Professional Documents
Culture Documents
CONTENTS
Page 2
CORPORATE INFORMATION
Page 3
CORPORATE PROFILE
Page 5
Page 6
CORPORATE STRUCTURE
Page 7
DIRECTORS PROFILES
Page 10
CHAIRMANS STATEMENT
Page 13
MANAGEMENT OVERVIEW
Page 15
Page 24
Page 25
Page 27
Page 30
FINANCIAL STATEMENTS
Page 86
Page 87
ANALYSIS OF SHAREHOLDINGS
Page 89
CORPORATE INFORMATION
BOARD OF DIRECTORS
CORPORATE OFFICE
REGISTERED OFFICE
AUDIT COMMITTEE
Datuk Ng Kam Chiu
Chairman / Independent Non-Executive Director
PRINCIPAL BANKERS
Standard Chartered Bank Malaysia Berhad
CIMB Bank Berhad
AUDITORS
REMUNERATION COMMITTEE
NOMINATING COMMITTEE
SHARE REGISTRAR
COMPANY SECRETARIES
Ng Heng Hooi (MAICSA 7048492)
Wong Mee Kiat (MAICSA 7058813)
Jane Ong Su Ping (MAICSA 7059946)
CORPORATE PROFILE
Rexit Berhad (Rexit) is a company that focuses on delivering solutions and services to the Insurance
industry. Rexits intimate knowledge and understanding of the business processes and operations of the
industry, its capability to continually identify advances in technology and successfully adapting those for the
benefit of its customers have made Rexit the solutions partner of choice.
Rexit has grown from a four-person operation in 1998 into a public-listed company by November 2005. Rexit
is currently listed on the ACE market of Bursa Malaysia Securities Bhd.
As a public-listed entity, Rexit not only has the financial capacity to undertake large IT projects but also has
the experience of managing large IT infrastructures. It also operates under the stringent requirements of
various regulatory bodies ensuring that there is proper corporate governance and prudence in its operations.
Rexit offers several web-based insurance solutions which cater for the front-end marketing and sales functions,
as well as the back-end operations and management requirements of insurance companies.
CORPORATE PROFILE
Overseas Operations
Rexit International Sdn Bhd, a MSC Malaysia status company was formed to develop and market Rexits
solutions and services internationally. It is well placed to reinforce our presence through our existing
customers in Hong Kong, Singapore and Thailand. The implementation of these projects means that our
software has undergone the process of localization in these countries. This further enhances the marketability
and the acceptability of our products and services in these markets.
We will continue our efforts to market our e-Cover to the regional market with local strategic partners in the
market identified. The local partners with a comprehensive knowledge of the local business environment will
be in the best position to provide the necessary linkages to the government and the business sectors.
In order for the Group to continuously stay ahead in the competitive information technology business and to
provide new and enhanced software solutions to meet the needs of our customers, Rexit has set up Rexit
Software (Guangzhou) Co Ltd for the purpose of carrying out research and development for our overseas
projects. Furthermore, the setting up of this base will provide the Group with the availability of additional
resources for projects in the region.
Rexit offers a broad range of solutions and services specifically for the Insurance and Financial Services
industries that want to benefit from implementing secured e-commerce.
Our products support the entire spectrum of insurance processes and operations spanning from the external
sales and marketing processes through the various distribution channels which include agents, brokers and
banks through to the internal operations that involve the management of intermediaries and service providers,
policy administration, underwriting, customer services, claims management, compliance, reinsurance, etc.
Rexit also has the capacity to provide solutions and data management services for large scale nationwide
implementations and support various government initiatives.
Our primary products are:
InfoGuardian, an integrated workflow, case management and document management
system that provides and facilitates an on-line information sharing
environment for multiple users within and outside customer
organizations.
e-PPA, an online system used by all approved
unit trust companies in Malaysia to submit
investment and redemption applications to
InfoGuardian
Enabling online legal documentation
e-PPA
e-Cover
CORPORATE STRUCTURE
100 %
100 %
100 %
100 %
100 %
49 %
DIRECTORS PROFILES
Datuk Chung
Hon Cheong
Mr. Si Tho
Yoke Meng
YBhg Dato Abdul Murad was appointed to the Board on 17 October 2007. He holds a Diploma in Accounting
and Bachelor of Economics (Honours) from the University of Malaya. He is a Member of Malaysian Institute
of Chartered Public Accountants. He started his career with Bank Negara in 1976 as an Administrative Officer
and appointed as Assistant Governor in 1994 until his resignation in 1999. He joined RHB Bank Berhad in
January 1999 as Executive Director until his resignation in September 1999. He currently sits on the Board of
several private limited companies.
YBhg Datuk Abdul Murad is a Member of the Audit Committee and Remuneration Committee. He attended
all the four (4) Board meetings held in the financial year ended 30 June 2014.
DIRECTORS PROFILES
DIRECTORS PROFILES
Notes
None of the Directors have any family relationship with any director and/or major shareholder of the Company.
None of the Directors have any conflict of interest with the Company.
None of the Directors have been convicted for offences within the past 10 years.
CHAIRMANS STATEMENT
Dear Shareholders,
On behalf of the Board of Directors of Rexit Berhad, I am pleased to
present the Annual Report and the audited financial statements of the
Group for the financial year ended 30 June 2014 (FY2014).
Overview
The year under review was indeed demanding and challenging for our
e-Cover products and services. To stay relevant and remain profitable,
the Group positions itself to be readily able to respond effectively and
efficiently to the anticipated and actual structural changes in the
insurance industry and the financial institutions. Continuous and
aggressive marketing of the Groups products and services to new customers and the development of new
areas of focus for our e-Cover necessitates the increase in direct costs. Despite the turbulent and tough
operating conditions, the Group managed to deliver a decent performance and I am confident that the Group
will stay profitable for the next financial year.
As anticipated the new ruling by the Employment Provident Funds (EPF) that cuts contributors
investments in unit trusts had a significant impact of lowering the revenue contribution of our e-PPA project.
The Management believes this is temporary and EPF transactions will improve once the policy becomes more
certain.
The Group is targeting to launch the e-Cover motor insurance for the Malaysian Motor Insurance Pool
(MMIP) this year. MIMP is a high risk insurance pool that is run collectively by the insurance industry
under the orders of the regulators of the industry. MMIP provides an avenue for vehicle owners that finds
difficulty in securing cover to purchase their motor insurance policy. This service to MMIP is provided on user
pay per transaction and would upon implementation generate positive recurrent revenue for the Group.
Financial Performance
For the FY2014, the Groups revenue, mainly derived from software as a service subscription and transaction
fees, value added hardware and system software sales was recorded at RM11.991 million. This is 13%
decrease when compared to RM13.776 million recorded in the preceding year. The Groups profit before tax
decreased to RM3.480 million which is 27% decrease when compared to RM4.779 million in the last financial
year. The Groups profit after tax decreased to RM3.405 million compared to RM4.754 million in the previous
year.
For the FY2014, the Group purchased a total 1,327,400 ordinary shares from the open market. As of 30 June
2014, the Group holds a total of 7,555,200 Rexits shares in its Treasury.
Dividend
The total dividend for the FY2014 is 40 percent or 4 sen per ordinary share of RM0.10. The total dividend
payout amounted to 7.281 million.
10
CHAIRMANS STATEMENT
Prospects
The e-Cover motor insurance for MMIP is targeted to be launched this year. The attraction for clients to MMIP
will be the 24 X 7 availability of the service and providing an avenue for vehicle owners to purchase motor
insurance which is mandatory. The Group is expending resources to attract and train the people in the industry
to use this e-Cover for MMIP. The quantum of annual recurring revenue will depend on the number of
transactions once the e-Cover for MMIP is implemented successfully. I anticipate that the e-Cover for MMIP
will contribute positively to the Groups revenue and profit.
To ensure successful implementation of InfoGuardian to our second bank client, intensive training was
conducted to all potential users in the country. Currently, there are more than 600 legal firms and more than
120 property valuation companies registered as users of the InfoGuardian system. It is expected to generate
recurring revenue for the Group. The Group strongly believes that there is great potential for InfoGuardian in
the country and in the region.
The e-PPA will continue to contribute recurring revenue to the Group albeit in a smaller amount. The
Management believes this is temporary and EPF transactions will improve once the policy becomes more
certain.
The Governments plan to fully liberalize motor tariffs will spur more intense competition amongst the
insurance companies. Offers for more innovative products and effective and efficient service delivery to meet
customers requirements would be the order of the day in a deregulated market. The Groups experience in
providing e-Cover services in a deregulated environment to an insurance company in Singapore will put us in
good stead to exploit the potential opportunities by offering proven quality services to the industry.
Taking into consideration that the domestic market will be characterized by rapid changes and be more
demanding in 2015, the Group believes that the prospects of Rexit for the next financial year would remain
challenging.
Research and Development
Prioritizing recurring revenue generating projects remains the focus in all the Groups research and
development efforts. Continuous enhancement and development of new applications for the financial and
financial related services industry leveraging on our e-Cover infrastructure remains top priority. For FY2014,
the Group expended more than 2 million in R&D.
Corporate Social Responsibility
Human resources are the Groups greatest assets. Building a corporate culture which emphasizes team work
for more efficient and effective results, the Group organized a team building session for its employees.
Recognizing that the Goods and Services Tax to be implemented early 2015 will have an impact on the Group,
our employees and the community, a training session was conducted. Management and employees would be
in a better position in their respective communities to address the impact of GST.
The Group aims to attract the best talents and retain them by providing the appropriate opportunities such as
formal training and on the job training as part of their personal and professional development.
11
CHAIRMANS STATEMENT
Corporate Governance
The Board of Director places strong emphasis in maintaining high standards of corporate governance as it is
our responsibility to protect and maximize shareholders value and to ensure the sustainability of the Groups
business. The Statement of Corporate Governance highlighting the measures taken is in the Annual Report.
Appreciation
On behalf of the Board of Director, I would like to convey my thanks and appreciation to the management and
employees for the hard work, loyalty, dedication and commitment in assisting the Group to weather out the
challenging times. My sincere thanks goes out to all our customers, business associates and shareholders for
your invaluable support.
12
MANAGEMENT OVERVIEW
Financial Performance
For the FY 2014, the Rexit Group achieved a profit after tax of RM3.405 million on recorded revenue of
RM11.991 million, mainly attributable to reduction in subscription and transaction fees. Profit after tax has
also decreased in line with the reduction in revenue.
Group Prospects
The Rexit Group will continue to strengthen its core competencies in further developments to the e-Cover
products and services, improvement in operational efficiency, and to extend its marketing efforts in the Asia
Pacific region. We have identified the following as the main areas of growth:
(a) e-Cover
Rexit has been increasing its efforts to introduce its e-Cover non-motor products to our existing customers.
The current challenging economic situation has created opportunities for Rexit to engage our customers for
the implementation of additional products, as a result of the insurance companies looking at ways to further
improve their operational efficiency. Nevertheless, the continuing consolidation of the local insurance
industry presents a challenging operating landscape for the Company.
In addition to leveraging on our existing customers, Rexit is actively exploring opportunities in the Asia
Pacific region with potential partners to market our products and services in these markets.
The successful adoption of the e-Cover system in Hong Kong, Singapore and Thailand is very significant
as it provided the Group with the opportunity to localize the e-Cover system to meet the respective
countrys industry requirements.
Rexit will be launching the e-Cover for the Malaysian Motor Insurance Pool (MMIP) this year. This is
a significant achievement for Rexit as MMIP is the high risk insurance pool that is run collectively by the
insurance industry under the orders of the regulators of the industry. MMIP provides an avenue for vehicle
owners that have difficulties in securing covers to purchase their motor insurance policies. This service to
MMIP is provided on a pay-per-use basis and its implementation will generate positive recurring revenue
for the Group.
(b) e-PPA
Rexit has successfully implemented e-PPA for the Federation of Investment Managers Malaysia
(FIMM) in 2010, and its usage has since been expanded to include non-FIMM member companies.
The e-PPA continues to contribute to Rexits revenue in the current financial year and will continue to
contribute positively to Rexits revenue on a sustainable basis in the coming years.
(c) InfoGuardian
One of InfoGuardian customers, an international Islamic bank has further expanded its use of the system to
its Security Documentation Department. Furthermore, additional legal firms and property valuation firms
have joined the program resulting in a wider collaboration network for financial institutions. The bank is
looking to expand the usage of InfoGuardian to other types of external service provider e.g. debt collection
agencies.
Rexit has also successfully implemented InfoGuardian for a local bank and its panel of legal firms. Rexit
is confident that with the recent contract, InfoGuardian will be able to boost its future revenues, as
businesses look to improve their profitability through better efficiency.
Taking into consideration the domestic and regional economic environment which is expected to be more
volatile in 2015, the Group believes that the prospects of Rexit for the next financial year would remain
challenging.
13
MANAGEMENT OVERVIEW
14
The Board of Directors (the Board) is committed in ensuring good corporate governance is practiced
throughout the Group as a fundamental part of discharging its fiduciary responsibilities to protect and enhance
shareholders value and the financial performance of the Group.
The Board is pleased to disclose below the Company and its subsidiaries (Group)s application of the
Principles and Recommendations of the Malaysian Code on Corporate Governance 2012 (Code) throughout
the financial year.
PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD
Clear functions and Roles and Responsibilities of the Board
The Boards main responsibility is to lead and manage the Group in an effective manner including developing
strategic directions and objectives in line with its vision and missions, implement plans and supervise the
conduct of the Groups business as a whole. The Boards role is to provide leadership of the Group within a
framework of prudent and effective controls whilst ensuring risks are consistently assessed and controlled.
The Board conducts ongoing review and evaluation of the Groups strategic plans to ensure the Groups
focus is in line with the constantly evolving market conditions as well as identifying new businesses
and opportunities. The Board also ensures that an adequate system of internal controls is in place and
adopts appropriate measures to mitigate any foreseeable and/or unexpected risks. In addition, the Board also
focuses on succession planning for senior management, investor relations programme and shareholders
communication policy.
Board Charter
The Board Charter sets out the composition and balance, roles and responsibilities and processes of the Board
and is to ensure that all Board members acting on behalf of the Company are aware of their duties and
responsibilities as Board members.
The Board Charter shall be reviewed by the Board as and when required to ensure its relevance in assisting the
Board to discharge its duties with the changes in the corporate laws and regulations that may arise from time
to time and to remain consistent with the Board's objectives and responsibilities.
The Board Charter is published on the Companys website at www.rexit.com
Code of Conduct and Ethics
The Board acknowledges the importance of establishing a healthy corporate culture and has formalised in
writing a Code of Conduct and Ethics for the Board, which sets out the standards of good behaviour by
underscoring the core ethical values that are vital for their business decisions.
Sustainability of Business
The Board recognises the need for the Companys strategy to include sustainability on the operations. A
sustainability process would help the Company to set goals, measure its performance and manage changes in
its business. The effort would continue to be monitored by the Board in helping to shape the Companys
strategy and policy and ultimately to improve the overall performance.
15
Supply of Information
The Board recognises that the decision making process is highly dependent on the quality of information
furnished. As such, in discharging their duties, the Directors have full and timely access to all information
concerning the Company and the Group. Prior to each Board meeting, the agenda together with relevant
reports and Board papers would be circulated to all Directors in sufficient time to enable effective discussions
and decision making during Board meetings.
All Board members have access to the advice and services of the Company Secretaries and senior
management. The Board, whether as a full board or in their individual capacity, in the furtherance of their
duties, may seek independent professional advice in discharge of their duties and responsibilities at the
Companys expense.
PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD
Board Composition
The Board currently has five (5) members comprising two (2) Executive Directors, two (2) Independent
Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The Chairman of the Board
is an Independent Non-Executive Director. The current composition of the Board is in compliance with the
ACE Market Listing Requirements (Listing Requirements) of Bursa Malaysia Securities Berhad (Bursa
Securities), which states that at least 2 directors or 1/3 of the board of directors, whichever is higher, must be
independent directors. The Board members, with different background and specialisation, collectively bring
with them a wide range of experience and expertise to lead and control the Company. With their intimate
knowledge of the Groups business, all Board members are committed to take on the primary responsibilities
to direct towards successful growth of the Company and ultimately the enhancement of long-term
shareholders value.
Re-election of Directors
The Companys Articles of Association provides that at each Annual General Meeting, one-third (1/3) of the
Directors for the time being shall retire from office and an election of Directors shall take place provided
always that each Director shall retire at least once in every three (3) years but shall be eligible for re-election.
Any Director appointed during the year shall hold office only until the next Annual General Meeting and then
be eligible for re-election.
The following Directors shall retire at the forthcoming Tenth Annual General Meeting of the Company. Being
eligible, they have offered themselves for re-election:(a) Dato Abdul Murad Bin Khalid
(b) Mr. Kuah Hun Liang
A brief description on the profile of each Director and their respective attendance in Board Meetings are
presented in the Annual Report.
16
Board Committees
The Board has established and delegated specific responsibilities to four (4) Committees of the Board, which
operate within clearly defined written Terms of Reference. The various Committees report the outcome of their
meetings to the Board, which are then incorporated in the Boards minutes. Details of the membership,
objectives, duties and responsibilities, authorities and meetings are set out below:
1.
Audit Committee
The Audit Committee reviews issues of accounting policy and presentation for external financial reporting,
monitors the work of the internal audit function and ensures that an objective and professional relationship
is maintained with the external auditors. Its principal function is to assist the Board in maintaining a sound
system of internal control. The Committee has full access to the auditors both internal and external who,
in turn, have access at all times to the Chairman of the Committee. The Committee meets with the external
auditors without any executive present at least twice a year.
The Audit Committee Report is presented on page 27 to page 29 of the Annual Report.
2.
Remuneration Committee
The Remuneration Committee is delegated the responsibility to review and recommend to the Board the
remuneration packages and terms of employment of the Executive Directors. The Board as a whole
determines the remuneration of Non-Executive Directors with individual Director abstaining from
decisions in respect of their individual remuneration.
The policy practiced on Directors remuneration by the Remuneration Committee is to provide the
remuneration packages necessary to attract, retain and motivate Directors of the quality required to
manage the business of the Company and to align the interest of the Directors with those of the
shareholders.
The Remuneration Committee comprises the following members: Members
Designation
The Remuneration Committee convened one (1) meeting during the financial year to review and
recommend the Executive Directors remuneration packages.
The aggregate remuneration of the Directors of the Group for the financial year ended 30 June 2014
is as follows:Non-Executive Directors
(RM)
Total
(RM)
96,000
96,000
834,598
834,598
Total
834,598
96,000
930,598
Remuneration
Fees
Executive Directors
(RM)
17
The number of directors whose total remuneration from the Company falls within the following band for
the financial year ended 30 June 2014 is as follows:Range of Remuneration
Executive Directors
Non-Executive Directors
Below RM50,000
RM350,001 - RM400,000
RM400,001 - RM450,000
On the non-disclosure of detailed remuneration of each Director, the Board is of the view that the
transparency of Directors remuneration has been sufficiently dealt with by the band disclosure presented
in this Statement.
3.
Nominating Committee
The Nominating Committee is delegated the responsibility to ensure a formal and transparent procedure
for the appointment of new directors to the Board. The Nominating Committee will review and assess the
proposed appointment of new directors, and thereupon make the appropriate recommendations to the
Board for approval.
In addition, the Nominating Committee is also responsible for reviewing candidates for appointment to
the Board Committees and making appropriate recommendations to the Board for approval. It is also
tasked with assessing the competencies and effectiveness of the Board, the Board Committees and the
performance of individual directors ensuring that the required mix of skills and experience are present on
the Board.
The Nominating Committee comprises the following members: Members
Designation
The Nominating Committee convened one (1) meeting during the financial year and the following
activities were carried out:(i)
Assessing the effectiveness of the Board, Board Committees and the contribution of each director,
taking into consideration the required mix of skills, knowledge and expertise and experience and
other requisite qualities including core competencies contributed by Non-Executive Directors. All
assessment and evaluation is properly documented.
(ii)
Although the Board supports the initiative to include women representation on the Board to achieve
boardroom diversity, it does not intend to formalise any specific target on women Directors as it believes
that the Company should be on-boarding Directors who bring with them the requisite skills and
experience to enable the Company realise its corporate strategies and objectives.
18
4.
Options Committee
The Options Committee is entrusted with the responsibility of overseeing the administration of the
Companys Employees Share Option Scheme (ESOS) in accordance with the ESOS By-Laws to
determine participation eligibility, option offers and share allocation and to attend to such other matters as
may be required.
The Options Committee comprises the following members:
Members
Designation
The Company has not granted any option to its employees under the ESOS.
PRINCIPLE 3 REINFORCE INDEPENDENCE OF THE BOARD
There is a clear division of responsibilities between the Chairman and the Chief Executive Officer to ensure a
balance of authority and power. The Chairman is responsible for ensuring Board effectiveness and conduct
whilst the Chief Executive Officer is responsible for the Groups operations and implementation of Board
policies and making operational decisions. The presence of independent directors fulfills a pivotal role in
corporate accountability with their unbiased and independent views, advice and judgement to take into account
of the long term interests of the shareholders, employees, customers and the Groups business associates,
which ensure that no one individual dominates the decision of the Board.
Annual Assessment of Independent Director
On an annual basis, the Board carries out an assessment of the independence of its independent directors. When
assessing independence, the Board focuses on the independent directors background, family relationships and
considers whether the independent director can continue to bring independent and objective judgment to board
deliberations.
During the financial year, the Board carried out the assessment and is satisfied with the level of independence
demonstrated by the Independent Directors and their ability to act in the best interest of the Company.
Tenure of Independent Directors
As a matter of policy, the Board has established that the tenure of Independent Directors shall not exceed a
cumulative term of twelve (12) years. The Board believes that this tenure provides a balance of effectiveness
and independence that is appropriate for the Group.
The Independent Non-Executive Director may continue to serve on the Board beyond the twelve (12) years
tenure provided the Independent Non-Executive is re-designated as a Non-Independent Director. Where the
Board is of the view that the Independent Non-Executive Director can continue beyond the twelve (12) years
tenure, it must justify and seek shareholders approval.
19
Attendance
4/4
4/4
4/4
4/4
4/4
Directors of the Company do not hold more than five (5) directorships in public listed companies and there is no
restriction on number of directorships in non-public listed companies, as stipulated in the Listing Requirements.
The Directors observe the recommendation of the Code that they are required to notify the Chairman of the
Board before accepting any new directorships and to indicate the time expected to be spent on the new
appointment. Generally, Directors are at liberty to accept other Board appointments so long as such
appointments are not in conflict with the business of the Company and do not adversely affect the Directors
performance as a member of the Board.
Directors Training
All the Directors of the Company have completed the Mandatory Accreditation Programme prescribed by
Bursa Securities. The Directors will continue to participate in relevant training programmes to keep abreast
with the latest developments in the information technology industry, corporate governance and regulatory
changes so that they would be able to discharge their duties as directors effectively.
For the year ended 30 June 2014 and up to the date of this report, the courses attended by certain of the
Directors include:
Name
20
Programme Attended
The Company Secretary regularly updates the Board on changes to Listing Requirements and other relevant
guidelines/legislation at Board meetings. The External Auditors also briefed the Board members on changes to
the Malaysian Financial Reporting Standards that would affect the Groups financial statements during the
financial year under review. The Directors will continue to undergo relevant training programmes to further
enhance their skills and knowledge in the discharge of their stewardship role.
PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING BY THE COMPANY
Financial Reporting Standards
The Board has overall responsibility for the quality and completeness of the financial statements of the
Company and the Group, both on a quarterly and full year basis, and has a duty to ensure that those financial
statements are prepared based on appropriate and consistently applied accounting policies, supported by
reasonably prudent judgment and estimates and in accordance to the applicable financial reporting standards.
The Audit Committee plays a crucial role in assisting the Board to scrutinize the information for disclosure to
shareholders to ensure material accuracy, adequacy and timeliness.
Independence of External Auditors
The Audit Committee undertakes an annual review of the suitability and independence of the external auditors.
The External Auditors have confirmed that they were, and have been, independent throughout the conduct of
the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.
The External Auditors can be engaged to perform non-audit services that are not perceived to be in conflict
with their role as External Auditors.
Having assessed their performance, the Audit Committee is satisfied with the competence and independence
of the External Auditors and had recommended to the Board, upon which the shareholders approval will be
sought at the forthcoming Annual General Meeting of the Company.
PRINCIPLE 6 RECOGNISE AND MANAGE RISK OF THE GROUP
Establish a sound framework to manage risks
The Board acknowledges its responsibilities of setting up and maintaining an effective system in ensuring a
proper risk management environment. In achieving this, the Board has ensured that the system of internal
control has taken into account the process of identifying key risks, the likelihood of occurrence and materiality.
The Board believes that the internal control systems and procedures provide reasonable but not absolute
assurance that assets are safeguarded, transactions are authorised and recorded properly and that material
errors and irregularities are either detected or minimised to prevent recurrence.
21
22
Poll voting
The Chairman of the Meeting would inform the shareholders, proxies and corporate representatives on their
rights to demand for a poll vote at the commencement of the general meeting for any resolution in accordance
with the Articles of Association of the Company.
Effective communication and engagements with shareholders
The Board recognises the importance of an effective communication channel between the Board and
shareholders. The Companys website is updated regularly with the latest corporate developments of the
Group and is accessible to shareholders, investors and the public. Shareholders may also send their queries to
the Companys Executive Director, Mr. Si Tho Yoke Meng at ymsitho@rexit.com or the Chief Financial
Officer, Ms. Chan Shih Fei, at sfchan@rexit.com.
STATEMENT ON DIRECTORS RESPONSIBILITY
The Directors are required under the Companies Act, 1965 (the Act) to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the Company and of the Group and the
results and cash flows of the Company and of the Group for that period.
Hence, the Directors have ensured that the financial statements have been prepared in accordance with
applicable accounting standards in Malaysia, the requirements of the Act and other statutory requirements. In
preparing the financial statements, the Directors have applied appropriate accounting policies on a consistent
basis and made judgments and estimates that are reasonable and prudent.
The Directors are responsible for ensuring that proper accounting records are kept which disclose with
reasonable accuracy the financial position of the Group and the Company to enable them to ensure that the
financial statements comply with the Act. The Directors have overall responsibility for taking such steps
towards safeguarding the assets of the Group and to prevent and detect fraud and other irregularities.
This statement is made in accordance with a resolution of the Board dated 10 October 2014.
23
1.
Share Buy-back
The following are the Share Buy-back transactions during the year ended 30 June 2014. All shares
have been maintained as treasury shares and there has been no resale of the Companys treasury
share nor have there been any shares cancelled during the year under review.
Monthly
breakdown
2013/2014
August
September
February
May
Total
24
No. of Shares
bought back
834,000
201,500
100,000
191,900
1,327,400
Lowest
Price
(RM)
Highest
Price
(RM)
0.240
0.265
0.410
0.390
0.265
0.270
0.420
0.400
Average
Purchase
Price
(RM)
0.253
0.268
0.415
0.395
Total
Purchase Price
(RM)
213,275
54,242
41,496
76,144
385,157
2.
3.
4.
5.
Non-Audit Fees
There were no non-audit fees paid to the external auditors, Messrs. Sekhar & Tan or corporation
affiliated to the auditors firm by the Company during the financial year ended 30 June 2014.
6.
Profit Guarantee
There was no profit guarantee given by the Company during the financial year ended 30 June 2014.
7.
Material Contracts
There were no material contracts entered into by the Company and/or its subsidiaries during the
financial year ended 30 June 2014 that involves the interest of Directors and/or major shareholders.
8.
25
26
MEMBERSHIP
The Audit Committee (the Committee) comprises the following members:
Members
Designation
TERMS OF REFERENCE
1.
Composition
The Committee shall be appointed from amongst the Board and shall comprise of at least three (3)
members. All Committee Members must be non-executive directors with a majority of independent
directors. All Committee Members should be financially literate and at least one (1) member must be a
member of the Malaysian Institute of Accountants (MIA); or possess such other qualifications and/or
experience as approved by Bursa Malaysia Securities Berhad. The Chairman shall be an independent
director. If a Committee Member for any reason ceases to be a member with the result that the number of
members is reduced to below three (3), the Board shall within three (3) months of the event, appoint such
number of new members as may be required to make up the minimum number of three (3) members.
2.
Meetings
The Committee shall meet at least four (4) times a year, with due notice of issues to be discussed, and
should record its conclusion in discharging its duties and responsibilities. The head of finance, the head
of internal audit and a representative of the external auditors should normally attend meetings. Other
board members may attend meetings upon invitation of the Committee. The Committee shall have the
authority to convene meetings with the external auditors, the internal auditors or both, excluding the
attendance of other directors and employees of the Company, at least twice a year. The quorum for a
meeting shall be two (2) members, provided that the majority of members present at the meeting shall be
independent.
3.
Authority
The Committee shall have explicit authority to investigate any matter within its terms of reference, the
resources to do so, and full and unrestricted access to information. The Committee should be able to
obtain independent professional or other advice and to invite outsiders with relevant experience to attend,
if necessary.
4.
To consider the appointment of the external auditors and any question of resignation or dismissal;
(b)
To discuss with the external auditors before the audit commences, the nature and scope of the audit,
and ensure co-ordination where more than one audit firm is involved;
(c)
To review the quarterly and year-end financial statements of the board, focusing particularly on:
any change in accounting policies and practices;
significant adjustments arising from the audit;
the going concern assumption; and
compliance with accounting standards and other legal requirements.
27
(d)
To discuss problems and reservations arising from the interim and final audits, and any matter the
auditors may wish to discuss (in the absence of management where necessary);
(e)
(f)
(g)
(h)
To review any related party transactions and conflict of interest situation that may arise within the
Company or Group; and
(i)
To consider and review the major findings of internal investigations and managements response.
Attendance
4/4
4/4
4/4
The activities undertaken by the Committee during the financial year were as follows: -
28
a)
b)
Reviewed the unaudited quarterly financial results, audited financial statements and annual report
which are recommended for the Boards approval;
c)
Reviewed the issues and results arising from external audit and the resolutions of such issues
highlighted;
d)
Reviewed the internal audit plan and reports and assessed the internal auditors findings and the
managements response;
e)
f)
Considered the re-appointment of the external auditors and make recommendation to the Board for
approval.
Conducted internal audit reviews in accordance with the internal audit plan;
(ii)
Reviewed compliance with internal policies, procedures and standards and assessing the adequacy
and effectiveness of the Groups internal controls; and
(iii)
Reported the results of internal audits and made recommendations for improvements.
The cost incurred for the Internal Audit Department for the financial year 2014 amounted to RM86,630.
29
FINANCIAL STATEMENTS
Year Ended 30 June 2014
Page 31
DIRECTORS REPORT
Page 35
STATEMENT BY DIRECTORS
Page 35
STATUTORY DECLARATION
Page 36
Page 38
Page 39
Page 40
Page 42
Page 44
DIRECTORS REPORT
The directors hereby submit their report and the audited financial statements of the Group and of the
Company for the financial year ended 30 June 2014.
PRINCIPAL ACTIVITIES
The principal activity of the Company is investment holding whilst those of its subsidiary companies are
disclosed in note 6 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Group
RM
Company
RM
3,404,978
5,552,167
DIVIDENDS
Dividends paid, declared or proposed by the Company since the end of the previous financial year were:
in respect of the year ended 30 June 2014:
First interim tax exempt dividend of 20% per ordinary share,
paid on 8 January 2014
Second interim tax exempt dividend of 20% per ordinary share,
paid on 18 March 2014.
RM
3,641,401
3,639,400
7,280,801
The directors do not recommend the payment of any final dividend in respect of the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those
disclosed in the financial statements.
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable
steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making
of allowance for doubtful debts, and are satisfied that were no bad and doubtful debts.
At the date of this report, the directors are not aware of any circumstances which would render it necessary to
write off bad debts or to make an allowance for doubtful debts.
CURRENT ASSETS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable
steps to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course
of business their values as shown in the accounting records of the Company were written down to an amount
that they might be expected to realise.
At the date of this report, the directors are not aware of any circumstances which would render the values
attributed to the current assets in the financial statements of the Group and of the Company misleading.
31
DIRECTORS REPORT
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:
(i)
any charge on the assets of the Group and of the Company which has arisen since the end of the
financial year which secures the liabilities of any other person; or
(ii)
any contingent liability of the Group and of the Company which has arisen since the end of the
financial year.
No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely
to become enforceable within the period of twelve months after the end of the financial year which, in the
opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet
their obligations as and when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this
report or the financial statements of the Group and of the Company which would render any amount stated in
the financial statements of the Group and of the Company misleading.
ITEMS OF AN UNUSUAL NATURE
In the opinion of the directors:
(i)
the results of the operations of the Group and of the Company for the financial year have not been
substantially affected by any item, transaction or event of a material and unusual nature other than the
impairment loss of RM2,472,783 recognised at the Company level in respect of the investment in a
subsidiary company disclosed in note 6 to the financial statements.
(ii)
there has not arisen in the interval between the end of the financial year and the date of this report any
item, transaction or event of a material and unusual nature which is likely to affect substantially the
results of the operations of the Group and of the Company for the financial year in which this report is
made.
TREASURY SHARES
The shareholders of the Company granted a mandate to the Company to repurchase its own shares at the
Annual General Meeting held on 30 October 2008. The shareholders mandate was subsequently renewed at
the 9th Annual General Meeting held on 22 November 2013. The directors of the Company are committed to
enhance the value of the Company to its shareholders and believe that the repurchase plan can be applied in the
best interest of the Company and its shareholders.
During the financial year, the Company repurchased 1,327,400 of its issued share capital from the open
market. The average price paid for the shares repurchased was RM0.29 per share. The repurchase transactions
were financed by internally generated funds. The shares repurchased are being held as treasury shares in
accordance with Section 67A of the Companies Act, 1965.
As at 30 June 2014, the Company held as treasury shares a total of 7,555,200 of its 181,778,133 issued
ordinary shares. Such treasury shares are held at a carrying amount of RM3,264,176.
32
DIRECTORS REPORT
DIRECTORS
The directors who served since the date of the last report are:
Datuk Ng Kam Chiu
Datuk Chung Hon Cheong
Si Tho Yoke Meng
DatoAbdul Murad Bin Khalid
Kuah Hun Liang
The directors holding office at the end of the financial year and their interests in shares in the Company and its
related companies, as recorded in the register of directors shareholdings were as follows:
No. of ordinary shares of RM0.10 each
Shareholdings registered
in the name of the directors
The Company
Datuk Ng
Kam Chiu
Datuk Chung
Hon Cheong
Kuah Hun
Liang
Si Tho Yoke
Meng
DatoAbdul
Murad Bin
Khalid
At
1.7.2013
Bought
Sold
At
30.6.2014
At
1.7.2013
Bought
Sold
At
30.6.2014
268,000
268,000
6,100
6,100
223,334
223,334 71,361,227
- 71,361,227
18,057,300
- 71,361,227
- 71,361,227
6,900,000 20,690,000
- 20,690,000
5,900,000 1,000,000
18,057,300
By virtue of their substantial interests in the shares of the Company, Datuk Chung Hon Cheong and Mr. Si Tho
Yoke Meng are also deemed to have interests in the shares of its subsidiary companies to the extent the
Company has an interest during the financial year.
Other than the above, none of the other directors holding office at the end of the financial year had any interest
in shares in the Company and its related companies during the financial year.
DIRECTORS' BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit
(other than as disclosed in the financial statements) by reason of a contract made by the Company or a related
corporation with the director, or with a firm of which the director is a member, or with a company in which the
director has a substantial financial interest.
Neither during nor at the end of the financial year, was the Company a party to any arrangements whose object
is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.
33
DIRECTORS REPORT
..........................................................................
Datuk Chung Hon Cheong
Kuala Lumpur
Date: 10 October 2014
34
..........................................................................
Si Tho Yoke Meng
STATEMENT BY DIRECTORS
We, Datuk Chung Hon Cheong and Si Tho Yoke Meng, being directors of REXIT BERHAD do hereby
state that in the opinion of the directors, the accompanying financial statements give a true and fair view of
the financial position of the Group and of the Company as at 30 June 2014 and of their financial performance
and cash flows for the financial year ended on that date and are properly drawn up in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act, 1965 in Malaysia.
The information set out in note 32 to the financial statements have been prepared in accordance with the
Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context
of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the
Malaysian Institute of Accountants.
Signed in accordance with a resolution of the directors,
..........................................................................
Datuk Chung Hon Cheong
..........................................................................
Si Tho Yoke Meng
Kuala Lumpur
Date: 10 October 2014
STATUTORY DECLARATION
I, Chan Shih Fei, the officer primarily responsible for the financial management of REXIT BERHAD do
solemnly and sincerely declare that the accompanying financial statements are in my opinion correct, and I
make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of
the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed )
Chan Shih Fei at Kuala Lumpur in Wilayah )
Persekutuan on 10 October 2014
)
..........................................................................
Chan Shih Fei
Before me,
Commissioner for Oaths
35
36
Kuala Lumpur
Date: 10 October 2014
37
Note
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiary companies
Investment in an associated
company
Investment in quoted funds
Other investment
Current assets
Investment in quoted funds
Trade and other receivables
Prepayments
Tax recoverable
Cash and cash equivalents
Non-current liability
Deferred taxation
Current liabilities
Trade and other payables
Deferred income
Tax payable
Total liabilities
TOTAL EQUITY AND LIABILITIES
2013
RM
Company
2014
RM
5,205,098
76,729
-
4,548,278
245,438
-
5,155,405
7,628,188
7
8
9
4,286,388
2,132,746
45,000
11,745,961
3,619,045
2,088,825
45,000
10,546,586
3,087,000
8,242,405
3,087,000
10,715,188
8
10
11
2,003,000
1,840,380
462,764
55,077
14,453,297
18,814,518
2,614,764
436,655
75,838
21,631,575
24,758,832
7,851,198
7,851,198
5,061
7,483,549
7,488,610
30,560,479
35,305,418
16,093,603
18,203,798
13
13
14
18,933,333
(3,264,176)
11,715,123
27,384,280
18,933,333
(2,879,019)
15,544,080
31,598,394
18,933,333
(3,264,176)
405,850
16,075,007
18,933,333
(2,879,019)
2,134,484
18,188,798
15
62,000
16
17
454,864
2,658,739
596
3,114,199
916,487
2,790,264
273
3,707,024
18,000
596
18,596
15,000
15,000
3,176,199
3,707,024
18,596
15,000
30,560,479
35,305,418
16,093,603
18,203,798
12
38
2013
RM
4
5
6
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the Company
Share capital
Treasury shares
Reserves
Total equity
Group
2014
RM
Revenue
Direct costs
Gross profit
Other operating income
Administrative expenses
Other operating expense
Share of profit of an associated
company, net of tax
Profit before taxation
Taxation
Profit after taxation
Other comprehensive income for
the year, net of tax:
Items that may be reclassified
subsequently to profit or loss
Net gain on available-for-sale
financial assets:
Gain on fair value changes
Foreign currency translation (loss)/gain
18
19
20
21
2013
RM
11,991,033
(4,236,731)
7,754,302
535,469
(5,477,556)
-
13,775,540
(4,894,782)
8,880,758
630,668
(5,053,878)
-
8,234,336
8,234,336
(205,843)
(2,472,783)
5,181,344
5,181,344
(208,220)
(2,375,696)
667,345
3,479,560
(74,582)
3,404,978
321,937
4,779,485
(25,339)
4,754,146
5,555,710
(3,543)
5,552,167
2,597,428
(1,489)
2,595,939
46,921
(55)
46,866
52,115
682
52,797
5,552,167
3,451,844
4,806,943
Profit attributable to
Owners of the Company
3,404,978
4,754,146
3,451,844
4,806,943
1.87
2.58
22
Company
2014
2013
RM
RM
2014
RM
2,595,939
39
40
At 1 July 2012
Total comprehensive income for the year
Transactions with owners:
Shares repurchased
Dividends
At 30 June 2013/1 July 2013
Total comprehensive income for the year
Transactions with owners:
Shares repurchased
Dividends
At 30 June 2014
Group
18,933,333
18,933,333
13
23
18,933,333
13
23
Note
Share
capital
RM
(52,943)
(52,888)
(55)
(53,570)
682
Exchange
translation
reserve
RM
(28,731)
(75,652)
46,921
(127,767)
52,115
Fair value
adjustment
reserve
RM
(385,157)
(3,264,176)
(508,274)
(2,879,019)
-
(2,370,745)
-
Treasury
shares
RM
(7,280,801)
11,796,797
(3,689,647)
15,672,620
3,404,978
14,608,121
4,754,146
Retained
profits
RM
(385,157)
(7,280,801)
27,384,280
30,989,372
4,806,943
(508,274)
(3,689,647)
31,598,394
3,451,844
Total
RM
Note
Company
At 1 July 2012
Total comprehensive income
for the year
Transactions with owners:
Shares repurchased
Dividends
At 30 June 2013/1 July 2013
Total comprehensive income
for the year
Transactions with owners:
Shares repurchased
Dividends
At 30 June 2014
13
23
18,933,333
-
13
23
18,933,333
(2,370,745)
(508,274)
(2,879,019)
(385,157)
(3,264,176)
3,228,192
19,790,780
2,595,939
2,595,939
(3,689,647)
2,134,484
(508,274)
(3,689,647)
18,188,798
5,552,167
5,552,167
(7,280,801)
405,850
(385,157)
(7,280,801)
16,075,007
41
42
2013
RM
Company
2014
2013
RM
RM
3,479,560
4,779,485
5,555,710
2,597,428
168,709
748,008
249,014
712,886
(535,470)
32,644
(667,345)
(605,160)
(25,507)
(321,937)
2,472,783
(8,000,000)
(234,336)
-
2,375,696
(5,000,000)
(181,344)
-
3,226,106
715,703
(593,899)
3,347,910
(66,516)
75,018
3,356,412
4,788,781
(951,467)
345,457
4,182,771
(26,526)
188,762
4,345,007
(205,843)
3,000
(202,843)
(1,125)
3,239
(200,729)
(208,220)
6,005,000
3,000
5,799,780
(3,174)
5,796,606
(1,404,766)
(2,000,000)
(2,869,296)
535,470
-
2013
RM
605,160
-
Company
2014
2013
RM
RM
234,336
8,000,000
181,344
5,000,000
(1,587,000)
(324,124)
(1,305,964)
8,234,336
(1,587,000)
3,594,344
(7,280,801)
(385,157)
(7,665,958)
(3,689,647)
(508,274)
(4,197,921)
(7,280,801)
(385,157)
(7,665,958)
(3,689,647)
(508,274)
(4,197,921)
(7,178,842)
(1,158,878)
367,649
5,193,029
564
911
21,631,575
22,789,542
7,483,549
2,290,520
14,453,297
21,631,575
7,851,198
7,483,549
43
CORPORATE INFORMATION
The Company is principally engaged in investment holding whilst those of its subsidiary companies
are disclosed in note 6 to the financial statements. There have been no significant changes in the nature
of these activities during the year.
The Company is a public company limited by shares, incorporated and domiciled in Malaysia and
listed on the ACE Market of Bursa Malaysia Securities Berhad.
The financial statements of the Group and of the Company were authorised for issue in accordance
with a resolution of the directors on 10 October 2014.
2.
(a)
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost
convention unless otherwise disclosed in the accounting policies below, and comply with Malaysian
Financial Reporting Standards [MFRSs], International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
The preparation of financial statements in conformity with MFRSs require management to exercise its
judgement in the process of applying the Groups and the Companys accounting policies. It also
requires the use of accounting estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the year. Although these estimates are based on
managements best knowledge of current events and actions, actual results may ultimately differ from
those estimates. Critical accounting estimates and assumptions used that are significant to the financial
statements, and areas involving a higher degree of judgement or complexity, are disclosed in note 3 to
the financial statements.
During the year, the Group and the Company adopted all of the new or revised MFRSs and Issues
Committee [IC] Interpretations that are effective for the Groups and the Companys financial period
beginning 1 July 2013. The adoption of these new and revised MFRSs and IC Interpretations has no
material effect on the financial statements.
44
(a)
Share-based Payment*
Business Combination*
Business Combination**
Operating Segments*
Fair Value Measurement**
Property, Plant and Equipment*
Defined Benefit Plans: Employee Contributions
Related Party Disclosures*
Intangible Assets*
Investment Property**
45
(a)
(b)
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiary companies, made up to the end of the year.
Subsidiary companies are entities, including unincorporated entities, controlled by the Group. The
Group controls an entity when it is exposed to, or has rights to, variable returns through its power over
the entity and has the ability to affect those returns through its power over the entity. The existence and
effect of substantive potential voting rights are considered when assessing whether the Group has such
power over another entity.
The financial statements of subsidiary companies are included in the consolidated financial statements
from the date that control effectively commences until the date that control effectively ceases.
Subsidiary companies are consolidated using the acquisition method of accounting.
Identifiable assets acquired and liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the
periods in which the costs are incurred and the services are received.
In business combinations achieved in stages, previously held equity interests in the acquiree are
re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in
profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the
acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interests
proportionate share of the acquiree net identifiable assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination,
the amount of non-controlling interest in the acquiree (if any), and the fair value of the Groups
previously held equity interest in the acquiree (if any), over the net fair value of the acquirees
identifiable assets and liabilities is recorded as goodwill in the statement of financial position. In
instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain
purchase in profit or loss on the acquisition date.
Intragroup transactions, balances and unrealised gains are eliminated on consolidation and the
consolidated financial statements reflect external transactions only. Unrealised losses are also
eliminated on consolidation unless cost cannot be recovered.
Non-controlling interest represents the equity in subsidiary companies not attributable, directly or
indirectly, to owners of the Company, and is presented separately in the consolidated statements of
profit or loss and other comprehensive income and within equity in the consolidated statement of
financial position, separately from equity attributable to owners of the Company.
46
(b)
(c)
2%
20%
10% to 25%
10% to 20%
10% to 20%
20%
47
(d)
Intangible Assets
Intangible assets are recognised only when the identifiability, control and future economic benefit
probability criteria are met.
Intangible assets are initially measured at cost. After the initial recognition, intangible assets are
carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful
lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
are amortised on a straight-line basis over the estimated economic useful lives and are assessed for any
indication that the asset may be impaired. If any such indication exists, the entity shall estimate the
recoverable amount of the asset. The amortisation period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at each financial year end. The amortisation expense
on intangible assets with finite lives is recognised in profit or loss and is included within the direct
costs.
An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors,
there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows
to the Group. Intangible assets with indefinite useful lives are tested for impairment annually and
wherever there is an indication that the carrying amount may be impaired. Such intangible assets are
not amortised. Their useful lives are reviewed each period to determine whether events and
circumstances continue to support the indefinite useful life assessment for the asset. If they do not, the
change in the useful life assessment from indefinite to finite is accounted for as a change in accounting
estimate in accordance with MFRS 108 Accounting Policies, Changes in Accounting Estimates and
Errors.
Expenditure on an intangible item that is initially recognised as an expense is not recognised as part of
the cost of an intangible asset at a later date.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from
its use. The gain or loss arising from the derecognition determined as the difference between the net
disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss when the
asset is derecognised.
Research and development
Expenditure on development activities of internally developed products is recognised as an intangible
asset when it relates to the production of new or substantively improved products and processes and
when the Group and the Company can demonstrate that it is technically feasible to develop the product
or processes, adequate resources are available to complete the development and that there is an
intention to complete and sell the product or processes to generate future economic benefits.
Capitalised development costs are amortised on a straight-line basis over a period of five years.
Development expenditure not satisfying the criteria mentioned and expenditure arising from research
or from the research phase of internal projects are recognised in profit or loss as incurred.
Development assets are tested for impairment annually in accordance with the accounting policy on
impairment of non-financial asset in note 2(g).
48
(e)
Investments
Investments in subsidiary companies and associated company are stated in the Companys separate
financial statements at cost. Where an indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to its recoverable amount. See accounting policy
on impairment of non-financial assets in note 2(g).
Upon disposal of an investment, the difference between the net disposal proceeds and the carrying
value is charged or credited to the profit or loss.
(f)
Associated Companies
Associated companies are entities, including unincorporated entities, in which the Group has
significant influence, but not control, over the financial and operating policies.
Investments in associated companies are accounted for in the consolidated financial statements using
the equity method less any impairment losses, unless it is classified as held for sale or distribution. The
cost of the investment includes transaction costs. The consolidated financial statements include the
Groups share of profit or loss and other comprehensive income of the associated companies, after
adjustments if any, to align the accounting policies with those of the Group, from the date that
significant influence commences until the date that significant influence ceases.
When the Groups share of losses exceeds its interest in an associated company, the carrying amount
of that interest including any long-term investments is reduced to zero, and the recognition of further
losses is discontinued except to the extent that the Group has an obligation or has made payments on
behalf of the associated company.
When the Group ceases to have significant influence over an associated company, any retained interest
in the former associated company at the date when significant influence is lost is measured at fair value
and this amount is regarded as the initial carrying amount of a financial asset. The difference between
the fair value of any retained interest plus proceeds from the interest disposed of and the carrying
amount of the investment at the date when equity method is discontinued is recognised in the profit or
loss.
When the Groups interest in an associated company decreases but does not result in a loss of
significant influence, any retained interest is not re-measured. Any gain or loss arising from the
decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other
comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss
would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
The most recent available financial statements of the associated company are used by the Group in
applying the equity method. When the end of the reporting periods of the financial statements are not
coterminous, the associated company prepares, for the use of the Group, financial statements as of the
same date as that of the Group.
49
(g)
(h)
Taxation
Income tax expense comprises current and deferred tax.
Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss
for the year. Current tax for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities using the tax rates that have been enacted or
substantive enacted by the reporting date.
Current tax is recognised in profit or loss except to the extent that the tax relates to the items recognised
outside profit or loss, either in other comprehensive income or directly in equity.
Deferred tax liabilities and assets are provided for, using the liability method, in respect of all
temporary differences between the carrying amount of an asset or liability in the statement of financial
position and its tax base including unabsorbed tax losses and capital allowances unless the deferred tax
arises from the initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of transaction, affects neither accounting profit nor taxable profit.
A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences can be utilised. The carrying amount of a
deferred tax asset is reviewed at each reporting date. If it is no longer probable that sufficient taxable
profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the
carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that
sufficient taxable profit will be available, such reduction will be reversed to the extent of the taxable
profit.
50
(h)
Taxation (Contd)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation
authority.
Deferred tax will be recognised as income or expense and included in the profit or loss for the period
unless the tax relates to items recognised outside the profit or loss. Deferred tax items are recognised
in correlation to the underlying transaction either in other comprehensive income or directly to equity
and deferred tax arising from a business combination is adjusted against goodwill on consolidation.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted by the reporting date.
(i)
Foreign Currencies
Functional and Presentation Currency
The financial statements of the Company and its subsidiary companies are measured using the
currency of the primary economic environment in which the entity operates [the functional
currency]. The consolidated financial statements are presented in Ringgit Malaysia [RM], which is
also the Companys functional and presentation currency.
Foreign Currency Transactions and Translations
Transactions in currencies other than the Companys and its subsidiary companies functional
currency [foreign currencies] are recorded in the functional currency using the exchange rates
prevailing at the dates of the transactions. At each reporting date, monetary items denominated in
foreign currencies are translated at the rates prevailing on the reporting date. Non-monetary items
carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on
the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are included in profit or loss for the period.
Exchange differences arising on the translation of non-monetary items carried at fair value are
included in profit or loss for the period except for the differences arising on the translation of
non-monetary items in respect of which gains and losses are recognised directly in equity.
Foreign Operations
Financial statements of foreign operations are translated at year end exchange rates with respect to the
assets and liabilities, and at exchange rates at the dates of the transactions with respect to profit or loss.
All resulting translation differences are recognised as a separate component in equity.
In the consolidated financial statements, exchange differences arising from the translation of net
investment in foreign operations are taken to equity. When a foreign operation is partially disposed of
or sold, exchange differences that were recorded in equity are recognised in profit or loss as part of the
gain or loss on disposal.
Fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation
are treated as assets and liabilities of acquired entity and translated at the exchange rate ruling at the
reporting date.
51
(j)
Financial Assets
Financial assets are recognised in the statement of financial position when, and only when the Group
or the Company becomes a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of
financial assets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition,
and the categories include financial assets at fair value through profit or loss, loans and receivables,
held-to-maturity investments and available-for-sale financial assets.
(i) Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss if they are held
for trading or are designated as such upon initial recognition. Financial assets held for trading are
derivatives (including separated embedded derivatives) or financial assets acquired principally for
the purpose of selling in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured
at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss.
Net gains or net losses on financial assets at fair value through profit or loss do not include
exchange differences, interest and dividend income. Exchange differences, interest and dividend
income on financial assets at fair value through profit or loss are recognised separately in profit or
loss as part of other losses or other income.
Financial assets at fair value through profit or loss could be presented as current or non-current.
Financial assets that are held primarily for trading purposes are presented as current whereas
financial assets that are not held primarily for trading purposes are presented as current or
non-current based on the settlement date.
(ii) Loan and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are
classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, and through the amortisation process.
Loan and receivables are classified as current assets, except for those having maturity dates later
than 12 months after the reporting date which are classified as non-current.
(iii) Held-to-maturity investments
Financial assets with fixed and determinable payments and fixed maturity are classified as
held-to-maturity when the Group or the Company has the positive intention and ability to hold the
investment to maturity.
Subsequently to initial recognition, held-to-maturity investments are measured at amortised cost
using the effective interest method. Gains or losses are recognised in profit or loss when the
held-to-maturity investments are derecognised or impaired, and through the amortisation process.
Held-to-maturity investments are classified as non-current assets, except for those having maturity
within 12 months after the reporting date which are classified as current.
52
(j)
(k)
53
(k)
(l)
(m)
Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial
position when, and only when, the Group and the Company become parties to the contractual
provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at
fair value through profit or loss or other financial liabilities.
(i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the
Company that do not meet the hedge accounting criteria. Derivative liabilities are initially
measured at fair value and subsequently stated at fair value, with any resultant gains or losses
recognised in profit or loss. Net gains or losses on derivatives include exchange differences.
54
(m)
(n)
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of
shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are
classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from
equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss.
Dividends to shareholders are recognised in equity in the period in which they are declared.
If the Company reacquires its own equity instruments, the consideration paid, including any
attributable transaction costs, is deducted from equity as treasury shares until they are cancelled. No
gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Companys
own equity instruments. Where such shares are issued by resale, the difference between the sales
consideration and the carrying amount is shown as movement in equity. When the treasury shares are
distributed as share dividend, the cost of the treasury shares will be reduced against share premium
account or the distributable reserve, or both.
55
(o)
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable net of discounts and
rebates. Revenue is recognised to the extent that it is probable that the economic benefits associated
with the transaction will flow to the Group and the Company, and the amount of revenue and the cost
incurred or to be incurred in respect of the transaction can be reliably measured. The Group and the
Company assess their revenue arrangements to determine if they are acting as principal or agent. The
following specific recognition criteria must be met for each of the Groups and the Companys
activities before revenue is recognised:
Hardware sales and services
(p)
Interest income
Dividend income
Employee Benefits
Wages, salaries, social security contributions, paid annual leave and sick leave, bonuses and
non-monetary benefits are recognised as an expense in the period which the employees have rendered
the associated services.
Short term accumulating compensated absences such as paid annual leave are recognised as an
expense when employees render services that increase their entitlement to future compensated
absences. Short term non-accumulating absences such as sick leave are recognised when the absences
occur.
Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make
such payments, as a result of past events and when a reliable estimate can be made of the amount of
the obligation.
The Group and the Company make contributions to a statutory provident fund. The contributions are
recognised as a liability after deducting any contribution already paid and as an expense in the period
in which the employees render their services.
(q)
Deferred Income
Deferred income represents unearned revenue received in advance and is recognised in profit or loss
when the services are provided.
56
(r)
(s)
Contingencies
A contingent liability or asset is a possible obligation or benefit that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not
wholly within control of the Group and the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group
and the Company.
57
(a)
58
(b)
59
4.
60
Freehold land
Building
Motor vehicle
Computers
Office equipment
Furniture and fittings
Renovation
Carrying amount
Freehold land
Building
Motor vehicle
Computers
Office equipment
Furniture and fittings
Renovation
Group
Balance as
at 1.7.2013
RM
1,561,386
545,204
2,166,518
231,061
44,109
4,548,278
1,561,386
531,009
2,879,840
204,733
28,130
5,205,098
Cost
RM
(178,711)
(145,561)
(5,110,687)
(504,899)
(201,817)
(863,435)
(7,005,110)
Carrying
amount
RM
At 30.6.2014
Accumulated
depreciation
RM
1,561,386
709,720
145,561
7,990,527
709,632
229,947
863,435
12,210,208
1,561,386
531,009
2,879,840
204,733
28,130
5,205,098
Balance as
at 30.6.2014
RM
51
11
62
Translation
adjustments
RM
(14,195)
(659,627)
(58,207)
(15,979)
(748,008)
Depreciation
charge for
the year
RM
4.
Freehold land
Building
Motor vehicle
Computers
Office equipment
Furniture and fittings
Renovation
Carrying amount
Freehold land
Building
Motor vehicle
Computers
Office equipment
Furniture and fittings
Renovation
Group
Balance as
at 1.7.2012
RM
1,561,386
559,398
2,454,544
295,428
60,320
5,623
4,936,699
1,561,386
545,204
2,166,518
231,061
44,109
4,548,278
Cost
RM
(164,516)
(145,561)
(4,450,078)
(446,657)
(185,838)
(863,100)
(6,255,750)
Carrying
amount
RM
At 30.6.2013
Accumulated
depreciation
RM
1,561,386
709,720
145,561
6,616,596
677,718
229,947
863,100
10,804,028
1,561,386
545,204
2,166,518
231,061
44,109
4,548,278
Balance as
at 30.6.2013
RM
282
59
341
Translation
adjustments
RM
(14,194)
(611,608)
(65,250)
(16,211)
(5,623)
(712,886)
Depreciation
charge for
the year
RM
61
5.
INTANGIBLE ASSETS
Group
Carrying amount
Balance as
at 1.7.2013
RM
Amortisation
charge for
the year
RM
Balance as
at 30.6.2014
RM
245,438
(168,709)
76,729
Cost
RM
At 30.6.2014
Accumulated
amortisation
RM
Carrying
amount
RM
2,495,728
(2,418,999)
76,729
Balance as
at 1.7.2012
RM
Amortisation
charge for
the year
RM
Balance as
at 30.6.2013
RM
494,452
(249,014)
245,438
Cost
RM
At 30.6.2013
Accumulated
amortisation
RM
Carrying
amount
RM
2,495,728
(2,250,290)
245,438
Development expenditure
Development expenditure
Carrying amount
Development expenditure
Development expenditure
6.
62
Company
2014
RM
20,099,724
(14,944,319)
5,155,405
2013
RM
20,099,724
(12,471,536)
7,628,188
Name of company
Principal place of
business/country
of incorporation
Principal activities
Group's
effective interest
2014 2013
%
%
Malaysia
Sales of application
software solutions and
related products and
services
100
100
Malaysia
Provision of software
technical and consultancy
services
100
100
Rexit Software
Sdn. Bhd. ["RSWSB"]
Malaysia
100
100
Rexit Software
(Guangzhou) Co.
Ltd.* ["RSGZ"]
People's Republic
of China
100
100
Rexit International
Sdn. Bhd. ["RISB"]
Malaysia
100
100
63
Company
2014
RM
2013
RM
2014
RM
2013
RM
3,087,000
3,087,000
3,087,000
3,087,000
1,199,388
4,286,388
532,045
3,619,045
3,087,000
3,087,000
Name of company
Reward-Link.com
Sdn. Bhd.
Principal place of
business/country
of incorporation
Malaysia
Principal activities
The Government
authorised Road Transport
Department [JPJ]
eINSURANS gateway
provider between the
insurance companies in
Malaysia and the JPJ
Group's
effective interest
2014
%
2013
%
49
49
During the prior year, the Group acquired an additional 29% equity interest in Reward-Link.com
Sdn. Bhd. comprising 1,450,000 ordinary shares of RM1 each for a cash consideration of
RM1,587,000. Upon the completion of the acquisition, the Groups equity interest in
Reward-Link.com Sdn. Bhd. increased to 49%.
The results of the associated company have been accounted for based on its unaudited
management accounts for the year ended 30 June 2014.
The following table summarises the information of the Groups material associated company
and reconciles the information to the carrying amount of the Groups interest in the associated
company.
64
824,210
6,681,580
(231,000)
(14,692)
7,260,098
2013
RM
1,031,658
5,152,276
(259,000)
(26,761)
5,898,173
Revenue
Profit for the year and total comprehensive income
2014
RM
2013
RM
2,500,798
1,361,929
2,270,421
657,010
2014
RM
2013
RM
3,557,448
728,940
4,286,388
2,890,105
728,940
3,619,045
2014
RM
2013
RM
667,345
321,937
As at 30 June
Group's share of net assets
Goodwill
Carrying amount in the statement of financial position
Group's share of results
Year ended 30 June
Group's share of profit for the year and total
comprehensive income
65
Market value
9.
2014
RM
2013
RM
2,132,746
2,003,000
4,135,746
2,088,825
2,088,825
4,135,746
2,088,825
OTHER INVESTMENT
Group
Group
2014
RM
Trade receivables:
An associated company
Third parties
Other receivables - Deposits
1,781,677
1,781,677
58,703
1,840,380
2013
RM
45,320
2,510,811
2,556,131
58,633
2,614,764
2014
RM
2013
RM
45,000
45,000
Company
2014
RM
-
2013
RM
-
Trade receivables
Trade receivables are non-interest bearing and the Groups normal credit terms ranged from 30 to
60 (2013: 30 to 60) days. They are recognised at their original invoiced amounts which represent
their fair values on initial recognition.
66
2013
RM
Company
2014
RM
2013
RM
942,467
2,464,942
265,167
1,800
574,043
839,210
1,781,677
89,389
91,189
2,556,131
67
Company
2014
RM
2013
RM
2014
RM
2013
RM
1,336,010
1,665,381
844,239
436,649
10,753,402
2,363,885
14,453,297
18,825,330
1,140,864
21,631,575
5,974,716
1,032,243
7,851,198
6,958,757
88,143
7,483,549
Information on the financial risks of cash and cash equivalents are disclosed in note 28 to the financial
statements.
13. SHARE CAPITAL
Group and Company
2014
RM
2013
RM
Authorised:
250,000,000 ordinary shares of RM0.10 each
25,000,000
25,000,000
18,933,333
18,933,333
During the year, the Company repurchased 1,327,400 (2013: 1,859,700) of its issued share capital
from the open market. The average price paid for the shares repurchased was RM0.29 (2013: RM0.27)
per share. The repurchase transactions were financed by internally generated funds. The shares
repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act,
1965.
At the reporting date, the number of outstanding ordinary shares in issue after setting off the treasury
shares of 7,555,200 (2013: 6,227,800) against its equity of 189,333,333 is 181,778,133 (2013:
183,105,533).
Details relating to the repurchase during the year are as follows:
Amount
Number of shares
At 1 July 2013/2012
Shares repurchased during
the year
At 30 June
68
2014
2013
2014
RM
2013
RM
6,227,800
4,368,100
2,879,019
2,370,745
1,327,400
7,555,200
1,859,700
6,227,800
385,157
3,264,176
508,274
2,879,019
RESERVES
Group
Non-distributable
Exchange translation reserve
Fair value adjustment reserve
Distributable
Retained profits
2014
RM
2013
RM
(52,943)
(28,731)
(52,888)
(75,652)
11,796,797
11,715,123
15,672,620
15,544,080
Company
2014
RM
2013
RM
405,850
405,850
2,134,484
2,134,484
DEFERRED TAXATION
Group
At 1 July 2013/2012
Recognised in profit or loss (Note 21)
Temporary difference on the excess of capital allowances
over the corresponding depreciation
At 30 June
2014
RM
2013
RM
62,000
62,000
Deferred tax liabilities at the reporting date are in respect of temporary differences on the excess capital
allowances over the corresponding depreciation.
69
15.
70
Group
(62,000)
(366,500)
(428,500)
366,500
(62,000)
366,500
366,500
(366,500)
-
2014
Deferred
Deferred
tax assets tax liabilities
RM
RM
(62,000)
(366,500)
(62,000)
(62,000)
366,500
Net
RM
274,750
(274,750)
-
274,750
Deferred
tax assets
RM
(274,750)
(274,750)
274,750
-
2013
Deferred
tax liabilities
RM
(274,750)
-
274,750
Net
RM
2014
RM
2013
RM
3,194,250
2,564,500
26,750
8,500
3,229,500
33,500
2,598,000
Deferred tax assets have not been recognised in respect of the above items because it is not probable
that future taxable profits will be available against which the subsidiary companies can utilise the
benefits therefrom.
Group
2014
RM
2013
RM
2,000
2,000
(48,000)
(46,000)
(162,000)
(160,000)
Deferred tax liabilities have not been recognised in respect of the above items of a subsidiary company,
RSWSB, for the period up to 31 March 2015 as RSWSB was granted Multimedia Super Corridor
[MSC] Status under the Promotion of Investment Act, 1986. By virtue of this status, RSWSB
obtained its pioneer status incentive which includes five years exemption on statutory business
incomes under Section 127 of the Income Tax Act, 1967 which expired on 24 March 2010. RSWSB
was granted extension of the pioneer status for another five years until 24 March 2015.
71
2013
RM
Company
2014
RM
2013
RM
132,963
600
133,563
98,669
600
99,269
321,301
817,218
18,000
15,000
454,864
916,487
18,000
15,000
Trade payables are non-interest bearing and the Groups normal credit terms ranged from 60 to 90
(2013: 60 to 90) days.
17.
DEFERRED INCOME
Group
Deferred income represents unearned subscriptions received in advance.
18.
REVENUE
Group
2014
RM
Dividends received from
a subsidiary company
Interest income
Hardware and system
software sales and services
Software sales and services
19.
2013
RM
Company
2014
RM
8,000,000
234,336
5,000,000
181,344
1,600,813
10,390,220
11,991,033
2,533,125
11,242,415
13,775,540
8,234,336
5,181,344
DIRECT COSTS
Group
This includes amortisation of development expenditure of RM168,709 (2013: RM249,014).
72
2013
RM
21.
Company
2014
RM
2014
RM
2013
RM
64,951
56,260
18,000
18,000
4,500
748,008
3,300
712,886
3,000
-
3,000
-
2,472,783
2,375,696
34,656
32,644
168,925
37,263
190,152
535,470
605,160
25,507
2013
RM
TAXATION
Group
2014
RM
Recognised in profit or loss
Taxation for the year:
Malaysian income tax
Foreign tax
Deferred taxation (Note 15)
Over provision of taxation
in respect of prior years:
Malaysian income tax
2013
RM
Company
2014
RM
2013
RM
13,670
62,000
75,670
14,300
13,886
28,186
4,600
4,600
3,960
3,960
(1,088)
74,582
(2,847)
25,339
(1,057)
3,543
(2,471)
1,489
Malaysian income tax is calculated at the statutory rate of 25% (2013: 25%) on the estimated taxable
profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
73
TAXATION (Contd)
The numerical reconciliation between the tax expense in the profit or loss and the income tax expense
applicable to profit before taxation at the statutory income tax rates of the Group and of the Company
is as follows:
Group
2014
RM
Profit before taxation
Tax at the Malaysian statutory
rates of 25% (2013: 25%)
Tax effects of:
Expenses not deductible for
tax purposes
Income not subject to tax
Share of results of an
associated company
Deferred tax assets not
recognised
Deferred tax liabilities not
recognised
Utilisation of deferred tax
assets not recognised in
prior years
- Unabsorbed capital
allowance
- Unabsorbed tax losses
Recognition of previously
unrecognised deferred tax
liabilities
Over provision of Malaysian
income tax in respect of
prior years
Tax expense
2013
RM
Company
2014
RM
2013
RM
3,479,560
4,779,485
5,555,710
2,597,428
869,890
1,194,870
1,388,928
649,357
29,121
(1,400,592)
107,841
(1,664,829)
669,662
(2,053,990)
645,978
(1,291,375)
(166,836)
(80,484)
729,388
595,470
49,000
41,000
(51,626)
(44,675)
(84,223)
(81,459)
(2,847)
25,339
(1,057)
3,543
(2,471)
1,489
62,000
(1,088)
74,582
RSWSB, a subsidiary company of the Company, was granted the Multimedia Super Corridor (MSC)
status on 25 March 2005. As such, statutory income of the subsidiary company will be tax exempted
under the Pioneer Status incentive for the next five years up to 24 March 2010. On 31 May 2010,
RSWSB was granted extension of the Pioneer Status for another five years until 24 March 2015.
At the reporting date, the Company has tax exempt income for payment of tax exempt dividends of
approximately RM18,857,000 (2013: RM18,138,000).
74
23.
DIVIDENDS
Group and Company
2014
2013
RM
RM
In respect of the year ended 30 June 2013:
Interim tax exempt dividend of 20% per ordinary share,
paid on 12 March 2013
In respect of the year ended 30 June 2014:
First interim tax exempt dividend of 20% per ordinary
share, paid on 8 January 2014
Second interim tax exempt dividend of 20% per ordinary
share, paid on 18 March 2014
24.
3,689,647
3,641,401
3,639,401
7,280,801
3,689,647
EMPLOYEE BENEFITS
Included in:
Direct costs
Staff costs:
Salaries and other
emoluments
Employees' provident fund
Administrative expenses
Directors' remuneration:
Directors of the Company:
Fees
Salaries and other
emoluments
Employees' provident fund
Staff costs:
Salaries and other
emoluments
Employees' provident fund
Group
2014
RM
2013
RM
Company
2014
RM
2013
RM
1,119,276
136,815
936,027
113,712
96,000
96,000
96,000
96,000
761,398
73,200
637,445
61,320
1,896,206
235,063
4,317,958
1,972,901
177,392
3,994,797
96,000
96,000
75
RELATED PARTIES
Group and Company
(a)
(b)
Associated company:
Sales of application software solutions and hardware
26.
2014
RM
2013
RM
362,755
230,992
COMMITMENT
Group
The Group had entered into non-cancellable lease agreements for office use and staff housing,
resulting in future rental commitments which can, subject to terms in the agreements, be revised
annually based on prevailing market rates. The Group has aggregate future minimum lease
commitment as at the reporting date as follows:
76
2014
RM
2013
RM
48,600
30,180
78,780
30,180
30,180
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81
82
Company
2014
RM
Note
2014
RM
2013
RM
8
9
4,135,746
45,000
2,088,825
45,000
2013
RM
Financial assets
Available-for-sale:
Quoted trust funds
Other investment
Loan and receivables:
Trade and other
receivables
Cash and cash
equivalents
10
1,840,380
2,614,764
12
14,453,297
21,631,575
7,851,198
7,483,549
Financial liabilities
Other financial liabilities:
Trade and other
payables
16
454,864
916,487
18,000
15,000
(a)
At 30 June 2014
Financial assets:
Available-for-sale
Equity instruments
quoted funds in
Malaysia
Quoted price
in active markets
for identical
instruments
(Level 1)
RM
Significant
other
observable
inputs
(Level 2)
RM
Significant
unobservable
inputs
(Level 3)
RM
Total
RM
4,135,746
4,135,746
2,088,825
2,088,825
At 30 June 2013
Financial assets:
Available-for-sale
Equity instruments
quoted funds in
Malaysia
Fair value hierarchy
The fair value measurement hierarchies used to measure financial assets and liabilities carried at fair
value in the statements of financial position as at 30 June 2014 are as follows:
(i)
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii)
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or
liabilities, either directly (i.e. prices) or indirectly (i.e. derived from prices).
(iii)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
There were no transfers between Level 1, Level 2 and Level 3 during the current financial year.
The Group and the Company do not have any financial liabilities carried at fair value classified as
above as at 30 June 2014.
83
(a)
Fair value of financial instruments that are carried at fair value (Contd)
Determination of fair value
Quoted equity instruments Fair value is determined by direct reference to their bid price quotations
in an active market at the end of the reporting period.
(b)
Fair value of financial instruments that are not carried at fair value and whose carrying amounts
are reasonable approximation of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value:
Group
2014
RM
1,840,380
14,453,297
454,864
Company
2013
RM
2,614,764
21,631,575
916,487
2014
RM
7,851,198
18,000
2013
RM
7,483,549
15,000
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair
values, due to their short term nature.
It was not practicable to estimate the fair value of the Groups investment in club membership due to
the lack of comparable quoted prices in an active market and the fair value cannot be reliably
measured.
31.
CAPITAL MANAGEMENT
The Groups and the Companys objectives when managing capital are to safeguard the Groups and
the Companys abilities to continue as going concerns and to maintain optimal capital structures so as
to maximise shareholder value. The Groups and the Companys policies are to maintain an adequate
capital base so as to maintain investor, creditor and market confidence and to sustain future business
developments. The Group and the Company fund their operations and growth through internally
generated funds.
The management does not set a target level of gearing but uses capital opportunistically to support its
business and to add value for shareholders. The key discipline adopted is to widen the margin between
the return on capital employed and the cost of that capital.
There was no change in the Groups and the Companys approaches to capital management during the
financial year.
The Group and the Company have no external borrowings. The debt-to-adjusted capital ratio does not
provide a meaningful indicator of the risk of borrowings.
84
Company
2014
RM
11,829,441
(32,644)
2013
RM
15,700,001
(27,381)
2014
RM
405,850
-
2013
RM
2,134,484
-
11,796,797
15,672,620
405,850
2,134,484
The supplementary information on realised and unrealised profits or losses has been prepared in
accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive
of Bursa Malaysia Securities Berhad.
85
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91
For
1.
2.
3.
To approve the payment of Directors fees for the financial year ended 30 June 2014.
4.
To re-appoint Messrs Sekhar & Tan as Auditors of the Company and to authorise the Directors
to fix their remuneration.
5.
Authority to Issue and Allot Shares pursuant to Section 132D of the Companies Act, 1965.
6.
Against
Please indicate with an X how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his
discretion.
If appointment of proxy is under hand
________________________________
Signed by *individual member/*officer or
attorney of member/*authorised nominee
of ________________________________
(beneficial owner)
_______________
Director/Secretary
______________
Director
First Proxy
Seal
________________________________was
hereto affixed in accordance with its
Articles of Association in the presence of :-
Second Proxy
No. of Shares held : ________________
Securities Account No :
_________________________________
(CDS Account No.)
(Compulsory)
Date :
________________________________
(beneficial owner)
Notes:(i)
(ii)
(iii)
(iv)
A member of the Company entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead.
Where a member appoints two proxies, the appointment shall be invalid unless the member specifies the proportion of his holdings to be represented by
each proxy. The provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 which holds
ordinary shares in the Company for multiple beneficial owners in one (1) securities account (Omnibus Account), there is no limit to the number of proxies
which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a
corporation, either under its common seal or the hand of its officer or its duly authorised attorney.
th
The instrument appointing a proxy shall be deposited at the Registered Office of the Company at Lot 6.08, 6 Floor, Plaza First Nationwide, No. 161, Jalan
Tun H.S. Lee, 50000 Kuala Lumpur, not less than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof.
Stamp