View - mTouche

Transcription

View - mTouche

CONTENTS
02
04
05
06
08
10
15
18
19
20
21
75
84
86
Corporate Information
Corporate Structure
Five Years Group Financial Summary
Profile of Directors and CEO
Chairman's Statement
Statement on Corporate Governance
Audit Committee Report
Statement on Risk Management and
Internal Control
Sustainability Report
Additional Compliance Information
Financial Statements
Analysis of Shareholdings
Notice of Annual General Meeting
Statement Accompaying Notice of
Annual General Meeting
87
Proxy Form
CORPORATE INFORMATION
BOARD OF
DIRECTORS
NAME
Y.M. Raja Hizad Bin Raja Kamarulzaman
Dato’ Kong Hien Nigh
Pua Soo Jyue
Yee Chee Wai, Patrick
Dato’ Ahmad Bahrin Bin Idrus
Yeap Teik Pung
AUDIT
COMMITTEE
NAME
Yeap Teik Pung
DESIGNATION
Chairman
Member
Member
DIRECTORSHIP
Independent Non-Executive Director
Senior Independent Non-Executive Director
Non-Independent Non-Executive Director
DESIGNATION
Chairman
Member
Member
DIRECTORSHIP
NOMINATION
COMMITTEE
NAME
Yeap Teik Pung
REMUNERATION
COMMITTEE
NAME
Yeap Teik Pung
2
DESIGNATION
Chairman
Member
Member
Technology Berhad (656395-X)
DIRECTORSHIP
Non- Independent Non-Executive Chairman
annual report 2012
CORPORATE INFORMATION(cont'd.)
annual report 2012
COMPANY
SECRETARY
Pang Chia Tyng (MAICSA 7034545)
REGISTERED
OFFICE
10th Floor Menara Hap Seng
HEAD
OFFICE
mTouche Technology Berhad
Suite 39-06 Menara Citibank
AUDITORS
Messrs Ernst & Young (AF 0039)
Level 23A, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
50490 Kuala Lumpur
Tel: 03-7495 8000
Fax: 03-2095 5332
PRINCIPAL
BANKERS
Malayan Banking Berhad
OCBC Bank (Malaysia) Berhad
SHARE
REGISTRAR
Tricor Investor Services Sdn Bhd (118401-V)
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Tel: 03-2264 3883
Fax: 03-2282 1886
STOCK
EXCHANGE
LISTING
ACE Market of Bursa Malaysia Securities Berhad
Stock Short Name: MTOUCHE
Stock Code: 0092
Ng Sally (MAICSA 7060343)
No. 1 & 3 Jalan P. Ramlee
50250 Kuala Lumpur
Tel: 03-2382 4288
Fax: 03-2382 4170/71/72
165 Jalan Ampang
50450 Kuala Lumpur
Tel: 03-2166 0018
Fax: 03-2166 1028
Website:www.mtouche.com
Warrant Code: 0092WA and 0092WB
3
CORPORATE STRUCTURE
100%
MOBILE TOUCHETEK SDN BHD
(Malaysia)
100%
(Singapore)
MTOUCHE PTE LTD
100%
(Hong Kong)
NASTECH LIMITED
100%
MOBILE FUSION PTE LTD
(Singapore)
99%
PT MTOUCHE
(Indonesia)
99.94%
(Thai)
100%
MTOUCHE (THAILAND) CO., LTD
MTOUCHE (HONG KONG) LTD
(Hong Kong)
100%
MTOUCHE (VIETNAM) LTD
(Vietnam)
64.9%
(Vietnam)
100%
(Singapore)
99.99%
(Philippines)
100%
(Malaysia)
4
M.B.O.X. JOINT STOCK COMPANY
MBIT PTE. LTD.
MTOUCHE TECHNOLOGY PHILIPPINES INC
MTOUCHE INTERNATIONAL SDN BHD
annual report 2012
’09
’12
Revenue (RM ’000)
4,245
6,094
2,300
(3,991)
’11
’12
’10
’09
’11
’12
’10
’11
’12
’08
’09
’10
2,271
20,360
30,070
91,131
Total Assets (RM ’000)
11,195
11,754
13,215
17,734
’09
34,027
’08
32,550
’12
43,639
’11
40,384
’10
22,647
’08
’10
(4,407)
1,203
’09
Profit /(Loss) Attributable to Equity Owners
of the Company (RM ’000)
19,523
’09
Profit /(Loss) before Tax (RM ’000)
(65,244)
(38,426)
’08
’08
110,856
’08
(64,502)
’11
(24,373)
43,754
’10
36,889
44,080
41,916
35,826
FIVE-YEAR GROUP FINANCIAL SUMMARY
’11
’12
Net Assets Attributable to Equity Owners
of the Company (RM ’000)
68.00
’12
’08
’11
annual report 2012
10.00
9.00
(1.94)
’10
13.00
’09
Basic Earnings /(Loss) per Share (Sen)
18.00
’08
(0.29)
(0.51)
0.56
1.87
Total Liabilities (RM ’000)
’09
’10
’11
’12
Net Assets per Share Attributable to
Equity Owners of the Company (Sen)
5
PROFILE OF DIRECTORS AND CEO
Standing (from left): Low Keng Fei, Aaron Loke (Group Financial Controller), Dato’ Kong, Patrick Yee, Pua Soo Jyue, Yeap Teik Pung
Front (from left) : Dato’ Ahmad Bahrin, Y.M. Raja Hizad
Pua Soo Jyue
Non-Independent Non-Executive Chairman
Executive Director
Y.M. Raja Hizad Bin Raja Kamarulzaman, a Malaysian, aged 59, was
appointed as Non-Independent Non-Executive Chairman on 27 April
2012. Y.M. Raja Hizad is also the Chairman of the Remuneration
Committee.
Pua Soo Jyue, a Malaysian, aged 38 was appointed as Executive
Director on 21 December 2010.
Y.M. Raja Hizad is currently a project director with EAG Consulting
Sdn Bhd an Environmental Analytical Green Consultant where he is
responsible of the administration of the Company. He has more than
35 years working experience in architectural and planning
construction projects.
Y.M. Raja Hizad holds a Certificate in Town Planning from Institut
Teknologi MARA (currently known as Universiti Teknologi MARA) and
Diploma in Town Planning Universiti Teknologi Malaysia.
He is currently the Head of Business Development of mTouche
Technology Berhad and has had an extensive ten (10) years of
experience focusing on Mobile Value Added Services (VAS) in the
Asia Pacific region and vast exposure in South East Asian countries
as Country Manager where he was responsible for operations and
revenue management.
He holds a Diploma in Marketing from the Chartered Institute of
Marketing, United Kingdom.
Executive Director
Dato’ Kong Hien Nigh, a Malaysian, aged 60, was appointed as
Executive Director on 27 April 2012.
Dato’ Kong joined the Royal Malaysian Police (RMP) as an Inspector
in September 1973. After serving 38 years in the RMP he retired in
October 2011 with the rank of Senior Assistant Commissioner of
Police (SAC). He has held various commanding and operational post
in the RMP. Prior to his retirement, he was the Principal Assistant
Director of the Economic Intelligence Division in Bukit Aman. He
specialises in the area of counter terrorism, financial intelligence,
security risk analysis, VVIP protection and crisis negotiation.
Dato’ Kong holds an Advanced Diploma in Police Science from the
National University of Malaysia.
Dato’ Ahmad Bahrin Bin Idrus, a Malaysian, aged 62, was appointed
as Independent Non-Executive Director on 27 April 2012. Subsequent
to this, Dato’ Ahmad Bahrin was appointed as Senior Independent
Non-Executive Director on 26 November 2012. Dato’ Ahmad Bahrin is
also the Chairman of the Nomination Committee and a member of the
Audit Committee.
Dato’ Ahmad Bahrin joined the Royal Malaysian Police (RMP) in June
1970. After serving 37 years in the RMP he retired in March 2007 as
the Chief Police Officer of Negeri Sembilan. He has held various
commanding and operational post in the RMP which includes in the
Assistant Commissioner of the Commercial Crime Department, FRU
Commander Bukit Aman, Federal Traffic Chief Bukit Aman and
Deputy Chief Police Officer of Kuala Lumpur. He is currently the
Executive Chairman K&K Security Services Sdn. Bhd.
Dato’ Ahmad Bahrin is a Senior Cambridge holder.
6
annual report 2012
PROFILE OF DIRECTORS AND CEO(cont'd.)
Low Keng Fei
Chief Executive Officer
Yee Chee Wai, Patrick, a Malaysian, aged 48 was appointed as
Non-Independent Non-Executive Director on 31 March 2008. He is
also a member of the Audit Committee, Nomination Committee and
Remuneration Committee.
Low Keng Fei, a Malaysian, aged 44 was appointed as Chief
Executive Officer on 27 April 2012.
Patrick is a member of the Malaysian Institute of Accountants as a
Chartered Accountant and Malaysian Institute of Certified Public
Accountants as a Certified Public Accountant. He has more than 16
years of investment banking experience, in particular, the corporate
finance activities such as initial public offerings, capital raising
exercises, mergers and acquisitions, corporate restructuring and
underwritings of equity issues.
Patrick is currently the Executive Director/Chief Operating Officer of
OSK Ventures International Berhad. He has been an investment
banker with various investment banks in Malaysia from June 1991 to
year 2007. He began his career in the investment banking industry
with Affin Investment Bank Berhad and his last posting in the industry
before joining OSK Venture Equities Sdn Bhd in August 2007 was with
Public Investment Bank Berhad, where he worked for more than 6
years as General Manager.
Patrick is also a Director of OSK Ventures International Berhad, Green
Packet Berhad and Maxwell International Holdings Berhad
Keng Fei has been in mTouche since 2004 and held a number of
management positions such as Senior Manager in operation,
Malaysia Country Manager, Regional Country Manager APAC
operations and subsequently promoted to Group General Manager.
Prior to his joining of mTouche, he had worked in various industries
such as consumer banking, property research and valuation and
corporate affairs and strategy in a telecommunication company.
Keng Fei holds a Master of Business Administration degree and a
Bachelor degree from the University of Mississippi. He is also
currently a PhD student with a Malaysian local university.
The details of Keng Fei’s shareholding in the securities of the
Company and its subsidiaries is as follows:
Direct interest in shares
mTouche Technology Berhad
PT mTouche
mTouche (Thailand) Co Ltd
M.B.O.X. Joint Stock Company
1,000
250
1
24
Yeap Teik Pung
Notes to Directors’ Profiles
Yeap Teik Pung, a Malaysian, aged 50, was appointed as
Independent Non-Executive Director on 27 April 2012. Teik Pung is
also the Chairman of the Audit Committee and a member of the
Nomination Committee and the Remuneration Committee.
The Directors and the CEO do not have directorship in other public
listed companies in Malaysia, except as disclosed for Yee Chee Wai,
Patrick.
Teik Pung began his career with Hanafiah, Raslan & Mohamad, an
accounting firm as an audit assistant in 1984. He left the firm as an
audit senior in 1991 to join a multinational manufacturing corporation,
NORTEL as an accounting manager. He left NORTEL in 1994 to join
Fifth Media Sdn Bhd, a local IT company as a Chief Financial Officer.
In 1999 he left and became a consultant and a partner of Baqir
Hussain, Yeap & Associates to provide business advisory and
accounting services. In 2009 he left and set up True Vision Business
Services to provide business advisory and accounting services. He
was also an executive director of RC Planet Sdn Bhd, a company
involved in distribution and retailing in radio control & educational
robotic products, services and related accessories. He has more
than 28 years of working experience in the public practice, commerce
and industry, specializes in the area of audit, accounting, taxation,
business advisory and corporate finance.
Teik Pung is a Chartered Accountant and is member of the Malaysia
Institute of Accountants and Malaysian Institute of Certified Public
Accountants.
annual report 2012
The Directors and the CEO do not have any family relationship with
any other Directors and/or major shareholders of the Company.
The details of the Directors’ securities holdings are set out in the
Analysis of Shareholdings as at 30 April 2013 as set out on page 75 of
this Annual Report.
The details of the Directors’ attendance at Board and Audit
Committee meetings are set out on pages 11 and 15 of this Annual
Report respectively.
None of the Directors and the CEO have been convicted for any
offences within the past ten (10) years other than traffic offences, if
any, nor have any conflict of interest with the Company.
The composition of the Board of Directors complies with Rule 15.02
of the ACE Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”)(“ACE Market Listing Requirements”)
whereby the number of Independent Directors equal 1/3 of the Board.
7
It brings me delight to
announce that mTouche
Technology Berhad has
improved upon its previous
year’s performance, moving
the company financial
performance back into the
black, a positive turn from
the previous year’s losses
of approximately
RM4.3 million.
CHAIRMAN’S STATEMENT
n behalf of the Board of Directors, I am pleased to
Opresent
today the Annual Report and Audited Financial
Statements of mTouche Technology Berhad for the
financial year ended on the 31st of December 2012.
FINANCIAL PERFORMANCE
For the financial year ended 31st of December 2012,
the Group had recorded a revenue figure of
approximately RM36.9 million, with a net profit of
approximately RM4.4 million for the year. It brings
me delight to announce that mTouche Technology
Berhad has improved upon its previous year’s
performance, moving the company financial
performance back into the black, a positive turn
from the previous year’s losses of approximately
RM4.3 million.
The Group has also been able to manage to
maintain a healthy cash flow of approximately
RM21.2 million at year end.
Since our last Annual General Meeting in 2012
last year, the Group distributed dividends
totaling RM2.2 million to our shareholders, as
part of our philosophy to share the rewards
of the Group with our shareholders.
CORPORATE DEVELOPMENT
In 2012, the Group via the shareholders
mandate given in the previous Annual
General Meeting, undertook a share
buy-back exercise of approximately 6.6
million share, at an average price of
approximately RM0.45 with a total
consideration of RM3.0 Million. These
shares are currently maintained as
treasury shares.
During this financial year, approximately
4.2 Million Warrants 2010/2020 were
exercised, with a total exercise price of
RM1.1 Million and 4.2 million shares being
issued.
Chairman
8
annual report 2012
CHAIRMAN’S
STATEMENT
BUSINESS DEVELOPMENT
The year 2012 followed as a challenging year for the entire Group. The
hurdles of a vibrant and constantly evolving market had kept many in
the Company on their toes.
This renewed focus on the mobile app development will allow
mTouche to enter into the new phase of the smart phone era, playing
a major role in the direction of the mobile market, and the Group will
be prepared to face the future.
PROSPECTS
Certain issues of mention were regulatory changes in some of our
emerging market countries. These issues required some significant
attention, and the management performed at their best to overcome
these challenges in each country.
Also of significant mention is the Group has looked ahead into the
market and has realigned the focus of the business to include a more
popular market trend, which is developing mobile applications.
Following on with this trend, the Group has released some new
applications specific to certain regions and languages, marking
mTouche’s presence in mobile app market.
Also, in accordance to the development of the mobile market moving
towards a more global market, it is the goal for mTouche to move its
operations towards emulating the success achieved in other
countries to each country in order to give mTouche a significant
international presence.
RESEARCH AND DEVELOPMENT (“R&D”)
With mTouche’s new move towards developing itself to be the
premier mobile content provider on the mobile application market,
mTouchewill continue to pay significant attention towards the
importance of our R&D.
This will require some investment and development in expanding our
R&D resources and team, allowing mTouche to grasp all corners of
the market with finesse and direction.
annual report 2012
mTouche’s large presence in South East Asia has set up the Group as
a major player in the mobile content industry. The strategic presence
in this geographic area will be used to grant the Group with the benefit
to possibly expand into new countries and territories, deepening our
foothold in the region.
The positive growth of smart phones and tablets will produce exciting
results for the market, and the Group will perform to approach these
challenges with the masterful knowledge of the region and trade.
It is also our intention to refocus our dependency on single sources of
revenue, improving our revenue streams by diversifying our revenue
sources. This will be approached by implementing new charging
models, business strategies and including and improving new and
existing services.
It is our belief on the board that this will allow mTouche to continue
being a leader in the market, and with the hope that it will move the
Group up from not just to a regional level but a global standard and
trend setter.
APPRECIATION
In closing, I would like to extend a warm thank you to our Board
members, management team, employees and all stakeholders for
allowing me to chair this Group. I am certain that we can bring
mTouche towards a greater level, together, and further extend our
reach for the year 2013.
9
STATEMENT ON CORPORATE GOVERNANCE
The Importance of Corporate Governance
The Board of Directors (“the Board”) is committed in ensuring that the highest standards of corporate governance are upheld throughout the
Group as a fundamental part of discharging its responsibilities to protect and enhance stakeholders’ value. To this end, the Board fully supports
the principles and the corresponding recommendations of the Malaysian Code on Corporate Governance 2012.
The Board has taken measures and efforts to ensure that as far as practicable, the adoption and the implementation of the Code’s principles and
recommendations. Save for recommendations 2.2, 3.5 and 8.2, in which the Board having duly considered the rationale for the deviation as set
out in this statement, all other recommendations of the Code are fully adopted.
The Board is pleased to outline the corporate governance practices of the Group, which forms the system of governance adopted by the Board.
A.
Directors
The Board
An effective Board with diversed background leads and controls
the Group to ensure capable management. It resolves key
business matters and corporate policies except those reserved
for shareholders as provided in the Articles of Association, in
accordance with the Companies Act, 1965, Listing Requirements
of Bursa Malaysia Securities Berhad and other regulations.
The group has in place a Board Charter which sets out the roles
and responsibilities of the Board including functions delegated to
Management. The Board Charter is available on the Group’s
website at www.mtouche.com.
The Board consists of competent individuals with appropriate
specialised skills and knowledge to successfully direct, supervise
and manage the Group’s business as a going concern, which
encompassed issues of setting strategic business directions,
overseeing conducts and affairs, developing shareholders and
investors relations and communications, reviewing the system
on risk management and internal control and succession
planning.
The Board takes full responsibility for the performance of the
Group and reviews the strategic direction and effective control of
the Group taking into account changes in the business and
political environment and risk factors. The Board complements
an executive management team in delivering sustainable added
value for shareholders.
In discharging its fiduciary duties, the Board is assisted by Board
Committees, namely the Audit Committee, the Nomination
Committee and the Remuneration Committee. Each Committee
operates within its respective specific terms of reference which
have been approved by the Board. The ultimate responsibility for
the final decision on all matters, however, lies with the Board as
a whole.
The Board is also guided by the Group Code of Conduct and
Whistle Blowing Policy in discharging its oversight role
effectively. A summary of the Code of Conduct and Whistle
Blowing Policy is published on the corporate website.
Board Composition and Balance
The Board currently has six (6) members, comprising two (2)
Executive Directors, two (2) Independent Non-Executive
Directors and two (2) Non-Independent Non-Executive Directors.
Together, the Directors bring a wide range of business and
financial experience which adds value to the Group. The profile of
each Director is presented on pages 6 and 7 of this Annual
Report.
The role of the Chairman and the Chief Executive Officer (“CEO”)
is held by different individuals, with the Chairman being a
Non-Executive Director. The separation of these positions
10
promotes
accountability
and
facilitates
division
of
responsibilities. The task of the Chairman includes leading
the Board in the oversight of management whilst the Chief
Executive Officer focuses on the business and day to day
management of the Group.
The presence of Independent Non-Executive 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 Group’s business associates, which ensure
that no one individual dominates the decisions of the Board. The
tenure of an independent director should not exceed a
cumulative term of nine (9) years. Nevertheless, upon completion
of the nine years, an Independent Director may continue to serve
the Board subject to the approval of shareholders to continue as
an Independent Director or be re-designated as a
Non-Independent Director.
The Board has assessed the independence of its Independent
Directors, namely Dato’ Ahmad Bahrin Bin Idrus and Mr Yeap
Teik Pung, who in the opinion of the Board are able to bring
independent and objective judgement to Board’s deliberations.
According to the Recommendation 3.5 of the Code, the Board
must comprise a majority of Independent Directors where the
Chairman of the Board is not an Independent Director. The
Chairman of the Board is Y.M. Raja Hizad Bin Raja
Kamarulzaman, a Non-Independent Non-Executive Director. He
was appointed as Chairman after considering his wide
experience in providing leadership to the Board.
The compliance to the Recommendation 3.5 of the Code would
require an increase in the current size of the Board. The Board
considers its current size as adequate, given the present scope
of work and nature of the Group’s business operations and the
investment of the minority shareholders is fairly reflected in the
Board representation. The Board is of the view that the Chairman
provides strong leadership and is able to marshal the Board’s
priorities objectively. In addition, the Board holds the view that
there is no imbalance of power and authority in the current Board
composition.
Balance in the Board is achieved and maintained where the
composition of the members of the Board are professionals and
entrepreneurs, with the combination of industrial knowledge,
broad business ideas and commercial experiences. Such
balance enables the Board to provide effective leadership in all
aspects, as well as maintaining high standards of governance
and integrity in making decisions relating to strategy,
performance, internal control, investors’ relation and human
resource management. The Board will continue to monitor and
review the Board size and composition as periodically.
Dato’ Ahmad Bahrin Bin Indrus was appointed as the Senior
Independent Non-Executive Director to whom concerns may be
conveyed to him at [email protected].
annual report 2012
(cont'd.)
A.
Directors (cont’d.)
Board Meetings
The Board meets at least four times annually on a quarterly basis, with additional meetings convened as and when necessary. The Chairman,
with the assistance of Management and the Company Secretary, is responsible for setting the agenda for Board Meetings.
The Board met seven (7) times during the financial year 31 December 2012. The record of meeting attendance is as follow: -
Board Meetings
Position
Attendance
%
Non- Independent Non-Executive Chairman
5/5
100
Executive Director
5/5
100
Pua Soo Jyue
Executive Director
7/7
100
5/5
100
7/7
100
Yeap Teik Pung
5/5
100
Goh Eugene (Wu Eugene)
- resigned on 27 April 2012
Executive Chairman /
Chief Executive Officer
2/2
100
Tan Wee Meng (Chen Weiming)
Chief Operating Officer /
Chief Financial Officer
2/2
100
Ng Joo How
2/2
100
Lai Teik Kin
2/2
100
Foo San Kan
- retired on 15 June 2012
4/4
100
Reagan Chan Chung Cheng
- ceased on 11 May 2012
Alternate Director to Yee Chee Wai, Patrick
2/3
67
During the financial year, the Board also resolved and approved
the Company’s matters through circular resolutions. Board
members are provided with sufficient detailed information for
approvals via circular resolutions and are given full access to
senior Management to clarify any matters that may arise.
Every Director has unrestricted access to advice and services of
the Company Secretary. The Board believes that the Company
Secretary is capable of carrying out her duties to ensure the
effective functioning of the Board while the terms of appointment
permit her removal and appointment only by the Board as a
whole.
Supply of Information
The Board recognises that decision making process is highly
contingent on the strength of information furnished. As such,
Directors have unrestricted access to any information pertaining
to the Group.
The Chief Executive Officer plays a key role in ensuring that all
Directors have full and timely access to information with Board
papers circulated at least three (3) working days in advance of
Board meetings. This ensures that Directors have sufficient time
to appreciate issues deliberated at the Board meetings and
expedite their decision making process.
annual report 2012
The Audit Committee plays a pivotal role in channeling pertinent
operational and assurance related issues to the Board. The Audit
Committee partly functions as a filter to ensure that only pertinent
matters are tabled at the Board level.
The Board is also regularly updated from time to time by the
Company Secretary and/or Management on new statutory and
regulatory requirements or any changes or amendments to the
regulatory requirements concerning their duties and
responsibilities.
11
(cont'd.)
A.
Directors (cont’d.)
Directors’ Training
It is imperative that all Board members devote sufficient time to
update their knowledge and enhance their skills through
appropriate continuing education programmes and life-long
learning. The Board fully supports the need for its members to
further enhance their skills and knowledge to enable its members
to effectively discharge their duties.
All Directors have completed the Mandatory Accredited
Programme prescribed by Bursa Securities.
All Directors were constantly given in-house briefings by the
Company Secretary on the various amendments to the Listing
Requirements. In addition to the periodical briefings, the
Directors have attended the following seminars during year:
The Board reviews and evaluates its own performance and the
performance of its Committees on an annual basis. The Board’s
evaluation comprises Board Assessment, Board Committee
Assessment, Individual Assessment and Assessment of
Independence of Independent Director. The assessment of the
Board is based on specific criteria, covering areas such as the
Board structure, Board operations, roles and responsibilities of
the Board, the Board Committee and the Chairman’s role and
responsibilities.
The results of the assessment would form the basis of the
recommendation of the Nomination Committee to the Board for
the re-election of Directors at the next AGM.
In addition, the Nomination Committee has reviewed and
evaluated the performance of the CEO and the Chief Financial
Officer (“CFO”) during the financial year.
t ASEAN 1st eBook Conference
t 2nd APAC Pricing Strategy Forum by Simon+Kucher
t Advocacy Session on Disclosure for CEOs and CFOs by
Bursa Malaysia
t Board Challenges by Malaysian Institute of Accountants
Bursa Malaysia Half Day Governance Programme
t Bursa Malaysia Sustainability Training For Directors &
Practitioners
t Global Public Lecture by Christine Lagarde, Managing
Director of International Monetary Fund, on “Asia and the
Global Economy: The Promise of Integration”. This lecture
was organised by the Malaysian Economic Association
t Listing in Hong Kong 2012
t Related Party Transactions and Listing Requirements by
Malaysian Institute of Accountants
t Spokesperson Training by Jireh Consult
t The Asian Business Angel Forum 2012 by Cradle Fund
Sdn. Bhd.
t The Case for Diversity in the Boardroom by Corporate
Social Responsibility (CSR) Asia
t The Malaysian Code on Corporate Governance 2012
Seminar
t Trends in Cash Management and Centralization by Bank
of America
12
The Articles of Association of the Company provides that at least
one-third (1/3) of the Board is subject to retire by rotation at each
AGM. The Directors to retire in each year are the Directors who
have been the longest in office since their appointment or
re-appointment. A retiring Director is eligible for re-election. This
provides an opportunity for shareholders to renew their mandates.
The election of each Director is voted on separately. To assist
shareholders to renew their decision, sufficient information such
as personal profile, meetings attendance and the shareholdings in
the Group of each Director standing for election are available in
the Annual Report.
In accordance to Recommendation 2.2 of the Code, which
requires the establishment of policy formalising its approach to
boardroom diversity and to ensure that women candidates are
sought as part of the recruitment exercise, the Board has yet to
implement gender diversity policies and targets, or has any
immediate plans to implement such policies and targets as the
Board is of the view that gender should not be a basis of
evaluation and that candidate should be sought after based on
their level of experience and skill set.
B. Board Committees
To assist the Board in discharging its duties, the Board delegates
certain of its responsibilities to the respective committees namely,
Audit Committee, Nomination Committee and Remuneration
Committee, which operate within clearly defined terms of
reference, primarily to assist the Board in the execution of its
duties and responsibilities as well as enhancing business and
corporate efficiency and effectiveness.
The Board Committees will deliberate and examine issues within
the established terms of reference and report to the Board on
significant matters that require the Board’s attention.
Appointment of Directors and Re-election
Audit Committee (“AC”)
Majority of the Nomination Committee are Independent
Non-Executive Directors. The Nomination Committee is
responsible for identifying and recommending to the Board
suitable nominees for appointment to the Board and Board
Committees. A mix of skills and other qualities of the nominees
will be considered by the Nomination Committee before
recommending any nominees to the Board.
The AC is led by a competent Independent Non-Executive
Director. The responsibilities, composition, terms of reference and
duties and responsibilities of the AC are outlined in this Annual
Report under the section of Audit Committee Report.
annual report 2012
(cont'd.)
B. Board Committees (cont’d.)
Nomination Committee (“NC”)
The NC is led by the Senior Independent Non-Executive Director.
The NC is responsible for providing the Board with
recommendation on candidates for directorship in the Company
and Directors to fill the seats on the Company’s board
committees. In addition, the NC is responsible to assess the
effectiveness of the Board as a whole, the committees of the
Board, the performance and contribution of each Director and
key senior management, and to review the required mix of skills
and experience and other qualities, including core competencies
which non-executive directors should bring to the Board and the
independence of Independent Director. The NC comprises
entirely Non-Executive Directors, the majority of whom are
Independent Directors. The members are as follows:
Current members:
i. Dato’ Ahmad Bahrin Bin Idrus – Chairman
(appointed on 27 April 2012)
The remuneration packages of the Company’s Executive and
Non-Executive Directors are determined by the Board as a whole,
with the Director concerned abstaining from participating in the
decision making in respect of his own individual remuneration.
RC meeting is held at least once a year. During the financial year
ended 31 December 2012, three (3) RC meetings were held.The
record of the RC meeting attendance is as follow:
Director
Y.M. Raja Hizad Bin Raja
%
1/1
100
1/1
3/3
100
100
2/2
2/2
100
100
Kamarulzaman
Yeap Teik Pung
Ng Joo How
Lai Teik Kin
C. Directors’ Remuneration
The Level and Make-up of Remuneration
ii. Yeap Teik Pung – Member
The remuneration of Directors is determined at levels which enable
the Group to attract and retain the Directors with relevant
experience and expertise needed to assist in managing the Group
effectively. In case of Executive Directors of the Group, their
remuneration are structured to link rewards to corporate and
individual performance.
iii. Yee Chee Wai, Patrick – Member
Resigned members during the year:
i. Ng Joo How (resigned on 27 April 2012)
ii. Lai Teik Kin (resigned on 27 April 2012)
The aggregate remuneration of Directors for the financial year ended
31 December 2012 is categorised as follow:
NC meeting is held at least once a year. During the financial year
ended 31 December 2012, one (1) NC meeting was held on 27
April 2012.The record of the NC meeting attendance is as follow:
Director
Ng Joo How
Lai Teik Kin
Attendance
Non-Executive
Executive Directors Directors
RM’000
RM’000
139
Attendance
1/1
1/1
%
100
100
Fees
1/1
100
Salaries and
other emoluments
854
-
Total
854
139
* No NC Meeting were held subsequent to the appointment of Dato’ Ahmad Bahrin Bin
Idrus and Mr Yeap Teik Pung to the NC.
Remuneration Committee (“RC”)
Analysis of Remuneration
The RC is responsible for reviewing and recommending to the
Board the remuneration packages of the Executive Directors and
Chief Executive Officer. The RC comprises entirely
Non-Executive Directors. The members are as follows:
Current members:
i. Y.M. Raja Hizad Bin Raja Kamarulzaman
– Chairman (appointed on 27 April 2012)
Below RM50,001
RM150,00 – RM200,000
RM350,00 – RM400,000
Total
No. of Directors
Executive
Non-Executive
7
3
1
4
7
ii. Yeap Teik Pung – Member (appointed on 27 April 2012)
iii. Yee Chee Wai, Patrick – Member
Resigned members during the year:
i. Ng Joo How (resigned on 27 April 2012)
For security and confidential reasons, the details of individual
Directors’ remuneration are not shown. The Board is of the
opinion that the transparency and accountability aspect of
corporate governance as applicable to Directors’ remuneration are
appropriately served by the disclosures made above.
ii. Lai Teik Kin (resigned on 27 April 2012)
annual report 2012
13
(cont'd.)
D. Shareholders
Internal Audit Function
The Group values good communication with its shareholders and
investors. The Board and Management ensure timely
dissemination of information on the Group’s performance and
other matters affecting interests of the shareholders and investors
through announcements, circulars, press releases and
distribution of annual reports as set out in the Listing
Requirements of the Bursa Malaysia Securities Berhad and the
Code. The Group’s corporate website is regularly updated as part
of the Group’s effort to leverage on information technology for
effective dissemination of information.
The AGM is the principal avenue for dialogues and interaction
with the shareholders. At the AGM, the Board presents the
progress and performance of the Group. Shareholders present
are given opportunity to present their views or to seek more
information, and all Board Members, Senior Management and the
Group’s External Auditors are available to respond to
shareholders’ enquiries during the meeting. However any
information that may be regarded as undisclosed material
information about the Group will not be given.
In accordance to Recommendation 8.2 of the Code, the Board is
encouraged to put substantive resolutions to vote by poll and
make an announcement of the detailed results showing the
number of votes cast and against each resolution.
Recommendation 8.2 of the Code further encourages the
employment of electronic means for poll voting. The Board is of
the view that voting by way of a show of hands is an effective
method, given the current level of shareholders’ attendance at the
Group’s AGMs. The Board will continuously evaluate the
feasibility and appropriateness of this method in each AGM.
Nevertheless, effective 1 June 2013, poll voting is mandated for
related party transactions that require specific shareholders’
approval.
E. Accountability and Audit
Financial Reporting
The Board aims to provide and present a fair and meaningful
assessment of the Group’s financial performance and prospects
to the shareholders, primarily through the annual financial
statements and quarterly announcement of results as well as the
Chairman’s statement and review of operations in the annual
report. The Board is assisted by the AC to oversee the Group’s
financial reporting processes and the accuracy, adequacy and
completeness of its financial reporting.
Statement on Risk Management and Internal Control
The Board recognises the importance for maintaining a sound risk
management and internal control system that covers, inter alia,
risk management, financial, organisational, operational and
compliance to safeguard shareholders’ investments and the
Group’s assets. The Statement on Risk Management and Internal
Control which provides an overview of the state of the Risk
Management and Internal Control within the Group is set out on
page 18 of this Annual Report.
14
Relevant Internal Control systems are implemented for the day to
day operations of the Group. The internal auditors has an
independent reporting channel to the AC and is authorised to
conduct independent audits of all the departments and offices
within the Group and reports the findings to the AC at the end
each quarter.
The AC reviews, deliberates and decides on the next course of
action and evaluates the effectiveness and efficiency of the
Internal Control systems in the organisation.
Relationship with Auditors
The Board has established transparent and appropriate
relationship with its external auditors through the AC. The AC and
the Board maintain a great emphasis on the objectivity and
independence of the external auditors, in providing the relevant
and transparent reports to shareholders. In ensuring full
disclosure, the external auditors is regularly invited to attend AC
Meetings as well as the AGM, including discussions with the AC
without the presence of Management. In this regard, the external
auditors have an obligation to highlight any concerns in the
Group’s system of internal control and compliance to
Management, AC and the Board.
Annually, the AC also reviews the appointment, performance and
remuneration of the external auditors before recommending them
to the shareholders for re-appointment in the AGM.
The role of the AC in relation to the external auditors is set out in
the AC Report on page 15 of this Annual Report.
Directors’ Responsibility Statement
The Directors are required to ensure that the financial statements
of the Group and Company are drawn up in accordance with the
applicable Financial Reporting Standards in Malaysia and the
provisions of the Companies Act, 1965, so as to give a true and
fair view of the state of affairs of the Group and the Company for
the financial year ended.
In preparing the financial statements, the Directors have ensured
appropriate accounting policies are adopted and applied
consistently, and made reasonable and prudent judgments and
estimates.
The Directors also have a general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of
the Group and to prevent and detect fraud and other irregularities.
This statement was made in accordance with a resolution of the
Board dated 23 April 2013.
annual report 2012
AUDIT COMMITTEE REPORT
The Audit Committee (the “Committee”) is pleased to present their report for the financial year ended 31 December 2012.
Membership
The Committee comprises the following members:
Yeap Teik Pung
Chairman, Independent Non-Executive Director
Ng Joo How
Chairman, Independent Non-Executive Director
(resigned on 27 April 2012)
Lai Teik Kin
Meetings
c)
The Committee convened six (6) meetings during the financial
year ended 31 December 2012. The details of attendance of each
Committee member are as follow: -
Maintain through regularly scheduled meetings, a direct
line of communication between the Board and the
external auditors as well as internal auditors.
d)
Enhance the independence of both the external and the
internal auditors’ functions through active participation in
the audit process.
e)
Strengthen the role of the Independent Directors by giving
them a greater depth of knowledge as to the operations of
the Company and the Group through their participation in
the Committee.
f)
Act upon the Board’s request to investigate and report on
any issues or concerns in regards to the management of
the Group.
Directors
Yeap Teik Pung
Ng Joo How
Lai Teik Kin
Attendance
4/4
4/4
6/6
2/2
2/2
%
100
100
100
100
100
The Chief Executive Officer (“CEO”), other members of the Board
of Directors (the “Board”), senior management, external auditors
and internal auditors attended the meetings upon invitation by the
Committee. The Committee had met 3 times with the external
auditors on separate session without the presence of
Management.
The meetings were appropriately structured throughout the use of
agendas, which were distributed to members with sufficient
notification.
Terms of Reference
2. Composition
The Committee shall be appointed from amongst the Board
and shall comprise no fewer than three (3) members. All the
Committee members must be non-executive directors. The
majority of them must be independent directors and at least
one (1) member must be a member of the Malaysian Institute of
Accountants or possess such other qualifications and/or
experience as approved by Bursa Malaysia Securities Berhad
(“Bursa Securities”). The Chairman of the Committee shall be
an independent director.
The Committee is established as a committee of the Board:
1. Objective
The primary objectives of the Committee are to:
a)
Provide assistance to the Board in fulfilling its fiduciary
responsibilities relating to the corporate accounting and
practices for the Company and all its wholly and majority
owned subsidiaries (the “Group”).
b)
Improve the Group’s business efficiency, the quality of the
accounting function, the system of internal control and
audit function and strengthen the confidence of the public
in the Group’s reported results.
annual report 2012
In the event of any vacancy in the Committee resulting in the
non-compliance of sub-Rule 15.09(1) of the ACE Market Listing
Requirements of Bursa Securities, the Company shall fill in the
vacancy within three (3) months.
15
AUDIT COMMITTEE REPORT(cont'd.)
3. Authority
The Committee shall in accordance with the procedure
determined by the Board and at the expenses of the
Company:
a)
have explicit authority to investigate any matter within its
terms of reference;
b)
have the resources which are required to perform its
duties;
c)
have full and unrestricted access to any information
which it requires in the course of performing its duties;
d)
have unrestricted access to the CEO and the Chief
Financial Officer (“CFO”);
e)
have direct communication channels with the external
auditors and person(s) carrying out the internal audit
function or activity (if any);
f)
be able to obtain independent/external professional or
other advice and to secure the attendance of outsiders
with relevant experience and expertise if it considers this
necessary; and
g)
be able to convene meetings with the external auditors
excluding the attendance of the executive members of
the Company, whenever deemed necessary.
4. Duties and Responsibility
To review the following and report the same to the Board :a)
with the external auditors:
i) the external audit plan;
ii) the evaluation of the system of internal controls; and
iii) the external audit report.
b)
the assistance given by the Company’s employees to the
external auditors;
c)
the adequacy of the scope, functions, competency and
resources of the internal audit functions and that it has the
necessary authority to carry out its works;
d)
e)
f)
16
the internal audit programme, processes, the results of
the internal audit programme, processes or investigation
undertaken and whether or not appropriate action is
taken on the recommendations of the internal audit
function;
the quarterly results and year end financial statements,
prior to the approval by the Board, focusing particularly
on :
- changes in or implementation of major accounting
policy changes;
- significant and unusual events; and
- compliance with accounting standards and other legal
requirements;
g)
any letter of resignation from the external auditors of the
Company;
h)
whether there is any reason (supported by grounds) to
believe that the external auditors is not suitable for
re-appointment; and
e)
recommend the nomination of a person or persons as
external auditors
5. Meetings
The Committee shall meet at least four (4) times in a year or
more frequently as circumstances required with due notice of
issues to be discussed and shall record its conclusions in
discharging its duties and responsibilities. Quorum shall be by
majority of the members who are Independent Directors.
Upon the request of any member of the Committee, the
external auditors or the internal auditors, the Chairman of the
Committee shall convene a meeting of the Committee to
consider matters which should be brought to the attention of
the directors or shareholders.
The internal auditors and the external auditors have the right to
appear and be heard at any meeting at the invitation of the
Committee and shall appear before the Committee when
required to do so by the Committee.
The Company must ensure that other directors and
employees attend any particular Committee meeting only at
the Committee’s invitation, specific to the relevant meeting.
The Committee shall meet with the external auditors, the
internal auditors or both without executive board members
present at least twice a year.
6. Minutes
The Company Secretary or other appropriate senior official
shall be the Secretary to the Committee and shall be
responsible, in conjunction with the Chairman, for drawing up
the agenda and circulating it prior to each meeting.
The Secretary shall also be responsible for keeping the
minutes of meetings of the Committee and circulating them to
the Committee members. The Committee members may
inspect the minutes of the Committee at the Registered Office
or such other place as may be determined by the Committee.
7. Procedures of the Committee
The Committee may regulate its own procedures, in particular:
(a)
(b)
(c)
(d)
(e)
the calling of meetings;
the notice to be given of such meetings;
the voting and proceedings of such meetings;
the keeping of minutes; and
the custody, production and inspection of such minutes.
any related party transactions and conflict of interest
situation that may arise within the Group including any
transaction, procedure or course of conduct that raises
questions of management integrity;
annual report 2012
AUDIT COMMITTEE REPORT(cont'd.)
Summary of activities
Internal audit function
During the financial year ended 31 December 2012, the
Committee carried out its duties in accordance with the Terms of
Reference which included the following:
The Internal Audit Function, which is outsourced to a professional
services firm, assists the Committee in ensuring the adequacy
and effectiveness of the internal control systems. The activities of
the Internal Audit Function during the financial year ended 31
December 2012 were as follows:
1) Reviewed the quarterly unaudited results, audited financial
statements and annual report which are recommended for the
Board’s adoption;
2) Reviewed the external auditors’ audit planning memorandum
of the Group;
3) Reviewed the issues and results arising from external audit
and the resolutions of such issues highlighted;
4) Reviewed and ensured the adequacy of the scope and
coverage of the audit plan proposed by the internal auditors
and approved the audit plan for audit execution;
5) Reviewed the internal audit reports and the results and
recommendations arising from the reviews conducted by the
outsourced internal audit function; and
6) Reviewed related party transactions entered into by the
Company and the Group, the approval process and
disclosure of such transactions.
annual report 2012
a) Conducted internal audit reviews in accordance with the
internal audit plan approved by the Committee;
b) Reported the results of internal audits and made
recommendations for improvements to the Committee on a
periodic basis; and
c) Performed follow-up visits to ensure that recommendations
for improvement were satisfactorily implemented.
The internal audits conducted did not reveal any weaknesses
which would result in material losses, contingencies or
uncertainties that would require separate disclosure in the Annual
Report.
The costs incurred for the internal audit function in respect of the
financial year ended 31 December 2012 was RM36,000.
This report was made in accordance with a resolution of the
Board dated 23 April 2013.
17
STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL
Pursuant to Rule 15.26 (b) of the
ACE Market Listing Requirements of
Bursa Securities (the “ACE LR”), the
Board is required to make a
statement in the annual report on
the state of the internal control of
the Group. In this respect, the Board
is pleased to present the following
Statement on Risk Management
and Internal Control prepared in
accordance with the ACE LR and as
guided by the Statement on Risk
Management and Internal Control:
Guidelines for Directors of Listed
Issuers issued by the Taskforce on
Internal Control.
Board Responsibility
The Board acknowledges its overall responsibility in establishing a sound framework of risk
management and internal controls which are fundamental for good corporate governance. The Board
focuses on effective risk oversight which is critical to setting the tone and culture towards effective risk
management and internal control. Due to the limitations that are inherent in any system of risk
management and internal control, this system is designed to manage and minimise, rather than
eliminate, the risk of failure to achieve corporate objectives. Accordingly, it can only provide
reasonable but not absolute assurance against material misstatement or loss. The system on internal
control covers, inter alia, risk management, financial, organisational, operational and compliance
controls.
Main Features of Risk Management and Internal
Control System
The Group cannot achieve its objectives and sustain success without effective governance, risk
management and internal control procedures. The following are the main features of the Group’s risk
management and internal control system:
Risk Management Framework
Formalised policies and procedures
In order to achieve a sound system of risk management
and internal control, the Board together with
Management ensures that the risk management
framework and internal control system is embedded into
the culture, processes and structures of the Group. The
Board is responsible in determining the overall risk
appetite and delegates the responsibility of implementing
the processes for identifying, evaluating, monitoring and
reporting of risks and internal control, including taking
appropriate and timely corrective actions as needed, to
the Management. The Group adopts a Three Line of
Defence Model in its risk management framework. The
first line of defence is carried out via the internal controls
in place as part of the day to day operations. The second
line of defence relates to the oversight function by both
the Board and Management. The final and third line of
defence is that of the independent assurance providers,
namely the Internal Auditors and the External Auditors.
To facilitate effective and efficient operations, clear
formalised internal policies and procedures are in place to
support the Group to achieve its objectives. These
policies and procedures serves as a guideline to ensure
compliance with applicable laws and regulations, and
also internal controls with respect to the conduct of
business.
Clear roles and responsibilities
The Group has in place an organisational structure with
clearly defined lines of responsibilities and appropriate
levels of delegation and authority. The roles and
responsibilities of the Board is set out in the Board
Charter. Committees namely Audit Committee,
Nomination Committee and Remuneration Committee
with clearly defined Terms of Reference are established to
assist the Board to discharge its responsibilities. Authority
limits within the Group facilitates accountability and
supports an efficient decision making process.
Budgetary planning and monitoring
Business plan and budgetary exercise is carried out
annually which serves as a monitoring tool to ensure that
Group is on track to meet its objectives. Actual
performances are monitored against the budget
periodically with appropriate corrective action taken on a
timely basis.
Internal audit
As part of the Group’s Three Line of Defence Model in its
risk management framework, an internal audit function is
in place to provide independent and objective assurance
on the risk management and internal controls. The
internal audit function is outsourced to a professional
services firm which reports directly to the Audit
Committee to ensure high level of independence.
Review by External Auditors
Pursuant to Rule 15.23 of the ACE LR, the External Auditors have reviewed this Statement of Risk
Management and Internal Control, and reported to the Board that nothing has come to their attention
that causes them to believe that this statement is inconsistent with their understanding of the process
adopted by the Board in reviewing the adequacy and integrity of the system of internal control.
Conclusion
The Board is in the view that the Group’s risk management and internal control system is operating
adequately and effectively, in all material aspects, based on the risk management model adopted by
the Group and has received the same assurance from the Chief Executive Officer and Group Financial
Controller.
This statement was made in accordance with a resolution of the Board dated 23 April 2013.
18
annual report 2012
SUSTAINABILITY
REPORT
2013
mTouche aims to conduct a sustainable
business which enhances the value of all
our stakeholders. We are committed to
actively play our role as a responsible
corporate citizen and always believed a
sustainable business should be carried out
ethically with integrity. We have identified
three important pillars to support our
initiative to build a sustainable business.
Workplace
Community
Great people makes a great organisation. mTouche strives to
provide all our employees with a conducive workplace in order for
us to consistently perform at our very best. We take pride in
ensuring that our operations are carried out in a safe and healthy
environment with sufficient support for training and development
to bring the best out of our team.
mTouche believes in contributing back to society and actively
participate in Corporate Social Responsibilty (“CSR”) activities.
Environment
Headquartered in a certified green building by the Green Building
Index Accreditation Panel in Kuala Lumpur, mTouche is aware of
the impact of our business on the environment and has taken
active steps to reduce our carbon footprint on the environment.
These steps include reducing our energy consumption through
switching off unused lights and air conditioning, and our paper
management initiative to print only when necessary, including
printing on both sides if possible and the recycling of used
papers.
annual report 2012
Since 2011, we have been contributing to World Vision in their
“Sponsor a Child” campaign and is currently sponsoring a 14 year
old child from Mongolia and an 11 year old child from Indonesia.
We hope that our contribution will help transform these children’s
life for the better.
mTouche also provided the technical support for Starhub’s SMS
Donation Drive in conjunction with World Charity Day which
targeted on providing support to the youth, elderly and disabled.
Three charities were selected based on their needs for funding as
well as the holistic and long-term support that they seek to
provide for their beneficiaries, namely Xin Yuan Community Care,
Sunshine Welfare Action Mission and Metta Welfare Association.
During the financial year, mTouche also contributed to people in
need of financial assistance to perform medical surgery through
Yayasan Sin Chew.
19
ADDITIONAL COMPLIANCE INFORMATION
1) UTILISATION OF PROCEEDS
As at 31 December 2012, the Company had fully utilised the
proceeds raised from the Rights Issue with Warrants exercise.
2) SHARE BUY-BACK
The shareholders of the Company had given their approval
for the Company to buy-back its own shares at the Annual
General Meeting held on 15 June 2012.
During the year, the Company bought back a total of
6,643,900 of its ordinary shares of RM0.10 each (“mTouche
Share(s)”) in the open market. The details of the mTouche
Shares bought back during the financial year are as follows:
Number of
Monthly
mTouche
breakdown
shares
2012
bought back
January
February
March
April
0
10,000
0
0
Buy Back Price
Average Cost
Total
Per mTouche Share (RM)
of mTouche
Cost
Share (RM)
(RM)
Lowest
Highest
0
0
0
0
0.390
0.390
0.395
3,946
0
0
0
0
0
0
0
0
May
0
0
0
0
0
June
1,068,900
0.425
0.430
0.430
460,610
July
August
5,515,000
0.420
0.425
0.475
0.435
0.450
0.434
2,479,206
21,683
September
50,000
0
0
0
0
0
October
0
0
0
0
0
November
December
0
0
0
0
0
0
0
0
0
0.446
2,965,445
Total
0
6,643,900
As at 31 December 2012, a total of 6,643,900 mTouche
Shares bought back were held as treasury shares. The
Company is seeking renewal of the Shareholders’
mandate on the share buy-back proposal at the
Company’s Ninth Annual General Meeting.
3) OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
During the financial year ended 31 December 2012, a total of
4,238,000 Warrant 2010/ 2020 were converted into 4,238,000
ordinary shares of RM0.10 for cash consideration of RM0.27
per share, totalling RM1,144,260 .
As at 31 December 2012, Warrants 2010/2020 and Warrants
2008/2018 outstanding of 49,012,000 and 67,959,945
respectively, remained unexercised.
4) DEPOSITORY RECEIPT PROGRAMME
The Company did not sponsor any depository receipt
programme during the financial year.
7) VARIATION IN RESULTS
There was no variance of 10% or more between the audited
results for the financial year ended 31 December 2012 and
the unaudited results previously announced by the Company.
8) PROFIT GUARANTEE
There was no profit guarantee given by the Company during
the financial year.
9) MATERIAL CONTRACTS
There were no material contracts entered into by the
Company and its subsidiaries that involves the directors
and/or major shareholders since the end of the previous
financial year.
10) RECURRENT RELATED PARTY TRANSACTIONS OF
REVENUE NATURE
There were no recurrent related party transactions of revenue
nature entered into during the financial year.
5) SANCTIONS AND/OR PENALTIES
There were no sanctions and/or penalties imposed on the
Company and/or its subsidiaries during the financial year.
6) NON-AUDIT FEES
The amount of non-audit fees paid to the external auditors by
the Group during the financial year was RM109,000.
20
annual report 2012
22 Director’s Report
25 Statement by Directors
25 Statutory Declaration
26 Independent
FINANCIAL
STATEMENTS
Auditors' Report
28
29
30
Statement of
Comprehensive Income
Statements of
Financial Position
Statements of
Change in Equity
34 Statements of Cash Flows
36 Notes to the Financial Statements
DIRECTORS' REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the
financial year ended 31 December 2012.
Principal activities
The principal activities of the Company are investment holding, research and development of existing and new technologies in the field of information technology and telecommunications and related activities.
The principal activities of the subsidiaries are shown in Note 16 to the financial statements.
There have been no significant changes in the nature of the principal activities during the year.
Results
Profit from continuing operations, net of tax
Group
Company
RM
RM
4,382,177
2,082,949
4,244,869
2,082,949
Profit attributable to:
Owners of the parent
Non-controlling interests
137,308
-
4,382,177
2,082,949
There were no material transfers to or from reserves or provisions during the year other than as disclosed in the financial statements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially
affected by any item, transaction or event of a material and unusual nature, other than as disclosed in the financial statements.
Dividend
Since the end of the previous financial year, the Company declared an interim tax exempt dividend of 1 sen per share on 221,773,100 ordinary
shares, totalling RM2,217,713 in respect of the financial year ended 31 December 2012 on 22 March 2013 and paid on 22 April 2013.
The financial statements for the current financial year do not reflect this dividend. Such dividend will be accounted for in equity as an appropriation
of retained earnings in the financial year ending 31 December 2013
The directors do not recommend any payment of final dividend in respect of the financial year ended 31 December 2012.
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Goh Eugene (Wu Eugene)
Tan Wee Meng (Chen Weiming)
Lai Teik Kin
Ng Joo How
Yee Chee Wai
Pua Soo Jyue
Reagan Chan Cheng Chung
(alternate director to Yee Chee Wai, resigned on 11 May 2012)
Foo San Kan
(retired on 15 June 2012)
Kamarulzaman
Dato' Ahmad Bahrin Bin Idrus
Yeap Teik Pung
22
annual report 2012
DIRECTORS' REPORT (cont'd.)
Directors' benefits
Neither at the end of the year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the
directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Since the end of the previous year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate
amount of emoluments received or due and receivable by the directors or the fixed salary of a full time employee of the Company as shown in
Note 11 to the financial statements) by reason of a contract made by the Company or a related corporation with any 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.
Directors' interests
According to the register of directors' shareholdings, the interests of directors in office at the end of the year in shares and warrants in the
Company and its related corporations during the year were as follows:
Number of ordinary shares of RM0.10 each
Name of directors
27.4.2012 *
Acquired
Sold
31.12.2012
66,500,000
-
(635,000)
65,865,000
The Company
Indirect Interest:
Kamarulzaman
*Date of appointment
Y.M. Raja Hizad Bin Raja Kamarulzaman by virtue of his interest in shares in the Company is also deemed interested in shares of all the Company's
subsidiaries to the extent the Company has an interest.
Other than as disclosed above, none of the other directors in office at the end of the year had any interest in shares in the Company or its related
corporations during the year.
Warrants and issue of shares
During the financial year ended 31 December 2012, a total of 4,238,000 Warrant 2010/ 2020 were converted into 4,238,000 ordinary shares of
RM0.10 for cash consideration of RM0.27 per share, totalling RM1,144,260 .
As at the end of the year, the entire Warrants 2010/2020 and Warrants 2008/2018 outstanding of 49,012,000 and 67,959,945 respectively,
remained unexercise. Please refer to Note 25(a) to the financial statements for further details.
The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company.
Treasury shares
During the year, the Company repurchased 6,643,900 of its issued ordinary shares from the open market at an average price of RM0.45 per share.
The total consideration paid for the repurchase including transaction cost was RM2,965,445. The shares repurchased are being held as treasury
shares in accordance with Section 67A of the Companies Act, 1965.
At 31 December 2012, the Company held as treasury shares a total of 7,508,100 of its 231,541,100 issued ordinary shares. Such treasury shares
are held at a carrying amount of RM3,118,571 and further details are disclosed in Note 24(b) to the financial statements.
annual report 2012
23
DIRECTORS' REPORT (cont'd.)
Other statutory information
(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the
directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and
satisfied themselves that there were no known bad debts and that adequate allowance had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of
business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) it necessary to write off any bad debts or the amount of the allowance for doubtful debts inadequate to any substantial extent; and
(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing
method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the
Group and of the Company which would render any amount stated in the financial statements misleading.
(e) As 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 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 year.
(f) In the opinion of the directors:
(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end
of the year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the year and the date of this
report which is likely to affect substantially the results of the operations of the Group and of the Company for the year in which this report is
made.
Significant events
Significant events during the year are disclosed in Notes 24(a) and 24(b) to the financial statements.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 23 April 2013.
24
Pua Soo Jyue
annual report 2012
STATEMENT BY DIRECTORS
Pursuant to Section 169(15) of the Companies Act, 1965
We, Dato’ Kong Hien Nigh and Pua Soo Jyue, being two of the directors of mTouche Technology Berhad, do hereby state that, in the opinion of
the directors, the accompanying financial statements set out on pages 28 to 74 are drawn up in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial
position of the Group and of the Company as at 31 December 2012 and of their financial performance and the cash flows for the year then ended.
The information set out in Note 34 on page 74 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 on behalf of the Board in accordance with a resolution of the directors dated 23 April 2013.
Pua Soo Jyue
STATUTORY DECLARATION
Pursuant to Section 169(16) of the Companies Act, 1965
I, Aaron Loke Khy-Min, being the officer primarily responsible for the financial management of mTouche Technology Berhad, do solemnly and
sincerely declare that the accompanying financial statements set out on pages 28 to 74 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 Aaron Loke Khy-Min
at Kuala Lumpur in the Federal Territory
on 23 April 2013
Aaron Loke Khy-Min
Before me,
Arshad Abdullah
W550
Commissioner for Oaths
annual report 2012
25
INDEPENDENT
AUDITORS’
REPORT
to the members of mTouche Technology Berhad (Incorporated in Malaysia)
Report on the financial statements
We have audited the financial statements of mTouche Technology Berhad, which comprise statements of financial position as at 31 December
2012 of the Group and of the Company, and statements of comprehensive income, statements of changes in equity and statements of cash flows
of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as
set out on pages 28 to 74.
Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia. The directors are
also responsible for such internal control as the directors deem necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved
standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012
and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and the requirements of the Companies Act, 1965 in Malaysia.
Report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which
we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the financial statements and the auditors' reports of all the subsidiaries of which we have not acted as auditors, which
are indicated in Note 16 to the financial statements, being financial statements that have been included in the consolidated financial
statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are
in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received
satisfactory information and explanations required by us for those purposes.
(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment
required to be made under Section 174(3) of the Act.
Other reporting responsibilities
The supplementary information set out in Note 34 on page 74 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The
directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1,
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our
opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa
Malaysia Securities Berhad.
26
annual report 2012
INDEPENDENT
AUDITORS’
REPORT
(cont'd.)
to the members of mTouche Technology Berhad (Incorporated in Malaysia)
Other matters
As stated in Note 2.1 to the financial statements, mTouche Technology Berhad adopted Malaysian Financial Reporting Standards on 1 January
2012 with a transition date of 1 January 2011. These standards were applied retrospectively by Directors to the comparative information in these
financial statements, including the statements of financial position as at 31 December 2011 and 1 January 2011, and the income statements,
statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended 31 December 2011 and
related disclosures. We were not engaged to report on the restated comparative information and it is unaudited. Our responsibilities as part of our
audit of the financial statements of the Group and of the Company for the year ended 31 December 2012 have, in these circumtances, included
obtaining sufficient appropropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially
affect the financial position as of 31 December 2012 and financial performance and cash flows for the year then ended.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia
and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Ernst & Young
AF: 0039
Chartered Accountants
Teoh Soo Hock
No. 2477/10/13(J)
Chartered Accountant
Kuala Lumpur, Malaysia
23 April 2013
annual report 2012
27
STATEMENTS OF COMPREHENSIVE INCOME
for the year ended 31 December 2012
Company
Group
Note
2012
2011
2012
2011
RM
RM
RM
RM
7,090,614
Revenue
4
36,888,891
43,753,951
Cost of sales
5
(19,996,889)
(25,462,198)
(8,181)
-
16,892,002
18,291,753
7,082,433
8,260,335
542,188
1,491,657
55,140
1,068,145
(9,232,891)
(10,230,960)
(3,623,743)
(3,208,843)
(4,522,166)
-
(1,117,005)
(3,684)
(3,684)
(3,684)
(3,684)
(2,103,901)
(9,019,582)
(467,347)
(2,274,586)
6,093,714
(3,992,982)
3,042,799
2,724,362
-
1,559
-
-
9
6,093,714
(3,991,423)
3,042,799
2,724,362
12
(1,711,537)
(319,551)
(959,850)
(19,879)
4,382,177
(4,310,974)
2,082,949
2,704,483
(525,996)
(69,764)
-
-
3,856,181
(4,380,738)
2,082,949
2,704,483
4,244,869
(4,406,552)
2,082,949
2,704,483
137,308
95,578
-
-
4,382,177
(4,310,974)
2,082,949
2,704,483
3,731,881
(4,462,675)
2,082,949
2,704,483
124,300
81,937
-
-
3,856,181
(4,380,738)
2,082,949
2,704,483
1.87
(1.94)
Gross profit
6
Other income
8,260,335
Other items of expense
Administrative expenses
Impairment losses
7
Finance costs
8
Other expenses
Share of results of associates
Profit/(Loss) before tax
Income tax expense
Profit/(Loss) net of tax
-
Other comprehensive income:
Foreign currency translation,
representing other
comprehensive income for
the year, net of tax
Total comprehensive income/
(loss) for the year
Profit/(Loss) attributable to:
Total comprehensive income/
(loss) attributable to:
Earnings/(Loss) per share
attributable to owners of
the parent (sen per share)
13
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
28
annual report 2012
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2012
Group
Assets
Non-current assets
Property, plant and
equipment
Intangible assets
Investments in
subsidiaries
Investments in
associates
Investment in a
joint venture
Deferred tax assets
Other receivables
Current assets
Trade and other
receivables
Prepayments
Tax recoverable
Cash and bank
balances
Company
Note
31.12.2012
RM
31.12.2011
RM
14
15
579,226
287,740
604,104
472,320
16
-
17
31.12.2012
RM
31.12.2011
RM
888,972
6,339,064
106,986
-
144,526
-
43,469
1,755,294
-
-
9,061,610
9,061,610
9,061,610
-
-
7,424,913
-
-
4,564,676
18
19
20
807,529
1,674,495
793,211
1,869,635
897,404
15,550,353
576,392
9,744,988
576,392
9,782,528
576,392
16,001,441
20
10,314,587
335,533
547,413
8,878,539
329,899
369,256
12,624,393
384,401
198,001
31,376,698
16,148
-
30,981,523
47,702
-
25,977,915
241,737
-
21
21,154,561
32,352,094
34,026,589
21,102,736
30,680,430
32,550,065
14,881,921
28,088,716
43,639,069
2,300,432
33,693,278
43,438,266
1,346,234
32,375,459
42,157,987
2,638,186
28,857,838
44,859,279
22
27,804
27,804
-
27,804
27,804
-
23
9,903,214
1,085,031
11,016,049
11,577,439
65,101
11,670,344
12,917,608
297,408
13,215,016
1,243,053
959,850
2,230,707
1,156,584
1,184,388
1,426,569
1,426,569
22
55,588
83,392
-
55,588
83,392
-
19
123,627
179,215
83,392
-
55,588
83,392
-
11,195,264
11,753,736
13,215,016
2,286,295
1,267,780
1,426,569
24
24
24
23,154,110
4,864,158
(3,118,571)
22,730,310
3,969,232
(153,126)
24,282,800
53,298,069
(3,635,649)
23,154,110
4,864,158
(3,118,571)
22,730,310
3,969,232
(153,126)
24,282,800
53,298,069
(3,635,649)
26
25
(15,699,499)
13,070,853
22,271,051
(19,944,368)
13,758,307
20,360,355
(80,421,584)
36,546,380
30,070,016
2,612,310
13,639,964
41,151,971
529,361
13,814,430
40,890,207
(42,774,450)
12,261,940
43,432,710
560,274
22,831,325
435,974
20,796,329
354,037
30,424,053
41,151,971
40,890,207
43,432,710
34,026,589
32,550,065
43,639,069
43,438,266
42,157,987
44,859,279
Total assets
1.1.2011
RM
1.1.2011
RM
Equity and liabilities
Current liabilities
Borrowings
Trade and other
payables
Income tax payable
Non-current liability
Borrowings
Deferred tax
liabilities
Total liabilities
Equity attributable
to owners of the
parent
Share capital
Share premium
Treasury shares
(Accumulated
losses)/Retained
earnings
Other reserves
Non-controlling
interests
Total equity
Total equity and
liabilities
annual report 2012
29
30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent
Equity
attributable
to owners
of the
Equity,
parent,
total
total
Non-distributable
Non-distributable
Other
reserves,
total
Foreign
Capital
currency
redemption translation
reserve
reserve
(Note 25)
(Note 25)
RM
RM
Other
Noncapital controlling
reserves
interests
(Note 25)
RM
RM
RM
Warrant
reserve
(Note 25)
RM
(19,944,368) 13,758,307
9,619,740
4,194,690
(56,123)
-
435,974
(512,988)
-
-
(512,988)
-
124,300
-
-
-
-
-
-
- (174,466)
- (174,466)
(15,699,499) 13,070,853
(174,466)
(174,466)
9,445,274
4,194,690
(569,111)
-
560,274
Share
capital
(Note 24)
RM
Treasury Accumulated
losses
shares
(Note 24)
RM
RM
RM
RM
Share
capital
(Note 24)
RM
20,796,329
20,360,355
22,730,310
3,969,232
(153,126)
3,856,181
3,731,881
-
-
-
4,244,869
(2,965,445)
(2,965,445)
-
- (2,965,445)
-
1,144,260
(1,821,185)
22,831,325
1,144,260
(1,821,185)
22,271,051
423,800
423,800
23,154,110
894,926
894,926 (2,965,445)
4,864,158 (3,118,571)
Group
At 1 January 2012
Total comprehensive income
Transactions with owners
Purchase of treasury shares
Issuance of ordinary shares pursuant
to exercise of warrants
Total transactions with owners
At 31 December 2012
annual report 2012
annual report 2012
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(cont'd.)
Attributable to owners of the parent
Non-distributable
Equity
attributable
to owners
of the
parent,
Equity,
total
total
Share
capital
(Note 24)
RM
RM
RM
Share
capital
(Note 24)
RM
Non-distributable
Treasury Accumulated
shares
losses
(Note 24)
RM
RM
Other
reserves,
total
Warrant
reserve
(Note 25)
RM
RM
Foreign
Capital
currency
redemption translation
reserve
reserve
(Note 25)
(Note 25)
RM
RM
Other
capital
reserves
(Note 25)
RM
Noncontrolling
interests
RM
Group
At 1 January 2011
30,424,053
30,070,016
Share premium reduction (Note 24)
Dividends on ordinary shares
Dissolution of an associate
Cancellation of shares
- Cancellation of treasury shares and
creation of capital redemption
reserve (Note 24)
- Costs of treasury shares cancelled
set off against share premium account
Expenses relating to cancellation
of shares
At 31 December 2011
(4,380,738)
(4,462,675)
-
-
-
(687,158)
(4,528,778)
-
(687,158)
(4,528,778)
-
- (45,212,000)
-
(687,158)
-
-
-
(1,552,490)
-
-
-
-
-
-
(4,116,837)
4,116,837
-
(31,050)
(5,246,986)
20,796,329
(31,050)
(5,246,986)
20,360,355
24,282,800 53,298,069 (3,635,649) (80,421,584) 36,546,380
(1,552,490) (49,328,837)
22,730,310
3,969,232
9,619,740
2,642,200
(56,123)
-
-
45,212,000
(4,528,778)
24,284,440 (24,284,440)
-
-
1,552,490
-
-
52,844
(83,894)
3,482,523 64,883,768 (22,731,950)
(153,126) (19,944,368) 13,758,307
(4,406,552)
- 24,284,440
(56,123)
354,037
-
81,937
- (24,284,440)
-
1,552,490
-
-
-
-
-
-
-
9,619,740
1,552,490
4,194,690
435,974
- (24,284,440)
(56,123)
-
31
32
STATEMENT OF CHANGES IN EQUITY(cont'd.)
Non-distributable
Equity,
total
Non-distributable
RM
Warrant
reserve
(Note 25)
RM
Capital
redemption
reserve
(Note 25)
RM
529,361
13,814,430
9,619,740
4,194,690
-
2,082,949
-
-
-
-
(2,965,445)
-
-
-
-
894,926
894,926
4,864,158
(2,965,445)
(3,118,571)
2,612,310
(174,466)
(174,466)
13,639,964
(174,466)
(174,466)
9,445,274
4,194,690
RM
Share
capital
(Note 24)
RM
Share
premium
(Note 24)
RM
Treasury
shares
(Note 24)
RM
Distributable
Retained
earnings
RM
40,890,207
22,730,310
3,969,232
(153,126)
2,082,949
-
-
(2,965,445)
-
1,144,260
(1,821,185)
41,151,971
423,800
423,800
23,154,110
Other
reserves,
total
Company
At 1 January 2012
At 31 December 2012
annual report 2012
annual report 2012
STATEMENT OF CHANGES IN EQUITY(cont'd.)
Non-distributable
Non-distributable
Share
capital
(Note 24)
RM
Share
premium
(Note 24)
RM
Treasury
shares
(Note 24)
RM
(Accumulated
losses)/
Retained
earnings*
RM
43,432,710
24,282,800
53,298,069
(3,635,649)
2,704,483
-
-
(687,158)
(4,528,778)
-
(31,050)
(5,246,986)
40,890,207
Equity,
total
RM
Other
reserves,
total
RM
Warrant
reserve
(Note 25)
RM
Capital
redemption
reserve
(Note 25)
RM
(42,774,450)
12,261,940
9,619,740
2,642,200
-
2,704,483
-
-
-
(45,212,000)
-
(687,158)
-
45,212,000
(4,528,778)
-
-
-
(1,552,490)
-
-
-
1,552,490
-
1,552,490
(1,552,490)
22,730,310
(4,116,837)
(49,328,837)
3,969,232
4,116,837
52,844
3,482,523
(153,126)
(83,894)
40,599,328
529,361
1,552,490
13,814,430
9,619,740
1,552,490
4,194,690
Company
At 1 January 2011
Share premium reduction (Note 24)
Dividends on ordinary shares
- Cancellation of treasury shares and creation
of capital redemption reserve (Note 24)
- Costs of treasury shares cancelled set off
against share premium account
Expenses relating to cancellation of shares
At 31 December 2011
* Distributable
33
CONSOLIDATED STATEMENT OF CASH FLOWS
2012
2011
RM
RM
6,093,714
(3,991,423)
(523,530)
(393,562)
Operating activities
Adjustments for:
Interest income
Interest expenses
3,684
3,684
Amortisation of intangible assets
181,550
1,538,454
Depreciation of property, plant and equipment
Impairment losses on intangible assets
304,895
-
463,756
4,284,890
-
237,276
Impairment losses on property, plant and equipment
Property, plant and equipment written off
Loss on disposal of an associate
Gain on dissolution of an associate
6,374
8,285
-
3,926,472
(1,023,733)
Allowance for impairment losses on financial assets
14,752
24,234
Short term accumulating compensated absences
77,703
(26)
Increase in retirement benefits obligation
Unrealised foreign exchange loss
29,563
Total adjustments
Operating cash flows before changes in working capital
Changes in working capital
-
95,589
-
135,146
(1,559)
190,580
9,203,317
6,284,294
5,211,894
(Increase)/Decrease in trade and other receivables
and prepayments
Decrease in trade and other payables
Total changes in working capital
Cash generated from operations
Interest received
Interest paid
Income taxes paid
Net cash flows generated from operating activities
(1,415,236)
3,821,266
(1,877,080)
(1,475,289)
(3,292,316)
2,991,978
2,345,977
7,557,871
482,332
348,418
(3,684)
(3,684)
(765,688)
2,704,938
(619,084)
7,283,521
(295,258)
(4,360)
(299,618)
(283,510)
3,500,000
1,023,733
4,240,223
Investing activities
Purchase of property, plant and equipment (Note 14)
Purchase of software license (Note 15)
Proceed from disposal of an associate
Dividend income from an associate
Net cash flows (used in)/generated from investing activities
Financing activities
Payments of expenses relating to cancellation of shares
-
(31,050)
Exercise of warrant
Repayment of obligations under finance lease
Dividends paid
Net cash flows used in financing activities
(2,965,445)
1,144,260
(27,804)
(687,158)
-
(1,848,989)
(4,528,778)
(5,274,791)
Net increase in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December (Note 21)
556,331
(504,506)
21,102,736
21,154,561
6,248,953
(28,138)
14,881,921
21,102,736
(27,805)
34
annual report 2012
COMPANY STATEMENT OF CASH FLOWS
2012
2011
RM
RM
3,042,799
2,724,362
Operating activities
Profit before tax
Adjustments for:
Interest income
Interest expenses
Amortisation of intangible assets
Depreciation of property, plant and equipment
Impairment losses on intangible assets
Loss on dissolution of an associate
Allowance for impairment losses on financial assets
Total adjustments
Operating cash flows before changes in working capital
Changes in working capital
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Total changes in working capital
Cash flows generated from/(used in) operations
Interest received
Interests paid
(55,140)
(44,412)
-
(1,023,733)
3,684
-
3,684
638,289
37,540
73,473
-
1,117,005
25,021
1,064,676
21,885
53,649
8,686
64,754
1,859,553
3,107,553
4,583,915
(388,642)
(4,831,458)
32,820
(278,671)
(355,822)
2,751,731
(5,110,129)
55,140
(526,214)
44,412
(3,684)
(3,684)
2,803,187
(19,879)
(505,365)
Purchase of property, plant and equipment (Note 14)
Proceed from disposal of associate
-
(35,529)
3,500,000
Dividend received from an associate
-
1,023,733
Net cash flows generated from investing activities
-
4,488,204
Income taxes paid
Net cash flows generated from/(used in) operating activities
Investing activities
Financing activities
-
(31,050)
(687,158)
-
Dividends paid
(2,965,445)
1,144,260
(27,804)
-
Net cash used in financing activities
(1,848,989)
Payments of expenses relating to cancellation of shares
Proceeds from issuance of new shares
Repayment of obligations under finance lease
Net increase/(decrease) in cash and cash equivalents
954,198
Cash and cash equivalents at 1 January
1,346,234
Cash and cash equivalents at 31 December (Note 21)
2,300,432
(27,805)
(4,528,778)
(5,274,791)
(1,291,952)
2,638,186
1,346,234
annual report 2012
35
NOTES
TO
THE
FINANCIAL
STATEMENTS
31 December 2012
1. Corporate information
mTouche Technology Berhad (“the Company”) is a public limited liability company incorporated and domiciled in Malaysia, and is listed on
the ACE market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at 10th Floor, Menara Hap Seng, No. 1 &
3 Jalan P. Ramlee, 50250 Kuala Lumpur. The principal place of business of the Company is located at Suite 39-06, Menara Citibank 165, Jalan
Ampang, 50450 Kuala Lumpur.
The principal activities of the Company are investment holding, research and development of existing and new technologies in the field of
information technology and telecommunications and related activities.
The principal activities of the subsidiaries are shown in Note 16. There have been no significant changes in the nature of the principal activities
during the year.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 23 April 2013.
2. Summary of significant accounting policies
2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting
Standards (“MFRSs”), International Financial Reporting Standards (“IFRS”), and the requirements of the Companies Act, 1965 in Malaysia.
These are the Group's and the Company's first financial statements prepared in accordance with MFRSs and MFRS 1 First-time
Adoption of Malaysian Financial Reporting Standards has been applied.
For the periods up to and including the year ended 31 December 2011, the financial statements of the Group and of the Company were
prepared in accordance with Financial Reporting Standards (“FRSs”) in Malaysia. The financial impact on transition to MFRSs is disclosed
in Note 2.2(a).
The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.
The financial statements are presented in Ringgit Malaysia (RM).
2.2 Malaysian Financial Reporting Standards (MFRS Framework)
On 19 November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approved accounting framework, the
Malaysian Financial Reporting Standards (“MFRS Framework”).
The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012,
with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141) and IC Interpretation 15 Agreements for
Construction of Real Estate (IC 15), including its parent, significant investor and venturer.
These financial statements, for the year ended 31 December 2012, are the first the Group has prepared its financial statements with MFRSs.
For periods up to and including the year ended 31 December 2011, the Group prepared its financial statements in accordance with Financial
Reporting Standards (“FRS”) in Malaysia.
Accordingly, the Group has prepared financial statements which comply with MFRS for the period ending on or after 31 December 2012,
together with the comparative period data as at and for the year ended 31 December 2011, as described in the summary of significant
accounting policies. In preparing these financial statements, the Group's opening statement of financial position was prepared as at 1
January 2011, the Group's date of transition to MFRS.
(a) Business combinations
MFRS 3 Business Combinations has not been applied to acquisitions of subsidiaries, which are considered businesses for MFRS that
occurred before 1 January 2011. Use of this exemption means that the FRS carrying amounts of assets and liabilities, that are required
to be recognised under MFRS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in
accordance with MFRS. Assets and liabilities that do not qualify for recognition under MFRS are excluded from the opening MFRS
statement of financial position. The Group did not recognise or exclude any previously recognised amounts as a result of MFRS
recognition requirements. MFRS 1 also requires that the FRS carrying amount of goodwill must be used in the opening MFRS
statement of financial position (apart from adjustments for goodwill impairment and recognition or derecognition of intangible assets).
(b) Foreign currency translation reserve
Under FRSs, the Group recognised foreign currency translation differences on foreign operations in the foreign currency translation
reserve in equity.
Upon the transition to MFRS, the Group elected to deem all foreign currency translation differences that arose prior to the date of
transition in respect of foreign operations to be nil as at the date of transition to MFRSs.
The reconciliation of equity for comparative periods at the date of transition reported under FRS to those reported for those periods
and at the date of transition under MFRS are provided below:
36
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2. Summary of significant accounting policies (cont'd.)
2.2 Malaysian Financial Reporting Standards (MFRS Framework) (cont'd.)
(b) Foreign currency translation reserve (cont'd.)
FRS
RM
Effect of
transition to
MFRS
RM
MFRS
RM
Consolidated statement of financial position
At 1 January 2011
Equity
Accumulated losses
Other reserves
(79,634,075)
35,758,871
(787,509)
787,509
(80,421,584)
36,546,380
At 31 December 2011
Equity
Accumulated losses
Other reserves
(19,156,859)
12,970,798
(787,509)
787,509
(19,944,368)
13,758,307
FRS
RM
Effect of
transition to
MFRS
RM
MFRS
RM
Consolidated statement of changes in equity
At 1 January 2011
Foreign currency translation reserve
Accumulated losses
(787,509)
(79,634,075)
787,509
(787,509)
(80,421,584)
At 31 December 2011
Foreign currency translation reserve
Accumulated losses
(843,632)
(19,156,859)
787,509
(787,509)
(56,123)
(19,944,368)
Group
Group
The above changes did not have any impact on the financial performance of the Group and of the Company.
annual report 2012
37
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2. Summary of significant accounting policies (cont’d)
2.3 Standards issued but not yet effective
As at the date of authorisation of these financial statements, the following Standards, Amendments and Issues Committee (“IC”)
Interpretations have been issued by the Malaysian Accounting Standards Board ("MASB") but are not yet effective and have not been
adopted by the Group and the Company:
Effective for annual
periods beginning
on or after
Description
MFRS 101 Presentation of Items of Other Comprehensive Income
(Amendments to MFRS 101)
Amendments to MFRS 101: Presentation of Financial Statements
(Annual Improvements 2009-2011 Cycle)
Amendment to IC Interpretation 2 Members’ Shares in Co-operative
Entities and Similar Instruments (Annual Improvements 2009-2011 Cycle)
Amendments to MFRS 1: First-time Adoption of Malaysian Financial
Reporting Standards – Annual Improvements 2009-2011 Cycle)
Amendments to MFRS 116: Property, Plant and Equipment
Amendments to MFRS 132: Financial Instruments: Presentation
Amendments to MFRS134: Interim Financial Reporting
Amendments to MFRS 10: Consolidated Financial Statements:
Transition Guidance
Amendments to MFRS 11: Joint Arrangements: Transition Guidance
Amendments to MFRS 12: Disclosure of Interests in Other Entities:
Transition Guidance
Amendments to MFRS 132: Offsetting Financial Assets and
IC 20: Stripping Costs in the Production Phase of a Surface Mine
MFRS 3: Business Combinations (IFRS 3 Business Combinations
issued by IASB in March 2004)
Amendments to MFRS 1: First-time Adoption of Malaysian
Financial Reporting Standards – Government Loans
Amendments to MFRS 7: Disclosures – Offsetting Financial Assets and
Financial Liabilities
MFRS 10: Consolidated Financial Statements
MFRS 11: Joint Arrangements
MFRS 12: Disclosure of Interests in Other Entities
MFRS 13: Fair Value Measurement
MFRS 119: Employee Benefits
MFRS 127: Separate Financial Statements
MFRS 127: Separate Financial Statements (IAS 27 as amended by IASB in May 2003)
MFRS 128: Investments in Associates and Joint Venture
Financial Liabilities
Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities
MFRS 9 Financial Instruments
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2014
1 January 2014
1 January 2015
The Group and the Company will adopt the above pronouncements when they become effective in the respective financial periods.
These pronouncements are not expected to have any significant effect to the financial statements of the Group and of the Company upon
their initial application.
38
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.4 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The
financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting
date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.
Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contigent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair
values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of an
acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any
non-controlling interest in the acquiree. Any excess of the cost of business combination over the Group’s share in the net fair value of the
acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position.
The accounting policy for goodwill is set out in Note 2.8(a). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s
identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the
date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are
reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the
cash flows that would otherwise be required under the contract.
2.5 Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is
presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial
position, separately from equity attributable to owners of the Company.
Changes in the Company owners' ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and
the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.
2.6 Foreign currency
(a) Functional and presentation currency
The individual financial statements of each entity in the Group 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 Company’s functional currency.
(b) Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are
recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date.
Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as
at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using
the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised
in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign
operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in
equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign
operation.
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. Exchange differences arising from such non-monetary items are also recognised directly in equity.
(c) Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and
expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken
directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive
income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in
the profit or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign
operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.
annual report 2012
39
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.7 Property, plant and equipment, and depreciation
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised
as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises
such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All
other repair and maintenance costs are recognised in profit or loss as incurred.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets at the following annual rates:
- Computers
- Furniture and fittings
- Office equipment
- Renovations
- Motor vehicles
33%
20%
33%
20%
20%
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that
the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each year-end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.
2.8 Intangible assets
(a) Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating
units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that
the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated the
goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than
carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in
subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on
disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations
disposed of and the portion of the cash-generating unit retained.
(b) Other intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is
their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated
amortisation and accumulated impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each
financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in
the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events
and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such
intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine
whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.
40
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.8 Intangible assets (cont'd.)
(b) Other intangible assets (cont'd.)
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.
( i ) Intellectual property
Intellectual property comprises telecommunication software and television programme rights acquired and is considered to have
a finite useful life due to the technological risks and advancement inherent in the industry. Intellectual property of the Group
is amortised on a straight line basis over its estimated useful lives ranging between 2 and 10 years.
( ii ) Software license
The Group has developed the following criteria to identify computer software license to be classified as plant and equipment or
intangible asset:
- software license that is embedded in computer-controlled equipment, including operating system that cannot operate without
that specific software is an integral part of the related hardware and is treated as plant and equipment;
- application software that is being used on a computer that is generally easily replaced and is not an integral part of the related
hardware is classified as intangible asset.
Due to the risk of technological changes, the useful lives of all software licenses are generally assessed as finite. The software
license classified as intangible asset is amortised over its estimated useful life ranging between 3 and 5 years.
(iii) Research and development costs
All research costs are recognised in the profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the
technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its
ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the
project and the ability to measure reliably the expenditure during the development. Product development expenditures which do
not meet these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised using
the straight-line basis over the commercial lives of the underlying products ranging between 5 and 10 years.
2.9 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or
when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount.
Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any
goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups
of units on a pro-rata basis. Impairment losses are recognised in profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.
Impairment loss on goodwill is not reversed in a subsequent period.
2.10 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits
from its activities.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any impairment losses.
annual report 2012
41
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.11 Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity
accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the
associate.
The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates
is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the
associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the
net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the
carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or
loss for the period in which the investment is acquired.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the
Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the
investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.
The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments
are made to bring the accounting policies in line with those of the Group.
In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such
investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.
2.12 Joint venture
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control,
where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.
The Group recognises its interest in joint venture using equity method as describe in Note 2.11.
In the Company’s separate financial statements, its investment in joint venture is stated at cost less impairment losses. On disposal of
such investment, the difference between net disposal proceeds and the carrying amount is included in profit or loss.
2.13 Financial assets
Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become 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.
(a) Loans 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.
Loans 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.
A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a
financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative
gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally
established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are
recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.
42
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.14 Impairment of financial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.
Trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the
Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant
delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of
impairment for a portfolio of receivables could include the Group’s and the Company's past experience of collecting payments, an increase
in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic
conditions that correlate with default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is
recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes
uncollectible, it is written off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the
asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
2.15 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are
readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank
overdrafts that form an integral part of the Group’s cash management.
2.16 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow
of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material,
provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognised as a finance cost.
2.17 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 a party 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.
(a) 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 as 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.
The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.
annual report 2012
43
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.17 Financial liabilities (cont'd.)
(b) Other financial liabilities
The Group’s and the Company's other financial liabilities include trade payables, other payables and loans and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at
amortised cost using the effective interest method.
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised
cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting date.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the
amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in
the respective carrying amounts is recognised in profit or loss.
2.18 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or
production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale
are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs
that the Group and the Company incurred in connection with the borrowing of funds.
2.19 Employee benefits
(a) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in which the associated
services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating
compensated absences such as sick leave, maternity and paternity leave are recognised when the absences occur.
(b) Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The
Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension
scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related
service is performed.
(c) Retirement benefits plan
The cost of providing benefits under the defined benefit plans is determined using the projected unit credit method. Actuarial gains and
losses for defined benefit plans are recognised in full in the period in which they occur in other comprehensive income. Such actuarial
gains and losses are also immediately recognised in retained earnings and are not reclassified to profit or loss in subsequent periods.
The past service costs are recognised as an expense on a straight line basis over the average period until the benefits become vested.
If the benefits have already vested, immediately following the introduction of, or changes to, a pension plan, past service costs are
recognised immediately.
The defined benefit asset or liability comprises the present value of the defined benefit obligation using market yield of government
bonds that are denominated in the currency in which the benefits will be paid, less past service costs and less the fair value of plan
assets out of which the obligations are to be settled. Plan assets are assets that are held by a long-term employee benefit fund or
qualifying insurance policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly to the Group. Fair
value is based on market price information and in the case of quoted securities it is the published bid price. The value of any defined
benefit asset recognised is restricted to the sum of any past service costs and the present value of any economic benefits available in
the form of refunds from the plan or reductions in the future contributions to the plan.
44
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.20 Leases
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised
at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial
direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or
loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will
obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit
of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.
2.21 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. Revenue is measured at the fair value of consideration received or receivable.
(i) Revenue from provision of services
Revenue from provision of services is recognised net of service taxes and discount as and when the services are performed.
(ii) Fee income
Fee income is recognised in the income statement on an accrual basis when services are rendered.
(iii) Interest income
Interest income is recognised using the effective interest method.
(iv) Sale of goods
Revenue is recognised net of sales taxes and upon transfer of significant risks and rewards of ownership to the buyer. Revenue is not
recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the
possible return of goods.
(v) Dividend income
Dividend income is recognised when the Group's right to receive payment is established.
2.22 Income taxes
(a) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in
other comprehensive income or directly in equity.
(b) Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
-
where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
-
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures,
where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
annual report 2012
45
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
2.22 Income taxes (cont'd.)
(b) Deferred tax (cont'd.)
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses,
to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can be utilised except:
-
where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
-
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognised only to the extent that is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow
the deferred tax assets to be utilised.
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 at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised
in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a
business combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
2.23 Segment reporting
For management purposes, the Group is organised into operating segments based on geographical location of its customers and assets
which are independently managed by the respective segment managers responsible for the performance of the respective segments
under their charge. The segment managers report directly to the management of the Company who regularly review the segment results
in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments
are shown in Note 32, including the factors used to identify the reportable segments and the measurement basis of segment information.
2.24 Share capital and share issuance expenses
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of
its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are
classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.
2.25 Treasury shares
When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is
recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain
or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by
resale, the difference between the sales consideration and the carrying amount is recognised in equity.
46
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
3. Significant accounting judgements and estimates
The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However,
uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of
the asset or liability affected in the future.
3.1 Judgements made in applying accounting policies
The significant judgement made in applying the accounting policies of the Group and of the Company which may have significant
effects of the amounts recognised in the financial statements is discussed below.
(a) Capitalisation and amortisation of intangible assets
Intangible assets are capitalised in accordance with the accounting policy in Note 2.8. Initial capitalisation of costs is based on
management's judgement that it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. In determining the amounts to be capitalised, management makes assumptions regarding the
expected future cash generation of the assets, discount rates to be applied and the expected period of useful live. At 31
December 2012, the carrying amount of intangible assets of the Group and Company is RM287,740 (2011: RM472,320) and RM Nil
(2011: RM Nil) respectively.
Amortisation is recognised in the income statement based on a straight-line basis over the estimated useful lives of respective
components. Because the intangible assets have a finite life, the Group and the Company review the amortisation period and useful life
at least once a year. However, if there are indications that the intangible assets are unable to generate future cash flow, immediate
impairment loss would be recognised. Further details are disclosed in Note 15.
3.2 Key sources of estimation uncertainties
The key assumptions concerning the future and other key sources of estimation uncertainties at the reporting date that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are discussed below.
(a) Impairment of non-financial assets
At reporting date, the management determines whether the carrying values of its non-financial assets are impaired. This involves
measuring the recoverable amounts using the 5 years-discounted cash flow (“DCF”) analysis taking into consideration the past
trends and the more recent performances achieved by the cash generating unit (“CGU”). Where the investment is quoted, its
market value is also a basis of measurement considered by management.
The discount rate applied to the DCF analysis is 8% (2011: 8%) which is in line with the average pre-tax weighted average cost of
capital (“WACC”) of the Group. The cashflows for the following year reflect the recent performance of the respective CGU whilst
growth rates for projection of cashflows beyond the following year range between 3% and 5% (2011: 3% and 5%) reflecting its
market experience. Long term growth rate is 5% (2011: 5%).
Following the above assessment, the Group and the Company recognised impairment losses of RM Nil (2011: RM4,522,166) and RM
Nil (2011: RM1,117,005) on intangible assets and property, plant and equipment respectively as further disclosed in Note 7. The
carrying amounts of intangible assets and property, plant and equipment have been disclosed in the respective notes. Based on
management's review, no further adjustment for impairment is required for the non-financial assets of the Group and
Company during the current year.
(b) Deferred tax assets
Deferred tax assets are recognised for all unused tax losses, unabsorbed capital allowance and other deductible temporary
differences to the extent that it is probable that taxable profit will be available against which the losses, capital allowance and
other deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of
deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits. The unrecognised tax
losses, capital allowances and other deductible temporary differences of the Group amounted to RM31,257,979
(2011:RM28,842,629), at the year end.
Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depends on
estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management
transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject
to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the
amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and
unrecognised temporary differences.
annual report 2012
47
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
3. Significant accounting judgements and estimates (cont'd.)
3.2 Key sources of estimation uncertainties (cont'd.)
(c) Allowance for doubtful debts
The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine
whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant
financial difficulties of the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss
experience for assets with similar credit risk characteristics. Following this assessment, the Group and the Company recognised
impairment losses of RM14,752 (2011: RM24,234) and RM25,021 (2011: RM21,885) respectively on trade and other receivables as
further disclosed in Note 20. The carrying amounts of trade and other receivables have been disclosed in the respective note. Based
on management's review, no further allowance is required for the Group and Company during the year.
4. Revenue
Group
Rendering of services
Licensing fees
Management fees
Dividend income
Company
2012
RM
2011
RM
2012
RM
2011
RM
36,888,891
36,888,891
43,753,951
43,753,951
4,706,754
1,385,359
998,501
7,090,614
7,138,686
1,121,649
8,260,335
2012
RM
2011
RM
2012
RM
2011
RM
523,530
-
393,562
1,023,733
55,140
-
44,412
1,023,733
-
5. Cost of sales
Cost of sales represents cost of services provided.
6. Other income
Included in other income are:
Group
Interest income on placement of deposits
Gain on dissolution of an associate
Company
7. Impairment losses
The impairment losses recognised in profit or loss are as follows:
Group
Impairment losses of:
- Intangible assets (Note 15)
- Property, plant, and equipment (Note 14)
Company
2012
RM
2011
RM
2012
RM
2011
RM
-
4,284,890
237,276
4,522,166
-
1,117,005
1,117,005
The impairment losses recognised in the previous year were in respect of the Company's and subsidiaries' intangible assets in respect of
intellectual property and development costs.
48
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
8. Finance costs
2012
RM
Group
2011
RM
Company
2012
RM
2011
RM
3,684
3,684
3,684
3,684
2012
RM
2011
RM
Company
2012
RM
2011
RM
169,414
10,440
154,151
-
Interest expense on obligation
under finance lease
9. Profit/(Loss) before tax
The following items have been included in arriving at profit/(loss) before tax:
Group
Auditors' remuneration:
- statutory audits
Current year
Underprovision in prior year
- other services
65,000
10,440
65,000
-
109,000
121,842
109,000
114,410
7,122,661
8,406,675
3,414,710
2,963,745
Non-executive directors' remuneration (Note 11)
139,083
123,333
139,083
123,333
Depreciation of property, plant and equipment (Note 14)
Amortisation of intangible assets (Note 15)
304,895
181,550
463,756
1,538,454
37,540
-
73,473
638,289
1,064,676
Employee benefits expense (Note 10)
6,374
8,285
Loss on disposal of an associate
-
3,926,472
Impairment loss of intangible assets (Note 15)
Impairment loss of property, plant and equipment (Note 14)
-
4,284,890
237,276
-
-
14,752
24,234
25,021
21,885
14,752
-
24,234
-
25,021
21,885
834,857
844,851
19,223
20,971
(125,334)
95,589
230,283
135,146
-
66,726
-
2012
RM
2011
RM
2012
RM
2011
RM
6,134,599
167,905
470,314
77,703
29,563
242,577
7,122,661
7,576,461
104,791
475,988
(26)
249,461
8,406,675
2,919,382
22,682
338,840
53,649
80,157
3,414,710
2,591,273
21,422
280,840
8,686
61,524
2,963,745
1,117,005
-
Allowance for/(reversal of) impairment losses on
financial assets:
- trade receivables (Note 20(a))
- other receivables (Note 20(b))
Operating lease, minimum lease payments for office
Foreign exchange (gain)/loss:
- realised
- unrealised
Group
10. Employee benefits expense
Wages and salaries
Social security contributions
Contributions to defined contribution plan
Increase in retirement benefits obligation ( Note 23(c) )
Other benefits
Company
Included in employee benefits expense of the Group and the Company are executive directors' remuneration amounting to RM
854,089 (2011: RM1,800,970) and RM506,055 (2011: RM271,608) respectively as further disclosed in Note 11.
annual report 2012
49
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
11. Directors' remuneration
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
778,305
74,751
1,033
854,089
139,083
993,172
1,695,828
104,574
568
1,800,970
123,333
1,924,303
458,714
46,308
1,033
506,055
139,083
645,138
242,000
29,040
568
271,608
123,333
394,941
2012
RM
2011
RM
2012
RM
2011
RM
854,089
139,083
993,172
1,800,970
123,333
1,924,303
506,055
139,083
645,138
271,608
123,333
394,941
Directors of the Company
Executive directors:
- Salaries and other emoluments
- Contributions to defined contribution plan
- Social security contributions
Non-executive directors' fees
Group
Company
Analysis of remuneration:
Total executive directors' remuneration (Note 10)
Total non-executive directors' remuneration (Note 9)
The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:
Number of Directors
2012
2011
Executive directors:
RM150,000 - RM200,000*
RM250,000 - RM300,000
RM350,000 - RM400,000
RM750,000 - RM800,000
3
1
-
1
2
Non-executive directors:
Less than RM50,001*
7
4
* Including 2 executive directors and 3 non-executive directors who resigned during the year.
50
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
12. Income tax expense
Major components of income tax expense
The major components of income tax expense for the years ended 31 December 2012 and 2011 are:
Group
Statement of comprehensive income:
Current income tax
- Malaysian income tax
- Foreign tax
- Underprovision in respect of previous years
Deferred income tax (Note 19)
- Origination and reversal temporary differences
Income tax expense recognised in profit or loss
Company
2012
RM
2012
RM
2011
RM
2011
RM
16,447
1,591,014
1,607,461
13,656
181,987
19,879
215,522
959,850
959,850
19,879
19,879
104,076
1,711,537
104,029
319,551
959,850
19,879
Reconciliation between tax expense and accounting profit/(loss)
The reconciliation between tax expense and the product of accounting profit/(loss) multiplied by the applicable corporate tax rate for the
years ended 31 December 2012 and 2011 are as follows:
2012
RM
2011
RM
6,093,714
(3,991,423)
Tax at Malaysian statutory tax rate of 25% (2011: 25%)
Different tax rates in other countries
Adjustments:
Non-deductible expenses
Income not subject to tax
Utilisation of capital allowances and tax losses previously
not recognised
Deferred tax assets not recognised
Underprovision of income tax in respect of previous years
Income tax expense recognised in profit or loss
1,523,429
714,795
(997,856)
393,238
771,411
(582,042)
977,286
(155,680)
(953,120)
237,064
1,711,537
(559,244)
641,928
19,879
319,551
2012
RM
2011
RM
3,042,799
2,724,362
760,700
681,091
959,850
175,959
(582,040)
(354,619)
959,850
702,905
(1,383,996)
19,879
19,879
Group
Company
Profit before tax
Tax at Malaysian statutory tax rate of 25% (2011: 25%)
Adjustments:
Foreign tax
Non-deductible expenses
Income not subject to tax
Utilisation of previously unrecognised capital allowances
Underprovision of income tax in respect of previous years
annual report 2012
51
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
12. Income tax expense (cont'd.)
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2011: 25%) of the estimated assessable profit/(loss) for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The Company has been granted Multimedia Super Corridor (“MSC”) status and the incentive awarded to the Company is Pioneer Status under
Section 4A of the Promotion of Investments Act 1986. The Company has been granted an extension of its status for a further five years period
from 3 June 2009. Accordingly, its income from MSC-qualifying services continued to be exempted from tax. The provision for income tax
made by the Company are in respect of foreign witholding tax and interest income.
Tax saving during the year arising from:
Group
Utilisation of capital allowances and tax losses previously not recognised
2012
RM
2011
RM
953,120
559,244
13. Earning/(Loss) per share
Basic earnings/(loss) per share is calculated by dividing profit/ (loss) for the year, net of tax attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during the year, excluding treasury shares held by the Company.
The following reflect the profit/ (loss) and share data used in the computation of basic earnings/ (loss) per share for the years ended 31 December:
Group
Profit/(Loss) net of tax attributable to owners of the parent used in the computation of
basic earnings per share
Weighted average number of ordinary shares for basic earnings per share computation *
Basic earnings/(loss) per share for the year
2012
RM
2011
RM
4,244,869
(4,406,552)
226,476,808
227,106,406
1.87
(1.94)
* The weighted average number of shares takes into account the weighted average effect of changes in treasury shares transactions as well
as treasury shares cancelled during the year.
The outstanding warrants have been excluded from the computation of fully diluted earning/(loss) per share as the exercise of warrants to
ordinary shares would be antidilutive. There were no other transactions involving the potential dilution of ordinary shares in issue.
52
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
14. Property, plant and equipment
Computers
RM
Furniture
and fittings
RM
Office
equipment
RM
Renovations
RM
Motor
vehicles
RM
Total
RM
2,838,699
175,887
(857)
27,494
3,041,223
144,129
(68,761)
(12,555)
3,104,036
232,166
8,394
332
240,892
42,025
(7,527)
(2,097)
273,293
560,248
37,539
(481)
(7,656)
589,650
39,136
(5,595)
(4,558)
618,633
392,805
26,161
(15,548)
(2,457)
400,961
69,968
(5,729)
(4,019)
461,181
454,815
174,530
32
629,377
(322)
629,055
4,478,733
422,511
(16,886)
17,745
4,902,103
295,258
(87,612)
(23,551)
5,086,198
2,251,735
330,103
237,276
21,011
2,840,125
182,474
(68,665)
(7,770)
2,946,164
211,376
13,224
321
224,921
8,373
(7,674)
(1,166)
224,454
401,042
41,853
(4,028)
438,867
35,065
(4,899)
(3,384)
465,649
273,930
42,921
(8,601)
(1,498)
306,752
43,371
(2,225)
347,898
451,678
35,655
1
487,334
35,612
(139)
522,807
3,589,761
463,756
237,276
(8,601)
15,807
4,297,999
304,895
(81,238)
(14,684)
4,506,972
At 1 January 2011
586,964
20,790
159,206
118,875
3,137
888,972
At 31 December 2011
201,098
15,971
150,783
94,209
142,043
604,104
At 31 December 2012
157,872
48,839
152,984
113,283
106,248
579,226
Group
Cost
At 1 January 2011
Additions
Written off
Exchange differences
At 31 December 2011 and 1 January 2012
Additions
Written off
At 31 December 2012
Accumulated depreciation and
impairment losses
At 1 January 2011
Depreciation charge (Note 9)
Impairment loss (Note 7)
Written off
Written off
At 31 December 2012
Net carrying amount
annual report 2012
53
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
14. Property, plant and equipment (cont'd.)
Computers
RM
Furniture
and fittings
RM
Office
equipment
RM
Renovations
RM
Motor
vehicles
RM
Total
RM
149,014
149,014
520
520
11,913
11,913
7,456
7,456
174,530
174,530
168,903
174,530
343,433
110,739
35,792
146,531
726
147,257
138
104
242
104
346
7,104
2,671
9,775
1,804
11,579
7,453
3
7,456
7,456
34,903
34,903
34,906
69,809
125,434
73,473
198,907
37,540
236,447
38,275
382
4,809
3
-
43,469
At 31 December 2011
2,483
278
2,138
-
139,627
144,526
At 31 December 2012
1,757
174
334
-
104,721
106,986
Company
Cost
At 1 January 2011
Additions
At 31 December 2011/ 31 December 2012
Accumulated depreciation
At 1 January 2011
At 31 December 2012
Net carrying amount
At 1 January 2011
Assets held under finance lease
In the previous financial year, the Group acquired motor vehicles by means of finance lease. The cash outflow on acquisition of property, plant
and equipment amounted to RM422,511. The carrying amount of motor vehicles held under finance lease at the reporting date were
RM104,721 (2011: RM139,627).
Additions of property, plant and equipment comprise the following:
Cash
Hire purchase
31.12.2012
RM
Group
31.12.2011
RM
01.01.2011
RM
295,258
295,258
283,510
139,001
422,511
287,013
287,013
Company
31.12.2012 31.12.2011
RM
RM
-
35,529
139,001
174,530
01.01.2011
RM
8,306
8,306
Impairment of assets
In the previous financial year, a subsidiary of the Group within the matured market segment, mTouche Pte. Ltd. carried out a review of the
recoverable amount of its computers. An impairment loss of RM237,276, representing the write-down of the software license that was
embedded in computer-controlled equipment, including operating system that cannot operate without that specific software, to the recoverable
amount was recognised in "Impairment losses" line item of the statement of comprehensive income for the year ended 31 December 2011.
54
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
15. Intangible assets
Development
costs
RM
Goodwill
RM
Intellectual
property
RM
Software
license
RM
2,595,672
27,470
2,623,142
(69,487)
2,553,655
26,041,116
(11,526,524)
344,098
14,858,690
(45,278)
14,813,412
4,241,442
4,241,442
4,360
4,245,802
712,047 33,590,277
- (11,526,524)
9,741
381,309
721,788 22,445,062
4,360
10,342
(104,423)
732,130 22,344,999
2,360,111
37,906
2,398,017
(63,523)
2,334,494
22,018,916
715,736
(11,526,524)
3,021,806
381,561
14,611,495
180,696
(43,845)
14,748,346
2,486,148
638,289
1,117,005
4,241,442
854
(7)
4,242,289
386,038 27,251,213
184,429
1,538,454
- (11,526,524)
146,079
4,284,890
5,242
424,709
721,788 21,972,742
181,550
10,342
(97,033)
732,130 22,057,259
At 1 January 2011
235,561
4,022,200
1,755,294
326,009
6,339,064
At 31 December 2011
225,125
247,195
-
-
472,320
At 31 December 2012
219,161
65,066
3,513
-
287,740
Total
RM
Group
Cost
At 1 January 2011
Written off
Additions
At 31 December 2012
Accumulated amortisation and
impairment losses
At 1 January 2011
Amortisation (Note 9)
Written off
At 31 December 2012
Net carrying amount
The intangible assets written off in the previous year amounting RM11,526,524 was in respect of subsidiaries which had ceased operations in
prior years.
Company
Software license
2011
2012
RM
RM
Cost
At 1 January/31 December
4,241,442
4,241,442
4,241,442
4,241,442
2,486,148
638,289
1,117,005
4,241,442
-
-
Accumulated amortisation and impairment losses
At 1 January
At 31 December
Net carrying amount
At 31 December
annual report 2012
55
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
15. Intangible assets (cont'd.)
Intellectual property, software license and development costs
Intellectual property relates to telecommunication software and television programme rights acquired and has an average remaining
amortisation period of 6 (2011: 6) years.
Software license relates to:
-
software license that is embedded in computer-controlled equipment, including operating system that cannot operate without that specific
software is an integral part of the related hardware;
-
application software that is being used on a computer that is generally easily replaced and is not an integral part of the related hardware.
The software license and development cost which related to expenditure incurred on projects to develop new products had been fully impaired
in the previous year.
Impairment testing of goodwill
The carrying amounts of goodwill allocated to CGU of emerging market is RM219,161 (2011: RM225,125).
The recoverable amounts of the CGU has been determined based on value in use calculations using cash flow projections from financial
budgets approved by management covering a five-year period.
The pre-tax discount rate applied to the cash flow projections and the forecast growth rates used to extrapolate cash flows beyond the
five-year period is 8% (2011: 8%) and range 3% and 5% (2011: 3% and 5%) respectively.
16. Investments in subsidiaries
Company
Unquoted shares, at costs
Impairment losses
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
13,666,099
(4,604,489)
9,061,610
13,666,099
(4,604,489)
9,061,610
13,720,851
(4,659,241)
9,061,610
The details of the subsidiaries are as follows:
Country of
incorporation
Name
Proportion (%) of
ownership interest
31.12.2012
31.12.2011
1.1.2011
Malaysia
100
100
100
Malaysia
100
100
100
Singapore
100
100
100
Republic of Indonesia
99
99
99
Thailand
99.94
99.94
99.94
Hong Kong
100
100
100
Vietnam
100
100
100
Singapore
95
95
95
mTouche Technology Philippines Inc 3#
Philippines
99.99
99.99
99.99
mTouche Technology India Private Ltd
India
-
-
100
Hong Kong
-
-
100
Held by the Company:
1
Mobile Touchetek Sdn Bhd
1
mTouche International Sdn Bhd
mTouche Pte Ltd
2
PT mTouche2
mTouche (Thailand) Co Ltd
mTouche (HK) Ltd
2
mTouche (Vietnam) Co Ltd
mBit Pte Ltd
2
2
2
Mymyad (China) Limited
56
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
16. Investments in subsidiaries (cont'd.)
Proportion (%) of
ownership interest
Country of
incorporation
31.12.2012
31.12.2011
1.1.2011
Vietnam
64.9
64.9
64.9
Hong Kong
100
100
100
Singapore
100
100
100
Held through subsidiaries:
mBox Joint Stock Company 2
Nastech Limited 2
Mobile Fusion Pte Ltd
2
The principal activities of the above subsidiaries are the provision of mobile applications and related technology services.
1
2
3
#
Audited by Ernst & Young, Malaysia
Audited by firms other than Ernst & Young, Malaysia
This subsidiary is dormant and/or do not have significant activities
This subsidiary are in the process of being deregistered
17. Investments in associates
Group
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
-
-
38,342,757
4,564,676
42,907,433
12,813,989
(48,296,509)
7,424,913
-
-
38,342,757
4,564,676
42,907,433
-
-
(38,342,757)
4,564,676
At cost
Unquoted shares outside Malaysia
Unquoted shares in Malaysia
Share of post-acquisition reserves
Less: Accumulated impairment losses
Company
At cost
Unquoted shares outside Malaysia
Unquoted shares in Malaysia
Less: Accumulated impairment losses
annual report 2012
57
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
17. Investments in associates (cont'd.)
Details of the associates are as follows:
Name of associates
Country of incorporation
IdotTV Sdn Bhd
GMO Global Limited
Proportion (%) of ownership interest
31.12.2012
31.12.2011
1.1.2011
%
%
%
Malaysia
-
-
20
British Virgin Islands (BVI)
-
-
38.56
Provision of value added
telecommunication services
Investment holding
The financial statements of the above associates were coterminous with those of the Group, and were audited by firms other than Ernst &
Young, Malaysia.
The summarised financial information of the associates were as follows:
Group
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
Assets and liabilities
Current assets
Non-current assets
Total assets
-
-
15,608,928
3,533,824
19,142,752
Current liabilities
Non-current liabilities
Total liabilities
-
-
211,986
211,986
Results
Revenue
Profit/(Loss) for the year
-
5,761,936
7,797
26,523,915
(60,952,103)
On 10 May 2011, the Company entered into a conditional sale and purchase agreement to dispose its 20% equity interest in IdotTV Sdn Bhd
for a total cash consideration of RM3,500,000 and the disposal was completed on 4 July 2011.
On 30 September 2011, GMO Global Limited was dissolved pursuant to Section 208 of the BVI Business Companies Act, 2004 by the Registrar
of Corporate Affairs of the British Virgin Islands.
18. Investment in a joint venture
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
-
-
23,651
(23,651)
-
-
-
23,651
(23,651)
-
Group
Unquoted shares, at cost
Less: Accumulated impairment loss
Company
Unquoted shares, at cost
Less: Accumulated impairment loss
58
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
18. Investment in a joint venture (cont'd.)
<--------------- Equity interest held --------------->
Name of joint venture
Direct:
Cellcast SEA Limited
Country of incorporation
31.12.2012
%
31.12.2011
%
1.1.2011
%
Hong Kong
-
-
50
Provision of television
broadcasting services
On 20 May 2011, Cellcast SEA Limited was deregistered under Section 291AA(9) of the Hong Kong Companies Ordinance.
19. Deferred taxation
Deferred income tax as at 31 December relates to the following:
RM
Recognised
in profit
or loss
(Note 12)
RM
806,838
5,924
(5,233)
807,529
13,627
13,627
110,000
110,000
-
110,000
13,627
123,627
793,211
(104,076)
(5,233)
683,902
828,373
69,031
897,404
(21,848)
(82,181)
(104,029)
313
(477)
(164)
806,838
(13,627)
793,211
As at
1 January
Exchange
differences
As at
31 December
RM
RM
Group
2012
Deferred tax assets:
Unused tax losses and unabsorbed capital allowances
Deferred tax liabilities:
Witholding tax
Others
Total
2011
Deferred tax assets:
Unused tax losses and unabsorbed capital allowances
Others
Unrecognised tax losses and unabsorbed capital allowances
Group
2012
RM
Unused tax losses
Unabsorbed capital allowances
24,616,891
6,641,088
31,257,979
2011
RM
22,361,532
6,481,097
28,842,629
No deferred tax asset is recognised due to uncertainty of future taxable profits of the respective subsidiaries. For subsidiaries in Malaysia, the
availability of unused tax losses for offsetting against future taxable profit are subject to no substantial changes in shareholdings under the
Income Tax Act, 1967 and guidelines issued by the tax authority.
annual report 2012
59
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
20. Trade and other receivables
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
9,436,447
(38,986)
9,397,461
8,167,347
(24,234)
8,143,113
10,981,563
10,981,563
496,524
420,602
917,126
10,314,587
263,512
471,914
735,426
8,878,539
473,805
352,158
816,867
1,169,025
12,150,588
10,314,587
21,154,561
31,469,148
8,878,539
21,102,736
29,981,275
12,150,588
14,881,921
27,032,509
26,867,113
(593,381)
26,273,732
27,379,565
(593,381)
26,786,184
25,949,045
(593,381)
25,355,664
5,479,317
194,273
53,682
5,727,272
(624,306)
5,102,966
31,376,698
4,752,988
9,273
32,363
4,794,624
(599,285)
4,195,339
30,981,523
785,165
354,959
44,803
14,724
1,199,651
(577,400)
622,251
25,977,915
19,890,000
(19,313,608)
576,392
19,890,000
(19,313,608)
576,392
19,890,000
(19,313,608)
576,392
31,953,090
2,300,432
34,253,522
31,557,915
1,346,234
32,904,149
26,554,307
2,638,186
29,192,493
Group
Current
Trade receivables
Third parties
Less: Allowance for impairment losses
Other receivables
Amounts due from associate
Deposits
Sundry receivables
Total trade and other receivables
(current and non-current)
Add: Cash and bank balances (Note 21)
Total loans and receivables
Company
Trade receivables
Amounts due from subsidiaries
Other receivables
Amounts due from
- Subsidiaries
- Associate
Deposits
Sundry receivables
Less: Allowance for impairment in subsidiaries
Non-current
Other receivables
Amounts due from subsidiaries
Total trade and other
receivables (current and non-current)
Add: Cash and bank balances (Note 21)
Total loans and receivables
60
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
20. Trade and other receivables (cont'd.)
(a) Trade receivables
Trade receivables are non-interest bearing and are generally on 30 to 90 (2011: 30 to 90) days terms. They are recognised at their original
invoice amounts which represent their fair values on initial recognition.
Ageing analysis of trade receivables
The ageing analysis of the Group’s and the Company's trade receivables are as follows:
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
3,821,102
3,796,001
1,547,491
24,443
208,424
5,576,359
38,986
9,436,447
5,514,203
1,677,247
416,322
445,700
89,641
2,628,910
24,234
8,167,347
8,693,523
926,510
675,324
428,487
257,719
2,288,040
10,981,563
7,090,614
19,183,118
19,183,118
593,381
26,867,113
7,097,589
325,702
7,187,601
12,175,292
19,688,595
593,381
27,379,565
7,187,601
3,428,568
7,813,424
6,926,071
18,168,063
593,381
25,949,045
Group
Neither past due nor impaired
1 to 30 days past due not impaired
More than 365 days past due not impaired
Impaired
Company
Neither past due nor impaired
More than 365 days past due not impaired
Impaired
Receivables that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and
the Company. None of the Group's and the Company's trade receivables that are netiher past due nor impaired have been renegotiated
during the year.
Receivables that are past due but not impaired
The Group and the Company have trade receivables amounting to RM5,576,359 (2011: RM2,628,910) and RM19,183,118 (2011:
RM19,688,595) respectively that are past due at the reporting date but not impaired. Based on historical payment received, the Group and
the Company believe that no impairment allowance is necessary.
Amounts past due more than 365 days not impaired represents partial amounts due from subsidiaries. No impairment allowance is necessary as these amounts are repayable on demand.
Receivables that are impaired
The Group’s and the Company's trade receivables that are impaired at the reporting date and the movement of the allowance accounts
used to record the impairment are as follows:
annual report 2012
61
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
20. Trade and other receivables (cont’d.)
(a) Trade receivables (cont'd.)
Receivables that are impaired (cont'd.)
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
38,986
(38,986)
-
24,234
(24,234)
-
-
593,381
(593,381)
-
593,381
(593,381)
-
593,381
(593,381)
-
Group
Trade receivables - nominal amounts
Company
Trade receivables - nominal amounts
Movement in allowance accounts:
Group
At 1 January
Allowance for
impairment losses
for the year (Note 9)
At 31 December
Company
2012
RM
2011
RM
2012
RM
2011
RM
24,234
-
593,381
593,381
14,752
38,986
24,234
24,234
593,381
593,381
(b) Other receivables
Other receivables that are impaired
The Group's other receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the
impairment are as follows:
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
-
-
-
624,306
(624,306)
-
599,285
(599,285)
-
577,400
(577,400)
-
Group
Other receivables- nominal amounts
Company
Other receivables- nominal amounts
62
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
(b) Other receivables (cont'd.)
Other receivables that are impaired (cont'd.)
Movement in allowance accounts:
Group
2012
RM
2011
RM
Company
2012
RM
2011
RM
Current
At 1 January
(Reversal of)/allowance
for impairment losses for the year (Note 9)
At 31 December
-
-
599,285
577,400
-
-
25,021
624,306
21,885
599,285
-
-
19,313,608
19,313,608
Non-current
(c) Related party balances
Current (trade and non-trade)
These amounts are unsecured, non-interest bearing and are repayable upon demand.
Non-current (non-trade)
These amounts are non-interest bearing and no repayment terms is stipulated. These amounts are not expected to be repaid within the next
twelve months.
21. Cash and bank balances
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
13,822,689
7,331,872
21,154,561
10,665,496
10,437,240
21,102,736
12,724,854
2,157,067
14,881,921
1,888,215
412,217
2,300,432
336,919
1,009,315
1,346,234
2,638,186
2,638,186
Group
Cash on hand and at banks
Short term deposits with licensed bank
Cash and cash equivalents
Company
Cash on hand and at banks
Short term deposits with licensed bank
Cash and cash equivalents
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of
the Group and the Company, and earn interests at the respective short-term deposit rates.
The effective interest rates of short term deposits with licensed banks at the reporting date ranged from 0.1% to 9% (2011: 0.1% to 14%)
per annum.
Short-term deposits' matures periods as at 31 December 2012 are varying between one to three months.
annual report 2012
63
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
22. Borrowings
Group and company
1.1.2011
31.12.2011
31.12.2012
RM
RM
RM
Current
Secured:
Obligations under finance lease (Note 28(b))
27,804
27,804
-
55,588
83,392
-
83,392
111,196
-
Non-current
Secured:
Total borrowings
Secured:
Obligations under finance lease
These obligations are secured by a charge over the motor vehicle (Note 14). The effective interest rate was 5.01% p.a.. These obligations are
denominated in RM.
23. Trade and other payables
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
2,090,871
1,538,985
3,672,895
6,682,946
29,563
1,099,834
7,812,343
8,700,763
1,337,691
10,038,454
6,958,173
2,286,540
9,244,713
9,903,214
83,392
9,986,606
11,577,439
111,196
11,688,635
12,917,608
12,917,608
393,588
639,940
209,525
1,243,053
393,588
680,330
82,666
1,156,584
466,900
959,669
1,426,569
1,243,053
83,392
(29,563)
1,296,882
1,156,584
111,196
1,267,780
1,426,569
1,426,569
Group
Trade payables
Third parties
Other payables
Accruals
Retirement benefits obligation
Sundry payables
Total trade and other payables
Add: Borrowings (Note 22)
Total financial liabilities
Company
Other payables
Amounts due to subsidiaries
Accruals
Sundry payables
Total trade and other
payables
Add: Borrowings (Note 22)
Less: Retirement benefits obligation
Total financial liabilities
64
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
(a) Trade payables
These amounts are non-interest bearing. Trade payables are normally settled on 60 to 90 (2011: 60 to 90) days terms.
(b) Amounts due to subsidiaries
These amounts are unsecured, non-interest bearing and repayable on demand.
(c) Retirement benefits obligation
Under labour laws in Thailand, all Thailand employees with more than 120 days of service are entitled to Legal Severance Payment benefits
ranging from 30 days to 300 days of final salary upon on termination of service, including forced termination or retrenchment, or in the event
of retirement. The present value of defined benefits obligations are as follow:
2012
RM
2011
29,235
-
328
-
RM
Group
Net Benefit expense
Current service cost
Interest cost
Net benefit expense included in employee cost (Note 10)
29,563
Benefit Liability
Defined benefit obligation
29,563
-
Fair value of planned assets
Benefit Liability
29,563
-
-
-
29,235
-
-
Changes of the present value of defined benefit obligation is as follows:
At 1 January
Current service cost
Interest cost
Exchange difference
At 31 December
328
160
29,723
-
The principal assumptions used in determining the employee benefit obligations is as follows:
Discount rate
Inflation rate
Future salary increases
- Prior to age 30
- age 30 onwards
annual report 2012
4%
3%
12%
8%
65
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
24. Share capital, share premium and treasury shares
Group and Company
Number of ordinary
share of RM0.10 each
At 1 January 2011
Share premium reduction
Cancellation of shares:
- Cancellation of treasury shares and creation
of capital redemption reserve
- Cost of treasury shares cancelled set off
against share premium account
Expenses relating to cancellation of shares
At 31 December 2011
At 31 December 2012
Amount
Share
premium
RM
Total
share
capital
and share
premium
RM
Treasury
shares
RM
24,282,800
-
53,298,069
(45,212,000)
-
77,580,869
(45,212,000)
-
(3,635,649)
(687,158)
-
(1,552,490)
-
(1,552,490)
-
227,303,100
15,524,900
(864,200)
22,730,310
(4,116,837)
3,969,232
(4,116,837)
26,699,542
4,116,837
52,844
(153,126)
-
(6,643,900)
-
-
-
(2,965,445)
4,238,000
231,541,100
(7,508,100)
423,800
23,154,110
894,926
4,864,158
1,318,726
28,018,268
(3,118,571)
Share
capital
(Issued and
fully paid)
RM
(13,695,100)
(2,694,000)
(15,524,900)
Share
capital
(Issued and
fully paid)
Treasury
shares
242,828,000
-
Group and Company
Number of ordinary
share of RM0.10 each
Amount
2012
2011
2012
RM
2011
RM
500,000,000
500,000,000
50,000,000
50,000,000
Authorised share capital
(a) Share capital
During the year, a total of 4,238,000 Warrant 2010/2020 were exercised at an exercise price of RM0.27 per warrant totaling RM1,144,260
and 4,238,000 ordinary shares were issued during the year as a result of the exercise of these warrants.
On 31 May 2011, the Company cancelled 15,524,900 treasury shares of RM0.10 each with a total cost of RM4,116,837 by utilising share
premium account. The transaction costs paid for the cancellation of shares was RM31,050. Pursuant to the cancellation of the said
treasury shares, a capital redemption reserve account of RM1,552,490 (Note 25) was created in the previous year.
The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All
ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.
(b) Treasury shares
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of
treasury shares net of the proceeds received on their subsequent sale or issuance.
The Company acquired 6,643,900 (2011: 2,694,000) shares in the Company through purchases on the Bursa Malaysia Securities Berhad
during the year. The total amount paid to acquire the shares was RM2,965,445 (2011: RM687,158) and this was presented as a component
within shareholders’ equity.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase
plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally
generated funds. The shares repurchased are being held as treasury shares.
66
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
24. Share capital, share premium and treasury shares (cont'd.)
(c) Share premium
On 29 April 2011, the Company had proposed to utilise its share premium account in setting off against the Company's accumulated
losses and has obtained shareholders' approval on 30 June 2011. Pursuant to Section 64 of the Companies Act, 1965, the High Court of
Malaya at Kuala Lumpur had granted an order for the share premium reduction of RM45,212,000 against the Company's accumulated
losses on 23 September 2011. The certified true copy of this court order was lodged with the Companies Commission of Malaysia on 12
October 2011.
On 23 September 2011, pursuant to Section 64 of the Companies Act, 1965, the High Court of Malaya at Kuala Lumpur had granted an
order confirming the share premium reduction of RM45,212,000 against the Company's accumulated losses that was proposed to the
shareholders of the Company on 29 April 2011 and approved by the shareholders of the Company on 30 June 2011. The certified true
copy of this court order was lodged with the Companies Commission of Malaysia on 12 October 2011.
25. Other reserves
Warrant
reserve
RM
Capital
redemption
reserve
RM
Foreign
currency
translation
reserve
RM
Other
capital
reserves
RM
Other
reserve,
total
RM
9,619,740
2,642,200
-
24,284,440
35,758,871
-
-
(56,123)
-
(56,123)
9,619,740
1,552,490
1,552,490
4,194,690
(56,123)
(24,284,440)
(24,284,440)
-
(24,284,440)
1,552,490
(22,731,950)
13,758,307
-
-
(512,988)
-
(512,988)
(174,466)
9,445,274
4,194,690
(569,111)
-
(174,466)
13,070,853
Capital
redemption
reserve
RM
Warrant
reserve
RM
Other
reserve,
total
RM
At 1 January 2011
2,642,200
9,619,740
12,261,940
Transactions with owners:
1,552,490
4,194,690
9,619,740
1,552,490
13,814,430
Exercise of warrant
At 31 December 2012
4,194,690
(174,466)
9,445,274
(174,466)
13,639,964
Group
At 1 January 2011
Foreign currency translation
Dissolution of an associate
Foreign currency translation
Exercise of warrant
At 31 December 2012
Company
annual report 2012
67
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
25. Other reserves (cont'd.)
(a) Warrant reserve
(i) Warant 2010/2020
The warrants which were listed on the ACE market of Bursa Malaysia Securities Berhad on 19 March 2010 were constituted by a Deed
Poll executed on 25 January 2010. The main features of the warrants are as follows:
(i) Each warrant entitles the holder to subscribe for 1 new ordinary share of RM0.10 each in the Company at a price of RM0.27 per
share by cash;
(ii) The warrants may be exercised at any time on or before 16 March 2020;
(iii) The exercise price and the unexercised warrants are subject to adjustments in accordance with the provisions as set out in the
Deed Poll; and
(iv) Full provisions regarding the transferability of warrants to new ordinary shares, which will thereafter rank pari passu with the
existing ordinary shares of the Company, adjustment of the exercise price and other terms and conditions pertaining to the
warrants are set out in detail in the Deed Poll which is available for inspection at the registered office of the Company.
As at the end of the year, warrants outstanding amounting to 49,012,000 remained unexercised.
(ii) Warant 2008/2018
The warrants which were listed on the ACE market of Bursa Malaysia Securities Berhad on 28 January 2008 were constituted by a Deed
Poll executed on 21 November 2007. The main features of the warrants are as follows:
(i) Each warrant entitles the holder to subscribe for 1 new ordinary share of RM0.10 each in the Company at a price of RM0.89 per
share by cash;
(ii) The warrants may be exercised at any time on or before 27 January 2018;
(iii) The exercise price and the unexercised warrants are subject to adjustments in accordance with the provisions as set out in the
Deed Poll; and
(iv) Full provisions regarding the transferability of warrants to new ordinary shares, which will thereafter rank pari passu with the
existing ordinary shares of the Company, adjustment of the exercise price and other terms and conditions pertaining to the
warrants are set out in detail in the Deed Poll which is available for inspection at the registered office of the Company.
Pursuant to Condition 2 of the Second Schedule (Part III) and the Memorandum to the Deed Poll dated 21 November 2007 (Deed Poll)
constituting the Warrants 2008/2018, the subscription price of the Warrants 2008/2018 was revised downwards from RM0.89 to
RM0.63 and an additional 22,584,945 Warrants 2008/2018 was issued pursuant to the Rights Issue with New Warrants.
As at the end of the year, the entire warrants outstanding of 67,959,945 remained unexercised.
Warrants reserve represents the fair value of the warrants issued at issue date.
(b) Capital redemption reserve
Capital redemption reserve was created for the cancellation of ordinary shares.
(c) Foreign currency translation reserve
The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of
foreign operations whose functional currencies are different from that of the Group’s presentation currency.
(d) Other capital reserves
Other capital reserves comprised gain or loss on dilution of interest in an associate and share of post acquisition reserves of an associate.
Upon dissolution of the associate in the previous year, the entire other capital reserves was transferred to retained earnings.
68
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
26. Retained earnings
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007
which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividends paid, credited or distributed to its
shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a
transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under
limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single
tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with
Section 39 of the Finance Act 2007.
As at 31 December 2012, the Company has not elected for the single tier system. When the tax credit balance is fully utilised, or by 31
December 2013 at the latest, the Company will automatically move to the single tier tax system. Under the single tier tax system, tax on the
Company's profit is a final tax, and dividends distributed to the shareholders will be exempted from tax.
The Company has sufficient tax-exempt income to frank the payment of dividends out of its entire retained earnings without incurring
additional tax liabilities.
27. Related party disclosures
(a) Significant transactions with related parties
In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between
the Group and related parties took place at terms agreed between the parties during the year:
Subsidiaries
The recurrent transactions with subsidiaries are as follows:
Company
Licensing fees charged to*
Management fees charged to*
Dividend income
Settlement of liabilities on behalf by
Settlement of liabilities on behalf of
2012
RM
2011
RM
4,706,754
1,385,359
998,501
110,644
538,753
7,138,686
1,121,649
15,057
340,388
* The licensing and management fees are charged to subsidiaries at an escalating rate depending on the revenue achieved by the
respective subsidiaries during the year.
Related companies are companies within mTouche Technology Berhad group.
(b) Compensation of key management personnel
Group
Short-term employee benefits
Defined contribution plan
Company
2012
RM
2011
RM
2012
RM
2011
RM
2,286,996
233,552
2,520,548
2,245,765
145,022
2,390,787
1,163,154
129,378
1,292,532
540,688
64,752
605,440
Included in the total key management personnel are directors' remuneration as disclosed in Note 11.
annual report 2012
69
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
28. Commitments
(a) Operating lease commitments – as lessee
The Group has entered into commercial lease on office space, with a lease term of 2 (2011: 2) years. Minimum lease payments recognised
in profit or loss for the year of the Group and Company amounted to RM844,851 (2011: RM844,851) and RM20,971 (2011: RM20,971).
Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
633,824
232,056
865,880
703,777
276,451
980,228
8,738
8,738
20,970
8,738
29,708
Future minimum rental payments:
Not later than 1 year
Later than 1 year but not later than 5 years
(b) Finance lease commitments
The Group and the Company have a finance lease for motor vehicle (Note 14). There are no restrictions placed upon the Group and
Company by entering into the lease and no arrangement have been entered into for contingent rental payments.
Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows
Group and Company
Minimum lease payments:
Later than 2 years but not later than 5 years
Less: Amounts representing finance charges
Present value of minimum lease payments
Present value of payments:
Later than 2 years but not later than 5 years
Less: Amount due within 12 months (Note 22)
Amount due after 12 months
2012
RM
2011
RM
31,488
31,488
31,466
94,442
(11,050)
83,392
31,488
31,488
62,954
125,930
(14,734)
111,196
27,804
27,804
27,784
83,392
(27,804)
55,588
27,804
27,804
55,588
111,196
(27,804)
83,392
29. Fair value of financial instruments
It is not practical to determine the fair values of balances with all related parties due principally to a lack of fixed repayment terms entered into
by the parties involved and without incurring excessive costs. However, the directors do not anticipate the carrying amounts recorded at the
reporting date to be significantly different from the values that would eventually be received or settled.
The carrying amounts of other financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature
or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date except as indicated in their
respective notes.
30. Financial risk management objectives and policies
The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial
risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.
The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Chief
Executive Officer. The audit committee provides independent oversight to the effectiveness of the risk management process.
It is, and has been throughout the current and previous year, the Group’s policy that no derivatives shall be undertaken.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the
objectives, policies and processes for the management of these risks.
70
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
30. Financial risk management objectives and policies (cont'd.)
(a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The
Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. Deposits with banks are
maintained with reputable licensed financial insitution with high credit rating.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The
Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit
terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result
that the Group’s exposure to bad debts is not significant.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each
class of financial assets recognised in the statements of financial position.
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the country profile of its trade receivables on an ongoing basis. The
credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:
Group
By market:
Matured market
Emerging market
2012
RM
% of total
7,992,229
85%
1,405,232
15%
9,397,461
100%
2011
RM
% of total
5,868,033
72%
2,275,080
28%
8,143,113
100%
Information regarding matured markets and emerging markets is disclosed in Note 32.
Financial assets that are neither past due nor impaired
Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 20.
(b) Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds.
The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and
liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use
of stand-by credit facilities.
At the reporting date, the Group's and the Company's financial liabilities will mature in less than one year based on carrying amount
reflected in financial statements except for certain obligation under finance lease which will mature within 1 to 5 years (Note 22).
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate
because of changes in market interest rates.
As the Group has no significant interest-bearing financial assets, except short term deposits with licensed banks as disclosed in Note 21,
the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group's
interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits.
The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow
interest rate risk whereas borrowings at fixed rates expose the Group to fair value interest rate risk. The Group’s policy is to borrow only
from reputable licensed financial institutions. As at reporting date, the Group and the Company has no interest-bearing borrowings, except
for an obligation under finance lease at a fixed interest rate, to purchase a motor vehicle (Note 22).
(d) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates.
annual report 2012
71
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
30. Financial risk management objectives and policies (cont'd.)
(d) Foreign currency risk (cont'd.)
The Group has transactional currency exposures arising from sales or purchases that are denominated in various foreign currencies,
primarily Thai Baht (“THB”), Indonesian Rupiah (“IDR”),Vietamese Dong (“VND”), Singapore Dollar (“SGD”) and Hong Kong Dollar (“HKD”).
Approximately 71% (2011: 66%) of the Group’s sales are denominated in foreign currencies whilst almost 64% (2011: 70%) of costs of
sales are denominated in the respective functional currencies of the Group entities. The Group’s trade receivables and trade payables
balances at the reporting date have similar exposures.
The Group also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. At the reporting date,
such foreign currency balances amount to RM15,534,835 (2011: RM13,613,151).
The following tables demonstrate the sensitivity of the Group's profit or loss to a reasonably possible change in the following foreign
currencies:
RM
RM/ SGD Strengthened 2%
RM/ THB Strengthened 1%
RM/ HKD Strengthened 4%
RM/ VND Strengthened 3%
RM/ IDR Strengthened 9%
RM/ USD Strengthened 4%
49,000
41,000
86,000
61,000
(67,000)
31,000
The weakening of the currencies at a similar rate above will result in an equal but opposite effect to the Group's profit or loss.
31. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order
to support its business and maximise shareholders' value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes
were made in the objectives, policies or processes during the years ended 31 December 2012 and 31 December 2011.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group's policy is to keep the
gearing ratio at manageable level. The Group includes within net debt, borrowings, trade and other payables, less cash and bank balances.
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
Borrowings (Note 22)
Trade and other payables (Note 23)
Less: Cash and bank balances (Note 21)
Net debt
83,392
9,903,214
(21,154,561)
(11,167,955)
111,196
11,577,439
(21,102,736)
(9,414,101)
83,392
1,243,053
(2,300,432)
(973,987)
111,196
1,156,584
(1,346,234)
(78,454)
Equity attributable to the
owners of the parent,
representing total capital
22,271,051
20,360,355
41,151,971
40,890,207
Total capital and net debt
11,103,096
10,946,254
40,177,984
40,811,753
*
*
*
*
Gearing ratio
* Not applicable as the amount of net debt is negative.
32. Segment information
For management purposes, the Group is organised into business units based on geographical segments, and has two reportable operating
segments as follows:
(i)
(ii)
Matured markets - countries with saturated market, including Malaysia, Hong Kong, Thailand and Singapore.
Emerging markets - countries with potential growth and penetration rate including China, Indonesia, Vietnam, India and the Philippines.
Except as indicated above, no operating segments has been aggregated to form the above reportable operating segments.
72
annual report 2012
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
32. Segment information (cont'd.)
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the
table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance
costs) is managed on a Group basis and is not allocated to operating segments.
Transfer prices between operating segments are at terms agreed between the parties during the year.
Per
consolidated
financial
statements
RM
Matured
markets
RM
Emerging
markets
RM
Eliminations
RM
Total
RM
30,991,240
7,090,614
38,081,854
5,897,651
5,897,651
(7,090,614)
(7,090,614)
36,888,891
36,888,891
239,560
3,684
405,863
(483,461)
1,496,047
7,580,418
283,970
80,582
125,644
105,490
(393,047)
474,532
110,000
(1,093,657)
523,530
3,684
486,445
116,715
1,711,537
6,093,714
Assets:
Additions to plant and equipment
Tax recoverable
Deferred tax assets
Segment assets
265,303
547,413
818,316
77,454,130
29,955
55,646
5,011,520
(66,433)
(48,439,061)
295,258
547,413
807,529
34,026,589
295,258
547,413
807,529
34,026,589
Segment liabilities
46,909,742
5,347,124
(41,061,602)
11,195,264
11,195,264
29,044,995
8,844,399
37,889,394
14,708,956
14,708,956
(8,844,399)
(8,844,399)
43,753,951
43,753,951
141,091
3,684
1,906,054
1,559
8,729,688
216,899
(364,335)
252,471
96,156
(62,685)
102,652
(409,361)
(50,700)
(3,537,278)
393,562
3,684
2,002,210
1,559
8,616,303
319,551
(4,310,974)
Assets:
Additions to plant and equipment
Tax recoverable
Deferred tax assets
Segment assets
333,602
369,256
798,743
72,673,694
88,909
60,900
9,853,346
(66,432)
(49,976,975)
422,511
369,256
793,211
32,550,065
422,511
369,256
793,211
32,550,065
Segment liabilities
64,954,896
9,742,099
(62,943,259)
11,753,736
11,753,736
2012
Revenue:
External customers
Inter-segment
Total revenue
Results:
Interest income
Interest expense
Depreciation and amortisation
Other non-cash expenses
Income tax expense
Segment gain/(loss)
A
B
36,888,891
36,888,891
523,530
3,684
486,445
116,715
1,711,537
6,093,714
2011
Revenue:
External customers
Inter-segment
Total revenue
Results:
Interest income
Interest expense
Depreciation and amortisation
Other non-cash expenses
Income tax expense
Segment loss
A
B
43,753,951
43,753,951
393,562
3,684
2,002,210
1,559
8,616,303
319,551
(4,310,974)
Notes: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements
A Inter-segment revenues are eliminated on consolidation.
B Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:
annual report 2012
73
NOTES
TO
THE
FINANCIAL
STATEMENTS
(cont'd.)
31 December 2012
32. Segment information (cont'd.)
Loss on disposal of interests in associates
Impairment losses of intangible assets
Impairment losses of property, plant and equipment
Allowances for impairment loss on financial assets
Unrealised foreign exchange loss
2012
RM
2011
RM
14,752
6,374
95,589
116,715
3,926,472
4,284,890
237,276
24,234
8,285
135,146
8,616,303
Information about major customers
Revenue from three major customers amounted to RM19,700,000 (2011: RM18,270,000) arising from sales in matured market segment.
33. Dividends
Subsequent to the financial year, the Company declared an interim tax exempt dividend of 1 sen per share on 221,773,100 ordinary shares,
totalling RM2,217,713 in respect of the financial year ended 31 December 2012 on 22 March 2013, and paid on 22 April 2013.
The financial statements for the current financial year do not reflect this dividend. Such dividend will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2013.
The directors do not recommend any payment of final dividend in respect of the financial year ended 31 December 2012.
34. Supplementary explanatory note on disclosure of realised and unrealised losses
The breakdown of the accumulated losses of the Group and of the Company as at 31 December 2012 into realised and unrealised losses is
presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance
with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to
Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
Group
Total (accumulated losses)/ retained
earnings of the Company and its subsidiaries
- Realised
- Unrealised
Add: Consolidated adjustments
Accumulated losses/
Retained earnings as per financial statements
Company
2012
RM
2011
RM
2012
RM
2011
RM
(12,683,435)
(588,312)
(13,271,747)
(2,427,752)
(16,390,933)
(1,445,574)
(17,836,507)
(2,107,861)
2,612,310
2,612,310
-
529,361
529,361
-
(15,699,499)
(19,944,368)
2,612,310
529,361
The determination of realised and unrealised losses above is solely for complying with the disclosure requirements as stipulated in the directive
of Bursa Malaysia Securities Berhad and should not be applied for any other purposes.
74
annual report 2012
ANALYSIS
OF
SHAREHOLDINGS
As at 30 April 2013
Authorised Share Capital
:
RM50,000,000.00 comprising of 500,000,000 ordinary shares of RM0.10 each
Issued and Paid-Up Share Capital
:
RM23,154,110.00 comprising of 231,541,100 ordinary shares of RM0.10 each
Class of Shares
:
Ordinary shares of RM0.10 each
Voting Rights
:
One (1) vote per ordinary share
Number of shareholders
:
1,090
Analysis of Shareholdings
Holdings
No. of shareholders
1 – 99
% of shareholders
No of shares held
% of shareholdings
12
1.10
509
0.00
100 – 1,000
317
29.08
83,000
0.04
1,001 – 10,000
10,001 – 100,000
292
361
26.79
33.12
1,705,750
14,423,592
0.77
6.50
100,001 – 11,088,654*
105
9.63
64,038,053
28.88
3
0.28
141,522,196
63.81
1,090
100.00
221,773,100
100.00
11,088,655 and above**
TOTAL
Note:
*
less than 5 % of issued shares
** 5% and above of issued shares
List of Substantial Shareholders (based on Register of Substantial Shareholders)
Shareholders
RHB Nominees (Tempatan) Sdn. Berhad
Direct
No. of shares
65,865,000
Indirect
No. of shares
%
%
29.70
-
-
(OSK Capital Sdn. Bhd. for
Homegrown Media Sdn. Bhd.)
OSK Capital Partners Sdn. Bhd.
-
-
65,865,000
29.70
48,358,496
21.81
-
-
Kamarudin Bin Meranun
27,298,700
12.31
-
-
-
-
48,358,496
48,358,496
21.81
21.81
OSK Ventures International Berhad
Ong Leong Huat @ Wong Joo Hwa
List of Directors’ Shareholdings
Direct
No. of shares
Indirect
%
No. of shares
%
Dato Ahmad Bahrin Bin Idrus
-
-
-
-
Dato Kong Hien Nigh
-
-
-
-
Pua Soo Jyue
-
-
-
-
-
65,865,000(1)
29.70
Teap Teik Pung
-
-
-
-
Yee Chee Wai
-
-
-
-
75
Note:
1
Deemed interested by virtue of his substantial shareholding in Homegrown Media Sdn. Bhd.
annual report 2012
ANALYSIS
OF
SHAREHOLDINGS
(cont'd.)
As at 30 April 2013
List of Thirty (30) Largest Shareholders
Name
1
RHB Nominees (Tempatan) Sdn. Bhd.
No. of shares held
Percentage (%)
65,865,000
29.70
OSK Capital Sdn. Bhd. for Homegrown Media Sdn. Bhd.
2
48,358,496
21.81
3
Kamarudin Bin Meranun
27,298,700
12.31
4
Nor Ashikin Binti Khamis
7,573,600
3.42
5
Nora Ee Siong Chee
6,944,000
3.13
6
Amsec Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account – Ambank (M) Berhad for Raja Zainal Abidin Bin
6,374,600
2.88
Raja Hussin (Smart)
7
Siti Munajat Binti Md Ghazali
5,020,000
2.26
8
Maybank Securities Nominees (Tempatan) Sdn. Bhd.
3,936,700
1.78
1,750,400
0.79
1,560,000
0.70
1,400,000
0.63
Pledged Securities Account for Raja Zainal Abidin Bin Raja Hussin (REM 672)
9
Cimsec Nominees (Tempatan) Sdn. Bhd.
CIMB Bank for Wan Hazreek Putra Hussain Yusuf (MY1004)
10
HDM Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account for Chiong Hui Yee (M04)
11
TA Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account for Antara Realty Sendirian Berhad
12
Lee Chew Wah
1,371,000
0.62
13
1,116,000
0.50
1,113,900
0.50
CIMB Bank for Lee Chew Wah (M52097)
14
ECML Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account for Koh Boon Poh (008)
15
Lim Gaik Bway @ Lim Chiew Ah
1,032,900
0.47
16
Citigroup Nominees (Tempatan) Sdn. Bhd.
1,000,000
0.45
775,000
0.35
766,100
0.35
762,900
0.34
UBS AG Singapore for Tan Swee Yeong
17
HLIB Nominees (Tempatan) Sdn. Bhd.
Hong Leong Bank Bhd. for Cheng Tzer Liang
18
Malacca Equity Nominees (Tempatan) Sdn. Bhd.
Exempt An for Phillip Capital Management Sdn. Bhd. (EPF)
19
76
Oon Yew Wei
annual report 2012
ANALYSIS
OF
SHAREHOLDINGS
(cont'd.)
As at 30 April 2013
List of Thirty (30) Largest Shareholders (cont’d.)
Name
No. of shares held
Percentage (%)
20
Beh Soo Lang
750,000
0.34
21
Chong Hon Min
600,000
0.27
22
Wong Wei Choy
600,000
0.27
23
Chua Poh Seng
570,000
0.26
24
Gooi Soon Lee
550,000
0.25
25
Chong Siew Pin
500,000
0.23
26
467,700
0.21
Amara Investment Management Sdn. Bhd. for Lee Chew Wah
27
Wong Yuet Ying
441,600
0.20
28
Citigroup Nominees (Asing) Sdn. Bhd.
420,000
0.19
Exempt An for Merrill Lynch Pierce Fenner & Smith Incorporated (Foreign)
29
Michael Christopher Mehta
420,000
0.19
30
Peng Tea Kee @ Pong Tea Kee
420,000
0.19
189,758,596
85.59
TOTAL
annual report 2012
77
ANALYSIS
OF
WARRANT
A
HOLDINGS
As at 30 April 2013
Distribution of Warrant A Holdings
Size of warrantholdings
No. of warrantholders
% of warrantholders
156
31.26
8,966
0.01
33
6.61
19,060
0.03
1,001 – 10,000
103
20.64
508,215
0.75
10,001 – 100,000
100,001 – 3,397,996*
134
71
26.86
14.23
5,797,911
45,059,193
8.53
66.30
2
0.40
16,566,600
24.38
499
100.00
67,959,945
100.00
1 – 99
100 – 1,000
3,397,997 and above**
TOTAL
No of warrant held
% of warrantholdings
Note:
*
less than 5 % of issued warrants
** 5% and above of issued warrants
Directors’ Warrant A Holdings
Direct
No. of shares
Dato Kong Hien Nigh
Pua Soo Jyue
Teap Teik Pung
Yee Chee Wai
78
-
Indirect
%
-
No. of shares
-
%
-
annual report 2012
ANALYSIS
OF
WARRANT
A
HOLDINGS
(cont'd.)
As at 30 April 2013
List of Thirty (30) Largest Warrant A Holders
Name
1
No. of warrants held
Percentage (%)
8,845,100
13.02
Pledged Securities Account for Kwong Ming Kwei (08KW032ZQ-008)
2
Gan Boon Guat
7,721,500
11.36
3
2,976,300
4.38
2,500,000
3.68
2,370,000
3.49
Pledged Securities Account for Chow Yee Chin (Kebun Teh-CL)
4
Pledged Securities Account for Heng Yong Kang @ Wang Yong Kang
(08HE101Q1-008)
5
Pledged Securities Account for Koh Boon Poh (008)
6
HSBC Nominees (Tempatan) Sdn. Bhd.
HSBC (M) Trustee Bhd. for OSK-UOB Global New Stars Fund (5717-401)
2,353,199
3.46
7
Peng Tea Kee @ Pong Tea Kee
2,336,000
3.44
8
Tam Kock Kay @ Tan Kock Kay
2,280,000
3.35
9
RHB Capital Nominees (Tempatan) Sdn. Bhd.
2,164,600
3.19
Pledged Securities Account for Quek Jin Ang (CEB)
10
Lee Chew Wah
1,630,000
2.40
11
Yee Kong Siong
1,600,000
2.35
12
Terence Lau Ming Kiat
1,561,400
2.30
13
Nora Ee Siong Chee
1,497,739
2.20
14
Khoo Hoon Chang
1,320,000
1.94
15
Tan Kok Keng
1,315,200
1.94
16
Wong Min Jie
1,211,100
1.78
17
1,068,700
1.57
18
Koh Boon Kai
954,500
1.40
19
Yang Keng Boon
800,200
1.18
20
669,000
0.98
Hong Leong Bank Bhd. for Cheng Tzer Liang
annual report 2012
79
ANALYSIS
OF
WARRANT
A
HOLDINGS
(cont'd.)
As at 30 April 2013
List of Thirty (30) Largest Warrant A Holders (cont’d.)
Name
Percentage (%)
21
Teo Ah Seng
637,812
0.94
22
Thia Lee Heong
632,485
0.93
23
Tam Tze Li
531,000
0.78
24
Sam Yoke Wan
500,000
0.74
25
474,700
0.70
Hong Leong Bank Bhd. for Tok Yean Ching
26
Yap Yak Lean @ Yap Yok Lean
450,000
0.66
27
Lee Ling Ling
435,000
0.64
28
Koh Oon Moi
426,900
0.63
29
On Su Leng
406,000
0.60
30
400,000
0.59
52,068,435
76.62
TOTAL
80
annual report 2012
ANALYSIS
OF
WARRANT
B
HOLDINGS
As at 30 April 2013
Distribution of Warrant B Holdings
Size of warrantholdings
No. of warrantholders
% of warrantholders
106
21.68
4,557
0.01
55
11.25
31,219
0.06
1,001 – 10,000
131
26.79
571,643
1.17
10,001 – 100,000
100,001 – 2,450,599*
123
70
25.15
14.31
5,020,001
27,266,780
10.24
55.63
4
0.82
16,117,800
32.89
489
100.00
49,012,000
100.00
1 1 – 99
100 – 1,000
2,450,600 and above**
TOTAL
No of warrant held
% of warrantholdings
Note:
*
less than 5 % of issued warrants
** 5% and above of issued warrants
Directors’ Warrant B Holdings
Direct
No. of shares
Indirect
%
No. of shares
%
-
-
-
-
Dato Kong Hien Nigh
-
-
-
-
Pua Soo Jyue
-
-
-
-
Teap Teik Pung
-
-
-
-
Yee Chee Wai
-
-
-
-
81
annual report 2012
ANALYSIS
OF
WARRANT
B
HOLDINGS
(cont'd.)
As at 30 April 2013
List of Thirty (30) Largest Warrant B Holders
Name
Percentage (%)
1
6,405,900
13.07
2
3,707,700
7.56
3
HSBC Nominees (Asing) Sdn. Bhd.
3,004,200
6.13
Exempt AN for Credit Suisse (SG BR-TST-Asing)
4
Citigroup Nominees (Tempatan) Sdn. Bhd.
UBS AG Singapore for Tan Swee Yeong
3,000,000
6.12
5
Nora Ee Siong Chee
1,388,800
2.83
6
Lee Chew Wah
1,338,000
2.73
7
1,272,100
2.60
1,170,000
2.39
1,056,000
2.15
1,000,200
2.04
935,000
1.91
888,600
1.81
Pledged Securities Account for Chin Sok Kim (Dealer 060)
8
RHB Capital Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account for Quek Jin Ang (CEB)
9
Pledged Securities Account for Raja Zainal Abidin Bin Raja Hussin (REM 672)
10
Pledged Securities Account for Chow Yee Chin (Kebun Teh-CL)
11
Pledged Securities Account for Kwong Ming Kwei (08KW032ZQ-008)
12
Pledged Securities Account for Jasmy Bin Ismail
13
Nor Ashikin Binti Khamis
875,000
1.79
14
Lim Sye Guek
855,000
1.74
15
830,000
1.69
16
725,000
1.48
Pledged Securities Account for Jacob Lim Hoong Teong (001)
17
Siow Jin Ho
616,000
1.26
18
Kho Soon Bee
600,000
1.22
19
Lee Yeow Teng
570,000
1.16
20
Oon Yew Wei
560,000
1.14
82
annual report 2012
ANALYSIS
OF
WARRANT
B
HOLDINGS
(cont'd.)
As at 30 April 2013
List of Thirty (30) Largest Warrant B Holders (cont’d.)
Name
21
Percentage (%)
500,000
1.02
Pledged Securities Account for Lai Siew Leong (08LA583Q-008)
22
JF Apex Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account for Paragon Pacific Ventures Sdn. Bhd. (Margin)
460,000
0.94
23
TA Nominees (Tempatan) Sdn. Bhd.
436,500
0.89
Pledged Securities Account for Loh Hang Min
24
Soon Tian Lye
400,000
0.82
25
Tam Kock Kay @ Tan Kock Kay
400,000
0.82
26
Maybank Nominees (Tempatan) Sdn. Bhd.
383,000
0.78
380,000
0.78
Pledged Securities Account for Lai Siew Leong
27
JF Apex Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account for Lee Yeow Teng (Margin)
28
Seik Yee Kok
373,400
0.76
29
Ng Thew Choay
370,000
0.75
30
Gooi Soon Lee
350,000
0.71
34,850,400
71.11
TOTAL
annual report 2012
83
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Ninth Annual General Meeting (AGM) of the Company will be held at Greens I, Tropicana Golf and Country
Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 25 June 2013 at 3.00 p.m. for the purpose of considering
the following businesses:AGENDA
Ordinary Business
1. To receive the Audited Financial Statements for the financial year ended 31 December 2012
together with the Reports of the Directors and the Auditors thereon.
(Please refer to Explanatory Note 1)
2. To approve the payment of Directors’ fees of RM168,000.00 for the financial year ending 31
December 2013.
Ordinary Resolution 1
3. To elect the following Directors who are retiring pursuant to Article 93 of the Company’s Articles
of Association, and being eligible, offering themselves for election:(i) Mr Yee Chee Wai, Patrick
(ii) Mr Pua Soo Jyue
4. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors
to fix their remuneration.
Special Business
To consider and if thought fit, to pass the following Ordinary Resolutions, with or without modifications:5. Authority to Issue Shares
“THAT subject always to the Companies Act, 1965, Articles of Association of the Company and
approvals from Bursa Malaysia Securities Berhad and any other governmental/regulatory bodies,
where such approval is necessary, authority be and is hereby given to the Directors pursuant to
Section 132D of the Companies Act, 1965 to issue and allot not more than ten percent (10%) of
the issued capital of the Company at any time upon any such terms and conditions and for such
purposes as the Directors may in their absolute discretion deem fit or in pursuance of offers,
agreements or options to be made or granted by the Directors while this approval is in force until
the conclusion of the next Annual General Meeting of the Company and that the Directors be and
are hereby further authorised to make or grant offers, agreements or options which would or
might require shares to be issued after the expiration of the approval hereof.”
6. Proposed Renewal of Authority for the Company to Purchase its Own Shares
“THAT, subject always to the Companies Act, 1965, the provisions of the Memorandum and
Articles of Association of the Company, the Listing Requirements of Bursa Malaysia Securities
Berhad and all other applicable laws, guidelines, rules and regulations, the Company be and is
hereby authorised to purchase such amount of ordinary shares of RM0.10 each in the Company
as may be determined by the Directors of the Company from time to time through Bursa Securities as the Directors may deem fit and expedient in the interest of the Company, provided that:
(i) the aggregate number of shares purchased does not exceed 10% of the total issued and
paid-up share capital of the Company as quoted on Bursa Securities as at the point of
purchase;
(ii) the maximum funds to be allocated by the Company for the purpose of purchasing the shares
shall not exceed the Company’s latest audited retained earnings and/or share premium
account; and
(iii) the Directors of the Company may decide either to retain the shares purchased as treasury
shares, or cancel the shares, or retain part of the shares so purchased as treasury shares and
cancel the remainder, or to resell the shares, or distribute the shares as dividends;
AND THAT the authority conferred by this resolution will commence after the passing of this
ordinary resolution and will continue to be in force until:-
84
annual report 2012
NOTICE OF ANNUAL GENERAL MEETING(cont'd.)
AGENDA (cont’d.)
6. Proposed Renewal of Authority for the Company to Purchase its Own Shares (cont’d)
(i) the conclusion of the next Annual General Meeting (AGM) at which time it shall lapse unless
by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally
or subject to conditions; or
(ii) the expiration of the period within which the next AGM after that date is required by law to be
held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a
general meeting
whichever occurs first.
AND THAT the Directors of the Company be and are hereby authorised to take all such steps as
are necessary or expedient to implement or to effect the purchase(s) of the shares with full power
to assent to any condition, modification, variation and/or amendment as may be imposed by the
relevant authorities and to take all such steps as they may deem necessary or expedient in order
to implement, finalise and give full effect in relation thereto.”
7. To transact any other business of which due notice shall have been given.
BY ORDER OF THE BOARD
NG SALLY (MAICSA 7060343)
PANG CHIA TYNG (MAICSA 7034545)
Company Secretaries
3 June 2013
Notes :
1. A member shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting. Where a member appoints two (2) proxies,
the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. A proxy may but need
not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 (the Act) shall not apply to the Company.
The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the
appointor is a corporation, either under seal or at hand of an officer or attorney duly authorised.
2. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners
in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint
in respect of each omnibus account it holds.
3. The instrument of appointing a proxy shall be deposited at the Company’s Share Registrar’s Office at Tricor Investor Services Sdn. Bhd. at
Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the
time for holding the meeting.
4. Form of Proxy sent through facsimile transmission shall not be accepted.
5. GENERAL MEETING RECORD OF DEPOSITORS
For the purposes of determining a member who shall be entitled to attend this Ninth AGM, the Company shall be requesting Bursa Malaysia
Depository Sdn Bhd in accordance with Article 58 of the Company’s Articles of Association and Section 34(1) of the Securities Industry
(Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 18 June 2013. Only a depositor whose name appears
on such Record of Depositors shall be entitled to attend this meeting or appoint proxies to attend and/or vote on his/her behalf.
6. EXPLANATORY NOTES ON SPECIAL BUSINESS
(i) Item 1 of the Agenda
This Agenda item is meant for discussion only, as the provision of Section 169(1) of the Act does not require a formal approval of the
shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.
annual report 2012
85
NOTICE OF ANNUAL GENERAL MEETING(cont'd.)
Notes: (cont’d.)
6. EXPLANATORY NOTES ON SPECIAL BUSINESS (cont’d)
(ii) Ordinary Resolution 5 – Authority to Issue Shares
The proposed Ordinary Resolution 5, if passed, will give flexibility to the Directors of the Company to issue shares up to a maximum of ten
per centum (10%) of the issued share capital of the Company at the time of such issuance of shares and for such purposes as they
consider would be in the best interest of the Company without having to convene separate general meetings. This authority, unless
revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.
This is the renewal of the mandate obtained from the shareholders at the last AGM (the previous mandate). The previous mandate was
not utilised and accordingly no proceeds were raised. The purpose of this general mandate sought will provide flexibility to the Company
for any possible fund raising activities but not limited for futher placement of shares for purpose of funding current and/or future investment
projects, working capital, repayment of borrowings and/or acquisitions.
(iii) Ordinary Resolution 6 – Proposed Renewal of Authority for the Company to Purchase its Own Shares
The proposed Ordinary Resolution 6, if passed, will empower the Company to purchase and / or hold up to ten per centum (10%) of the
issued and paid-up share capital of the Company. This authority unless revoked or varied by the Company at a general meeting will expire
at the next AGM.
Please refer to the Share Buy-Back Statement dated 3 June 2013 which is dispatched together with this Annual Report for further
information
STATEMENT ACCOMPANYING NOTICE OF AGM
Further details of the Directors standing for election in Agenda item 3 of the Notice of the Ninth AGM are set out in the Directors’ Profiles appearing
on pages 6 to 7 of this Annual Report.
86
annual report 2012
Please fold here
MTOUCHE TECHNOLOGY BERHAD
(656395-X)
LEVEL 17, THE GARDEN NORTH TOWER
MID VALLEY CITY
LINGKARAN SYED PUTRA
59200 KUALA LUMPUR
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initiating change, accelerating growth

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NOTES TO THE FINANCIAL STATEMENTS (Cont`d)