for payment on the trade date.

the recognition of an asset on the day it is received by the Group and the Company,and

derecognition of an asset and recognition of any gain or loss on disposal on the daythat is delivered by the Group and the Company.

Any change in the fair value of the asset to be received during the period between thetrade date and the settlement date is accounted in the same way as it accounts for theacquired asset.

37

73

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(ii) Financial instrument categories and subsequent measurement (Cont'd.)

Financial liabilities (Cont'd.)

(iv) Financial guarantee contracts

• the amount of the loss allowance; and•

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

Financial guarantees issued are initially measured at fair value. Subsequently, they aremeasured at higher of:

the amount initially recognised less, when appropriate, the cumulative amount ofincome recognised in accordance to the principles of MFRS 15, Revenue fromContracts with Customers .

Liabilities arising from financial guarantees are presented together with other provisions.

38

74

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.3 Financial instruments (Cont'd.)

(v) Derecognition

(vi) Offsetting

3.4 Property, plant and equipment

(i) Recognition and measurement

A financial asset or part of it is derecognised when, and only when, the contractual rightsto the cash flows from the financial asset expire or transferred, or control of the asset isnot retained or substantially all of the risks and rewards of ownership of the financialasset are transferred to another party. On derecognition of a financial asset, the differencebetween the carrying amount of the financial asset and the sum of consideration received(including any new asset obtained less any new liability assumed) is recognised in profitor loss.

A financial liability or a part of it is derecognised when, and only when, the obligationspecified in the contract is discharged, cancelled or expires. A financial liability is alsoderecognised when its terms are modified and the cash flows of the modified liability aresubstantially different, in which case, a new financial liability based on modified terms isrecognised at fair value. On derecognition of a financial liability, the difference betweenthe carrying amount of the financial liability extinguished or transferred to another partyand the consideration paid, including any non-cash assets transferred or liabilitiesassumed, is recognised in profit or loss.

Financial assets and financial liabilities are offset and the net amount presented in thestatements of financial position when, and only when, the Group and the Companycurrently has a legally enforceable right to set off the amounts and it intends either tosettle them on a net basis or to realise the asset and liability simultaneously.

Items of property, plant and equipment are measured at cost less any accumulateddepreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset andany other costs directly attributable to bringing the asset to working condition for itsintended use, and the costs of dismantling and removing the items and restoring the siteon which they are located. The cost of self- constructed assets also includes the cost ofmaterials and direct labour. For qualifying assets, borrowing costs are capitalised inaccordance with the accounting policy on borrowing costs. Cost also may includetransfers from equity of any gain or loss on qualifying cash flow hedges of foreigncurrency purchases of property, plant and equipment.

39

75

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.4 Property, plant and equipment (Cont'd)

(i) Recognition and measurement (Cont'd.)

(ii) Subsequent costs

(iii) Depreciation

When significant parts of an item of property, plant and equipment have different usefullives, they are accounted for as separate items (major components) of property, plant andequipment.

The gain or loss on disposal of an item of property, plant and equipment is determined bycomparing the proceeds from disposal with the carrying amount of property, plant andequipment and is recognised net within “other income” and “other expenses” respectivelyin profit or loss.

The cost of replacing a component of an item of property, plant and equipment isrecognised in the carrying amount of the item if it is probable that the future economicbenefits embodied within the component will flow to the Group and the Company, and itscost can be measured reliably. The carrying amount of the replaced component isderecognised to profit or loss. The costs of the day-to- day servicing of property, plantand equipment are recognised in profit or loss as incurred.

Depreciation is based on the cost of an asset less its residual value. Significantcomponents of individual assets are assessed, and if a component has a useful life that isdifferent from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimateduseful lives of each component of an item of property, plant and equipment from the datethat they are available for use. Leased assets are depreciated over the shorter of the leaseterm and their useful lives unless it is reasonably certain that the Group will obtainownership by the end of the lease term.

Freehold land is not depreciated. Property, plant and equipment under construction arenot depreciated until the assets are ready for their intended use.

Purchased software that is integral to the functionality of the related equipment iscapitalised as part of that equipment.

40

76

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.4 Property, plant and equipment (Cont'd.)

(iii) Depreciation (Cont'd.)

20%10 - 20%

20%20%

3.5 Leased assets

Operating lease

3.6 Research and development costs

Leases, where the Group and the Company does not assume substantially all the risks andrewards of ownership are classified as operating leases and, except for property interest heldunder operating lease, the leased assets are not recognised on the statement of financialposition. Property interest held under an operating lease, which is held to earn rental income orfor capital appreciation or both, is classified as investment property and measured using fairvalue model.

Payments made under operating leases are recognised in profit or loss on a straight- line basisover the term of the lease. Lease incentives received are recognised in profit or loss as anintegral part of the total lease expense, over the term of the lease. Contingent rentals arecharged to profit or loss in the reporting period in which they are incurred.

Expenditure on research activities is recognised as an expense in the period in which it isincurred.

An internally-generated intangible asset arising from development (or from the developmentphase of an internal project) is recognised if, and only if, all of the following have beendemonstrated:

The principal annual rates used are as follows:

ComputersOffice equipment, furniture and fittingsMotor vehiclesRenovation

Depreciation methods, useful lives and residual values are reviewed at end of thereporting period, and adjusted as appropriate.

41

77

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.6 Research and development costs (Cont'd.)

(i)

(ii)(iii)(iv)(v)

(vi)

3.7 Intangible assets

3.8 Cash and cash equivalents

3.9 Impairment

(i)

the technical feasibility of completing the intangible asset so that it will be available foruse or sale;the intention to complete the intangible asset and use or sell it;

Intangible assets which represent licenses, copyrights and other incidental costs incurred, arestated at cost less accumulated amortisation and impairment losses, are amortised over a periodof five (5) years.

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highlyliquid investments which have an insignificant risk of changes in fair value with originalmaturities of three months or less, and are used by the Group and the Company in themanagement of their short term commitments. For the purpose of the statement of cash flows,cash and cash equivalents are presented net of bank overdrafts.

Financial assets

Unless specifically disclosed below, the Group and the Company generally applied thefollowing accounting policies retrospectively. Nevertheless, as permitted by MFRS 9,Financial Instruments , the Group and the Company elected not to restate thecomparatives.

the ability to use or sell the intangible asset;how the intangible asset will generate probable future economic benefits;the availability of adequate technical, financial and other resources to complete thedevelopment and to use or sell the intangible asset; andthe ability to measure reliably the expenditure attributable to the intangible asset duringits development.

The amount initially recognised for internally-generated intangible assets is the sum of theexpenditure incurred from the date when the intangible asset first meets the recognition criterialisted above. Where no internally-generated intangible asset can be recognised, developmentexpenditure is recognised in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at costsless accumulated amortisation and accumulated impairment losses. The average expected life of the development projects is five years. Development costs in progress are not amortised.

42

78

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.9 Impairment (Cont'd.)

(i) Financial assets (Cont'd.)

An impairment loss in respect of debt investments measured at fair value through othercomprehensive income is recognised in profit or loss and the allowance account isrecognised in other comprehensive income.

The Group and the Company recognise loss allowances for expected credit losses onfinancial assets measured at amortised cost, debt investments measured at fair valuethrough other comprehensive income, contract assets and lease receivables. Expectedcredit losses are a probability-weighted estimate of credit losses. The Group and the Company measure loss allowances at an amount equal to lifetimeexpected credit loss, except for debt securities that are determined to have low credit riskat the reporting date, cash and bank balance and other debt securities for which credit riskhas not increased significantly since initial recognition, which are measured at 12-monthexpected credit loss. Loss allowances for trade receivables, contract assets and leasereceivables are always measured at an amount equal to lifetime expected credit loss.

When determining whether the credit risk of a financial asset has increased significantlysince initial recognition and when estimating expected credit loss, the Group and theCompany consider reasonable and supportable information that is relevant and availablewithout undue cost or effort. This includes both quantitative and qualitative informationand analysis, based on the Group’s historical experience and informed credit assessmentand including forward- looking information, where available.

Lifetime expected credit losses are the expected credit losses that result from all possibledefault events over the expected life of the asset, while 12-months expected credit lossesare the portion of expected credit losses that result from default events that are possiblewithin the 12 months after the reporting date. The maximum period considered whenestimating expected credit losses is the maximum contractual period over which theGroup and the Company are exposed to credit risk.

The Group and the Company estimate the expected credit losses on trade receivablesusing a provision matrix with reference to historical credit loss experience.

An impairment loss in respect of financial assets measured at amortised cost isrecognised in profit or loss and the carrying amount of the asset is reduced through theuse of an allowance account.

43

79

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.9 Impairment (Cont'd.)

(i)

(ii)

Financial assets (Cont'd.)

At each reporting date, the Group and the Company assess whether financial assetscarried at amortised cost and debt securities at fair value through other comprehensiveincome are credit- impaired. A financial asset is credit impaired when one or more eventsthat have a detrimental impact on the estimated future cash flows of the financial assethave occurred.

The gross carrying amount of a financial asset is written off (either partially or full) to theextent that there is no realistic prospect of recovery. This is generally the case when theGroup and the Company determines that the debtor does not have assets or sources ofincome that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcementactivities in order to comply with the Group’s and the Company’s procedures forrecovery amounts due.

Other assets

The carrying amounts of other assets (except for inventories, contract assets, leasereceivables, deferred tax asset, assets arising from employee benefits, investmentproperty measured at fair value and non-current assets (or disposal groups) classified asheld for sale) are reviewed at the end of each reporting period to determine whether thereis any indication of impairment. If any such indication exists, then the asset’s recoverableamount is estimated. For goodwill and intangible assets that have indefinite useful livesor that are not yet available for use, the recoverable amount is estimated each period atthe same time.

For the purpose of impairment testing, assets are grouped together into the smallest groupof assets that generates cash inflows from continuing use that are largely independent ofthe cash inflows of other assets or cash-generating units. Subject to an operating segmentceiling test, for the purpose of goodwill impairment testing, cash-generating units towhich goodwill has been allocated are aggregated so that the level at which impairmenttesting is performed reflects the lowest level at which goodwill is monitored for internalreporting purposes. The goodwill acquired in a business combination, for the purpose ofimpairment testing, is allocated to a cash-generating unit or a group of cash- generatingunits that are expected to benefit from the synergies of the combination.

44

80

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.9 Impairment (Cont'd.)

(ii)

3.10 Equity instruments

(i)

(ii)

Other assets (Cont'd.)

Costs directly attributable to the issue of instruments classified as equity are recognisedas a deduction from equity.

Ordinary shares

Ordinary shares are classified as equity.

The recoverable amount of an asset or cash-generating unit is the greater of its value inuse and its fair value less costs of disposal. In assessing value in use, the estimated futurecash flows are discounted to their present value using a pre-tax discount rate that reflectscurrent market assessments of the time value of money and the risks specific to the assetor cash-generating unit. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised inrespect of cash-generating units are allocated first to reduce the carrying amount of anygoodwill allocated to the cash-generating unit (group of cash-generating units) and thento reduce the carrying amounts of the other assets in the cash-generating unit (groups ofcash-generating units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets,impairment losses recognised in prior periods are assessed at the end of each reportingperiod for any indications that the loss has decreased or no longer exists. An impairmentloss is reversed if there has been a change in the estimates used to determine therecoverable amount since the last impairment loss was recognised. An impairment loss isreversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised. Reversals of impairment losses are credited toprofit or loss in the financial year in which the reversals are recognised.

Instruments classified as equity are measured at cost on initial recognition and are notremeasured subsequently.

Issue expenses

45

81

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.11 Employee benefits

(i)

(ii)

Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paidannual leave and sick leave are measured on an undiscounted basis and are expensed asthe related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonusor profit- sharing plans if the Group has a present legal or constructive obligation to paythis amount as a result of past service provided by the employee and the obligation can beestimated reliably.

Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately foreach plan by estimating the amount of future benefit that employees have earned in thecurrent and prior periods, discounting that amount and deducting the fair value of anyplan assets. The calculation of defined benefit obligations is performed annually by a qualifiedactuary using the projected unit credit method. When the calculation results in a potentialasset for the Group, the recognised asset is limited to the present value of economicbenefits available in the form of any future refunds from the plan or reductions in futurecontributions 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 andlosses, the return on plan assets (excluding interest) and the effect of the asset ceiling (ifany, excluding interest), are recognised immediately in other comprehensive income. TheGroup determines the net interest expense or income on the net defined liability or assetfor the period by applying the discount rate used to measure the defined benefitobligation at the beginning of the annual period to the then net defined benefit liability orasset, taking into account any changes in the net defined benefit liability or asset duringthe period as a result of contributions and benefit payments.

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

When the benefits of a plan are changed or when a plan is curtailed, the resulting changein benefit that relates to past service or the gain or loss on curtailment is recognisedimmediately in profit or loss. The Group recognises gains or losses on the settlement of adefined benefit plan when the settlement occurs.

46

82

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.11 Employee benefits (Cont'd.)

(iii)

(iv)

3.12 Provisions

Share-based payment transactions

The grant date fair value of share-based payment granted to employees is recognised asan employee expense, with a corresponding increase in equity, over the period that theemployees unconditionally become entitled to the awards. The amount recognised as anexpense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimatelyrecognised as an expense is based on the number of awards that meet the related serviceand non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant date fair value ofthe share-based payment is measured to reflect such conditions and there is no true-up fordifferences between expected and actual outcomes.

The fair value of the employee share options is measured using a binomial lattice model.Measurement inputs include share price on measurement date, exercise price of theinstrument, expected volatility (based on weighted average historic volatility adjusted forchanges expected due to publicly available information), weighted average expected lifeof the instruments (based on historical experience and general option holder behaviour),expected dividends, and the risk- free interest rate (based on government bonds). Serviceand non- market performance conditions attached to the transactions are not taken intoaccount in determining fair value.

Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longerwithdraw the offer of those benefits and when the Group recognises costs for arestructuring. If benefits are not expected to be settled wholly within 12 months of theend of the reporting period, then they are discounted.

A provision is recognised if, as a result of a past event, the Group has a present legal orconstructive obligation that can be estimated reliably, and it is probable that an outflow ofeconomic benefits will be required to settle the obligation. Provisions are determined bydiscounting the expected future cash flows at a pre-tax rate that reflects current marketassessments of the time value of money and the risks specific to the liability. The unwinding ofthe discount is recognised as finance cost.

47

83

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.13 Revenue and other income

(i)

(a)

(b)

(c)

(ii)

3.14 Income tax

the Group’s and the Company’s performance does not create an asset with analternative use and the Group and the Company has an enforceable right to paymentfor performance completed to date.

Interest income

Interest income is recognised as it accrues using the effective interest method in profit orloss except for interest income arising from temporary investment of borrowings takenspecifically for the purpose of obtaining a qualifying asset which is accounted for inaccordance with the accounting policy on borrowing costs.

Income tax expense comprises current and deferred tax. Current tax and deferred tax arerecognised in profit or loss except to the extent that it relates to a business combination or itemsrecognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year,using tax rates enacted or substantively enacted by the end of the reporting period, and anyadjustment to tax payable in respect of previous financial years.

Revenue

Revenue is measured based on the consideration specified in a contract with a customerin exchange for transferring goods or services to a customer, excluding amounts collectedon behalf of third parties. The Group and the Company recognises revenue when (or as)it transfers control over a product or service to customer. An asset is transferred when (oras) the customer obtains control of the asset.

The Group and the Company transfers control of a good or service at a point in timeunless one of the following overtime criteria is met:

the customer simultaneously receives and consumes the benefits provided as theGroup and the Company performs;

the Group’s and the Company’s performance creates or enhances an asset thatthe customer controls as the asset is created or enhanced; or

48

84

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.14 Income tax (Cont'd.)

3.15 Earnings per ordinary share

Deferred tax is recognised using the liability method, providing for temporary differencesbetween the carrying amounts of assets and liabilities in the statements of financial position andtheir tax bases. Deferred tax is not recognised for the following temporary differences: theinitial recognition of goodwill, the initial recognition of assets or liabilities in a transaction thatis not a business combination and that affects neither accounting nor taxable profit or loss.Deferred tax is measured at the tax rates that are expected to be applied to the temporarydifferences when they reverse, based on the laws that have been enacted or substantivelyenacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offsetcurrent tax liabilities and assets, and they relate to income taxes levied by the same taxauthority on the same taxable entity, or on different tax entities, but they intend to settle currenttax assets and liabilities on a net basis or their tax assets and liabilities will be realisedsimultaneously. Deferred tax assets and liabilities are not discounted.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits willbe available against which the temporary difference can be utilised. Deferred tax assets arereviewed at the end of each reporting period and are reduced to the extent that it is no longerprobable that the related tax benefit will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that isnot a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probablethat the future taxable profits will be available against which the unutilised tax incentive can beutilised.

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

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

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholdersand the weighted average number of ordinary shares outstanding, adjusted for own shares held,for the effects of all dilutive potential ordinary shares, which comprise convertible notes andshare options granted to employees.

49

85

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

3. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

3.16 Operating segments

3.17 Fair value measurements

Level 1:

Level 2:

Level 3: unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of theevent or change in circumstances that caused the transfers.

An operating segment is a component of the Group that engages in business activities fromwhich it may earn revenues and incur expenses, including revenues and expenses that relate totransactions with any of the Group’s other components. Operating segment results are reviewedregularly by the management of the Group, to make decisions about resources to be allocated tothe segment and to assess its performance, and for which discrete financial information isavailable.

Fair value of an asset or a liability, except for share-based payment and lease transactions, isdetermined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurementassumes that the transaction to sell the asset or transfer the liability takes place either in theprincipal 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’sability to generate economic benefits by using the asset in its highest and best use or by sellingit to another market participant that would use the asset in its highest and best use. When measuring the fair value of an asset or a liability, the Group uses observable market dataas far as possible. Fair value is categorised into different levels in a fair value hierarchy basedon the input used in the valuation technique as follows:

quoted prices (unadjusted) in active markets for identical assets or liabilities that theGroup can access at the measurement date.

inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly.

50

86

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

4. PROPERTY, PLANT AND EQUIPMENT

Officeequipment,

furniture Motor Computers and fittings vehicles Renovation Total

RM RM RM RM RMGroup

Cost

At 1 July 2018 106,839 145,469 6,000 23,995 282,303Additions 334,781 138,851 - 1,738,108 2,211,740Foreign currency translation 1,183 168 - - 1,351At 30 June 2019 and 1 July 2019 442,803 284,488 6,000 1,762,103 2,495,394Additions 50,429 12,556 - - 62,985Foreign currency translation - 970 - - 970At 30 June 2020 493,232 298,014 6,000 1,762,103 2,559,349

Accumulated depreciationAt 1 July 2018 85,005 41,247 5,999 3,200 135,451 Charge for the year (Note 23) 32,346 34,934 - 126,220 193,500 Foreign currency translation 1,123 155 - - 1,278 At 30 June 2019 and 1 July 2019 118,474 76,336 5,999 129,420 330,229 Charge for the year (Note 23) 78,462 54,428 - 352,421 485,311 Foreign currency translation - - - - - At 30 June 2020 196,936 130,764 5,999 481,841 815,540 Net carrying amount

At 30 June 2019 324,329 208,152 1 1,632,683 2,165,165At 30 June 2020 296,296 167,250 1 1,280,262 1,743,809

51

87

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

4. PROPERTY, PLANT AND EQUIPMENT (CONT'D)

Officeequipment,

furnitureComputers and fittings Renovation Total

RM RM RM RM

Company

Cost

At 1 July 2018 9,402 113,547 23,995 146,944 Additions 331,312 138,851 1,738,108 2,208,271 At 30 June 2019 and 1 July 2019 340,714 252,398 1,762,103 2,355,215 Additions 42,880 4,600 - 47,480 At 30 June 2020 383,594 256,998 1,762,103 2,402,695

Accumulated depreciation At 1 July 2018 1,111 15,229 3,200 19,540 Charge for the year (Note 23) 23,841 32,398 126,220 182,459 At 30 June 2019 and 1 July 2019 24,952 47,627 129,420 201,999 Charge for the year (Note 23) 74,460 51,169 352,421 478,050 At 30 June 2020 99,412 98,796 481,841 680,049

Net carrying amount

At 30 June 2019 315,762 204,771 1,632,683 2,153,216

At 30 June 2020 284,182 158,202 1,280,262 1,722,646

52

88

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

5. RIGHT-OF-USE ASSETS

2020 2019 2020 2019RM'000 RM'000 RM'000 RM'000

As at 1 July 2019 - - - - Effect of adoption of new pronouncement 899,982 - 871,870 - As at 1 July 2019 (restated) 899,982 - 871,870 -

Depreciation (Note 23) (199,770) - (177,281) -

As at 30 June 2020 700,212 - 694,589 -

2020 2019 2020 2019RM'000 RM'000 RM'000 RM'000

As at 1 July 2019 - - - - Effect of adoption of new pronouncement 913,471 - 885,299 - As at 1 July 2019 (restated) 913,471 - 885,299 -

Accretion of interest 61,395 - 59,315 -

Payments (242,927) - (218,418) -

As at 30 June 2020 731,939 - 726,196 -

The Group and the Company has lease contracts for office with contract terms of 3 to 4 years and thelease contracts do not contain variable lease payments.

Upon the adoption of MFRS 16, the Group and the Company had resulted in an increase inaccumulated losses of RM13,489 and RM13,429 as at 1 July 2019.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during theperiod:

CompanyGroup

Set out below are the carrying amounts of lease liabilities and the movements during the period:

Group Company

53

89

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

5. RIGHT-OF-USE ASSETS (CONT'D)

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Current 154,805 - 149,063 -

Non-current 577,134 - 577,133 - 731,939 - 726,196 -

The maturity analysis of lease liabilities are disclosed in Note 28.

The following are the amounts recognised in profit or loss:

2019 2018 2019 2018RM'000 RM'000 RM'000 RM'000

Depreciation expense of right- of-use assets 199,770 - 177,281 -

Interest expense on lease liabilities 61,395 - 59,315 -

Total amount recognised in statement of comprehensive income 261,165 - 236,596 -

Group Company

Group Company

The Group and the Company have several lease contracts that include extension option. These optionsare negotiated by management to provide flexibility in managing the leased-asset portfolio and alignwith the Group's and the Company's business needs. Management excercises judegement indetermining whether these extension option are reasonably certain to be excercised.

54

90

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

6. INTANGIBLE ASSETS Internally Work in generated - progress

Acquired development developmentsoftware costs costs Total

RM RM RM RM

Group

Cost

At 1 July 2018 1,800,000 1,250,539 - 3,050,539 Addition - - 3,347,128 3,347,128 At 30 June 2019 and 1 July 2019 1,800,000 1,250,539 3,347,128 6,397,667 Addition - - 4,970,200 4,970,200 At 30 June 2020 1,800,000 1,250,539 8,317,328 11,367,867

Accumulated amortisation

At 1 July 2018 330,000 416,846 - 746,846 Amortisation (Note 23) 360,000 250,108 - 610,108 At 31 December 2018 and 1 January 2019 690,000 666,954 - 1,356,954 Amortisation (Note 23) 360,000 257,055 - 617,055 At 30 June 2020 1,050,000 924,009 - 1,974,009

Net carrying amount

At 30 June 2019 1,110,000 583,585 3,347,128 5,040,713

At 30 June 2020 750,000 326,530 8,317,328 9,393,858

55

91

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

6. INTANGIBLE ASSETS (CONT'D)

Internallygenerated

developmentcosts

Company RM

Cost

At 1 July 2018 1,250,539 Transferred to a subsidiary (1,250,539) At 30 June 2019/1 July 2019/ 30 June 2020 -

Accumulated amortisation

At 1 July 2018 416,846 Amortisation during the year 62,527 Transferred to a subsidiary (479,373) At 30 June 2019/1 July 2019/30 June 2020 -

Impairment testing of intangible assets

(a) Value in use

(i) Discount rates

2020 2019

Discount rates 15.8% 15.8%

The recoverable amount of the CGUs are based on value in use for the financial year ended 30 June2020.

Value in use basis is determined using cash flow projections based on financial budgets approvedby management covering a five-year period.

The rates used as follows are pre-tax and reflect specific risks relating to the relevantsegments.

The calculations of value in use for the CGUs are most sensitive to the following assumptions:

Group

56

92

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

6. INTANGIBLE ASSETS (CONT'D)

(ii) Sensitivity to changes in assumptions

7. INVESTMENTS IN SUBSIDIARIES

2020 2019RM RM

Unquoted ordinary shares, at costAt 1 July 2019/ 1 July 2018 73,087,901 73,067,901 Acquisition of a subsidiary - 20,000

73,087,901 73,087,901

Less: Accumulated impairment losses (67,901) (67,901) 73,020,000 73,020,000

Details of the subsidiaries are as follows:

Country of Name incorporation Principal activities 2020 2019

Held by theCompany:

Cworks Systems United States 51 51 Inc^# of America

ASAP Sdn. Bhd. Malaysia 100 100

Ganda Integrasi Malaysia 100 100 Sdn. Bhd.

Provision of computerisedmaintainance managementsystems and other informationtechnology services such assystem integration, supportservice and training. TheCompany has becomedormant.

To carry on business ofsoftware development andprogramming services.

Investment company.

The carrying values of CGUs are not sensitive to changes in any key assumptions used in thecash flow projections during the year.

Effectiveequity interest (%)

Company

57

93

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

7. INVESTMENTS IN SUBSIDIARIES (CONT'D)

^ Audited by firms other than Al Jafree Salihin Kuzaimi PLT.

#

(b) Acquisition of subsidiaries

*

This subsidiary was consolidated based on its unaudited management account as at 30 June 2020.The subsidiary is an insignificant component of the Group. The financial statements of thissubsidiary used for consolidation purpose were reviewed by Al Jafree Salihin Kuzaimi PLT.

On 2 August 2017, the Company acquired the entire equity interest in ASAP Sdn. Bhd.("ASAP"), which operates in the Information and Communication Technology industry assoftware solution provider to asset and facility management system. The Group expects to extractsynergies for the combined operations, which would lead to enlarged revenue stream and marketshare in the Computerised Maintenance Management Systems business.

The cost of combination that amounted to RM73,000,000 is made up by RM58,000,000 in cashconsideration and RM15,000,000 in the form of contingent consideration*.

On 17 October 2016, the Company has entered into a sales and purchase agreement ("theAgreement") with ASAP's former shareholders ("ASAP Vendors") for the acquisition of theentire equity interest in ASAP. The Agreement contains a clause whereby ASAP Vendorsprovided a guarantee that ASAP will generate cumulative profit after tax of not less thanRM15,000,000 ("Profit Guarantee") for 2 consecutive 12 months periods calculated startingfrom 1 July 2017. The Company and ASAP Vendors mutually agreed that the contingentconsideration will be progressively released to ASAP Vendors on quarterly basis uponsatisfaction of agreed terms and conditions to the Agreement.

58

94

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

7. INVESTMENTS IN SUBSIDIARIES (CONT'D)

Carrying Fair amount value

RM RM

31,085 31,0851,235,578 1,235,578

289,396 289,39648,099 48,099

133,175 133,175206,379 206,379

(1,499) (1,499) (797,137) (797,137) (133,175) (133,175)

Group's interest in fair value of net identifiable assets 1,011,901 1,011,901

Identifiable intangible assets 1,800,000Goodwill on acquisition 70,188,099Cost of combination 73,000,000

Carrying Fair amount value

RM RM

Cash in hand 1 1

Group's interest in fair value of net identifiable assets 1 1

Goodwill on acquisition 9,999

Cost of acquisition 10,000

The recognised amounts of assets and liabilities of ASAP Sdn. Bhd. at the acquisition date wereas follows:

Plant and equipmentTrade receivablesAmount due from contract customersOther receivables and prepaymentsFinance lease receivableCash and bank balanccesTrade payablesOther payables and accrualsFinance lease payable

On 14 September 2018, the Company acquired 100% equity interest in Ganda Integrasi Sdn. Bhd.("GANDA") for a total consideration of RM10,000, which carry on business of financialtechnology and investment company. Subsequently the Company acquired additional 9,999 shares in Ganda Integrasi Sdn. Bhd. for RM10,000 by way of increasing share capital in the subsidiary.

The recognised amounts of assets and liabilities of Ganda Integrasi Sdn. Bhd. at the acquisitiondate were as follows:

59

95

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

7. INVESTMENTS IN SUBSIDIARIES (CONT'D)

(c) Non controlling interest in subsidiary

The Group's subsidiary that has material non-controlling interest ("NCI") is as follows:

2020 2019RM RM

NCI percentage of owenrship interest and voting interest 49% 49%

Carrying amount of NCI (484,211) (483,614)Loss allocated to NCI (597) (9,252)

Summarised financial information before intra-group elimination

2020 2019RM RM

Statement of Financial Position Non-current assets 124 1,296 Current liabilities (1,726,296) (1,681,381)

Net liabilities (1,726,172) (1,680,085)

Statement of Profit or Loss and Other Comprehensive IncomeLoss for the year (1,219) (18,882)

Statement of Cash FlowsCash flow used in operating activities/Net decrease in cash cash equivalents (833) (833)

Cworks Systems Inc

Cworks Systems Inc

60

96

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

8. INVESTMENTS IN ASSOCIATE

2020 2019RM RM

Unquoted shares, at costAs at 1 July 2019/21 December 2018 (date of acquisition) 9,717,406 10,010,000Post-acquisition reserves brought forwardShare of results of the associates 375,287 (292,594) (-) Less :Reversal of share of result from disposal of associates (82,693) - Disposal of shares (10,020) - Reclassification to financial assets carried at amortised cost during the year (Note 9) (9,999,980) -

- 9,717,406

The details of the associate is as follows:

Country of Name incorporation Principal activities 2020 2019

Held by theCompany:

Sukaniaga Malaysia 20 20 Sdn. Bhd. ^

Principally engaged inconsulting in internet and webbased supplying computerhardware and software.

Group

The investment in an associate is held through Ganda Integrasi Sdn. Bhd., a subsidiary of the Company.

Effectiveequity interest (%)

61

97

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

8. INVESTMENTS IN ASSOCIATE (CONT'D)

Group 2020RM

310,569 373,944 684,513

- 77,047 77,047

2,009,663

82,963 10,016,067 10,099,030

9. OTHER INVESTMENTS

Unquoted Note shares Bonds Total

2020 2020 2020Non current RM RM RMFair value through other comprehensive income 9.1 - 82,669 82,669Reclassification from investment in associates to financial asset carried at amortised cost 9.2 9,999,980 - 9,999,980

Total 9,999,980 82,669 10,082,649

During the year, the Company sold 10,020 unit of shares with a considerations of RM10,000. TheCompany representative who sits in the board of director also has resigned from the board ofSukaniaga Sdn. Bhd. which resulted there is absence of significant influence in Sukaniaga Sdn.Bhd. This subsequently resulted in reclassification from investment in associates to simpleinvestment or aslo known as financial assets carried at amortised cost.

Results

Net loss for the year

Reconciliation of net assets to carrying amount as at 30 June 2020

Group's share of net assetsGoodwill

Group

Current assetsTotal assets

Non-current liabilitiesCurrent liabilitiesTotal liabilities

The summarised financial information of the associate, not adjusted for the proportion of ownershipinterest held by the Group as at 30 June 2020, is as follow:

Assets and LiabilitiesNon-current assets

62

98

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

9. OTHER INVESTMENTS (CONT'D)

Unquoted Note shares Bonds Total

2020 2020 2020Non current RM RM RMFair value through other comprehensive income 9.1 - 82,669 82,669

Unquoted Note shares Bonds Total

2019 2019 2019Non current RM RM RMFair value through other comprehensive income 9.1 - 77,893 77,893

9.1 Equity investment designated at fair value through other comprehensive income

Fair value asat 30 June

2020RM

-

9.2

Cworks Sdn. Bhd.

Financial asset carried at amortised cost

On 29 June 2020, the Company sold 10,020 unit of shares with a considerations of RM10,000.The Company representative who sits in the board of director also has resigned from the board ofSukaniaga Sdn. Bhd. which resulted there is absence of significant influence in Sukaniaga Sdn.Bhd. This subsequently resulted in reclassification from investment in associates to simpleinvestment or aslo known as financial assets carried at amortised cost.

Group/Company

Company

At 1 July 2018, the Group designated the investment shown below as equity security as at fairvalue through other comprehensive income because this equity securities represents investmentthat the Group intends to hold for long- term strategic purposes. In 30 June 2018, this investmentwas classified as available-for-sale.

63

99

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

10. GOODWILL

2020 2019RM RM

As at 1 July 70,198,098 70,188,099Addition - 9,999As at 30 June 70,198,098 70,198,098

(a)

2020 2019RM RM

70,198,098 70,198,098

(b) Key assumptions used in value-in-use calculation

30 June 2020 30 June 2019

65% 60%15.80% 15.80%

24% 10% - 30%10 - 13 years 10 - 14 years

Group

Goodwill has been allocated to the Group's cash-generating unit ("CGU") identified according tobusiness segment as follows:

Group

Software business

Pre-tax discount rate The pretax discount rate applied to the cash flow projection is based on the weighted average costof capital of the Group.

Revenue growth ratesRevenue growth rates is based on the estimated growth rate of loan disbursed through Angkasaloan management system and SME bank loan management system. The assumption is derivedafter taking into account consideration the current and future industry market trend and outlook.

The recoverable amount of goodwill has been determined based on value-in-use calculation usingfinancial projections based on financial budgets approved by the management.

Budgeted gross profit margin Pre-tax discount rate Average revenue growth rate Period-covered

Budgeted gross profit margin The budgeted gross profit margin is based on the estimated gross margin approved by the Boardtaking into consideration the direct expenses associated with the revenue.

64

100

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

10. GOODWILL (CONT'D)

(b) Key assumptions used in value-in-use calculation (cont'd)

Period

(c)

11. TRADE AND OTHER RECEIVABLES

2020 2019 2020 2019RM RM RM RM

Trade receivables Note Third parties 11.1 10,535,336 7,845,612 - 1,858,442Less: Allowance for

expected credit losses

- Third parties (819,593) (222,902) - -Total trade receivables 9,715,743 7,622,710 - 1,858,442

The period cover for the Angkasa and SME bank loan management system was 14 years and 10years based on the remaining contract period in agreement with the Group.

Sensitivity to changes in assumptions

Group Company

The management believes there are no reasonable possible changes in any of the key assumptionsthat would cause the carrying amount of the CGU to materially exceed its recoverable amount.

65

101

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

11. TRADE AND OTHER RECEIVABLES (CONT'D)

2020 2019 2020 2019RM RM RM RM

Other receivablesOther receivables 11.2 14,298,215 15,286,078 10,816,249 13,773,637Amounts due from subsidiaries 11.3 - - 20,043,909 14,682,306Amount due from an associate 11.3 - 1,717,304 - 1,464,647Amount due from related party 11.4 2,083,135 2,191,092 2,083,135 2,207,092Deposits 125,796 196,675 116,469 180,575Prepayments 805,444 370,671 175,944 176,456

17,312,590 19,761,820 33,235,706 32,484,713Less: Allowance for

expected credit losses

- Third parties (3,303,655) - - - - Amount due from

subsidiary - - (994,268) (994,268)

Total other receivables 14,008,935 19,761,820 32,241,438 31,490,445

Total trade and other receivables 23,724,678 27,384,530 32,241,438 33,348,887

(a) Trade receivables

2020 2019RM RM

At 1 July 222,902 1,432,617 Provision for expected

credit losses (Note 23) 598,191 222,902 Reversal of impairment loss

(Note 20) (1,500) (1,432,617) As at 30 June 819,593 222,902

Group Company

Group

Set out below is the movement in the allowance for expected credit losses of trade receivables :

66

102

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

11. TRADE AND OTHER RECEIVABLES (CONT'D)

(b) Other receivables

2020 2019 2020 2019RM RM RM RM

At 1 July - - 994,268 978,268 Provision for expected

credit losses (Note 23) 3,303,655 - - 16,000 At 31 December 3,303,655 - 994,268 994,268

11.1

11.2

11.3

11.4

The amounts owing by a subsidiary and an associate represent non-trade transactions which thebalances are unsecured, non-interest bearing and repayable on demand.

The Group’s and the Company's normal trade credit term ranges from 30 to 90 days (2019: 30 to90 days) and 30 days (2019: 30 days) respectively. Other credit terms are assessed and approvedon a case to case basis. During the year, the trade receivables of the Group retention sum ofRM1,095,421 has been fully provided in the contingent liability (2019: RM1,151,863). The tradereceivables at Company level has been fully paid by the customers during the year. There is anincrease in the allowance for expected credit losses during the year due to there is an issues withrecoverability of the trade receivables.

Included in other receivables of the Group and the Company is an amount of RM10,597,819(2019: RM10,698,047) which represents the balance of contingent consideration for acquisitionof ASAP. The amount for contingent consideration is placed in a stakeholder account appointedby the Company in favour of ASAP Vendors and will progressively be released to ASAP Vendorsupon satisfaction of agreed terms and conditions in the sales and purchase agreement.

Set out below is the movement in the allowance for expected credit losses of other receivables(including amounts due from subsidiaries - non-trade):

Group Company

Included in amount owing by a related party of the Group and the Company is an amount ofRM2,083,134 (2019: RM2,083,134) which represents amount owing by Cworks Sdn. Bhd.

67

103

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

12. CONTRACT ASSETS

2020 2019RM RM

CurrentAmount due from contract customers 3,658,638 2,908,935

12.12020 2019RM RM

9,647,890 8,881,852 13,445,509 9,722,086 23,093,399 18,603,938

(19,434,761) (15,695,003) 3,658,638 2,908,935

13. CASH AND BANK BALANCES

2020 2019 2020 2019RM RM RM RM

Cash at banks 381,484 221,064 296,857 181,660Cash in hands 92 599 91 598Fixed deposits with licensed banks - 673,473 - 673,473Cash and bank balances 381,576 895,136 296,948 855,731

There is no fixed deposits placed with licensed bank during the year (2019: RM674,473). The weightedaverage effective rate for the fixed deposits with licensed bank was 2.75%.

The contract assets primarily relate to the Group's rights to consideration for work completed on systemdevelopment contracts but not yet billed at the reporting date.

CompanyGroup

Group

Amount owing by contract customers

GroupAmount due from contract customer

Aggregate costs incurred to dateAttributable profits

Less: Progress billings

68

104

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

14.

2020 2019 2020 2019RM RM RM RM

At 1 July 707,176,930 598,956,930 112,504,040 95,637,906 Issuance of shares:- private placement 21,900,000 108,220,000 799,350 17,856,300

Share issuance expense - - - (990,166) As at 30 June 2020 729,076,930 707,176,930 113,303,390 112,504,040

15. RESERVES

2020 2019 2020 2019RM RM RM RM

Non-distributable

Warrant reserves 21,569,085 21,569,085 21,569,085 21,569,085 Exchange reserves (373,809) (349,539) - - Fair value reserves (20,145) (24,921) (20,145) (24,921)

21,175,131 21,194,625 21,548,940 21,544,164

(a) Warrant reserves

The salient terms of the Warrants are as follows:

(i)

(ii)

Each Warrant entitles the registered holder to subscribe for one (1) new ordinary share ofRM0.10 each at the Exercised Price of RM0.17 during the 5-year period expiring on 26 July2022 ("Exercise Period"), subject to the adjustments in accordance with the deed pool;

SHARE CAPITAL

Group and CompanyNumber of ordinary shares Amount

During the financial year, the Group and the Company received paid up ordinary share capitalamounting to RM799,350 by way of issuance of 21,900,000 ordinary shares through private placementfor cash.

Group Company

On 2 August 2017, the Company issued 232,927,485 free detachable warrants ("Warrants")pursuant to the Rights Issue with Warrants exercise on the basis of one (1) Warrant for every two(2) rights shares subscribed and were listed and quoted on the ACE Market of Bursa MalaysiaSecurities Berhad.

At the expiry of the Exercise Period, any Warrants not exercised shall automatically lapseand cease to be valid for any purpose;

69

105

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

15. RESERVES (CONT'D)

(a) Warrant reserves (cont'd)

(iii)

(iv)

The Warrants are constituted by a deed poll dated 9 June 2017.

At the end of the financial year, all Warrants remained unexercised.

(b) Exchange reserves

(c) Fair value reserves

16. TRADE AND OTHER PAYABLES

2020 2019 2020 2019RM RM RM RM

Trade payables Notes

Third parties 16.1 4,340,088 279,180 - - Amounts due to related party 16.1 - 155,452 - -

4,340,088 434,632 - -

The holders of Warrants are not entitled to any voting rights or participate in any dividend,rights, allotments and/or other form of distribution in the Company, until and unless suchholders of the Warrants exercise their rights into new ordinary shares;

Group Company

The new ordinary shares pursuant to be issued upon the exercise of the Warrants shall, uponissue and allotment, rank pari passu in all respects with the then existing shares of theCompany except that they will not be entitled to an dividends, rights allotments and/ordistributions declared by the Company, the entitlement date of which is prior to the date ofallotment of the new shares; and

The Warrants are tradable upon listing in board lots of 100 units carrying rights to subscribefor 100 new ordinary shares at any time during the Exercise Period or such other number ofunits as may be prescribed by Bursa Malaysia Securities Berhad.

Exchange reserve comprises all foreign exchange differences arising from the translation of thefinancial statements of a foreign subsidiary.

Fair value reserve comprises all changes arising from changes in fair value of financial assets atfair value through other comprehensive income (FVOCI).

70

106

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

16. TRADE AND OTHER PAYABLES (CONT'D)

2020 2019 2020 2019RM RM RM RM

Other payables Notes

Amount due to subsidiary 16.2 - - - 413,263 Amount due to a related party 16.2 818,217 1,697,051 131,800 200,000Other payables 1,509,137 1,812,123 751,719 1,150,122Accruals 529,808 307,191 66,974 152,245Amount due to directors 16.2 406,500 17,162 406,500 - 3,263,662 3,833,527 1,356,993 1,915,630Total trade and other payables 7,603,750 4,268,159 1,356,993 1,915,630

16.1

16.2

17.

2020 2019 2020 2019RM RM RM RM

1,095,420 395,420 - - 10,214,645 10,214,645 10,214,645 10,214,645 11,310,065 10,610,065 10,214,645 10,214,645

(a)

Group Company

Liquidated ascertained damagesContingent consideration payables

Liquidated ascertained damages ("LAD")

Provision for LAD is recognised in respect of late delivery of system development undertaken bythe Company. The provision has been recognised for the expected LAD claims provided by theterms and conditions stated in the agreement. The LAD amounting to RM700,000 was providedduring the year as the Company has contractual obligations due to the late delivery of system.

Group Company

The normal trade credit term granted to the Group and to the Company is generally 15 to 30 days(2019: 15 to 30 days) and 15 days (2019: 15 days) respectively.

Amounts owing to a subsidiary, related parties and Directors are unsecured, interest-free andrepayable on demand.

PROVISIONS AND CONTINGENT CONSIDERATIONS PAYABLES

71

107

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

17.

2020 2019RM RM

395,420 1,095,420 700,000 (700,000) 1,095,420 395,420

(b) Contingent consideration payable - Group/Company

The movement of the contingent consideration payable during the financial year are as follows:

RM 15,000,000 (3,530,126) 11,469,874 (1,255,229) 10,214,645

18. LEASE LIABILITY

2020 2019 2020 2019RM RM RM RM

Current

Obligations under right-of-use asset (Note 30) 154,805 - 149,063 -

154,805 - 149,063 -

On 17 October 2016, the Company and ASAP Vendors mutually agreed the part of theconsideration amounting to RM15,000,000 will be progressively released to ASAP Vendors uponthe satisfaction of agreed terms and conditions stated in the agreement for sales and purchase ofshares in ASAP Sdn. Bhd.

Company

2020

MaturityGroup

The movement of the provisions for LAD is as follows:

At the date of acquisition of ASAPLess : Payment released during the periodAt 30 June 2018/1 July 2018Less : Payment released during the yearAs at 30 June 2019/ 1 July 2019 / 30 June 2020

PROVISIONS AND CONTINGENT CONSIDERATIONS PAYABLES (CONT'D)

Group

At the beginning of the yearProvision/(Reversal) during the yearAt the end of the year

72

108

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

18. LEASE LIABILITY (CONT'D)

2020 2019 2020 2019RM RM RM RM

Non-current

Obligations under right-of-use asset (Note 30) 577,134 - 577,134 -

577,134 - 577,134 - Total lease liability 731,939 - 726,197 -

The remaining maturities of lease liability as at 30 June 2020 are as follows:

2020 2019 2020 2019RM'000 RM'000 RM'000 RM'000

Maturity of lease liability:Within one year 154,805 - 149,063 - More than 1 year and less than 2 years 152,150 - 152,150 - More than 2 years and less than 5 years 424,984 - 424,984 -

731,939 - 726,197 -

Group Company

2021 - 2025

MaturityGroup Company

73

109

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

19. REVENUES

2020 2019 2020 2019RM RM RM RM

Revenue from contract with customers 8,653,024 5,697,371 - 1,100,000

19.1 Disaggregration of revenue

2020 2019 2020 2019RM RM RM RM

Primary geographical marketsMalaysia 8,653,024 5,697,371 - 1,100,000

Major products and service lines

System development and software installation 6,258,986 3,416,663 600,000 Service maintainence 1,644,038 492,908 - Sales of software - 1,787,800 500,000 Others 750,000 - - -

8,653,024 5,697,371 - 1,100,000

Timing of revenue recognitionGoods transferred at a point

in time 750,000 1,787,800 - 500,000 Services transferred over time 7,903,024 3,909,571 - 600,000 Total revenue from contracts with customers 8,653,024 5,697,371 - 1,100,000

Group Company

Group Company

Reportable segment Software business

74

110

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

19. REVENUES (CONT'D)

19.2 Nature of goods and services

The following information reflects the typical transactions of the Group and the Company:

20. OTHER OPERATING INCOME

2020 2019 2020 2019RM'000 RM'000 RM'000 RM'000

Gain on disposal of investment in bonds - 58,605 - 58,605

Reversal of allowance of liquidated ascertained damages - 700,000 - - Rental income 16,500 - - Waiver of debt - 4,315 - - Reversal of impairment loss on trade and other receivables 1,500 1,432,617 - - Realised gain on foreign exchange - 24,640 - - Others 24,100 1,090 7,300 1,090

25,600 2,237,767 7,300 59,695

System development andsoftware installation

Based on the agreedmilestones. 30 to 90 daysfrom the date of invoices.

Significant payment terms

Timing of recognition or method

used to recognised revenue WarrantyNature of goods or services

Service andmaintainance

30 days from the date ofinvoice.

Not applicable.

Revenue is recognised at thepoint of time when the goodsare delivered and accepted bythe customers

Sales of software 30 days from the date ofinvoice.

Not applicable.

3 months to 1year.

Revenue is recognisedovertime based on thecontract period as and whenthe services are rendered.

Revenue is recognisedovertime based on stages ofcompletion and is determinedbased on proportion of costincurred for work performedto date over the estimatedtotal cost.

Group Company

75

111

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

21. DIRECTORS' REMUNERATION

2020 2019 2020 2019RM RM RM RM

Fees 10,500 480,667 10,000 277,667 Salaries and other emoluments 831,000 266,500 393,000 266,500 EIS 189 142 47 95 EPF 69,120 55,680 16,560 31,680

SOCSO 1,424 1,244 417 829 Total directors' remuneration

(Note 31.2) 912,233 804,233 420,024 576,771

22. STAFF COSTS

2020 2019 2020 2019RM RM RM RM

Salaries, wages, allowance, overtime and bonus 659,348 594,334 322,605 503,734 EIS 662 415 375 412 EPF 70,521 55,364 41,211 55,364

SOCSO 6,663 7,253 3,271 4,147 Insurance 17,405 - 15,307 -

754,599 657,366 382,769 563,657

23. OTHER OPERATING EXPENSES

2020 2019 2020 2019RM RM RM RM

Included in the other operating expenses is as follows:

Allowance for impairment on trade and other receivables (Note 11) 3,901,846 238,902 - 16,000Auditors remuneration : - current year 160,000 124,000 85,000 81,000Provision/(reversal) for liquidated ascertained damages (Note 17) 700,000 (700,000) - - Rental of premises - 182,147 - 115,058Loss on disposal of shares in associate 20 - - - Depreciation of property, plant and equipment (Note 4) 485,311 193,500 478,050 182,459

Group Company

Group Company

Group Company

76

112

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

23. OTHER OPERATING EXPENSES (CONT'D)

2020 2019 2020 2019RM RM RM RM

Included in the other operating expenses is as follows (cont'd):

Depreciation of right of use assets 199,770 - 177,281 - Amortisation of intangible assets 617,055 610,108 - 62,527 Finance costs on right of use assets 61,395 - 59,315 -

24. FINANCE COSTS

2020 2019 2020 2019RM RM RM RM

Interest expense on: Obligations under right-of-use 61,395 - 59,315 -

25. INCOME TAX EXPENSE

Major components of income tax expense

2020 2019 2020 2019RM RM RM RM

Statements of comprehensive income:

Current income tax: Malaysian income tax - - - - Underprovision in prior years: Malaysian income tax - 111 - - Income tax expense recognised in statement of comprehensive income - 111 - -

Company

The major components of income tax expense for the financial years ended 30 June 2020 and 30June 2019 are:

Group Company

Group Company

Group

77

113

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

25. INCOME TAX EXPENSE (CONT'D)

Reconciliations between tax expense and accounting loss

2020 2019 2020 2019RM RM RM RM

Profit/(loss) before tax (3,955,562) 1,637,397 (2,355,694) (2,176,660)

Taxation at Malaysian statutory tax rate of 24% (2019: 24%)* (949,335) 392,975 (565,367) (522,398) Effect of expenses not deductible for tax purposes 1,382,201 489,757 199,136 270,481 Non taxable income - (1,036) - - Exempted income (808,693) (1,328,064) - - Effect of different tax rates in other countries 4,939 667 - - Deferred tax assets not recognised 370,888 445,701 366,231 251,917 (Over)/underprovision of income tax in prior years - 111 - - Income tax expense recognised in statement of comprehensive income - 111 - -

2020 2019 2020 2019RM RM RM RM

401,676 275,249 396,902 275,24912,474,000 11,055,059 11,672,894 10,268,585

* Malaysia subsidiary income tax is calculated at the statutory tax rate of 24% (2019: 24%) of theestimated assessable profit for the financial year.

The reconciliations between tax expense and the accounting (loss)/profit multiplied by the applicablecorporate tax rate for the years ended 30 June 2020 and 2019 are as follows:

Group Company

Deferred tax assets have not been recognised on the following items:

Group Company

Unutilised capital allowanceUnabsorbed tax losses

78

114

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

26. EARNINGS/(LOSS) PER SHARE

(a)

2020 2019RM RM

Net (loss)/profit for the financial year attributable to owners of the Company (3,954,965) 1,646,538

Number of Number ofshares shares

'000 '000

Weighted average number of ordinary shares in issue (unit '000 ) 713,297 617,635

2020 2019

Basic (loss)/earnings per share (sen per share) (0.55) 0.27

(b) Fully diluted (loss)/earnings per share

The basic earnings/(loss) per share has been calculated based on the consolidated profit/(loss)after taxation for the financial year attributable to owners of the Company for the Group andthe weighted average number of ordinary shares in issue during the financial year are asfollows:

Diluted (loss)/earnings per share is equal to the basic (loss)/earnings per share because theconversion have an anti-dilutive effect.

Group

Group

79

115

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

27. OPERATING SEGMENTS

United States Inter-segment

Malaysia of America Eliminations TotalRM RM RM RM

RevenueTotal Revenue 8,653,024 - - 8,653,024

ResultsSegment operating results (4,533,217) (1,216) - (4,534,433)Included in the segment profit/(loss) are:

(1,102,366) (1,216) - (1,103,582)

(700,000) - - (700,000) 264,979 - - 264,979 375,287 - - 375,287

Segment profit is used to measure performance as management believes that such information is themost relevant in evaluating the results of certain segments relative to other entities that operate withinthese industries.

The total of segment liabilities is measured based on all liabilities of a segment, as included in theinternal management reports that are reviewed by the Group's Executive Directors.

Depreciation and amortisationProvision of liquidated damagesInterest incomeShare of profit from an associate

The accounting policies of the segments are consistent with the accounting policies of the Group.

2020

Segment revenue, results, assets and liabilities include items directly attributable to a segment andthose where a reasonable basis of allocation exists. Inter-segment revenue is eliminated onconsolidation.

Segment information is primarily presented in respect of the Group's business segment which basedon the Group's management and internal reporting structure. Thre is no information on businesssegments as the Group is principally involved in the provision of computerised maintenancemanagement systems and other information technology services such as systems intergration, support

80

116

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

27. OPERATING SEGMENTS (CONT'D)

United States Inter-segment

Malaysia of America Eliminations TotalRM RM RM RM

AssetsSegment assets 140,932,141 124 (21,048,747) 119,883,518

Segment liabilities 38,449,329 1,726,420 (20,529,995) 19,645,754

Capital expenditure 62,985 - - 62,985

United States Inter-segment

Malaysia of America Eliminations TotalRM RM RM RM

RevenueTotal Revenue 5,697,371 - - 5,697,371

ResultsSegment operating results 1,668,046 (18,779) - 1,649,267Included in the segment profit/(loss) are:

(801,711) (1,897) - (803,608)

700,000 - - 700,000280,724 - - 280,724292,594 - - 292,594

AssetsSegment assets 133,964,078 1,296 (15,577,498) 118,387,876

Segment liabilities 27,837,945 1,681,381 (14,641,102) 14,878,224

Capital expenditure 2,211,740 - - 2,211,740

2019

Depreciation and amortisationReversal of liquidated damagesInterest incomeShare of loss from an associate

All the inter-segment transactions were carried out on normal commercial basis and in the ordinarycourse of business.

2020

81

117

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

27. OPERATING SEGMENTS (CONT'D)

Major customers

The following are major customers with revenue equal or more than 10% of the total group revenue:

2020 2019RM RM

Customer A 3,500,000 600,000Customer B 2,758,986 600,000Customer C - 1,374,978 Customer D - 1,500,000 Customer E - 700,000

6,258,986 4,774,978

28. FINANCIAL INSTRUMENTS

28.1

(i)(ii)

Carrying amount FVOCI AC

RM RM RM

10,082,649 82,669 9,999,980 26,222,889 - 26,222,289 3,658,638 - 3,658,638 381,576 - 381,576 40,345,752 82,669 40,262,483

82,669 82,669 - 33,059,762 - 33,059,762 296,948 - 296,948 33,439,379 82,669 33,356,710

Group

Other investments

Trade and other receivablesCash and cash equivalents

Trade and other receivablesContract assetsCash and cash equivalents

Company

Other investments

Fair value through other comprehensive income ("FVOCI")

2020

Finacial assets

Group

Categories of financial instruments

The table below provides an analysis of financial instruments as at 30 June 2020 categorised asfollows:

Amortised cost ("AC")

82

118

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)Carrying

amount ACRM RM

11,310,065 11,310,065 7,603,750 7,603,750

18,913,815 18,913,815

10,214,645 10,214,645 1,356,993 1,356,993

11,571,638 11,571,638

(i)(ii)

Carrying amount FVOCI AC

RM RM RM

77,893 77,893 - 27,013,859 - 27,013,859 2,908,935 - 2,908,935 895,136 - 895,136

30,895,823 77,893 30,817,930

77,893 77,893 - 33,172,431 - 33,172,431 855,731 - 855,731 34,106,055 77,893 34,028,162

2020

Financial liabilities

Trade and other payable

The table below provides an analysis of financial instruments as at 30 June 2019 categorised asfollows:

Amortised cost ("AC")Fair value through other comprehensive income ("FVOCI")

2019

Group

Provisions and contingent consideration payableTrade and other payable

Company

Provisions and contingent consideration payable

Cash and cash equivalents

Company

Other investmentsTrade and other receivablesCash and cash equivalents

Financial assets

Group

Other investmentsTrade and other receivablesContract assets

83

119

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)Carrying

amount ACRM RM

10,610,065 10,610,065 4,268,159 4,268,159

14,878,224 14,878,224

10,214,465 10,214,465 1,915,630 1,915,630

12,130,095 12,130,095

28.2

2020 2019RM RM

- 58,605 4,776 (1,278)

- (34,172)

- (25,500)

- 1,490,439

(700,000) 700,000 (695,224) 2,188,094

Company

Net (losses)/gain on:

Debts instruments designated at fair value through other comprehensive income

Company

Provisions and contingent consideration payableTrade and other payable

Net gain or losses arising from financial instruments

2019

Financial liabilities

Group

Provisions and contingent consideration payableTrade and other payable

Equity instruments designated at fair value through other comprehensive income

- recognised in other comprehensive income

Financial assets at amortised cost

Financial liabilities at amortised cost

- recognised in other comprehensive income - reclassified from other comprehensive income to profit or loss

- recognised in profit or loss

84

120

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.3

28.4

Trade receivables and contract assets

There are no significant changes as compared to previous year.

Credit risk is the risk of a financial loss if a customer or counterparty to a financial instrumentfails to meet its contractual obligations. The Group’s exposure to credit risk arises principallyfrom the individual characteristics of each customer and investment in debt securities. TheCompany’s exposure to credit risk arises principally from loans and advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries. There are nosignificant changes as compared to prior periods.

Management has a credit policy in place and the exposure to credit risk is monitored on anongoing basis. Normally financial guarantees given by banks, shareholders or directors ofcustomers are obtained, and credit evaluations are performed on customers requiring credit overa certain amount.

At each reporting date, the Group and the Company assesses whether any of the tradereceivables and contract assets are credit impaired

The gross carrying amounts of credit impaired trade receivables and contract assetsare writtenoff (either partially or full) when there is no realistic prospect of recovery. This is generally thecase when the Group and the Company determines that the debtor does not have assets orsources of income that could generate sufficient cash flows to repay the amounts subject to thewrite- off. Nevertheless, trade receivables and contract assets that are written off could still besubject to enforcement activities.

- Market risk

Credit risk

Risk management objectives, policies, and processes for managing the risk

Financial risk management

The Group has exposure to the following risks from its financial instruments:

- Credit risk- Liquidity risk

85

121

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.4

2020 2019RM RM

9,715,743 7,622,710

Recognition and measurement of impairment loss

Concentration of credit risk

The exposure of credit risk for trade receivables as at the end of the reporting period bygeographic region was:

Group

Malaysia

In managing credit risk of trade receivables and contract assets, the Group manages its debtorsand takes appropriate actions (including but not limited to legal actions) to recover long overduebalances. Generally, trade receivables will pay within 30 days.

The Group uses an allowance matrix to measure ECLs of trade receivables for all segments.Consistent with the debt recovery process, invoices which are past due 90 days will beconsidered as credit impaired.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from tradereceivables and contract assets are represented by the carrying amounts in the statements offinancial position.

Management has taken reasonable steps to ensure that receivables that are neither past due norimpaired are stated at their realisable values. A significant portion of these receivables areregular customers that have been transacting with the Company. The Group uses ageing analysisto monitor the credit quality of the receivables. Any receivables having significant balances pastdue more than 30 days, which are deemed to have higher credit risk, are monitored individually.

Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivableprogressing through successive stages of delinquency to 90 days past due.

Loss rates are based on actual credit loss experience over the past three years. The Group alsoconsiders differences between (a) economic conditions during the period over which the historicdata has been collected, (b) current conditions and (c) the Group’s view of economic conditionsover the expected lives of the receivables. Nevertheless, the Group believes that these factors are immaterial for the purpose of impairment calculation for the year.

Credit risk (cont'd)

86

122

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.4

Recognition and measurement of impairment loss (cont'd)

Grosscarrying Lossamount allowance Net balance

Group RM RM RM

4,250,000 - 4,250,000 2,758,986 - 2,758,986 5,255 - 5,255 13,360 - 13,360 3,507,735 (819,593) 2,688,142

10,535,335 (819,593) 9,715,743

Grosscarrying Lossamount allowance Net balance

Company RM RM RM

- - - - - - - - - - - - - - - - - -

61 - 90 days past dueMore than 90 days past due

Current (not past due)1 - 30 days past due

2020

Current (not past due)1 - 30 days past due31 - 60 days past due

The following table provides information about the exposure to credit risk for trade receivablesas at 30 June 2020 which are grouped together as they are expected to have similar risk nature.

31 - 60 days past due61 - 90 days past dueMore than 90 days past due

Credit risk (cont'd)

87

123

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.4

Recognition and measurement of impairment loss (cont'd)

Grosscarrying Lossamount allowance Net balance

Group RM RM RM

2,747,959 (6,000) 2,741,959153,834 - 153,83431,881 - 31,88112,271 (2,345) 9,926

4,899,667 (214,467) 4,685,2007,845,612 (222,812) 7,622,800

Grosscarrying Lossamount allowance Net balance

Company RM RM RM

530,000 - 530,000 1,328,442 - 1,328,442

1,858,442 - 1,858,442

2020 2019RM RM

222,902 1,432,617 598,191 222,902

- (1,432,617) 821,093 222,902

1 - 30 days past due31 - 60 days past due61 - 90 days past dueMore than 90 days past due

Current (not past due)

2019

Current (not past due)

Credit risk (cont'd)

The cash and cash equivalents are held with banks and financial institutions. As at the end of thereporting period, the maximum exposure to credit risk is represented by their carrying amountsin the statements of financial position.

At beginning of the year Impairment lossReversal of impairment lossAt end of the year

Cash and cash equivalents

More than 90 days past due

The movement in the allowance for impairment loss of trade receivables during the year are asfollows:

Group

88

124

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.4

Recognition and measurement of impairment loss (cont'd)

2020 2019 2020 2019RM RM RM RM

- - 994,268 978,268 3,303,655 - - 16,000 3,303,655 - 994,268 994,268

Financial guarantees

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets as at the end of the reporting period.

Company

Impairment lossAt end of the year

At beginning of the year

Group

Credit risk (cont'd)

Cash and cash equivalents

Exposure to credit risk, credit quality and collateral

Credit risks on other receivables are mainly arising from deposits and prepayments paid forexpenditures and amount deposits in stakeholder account which represents the balance ofcontingent consideration for acquisition of ASAP and remaining balance from privateplacement. These deposits and prepayments will be charge out to profit or loss or financialpositions when it met criteria for recognition.

As at the end of the reporting period, the maximum exposure to credit risk is represented bytheir carrying amounts in the statements of financial position.

The movement in the allowance for impairment loss of other receivables during the year are asfollows:

These banks and financial institutions have low credit risks. In addition, some of the bankbalances are insured by government agencies. Consequently, the Group and the Company are ofthe view that the loss allowance is not material and hence, it is not provided for.

Other receivables

89

125

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.4

2020 2019RM RM

9,715,743 7,622,710

- The subsidiary is unlikely to repay its loan or advance to the Company in full; and-

Group

Domestic

Risk management objectives, policies and processes for managing the risk

The exposure of credit risk for trade receivables as at end of the financial period by geographicregion was:

Generally, the Company considers loans and advances to subsidiaries have low credit risk. TheCompany assumes that there is a significant increase in credit risk when a subsidiary’s financialposition deteriorates significantly. As the Company is able to determine the timing of paymentsof the subsidiaries’ loans and advances when they are payable, the Company considers the loansand advances to be in default when the subsidiaries are not able to pay when demanded. TheCompany considers a subsidiary’s loan or advance to be credit impaired when:

The subsidiary is continuously loss making and is having a deficit shareholders’ fund.

The Company determines the probability of default for these loans and advances individuallyusing internal information available.

The Company provides unsecured loans and advances to subsidiaries and related companies.

As at the end of the reporting period, the maximum exposure to credit risk is represented by thecarrying amount in the statement of financial position. The Company does not specificallymonitor the ageing of the advances to the subsidiaries and related companies. Nevertheless,these advances are repayable on demand.

Recognition and measurement of impairment loss

Credit risk (cont'd)

Exposure to credit risk, credit quality and collateral (cont'd)

Inter-company loans and advances

90

126

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.4

2020 2019RM RM

19,049,641 13,688,038

994,268 994,268 20,043,909 14,682,306

(994,268) (994,268) 19,049,641 13,688,038

2020 2019RM RM

994,268 978,268 - 16,000

994,268 994,268

28.5 Liquidity risk

Amount due from subsidiaries that are impaired at the reporting date and the movement of theallowance accounts used to to record the impairment are as follows:

Company

Individually not impairedAmount due from a subsidiary - nominal

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequateby the management to ensure, as far as possible, that it will have sufficient liquidity to meet itsliabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantlyearlier, or at significantly different amounts.

Company

At beginning of the yearCharge for the yearAt end of the year

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as theyfall due. The Group’s exposure to liquidity risk arises principally from its various payables,loans and borrowings.

Individually impairedAmount due from a subsidiary - nominal

Individually impairedNet amount

Movement in allowance account used to record the impairment is as follow:

Credit risk (cont'd)

Inter-company loans and advances (cont'd)

Recognition and measurement of impairment loss (cont'd)

91

127

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.5 Liquidity risk (cont'd)

Carrying Contractual amount cash flows Under 1 year

RM RM RM

11,310,065 11,310,065 11,310,065 Trade and other payables 7,603,750 7,603,750 7,603,750

18,913,815 18,913,815 18,913,815

10,214,645 10,214,645 10,214,645 Trade and other payables 1,356,993 1,356,993 1,356,993

11,571,638 11,571,638 11,571,638

Carrying Contractual amount cash flows Under 1 year

RM RM RM

10,610,065 10,610,065 10,610,065 Trade and other payables 4,268,159 4,268,159 4,268,159

14,878,224 14,878,224 14,878,224

10,214,645 10,214,645 10,214,645 Trade and other payables 1,915,630 1,915,630 1,915,630

12,130,275 12,130,275 12,130,275

Provisions and contingent consideration

Company

Provisions and contingent consideration

2019

Group

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s financialliabilities as at the end of the reporting period based on undiscounted contractual payments.

2020

Group

Provisions and contingent consideration

Company

Provisions and contingent consideration

92

128

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.6

Denominatedin

USDRM

(11,380) (11,380)

Denominatedin

USDRM

(663,480) (663,480)

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than thefunctional currency of the Group entities) risk, based on carrying amounts as at the endof the reporting period are as follows:

Group

The Group is exposed to foreign currency risk on sales, purchases and borrowings thatare denominated in a currency other than the respective functional currencies of Groupentities. The currencies giving rise to this risk are primarily U.S. Dollar (“USD”).

Risk management objectives, policies and processes for managing the risk

Management of the Group monitors the foreign currency movement on a portfolio

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interestrates and other prices that will affect the Group’s financial position or cash flows.

28.6.1 Currency risk

Group

2019

Balances recognised in the statement of financial position

Trade and other payablesNet exposure

2020

Balances recognised in the statement of financial position

Trade and other payablesNet exposure

93

129

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.6

2020 2019RM RM

(1,138) (50,424)

A 10% (2019: 10%) strengthening of the Malaysia Ringgit against the followingcurrencies at the end of the reporting period would have decreased post-tax profit orloss by the amounts shown below. This analysis is based on foreign currency exchangerate variances that the Group considered to be reasonably possible at the end of thereporting period. The analysis assumes that all other variables, in particular interestrates, remained constant.

Currency risk sensitivity analysis

The Group’s variable rate borrowings are exposed to a risk of change in cash flows dueto changes in interest rates. Short term receivables and payables are not significantlyexposed to interest rate risk.

Risk management objectives, policies and processes for managing the risk

The Group's policy is to obtain the most favourable interest rates available. Any surplusfunds of the Group will be placed with licensed financial institutions to generateinterest income. The Group manages the net exposure to interest rate risks bymaintaining sufficient lines of credit to obtain acceptable lending costs and bymonitoring the exposure to such risks on an ongoing risks.

Profit or loss

USD

A 10% (2019: 10%) weakening of Malaysia Ringgit against the above currencies at theend of the reporting period would have had equal but opposite effect on the abovecurrencies to the amounts shown above, on the basis that all other variables remainedconstant.

28.6.2 Interest rate risks

Market risk (cont'd)

28.6.1 Currency risk (cont'd)

94

130

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.6

2020 2019RM RM

Group

Fixed rate instruments

Financial assets - 14,251,929

Company

Fixed rate instruments

Financial assets - 14,251,929

Interest rate sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fairvalue through profit or loss, and the Group does not designate derivatives as hedginginstruments under a fair value hedge accounting model. Therefore, a change in interestrates at the end of the reporting period would not affect profit or loss.

A decrease in market interest rates by 1 on financial assets and liabilities of the Groupwhich have variable interest rates at the reporting date would have had the equal butopposite effect on the amounts shown above, on the basis that all other variables remainconstant.

Market risk (cont'd)

28.6.2 Interest rate risks (cont'd)

Exposure to interest rate risk

The interest rate profile of the Group’s and the Company’s significant interest-bearingfinancial instruments, based on carrying amounts as at the end of the reporting periodare as follows:

An increase in market interest rates by 1% (2019: 1%) on financial assets and liabilitiesof the Group which have variable interest rates at the reporting date would not havematerial impact to the Group profit net of tax.

95

131

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

28. FINANCIAL INSTRUMENTS (CONT'D)

28.6

Other price risk

28.7 Fair value information

Total Carrying Level 1 Level 3 Total fair value amount

RM RM RM RM RM

Group/CompanyFinancial assetsOther investments 82,669 - 82,669 82,669 82,669

Group/CompanyFinancial assetsOther investments 77,893 - 77,893 77,893 77,893

Market risk (cont'd)

Fair value of financial instruments

2020

2019

The fair value of investment in Cworks Sdn. Bhd. is derived based on the share of net assets inthe company. In prior year,the investment is stated at cost due to lack of market prices and thefair value cannot be measured reliably without incurring excessive cost.

There were no material transfers between Level 1, Level 2 and Level 3 during the financial year.

The fair value of bond investment was derived based on the market value provided by the bank.

28.6.3

The Group and the Company do not have any quoted investments and hence is notexposed to equity price risk.

The carrying amounts of cash and cash equivalents, short term receivables and payables andshort term borrowings reasonably approximate their fair values due to the relatively short termnature of these financial instruments.

96

132

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

29. CAPITAL MANAGEMENT

2020 2019RM RM

11,310,065 10,610,065 -

7,603,750 4,268,159 - (673,473)

(381,576) (221,663) 18,532,239 13,983,088

100,237,764 103,509,652 118,770,003 117,492,740

16% 12%

30. LEASE COMMITMENT

2020 2019 2020 2019RM RM RM RM

Minimum lease payment:Not later than 1 year 203,845 - 197,718 - Later than 1 year but not

later than 2 years 190,818 - 190,818 - Later than 2 years but not

later than 5 years 477,046 - 477,046 - Total minimum lease

payments 871,709 - 865,582 - Less: Future finance charges (139,770) - (139,385) - Present value of minimum

lease payments 731,939 - 726,197 -

Total net debt and equityNet debt to net debt and equity ratio

Group Company

Provisions and contingent consideration payableFinance lease payableTrade and other payablesLess: Deposits with a licensed bankLess: Cash and bank balancesNet debt

Total equity

The objective of the Group on capital management is to ensure that it maintains a strong credit ratingand safeguard the Group's ability to continue as a going concern, so as to support its business,maintain the market confidence and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it in the light of changes ineconomic conditions or expansion of the Group. The Group may adjust the capital structure issuingnew shares, returning capital to shareholders or adjusting the amount of dividends to be paid toshareholders or sell assets to reduce debts.

Group

97

133

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

30. LEASE COMMITMENT (CONT'D)

Analysis of present value of finance lease liabilities:Not later than 1 year 154,805 - 149,063 - Later than 1 year but not

later than 2 years 152,150 - 152,150 - Later than 2 years but not

later than 5 years 424,984 - 424,984 - 731,939 - 726,197 -

Less: Amount due within 12 months (154,805) - (149,063) - Amount due after 12 months 577,134 - 577,134 -

31. RELATED PARTIES

31.1 Identity of related parties

The Company has related party relationship with:

(i)

(ii) The directors who are the key management personnel.

Related parties Relationships

CFR Sdn. Bhd.

Cworks Sdn. Bhd.

Winnova Resources Sdn. Bhd Related by a common director.

Tekad Maju Solutions Sdn. Bhd.

Its subsidiary and associates companies as disclosed in Note 7 and Note 8 to the financialstatements; and

Related by a common Director, who is ashareholder of the company.

Related by a common Director of thecompany.

Related by a common director, who is ashareholder of the company.

The Group has entered into rental agreement for building as disclosed in Note 5. The lease liabilitypayable of the Group and the Company bore effective interest rate of 6.7% (2019: Nil).

98

134

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

31. RELATED PARTIES (CONT'D)

31.2 Significant related party transactions

The significant related party transactions of the Group and Company are shown below.

2020 2019 2020 2019RM RM RM RM

Purchases from- Tekad Maju Solutions Sdn. Bhd. - 28,000 - -

Advances from/(to)- Winnova Resources Sdn. Bhd. (1,068,200) 1,200,000 (68,200) 200,000 - MyAngkasa Az Zahra Sdn. Bhd. 107,957 107,957 107,957 107,957 - Cworks System Inc - - - 16,000 - Ganda Integrasi Sdn. Bhd. - - (4,257,109) 13,688,038 - Sukaniaga Sdn. Bhd. 1,654,013 1,717,304 1,464,647 1,464,647 - ASAP Sdn. Bhd. - - (1,517,757) (391,235)

Transfer of intangible assets to a subsidiary

- ASAP Sdn. Bhd. - - - 771,166

Repayment from-Cworks Sdn. Bhd. - 1,000,000 - 1,000,000

Directors remuneration- Fees 10,500 480,667 10,000 277,677 - Salaries and other emoluments 831,000 266,500 393,000 266,500 - EPF 69,120 55,680 16,560 31,680 - EIS 189 142 47 95 - Socso 1,424 1,244 417 829

912,233 804,233 420,024 576,781

Group Company

99

135

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

32. MATERIAL LITIGATIONS

(i)

(ii)

On 28 June 2017, Sporty Beans Sdn. Bhd. ("Sporty Beans") filed a Writ and Statement of Claimagainst ASAP Sdn. Bhd. In the Shah Alam High Court vide Suit No. BA-22NCvC-384-06/2017for breach of a joint venture agreement to design, develop, deploy and launch an e-portal.

In the opinion of the Directors, the Company has received full indemnity from the two partiesand a director of the company against all claims, actions, damages, losses, liabilities, costs andexpenses in connection with the legal suit by Sporty Beans. In the circumstances and as the trialof the matter has yet to complete, no provision is recognised at the reporting date.

In April 2019, Prabuddha Kumar Pronob Chakravertty ("Plaintiff") had in the Kuala LumpurHigh Court vide Suit No. WA-22NCC-196-04/2019 filed a Writ and Statement of Claim againstASAP Sdn. Bhd. and its direcctors for inter alia, failed, neglected and/or omitted to reply toPlaintiff's queries made to the Board of ASAP in respect of the purported irregular transactionsin ASAP. The Plaintiff claims he might be jeopardised and prejudiced as a director of ASAP onwhat he perceives as irregular and suspicious transactions in ASAP. In this action, the Plaintiffseeks various declaratory orders against ASAP and its directors and damages to be assessedagainst them.

ASAP's legal counsel has put in an appearance for the case. ASAP had earlier obtained a legalopinion for the Letter of Demand dated 15 February 2017 served on ASAP that Sporty Bean'sallegations are frivolous and unsubstantiated as ASAP is not a party to the joint ventureagreement with the Plaintiff.

ASAP had filed an application to strike out Sporty Beans's claim against ASAP together with anaffidavit in support on 28 August 2017. The court had decided to dismiss ASAP's interlocutoryapplication to strike out the Writ and Statement of Claim with cost in the cause and proceed tonext trial.

On 9 August 2019, Sporty Beans had called two witnesses and the Director has completed hisevidence for Sporty Beans.

The former shareholders of ASAP, namely Dato' Paduka Mohamad Sharaff bin Haji MohdShariff, Prabuddha Kumar Pronob Chakravertty and Lilibeth Gamboa Belinario had on 28 July2017 agreed to fully indemnify the company against all claims, actions, damages, losses,liabilities, costs and expenses that the Company or ASAP may inccur, suffer or be liable for inconnection with the above case. As such, there is no immediate operational and financial impactto the Company. The Board of Directors of the Company will also further deliberate on its nextcourse of action with regards to the above case.

Sport Beans alleged that ASAP had breached the joint venture agreement. Sporty Beans isclaiming for approximately RM45.41 million for loss of profits as a result of the alleged breachof agreement by ASAP.

100

136

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

32. MATERIAL LITIGATIONS (CONT'D)

The management is of the the view that there is no financial impact to Orion.

(iii)

1. A declaration that ASAP has breached the Sub-Contract dated 1 July 2018;2. A declaration that the Sub-Contract dated 1 July 2018 had been lawfully terminated;3.

4.

5. General damages to be assessed;6.

7.

In May 2019, Prabuddha Kumar Pronob Chakravertty ("Plaintiff") in the Kuala Lumpur HighCourt vide Suit No. WA-22NCC-240-05/2019 against Orion IXL Berhad and claims that Orionhas breached a Notice of Assignment entered into between parties on or about 1.7.2019 andhence led to the purported termination of the Notice of Assignment by the Plaintiff. Flowingfrom the breaches, the Plaintiff seek various declaration against Orion inter alia, that the Noticeof Assignment is lawfully terminated and that Orion to pay the Plaintiff a sum of RM10,214,646being the alleged unpaid profit guarantee pursuant to the Sale and Purchase Agreement dated17.10.2016 ("Sale and Purchase Agreement"). The Plaintiff is also seeking damages to beassessed against Orion.

Pursuant to the Writ and the Statement of the Claim, the Plaintiff is claiming for inter alia of thefollowing:

A declaration that Orion and ASAP whether jointly or severally have breached theagreement to pay the Plainiff a sum of RM135,000 per month on 20th of every month forevery month from 20.12.2018 to 20.07.2019;In the alternative, in the event Prabuddha is found to be personally liable, Prabuddha to paythe Plaintiff a sum of RM135,000 per month that was to be paid on 20th of every monthstarting from 20.12.2018 to 20.07.2019;

Special damages in the sum of RM10,337,700 against Orion and ASAP whether jointly orseverally; orAlternatively, special damages in the sum of RM10,337,700 against Prabuddha in the eventPrabuddha is found to be personally liable.

The parties had exchanged the pleadings and Orion and ASAP had filed striking out applicationand a summary determination application to summarily dispose off the Plaintiff's action onquestion of law or on the construction of documents. On 17 October 2019, The plaintiff hadinstructed his solicitor to withdraw the both cases against the Group. Orion and ASAP hadrequested for withdrawal of both suits without liberty to file a fresh both suits.The judge hadfixed a short case management on 12 November 2019.

This action was filed by Capstone Technologies Sdn. Bhd. ("Plaintiff") in the Kuala LumpurHigh Court vide Suit No. WA-22NCC-544-10/2019 in 1 October 2019 against Orion IXLBerhad, ASAP Sdn. Bhd. and Prabuddha Kumar Pronob Chakravertty claiming for breach of asub-contract agreement dated 1 July 2018.

101

137

ANNUAL REPORT 2020

Notes to the Financial Statements

30 June 2020 (cont’d)

Registration No. 200101019222 (554979-T) ORION IXL BERHAD (Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2020

32. MATERIAL LITIGATIONS (CONT'D)

33. SUBSEQUENT EVENTS

-

-

34. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE

35. COMPARATIVE FIGURES

The comparative figures are audited by another firm of Chatered Accountants other than Al JafreeSalihin Kuzaimi PLT.

The financial statements for the year ended 30 June 2020 were authorised for issue in accordance witha resolution of the directors on 30 October 2020.

Events subsequent to the reporting date are as follows:

On 19 August 2020, the Company has entered into a supplementary agreement with EnrichMining Sdn. Bhd. to supplement the provisions of the MOU.

On 22 October 2020, the Court has directed parties to exchange documents for the purpose offinalizing common bundle of documents. The matter has been fixed for Full Trial on 1, 4, 8 and9 March 2021.

The Board had obtained the legal opinion in this matter and do not foresee that Writ andStatement of Claims will have any material financial and operational impact on the Group.

The Covid-19 pandemic has impacted significantly on the global and domestic economies and itis expected to have an adverse impact on the results of the Group and the Company for thefinancial year ending 30 June 2020. However, at this juncture, management is unable to reliablyestimate the financial impact arising from this unprecedented circumstances. The Group and theCompany is implementing timely and appropriate measures to minimise the impact.

102

138

SHARE CAPITAL

Total Number of Issued Shares : 778,643,290

Class of Shares : Ordinary shares

Voting Rights : One vote per ordinary share

Size of Shareholdings No. of % ofShares Held Shares

11 Less than 100 327 *461 100 to 1,000 157,481 0.02

1,511 1,001 to 10,000 11,090,480 1.43 3,334 10,001 to 100,000 152,801,842 19.62 1,046 100,001 to less than 5 % of issued shares 614,593,160 78.93

- 5% and above of the issued shares - -

6,363 TOTAL 778,643,290 100

* Less than 0.01%

(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNT BELOGING TO THE SAME PERSON)

Name of Shareholders No. of Shares Held %

1 M&A Nominee (Tempatan) Sdn. Bhd. 38,304,400 4.92 Majestic Salute Sdn Bhd for Mohamad Shaharul bin Mohamad Shariff

2 Koh Kin Lip 20,000,000 2.57 3 Ong Keng Seng 15,791,000 2.03 4 UOB Kay Hian Nominees (Asing) Sdn. Bhd. 14,300,000 1.84

Exempt an for UOB Kay Hian Pte Ltd (A/C Clients)5 M & A Nominee (Tempatan) Sdn. Bhd. 14,000,000 1.80

Majestic Salute Sdn Bhd for Khoo Chee Siang6 M & A Nominee (Tempatan) Sdn. Bhd. 13,022,000 1.67

Pledged Securities Account for Chow Dai Ying (M&A)7 CIMSEC Nominees (Tempatan) Sdn. Bhd. 11,800,000 1.52

CIMB for Mohamed Nizam bin Abdul Razak (PB)8 Koh Chee Meng 8,835,000 1.13 9 Affin Hwang Nominees (Tempatan) Sdn. Bhd. 8,000,000 1.03

Pledged Securities Account for Tan Roy Soon (TAN8615M)10 Lam Kong Yen 6,000,000 0.77 11 Teng Chuan Heng 6,000,000 0.77 12 Chong Oi Mei 5,000,000 0.64 13 TA Nominees (Tempatan) Sdn. Bhd. 5,000,000 0.64

Pledeged Securities Account for Oh Kim Sun14 HLB Nominees (Tempatan) Sdn. Bhd. 4,400,000 0.57

Pledeged Securities Account for Oh Kim Sun15 Phua Sin Mo 4,000,000 0.51 16 Lau Chi Chiang 3,700,000 0.48 17 Mah Siew Hoe 3,600,000 0.46 18 Chin Chin Seong 3,500,000 0.45 19 CGS-CIMB Nominees (Tempatan) Sdn. Bhd. 3,067,500 0.39

Pledged Securities Account for Tan Tzer Siew20 Mohd Ja'afar bin Abdul Rahman @Aman 3,000,000 0.39 21 Tan Chin Siang 3,000,000 0.39 22 Goh Siew May 2,900,000 0.37 23 Li Teck Eng 2,883,540 0.37 24 Mak Teck Kiong 2,700,000 0.35 25 Public Nominees (Tempatan) Sdn. Bhd. 2,600,000 0.33

Pledged Securities Account for Yeoh Joey Keng (E-TSA)26 Ong Ling Chew 2,557,000 0.33 27 Yong Siew Yee 2,550,000 0.33 28 Alliancegroup Nominees (Tempatan) Sdn. Bhd. 2,500,000 0.32

Pledged Securities Account for Koh Kin Lip (7003423)29 Alliancegroup Nominees (Tempatan) Sdn. Bhd. 2,500,000 0.32

Pledged Securities Account for Teoh Soo Choon (7000254)30 Ang Huat Keat 2,500,000 0.32

TOTAL 218,010,440 28.01

ANALYSIS OF SHAREHOLDINGS AS AT 13 OCTOBER 2020

SHAREHOLDING DISTRIBUTION SCHEDULE (AS PER THE RECORD OF DEPOSITORS)

LIST OF 30 LARGEST SECURITIES ACCOUNT HOLDERS

No. of Shareholders

analYsis of SHareHoldIngS as at 13 october 2020

139

ANNUAL REPORT 2020

NAME OF DIRECTORS DIRECT % INDIRECT %

1. Yahya bin Razali - - - -2. Abdul Rani bin Achmed Abdullah 85,072 0.01 - -3. Rahimi bin Ramli - - - -4. Mohamad Shaharul bin Mohamad Shariff 38,304,400 4.92 - -5. Adnan bin Zainol - - - -

NO. OF SHARES HELD

DIRECTORS' SHAREHOLDINGS

Analysis of Shareholdings

as at 13 October 2020 (cont’d)

140

No. of Warrants :

Exercise Price of Warrants : RM0.17

Exercise Period of Warrants : 27 July 2017 to 26 July 2022

Number of Warrant Holders : 1,398

Size of Warrant holdings No. of % ofWarrants Held Warrant

8 Less than 100 400 *29 100 to 1,000 12,700 0.01

215 1,001 to 10,000 1,590,775 0.68748 10,001 to 100,000 36,236,125 15.56398 100,001 to less than 5% of warrants 195,087,485 83.75- 5% and above of the warrants - -

1,398 TOTAL 232,927,485 100

* Less than 0.01%

Name of Warrant holders

1. Kenanga Nominees (Tempatan) Sdn. Bhd. 8,100,000 3.48 Pledged Securities Account for Chong Soong Huat

2. 6,811,000 2.92 Majestic Salute Sdn. Bhd. for Mohamad Shaharul bin Mohamad Shariff

3. 5,400,000 2.32 4. 4,383,600 1.88 5. 4,000,000 1.72 6. 3,745,099 1.61

7. 3,402,400 1.46

8. 2,631,741 1.13

9. 2,588,000 1.11 10. 2,200,000 0.94 11. 2,000,000 0.86

12. Chan Yoon Chai 2,000,000 0.86 13. On Thiam Chai 2,000,000 0.86 14. 2,000,000 0.86 15. 2,000,000 0.86 16. 1,855,500 0.80 17. RHB Capital Nominees (Tempatan) Sdn. Bhd. 1,826,700 0.78

18. Mohd Zaid Hasani bin Ahmad Shazali 1,801,000 0.77 19. Lim Ah Poh 1,800,000 0.77 20. Loh Chiew Hor 1,750,000 0.75 21. 1,700,000 0.73 22. 1,582,500 0.68 23. Chin Soon Hin 1,582,400 0.68 24. Justin Lim Teck Yin 1,501,000 0.64 25. Kenanga Nominees (Tempatan) Sdn. Bhd. 1,500,000 0.64

26. Muhammed Faizal bin Haye 1,500,000 0.64 Pledged Securities Account for Chia Lok Yuen

ANALYSIS OF WARRANT A HOLDINGS AS AT 13 OCTOBER 2020

WARRANT DISTRIBUTION SCHEDULE

LIST OF 30 LARGEST WARRANT ACCOUNT HOLDERS (WITHOUT AGGREGATING WARRANT FROM DIFFERENT

No. of Warrant holders

WARRANT ACCOUNTS BELONGING TO THE SAME REGISTERED WARRANT HOLDER)

CIMSEC Nominees (Tempatan) Sdn. Bhd.

Neo Yiap Seng

232,927,485

CIMB for Mohamed Nizam bin Abdul Razak (PB)

Pledged Securities Account for Woo Chee San

No. of Warrants Held

Majestic Salute Sdn. Bhd. for Winnova Resources Sdn. Bhd.

Affin Hwang Nominees (Tempatan) Sdn. Bhd.

Yong Ka Huat

Pledged Securities Account for Koh Geok Kang (E-JBU)

Sabariah binti Zakaria

Latifah binti Abdul Rahman

Heng Chu YoogTong Sian Teng

Pledged Securities Account for Ong Kian Chye (071596)

Ong Ling Chew

M & A Nominee (Tempatan) Sdn. Bhd.

Chin Chin Seong

Public Nominees (Tempatan) Sdn. Bhd.

M & A Nominee (Tempatan) Sdn. Bhd.

Chong Hock Lit

Loh Pek Har

Percentage (%)

analYsis of warrant a HoldIngS aS at 13 octoBer 2020

141

ANNUAL REPORT 2020

27. Li Teck Eng 1,441,770 0.62 28. Asrul Effendi bin Hasbi 1,300,000 0.56 29. Lee Chiang Boh @ Lee Ching Moo 1,231,000 0.53 30. Public Nominees (Tempatan) Sdn. Bhd. 1,200,000 0.52

TOTAL 76,833,710 32.98

DIRECTORS' WARRANT HOLDINGS

NAME OF DIRECTORS % %

1. Yahya bin Razali - - -2. Abdul Rani bin Achmed Abdullah - - 1.133. Rahimi bin Ramli - - -4. Mohamad Shaharul bin Mohamad Shariff 6,811,000 2.92 -5. Adnan bin Zainol - - -

* Deemed interested by virtue of his shareholdings in Winnova Resources Sdn. Bhd. pursuant to Section 8 of the Companies Act 2016.

Pledged Securities Account for Seow Chin Teck (E-KKU)

INDIRECTDIRECTNO. OF WARRANTS HELD

2,631,741*-

---

Analysis of Warrant A Holdings

as at 13 October 2020 (cont’d)

ORION IXL BERHAD 200101019222 (554979-T)

ORION IXL BERHAD 200101019222 (554979-T)

Level 5, Block B, Dataran PHB, Saujana Resort Section U2, 40150 Shah Alam, Selangor Darul Ehsan

T : (603) 7890 0638 F : (603) 7890 3163 E : info@orionixl.com.my

www.orionixl.com.my

ANNUAL

REPORT

2020