XOX -AR 2015 - News and Announcement

Transcription

CONTENTS
Corporate Information
2
Profile of Directors and Chief Executive Officer
3
Chairman’s Statement
7
Event Highlights
9
Corporate Social Responsibility
11
Plans/Products
14
Statement on Corporate Governance
17
Audit Committee Report
27
Statement on Risk Management and Internal Control
32
Statement of Directors’ Responsibility
35
Other Compliance Disclosures
36
Financial Statements
37
Analysis of Shareholdings
110
Notice of Annual General Meeting
112
Form of Proxy Enclosed
Corporate Information
Board of Directors
Dato’ Seri Abdul Azim bin Mohd Zabidi
Non-Independent Non-Executive Chairman
Faidzan bin Hassan
Independent Non-Executive Director
Datuk Chai Woon Chet
Managing Director
Cheong Wai Loong
Soo Pow Min
Hew Tze Kok
Datuk Lor Chee Leng
Audit Committee
Faidzan bin Hassan (Chairman)
Soo Pow Min (Member)
Hew Tze Kok (Member)
Nomination and Remuneration Committee
Cheong Wai Loong (Chairman)
Soo Pow Min (Member)
Hew Tze Kok (Member)
Company Secretaries
Tan Tong Lang (MAICSA 7045482)
Chong Voon Wah (MAICSA 7055003)
Principal Bankers
Ambank (M) Berhad (8515-D)
Public Bank Berhad (6463-H)
Hong Leong Bank Berhad (97141-X)
Registered Office
Suite 10.03, Level 10
The Gardens South Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Telephone: (03) 2279 3080
Facsimile : (03) 2279 3090
Business Office
Lot 8.1, 8th Floor, Menara Lien Hoe
No. 8, Persiaran Tropicana
Tropicana Golf & Country Resort
47410 Petaling Jaya
Selangor Darul Ehsan
Telephone: (03) 7884 2388
Facsimile : (03) 7803 0778
Auditors
Messrs UHY
Suite 11.05, Level 11
The Gardens South Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Telephone: (03) 2279 3088
Facsimile : (03) 2279 3099
Share Registrar
Shareworks Sdn Bhd (229948-U)
No 2-1, Jalan Sri Hartamas 8
Sri Hartamas
50480 Kuala Lumpur
Telephone: (03) 6201 1120
Facsimile : (03) 6201 3121
Stock Exchange Listing ACE Market
of Bursa Malaysia Securities Berhad
Stock Name : XOX
Stock Code : 0165
Website
www.xox.com.my
2
ANNUAL REPORT 2015
Dato’ Seri Abdul Azim bin Mohd Zabidi, a Malaysian aged 56, is the Non-Independent Non-Executive
Chairman of the Company having been appointed to the Board on 30 June 2010. He graduated with
a Master of Arts in Business Law from the London Metropolitan University, United Kingdom in 1983.
He is also a Fellow of The Chartered Institute of Secretaries, United Kingdom.
Dato’ Seri Azim was Chairman of Bank Simpanan Nasional (“BSN”), Malaysia’s National Savings Bank.
During his 10 years as Chairman of BSN, has seen a steady improvement in operating profits.
Dato’ Seri Azim started his career in banking in 1984 and rose quickly through the ranks when in 1990
he was appointed Group Head of the Bank’s Corporate Banking Department. He was then seconded
to Commerce Property Trust Managers (now known as Amanah Property Trust Managers) and
initiated the establishment of Commerce BT Fund Managers (today known as CIMB-Principal Asset
Management). His association with the fund management industry saw him elected as President of
the Federation of Malaysian Unit Trust Managers (now know as Federation of Investment Managers
Malaysia) from 1998-2003. During this period, he was appointed to the Board of the International
Investment Funds Association and was Chairman of its Audit Committee. He held the position of
Chairman of Bank Simpanan Nasional from 1999 to 2009 and during his tenure, he was actively
involved with the World Savings Banks Institute (“WSBI”). In 2000, he was appointed President (Asia
Pacific) for WSBI and in 2003, he was elevated to its Board of Directors. Dato’ Seri Azim was elected
as Vice President and Treasurer of WSBI in September 2006, a position he relinquished in April 2009.
He now sits on numerous local and foreign Boards of Companies, both public and private, amongst
which are Anzo Holdings Berhad (formerly known as Harvest Court Industries Berhad), Wang-Zheng
Berhad and Timberwell Berhad.
Datuk Chai Woon Chet, a Malaysian aged 37, was appointed to the Board on 13 January 2014 as
Managing Director. He graduated with a Diploma in Business Economics (KDU).
Datuk Chai was a Marketing Manager of Sanbumi Sawmill Sdn. Bhd. (a wholly-owned subsidiary of
Sanbumi Holdings Berhad which is listed on the Main Board of Bursa Malaysia Securities Berhad). He
had been involved in the timber business industry with buyers from Japan, Europe, South Africa and
Korea for the past 8 years. He also has extensive experience in property development, construction
and the automotive sector.
Datuk Chai was formerly the Managing Director of Lintasan Mayang Development Sdn Bhd, which
is the developer for Sabah’s biggest integrated township, Alamesra, an innovative 265 acre mixed
development with gross development value of RM1.3 billion. Datuk Chai was also the former
managing director of Maxims Circle Development Sdn Bhd, which carried out property development
projects at Kuala Lumpur with gross development value of RM23 million in Taman Permata, Melawati
and RM66 million in Segambut.
At present, Datuk Chai also sits on the board of directors of Anzo Holdings Berhad (formerly known
as Harvest Court Industries Berhad), Astral Supreme Berhad and various other private companies.
He is the Executive Director of KL Northgate Sdn Bhd, a prime developer for 18 acres shopping mall
and mixed development project at Selayang with a gross development value of RM1.6 billion and 86
acres Putra Medical City development project at Serdang.
ANNUAL REPORT 2015
3
(Cont’d)
Soo Pow Min
Soo Pow Min, a Malaysian aged 50, was appointed to the Board on 30 June 2010 as a Non-Independent
Non-Executive Director and was redesignated on 5 January 2012 to an Independent Non-Executive
Director. He graduated in 1990 with a Bachelor of Architecture in Structural Engineering from the
University of Illinois, Chicago, United States of America.
He started his career in 1990 with YTL Corporation Berhad as an Architect and was responsible
for overseeing the architectural work of the company. In 1994, he founded Urban Builder as a
sole proprietorship but subsequently ceased business in 1999 when he was appointed Director of
Pembinaan Wincon Sdn Bhd, a position which he held to date. In 2009, he founded DP Land Sdn Bhd
and has been the Director of DP Land Sdn Bhd since.
Mr Soo is presently the Member of the Audit Committee and Nomination and Remuneration
Committee of the Company.
Faidzan bin Hassan
Faidzan bin Hassan, a Malaysian aged 55, was appointed to the Board on 4 July 2012, as an
Independent Non-Executive Director. He graduated with an Advanced Diploma in Accounting from
the University Institute Technology Mara.
He was the Executive Director of Innosabah Securities Sdn Bhd from 1992 to 2000. Since 1995, he
has been the principal partner/trustee of Sititrust & Administrators Limited, and since 2003, the
Deputy Chairman of KIC Oil & Gas Ltd and the KIC Group of Companies.
Encik Faidzan is presently the Chairman of the Audit Committee of the Company.
Cheong Wai Loong
Cheong Wai Loong, a Malaysian aged 43, was appointed to the Board on 30 September 2013 as
an Independent Non-Executive Director. Mr Cheong graduated with a Bachelor Degree in Business
Accounting & Finance, is a Fellow Member of The Institute of Public Accountants Australia and a
member of the National Institute of Accountants, Australia.
Mr Cheong is one of the pioneer shareholders of XOX Bhd, and is instrumental in the opening of the
Company’s first branch in Malaysia upon listing on Bursa Malaysia Securities Berhad.
He is currently the Managing Director of Linear Design Sdn Bhd, a multi-award winning Interior
Architecture Firm whereby major developers in Malaysia make up its clientele list and he also sits on
the Boards of numerous private companies that are involved in property development, hospitality,
landscape architecture and trading.
Mr. Cheong is also the General Committee of the Royal Lake Club for 2015 and is Chairman for the Events
Subcommittee and the Youth Subcommittee. He is also the Deputy Chairman for the F&B Subcommittee.
Mr Cheong is the Chairman of the Nomination and Remuneration Committee of the Company.
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ANNUAL REPORT 2015
(Cont’d)
Hew Tze Kok
Hew Tze Kok, a Malaysian aged 38, was appointed to the Board on 21 October 2013 as an Independent
Non-Executive Director. Mr Hew is a fellow member of the Association of Chartered Certified
Accountants (“FCCA”).
He started his career path by practising in accounting firms, namely Wong Yew Seng & Co and BDO
Binder for approximately 7 years. Thereafter he served the Securities Commission Malaysia (“SC”)
for approximately 5 years in the area of enforcement of securities law. He was then appointed as an
Investigating Officer of the SC with a ranking of Senior Manager. Subsequent to that, he joined KPMG
Forensic Investigation Services as an Associate Director.
Mr Hew is presently the Member of the Audit Committee and Nomination and Remuneration
Committee of the Company.
Datuk Lor Chee Leng
Datuk Lor Chee Leng, a Malaysian aged 51, was appointed to the Board on 19 March 2014 as an
Independent Non-Executive Director. He graduated with a Bachelor degree from the National
University of Singapore.
Datuk Lor was previously the Group CEO of EON Bank Group, Malaysia. Under his leadership, EON
Bank Group recorded many notable product innovations and financial achievements. Most significant
was the transformation of the banking group from being previously perceived as a non-descript
player in the industry to being regarded as a rapidly growing bank and one of the most talked about
in the country. EON Bank Group was awarded the “Asia’s Best Employer Brand – Malaysia” in 2011
and was ranked 337 in the “Top 500 Most Valuable Global Banking Brands” by Brand Finance Plc.
Before joining EON Bank, he was the Worldwide Director for Banking Solutions with Hewlett Packard
Asia Pacific, and prior to that he was the EVP and Head of Consumer Banking for RHB Bank Malaysia.
Prior to returning to Malaysia in 2004, he was a Managing Director with DBS Bank (a leading bank
in SEA) for 17 years, serving in various senior management capacities in both their Singapore and
Thailand operations.
He has more than 25 years of senior level banking experience with extensive focus in retail banking,
strategy formulation, business transformation, sales and marketing; and human capital development
in various SEA countries.
He has previously, also served as a Director of the Malaysia Electronic Payment System (MEPS)
Berhad as well as a member of the EMVCo Global Board of Advisors.
ANNUAL REPORT 2015
5
(Cont’d)
Ng Kok Heng
Chief Executive Officer
Ng Kok Heng, a Malaysian aged 52, is the Chief Executive Officer of the Company. He graduated
with a Bachelor of Computer Science (Honours) from the Universiti Sains Malaysia, Penang in 1987.
Mr Ng was appointed as Managing Director and Chief Executive Officer of the Company on 30 June
2010. On 9 December 2013, he retired as Managing Director of the Company but continue to serve
the Company as Chief Executive Officer of the Company.
He started his career in 1987 as a Sales Manager in Communications Technology Sdn Bhd and
was in charge of sales and marketing. In 1992, he was appointed Executive Director for MTL
Communications Sdn Bhd and was responsible for the marketing, sales and business development
of the company. Subsequently in 2000, he joined Wilco Systems Sdn Bhd as the Managing Director
and was responsible for the performance as well as the day-to-day operations of the company.
He was also a consultant to Teligent AB, Sweden, a telecommunications provider and has worked
with key players in various South East Asian countries such as Telekom Malaysia Berhad, Singapore
Telecommunications Limited and Smart Communications Inc. He leads highly specialised teams of IT
integrators and implementers to implement systems for telecommunications providers.
Note :
The Directors do not have any family relationship with any other Directors and/or major shareholders
of the Company. The Directors do not have any conflict of interest with the Company and have no
conviction for any offences, other than traffic offences, if any, within the past ten (10) years.
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ANNUAL REPORT 2015
On behalf of the Board of Directors of XOX Bhd, I am pleased to present the Annual Report of the
Group and the Company for the financial year ended (“FYE”) on 30 June 2015.
Financial Performance
2015 continues to be a challenging year for XOX where the Group had to operate in an intensely
competitive environment. The effects of the recently introduced GST coupled with the constant
growing demand for quality mobile Internet services had contributed to these challenges. Even
now, more users are turning towards their smart phones and mobile internet to meet their daily
communication needs resulting in a lower Average Revenue Per User (ARPU) from traditional voice
and short messaging service (SMS).
Despite the difficult business environment, the Group registered an impressive improvement in its
Revenue of RM91.02 million compared to RM57.05 million in the previous financial year, a growth
of almost 60%.
The increase in revenue was mainly attributed to the 179% growth in our revenue generating
subscribers, whereby we were able to add about 420,000 subscribers during the financial year.
In addition, throughout the financial year, we pressed on with our efforts on product branding,
subscriber retention and quality subscriber acquisition through various business strategies and
product and marketing activities.
In 2015, XOX delivered a higher Earning Before Interest, Taxes, Depreciation, and Amortisation
(“EBITDA”) of RM6.19 million compared to RM2.79 million recorded in 2014. The higher EBITDA
was attributed to the higher revenue registered from increased quality subscribers after taking into
consideration higher marketing expenditure to support the business. As a result, Profit After Tax of
RM1.17 million was registered for the financial year compared to a Loss After Tax of RM1.58 million
in 2014.
Industry Trends and Development
Bank Negara Malaysia’s Second Quarterly Bulletin of 2015 reported that the growth in information
and communication sector was driven by strong demand for data communication services amid
attractive packages from telecommunications companies.
RAM Ratings was of the view that Malaysian telecommunication operators are facing heightened
competition amid a crowded landscape and the persistent downtrend in traditional voice and SMS
revenues and project a 3% revenue growth for telcos in 2015. On the other hand, the growth in
data revenue would be insufficient to offset the loss in traditional voice revenue. To stay in the
game, telcos must keep on improving their service quality and strive to remain relevant through
their pricing propositions. Telcos focus on the protection of their average revenue per user (ARPU)
would be by monetizing data.
According to BMI Research Report, data continues to be a major growth driver in mobile service
revenue, driven by rising smart phone adoption rates and the shift in demand towards more dataheavy premium services such as online shopping and OTT video streaming. The high speed broadband
(HSBB) and suburban broadband (SUBB) projects will also improve accessibility and affordability of
broadband when these are completed, and BMI believes that Malaysia will continue to observe
strong growth in data consumption in the next five years.
ANNUAL REPORT 2015
7
(Cont’d)
Future Prospects
The telecommunication industry is undergoing a major revolution driven by changes of user
requirements together with revenue drivers and new technologies. With this as the backdrop,
the Group expects to face challenges from the market through stiffer competition among industry
players, product offerings, pricing and regulatory changes. All these will have a direct impact on our
business. It is on this cautious note that the Group will strive harder to achieve better performance
through our marketing activities, subscriber retention, quality subscriber acquisition and also by
introducing innovative products and services, promoting the Group’s SIM-free mobile application
brand named Voopee, to be in line with current consumer trends in order to stay ahead of the
competition.
Our Group’s mobile network service subscribers consist of a mix between prepaid and postpaid
subscribers. As at FYE 30 June 2016, our Group had a wider base of prepaid subscribers as compared
to postpaid subscribers, however, the revenue contribution from our Group’s prepaid subscribers
were not regular. In other words, the subscribers only utilised the subscription during the trial period
when the prepaid mobile package was acquired, after which, in a short period, the service was
discontinued and the package disposed. As such, this resulted in a lack of recurring revenue from our
mobile network service subscriptions.
The key priorities in 2016 will be switching the focus to attract more quality subscribers, namely
post-paid subscribers, by offering innovative products and services to broaden the subscriber base
in order to better respond to subscribers’ needs. To this end, the Group is making great strides in
gaining more post-paid subscribers by embarking on providing phone bundling services to mobile
network users.
Good operational momentum and capability established in 2015 has set a solid foundation for the
Group which translates to a good head start for XOX. The Group has also put in place innovative
growth strategies, driving continuous improvements to our business and operating models and we
have also enhanced our management team.
Appreciation
On behalf of the Board, I would like to express my most sincere thanks and appreciation to our
major creditor for their continued support and encouragement, our shareholders who continue to
believe in our business strategy, all our loyal customers, business partners, bankers and regulatory
authorities for their continued support.
To my fellow colleagues on the Board, I would wish to express my sincere appreciation for their
guidance and support. The Board also wishes to acknowledge the management team and every
employee for their commitment and efforts through the year for the Group’s achievements and
success.
Non-Independent Non-Executive Chairman 8
ANNUAL REPORT 2015
Event Highlights
The 1,600 Pandas World Tour MY
XOX Mobile was appointed as the Community Creative and Cultural Partner for the 1,600 Pandas
World Tour Malaysia, which was a collaboration between World Wide Fund for Nature and the
panda’s creator Paulo Grangeon, to promote the message of panda conservation and sustainable
development, with the theme of “Initiating the Culture of Creative Conservation”.
The adorable pandas had their nationwide journey to more than 15 iconic landmarks in Malaysia
from 21st of December 2014 till 25th of January 2015. The pandas were used symbolically to
promote awareness of our natural environment and the importance of environmental
conservation and sustainable development.
XOX PIALA FA 2015
XOX secured the prestigious
title sponsorship of the
Football
Association
of
Malaysia FA Cup, ahead of the
hotly contested finals between
Kelantan Club and Singapore
Lions XII on Saturday, 23 rd of
May 2015. The FA Cup final
held at Stadium Bukit Jalil,
attracted a crowd of 70,000
football fans.
XOX Mobile sponsorship is an
extension of the XOX Program
of Nurturing Future Youth
Leaders via Sports.
A joint press
conference
to mark the
occasion was
held at the Bukit
Jalil Stadium
with XOX
Mobile and FAM
representatives
ANNUAL REPORT 2015
9
Event Highlights
Car Craze Contest 2015
The XOX Car Craze Contest was officially launched during the Dealers Conference at Genting
on 8th March 2015.
The Car Craze Contest campaign from March to December 2015 consists of 1 Volkswagen Passat,
3 Volkswagen Polo Sedan and 100 Tech Gadgets as prizes to be won! To participate, the XOX
customer needs to do a minimum top up of RM50.00.
10
ANNUAL REPORT 2015
The Board, whilst pursuing the business objectives of growth in enhancing shareholder
value, is also cognizant of its corporate social responsibilities (“CSR”) and the importance
of the contribution it can make in respect thereof, particularly towards improving the
workplace, the community it operates in and the environment.
The Group is constantly reviewing its workplace and policies to provide a conducive
working environment and ensure proper development and utilization of its human
resources. Personal development is important and employees are encouraged to
improve their knowledge through attendance at relevant seminars and workshops.
Apart from that, the Group considers health and safety management to be equally as
important as other management functions. It is the management’s responsibility to
provide the framework to promote, stimulate and encourage the highest standard of
safety and health at work.
At the marketplace, the Company and its subsidiaries maintain high integrity of
corporate governance practices as well as enhancing the shareholders’ value. We
believe in conducting business fairly, impartially and in full compliance with all laws
and regulations. Honesty and integrity underlie all of our relationships, including those
with customers, vendors, contractors, the business community at large and among
employees.
The Group is accountable for the impact of its business operations on the environment.
We constantly review and monitor our operations to make positive contribution to the
environment, economic and social wellbeing of our stakeholders, employees and the
broader community. In the office, the employee is encouraged to recycle used papers
for internal office use, set power save mode for desktops and notebooks, and switch off
air-conditioning and lights during lunch time and after office hours.
The Group continues its social roles to support the community by contributing to several
needy and charitable organisations through donations. Employees are encouraged and
supported to actively participate in social work and community service.
ANNUAL REPORT 2015
11
During the financial year, the Group has undertaken the following activities:
75th Anniversary Charity Painting Exhibition of Bruce Lee
Penang Chief Minister Mr Lim Guan Eng with XOX Group CEO Mr Ng Kok Heng and other officials
officiated the opening of 75th Anniversary Charity Painting Exhibition of Bruce Lee at ICT Mall,
Komtar.
This exhibition was jointly organized by
Gabungan Impian Kelantan and Bruce
Lee International Club with the aim to
raise funds for flood disaster relief and
reconstruction, in conjunction with
Bruce Lee 75th birthday.
12
ANNUAL REPORT 2015
My Carnival
Another of XOX social values is community education. XOX participated in the Nanyang Xiang
Pau and Astro’s MY Carnival project by raising funds for the Chinese primary schools.
Kechara Soup Kitchen Distribution on the Street
XOX Berhad raised awareness for the homeless with the staff and their spouse/family members
and initiated a volunteer food distribution with basic medical care with Kechara Soup Kitchen on
19th September 2015.
XOX Berhad made a donation of RM5,000.00 to Kechara Soup Kitchen.
ANNUAL REPORT 2015
13
Plans / Products
Prepaid Plus
Get talkin’ for less with XOX Prepaid Plus. With the lowest call rates you’ll ever find, make short
calls from just 5 Sen. Call other networks at a mere 15 Sen/ min. Top-up any amount you like to
start chatting. No minimum on top-ups, usage and definitely no sneaky hidden charges.
MNP
Switch your number to XOX now and keep your current Number with 28-months validity. At the
same time, because we love giving our subscriber more ‘bang for their buck’ get free SMS, free
data and free calls when you switch!.
14
ANNUAL REPORT 2015
Plans / Products
Season Pass
A plan that is shareable with rewarding up-front Discount and FREE calls. It’s a revolutionary new
prepaid that can shared with any XOX prepaid subscribers. The Season pass plan from XOX gives
you the ultimate freedom to decide what you need when you need. Absolutely no monthly
commitment
ANNUAL REPORT 2015
15
Plans / Products
Penang#1758
Special Hor Penang Lang Niaa! Call to anywhere in Malaysia from the state of Penang. A plan
exclusively designed for Penangites, receive the latest news & updates from the State via SMS.
From Penang, you can make calls from as low as 9 sen for the first 2 minutes. So, go on and call
your buddies and make use of this exclusive plan brought to you by XOX Mobile.
Voopee
Voopee is a SIM-FREE app that provides you with an actual mobile number on your existing
smartphone without the need of an additional SIM CARD. Traveling? Need to Call Home? Get
Voopee on the Google Play or App Store and make calls home to Malaysia instantly via WIFI or
Mobile data connection. Only RM0.10 per minute and avoid the SKY HIGH roaming charges!
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ANNUAL REPORT 2015
The Board of Directors (“the Board”) of XOX Bhd (“XOX” or “the Group” or “the Company”) strives
to ensure good corporate governance practices are implemented and maintained throughout the
Company and its subsidiaries (“Group”) as a fundamental part of discharging its duties to enhance
shareholders’ values consistent with the principles and best practices set out in the Malaysian Code
on Corporate Governance (“MCCG”). The Board will continuously evaluate the Group’s corporate
governance practices and procedures, and where appropriate will adopt and implement the best
practices as enshrined in MCCG to the best interest of the shareholders of the Company.
The statement below sets out the manner in which the Group has applied the key principles and the
extent of its compliance with the best practices set out in MCCG throughout the financial year under
review pursuant to Rule 15.25 of the ACE Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”) (“Listing Requirements”).
A. Board of Directors
The Board assumes responsibility for leading and controlling the Group. The Board has the
overall responsibilities for corporate governance, risk management, internal controls, strategic
direction, succession planning, formulation of policies and overseeing the investment and
business of the Group.
In carrying out its functions, the Board has delegated specific responsibilities to two (2) Board
Committees, namely Audit Committee and Nomination and Remuneration Committee. These
committees have the authority for their own specific issues and their recommendations are
reported back to the Board.
A.1
Board Balance
The current Board of Directors consists of seven (7) members, comprising a NonIndependent Non-Executive Chairman, one (1) Executive Director who is also the Managing
Director and five (5) Independent Non-Executive Directors. The Company thus complies
with Rule 15.02 of the Listing Requirements whereby at least two (2) or one-third (1/3) of
the Board of Directors, whichever is higher, are independent directors.
There is a clear division of responsibilities between the Chairman of the Board and the
Chief Executive Officer to ensure that there is a balance of power and authority. The
Chairman is responsible for running the Board and ensuring that all Directors receive
sufficient and reliable information on financial and non-financial matters to enable them
to participate actively in Board decisions whilst the Chief Executive Officer is responsible
over the operating units, organisation effectiveness and implementation of the Board’s
policies and decisions.
The size and composition of the Board reflects a balance of executive and non-executive
directors who are reputable and professional person of calibre in the business environment
to provide leadership and exercise control of the Group. The Independent Non-Executive
Directors of the Company play a key role in providing unbiased and independent views,
advice and contributing their knowledge and experience toward the formulation of policies
and in the decision making process. The Board structure ensures that no individual or group
of individuals dominates the Board’s decision-making process. Although all the Directors
ANNUAL REPORT 2015
17
(Cont’d)
have equal responsibility for the Company and the Group’s operations, the role of the
Independent Directors are particularly important in ensuring that the strategies proposed
by the Executive Directors are deliberated on and have taken into account the interest, not
only of the Company, but also that of the shareholders, employees, customers, suppliers
and the community.
The Board has yet to identify a Senior Independent Non-Executive Director to whom
concerns may be conveyed by shareholders and the general public. However, the Chairman
of the Board encourages the active participation of each and every Board member in the
decision making process.
The Board has not set a gender diversity targets as of the reporting period as it is of the view
the Board membership should be determined based on a candidate’s skills, experience
and other qualities regardless of gender but will nevertheless considers appointing more
directors of the female gender where suitable.
A.2 Code of Conduct and Ethics
The Board is committed in maintaining a corporate culture which engenders ethical conduct
through its Code of Conduct and Ethics, which summarises what the Company must
endeavour to do proactively in order to increase corporate value, and which describes the
areas in daily activities that require caution in order to minimise any risks that may occur.
A copy of the Code of Conduct and Ethics is available at the Company’s website.
A.3 Board Charter
As part of governance process, the Board has formalised and adopted the Board Charter.
This Board Charter sets out the composition and balance, roles and responsibilities,
operation and processes of the Board and is to ensure that all Board members acting on
behalf of the Company are aware of their duties and responsibilities as Board members.
A copy of the Board Charter is available at the Company’s website.
A.4 Promote Sustainability
18
The Board ensures that the Company’s strategies promote sustainability with attention
given particularly to environmental, social and governance (“ESG”) aspects of business
which underpin sustainability. The Board understands that balancing ESG aspects with
the interests of various stakeholders is essential to enhancing investor perception and
public trust. Disclosures on corporate responsibility are presented under “Corporate Social
Responsibility” of this Annual Report.
ANNUAL REPORT 2015
(Cont’d)
A.5 Board Meetings and Supply of Information to the Board
Board meetings are held regularly and the details of the attendance during the financial
year ended 30 June 2015 are as follows:
Name of Directors
No. of Meetings Attended
Datuk Chai Woon Chet Soo Pow Min
Faidzan bin Hassan
Cheong Wai Loong Hew Tze Kok Datuk Lor Chee Leng Khoo Chuin Yuen (Retired as Director on 04/12/2014)
6/6
6/6
6/6
4/6
6/6
5/6
5/6
4/4
The Board is satisfied with the level of time commitment given by the Directors of the
Company towards fulfilling their duties and responsibilities. This is evidenced by the
attendance record of the Directors as set out herein above.
The Directors have full and timely access to all information pertaining to the Group’s
business and affairs to enable them to discharge their duties. Senior management are
invited to attend the Board meetings to explain and clarify matters as required.
Prior to the Board meetings, the agenda for every meeting together with a full set of Board
papers containing information relevant to the business of the meetings are circulated to
the Directors for their perusal in advance before the meeting date. This is to allow the
Directors to have sufficient time to review and consider the agenda items before the
meeting and to obtain further explanations or clarifications, where necessary.
The proceedings and resolutions reached at each Board meeting are documented in the
minutes and signed by the Chairman of the next Board meeting. Besides Board meetings,
the Board exercises control on matters that require Board’s approval through circulation of
Directors’ Resolutions. These documents are kept at the registered office.
All Directors have direct access to the advice and services of the Company Secretary
who is responsible for ensuring the Board’s meeting procedures are adhered to and
that applicable rules and regulations are complied with. The Board recognises that the
Company Secretary is suitably qualified and capable of carrying out the duties required.
The Board is satisfied with the service and support rendered by the Company Secretary
in discharge of their functions. When necessary, Directors may whether as a full Board or
in their individual capacity, seek independent professional advice, including the internal
and external auditors, at the Company’s expense to enable the directors to discharge their
duties with adequate knowledge on the matters being deliberated.
ANNUAL REPORT 2015
19
(Cont’d)
A.6 Re-election of Directors
In accordance with the Company’s Articles of Association, at the first Annual General
Meeting (“AGM”) of the Company, all the Directors shall retire from office, and at the AGM
in every subsequent year, an election of directors shall take place and one-third (1/3) of
the Directors (including the Managing Director) for the time being, or if their number is
not three (3), or a multiple of three (3), then the number nearest to one-third (1/3) with
a minimum of one (1) shall retire from office and be eligible for re-election PROVIDED
ALWAYS that all Directors including a Managing Director shall retire from office at least
once in every three (3) years but shall be eligible for re-election. A retiring Director shall
retain office until the close of the meeting at which he retires and shall be eligible for reelection.
Any Director appointed during the year is required to retire and seek re-election by
shareholders at the first AGM following his appointment. Directors over seventy (70) years
of age are required to submit themselves for re-appointment annually in accordance with
the Section 129 (6) of the Companies Act, 1965.
A.7 Nomination and Remuneration Committee
In line with the Best Practices of MCCG, the Board has established a Nomination and
Remuneration Committee (“NRC”) which comprise exclusively of Independent NonExecutive Directors, with the responsibilities of assessing the balance composition of
Board members, nominate the proposed Board member by looking into his skills and
expertise for contribution to the Company on an ongoing basis. At the same time, the NRC
is authorised by the Board to establish a formal and transparent procedure for developing
policy on executive remuneration and for fixing the remuneration packages of individual
Directors. The remuneration of Directors shall be the ultimate responsibility of the full
Board after considering the recommendations of the NRC. The NRC meets as and when
deemed necessary.
The present members of the NRC of the Company are:
Designation
Name
Directorship
Chairman
Member
Member
Cheong Wai Loong
Soo Pow Min
Hew Tze Kok Independent Non-Executive Director
The functions of the NRC are summarise as following:
a) The Committee shall regularly review the structure, size and composition of the Board
and make recommendations to the Board with regard to any adjustments that are
deemed necessary;
b) The Committee has to evaluate the effectiveness of the Board as a whole, the various
Committees and each individual Director’s contribution to the effectiveness on the
decision making process of the Board;
20
ANNUAL REPORT 2015
(Cont’d)
c) The Committee shall give full consideration to succession planning for Directors and
other senior executives in the course of its work, taking into account the challenges
and opportunities facing the company, and the skills and expertise needed on the
Board in the future;
d) The Committee shall prepare a description of the role and capabilities required for a
particular appointment;
e) The Committee shall be responsible for identifying and nominating for the approval of
the Board, candidates to fill board vacancies as and when they arise;
f)
In determining the process for the identification of suitable new candidates, the
Committee will ensure that an appropriate review or search is undertaken by an
independent third party to ensure the requirement and qualification of the candidate
nominated;
g) The Committee shall make recommendations to the Board on candidates it considers
appropriate for appointment;
h) The Committee shall recommend to the Board concerning the re-election by
shareholders of any director under the “retirement by rotation” provisions in the
Company’s Article of Association;
i)
The Committee shall review and recommend to the Board the framework of
remuneration of the Executive Directors and Senior Management, taking into
account the performance of the individual, the inflation price index and information
from independent sources on the rates of salary for similar jobs in selected group of
comparable companies;
j)
The Committee shall review and determine the bonus scheme for Executive Directors
depending on various performance measurements of the Group;
k) The Committee shall review and determine the other benefits in kind for the Executive
Directors; and
l)
The Committee may request management or external consultants to provide necessary
information upon which the Board may make its assessment.
** Subject to shareholders’ approval in the general meeting, the Board as a whole
determines the level of remuneration of the Non-Executive Director of the Company.
The review of the remuneration of the Non-Executive Director should take into
consideration fee levels and trends for similar positions in the market, time commitment
required from the director and any additional responsibilities undertaken such as a
director acting as chairman of a board committee or as the senior independent nonexecutive director. The individuals concerned should abstain from discussion of their
own remuneration.
ANNUAL REPORT 2015
21
(Cont’d)
The appointment of new Directors is the responsibility of the full Board after considering
the recommendations of the NRC. As a whole, the Company maintains a very lean number
of Board members. In general, the process for the appointment of director to the Board is
as follows:
(i) The NRC reviews the Board’s composition through Board assessment/evaluation;
(ii) The NRC determines skills matrix;
(iii) The NRC evaluates and matches the criteria of the candidates, and will consider
diversity, including gender, where appropriate;
(iv) The NRC recommends to the Board for appointment; and
(v) The Board approves the appointment of the candidates.
22
The NRC does an annual review of the composition of the Board and makes recommendations
to the Board accordingly, with a view to meeting current and future requirements of
the Group. The NRC is satisfied with the current size of the Board, and with the mix of
qualifications, skills & experience among the Board members. Among other evaluation
criteria is the commitment displayed, the depth of contribution, ability to communicate
and undertake assignments on behalf of the Board.
A.8 Directors’ Training
All the Directors appointed to the Board have completed the Mandatory Accreditation
Programme as prescribed by the Listing Requirements of Bursa Malaysia Securities
Berhad. The Directors remain committed to undergoing further continuing education
training programmes to upgrade and enhance their business acumen and professionalism
in discharging their duties to the Group.
The following Board members have attended several relevant courses/seminars during the
financial year ended 30 June 2015 as detailed below:
Name of Director
Courses Attended
Dato’ Seri Abdul Azim bin
Mohd Zabidi
1. 2.
3. 4. Datuk Chai Woon Chet
Financial Reporting and the Control Environment
Soo Pow Min
1. Financial Reporting and the Control Environment
2. Bursa Nominating Committee Programme
Faidzan bin Hassan
Cheong Wai Loong
2. Bursa Nominating Committee Programme
Hew Tze Kok
1. Roles and Responsibilities of BOD in Relation to Financial
Statements.
2. Impact of Coods And Services Tax (GST) on Businesses
Datuk Lor Chee Leng
ANNUAL REPORT 2015
New Zealand Technology Showcase
An Evening with Boris Johnson
Management Course for Board of Directors and
Shareholders of Security Company
(Cont’d)
In addition to the above, Directors would be updated on recent developments in the areas
of statutory and regulatory requirements from the briefing by the External Auditors, the
Internal Auditors and Company Secretary during the Committee and Board Meetings.
A.9 Reinforce Independence
The Non-Executive Directors are not employees of the Group and do not participate in
the day to day management of the Group. The Non-Executive Directors are independent
directors and are able to express their views without any constraint. This strengthens the
Board which benefits from the independent views expressed before any decisions are
taken. The Nomination and Remuneration Committee has reviewed the performance
of the independent directors and is satisfied they have been able to discharge their
responsibilities in an independent manner.
None of the current independent board members had served the company for more than
nine (9) years as per the recommendations of MCCG. Should the tenure of an Independent
Director exceed nine (9) years, shareholders’ approval will be sought at a General Meeting
or if the services of the director concerned are still required, the director concerned will be
re-designated as a Non-Independent Director.
B. Directors’ Remuneration
The remunerations of the Executive Directors were determined fairly based on the performance
and the profitability of the Group as a whole. The Directors’ remuneration is at the discretion
of the Board, taking into account the comparative market rates that commensurate with the
level of contribution, experience and participation of each Director. The overriding principle
adopted in setting the remuneration packages for the Executive Directors by the Nomination and
Remuneration Committee is to ensure that the Company attracts and retains the appropriate
Directors of the caliber needed to run the Group successfully.
The determination of the remuneration for Non-Executive Directors is a matter of the Board
as a whole. The level of remuneration for Non-Executive Directors reflects the amount paid
by other comparable organisations, adjusted for the experience and levels of responsibilities
undertaken by the particular Non-Executive Directors concerned. The remuneration package
of Non-Executive Directors will be a matter to be deliberated by the Board, with the Director
concerned abstaining from deliberations and voting on deliberations in respect of his individual
remuneration. In addition, the Company also reimburses reasonable out-of-pocket expenses
incurred by all the Non-Executive Directors in the course of their duties as Directors of the
Company. The aggregate annual Directors’ fees are to be approved by shareholders at the Annual
General Meeting based on recommendations of the Board.
ANNUAL REPORT 2015
23
(Cont’d)
B.1 Details of Directors’ Remuneration
The details of directors’ remuneration for the financial year ended 30 June 2015 are as
follows:
Category
Fee
RM
SalariesAllowances
RM
RM
Total
RM
Executive Directors
Non-Executive Directors
-
-
485,020
-
33,000
281,900
518,020
281,900
Total
-
485,020
314,900
799,920
The Directors’ remuneration within the following bands is as follows:
Range of Remuneration
Number of
Executive Directors
Number of
Non-Executive Directors
Below RM50,000
RM50,001 – RM100,000
RM500,001 – RM600,000
-
-
1
6
1
-
The above includes Directors who have resigned during the financial year.
Details of the remuneration disclosure of each director are not disclosed in this report as
the Board is of the view that the above remuneration disclosures by band and analysis
between Executive and Non-Executive Directors satisfy the accountability and transparency
aspects of MCCG.
C. Communication with Shareholders and Investors
24
C.1 Relationship with Shareholders
The Board recognises the need for transparency and accountability to the Company’s
shareholders as well as regular communication with its shareholders, stakeholders and
investors on the performance and major developments in the Company. The Company
ensures that timely releases of the quarterly financial results, press releases and corporate
announcements are made to its shareholders and investors, which are clear, unambiguous,
succinct, accurate and contains sufficient and relevant information.
The Group also maintains a website www.xox.com.my whereby information can be
obtained.
The Company’s Annual Report and financial results are dispatched on annually basis to the
shareholders to provide an overview of the Group’s business activities and performances.
The Share Registrar is available to attend to administrative matters relating to shareholders’
interests.
ANNUAL REPORT 2015
(Cont’d)
C.2 Annual General Meeting
The Annual General Meeting (“AGM”) is the principal forum for dialogue with the
shareholders. The shareholders will be given sufficient notice of the holding of the AGM
through the Annual Report that is sent to them. At the AGM, the Board will present to
the shareholders with a comprehensive report on the progress and performance of the
Group and the shareholders are encouraged to participate in the questions and answers
session there at, where they will be given the opportunity to raise questions or seek
more information during the AGM. Informal discussions between the Directors, senior
management staff, the shareholders and investors are always active before and after the
general meetings.
Apart from contacts at general meetings, currently there is no other formal program or
schedule of meetings with investors, shareholders, stakeholders and the public generally.
However, the management has the option of calling for meetings with investors/analysts
if it deems necessary. Thus far, the management is of the opinion that the existing
arrangement has been satisfactory.
On poll voting, the Board is of the opinion that with the current level of shareholders’
attendance at general meetings, voting by way of a show of hands continues to be efficient.
During the general meetings, the Chairman of the meeting will remind all members present
about their right to demand for a poll in accordance with the provisions of the Company’s
Articles of Association in voting on any resolutions. Currently, all resolutions put forth for
the shareholders’ approval are carried out by a show of hands, unless a poll is properly
demanded or specifically required.
D. Accountability and Audit
D.1 Financial Reporting
The Board has a responsibility and aims to provide and present a fair and balanced
assessment of the Group’s financial performance and its prospects. The financial
statements of the Company are drawn up in accordance with the requirements of the
applicable accounting standards in Malaysia and provision of the Companies Act, 1965.
With assistance from the Audit Committee, the Board oversees the Group’s financial
reporting processes and the quality of its financial reporting.
D.2 Internal Control
The Board acknowledges its overall responsibility for maintaining a system of risk
management and internal controls, which provides reasonable assessment of effective
and efficient operations, internal controls and compliance with laws and regulations. The
Statement on Risk Management and Internal Control as set out on page 32 of the annual
report provides an overview of the state of internal controls within the Group.
ANNUAL REPORT 2015
25
(Cont’d)
D.3 Relationship with Auditors
Through the Audit Committee, the Group has established a transparent and appropriate
relationship with the Group’s auditors, in seeking professional advice and ensuring
compliance with the applicable accounting standards and statutory requirements in
Malaysia. From time to time, the auditors will highlight to the Audit Committee and the
Board of Directors on matters that require the Audit Committee’s and Board’s attention
and action. The Audit Committee has been explicitly accorded the power to communicate
directly with both the External Auditors and Internal Auditors. Annual appointment or
re-appointment of the External Auditor is via shareholders’ resolution at the AGM on the
recommendation of the Board.
E. Statement of Compliance with MCCG
26
The Board is committed to ensure high standards of corporate governance and to their best
ability and knowledge complied with the Best Practices set out in MCCG.
ANNUAL REPORT 2015
1 Members of the Audit Committee
The Board has established a Audit Committee to assists the Board in fulfilling its fiduciary
responsibilities relating to corporate accounting, financial reporting practices, system of internal
control, the audit process and the process of monitoring compliance with laws and regulations.
The members of Audit Committee shall be appointed by the Board from amongst the Directors
of the Company and shall comprise of at least three (3) members, all of whom must be NonExecutive Directors, with a majority of them being independent. The Board shall at all the times
ensure that at least one (1) member of the Audit Committee:
i) must be a member of the Malaysian Institute of Accountants (“MIA”); or
ii) if he is not a member of the MIA, he must have at least three (3) years’ working experience
and:
a) passed the examinations specified in Part I of the First Schedule of the Accountants Act
1967; or
b) must be a member of one of the associations of accountants specified in Part II of the
First Schedule of the Accountants Act 1967; or
iii) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities
Berhad (“Bursa Securities”).
No alternate director shall be appointed as a member of the Audit Committee. The members
of the Audit Committee shall elect a Chairman from among their number who shall be an
Independent Director. The term of office and performance of the Audit Committee and each
of its members shall be reviewed by the Board at least once every three (3) years to determine
whether the members have carried out their duties in accordance with their terms of reference.
If a member of the Audit Committee resigns or for any other reason ceases to be a member with
the result that the number of members is reduced to below three (3), the Board shall, within
three (3) months from the date of that event, appoint such number of new members as may be
required to make up the minimum number of three (3) members.
The Company Secretary or his nominee or such other persons authorised by the Board shall act
as the Secretary of the Audit Committee.
The present members of the Audit Committee are as follows:
Designation
Name
Directorship
Chairman
Member
Member
Faidzan bin Hassan
Soo Pow Min
Hew Tze Kok Independent Non-Executive Director
ANNUAL REPORT 2015
27
(Cont’d)
2 Functions of the Audit Committee
The Audit Committee assists the Board in discharging its oversight responsibilities. The
objectives of the Audit Committee are to provide an additional assurance to the Board by giving
objective and independent reviews of the financial, operational and administrative controls and
procedures, establishing and maintaining internal controls and reinforce the independence of
the External Auditors, ensuring that the auditors have free reign in the audit process. The Audit
Committee shall, amongst others, discharge the following functions:
(a) Review the following and report the same to the Board of Directors of the Company:
(i) with the External Auditors, the audit plan, the nature and scope of work and ascertain
that it will meet the needs of the Board, the shareholders and regulatory authorities;
(ii) with the External Auditors, their evaluation of the quality and effectiveness of the
entire accounting system, the adequacy and integrity of the internal control system
and the efficient of the Group’s operations;
(iii) with the External Auditors, their audit report;
(iv) the assistance given by employees of the Group to the External and Internal Auditors;
(v) the adequacy of the scope, functions, competency and resources of the internal audit
function and that it has the necessary authority to carry out its work including inter-alia
the appointment of Internal Auditors;
(vi) the internal audit programme, processes and results of the internal audit programme,
processes, major findings of internal investigation and Management’s response and
whether or not appropriate action is taken on the recommendations of the internal
audit function;
(vii) review any appraisal or assessment of the performance of members of the internal
audit function;
(viii)the quarterly results and annual financial statements prior to the approval by the Board
of Directors, focussing particularly on:
i. changes in or implementation of major accounting policies and practices;
ii. significant and unusual events;
iii. significant adjustments arising from the audit;
iv. compliance with accounting standards, other statutory and legal requirements and
the going concern assumption;
v. the accuracy and adequacy of the disclosure of information essential to a fair and
full presentation of the financial affairs of the Group.
(ix) any related party transactions and conflict of interest situations that may arise within
the Company or the Group and any related parties outside the Group including any
transaction, procedure or course of conduct that raises questions of management
integrity;
(x) any letter of resignation from the External Auditors of the Company;
(xi) whether there is any reason (supported by grounds) to believe that the Company’s
External Auditors are not suitable for re-appointment; and
(xii) any significant audit findings, reservations, difficulties encountered or material
weaknesses reported by the External and Internal Auditors, particularly any comments
and responses in Management letters as well as the assistance given by the employees
of the Group in order to be satisfied that appropriate action is being taken.
28
ANNUAL REPORT 2015
(Cont’d)
(b) Recommend the nomination of a person or persons as External Auditors and the external
audit fee.
(c) Promptly report to Bursa Securities on any matter reported by it to the Board of the Company
which has not been satisfactorily resolved resulting in a breach of the Listing Requirements.
(d) To verify the allocation of option pursuant to a share scheme for employees at the end
of each financial year and to prepare a statement verifying such allocation in the annual
reports.
(e) Carry out any other functions that may be mutually agreed upon by the Audit Committee
and the Board which would be beneficial to the Company and ensure the effective discharge
of the Audit Committee’s duties and responsibilities.
(f) To ensure the internal audit function of the Company reports directly to the Audit Committee.
3 Authorities of the Audit Committee
(a) The Audit Committee is authorised by the Board to investigate any matter within the Audit
Committee’s terms of reference. It shall have full and unrestricted access to any information
pertaining to the Group and shall have the resources it requires to perform its duties. All
employees of the Group are required to comply with the requests made by the Audit
Committee.
(b) The Audit Committee is authorised by the Board to obtain outside legal or external
independent professional advice and secure the attendance of outsiders with relevant
experience and expertise if it considers this necessary, the expenses of which will be borne
by the Company.
(c) The Audit Committee shall have direct communication channels with the External Auditors
and person(s) carrying out the internal audit function or activity.
(d) The Audit Committee shall be able to convene meetings with the External Auditors, the
Internal Auditors or both, excluding the attendance of other Directors and employees of
the Company, whenever deemed necessary, in order to enable the Audit Committee and
the External Auditors or the Internal Auditors or both, to discuss problems and reservations
and any other matter the External Auditors or Internal Auditors may wish to bring up to the
attention of the Audit Committee.
(e) The Internal Auditors report directly to the Audit Committee and shall have direct access
to the Chairman of the Audit Committee on all matters of control and audit. All proposals
by Management regarding the appointment, transfer and removal of senior staff members
of the Internal Audit of the Group shall require prior approval of the Audit Committee. The
Audit Committee is also authorised by the Board to obtain information on any resignation
of internal audit staff members and provide the staff member an opportunity to submit his
reasons for resigning.
ANNUAL REPORT 2015
29
(Cont’d)
4 Meetings of the Audit Committee
The Audit Committee shall meet at least four (4) times in a financial year, although additional
meetings may be called at any time at the Audit Committee Chairman’s discretion. The quorum
for a meeting of the Audit Committee shall consist of not less than two (2) members, majority
of whom must be Independent Directors. Other than in circumstances which the Chairman of
the Audit Committee considers inappropriate, the Chief Financial Officer, the representatives
of the Internal Auditors and External Auditors will attend any meeting of the Audit Committee
to make known their views on any matter under consideration by the Audit Committee or
which in their opinion, should be brought to the attention of the Audit Committee. Other Board
members, employees and external professional advisers shall attend any particular meetings
upon invitation by the Audit Committee. At least twice in a financial year, the Audit Committee
shall meet with the External Auditors without the Executive Directors being present.
The Audit Committee shall report to the Board and its minutes tabled and noted by the Board
of Directors. The books containing the minutes of proceedings of any meeting of the Audit
Committee shall be kept by the Company at the registered office or the principal office of the
Company, and shall be open for inspection of any member of the Audit Committee and the
Board.
During the financial year under review, the Audit Committee held four (4) meetings and the
details of the attendance are as follows:
Members Meeting Attendance
Faidzan bin Hassan
Soo Pow Min
Hew Tze Kok (Appointed on 12/02/2015)
Khoo Chuin Yuen (Resigned on 03/12/2014)
3/4
4/4
1/1
3/3
5 Summary of Activities of the Audit Committee
The Audit Committee had carried out the following activities during the financial year under
review in discharging their duties and responsibilities:
• Reviewed and assessed the adequacy of the scope and functions of the Internal Audit Plan.
• Reviewed the External Audit Plan for the Company and the Group presented by the External
Auditors to ensure the audit scope and activities is adequately covered.
• Reviewed quarterly and annual financial reports for the Company and the Group prior to
submission to the Board for consideration and approval.
• Reviewed and approved the proposed final audit fees for the External Auditors and Internal
Auditors in respect of their audit of the Company and the Group.
• Considered the reappointment of the External Auditors.
• Met with the External Auditors to discuss various issues on the Company, excluding the
attendance of the executive members of the Board and management.
• Reviewed related party transactions, if any, for compliance with the Listing Requirements.
30
ANNUAL REPORT 2015
(Cont’d)
6 Internal Audit Activities
In discharging its duties, the Audit Committee is supported by an internal audit function which
is outsourced to an independent internal audit service company (“Internal Auditor”), who
undertakes the necessary activities to enable the Audit Committee to discharge its functions
effectively. The Internal Auditor is independent of the activities audited by the External Auditors.
The Audit Committee has full access to the Internal Auditor and received reports on all audits
performed.
During the financial year under review, the internal audit has conducted various assignments
on a quarterly basis and made recommendations in improving the system of internal controls
to the Audit Committee. The areas internal audit covered were Corporate Governance and
Risk Management Review, billing, collection and receivables, purchasing, inventory, marketing,
customer services and call centre service.
The cost incurred by the Group for the internal audit function during the financial year ended 30
June 2015 amounted to RM42,021.
ANNUAL REPORT 2015
31
Statement on Risk Management and Internal
Control
MCCG requires listed companies to maintain a sound system of internal controls to safeguard
shareholders’ investments and the Group’s assets. The Board is pleased to include a statement on
the state of the Group’s risk management and internal control during the financial year under review.
The statement is prepared in accordance with the Listing Requirements and released Statement on
Risk Management & Internal Control : Guidelines for Directors of Listed Issuers.
Board Responsibility
The Board acknowledges its overall responsibility for reviewing the adequacy and integrity of the
Group’s system of internal controls, identifying principal risks and establishing an appropriate control
environment and framework to manage risks. However, the effectiveness of the Group’s system of
internal control is designed to manage rather than to eliminate the risk of failure to achieve business
objectives. Accordingly, the Group’s system of internal control can only provide reasonable but not
absolute assurance against material misstatement or loss.
The Group’s risk management and internal control framework is an ongoing process, and has been in
place for identifying, evaluating and managing significant risks faced or potentially to be encountered
by the Group. The Board either directly or via the Audit Committee, have an on-going process for
identifying, evaluating and managing the significant risks of the Group with the management. The
process is regularly reviewed by the Board.
The implementation of the risk management and internal control system within the Group inclusive
of design, operation, identification, assessment, mitigation and control of risks, are operated with
the assistance of the management throughout the period. The Board has received assurance from
the Managing Director that the Group’s risk management and internal control system is operating
adequately and effectively in all material aspects, based on the risk management and internal control
system of the Group.
The Board is of the view that the Group’s risk management and internal control framework and
systems is in place for identifying, evaluating and managing significant risks faced or potentially to
be encountered by the Group. The key features of the internal control systems which are operated
with the assistance of the management are described under the following headings.
Risk Management Framework
The Group has an embedded process for the identification, evaluation, reporting, treatment,
monitoring and reviewing of the major strategic, business and operation risks within the Group,
covering both wholly and partially owned subsidiaries. Both the Audit Committee and Board of
Directors review the effectiveness of the risk management function and deliberate on the risk
management and internal control frameworks, functions, processes and reports on a regular basis.
For the period under review, the Audit Committee is assisted by the operation staff from various
divisions to effectively embed risk management and control into the corporate culture, processes
and structures within the Group. The framework is continually monitored to ensure it is responsive
to the changes in the business environment and clearly communicated to all levels.
32
ANNUAL REPORT 2015
Control (Cont’d)
Audit Committee
The Audit Committee reviews the adequacy and effectiveness of the Group’s systems of internal
control as well as reviewing issues identified by the Internal Auditors. The Audit Committee also
ensures that there is continuous effort by management to address and resolve areas where control
weaknesses exist.
The Audit Committee reviews the quarterly results of the Group and recommends adoption of such
results to the Board before announcement to Bursa Securities is made.
Internal Audit
The Group outsources the internal audit function to an external firm. The firm is appointed by and
reports directly to the Audit Committee. Its role is to provide the Audit Committee with regular
assurance on the continuity, integrity and effectiveness of the internal control system through
regular monitoring and review of the internal control framework and management processes.
The internal audit firm prepares audit plans for presentation to the Audit Committee for approval
wherein the scope of work encompasses management and operational audit of functions in the
Group.
During the financial year under review, the internal audit has conducted various assignments on a
quarterly basis and made recommendations in improving the system of internal controls to the Audit
Committee. The areas internal audit covered were Corporate Governance and Risk Management
Review, billing, collection and receivables, purchasing, inventory, marketing, customer services and
call centre service.
Other Key Internal Control Elements
• The Board meets on a regular basis to review the performance and operations of the Group.
• The Group has in place an organisational structure that is aligned to business and operational
requirements, with clearly defined lines of accountability.
• Documentation of standard operating procedures and ensuring that internal policies, processes
and procedures are drawn-up, reviewed and revised as and when required and necessary.
• Active involvement by the Managing Director and Chief Executive Officer in the day-to-day
business operations of the Group including weekly operational and management meetings to
identify, discuss and resolve business and operational issues.
• Periodic review of management accounts by key personnel including the Managing Director and
Chief Executive Officer. The management accounts are also presented to the Board and Audit
Committee during the respective meetings.
ANNUAL REPORT 2015
33
Control (Cont’d)
Review of the Statement by External Auditors
The External Auditors have reviewed this Statement on Risk Management and Internal Control for
inclusion in the annual report of the Group for the financial year ended 30 June 2015 and reported
to the Board that nothing has come to their attention that causes them to believe that the statement
is inconsistent with their understanding of the process adopted by the Board in reviewing the
adequacy and effectiveness of the risk management and internal control system.
Conclusion
For the financial year under review, there were no significant internal control deficiencies or material
weaknesses resulting in material losses or contingencies requiring disclosure in the Annual Report.
The Board is of the view that the existing system of the internal control is adequate. Nevertheless, the
Board recognises that the development of internal control system is an ongoing process. Therefore,
in striving for continuous improvement, the Board will continue to take appropriate action plans to
further enhance the Group’s system of internal control.
34
ANNUAL REPORT 2015
Statement of Directors’ Responsibility
The Directors are required to take reasonable steps in ensuring that the financial statements of
the Group are properly drawn up in accordance with the provisions of the Companies Act, 1965,
applicable financial reporting standards and approved accounting standards in Malaysia so to give a
true and fair view of the state of affairs of the Group and the Company as at the end of the financial
year and of the results and the cash flows of the Group and the Company for that year then ended.
The Directors consider that in preparing the financial statements for the financial year ended 30
June 2015:
• the Group and the Company have adopted the appropriate accounting policies and applied
them consistently;
• reasonable and prudent judgements and estimates have been made; and
• all applicable approved accounting standards in Malaysia have been followed.
The Directors are also responsible for ensuring that the Group and the Company maintain accounting
records that disclose with reasonable accuracy at any time of the financial position of the Group and
of the Company and which enable them to ensure that the financial statements comply with the
Companies Act, 1965.
The Directors have general responsibilities for taking such steps that are reasonably available to
them to safeguard the assets of the Group and the Company, and to prevent and detect fraud and
other irregularities and material misstatements. Such systems, by their nature, can only provide
reasonable and not absolute assurance against material misstatement, loss or fraud.
ANNUAL REPORT 2015
35
Other Compliance Disclosures
1 Share Buyback
The Company did not enter into any share buyback transactions during the financial year under
review.
2 Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities were issued during the financial year
under review.
3 Depository Receipt Programme
The Company did not sponsor or participate in any depository receipt programme during the
financial year under review.
4 Imposition of Sanctions and/or Penalties
During the financial year, there were no sanctions and/or penalties imposed on the Company
and its subsidiaries, directors or management by the regulatory bodies.
5 Non-Audit Fee Paid to External Auditors
The non-audit fee paid to the external auditors of the Company and the Group for the financial
year under review was RM5,000 only.
6 Profit Guarantee
The Company does not provide any profit guarantees during the financial year under review.
7 Material Contracts and Contracts Relating to Loan
There were no material contracts or contracts relating to loan entered into by the Company
and its subsidiaries involving the interests of the Directors’ and major shareholders’ during the
financial year under review.
8 Status of Utilisation of Proceeds
During the financial year, there were no proceeds raised by the Company from any corporate
proposals.
9 Variance in Results
There were no significant variance between the results for the financial year and the unaudited
results previously announced on 29 August 2015.
The Company did not release any profit estimate, forecast or projection for the financial year.
10 Material Properties
The Group does not own any properties during the financial year under review.
11 Recurrent Related Party Transactions of a Revenue and Trading Nature (“RRPT”)
There was no material RRPT during the financial year under review.
36
ANNUAL REPORT 2015
Financial
Statements
Directors’ Report
38
Statement by Directors
43
Statutory Declaration
44
Independent Auditors’ Report to the Members 45
Statements of Financial Position
48
Statements of Profit Or Loss And
Other Comprehensive Income 50
Statements of Changes in Equity 51
Statements of Cash Flows 53
Notes to the Financial Statements
56
Supplementary Information on the Disclosure of
Realised and Unrealised Profits or Losses
109
Directors’ Report
The Directors hereby present their report together with the audited financial statements of the
Group and of the Company for the financial year ended 30 June 2015.
Principal Activities
The Company is principally engaged in the business of investment holding. The principal activities of
the subsidiary companies are set out in Note 5 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
Financial Results
Net profit/(loss) for the financial year
Group
RM
1,171,532
Company
RM
(922,569)
Attributable to:
Owners of the parent
Non-controlling interests
756,511
415,021
(922,569)
-
1,171,352
(922,569)
Reserves and Provisions
There were no material transfers to or from reserves or provisions during the financial year other
than as disclosed in the financial statements.
Dividend
There was no dividend proposed, declared or paid by the Company since the end of the previous
financial year. The Directors do not recommend any dividend in respect of the current financial year.
Issue of Shares and Debentures
There was no issuance of shares or debentures during the financial year.
Options Granted Over Unissued Shares
No options were granted to any person to take up unissued shares of the Company during the
financial year.
38
Annual Report 2015
Directors’ Report (Cont’d)
Directors
The Directors in office since the date of the last report are:
Dato’ Seri Abdul Azim Bin Mohd Zabidi
Soo Pow Min
Faidzan Bin Hassan
Cheong Wai Loong
Hew Tze Kok
Datuk Lor Chee Leng
Khoo Chuin Yuen(Retired on 4 December 2014)
Directors’ Interest
The interests and deemed interests in the shares and options over shares of the Company and of its
related corporations (other than wholly-owned subsidiary companies) of those who were Directors
at financial year end (including their spouses or children) according to the Register of Directors’
Shareholdings are as follows:
Number of ordinary shares of RM0.10 each
At 1.7.2014
Bought
Sold At 30.6.2015
Direct Interests
Dato’ Seri Abdul Azim Bin Mohd Zabidi
24,902,760 - (24,000,000)
902,760
Faidzan bin Hassan
3,000,000 -
- 3,000,000
Cheong Wai Loong
718,000 -
-
718,000
- 2,500,000 - 2,500,000
Indirect Interest
Sow Pow Min (1)
322,510 -
-
322,510
(1)
Deemed interested through spouse’s shareholdings in Company.
By virtue of their shareholdings in the Company, Dato’ Seri Abdul Azim Mohd Bin Mohd Zabidi,
Faidzan bin Hassan, Cheong Wai Loong, and Datuk Chai Woon Chet are deemed to have interests in
shares in its related corporations during the financial year to the extent of the Company’s interests,
in accordance with Section 6A of the Companies Act, 1965.
None of the other Directors in office at the end of the financial year had any interest in shares and
options in the Company or its related corporations during the financial year.
Annual Report 2015
39
Directors’ Benefits
Since the end of the previous financial year, no Director of the Company has received or become
entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments
received or due and receivable by Directors as shown in the financial statements) by reason of a
contract made by the Company or a related corporation with the Director or with a firm of which the
Director is a member, or with a company in which the Director has a substantial financial interest.
Neither during nor at the end of the financial year, was the Company a party to any arrangement
whose object was to enable the Directors to acquire benefits by means of the acquisition of shares
in, or debentures of, the Company or any other body corporate.
Other Statutory Information
(a) Before the statements of financial position and statements of profit or loss and other
comprehensive income of the Group and of the Company were made out, the Directors took
reasonable steps:
(i) to ascertain that action had been taken in relation to the writing off of bad debts and the
making of allowance for doubtful debts and satisfied themselves that all known bad debts
had been written off and that adequate allowance had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their values 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:
(i) which would render it necessary to written off any bad debts or the amount of the allowance
for doubtful debts in the financial statements of the Group and of the Company inadequate
to any substantial extent; or
(ii) which would render the values attributed to current assets in the financial statements of the
Group and of the Company misleading; or
(iii) not otherwise dealt with in this report or the financial statements of the Group and of the
Company which would render any amount stated in the financial statements misleading; or
(iv) 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.
40
Annual Report 2015
Other Statutory Information (Cont’d)
(c) At the date of this report, there does not exist:
(i) any charge on the assets of the Group and of the Company which has arisen since the end
of the financial year which secures the liabilities of any other person; or
(ii) any contingent liability in respect of the Group and of the Company which has arisen since
the end of the financial year other than those arising in the normal course of business of the
Group and of the Company.
(d) In the opinion of the Directors:
(i) no contingent liability or other liability has become enforceable or is likely to become
enforceable within the period of twelve months after the end of the financial year which
will or may affect the ability of the Group and of the Company to meet its obligations as and
when they fall due;
(ii) 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; and
(iii) there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely to affect
substantially the results of the operations of the Group and of the Company for the financial
year in which this report is made.
Significant Events
Details of significant events are disclosed in Note 30 to the financial statements.
Subsequent Events
Details of subsequent events are disclosed in Note 31 to the financial statements.
Annual Report 2015
41
Auditors
The Auditors, Messrs UHY, have expressed their willingness to continue in office.
Signed on behalf of the Board of Director in accordance with a resolution of the Directors dated
27 October 2015.
DATO’ SERI ABDUL AZIM BIN
MOHD ZABIDI
42
Annual Report 2015
DATUK CHAI WOON CHET
Statement By Directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, the undersigned, being two of the Directors of the Company, do hereby state that, in the opinion
of the Directors, the financial statements set out on pages 48 to 108 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 the Company as of 30 June 2015 and of their financial performance and cash flows of the
Group and of the Company for the financial year then ended.
The supplementary information set out in Note 33 to the financial statements on page 109 have
been compiled in accordance with Guidance on Special Matter No. 1, Determination of Realised
and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities
Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive
of Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Director in accordance with a resolution of the Directors dated
27 October 2015.
DATO’ SERI ABDUL AZIM BIN
MOHD ZABIDI
DATUK CHAI WOON CHET
Annual Report 2015
43
Statutory Declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Kong Choo Hui being the officer primarily responsible for the financial management of XOX BHD., do
solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements
set out on pages 48 to 109 are 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 at KUALA LUMPUR in the )
Federal Territory on 27 October 2015
)
KONG CHOO HUI
Before me,
No. W521
MOHAN A.S. MANIAM
COMMISSIONER FOR OATHS
44
Annual Report 2015
Independent Auditors’ Report
To The Members Of Xox Bhd
(Company No. : 900384-X) (Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of XOX Bhd., which comprise the statements of financial
position as at 30 June 2015 of the Group and of the Company, and the statements of profit or loss
and other comprehensive income, statements of changes in equity and statements of cash flows
of the Group and of the Company for the financial year then ended, and a summary of significant
accounting policies and other explanatory information, as set out on pages 48 to 108.
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 determine are necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with approved standards on auditing in Malaysia. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on our judgement, including the
assessment of risks of material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group
and of the Company as of 30 June 2015 and of their financial performance and cash flows for the
financial year then ended in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the Companies Act, 1965 in Malaysia.
Annual Report 2015
45
(Company No. : 900384-X) (Incorporated in Malaysia) (Cont’d)
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the
followings:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept
by the Company and its subsidiary companies of which we have acted as auditors have been
properly kept in accordance with the provisions of the Act.
(b) We are satisfied that the accounts of the subsidiary companies that have been consolidated
with the Company’s financial statements are in form and content appropriate and proper for
the purposes of the preparation of the financial statements of the Group and we have received
satisfactory information and explanations required by us for those purposes.
(c) 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.
The supplementary information set out in Note 33 on page 109 is disclosed to meet the requirement
of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are
responsible for the preparation of the supplementary information in accordance with Guidance on
Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of
Disclosures 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.
46
Annual Report 2015
(Company No. : 900384-X) (Incorporated in Malaysia) (Cont’d)
Other Matter
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.
UHY
Firm Number: AF 1411
Chartered Accountants
CHAN JEE PENG
Approved Number: 3068/08/16 (J)
Chartered Accountant
KUALA LUMPUR
27 October 2015
Annual Report 2015
47
Statements Of Financial Position
As at 30 June 2015
Group
Company
2015
2014
2015
2014
Note
RM RM RM RM
Assets
Non-Current Assets
Property, plant and equipment
4 32,772,742 31,382,977 -
Investments in subsidiary companies
5
-
-
60,004 40,004
Goodwill on consolidation
6
2,859 -
-
48
32,775,601 31,382,977 60,004 40,004
Current Assets
Inventories
7
2,919,489 745,964 -
Trade receivables
8 24,294,219 27,997,494 -
Other receivables
9
8,433,372 5,177,925 806,656 Amounts owing by subsidiary
companies
10
-
- 6,699,230 Tax recoverable
10,480 28,372 252 Short-term investment
11
20,714 20,173 9,854 Cash and bank balances
9,286,052 751,391 5,599 7,526,492
625
9,557
62,219
414,586
44,964,326 34,721,319 7,521,591 8,013,479
Total Assets
77,739,927 66,104,296 7,581,595 8,053,483
Annual Report 2015
Statements Of Financial Position
As at 30 June 2015 (Cont’d)
Group
Note
2015
RM 2014
RM Company
2015
2014
RM RM
Equity and Liabilities
Equity
Share capital
12 33,200,000 33,200,000 33,200,000 33,200,000
Share premium
13 32,730,251 32,730,251 32,530,249 32,530,249
Capital reserve
14
2,200,000 2,200,000 2,200,000 2,200,000
Accumulated losses (49,308,482) (50,064,993) (62,237,366) (61,314,797)
Shareholder’s equity
18,821,769 18,065,258 148,585 (304,530)
5,692,883 -
6,615,452
-
Total Equity
18,970,354 17,760,728 5,692,883 6,615,452
Non-Current Liabilities
Deferred tax liabilities
15
5,244 -
-
Finance lease payables
16
410,405 101,190 -
-
-
415,649 101,190 -
Current Liabilities
Trade payables
17 40,876,381 20,345,333 -
Other payables
18 16,942,587 26,900,420 332,166 433,745
Amounts owing to
subsidiary companies
10
-
- 1,556,546 1,004,286
Amount owing to a former Director
19
-
900,000 -
16
201,897 96,625 -
Tax payable
333,059 -
-
58,353,924 48,242,378 1,888,712 1,438,031
Total Liabilities
58,769,573 48,343,568 1,888,712 1,438,031
Total Equity and Liabilities
77,739,927 66,104,296 7,581,595 8,053,483
The accompanying notes form an integral part of the financial statements.
Annual Report 2015
49
Statements Of Profit Or Loss And Other
Comprehensive Income
For The Financial Year Ended 30 June 2015
Group
Company
2015
2014
2015
2014
Note
RM RM RM RM
Revenue
20 90,953,086 57,049,972 -
Cost of sales (48,968,723) (34,210,382)
-
Gross profit
41,984,363 22,839,590 -
Other income
2,292,569 2,420,433 443 4,352,842
Selling and distribution expenses (18,060,772) (6,905,648)
(30,008)
(39,674)
Administrative expenses (24,569,418) (19,926,817)
(893,004) (1,028,627)
Finance costs
21
(18,466)
(26,064)
-
Profit/(Loss) before taxation
22
1,628,276 (1,598,506)
(922,569) 3,284,541
Taxation
23
(456,744)
22,034 -
Net profit/(loss) for the
financial year, representing total comprehensive income
for the financial year
1,171,532 (1,576,472)
(922,569) 3,284,541
Net profit /(loss) for the financial year attributable to:
Owners of the parent
756,511 (1,253,343)
415,021 (323,129)
1,171,532 (1,576,472)
Earnings/(Loss) per share (sen)
Basic
24
0.23 (0.40)
The accompanying notes form an integral part of the financial statements.
50
Annual Report 2015
2,200,000 (50,064,993) 18,065,258 (304,530) 17,760,728
At 30 June 2014
33,200,000 32,730,251 Transaction with owners:
Issuance of shares
12
3,000,000 120,240 -
- 3,120,240 - 3,120,240
148,585 18,970,354
At 1 July 2013 30,200,000 32,610,011 2,200,000 (48,811,650) 16,198,361 18,599 16,216,960
Net loss for the financial year,
representing total comprehensive
income for the financial year
-
-
- (1,253,343) (1,253,343)
(323,129) (1,576,472)
2,200,000 (49,308,482) 18,821,769 33,200,000 32,730,251 At 30 June 2015
Attributable to owners of the parent
Non-Distributable
Share
Share
Capital
Accumulated
Non-Controlling Total
Capital
Premium
Reserve
Losses
Total Interests Equity
Note
RM
RM
RM
RM
RM
RM
RM
Group
At 1 July 2014 33,200,000 32,730,251 2,200,000 (50,064,993) 18,065,258 (304,530) 17,760,728
Net profit for the financial year,
-
-
-
756,511 756,511 415,021 1,171,532
Arising from acquisition of subsidiary company
-
-
-
-
-
38,094 38,094
Statements Of Changes In Equity
For The Year Ended 30 June 2015
Annual Report 2015
51
Annual Report 2015
Transaction with owners:
Issuance of shares
12
3,000,000 120,240 -
-
3,120,240
At 30 June 2014
33,200,000 32,530,249 2,200,000 (61,314,797)
(62,237,366)
At 1 July 2013
30,200,000 32,410,009 2,200,000 (64,599,338)
Net profit for the financial year,
-
-
-
3,284,541 2,200,000 32,530,249 5,692,883
33,200,000 At 30 June 2015
6,615,452
3,284,541
210,671
6,615,452
Total
Equity
RM
(922,569)
52
Non-Distributable
Share
Share
Capital
Accumulated
Capital
Premium
Reserve
Losses
Note
RM
RM
RM
RM
Company
At 1 July 2014
33,200,000 32,530,249 2,200,000 (61,314,797)
Net loss for the financial year,
-
-
-
(922,569)
Statements Of Changes In Equity
For The Year Ended 30 June 2015 (Cont’d)
Statements Of Cash Flows
For The Financial Year Ended 30 June 2015
Group
2015
RM 2014
RM Company
2015
2014
RM RM
Cash Flows From Operating Activities
1,628,276 (1,598,506)
(922,569) 3,284,541
Adjustments for:
Depreciation of property, plant and equipment
4,559,436 4,366,876 -
(Gain)/Loss on unrealised foreign exchange
(193,608)
302,984 -
(Gain)/Loss on disposal of property, plant and equipment
(1,866)
19,052 -
Impairment loss on:
- Trade receivables
2,561,393 1,776,329 -
- Other receivables
61,641 -
-
- Investments in subsidiary companies
-
-
40,000 202,000
Interest expenses
18,466 26,064 -
Interest income
(16,485)
(2,257)
(443)
(373)
Inventories written off
190,354 72,540 -
written off
280,084 -
-
Reversal of impairment of
trade receivables
(1,661,397) (1,963,222)
-
Reversal of impairment of amounts
owing by subsidiary companies
-
-
- (4,352,469)
Operating profit/(loss) before working capital changes
7,426,294 2,999,860 (883,012)
(866,301)
Annual Report 2015
53
For The Financial Year Ended 30 June 2015 (Cont’d)
Group
Note
2015
RM 2014
RM Company
2015
2014
RM RM
Changes in working capital:
Inventories
(2,363,879)
(34,842)
-
Receivables
(513,809) (19,240,557)
(392,070)
Payables
10,662,075 15,698,550 (101,579)
Subsidiary companies
-
- 1,379,522 Amount owing to former Director
(900,000)
900,000 -
(326,210)
80,496
(1,951,748)
-
885,873 (2,197,462)
Cash generated from/(used in) operations
14,310,681 323,011 2,861 (3,063,763)
Interest received
Interest paid
Tax refunded
Tax paid
6,884,387 (2,676,849)
16,485 (18,466)
27,582 (128,131)
2,257 (26,064)
11,399 (27,290)
443 -
650 (277)
373
(325)
(102,530)
(39,698)
816 48
Net cash generated from/
(used in) operating activities
14,208,151 283,313 3,677 Cash Flows From Investing Activities
Acquisition of a subsidiary company, net of cash and cash equivalents acquired
-
-
(60,000)
Net cash inflow from acquisition of subsidiary
company
5(b)
139,983 -
-
Purchase of property, plant and equipment
4(a) (5,682,466) (2,794,758)
-
Proceeds from disposal
of property, plant and equipment
3,700 279,982 -
Net cash used in investing activities
54
Annual Report 2015
(5,538,783)
(2,514,776)
(60,000)
(3,063,715)
(2)
(2)
For The Financial Year Ended 30 June 2015 (Cont’d)
Group
2015
RM 2014
RM Company
2015
2014
RM RM
Cash Flows From Financing Activities
Net proceeds from issuance of shares
- 3,120,240 -
Repayment of hire purchase payables
(134,166)
(381,835)
-
3,120,240
-
Net cash (used in)/generated
from financing activities
(134,166) 2,738,405 - 3,120,240
Net increase/(decrease) in
cash and cash equivalents 8,535,202 506,942 (56,323)
56,523
Cash and cash equivalents at
the beginning of the financial year
771,564 264,622 71,776 15,253
Cash and cash equivalents at
the end of the financial year 15,453 71,776
Cash and cash equivalents
at end of the financial year comprises:
Short-term investment
20,714 20,173 9,854 Cash and bank balances
9,286,052 751,391 5,599 9,557
62,219
71,776
9,306,766 9,306,766 771,564 771,564 15,453 The accompanying notes form an integral part of the financial statements.
Annual Report 2015
55
Notes to Financial Statements
1. Corporate Information
The Company is a public limited liability company, incorporated and domiciled in Malaysia and
is listed on the Ace Market of the Bursa Malaysia Securities Berhad.
The principal place of business of the Company is at Lot 8.1, 8th Floor, Menara Lien Hoe, No.
8, Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul
Ehsan.
The registered office of Company is located at Suite 10.03, Level 10, The Gardens South Tower,
Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.
The Company is principally engaged in the business of investment holding. The principal activities
of the subsidiary companies are set out in Note 5. There have been no significant changes in the
nature of these activities during the financial year.
2. Basis of Preparation
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance
with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting
Standards and the requirements of the Companies Act, 1965 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the
historical cost convention, unless otherwise indicated in the significant accounting policies
below.
Adoption of new and amended standards and IC Interpretations
During the financial year, the Group and the Company have adopted the following MFRSs,
amendments to MFRSs and IC Interpretations issued by the Malaysian Accounting Standards
Board (“MASB”) that are mandatory for current financial year:
Amendments to MFRS 10,
Investment Entities
MFRS 12 and MFRS 127
Amendments to MFRS 132Offsetting Financial Assets and Financial Liabilities
Amendments to MFRS 136
Recoverable Amount Disclosures for Non-Financial
Assets
IC Interpretation 21
Levies
Amendments to MFRS 119
Defined Benefits Plans: Employee Contributions
Annual Improvements to MFRSs 2010 – 2012 Cycle
Annual Improvements to MFRSs 2011 – 2013 Cycle
56
Adoption of above amendments to MFRSs did not have any significant impact on the financial
statements of the Group and the Company.
Annual Report 2015
(Cont’d)
2. Basis of Preparation (Cont’d)
(a) Statement of compliance (Cont’d)
Standards issued but not yet effective
The Group and the Company have not applied the following new MFRSs and amendments
to MFRSs that have been issued MASB but are not yet effective for the Group and the
Company:
Effective
dates for
financial
periods
beginning
on or after
MFRS 14
Regulatory Deferral Accounts1 January 2016
Amendments to MFRS 11 Accounting for Acquisitions of Interests
in Joint Operations1 January 2016
Amendments to MFRS 116 Clarification of Acceptable Methods of
and MFRS 138
Depreciation and Amortisation1 January 2016
Amendments to MFRS 116 Agriculture: Bearer Plants1 January 2016
and MFRS 141
Amendments to MFRS 127 Equity Method in Separate
Financial Statements1 January 2016
Amendments to MFRS 10 Sale or Contribution of Assets between an
and MFRS 128
Investor and its Associate or Joint Venture1 January 2016
Annual Improvements to MFRSs 2012–2014 Cycle1 January 2016
Amendments to MFRS 10, Investment Entities: Applying the
MFRS 12 and MFRS 128
Consolidation Exception1 January 2016
MFRS 15 Revenue from Contracts with Customers1 January 2017
MFRS 9
Financial Instruments (IMFRS 9 issued
by IASB in July 2014)1 January 2018
The Group and the Company intend to adopt the above MFRSs when they become effective.
Annual Report 2015
57
(Cont’d)
58
Standards issued but not yet effective (Cont’d)
The initial application of the abovementioned MFRSs are not expected to have any significant
impacts on the financial statements of the Group and the Company except as mentioned
below:
MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014)
MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces earlier versions of MFRS 9 and introduces
a package of improvements which includes a classification and measurement model, a single
forward looking ‘expected loss’ impairment model and a substantially reformed approach
to hedge accounting. MFRS 9 when effective will replace MFRS 139 Financial Instruments:
Recognition and Measurement.
MFRS 9 retains but simplifies the mixed measurement model and establishes three primary
measurement categories for financial assets: amortised cost, fair value through other
comprehensive income and fair value through profit or loss. The basis of classification
depends on the entity’s business model and the contractual cash flow characteristics of
the financial asset. Investments in equity instruments are required to be measured at fair
value through profit or loss with the irrevocable option at inception to present changes
in fair value in other comprehensive income not recycling. There is now a new expected
credit losses model that replaces the incurred loss impairment model used in MFRS 139.
For financial liabilities there were no changes to classification and measurement except for
the recognition of changes in own credit risk in other comprehensive income, for liabilities
designated at fair value through profit or loss. MFRS 9 relaxes the requirements for hedge
effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic
relationship between the hedged item and hedging instrument and for the ‘hedged ratio’
to be the same as the one management actually use for risk management purposes.
Contemporaneous documentation is still required but is different to that currently prepared
under MFRS 139.
The adoption of MFRS 9 will result in a change in accounting policy. The Group is currently
examining the financial impact of adopting MFRS 9.
Annual Report 2015
(Cont’d)
Standards issued but not yet effective (Cont’d)
MFRS 15 Revenue from Contracts with Customers
(b) Functional and presentation currency
MFRS 15 deals with revenue recognition and establishes principles for reporting useful
information to users of financial statements about the nature, amount, timing and uncertainty
of revenue and cash flows arising from an entity’s contracts with customers. Revenue is
recognised when a customer obtains control of a good or service and thus has the ability to
direct the use and obtain the benefits from the good or service. The Standard replaces MFRS
118 Revenue, MFRS 111 Construction Contracts and related IC Interpretations. The Group is
in the process of assessing the impact of this Standard.
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Group’s
and Company’s functional currency and all values has been rounded to the nearest RM
except when otherwise stated.
(c) Significant accounting judgements, estimates and assumptions
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.
Judgments
There are no significant areas of critical judgement in applying accounting policies that have
significant effect on the amounts recognised in the financial statements.
Annual Report 2015
59
(Cont’d)
(c) Significant accounting judgements, estimates and assumptions (Cont’d)
The key assumptions concerning the future and other key sources of estimation uncertainty
at the end of the reporting period, that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next reporting period are set out
below:
Useful lives of property, plant and equipment
The Group regularly reviews the estimated useful lives of property, plant and equipment
based on factors such as business plan and strategies, expected level of usage and future
technological developments. Future results of operations could be materially affected by
changes in these estimates brought about by changes in the factors mentioned above. A
reduction in the estimated useful lives of property, plant and equipment would increase
the recorded depreciation and decrease the value of property, plant and equipment. The
carrying amount at the reporting date for property, plant and equipment is disclosed in Note
4.
Impairment of loans and receivables
The Group assess at end of each reporting period whether there is any objective evidence that
a receivable is impaired. To determine whether there is objective evidence of impairment,
the Group and the Company consider factors such as the probability of insolvency or
significant financial difficulties of the receivable 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 of assets with similar credit risk
characteristics. The carrying amounts at the reporting date for loans and receivables are
disclosed in Notes 8, 9 and 10 respectively.
60
Key sources of estimation uncertainty
Income taxes
Judgment is involved in determining the provision for income taxes. There are certain
transactions and computations for which the ultimate tax determination is uncertain during
the ordinary course of business.
The Group recognises liabilities for expected tax issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recognised, such differences will impact the income tax and
deferred tax provisions in the period in which such determination is made. Details of income
tax expense are disclosed in Note 23.
Annual Report 2015
(Cont’d)
(c) Significant accounting judgements, estimates and assumptions (Cont’d)
Key sources of estimation uncertainty (Cont’d)
Impairment on investments in subsidiary companies
The Company has recognised impairment loss in respect of its investments in subsidiary
companies. The Company carried out the impairment test based on the estimation of the
higher of the value-in-use or the fair value less cost to sell of the cash-generating units
to which the investments in subsidiary companies belong to. Estimating the recoverable
amount requires the Company to make an estimate of the expected future cash flows from
the cash-generating units and also to determine a suitable discount rate in order to calculate
the present value of those cash flows.
Accrual of cost of recharge usage
Accrual of cost of recharge usage is recognised on a monthly basis by using the last average
6 months costs margin which is the directors’ best estimate of the expenditure required
to settle the Group’s obligation. When the actual invoices received, the Management will
do the necessary under/over provision in the accrual account to reflect the actual costs
incurred.
3. Significant Accounting Policies
(a) Basis of consolidation
(i) Subsidiary companies
Subsidiary companies are all entities (including structured entities) over which the Group
has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiary companies are fully consolidated
from the date on which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Annual Report 2015
61
(Cont’d)
3. Significant Accounting Policies (Cont’d)
(a) Basis of consolidation (Cont’d)
62
(i) Subsidiary companies (Cont’d)
The Group applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the
assets transferred, the liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred includes the fair
value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in business
combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the
recognised amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed off in profit or loss as incurred.
If the business combination is achieved in stages, previously held equity interest in the
acquiree is re-measured at its acquisition date fair value and the resulting gain or loss is
recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair
value at the acquisition date. Subsequent changes to the fair value of the contingent
consideration that is deemed to be an asset or liability is recognised in accordance with
MFRS 139 Financial Instruments: Recognition and Measurement either in profit or loss
or other comprehensive income. Contingent consideration that is classified as equity is
not re-measured, and its subsequent settlement is accounted for within equity.
Inter-company transactions, balances and unrealised gains or losses on transactions
between Group companies are eliminated. Unrealised losses are eliminated only if
there is no indication of impairment. Where necessary, accounting policies of subsidiary
companies have been changed to ensure consistency with the policies adopted by the
Group.
In the Company’s separate financial statements, investments in subsidiary companies
are stated at cost less accumulated impairment losses. On disposal of such investments,
the difference between net disposal proceeds and their carrying amounts are recognised
in profit or loss. Where an indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to its recoverable amount. See
accounting policy Note 3(i)(i) on impairment of non-financial assets.
Annual Report 2015
(Cont’d)
(a) Basis of consolidation (Cont’d)
(ii) Changes in ownership interests in subsidiary companies without change of control
Transactions with non-controlling interests that do not result in loss of control are
accounted for as equity transactions – that is, as transactions with the owners in their
capacity as owners. The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the subsidiary company
is recorded in equity. Gains or losses on disposals to non-controlling interests are also
recorded in equity.
(iii) Disposal of subsidiary companies
If the Group loses control of a subsidiary company, the assets and liabilities of
the subsidiary company, including any goodwill, and non-controlling interests are
derecognised at their carrying value on the date that control is lost. Any remaining
investment in the entity is recognised at fair value. The difference between the fair
value of consideration received and the amounts derecognised and the remaining fair
value of the investment is recognised as a gain or loss on disposal in profit or loss. Any
amounts previously recognised in other comprehensive income in respect of that entity
are accounted for as if the Group had directly disposed of the related assets or liabilities.
(iv) Goodwill on consolidation
The excess of the aggregate of the consideration transferred, the amount of any noncontrolling interest in the acquiree and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the identifiable net assets acquired
is recorded as goodwill. If the total consideration transferred, non-controlling interest
recognised and previously held interest measured at fair value is less than the fair value
of the net assets of the subsidiary company acquired (ie. a bargain purchase), the gain
is recognised in profit or loss.
Following the initial recognition, goodwill is measured at cost less accumulated
impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment
annually or more frequent when there is objective evidence that the carrying value may
be impaired. See accounting policy Note 3(i)(i) on impairment of non-financial assets.
Annual Report 2015
63
(Cont’d)
(b) Property, plant and equipment
64
Property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. The policy of recognition and measurement of impairment
losses is in accordance with Note 3(i)(i).
(i) Recognition and measurement
Cost includes expenditures that are directly attributable to the acquisition of the assets
and any other costs directly attributable to bringing the asset to working condition for its
intended use, cost of replacing component parts of the assets, and the present value of
the expected cost for the decommissioning of the assets after their use. The cost of selfconstructed assets also includes the cost of materials and direct labour. For qualifying
assets, borrowing costs are capitalised in accordance with the accounting policy on
borrowing costs. All other repair and maintenance costs are recognised in profit or loss
as incurred.
The cost of property, plant and equipment recognised as a result of a business
combination is based on fair value at acquisition date. The fair value of property is the
estimated amount for which a property could be exchanged on the date of valuation
between a willing buyer and a willing seller in an arm’s length transaction after proper
marketing wherein the parties had each acted knowledgeably, prudently and without
compulsion. The fair value of other items of plant and equipment is based on the quoted
market prices for similar items.
When significant parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of property, plant
and equipment.
Capital work-in-progress represents assets under construction, and which are not ready
for commercial use at the reporting period. Capital work-in-progress is stated at cost,
transferred to the relevant category of assets and depreciated accordingly when the
assets are completed and ready for commercial use.
Property, plant and equipment are derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Gains or losses arising on the
disposal of property, plant and equipment are determined as the difference between
the disposal proceeds and the carrying amount of the assets and are recognised in profit
or loss. On disposal of a revalued asset, the amounts in revaluation reserve relating to
those assets are transferred to retained earnings.
Annual Report 2015
(Cont’d)
(b) Property, plant and equipment (Cont’d)
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised
in the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the Group and to the Company and the cost
can be measured reliably. The costs of the day-to-day servicing of property, plant and
equipment are recognised in the profit or loss as incurred.
(iii) Depreciation
Depreciation is recognised in the profit or loss on straight line basis to write off the
cost of each asset to its residual value over its estimated useful life. Leased assets are
depreciated over the shorter of the lease term and their useful lives. Property, plant
and equipment under construction are not depreciated until the assets are ready for its
intended use.
Property, plant and equipment are depreciated based on the estimated useful lives of
the assets as follows:
Telecommunication network and equipment
Office equipment
Furniture and fittings
Renovation
Motor vehicles
10 years
5 years
10 years
10 years
5 years
The residual values, useful lives and depreciation method are reviewed at each
reporting period end to ensure that the amount, method and period of depreciation
are consistent with previous estimates and the expected pattern of consumption of the
future economic benefits embodied in the property, plant and equipment.
Annual Report 2015
65
(Cont’d)
(c) Leases
66
The determination of whether an arrangement is, or contains, a lease is based on the
substance of the arrangement at the inception date, whether fulfilment of the arrangement
is dependent on the use of a specific asset or asset or the arrangement conveys a right to
use the asset, even if that right is not explicitly specific in an arrangement.
(i) Finance lease
Leases in terms of which the Group and the Company assume substantially all the
risks and rewards of ownership are classified as finance lease. Upon initial recognition,
the leased asset is measured at an amount equal to the lower of its fair value and the
present value of the minimum lease payments. Subsequent to initial recognition, the
asset is accounted for in accordance with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between 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 recognised as finance costs in
the profit or loss. Contingent lease payments are accounted for by revising the minimum
lease payments over the remaining term of the lease when the lease adjustment is
confirmed.
(ii) Operating lease
Leases, where the Group or the Company do not assume substantially all the risks and
rewards of ownership are classified as operating leases and, except for property interest
held under operating lease, the leased assets are not recognised on the statement of
financial position.
Payments made under operating leases are recognised in profit or loss on a straight-line
basis over the term of the lease. Lease incentives received are recognised in profit or
loss as an integral part of the total lease expense, over the term of the lease. Contingent
rentals are charged to profit or loss in the reporting period in which they are incurred.
Annual Report 2015
(Cont’d)
(d) Financial assets
Financial assets are recognised on 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.
Financial assets are initially recognised at fair value plus transaction costs.
The Group and the Company classify their financial assets depending on the purpose for
which it was acquired at initial recognition, into the following categories:
(i) Loan and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets,
except for those maturing later than 12 months after the end of the reporting period
which are classified as non-current assets.
After initial recognition, financial assets categorised as loans and receivables are
measured at amortised cost using the effective interest method, less impairment losses.
Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired, and through the amortisation process.
(ii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this
category or not classified in any of the other categories. They are included in non-current
assets unless the investment matures or management intends to dispose of the assets
within 12 months after the end of the reporting period.
After initial recognition, available-for-sale financial assets are measured at fair value.
Any gains or losses from changes in fair value of the financial asset are recognised
in other comprehensive income, except that impairment losses, foreign exchange
gains and losses on monetary instruments and interest calculated using the effective
interest method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as
a reclassification adjustment when the financial asset is derecognised. Interest income
calculated using the effective interest method is recognised in profit or loss. Dividends
from an available-for-sale equity instrument are recognised in profit or loss when the
Group’s and the Company’s right to receive payment is established.
Investment in equity instruments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured are measured at cost less
impairment loss.
Annual Report 2015
67
(Cont’d)
68
(d) Financial assets (Cont’d)
A regular way purchase or sale is a purchase or sale of a financial asset under a contract
whose terms require delivery of the asset within the time frame established generally 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.
Financial assets are derecognised when the contractual rights to receive cash flows from the
financial assets have expired or have been transferred and the Group and the Company have
transferred substantially all risks and rewards of ownership. On derecognition of a financial
asset, the difference between the carrying amount and the sum of consideration received
and any cumulative gains or loss that had been recognised in equity is recognised in the
profit or loss.
(e) Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements
entered into and the definition of financial liabilities.
Financial liabilities are recognised on 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.
The Group and the Company classify their financial liabilities at initial recognition into other
liabilities measured at amortised cost.
The Group’s and the Company’s other financial liabilities comprise trade and 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.
Gains and losses on financial liabilities measured at amortised cost are recognised in profit
or loss when the liabilities are derecognised, and through the amortisation process.
Annual Report 2015
(Cont’d)
(e) Financial liabilities (Cont’d)
(f) Offsetting of financial instruments
A financial liability or a part of it is derecognised when, and only when, the obligation
specified in the contract is discharged or cancelled or expires. On derecognition of a financial
liability, the difference between the carrying amount of the financial liability extinguished
or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount is reported in the
statement of financial position if, and only if, there is a currently enforceable legal right to
offset the recognised amounts and there is an intention to settle on a net basis, or to realise
the assets and settle the liabilities simultaneously.
(g) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined
on weighted average basis and comprises the purchase price and incidentals incurred in
bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank
overdraft and highly liquid investments that are readily convertible to known amount of
cash and which are subject to an insignificant risk of changes in value. For the purpose of
statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and
pledged deposits.
Annual Report 2015
69
(Cont’d)
(i) Impairment of assets
70
(i) Non-financial assets
The carrying amounts of non-financial assets are reviewed at the end of each reporting
period to determine whether there is any indication of impairment. If any such indication
exists then the asset’s recoverable amount is estimated.
For the purpose of impairment testing, assets are grouped together into the smallest
group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or cash-generating units.
The recoverable amount of an asset or cash-generating unit is the greater of its valuein-use and its fair value less costs of disposal. In assessing value-in-use, the estimated
future cash flows 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 or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or cash-generating
unit exceeds its estimated recoverable amount. Impairment loss is recognised in profit
or loss. Impairment losses recognised in respect of cash-generating units are allocated
to reduce the carrying amounts of the other assets in the cash-generating unit (group of
cash-generating units).
An impairment loss in respect of goodwill is not reversed. In respect of other assets,
impairment losses recognised in prior periods are assessed at the end of each reporting
period for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed only if there has been a change in the estimates used to determine
the recoverable amount since the last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been determined, net of
depreciation or amortisation, had no impairment loss been recognised for asset in prior
years. Such reversal is recognised in the profit or loss unless the asset is carried at a
revalued amount, in which case the reversal is treated as a revaluation increase.
Annual Report 2015
(Cont’d)
(i) Impairment of assets (Cont’d)
(ii) Financial assets
All financial assets, other than those categorised as fair value through profit or loss,
and investments in subsidiary companies, are assessed at each reporting date whether
there is any objective evidence of impairment as a result of one or more events having
an impact on the estimated future cash flows of the asset.
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 considers factors such as the probability of
insolvency or significant financial difficulties of the receivable 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 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 defaults on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference
between the assets carrying amount and the present value of estimated future cash flows
(excluding future expected credit losses that have not yet been incurred) discounted at
the financial asset’s original effective interest rate. The carrying amount of the asset is
reduced through the use of an allowance account and the amount of impairment loss is
recognised in the profit or loss. Receivables together with the associated allowance are
written off when there is no realistic prospect of future recovery.
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.
Annual Report 2015
71
(Cont’d)
(i) Impairment of assets (Cont’d)
(ii) Financial assets (Cont’d)
72
Available-for-sale financial assets
Significant financial difficulties of the issuer or obligor, and the disappearance of an
active trading market are considerations to determine whether there is objective
evidence that investment securities classified as available-for-sale financial assets are
impaired. A significant or prolonged decline in the fair value of investments in equity
instruments below its cost is also an objective evidence of impairment.
If an available-for-sale financial asset is impaired, the amount of impairment loss is
recognised in profit or loss and is measured as the difference between its cost (net of
any principal payment and amortisation) and its current fair value, less any impairment
loss previously. When a decline of fair value of an available-for-sale financial asset has
been recognised in other comprehensive income, the cumulative loss is reclassified
from equity to profit or loss.
Impairment losses on available-for-sale equity investment are not reversed in profit
or loss in the subsequent periods. Increase in fair value of equity instrument, if any,
subsequent to impairment loss is recognised other comprehensive income. For availablefor-sale debt investments, impairment losses are subsequently reversed in profit or loss,
if an increase in the fair value of the investment can be objectively related to an event
occurring after the recognition of the impairment loss in profit or loss.
(j) Share capital
An equity instrument is any contract that evidences a residual interest in the assets of
the Company after deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the nominal value of shares issued. Ordinary shares are
classified as equity.
Dividends on ordinary shares are accounted for in equity as appropriation of retained
earnings and recognised as a liability in the period in which they are declared.
Annual Report 2015
(Cont’d)
(k) Foreign currency transactions
Transactions in foreign currency are recorded in the functional currency of the respective
Group entities using the exchange rates prevailing at the dates of the transactions. At each
reporting date, monetary items denominated in foreign currencies are retranslated at the
rates prevailing on that date. Non-monetary items carried at fair value that are denominated
in foreign currencies are retranslated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items or on translating monetary
items at the reporting date are included in profit or loss except for exchange differences
arising on monetary items that form part of the Group’s net investment in foreign operation.
These are initially taken directly to the foreign currency translation reserve within equity
until the disposal of the foreign operations, at which time they are recognised in profit or
loss. Exchange differences arising on monetary items that form part of the Company’s net
investment in foreign operation are recognised in profit or loss in the Company’s financial
statements or the individual financial statements of the foreign operation, as appropriate.
Exchange differences arising on the translation of non-monetary items carried at fair value
are included in profit or loss for the reporting period except for the differences arising on
the translation of non-monetary items in respect of which gains and losses are recognised in
other comprehensive income. Exchange differences arising from such non-monetary items
are also recognised in other comprehensive income.
(l) Employee benefits
(i) Short term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as expenses in
the reporting period in which the associated services are rendered by employees of the
Group and the Company. 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 and medical leave are recognised when the absences
occur.
The expected cost of accumulating compensated absences is measured as additional
amount expected to be paid as a result of the unused entitlement that has accumulated
at the end of the reporting period.
Annual Report 2015
73
(Cont’d)
(l) Employee benefits (Cont’d)
(ii) Defined contribution plans
(m)Revenue and income
(i) Sales of goods
Rental income is accounted for on a straight-line basis over the lease terms. The
aggregate costs of incentives provided to lessees are recognised as a reduction of rental
income over the lease term on a straight-line basis.
(iii) Interest income
74
Revenue recognised upon delivery of goods and customers’ acceptance and where
applicable, net of sales tax, return and trade discounts.
(ii) Rental income
As required by law, companies in Malaysia make contributions to the state pension
scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as
an expense in the profit or loss as incurred. Once the contributions have been paid, the
Group and the Company have no further payment obligations.
Interest income is recognised on accruals basis using the effective interest method.
(n) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of
a qualifying asset are capitalised as part of the cost of the assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale. All
other borrowing costs are recognised in profit or loss in the period in which 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.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences
when expenditure for the asset is being incurred, borrowing costs are being incurred and
activities that are necessary to prepare the asset for its intended use or sale are in progress.
Capitalisation of borrowing costs is suspended or ceases when substantially all the activities
necessary to prepare the qualifying asset for its intended use or sale are interrupted or
completed.
Investment income earned on the temporary investment of specific borrowings pending
their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation.
Annual Report 2015
(Cont’d)
(o) Income taxes
Tax expense in profit or loss comprises current and deferred tax. Current tax and deferred tax
is recognised in profit or loss except to the extent that it relates to a business combination or
items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted by the end of the reporting period,
and any adjustment to tax payable in respect of previous year.
Deferred tax is recognised using the liability method for all temporary differences between
the carrying amounts of assets and liabilities in the statement of financial position and their
tax bases. Deferred tax is not recognised for the temporary differences arising from the
initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction
which is not a business combination and that affects neither accounting nor taxable profit
or loss. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
The measurement of deferred tax is based on the expected manner of realisation or
settlement of the carrying amount of the assets and liabilities, at the end of the reporting
period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits
will be available against which the temporary difference can be utilised. Deferred tax assets
are reviewed at the end of each reporting period and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
Annual Report 2015
75
(Cont’d)
(p) Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence
will only be confirmed by the occurrence of one or more uncertain future events not wholly
within the control of the Group and of the Company. It can also be a present obligation
arising from past events that is not recognised because it is not probable that an outflow
of economic of resources will be required or the amount of obligation cannot be measured
reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements.
When a change in the probability of an outflow occurs so that the outflow is probable, it will
then be recognised as a provision.
(q) Segments reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision-maker. The chief operating decision-makers are
responsible for allocating resources and assessing performance of the operating segments
and make overall strategic decisions. The Group’s operating segments are organised and
managed separately according to the nature of the products and services provided, with
each segment representing a strategic business unit that offers different products and serves
different markets.
76
Annual Report 2015
4. Property, plant and equipment
Carrying amount
At 30 June 2015
At 30 June 2015
Accumulated impairment loss
At 30 June 2015
Accumulated depreciation
At 1 July 2014
Charge for the current year
Disposals Written off At 30 June 2015
926,110 (100,000)
- - - - - 1,026,110 27,941,083 - 12,391,539 8,670,453 3,721,086 - - 40,332,622 1,062,840 - 2,225,246 1,816,165 537,752 (66,080)
(62,591)
3,288,086 553,305 - 58,654 86,335 26,377 (1,286)
(52,772)
611,959 1,522,579 - 120,676 235,263 100,208 - (214,795)
1,643,255 Tele Capital communication
Furniture work-in-
network and
Office
and
progress
equipment equipment
fittings Renovation
RM
RM
RM
RM
RM
Group
Cost
At 1 July 2014
1,038,539 37,035,781 2,896,067 219,810 879,132 Additions 2,355,413 928,999 527,217 504,632 1,195,884 Reclassification
(2,367,842)
2,367,842 - - - Disposals - - (66,080)
(3,120)
- Written off - - (69,118) (109,363)
(431,761)
766,825 - 530,924 356,911 174,013 - - 32,772,742
(100,000)
15,327,039
11,165,127
4,559,436
(67,366)
(330,158)
48,199,781
42,648,104
6,231,119
- (69,200)
(610,242)
578,775 718,974 - -
- 1,297,749 Total
RM
Motor vehicles
RM
(Cont’d)
Annual Report 2015
77
78
4. Property, Plant and Equipment (Cont’d)
Annual Report 2015
At 30 June 2014
Accumulated depreciation
At 1 July 2013
Charge for the current year
Disposals At 30 June 2014
At 30 June 2014
Carrying amount
At 30 June 2014
938,539 (100,000)
- - - - 1,038,539 28,365,328 - 8,670,453 5,108,110 3,562,343 - 37,035,781 1,079,902 - 1,816,165 1,256,278 564,695 (4,808)
2,896,067 133,475 - 86,335 64,806 21,529 - 219,810 643,869 - 235,263 171,294 63,969 - 879,132 Tele Capital communication
Furniture work-in-
network and
Office
and
progress
equipment equipment
fittings Renovation
RM
RM
RM
RM
RM
Group
Cost
At 1 July 2013
1,051,263 34,760,899 2,698,890 208,997 559,330 Additions 2,099,314 162,844 201,985 10,813 319,802 Reclassification
(2,112,038)
2,112,038 - - - Disposals - - (4,808)
- - 221,864 - 356,911 482,312 154,340 (279,741)
31,382,977
(100,000)
11,165,127
7,082,800
4,366,876
(284,549)
42,648,104
40,436,929
2,794,758
- (583,583)
1,157,550 - - (578,775)
578,775 Total
RM
Motor vehicles
RM
(Cont’d)
(Cont’d)
4. Property, Plant and Equipment (Cont’d)
(a) The aggregate additional cost for the property, plant and equipment of the Group during the
financial year under finance lease arrangement and cash payment are as follows:
Aggregate costs
Less: Finance lease arrangement
Cash payments
Group
2015
RM
2014
RM
6,231,119 (548,653)
2,794,758
-
5,682,466 2,794,758
(b) Included in the property, plant and equipment of the Group are motor vehicles acquired
under hire purchase with carrying amount of RM766,825 (2014: RM221,864).
5. Investments in Subsidiary Companies
(a) Investment in subsidiary companies
Unquoted shares, at cost
At 1 July Additions 55,342,002
60,000
55,342,000
2
55,402,002
55,342,002
At 1 July Additions 55,301,998
40,000
55,099,998
202,000
At 30 June 55,341,998
55,301,998
60,004
40,004
At 30 June
Company
2015
2014
RM
RM
Annual Report 2015
79
(Cont’d)
5. Investments in Subsidiary Companies (Cont’d)
(a) Investment in subsidiary companies (Cont’d)
The details of the subsidiary companies, which are incorporated in Malaysia are as follows:
Name of Company Effective Interest
2015
2014
Pricipal Activities
XOX Com Sdn. Bhd.
100%
100%
Provider of mobile
telecommunication products
and services
XOX Management Services Sdn. Bhd.
100%
100%
Provision of management services
100%
100%
Provision of mobile application
services
100%
100%
Provision of mobile wallet
services and the trading
of telecommunications
airtime as a traded
commodity for Shariah
compliant financing
51%
51%
Special marketing arm of
XOX Mobile for
telecommunication and
broadband internet services
50%
50%
Retailers and dealers of all kind
of mobile telecommunications
products and to provide related
services in Malaysia or worldwide
60%
-
Provider of mobile
telecommunication products and
services
XOX Media Sdn. Bhd.
XOX Wallet Sdn. Bhd.
X Style Sdn. Bhd.
XOX Retail Sdn. Bhd.
One XOX Sdn. Bhd.
80
Company held by XOX Com Sdn. Bhd.
XOX Mobile Sdn. Bhd.
100%
100%
Agent for marketing promotion,
support services and managing
the distribution channels of
mobile telecommunication
products and services
All the subsidiary companies are audited by UHY.
Annual Report 2015
(Cont’d)
(b) Acquisition of a subsidiary company
During the financial year, the Company acquired 60,000 ordinary shares of RM1.00 each in
One XOX Sdn. Bhd. represent 60% equity interest for a total cash consideration of RM60,000.
Fair value of consideration transferred
The following summarises the major classes of consideration transferred, and the recognised
amounts of asset acquired and liability assumed at the acquisition date:
Cash and cash equivalents Other payables Net cash inflow arising from acquisition of a subsidiary company
Purchase consideration settled in cash Cash and cash equivalents acquired RM
199,983
(104,748)
95,235
RM
(60,000)
199,983
139,983
Goodwill arising from business combination
Goodwill was recognised as a result of the acquisition as follows:
Fair value of consideration transferred
Non-controlling interests, based on their proportionate interest in
the recognised amounts of the assets and liabilities of the acquiree
Fair value of identifiable assets acquired and liabilities assumed
RM
60,000
38,094
(95,235)
Goodwill on consideration
2,859
There was no acquisition in the previous financial year.
Annual Report 2015
81
(Cont’d)
(c) Material partly owned subsidiary companies
The summarised financial information on subsidiary companies with material non-controlling
interests (“NCI”) is as follows:
Name of
company
X Style Sdn. Bhd.
82
Proportion
of ownership
interests and voting rights held by non-controlling
interests
2015
%
49
2014
%
49
Loss
allocated to
non-
controlling
interests
2015
RM
(52,014)
Accumulated
non-controlling
interests
2014
RM
(81,411)
2014
RM
(62,813)
XOX Retail Sdn. Bhd.
50
50
One XOX Sdn. Bhd.
40
-
529,026 -
567,120 Total non-controlling interests
148,585
There are no significant restrictions on the ability of the subsidiary companies to transfer
funds to the Group in the form of cash dividends or repayment of loans and advances.
Generally, for all subsidiary companies which are not wholly-owned by the Company, noncontrolling shareholders hold protective rights restricting the Company’s ability to use the
assets of the subsidiary companies and settle the liabilities of the Group, unless approval is
obtained from non-controlling shareholders.
Annual Report 2015
(61,991) (241,717)
2015
RM
(114,827)
(303,708) (241,717)
(304,530)
(Cont’d)
6. Goodwill on Consolidation
2015
RM
Group
2014
RM
At 1 July Acquisition of a subsidiary company
-
2,859 -
At 30 June 2,859 -
Goodwill on consolidation arose upon the acquisition of subsidiary principally engaged in
providing mobile telecommunication products and services.
For the purpose of impairment testing, the recoverable amount of goodwill as at the end of the
financial year was determined based on a value-in-use calculation by discounting the future cash
flows generated from the continuing use of the cash generating unit (“CGU”).
7. Inventories
At cost
Sim cards and recharge cards
Recognised in profit or loss:
Group
2015
RM
2014
RM
2,919,489 745,964
190,354 72,540
8. Trade Receivables
Trade receivables
Less: Accumulated impairment loss
Group
2015
RM
2014
RM
26,855,612 30,027,623
(2,561,393) (2,030,129)
24,294,219 27,997,494
The normal trade credit terms granted is 7 to 210 days (2014: 7 to 210 days). Other credit terms
are assessed and approved on a case by case basis.
Annual Report 2015
83
(Cont’d)
8. Trade Receivables (Cont’d)
Amount owing by related party is unsecured, interest-free and is repayable on demand. Trade
amounts owing by related parties are subject to normal trade credit terms.
Movements in the allowance for impairment losses of trade receivables are as follows:
2014
RM
At 1 July
Impairment losses recognised
Reversal of impairment Written off At 30 June Analysis of the trade receivables ageing as at the end of the financial year is as follow:
84
Group
2015
RM
Neither past due nor impaired
Past due but not impaired:
Less than 30 days 31 to 60 days
More than 60 days
2,030,129 2,561,393 (1,661,397)
(368,732)
2,217,022
1,776,329
(1,963,222)
-
2,561,393 2,030,129
Group
2015
RM
2014
RM
2,138,979 4,067,783 6,745,625 4,746,493
21,430
12,952,387 4,767,923
Impaired 24,294,219 27,997,494
2,561,393 2,030,129
26,855,612 30,027,623
Annual Report 2015
11,341,832 23,229,571
(Cont’d)
8. Trade Receivables (Cont’d)
Trade receivables that are neither past due nor impaired are creditworthy debtors with good
payment records with the Group.
As at 30 June 2015, trade receivables of RM12,952,387 (2014: RM4,767,923) were past due
but not impaired. These relate to a number of independent customers from whom there is no
recent history of default.
The trade receivables of the Group that are individually assessed to be impaired amounting to
RM2,561,393 (2014: RM2,030,129), related to customers that are in financial difficulties, have
defaulted on payments and / or have disputed on the billings. These balances are expected to
be recovered through the debts recovery process.
9. Other Receivables
Group
Company
2015
2014
RM
RM
2015
RM
2014
RM
4,882,141 -
2,614,220 104,421 253,150 -
253,150
-
Deposits Prepayments
4,882,141 961,833 2,651,039 2,718,641 713,750 1,745,534 253,150 64,500 489,006 253,150
64,500
96,936
Less: Accumulated impairment
losses
8,495,013 5,177,925 806,656 414,586
(61,641)
-
-
-
8,433,372 5,177,925 806,656 414,586
Other receivables
- Third parties
- Related parties
Annual Report 2015
85
(Cont’d)
9. Other Receivables (Cont’d)
Movements in the allowance for impairment losses of other receivables are as follows:
Group
2015
RM
2014
RM
At 1 July Impairment losses recognised
-
61,641 -
At 30 June 61,641 -
Other receivables that are individually determined to be impaired at the reporting date relate to
debtors that are in significant financial difficulties and have defaulted on payments.
10. Amounts Owing by/(to) Subsidiary Companies
(a) Amount owing by subsidiary companies
This represents unsecured, interest free advances and is repayable on demand.
86
Company
2015
2014
RM
RM
Amounts owing by subsidiary companies
Less: Accumulated impairment loss
At beginning of the financial year
Reversal during the financial year
6,699,230 -
-
At the end of the financial year
-
-
6,699,230
7,526,492
(b) Amount owing to subsidiary companies
This represents unsecured, interest free advances and is repayable on demand.
Annual Report 2015
7,526,492
4,352,469
(4,352,469)
(Cont’d)
11. Short-Term Investment
Group
2015
RM
2014
RM
Company
2015
2014
RM
RM
At cost:
AmIncome
20,714
20,173
9,854
9,557
Market value of the investment:
AmIncome
20,714
20,173
9,854
9,557
12. Share Capital
Group/Company
Number of shares Amount
2015
2014
2015
2014
Units
Units RM
RM
Ordinary shares of RM0.10 each
Authorised At 1 July/ 30 June Issued and fully paid
At 1 July Issuance of shares during the
financial year
At 30 June The holders of ordinary 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’s residual assets.
1,000,000,000 1,000,000,000 100,000,000 100,000,000
332,000,000 302,000,000 33,200,000 30,200,000
- 30,000,000 -
3,000,000
332,000,000 332,000,000 33,200,000 33,200,000
Annual Report 2015
87
(Cont’d)
13. Share Premium
The movements in the share premium are as follows:
Group
2015
RM
2014
RM
Company
2015
2014
RM
RM
1 July
Issue of new shares
Listing expenses
32,730,251 32,610,011 32,530,249 32,410,009
-
300,000 -
300,000
-
(179,760)
-
(179,760)
30 June 32,730,251 32,730,251 32,530,249 32,530,249
The share premium is not distributed by way of cash dividends and may be utilised in the manner
as set out in Section 60(3) of the Companies Act, 1965.
14. Capital Reserve
The capital reserve arose from the special issue of share to selected pioneer management team
of the Group and is not distributable by way of dividends.
15. Deferred Tax Liabilities
2015
RM
2014
RM
3,622
(3,622)
At 1 July Recognised in profit or loss
At 30 June -
5,244 5,244 -
The net deferred tax assets and liabilities shown on the statement of financial position after
appropriate offsetting are as follows:
88
Group
Group
2015
RM
Deferred tax liabilites
Deferred tax assets
7,304,941 (7,299,697)
5,244 Annual Report 2015
2014
RM
7,372,514
(7,372,514)
-
(Cont’d)
15. Deferred Tax Liabilities (Cont’d)
The estimated deferred tax (assets)/liabilities of the Group arising from temporary differences
recognised in the financial statements are as flows:
Group
2015
RM
2014
RM
7,252,321 52,620 7,372,514
(6,302,950)
(1,069,564)
Deferred tax liabilities
Differences between the carrying amount of property, plant and
equipment and their tax base
Other timing differences
Deferred tax assets
Unutilised capital allowance
Unused tax losses
(7,148,659)
(151,038)
5,244 Deferred tax assets have not been recognised in respect of the following temporary differences
due to uncertainty of its recoverability:
Group
2015
RM
2014
RM
1,138,595 595,213
39,343,199 33,170,998
8,811,688 16,847,189
49,293,482 50,613,400
Unabsorbed capital allowances
Unutilised tax losses
Other timing differences
-
Deferred tax assets have not been recognised in respect of these items as they may not have
sufficient taxable profits to be used to offset or they have arisen in subsidiary companies that
have a recent history of losses.
Annual Report 2015
89
(Cont’d)
16. Finance Lease Payables
Group
2015
RM
2014
RM
Minimum finance lease payments
Within one year
Later than one year and not later than two years
Later than two year and not later than five years 227,902 124,212 323,724 103,740
103,690
-
Less: Future finance charges
675,838 (63,536)
207,430
(9,615)
612,302 197,815
(b) Present value of minimum lease payments
Within one year
Later than one year and not later than two years
Later than two year and not later than five years 201,897 106,403 304,002 96,625
101,190
-
612,302 197,815
201,897 410,405 96,625
101,190
612,302 197,815
(a)
Present value of minimum lease payments
Analysed as:
Repayable within twelve months Repayable after twelve months The finance lease payables bear interest ranging from 4.70% to 5.19% (2014: 4.80%) per annum.
17. Trade Payables
90
The normal trade credit terms granted to the Group ranging from 30 to 45 days (2014: 30 to 45
days). Other credit terms are assessed and approved on a case by case basis.
Annual Report 2015
(Cont’d)
18. Other Payables
Other payables
Deposits Accruals Group
2015
RM
2014
RM
Company
2015
2014
RM
RM
4,642,876 6,250,793 222,181 300,715 12,077,530 20,348,912 54,626 -
277,540 101,543
332,202
16,942,587 26,900,420 332,166 433,745
Included in accruals of the Group is the accrual cost of recharge usage from a trade payable
amounting to RM8,811,688 (2014: RM17,040,988).
Included in the other payables of the Group is the amount due to the vendor for the purchase
of telecommunication network equipments which amounting to RM2,814,635 (2014:
RM4,280,342).
The foreign currency exposure profile of other payables is as follows:
United States Dollar (“USD”)
Group
2015
RM
2014
RM
2,814,635 4,280,342
19. Amount Owing to a Former Director
This represents unsecured, interest-free advance and is repayable on demand.
20. Revenue
Revenue of the Group represents the invoiced value of goods sold less discounts, commissions
and returns.
Annual Report 2015
91
(Cont’d)
21. Finance costs
Interest expenses on:
Finance lease liabilities
Group
2015
RM
2014
RM
18,466
26,064
22. Profit/(Loss) before taxation
Profit /(Loss) before taxation is carried at after charging/(crediting):
92
Auditors’ remuneration
- statutory audits
- current year
- underprovision in prior year
- non statutory audit
Depreciation of property,
plant and equipment
Directors’ remuneration
- Salary and other emoluments
- EPF (Gain)/Loss on disposal of
property, plant and equipment
Impairment on:
- trade receivables
- other receivables
- investments in subsidiary companies
Incorporation expenses
(Gain)/Loss on foreign exchange
- realised - unrealised
written off Rental of premises
Reversal of impairment on
- trade receivables
- amounts owing by subsidiary
companies
Interest income
Rental income
Annual Report 2015
Group
Company
2015
2014
RM
RM
2015
RM
2014
RM
175,500 5,000 5,000 4,559,436 154,000 25,000 -
4,366,876 49,500 -
-
-
45,000
25,000
-
1,640,497 136,500 1,260,505 114,000 314,900 -
384,709
-
(1,866)
19,052 -
-
2,561,393 61,641 -
-
190,354 1,776,329 -
-
2,750 72,540 -
-
40,000 -
-
202,000
-
(27,567)
(193,608)
51,292 302,984 -
-
-
280,084 1,976,093 -
1,021,212 -
-
-
(1,661,397)
(1,963,222)
-
-
-
(16,485)
(125,400)
-
(2,257)
(50,000)
-
(443)
-
-
(4,352,469)
(373)
-
(Cont’d)
23. Taxation
Group
2015
RM
2014
RM
Company
2015
2014
RM
RM
Tax expense recognised in
profit or loss:
Current tax provision
Under/(Over) provision in prior years
440,022 11,478 -
(18,412)
-
-
-
451,500 (18,412)
-
-
Deferred tax:
Relating to origination or
reversal of temporary differences
5,244 (3,622)
-
-
456,744 (22,034)
-
-
Malaysian income tax is calculated at the statutory tax rate of 25% (2014: 25%) of the estimated
assessable profit for the financial year.
A reconciliation of income tax expense applicable to profit/(loss) before taxation at the statutory
income tax rate to income tax expense at the effective income tax rate of the Group and of the
Company is as follows:
At Malaysian statutory tax
rate of 25% (2014: 25%)
Expenses not deductible for
tax purpose
Income not subject to tax
Utilisation of previously unrecognised
deferred tax assets
Deferred tax assets not recognised
Under/(Over) provision of
taxation in respect of prior year
Tax expense for the financial year
Group
2015
RM
2014
RM
Company
2015
2014
RM
RM
1,628,276 (1,598,506)
(922,569)
3,284,541
407,069 (399,627)
(230,642)
821,135
468,921 (100,745)
321,728 -
230,753 (111)
(723,752)
393,773 (402,366)
476,643 -
-
-
11,478 (18,412)
-
-
456,744 (22,034)
-
-
233,419
(1,054,554)
Annual Report 2015
93
(Cont’d)
23. Taxation (Cont’d)
The Group have unabsorbed capital allowances and unused tax losses carry forward, available
to off-set against future taxable profits as follows:
Unabsorbed capital allowances
Unused tax losses Group
2015
RM
2014
RM
30,197,124 26,098,245
39,524,660 37,148,269
69,721,784 63,246,514
24. Earnings/(Loss) Per Share
The basic earnings/(loss) per share is arrived at by dividing the Group’s profit attributable to
the owners of the Group of RM756,511 (2014: loss of RM1,253,343) by the following weighted
average number of ordinary shares in issue during the financial year.
Group
2015
RM
Profit/(Loss) attributable to ordinary shares
Weighted average number of ordinary shares
332,000,000 312,849,315
756,511 2014
RM
(1,253,343)
Basic earnings/(loss) per ordinary shares (in sen) 0.23 (0.40)
The fully diluted earnings /(loss) per share for the Group was not presented as there were no
dilutive potential ordinary shares outstanding at the end of the reporting period.
25. Staff Costs
94
8,736,519 Group
2014
RM
Staff costs (excluding Directors)
Included in the total staff costs above are contributions made to EPF under a defined contribution
plan for the Group and the Company amounting to RM714,087 (2014: RM531,442).
Annual Report 2015
2015
RM
6,816,488
(Cont’d)
26. Related Party Disclosures
(a) Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the
Group if the Group or the Company has the ability, directly or indirectly, to control the party
or exercise significant influence over the party in making financial and operating decisions,
or vice versa, or where the Group or the Company and the party are subject to common
control or common significant influence. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having
authority and responsibility for planning, directing and controlling the activities of the Group
either directly or indirectly. The key management personnel include all the Directors of the
Group and certain members of senior management and chief executive officers of major
subsidiary companies of the Group.
The Group has related party relationships with its subsidiary companies and key management
personnel.
(b) Significant related party transaction
Related party transactions have been entered into the normal course of business under
normal trade terms. In addition, the related party balances are disclosed in Notes 9, 10 and
19.
(c) Key management personnel include personnel having authority and responsibility for
planning, directing and controlling the activities of the entity.
The remunerations of the key management are as follows:
Short-term employee benefits
Group
2015
RM
2014
RM
1,244,040
856,881
Company
2015
2014
RM
RM
33,000
36,500
27. Segment Information
Segmental information are neither included in the internal management reports nor provided
regularly to the Management as the Group operates principally in Malaysia and in one major
business segment. Hence, there are no segmental information disclosures.
Annual Report 2015
95
(Cont’d)
28. Financial Instruments
(a) Classification of financial instruments
Financial assets and financial liabilities are measured on an ongoing basis either at fair value
or at amortised cost. The principal accounting policies in Note 3 describe how the classes of
financial instruments are measured, and how income and expense, including fair value gains
and losses, are recognised.
The following table analyses the financial assets and liabilities in the statements of financial
position by the class of financial instruments to which they are assigned, and therefore by
the measurement basis:
Group 2015
Financial Assets
Trade receivables
Other receivables
Cash and bank balances
Financial Liabilities
Trade payables
Other payables Finance lease payables
Available
for
sales
RM
Other
financial
liabilities at
Loans and amortised
receivables
cost
RM
RM Total
RM
- 24,294,219 - 5,782,333 20,714 -
- 9,286,052 - 24,294,219
- 5,782,333
-
20,714
- 9,286,052
20,714 39,362,604 - 39,383,318
-
-
-
- 40,876,381 40,876,381
- 16,942,587 16,942,587
-
612,302 612,302
-
- 58,431,270 58,431,270
96
Annual Report 2015
(Cont’d)
28. Financial Instruments (Cont’d)
(a) Classification of financial instruments (Cont’d)
Group 2014
Financial Assets
Trade receivables
Other receivables
Trade payables
Other payables Amount owing to a former
Director
Available
for
sales
RM
Other
financial
liabilities at
Loans and amortised
receivables
cost
RM
RM Total
RM
- 27,997,494 - 5,177,925 20,173 -
-
751,391 - 27,997,494
- 5,177,925
-
20,173
-
751,391
20,173 33,926,810 - 33,946,983
-
-
- 20,345,333 20,345,333
- 26,900,420 26,900,420
-
-
-
-
-
- 48,242,378 48,242,378
900,000 96,625 900,000
96,625
Company
2015
Financial Assets
Other receivables
Amounts owing by
-
317,650 -
317,650
-
9,854 -
6,699,230 -
5,599 -
-
-
6,699,230
9,854
5,599
9,854 7,022,479 -
7,032,333
Annual Report 2015
97
(Cont’d)
(a) Classification of financial instruments (Cont’d)
98
Company
2015
Other payables Amounts owing to
Available
for
sales
RM
Other
financial
liabilities at
Loans and amortised
receivables
cost
RM
RM Total
RM
-
-
332,166 332,166
-
-
1,556,546 1,556,546
-
-
1,888,712 1,888,712
2014
Financial Assets
Other receivables
Amounts owing by
Cash and bank balances -
317,650 -
317,650
-
9,557 -
7,526,492 -
62,219 -
-
-
7,526,492
9,557
62,219
9,557 7,906,361 -
7,915,918
Other payables Amounts owing to
-
-
433,745 433,745
-
-
1,004,286 1,004,286
-
-
1,438,031 1,438,031
Annual Report 2015
(Cont’d)
(b) Financial risk management objectives and policies
The Group’s and the Company’s financial risk management policy are to ensure that adequate
financial resources are available for the development of the Group’s and the Company’s
operation whilst managing their financial risks, including foreign currency exchange risk,
interest rate risk, credit risk, liquidity and cash flows risks. The Group and the Company
operate within clearly defined guidelines that are approved by the Board and the Group’s
and the Company’s policy are not to engage in speculative transactions.
The following sections provide details regarding the Group’s and the Company’s exposure
to the abovementioned financial risks and the objectives, policies and processes for the
management of these risks.
(i) Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to
a financial instrument fails to meet its contractual obligations. The Group’s exposure
to credit risk arises principally from its receivables from customers and deposits with
banks and financial institutions. The Company’s exposure to credit risk arises principally
from loans and advances to subsidiary companies and financial guarantees given to
banks for credit facilities granted to subsidiary companies.
The Group have adopted a policy of only dealing with creditworthy counterparties.
Management has a credit policy in place to control credit risk by dealing with creditworthy
counterparties and deposit with banks and financial institutions with good credit rating.
The exposure to credit risk is monitored on an ongoing basis and action will be taken for
long outstanding debts. The Company only provided loans and advances to subsidiary
companies and the results of the subsidiary companies are monitored regularly.
The Company provides unsecured loans and advances to subsidiary companies. It
also provides unsecured financial guarantees to banks for banking facilities granted to
certain subsidiary companies. The Company monitors on an ongoing basis the results of
the subsidiary companies and repayments made by the subsidiary companies.
The carrying amounts of the financial assets recorded on the statements of financial
position at the end of the financial year represents the Group’s and the Company’s
maximum exposure to credit risk. The Group has significant concentration of credit
risk arise from its dealing with five of the customers (2014: five), which in aggregate
represents 74% (2014: 53%) of the total trade receivables.
Annual Report 2015
99
(Cont’d)
(b) Financial risk management objectives and policies (Cont’d)
(i) Credit risk (Cont’d)
Trade receivables that are neither past due nor impaired
A significant portion of trade receivables that are neither past due nor impaired are
regular customers that have been transacting with the Group. The Group uses ageing
analysis to monitor the credit quality of the trade receivables. Any receivables having
significant balances past due or more than 90 days, which are deemed to have higher
credit risk, are monitored individually.
Trade receivables that are past due but not impaired
The Group believes that adequate impairment has been made in respect of these trade
receivables. This represents companies with ongoing business with the Group with
active transactions.
(ii) Liquidity risk
100
Liquidity risk refers to the risk that the Group or the Company will encounter difficulty
in meeting its financial obligations as they fall due. 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 funding requirements and liquidity risk is managed with
the objective of meeting business obligations on a timely basis. The Group finances its
liquidity through internally generated cash flows. The Group and the Company rely on
its creditors and shareholders for appropriate financial support to enable it to meet its
obligations as and when they fall due.
The following table analyses the remaining contractual maturity for non-derivative
financial liabilities. The tables have been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which the Group and the
Company can be required to pay.
Annual Report 2015
48,249,493
103,690
-
-
-
103,690
20,345,333 26,900,420
900,000
103,740 2014
Trade payables Other payables Amount owing to a former Director Finance lease payables
124,212 58,046,870
-
-
323,724 -
-
124,212
-
-
-
-
-
323,724 2 to 5 years RM 1 to 2
years RM On demand
or repayable within one year RM Group
2015
Trade payables 40,876,381
Other payables
16,942,587 Finance lease payables 227,902
(ii) Liquidity risk (Cont’d)
48,353,183 20,345,333
26,900,420 900,000 207,430 58,494,806 40,876,381
16,942,587
675,838 Total
contractual cash flow RM
48,343,568
20,345,333
26,900,420
900,000
197,815
58,431,270
40,876,381
16,942,587
612,302
Carrying
amount
RM
(Cont’d)
Annual Report 2015
101
(Cont’d)
(ii) Liquidity risk (Cont’d)
On demand
or repayable
within one
year
RM
Company
2015
Financial Liability
Other payables
332,166 Amounts owing by subsidiary companies 1,556,546 332,166
1,556,546
1,888,712 1,888,712
2014
Financial Liability
Other payables
433,745 Amounts owing by subsidiary companies 1,004,286 433,745
1,004,286
1,438,031
1,438,031 Carrying
amount
RM
(iii) Market risks
(a) Foreign currency exchange risk
The Group incur foreign currency risk on transactions that are denominated in
foreign currency. The currency giving rise to this risk is primarily the USD. The Group
has not entered into any derivative instruments for hedging or trading purposes as
the net exposure to foreign currency risk is not significant.
The carrying amounts of the Group’s foreign currency denominated financial
liabilities at the end of the reporting period are as follows:
Denominated
in USD
RM
Group
2015
Financial liability
Other payables 2,814,635
102
Annual Report 2015
(Cont’d)
(iii) Market risks (Cont’d)
(a) Foreign currency exchange risk (Cont’d)
Denominated
in USD
RM
Group
2014
Financial liability
Other payables
4,280,342
Foreign currency sensitivity analysis
Foreign currency risk arises from Group entities which have a RM functional
currency. The exposure to currency risk of Group entities which do not have a RM
functional currency is not material and hence, sensitivity analysis is not presented.
The following table demonstrates the sensitivity of the Group’s profit before tax to
a reasonably possible change in the USD exchange rates against RM, with all other
variables held constant.
Change
currency rate RM USD Strengthened 5%
Weakened 5% 2015 Effect on in profit Change before tax currency rate RM
RM
(140,732)
140,732
Strengthened 5%
Weakened 5% 2014
Effect on
in profit
before tax
RM
(214,017)
214,017
(b) Interest rate risk
The Group obtains financing through other financial institutions. The Group’s policy
is to obtain the financing with the most favourable interest rates in the market.
The Group constantly monitors its interest rate risk and does not utilise interest
swap contracts or other derivative instruments for trading or speculative purposes.
At the end of the reporting period, there were no such arrangements, interest rate
swap contracts or other derivative instruments outstanding.
Annual Report 2015
103
(Cont’d)
(iii) Market risks (Cont’d)
(b) Interest rate risk (Cont’d)
The carrying amounts of the Group’s financial instruments that are exposed to
interest rate risk are as follows:
Group
Fixed rate instruments
Financial liability
Finance lease payables 104
2015 RM 2014
RM
612,302 197,815
Fair value sensitivity analysis for fixed rate instruments
The Group do not account for any fixed rate financial liability at fair value through
profit or loss. Therefore, a change in interest rates at the end of the reporting period
would not affect profit or loss.
(c) Fair values of financial instruments
The carrying amounts of short term receivables and payables, cash and cash
equivalents and short term payables approximate their fair value due to the
relatively short term nature of these financial instruments and insignificant impact
of discounting.
The table below analyses financial instrument not carried at fair value for which fair
value is disclosed, together with their fair values and carrying amounts shown in the
statement of financial position.
Fair value of financial instruments
not carried at fair value
Level 1
Level 2 Level 3 RM RM
RM Group
2015
Financial asset
Short-term investment 20,714
-
-
Financial liability
Finance lease payables Annual Report 2015
-
405,696
-
Carrying
amount
RM
20,714
410,405
(Cont’d)
(c) Fair values of financial instruments (Cont’d)
Fair value of financial instruments
not carried at fair value
Level 1
Level 2 Level 3 RM RM
RM Group
2014
Financial asset
-
-
Financial liability
-
101,076
-
101,190
Company
2015
Financial asset
9,854
-
-
9,854
2014
Financial asset
-
-
9,557
Carrying
amount
RM
20,173
(i) Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date
of the event or change in circumstances that caused the transfer.
There were no transfers between levels during current financial period and previous
financial years.
(ii) Level 1 fair value
Level 1 fair value is derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
(iii) Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Annual Report 2015
105
(Cont’d)
(c) Fair values of financial instruments (Cont’d)
(iii) Level 2 fair value (Cont’d)
Non-derivative financial instruments
Fair value, which is determined for disclosure purposes, is calculated based on the
present value of future principal and interest cash flows, discounted at the market rate
of interest at the end of the reporting period.
(iv) Level 3 fair value
Level 3 fair values for the financial assets and liabilities are estimated using unobservable
inputs.
29. Capital Management
The Group’s Management manages its capital to maintain a strong capital base and safeguard the
Group’s ability to continue as a going concern and maintains an optimal capital structure, so as
to maximise shareholders value. The Management reviews the capital structure by considering
the cost of capital and the risks associated with the capital.
In order to maintain or adjust the capital structure, the Group may issue new shares or sell
assets to reduce debt.
Total capital managed at Group level, which comprises shareholders’ funds, cash and cash
equivalents and bank borrowings. The gearing ratios are as follows:
2015
RM
Group
2014
RM
Total bank borrowings
Less: Cash and cash equivalents
-
(9,306,766)
(771,564)
Net cash
(9,306,766)
(771,564)
Total equity 18,970,354 17,760,728
Gearing ratio
-* -*
* The gearing ratio is not applicable as the Group does not incur any borrowing during the
financial year.
There were no changes in the Group’s approach to capital management during the financial year.
The Group is not subject to any externally imposed capital requirements.
106
Annual Report 2015
(Cont’d)
30. Significant Events
(a) On 9 October 2014 and 8 December 2014, the Company announced to Bursa Malaysia
Securities Berhad, a proposal to implement a Corporate Exercise. The details of the corporate
exercise are as follows:
(i) proposed reduction of up to RM32,730,251 from the share premium account of the
Company pursuant to Sections 60(2) and 64(1) of the Companies Act, 1965;
(ii) proposed reduction of the issued and paid-up share capital of XOX pursuant to Section 64
of the Act involving the cancellation of RM0.05 of the par value of each existing ordinary
share of RM0.10 each in the Company (“XOX Share(s)” or Share(s)”) and thereafter,
the consolidation of every 2 ordinary shares of RM0.05 each into 1 new XOX Share of
RM0.10 each on an entitlement date to be determined and announced later;
(iii) proposed restricted issue of 190,000,000 new XOX Shares at an issue price of RM0.10
each per restricted issue share to parties to be identified later;
(iv) proposed renounceable rights issue of up to 356,000,000 new XOX Shares (“Rights
Share”) on the basis of 1 Rights Share for every 1 existing XOX Share held on an
entitlement date to be determined later (“Rights Entitlement Date”), together with up
to 356,000,000 free detachable new warrants (“Warrants”) on the basis of 1 Warrant for
every 1 Rights Share subscribed by the entitled shareholders;
(v) proposed establishment of a share issuance scheme of up to 30% of the issued and
paid-up share capital of XOX (excluding treasury shares, if any) at any point in time for
the eligible directors and employees of XOX and its subsidiaries;
(vi) proposed increase in the authorised share capital of XOX from RM100,000,000
comprising 1,000,000,000 XOX Shares to RM300,000,000 comprising 3,000,000,000
Shares ; and
(vii)proposed amendment to the Memorandum of Association of XOX to facilitate the
implementation of the Proposed Capital Reduction and Proposed IASC.
On 18 February 2015, the Company obtained the approval from Bursa Malaysia Securities
Berhad on the proposal. The circular was send to Shareholders on 6 March 2015 and
approval from Shareholders on the proposals was obtained on 30 March 2015 through the
Extraordinary General Meeting.
On 19 June 2015, the Company announced that the High Court of Malaya had on 5 June
2015 granted an order confirming the Proposed Par Value Reduction and Proposed Share
Premium Reduction, whereby the draft Court Order was duly approved on 19 June 2015.
The sealed order will be extracted and an office copy of the order will be lodged with the
Companies Commission of Malaysia for the Proposed Par Value Reduction and Proposed
Share Premium Reduction to take effect.
Annual Report 2015
107
(Cont’d)
30. Significant Events (Cont’d)
(b) On 12 December 2014, the Company acquired 59,999 ordinary shares of RM1.00 each of the
share capital of One XOX Sdn. Bhd. (“One XOX”) for a consideration of RM59,999. As a result
of this subscription, total equity held by XOX Bhd. (“XOX”) in One XOX is 60,000 ordinary
shares of RM1.00 each, representing 60% of the enlarged issued and paid up share capital
of One XOX with total cost of investment of RM60,000. The management has indicated that
they have control over One XOX by controlling the decision making power and also the right
to distribute return.
31. Subsequent Events
(a) On 11 September 2015, XOX Com Sdn. Bhd. (“XOX Com”), a wholly-owned subsidiary of XOX
Bhd (“XOX”) has subscribed for 450,000 new ordinary shares of RM1.00 each in XOX Mobile
Sdn. Bhd. (“XOX Mobile”) for total cash consideration of RM450,000, Consequently, XOX
Mobile remained as 100% subsidiary company of XOX Com.
(b) On 2 October 2015, XOX has disposed its entire fifty percent (50%) equity interest in XOX
Retail Sdn. Bhd. (“XOX Retail”) a subsidiary of the XOX, comprising 1 ordinary share of
RM1.00 each for a cash consideration of RM1.00. Consequently, XOX Retail has ceased to be
subsidiaries of XOX.
32. Date of Authorisation for Issue
108
The financial statements were authorised for issue by the Board of Directors in accordance with
a resolution of Directors on 27 October 2015.
Annual Report 2015
(Cont’d)
33. Supplementary Information On The Disclosure Of Realised And Unrealised Profit Or Losses
The following analysis of realised and unrealised accumulated losses of the Group and of the
Company as at the reporting date is presented in accordance with the directive issued by Bursa
Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No.
1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian
Institute of Accountants.
Group
2015
RM
2014
RM
Company
2015
2014
RM
RM
Total accumulated losses of the
Company and its subsidiary
companies
- realised - unrealised
(106,040,692)(106,676,112) (62,237,366) (61,314,797)
188,364 (302,984)
-
-
Less: Consolidation adjustments
(105,852,328)(106,979,096) (62,237,366) (61,314,797)
56,543,846 56,914,103 -
-
Total accumulated losses
The disclosure of realised and unrealised profits or losses above is solely for complying with
the disclosure requirements stipulated in the directive of Bursa Malaysia Securities Berhad and
should not be applied for any other purposes.
(49,308,482) (50,064,993) (62,237,366) (61,314,797)
Annual Report 2015
109
Analysis of Shareholdings
As at 29 October 2015
A. SHARE CAPITAL
Authorised Share Capital
Issued and Paid-Up Capital
Class of Shares
Voting Rights
:
:
:
:
RM100,000,000.00
RM33,200,000.00
Ordinary Shares of RM0.10 each
One vote for each ordinary share held
B. DISTRIBUTION OF SHAREHOLDINGS AS AT 29 OCTOBER 2015
SIZE OF SHAREHOLDINGS
NO. OF HOLDERS
1 – 99 15
100 – 1,000
283
1,001 – 10,000
1,348
10,001 – 100,000
1,813
100,001 to less than 5% of
issued shares
417
5% and above of issued shares
2
TOTAL 3,878
%
0.39
7.30
34.76
46.75
NO. OF SHARES
481
200,834
8,471,534
75,824,959
%
0.00
0.06
2.55
22.84
10.75
0.05
203,216,302
44,285,890
61.21
13.34
100.00
332,000,000 100.00
C. SUBSTANTIAL SHAREHOLDERS AND DIRECTORS’ SHAREHOLDINGS AS AT 29 OCTOBER 2015
Substantial Shareholders 1 Mara Incorporated Sdn Bhd
2 Ng Kok Heng
3 Wong Ah Yong No. of
Shares Held
23,119,890
17,474,060
17,920,000
Direct
Indirect
Percentage
No. of Percentage
Held Shares Held
Held
6.96
-
5.26
-
5.40
-
-
Directors’ interests in shares
Direct
Indirect
No. of Percentage
No. of Percentage
Shares Held
Held Shares Held
Held
1 Dato’ Seri Abdul Azim bin
Mohd Zabidi
902,760
0.27
-
2 Datuk Chai Woon Chet
2,500,000
0.75
-
3 Soo Pow Min -
-
322,510 (1)
0.10
4 Faidzan bin Hassan
3,000,000
0.90
-
5 Cheong Wai Loong
718,000
0.22
-
6 Hew Tze Kok
-
-
-
7 Datuk Lor Chee Leng -
-
-
(1) Deemed interested through direct holding of spouse.
110
Annual Report 2015
List Of Top 30 Largest Securities Holders
(According To The Register Of Depositors As At 29 October 2015)
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
Name Shares Held Percentage
MARA INCORPORATED SDN BHD 23,119,890
6.96
PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED
SECURITIES ACCOUNT FOR KONG GOON KHING (E-BRT)
21,16,000
6.38
TAN SIEW LI 16,571,700
4.99
NG KOK HENG 10,000,000
3.01
NG KOK HENG 7,474,060
2.25
FO JIE SONG 5,770,000
1.74
WONG AH YONG 5,500,000
1.66
AMBANK (M) BERHAD PLEDGED SECURITIES ACCOUNT FOR
WONG AH YONG (SMART)
5,000,000
1.51
JF APEX NOMINEES (TEMPATAN) SDN BHD PLEDGED
SECURITIES A/C FOR TEOW CHEE CHOW (STA2) 4,612,100
1.39
MAYBANK NOMINEES (TEMPATAN) SDN BHD PLEDGED
SECURITIES ACCOUNT FOR NEO CHING YUEN
3,600,000
1.08
HILMAN BIN TULOT
3,000,000
0.90
FAIDZAN BIN HASSAN 3,000,000
0.90
MURLIDHAR A/L DUHLANOMAL
2,250,000
0.68
CIMSEC NOMINEES (TEMPATAN) SDN BHD CIMB BANK FOR
WONG AH YONG (MY1278)
2,200,000
0.66
CITIGROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED
SECURITIES ACCOUNT FOR WONG AH YONG (470281)
2,000,000
0.60
WONG CHOON FUI 2,000,000
0.60
CHIA MIN HUAN 1,902,550
0.57
AMSEC NOMINEES (ASING) SDN BHD PLEDGED SECURITIES
ACCOUNT FOR LAU SIU YIN AMY 1,890,000
0.57
NOR AIDA BINTI MOHD HUSSIN 1,853,000
0.56
FADZULLAH BIN ARIFFIN 1,850,000
0.56
KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED
SECURITIES ACCOUNT FOR DATUK CHAI WOON CHET (021)
1,600,000
0.48
CHUNG SHAN KWANG 1,599,960
0.48
PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED
SECURITIES ACCOUNT FOR KONG GOON KHING (E-BRT)
1,520,000
0.46
HLB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES
ACCOUNT FOR WONG AH YONG 1,500,000
0.45
MAYBANK NOMINEES (TEMPATAN) SDN BHD FOR WONG AH YONG 1,500,000
0.45
YAP MUN HUAT 1,500,000
0.45
CHOONG KEAN LEANG
1,400,000
0.42
KHOO ENG YEOW 1,300,000
0.39
LAI YOKE HOONG 1,300,000
0.39
CHAN KIM HOON 1,250,000
0.38
Total 139,229,260
41.94
Annual Report 2015
111
Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Fifth (5th) Annual General Meeting of XOX Bhd (“XOX” or “the
Company”) will be held at Inspire I & II, Food Tree Café (under Only World Group), No. 10, Jalan
Pelukis U1/46, Kawasan Perindustrian Temasya, Shah Alam, Selangor Darul Ehsan on Thursday, 3
December 2015 at 9.00 a.m. for the purpose of transacting the following businesses:AGENDA
1. To receive the Audited Financial Statements for the financial year ended
30 June 2015 together with the Directors’ and Auditors’ Reports thereon.
Please refer to Note A.
2. To re-elect the following Directors retiring pursuant to the Company’s
Articles of Association:
i) Dato’ Seri Abdul Azim bin Mohd Zabidi (Article 84)
ii) Faidzan bin Hassan (Article 84)
Ordinary Resolution 1
3. To re-appoint Messrs UHY as Auditors of the Company and to authorise Ordinary Resolution 3
the Directors to fix their remuneration. SPECIAL BUSINESSES :
To consider and, if thought fit, to pass the following Resolution:
4. Authority To Directors To Allot And Issue Shares
112
“THAT subject to the Companies Act, 1965, and the approval of the
relevant government and/or regulatory authorities, the Directors be and
are hereby empowered pursuant to Section 132D of the Companies Act,
1965, to issue shares of the Company from time to time upon such terms
and conditions and for such purposes and to such person or persons
whomsoever as the Directors may deem fit provided that the aggregate
number of shares issued pursuant to this resolution shall not exceed
10% of the issued capital of the Company for the time being, subject
always to the approval of all the relevant regulatory bodies having been
obtained for such allotment and issue, and such authority shall continue
to be in force until the conclusion of the next annual general meeting
of the Company; and FURTHER THAT the Directors be and are hereby
empowered to obtain the approval for the listing and quotation for the
additional shares so issued on the Bursa Malaysia Securities Berhad
(“Bursa Securities”).”
Annual Report 2015
(Cont’d)
5. Proposed New Shareholders’ Mandate for Recurrent Related Party Ordinary Resolution 5
Transactions of a Revenue or Trading Nature (“Proposed Shareholders’
Mandate”)
“THAT, subject to compliance with all applicable laws, regulations and
guidelines, approval be and is hereby given to the Company and/or
its subsidiaries to enter into Recurrent Related Party Transactions of a
revenue or trading nature with related parties as set out in Section 2.4 of
the Circular to Shareholders dated 11 November 2015 for the purposes
of Rule 10.09 of the ACE Market Listing Requirements of Bursa Malaysia
Securities Berhad (“Listing Requirements”), subject to the following:
(i) the transactions are necessary for the day to day operations of the
Company’s subsidiary in the ordinary course of business, at arm’s
length, on normal commercial terms and are on terms not more
favourable to the related party than those generally available to the
public and not detrimental to minority shareholders of the Company;
(ii) the mandate is subject to annual renewal. In this respect, any
authority conferred by a mandate shall only continue to be in force
until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of
the Company, at which time it will lapse, unless by a resolution
passed at the meeting, the authority is renewed;
(b) the expiration of the period within which the next AGM after
the date it is required to be held pursuant to Section 143(1) of
the Companies Act, 1965 (“CA”) (but shall not extend to such
extension as may be allowed pursuant to Section 143(2) of CA);
or
(c) revoked or varied by resolution passed by the shareholders in a
general meeting,
whichever is the earlier.
(iii) disclosure is made in the annual report of the Company of the
breakdown of the aggregate value of the Recurrent Related Party
Transactions conducted pursuant to the mandate during the current
financial year, and in the annual reports for the subsequent financial
years during which a shareholder’s mandate is in force, where:
(a) the consideration, value of the assets, capital outlay or costs of
the aggregated transactions is equal to or exceeds RM1.0 million;
or
(b) any one of the percentage ratios of such aggregated transactions
is equal to or exceeds 1%,
Annual Report 2015
113
(Cont’d)
whichever is the lower;
and amongst other, based on the following information:(a) the type of the Recurrent Related Party Transactions made; and
(b) the names of the related parties involved in each type of the
Recurrent Related Party Transactions made and their relationships
with XOX Group.
AND THAT the Directors of the Company be and are hereby authorised to
complete and do all such acts and things to give effect to the transactions
contemplated and/or authorised by this Ordinary Resolution.”
6. PROPOSED GRANTING OF OPTIONS TO NG KOK HENG
“THAT the Directors of the Company be and are hereby authorised, at
any time and from time to time during the existence of the Company’s
Share Issuance Scheme (“SIS”), to offer and grant to Ng Kok Heng,
being the Chief Executive Officer of the Company, options to subscribe
for XOX shares and if such options are accepted and exercised, to allot
and issue such number of XOX shares as may be required to be issued
to him under the SIS, in accordance with the provisions of the By-Laws
governing the SIS, provided that not more than ten percent (10%) of the
total number of SIS Options shall be allocated to Ng Kok Heng, as long as
Ng Kok Heng either singly or collectively through persons connected with
him (as defined in the Listing Requirements of Bursa Securities), hold
twenty percent (20%) or more of the issued and paid-up share capital of
XOX (excluding treasury shares, if any) subject always to such terms and
conditions and/or adjustments which may be made in accordance with
the provisions of the By-Law.”
7. To transact any other business of the Company for which due notice shall
have been given.
By order of the Board,
Tan Tong Lang (MAICSA 7045482)
Chong Voon Wah (MAICSA 7055003)
Company Secretaries
Kuala Lumpur
11 November 2015
114
Annual Report 2015
(Cont’d)
Notes
A. This Agenda item is meant for discussion only as Section 169(1) of the Companies Act, 1965 and
the Company’s Articles of Association provide that the audited financial statements are to be
laid in the general meeting. Hence, it is not put forward for voting.
1. A member entitled to attend and vote at the Meeting is entitled to appoint a maximum of two
(2) proxies to attend and vote in his/her stead. A proxy may but need not be a member of the
Company. The provision of Section 149(1)(b) of the Act shall not apply to the Company.
2. Where a member appoints more than one proxy to attend the same meeting, the appointment
shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by
each proxy.
3. Where a member of the Company is an exempt authorised nominee defined under the Central
Depositories Act which is exempted from compliance with the provision of subsection 25A(1) of
the Central Depositories Act 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.
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or his
attorney duly authorized in writing or, if the appointer is a corporation, either under its Common
Seal or signed by attorney so authorised.
5. The Form of Proxy must be deposited at the Registered Office of the Company at Suite 10.03,
Level 10, The Gardens South Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur
not less than 48 hours before the time set for holding the meeting or any adjournment thereof.
6. For the purpose of determining members’ eligibility to attend this meeting, only members
whose names appear in the Record of Depositors as at 26 November 2015 shall be entitled to
attend this meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.
EXPLANATORY NOTES ON SPECIAL BUSINESS
Ordinary Resolution 4: Authority to Directors to Allot and Issue Shares
The Proposed Ordinary Resolution 4, if passed, is a renewal of General Mandate to empower the
Directors to issue and allot shares up to an amount not exceeding 10% of the issued share capital
of the Company for the time being for such purposes as the Directors consider would be in the
best interest of the Company. This authority, unless revoked or varied by the Company at a General
Meeting, will expire at the next Annual General Meeting.
The General Mandate will provide flexibility to the Company for any possible fund raising activities,
including but not limited to further placing of shares, for the purpose of funding future investment
project(s), working capital and/or acquisitions.
As at the date of this Notice, no new shares in the Company were issued pursuant to the General
Mandate granted to the Directors at the Fourth (4th) Annual General Meeting held on 4 December
2014 and which will lapse at the conclusion of the Fifth (5th) Annual General Meeting.
Annual Report 2015
115
(Cont’d)
Ordinary Resolution 5: Proposed New Shareholders’ Mandate for Recurrent Related Party
Transactions of a Revenue or Trading Nature
The Ordinary Resolution 5, if passed, will enable the Company and/or its subsidiaries to enter into
recurrent related party transactions of a revenue or trading nature which are necessary for the
day-to-day operations of the Company and/or its subsidiaries, subject to the transactions being
carried out in the ordinary course of business of the Company and/or its subsidiaries and on normal
commercial terms which are generally available to the public and not detrimental to the minority
shareholders of the Company. This authority, unless revoked or varied by the Company at a general
meeting, will expire at the next annual general meeting of the Company.
Ordinary Resolution 6: Proposed Granting of Options to Ng Kok Heng
The Ordinary Resolution 6, if passed, will enable the Company to offer and grant to Ng Kok Heng,
the Chief Executive Officer of the Company, options to subscribe for XOX shares and if such options
are accepted and exercised, to allot and issue such number of XOX shares as may be required to be
issued to him under the Company’s Share Issuance Scheme (“SIS”) approved by the shareholders at
the Extraordinary General meeting held on 30 March 2015, in accordance with the provisions of the
By-Laws governing the SIS (as may be amended, varied or supplemented from time to time).
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING
The Directors who are standing for re-election at the Fifth (5th) Annual General Meeting of the
Company are:
(i) Dato’ Seri Abdul Azim bin Mohd Zabidi
Article 84
(Ordinary Resolution 1)
(ii) Faidzan bin Hassan Article 84
(Ordinary Resolution 2)
The profile of the above Directors are set out on pages 3 to 4 of the Annual Report 2015. The details
of the interest of the above Directors in the securities of the Company or its related corporations are
disclosed in the Directors report on page 39 of the aforesaid Annual Report.
The details of the Directors’ attendance for Board Meetings are disclosed in the Statement on
Corporate Governance on page 19 of the Annual Report 2015.
The Fifth (5th) Annual General Meeting of the Company will be held at Inspire I & II, Food Tree Café
(under Only World Group), No. 10, Jalan Pelukis U1/46, Kawasan Perindustrian Temasya, Shah Alam,
Selangor Darul Ehsan on Thursday, 3 December 2015 at 9.00 a.m.
116
Annual Report 2015
XOX BHD (900384-X)
FORM OF PROXY
(Before completing this form please refer to the notes below)
I / We (Full Name in Block Letters)
NRIC No. / Passport No. / Company No.
of
being a member of XOX BHD, hereby appoint
NRIC No. / Passport
of
NRIC No. / Passport No.
and/or
of
or failing him/her, the CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the Fifth (5th)
Annual General Meeting of the Company to be held at Inspire I & II, Food Tree Café (under Only World Group), No. 10, Jalan
Pelukis U1/46, Kawasan Perindustrian Temasya, Shah Alam, Selangor Darul Ehsan on Thursday, 3 December 2015 at 9.00
a.m. or at any adjournment thereof.
My/Our Proxy(ies) is/are to vote as indicate below :No. Resolutions
Ordinary Resolutions
1. To re-elect Dato’ Seri Abdul Azim bin Mohd Zabidi as Director
2. To re-elect Faidzan bin Hassan as Director.
3. To re-appoint Messrs UHY as Auditors of the Company for the ensuing year and to authorise the
For
Against
Directors to fix their remuneration.
As Special Business :4.
5.
6.
To approve the ordinary resolution pursuant to Section 132D of the Companies Act, 1965.
To approve the Proposed Shareholders’ Mandate.
To approve the Proposed Granting of Options to Ng Kok Heng.
(Please indicate with a “√” in the space provided on how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will
vote or abstain at his/her discretion)
Dated this
day of
, 2015.
The proportions of my/our holdings
to be represented by my/our proxies
are as follows:First Proxy
No. of Shares: ……………
Signature/Common Seal of Member
NUMBER OF SHARES HELD
Percentage : ……………….%
CDS ACCOUNT NO.
Second Proxy
No. of Shares: ……………
Percentage : ……………….%
NOTES:
1.
A member entitled to attend and vote at the Meeting is entitled to appoint a maximum of two (2) proxies to attend and vote in his/her
stead. A proxy may but need not be a member of the Company. The provision of Section 149(1)(b) of the Act shall not apply to the
Company.
2.
Where a member appoints more than one proxy to attend the same meeting, the appointment shall be invalid unless he/she specifies
the proportion of his/her holdings to be represented by each proxy.
3.
Where a member of the Company is an exempt authorised nominee defined under the Central Depositories Act which is exempted
from compliance with the provision of subsection 25A(1) of the Central Depositories Act 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.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if
the appointer is a corporation, either under its Common Seal or signed by attorney so authorised.
5.
The Form of Proxy must be deposited at the Registered Office of the Company at Suite 10.03, Level 10, The Gardens South Tower, Mid
Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any
adjournment thereof.
6.
For the purpose of determining members’ eligibility to attend this meeting, only members whose names appear in the Record of
Depositors as at 26 November 2015 shall be entitled to attend this meeting or appoint proxy(ies) to attend and/or vote on his/her
behalf.
Affix Stamp
THE COMPANY SECRETARY
XOX BHD (900384-X)
Suite 10.03, Level 10, The Gardens South Tower
Mid Valley City, Lingkaran Syed Putra
59200 Kuala Lumpur

XOX -AR 2015 - News and Announcement

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