TIDMTEL
RNS Number : 1962B
Teliti International Ltd
28 March 2013
28 March 2013
Teliti International Ltd.
("Teliti" or "the Group")
Results for the year ended 30 September 2012
Teliti International Ltd (AIM: TEL), the datacentre and IT
business, announces its full year results for the twelve months
ended 30 September 2012.
Financial Summary*
-- Revenues were RM54.4m (2011: RM55.2m)
-- Loss before tax was RM1.7m (2011: RM1.5m profit), which
includes exceptional costs of RM3.9m in AIM listing expenses and
RM0.46m in share-based payment charges
-- Excluding exceptionals, profit before tax increased by 78% to
RM2.6m and net profit after tax by 50% to RM1.6m (2011:
RM1.08m)
-- Gross profit was RM6.1m (2011: RM6.7m)
-- Raised GBP1m (c.RM4.9m) via a subscription for 1,754,386 new
ordinary shares, representing approximately 6.93% of the enlarged
issued share capital
-- Total equity and liabilities at 30 September 2012 were RM267.6m (2011: RM75m)
* As stated in the Group's Admission Document, Teliti
International Ltd was incorporated on 13 November 2009 as a Cayman
Islands company to act as the holding company of Teliti Solutions
Sdn. Bhd., Teliti Services Sdn. Bhd. and Teliti Datacentres Sdn.
Bhd. (the "Subsidiaries") upon Teliti being admitted to AIM. Teliti
was admitted to AIM, and the Subsidiaries became subsidiaries of
the Group, on 3 November 2011. Prior to Teliti being admitted to
AIM, the Subsidiaries were subsidiaries of Teliti Computers Sdn.
Bhd. ("Teliti Computers"). The Group was also a subsidiary of
Teliti Computers during this period. As a result, the figures shown
for the Group for the years ended 30 September 2011 and 2012 are
consolidated on a pro forma basis.
Operational Summary
-- Teliti Datacentres Sdn. Bhd. ("Teliti Datacentres"):
o Construction of Teliti's state-of-the-art datacentre ("the
Datacentre") continued, with the superstructure now being
substantially complete
o Financial arrangements being made to enable installation of
key equipment in the M&E block
o Specification of the Datacentre has been upgraded to
accommodate current technological advancements and to enable two
rooms to be certified as Tier 4 capable
o Post period-end, the Group secured new funding from SME Bank
for Teliti Datacentres of RM18.5m and a government facilitation
fund of RM47m
-- Teliti Solutions Sdn. Bhd. ("Teliti Solutions") and Teliti
Services Sdn. Bhd. ("Teliti Services"):
o Completed a number of significant projects, such as for the
Accountant General of Malaysia and Tenaga Nasional Berhad,
Malaysia's largest electric utility company
o Awarded new contracts, including a further two-year project
extension with the Accountant General of Malaysia and Pertubuhan
Keselamatan Sosial (PERKESO), the Malaysian government's department
of social security
Commenting on the results, Haji Mohamed Nasir, Chief Executive
Officer of Teliti, said: "Teliti Solutions and Teliti Services
continued to win new projects, and progress was made on the
Datacentre, with the superstructure being substantially
complete.
"Looking ahead, Teliti Solutions and Teliti Services entered the
new financial year with a strong order book. We arecurrently in
negotiations with various parties, which are still ongoing, to
secure the most favourable financing solutions and the Board is
confident that the Group will be able to raise sufficient funding
in the second quarter of calendar year 2013 to secure the
completion of the Datacentre. As a result, we believe that the
fundamentals of the business are resilient and that Teliti's
prospects remain strong."
Enquiries
Teliti International Ltd
--------------------------------------- --------------------
Hj Mohamed Nasir Abdul Majid, Chief
Executive Officer
Rosmida Din, Chief Financial Officer +603 7873 7733
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Daniel Stewart and Company plc
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Antony Legge, James Felix +44 (0)20 7776 6550
--------------------------------------- --------------------
Luther Pendragon
--------------------------------------- --------------------
Harry Chathli, Claire Norbury +44 (0)20 7618 9100
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Operational Review
Teliti International Ltd was incorporated on 13 November 2009 to
act as the holding company of Teliti Solutions Sdn. Bhd., Teliti
Services Sdn. Bhd. and Teliti Datacentres Sdn. Bhd., which came
into force upon the Group being admitted to AIM on 3 November 2011.
Teliti's Admission represented an important step in the Group's
development, and one that will facilitate its strategy of further
market penetration in Malaysia and subsequently across Asia and the
Middle East.
Teliti Datacentres
During the year, work continued on the construction of the
Datacentre superstructure, which is now substantially complete. As
announced previously, the Group experienced delays in the
construction of the Datacentre superstructure, which were primarily
caused by delays in the release of funding from Teliti's financing
facility. During this delay,the Group drew up a new commissioning
plan to enhance the original specification.
Under this new commissioning plan, the first phase will now
include a room dedicated to the provision of cloud computing
services, which attract a higher margin than the basic co-location
services. Teliti is also upgrading two rooms in the Datacentre with
the intention that these will be certified as Tier 4 capable. Tier
4 services provide a higher level of security and protection and,
as such, also carry a higher margin. In addition, Teliti upgraded
the specification of the Datacentre to accommodate current
technological advancements and utilise the most up-to-date
hardware. Once completed, the Datacentre will be one of the largest
of its kind in Malaysia with Tier 3 datacentre classification. The
additional time required in the delivery of some of this equipment
was heavily outweighed by the benefits that the Datacentre will
receive in these enhanced specifications, but this did increase the
delays and incur extra costs.
With the Datacentre superstructure now substantially complete,
the Group is working on the final stages of development, which
include:
-- the installation of the M&E equipment to enable power generation;
-- testing and commissioning of the M&E equipment;
-- receipt of Certificate of Completion from the local authority; and
-- fit-out of co-location and cloud computing equipment.
Teliti is currently in negotiations with various parties, which
are still ongoing, to secure the most favourable financing
solutions and the Board is confident that the Group will be able to
raise sufficient funding in the second quarter of calendar year
2013 to secure the completion of the Datacentre. (This is covered
further in note 1.2 of the Notes to the Financial Statements.) The
Board remains confident of commencing operations and generating
revenues by the end of this calendar year.
The Group continues to receive demand for, and significant
interest in, the Datacentre. As a result, the Board remains
confident that, as soon as the Datacentre commences operations,
this interest will quickly convert into rental contracts.
Teliti Services and Teliti Solutions
Teliti Services and Teliti Solutions receive revenue via Teliti
Computers, which, as the parent company, invoices the contracted
customer for the work performed. Teliti Services and Teliti
Solutions, through Teliti Computers, remained active in completing
existing projects and winning new contracts during the year.
Teliti Services' largest customer in financial year 2012 in
revenue, earned through Teliti Computers, was Pertubuhan
Keselamatan Sosial (PERKESO), the Malaysian government's department
of social security, which awarded a three-year contract, with a
total value of RM13.0m, to supply server units and maintenance for
disaster recovery facilities. In 2012, Teliti Services received
RM9.2m revenue under this contract, representing 22% of the
subsidiary's total revenues. The Accountant General of Malaysia's
Government continued to be a significant customer (via Teliti
Computers), awarding a two-year extension contract for the
maintenance of its Financial Management and Accounting System
("GFMAS") following the successful completion in November 2011 of
the previous three-year project.
Teliti Solutions also worked on the GFMAS project and was
awarded part of the two-year contract extension through Teliti
Computers (Teliti Solutions will receive c.25% of the total
contract value, with the remainder being allocated to Teliti
Services). However, Teliti Solutions' largest customer (through
Teliti Computers) in 2012 was Tenaga Nasional Berhad, Malaysia's
largest electric utility company, for which the Group was appointed
for the design, supply, installation and commissioning of a supply
chain management (SCM) system. Tenaga Nasional Berhad contributed
RM8.9m to Teliti Solutions' revenues in 2012, representing 73%.
Financial Review
The Group
Teliti was incorporated on 13 November 2009 as a Cayman Islands
company to act as the holding company of Teliti Solutions, Teliti
Services and Teliti Datacentres upon the Group's admission to AIM.
Teliti commenced trading on AIM on 3 November 2011. Prior to the
Group being admitted to AIM, Teliti Solutions, Teliti Services and
Teliti Datacentres were subsidiaries of Teliti Computers, the
parent company of Teliti. As a result, for the year ended 30
September 2012, the Subsidiaries made an 11-month financial
contribution to the Group.
In financial year 2012, the Group's reported loss attributable
to shareholders amounted to RM2.9m (2011: RM1.09m profit). However,
this includes exceptional costs of RM3.9m in AIM listing expenses
and RM0.46m in share-based charges. Excluding these exceptional
costs, the Group achieved a profit before tax of RM2.6m and net
profit after tax of RM1.4m, an increase of 73% and 30% respectively
over the prior year.
During the year, the Group raised GBP1m (c.RM4.9m) via a
subscription by RBC Trustees (CI) Limited as Trustee of The
Karvandi Family Trust ("RBC"), an existing shareholder, for
1,754,386 new ordinary shares, representing approximately 6.93% of
the enlarged issued share capital (resulting in RBC having a total
holding of 2,424,448 ordinary shares, equating to 9.59% of the
Group's total issued share capital). The proceeds of the
subscription were used for general working capital and for
expanding the Group's international marketing activities.
Teliti Services
Revenue increased by 26% to RM41.5m compared with RM33.0m for
the prior year, and profit before tax was RM2.4m as opposed to
RM1.1m. This growth was primarily due to an increase in revenue and
decrease in administrative expenses compared to the prior year.
However, gross profit remained largely flat at RM4.38m compared
with RM4.45m for the prior year due to a large proportion of
revenue for the first half of 2012 being derived from a lower
margin contract. Overall, the Group remains positive on the outlook
for Teliti Services for financial year 2013.
Teliti Solutions
Revenue for Teliti Solutions was RM12.3m compared with RM21.8m
for the year ended 30 September 2011. Gross profit was RM1.6m and
profit before tax was RM0.9m (2011: RM2.2m and RM0.4m
respectively). The decline in gross profit was due to a decrease in
revenue and as a result of a significant proportion of revenue
being derived from a lower margin contract. However, there was an
increase in profit before tax due to a significant decrease in
administrative, selling and distribution expenses compared with the
prior year.
Teliti Datacentres
During the year ended 30 September 2012, Teliti Datacentres
earned RM0.57m from the rental income from its first customer at
the Customer Experience Centre, which is contracted for 386 sq ft
on a two-year term. The gross profit for the period was RM0.12m and
profit before tax was RM0.11m. This is significantly behind market
expectations due to the delay in the opening of the Datacentre. The
term loan obtained for funding of the Datacentre building has been
fully drawn down, which equated to RM52.7m in 2012 compared with
RM35.2m in 2011.
Outlook
Teliti Services and Teliti Solutions continue to progress and,
having started financial year 2013 with a confirmed order book of
RM25.2m, are on track to meet market expectations of approximately
10% growth for financial year 2013. Whilst the Datacentre is not
expected to generate any revenue in financial year 2013, it is
anticipated that the Datacentre will become fully operational and
commence generating incremental revenue in the fourth quarter of
calendar year 2013, with meaningful revenues occurring from the
first quarter of calendar year 2014. As a result, the Board remains
confident in Teliti's prospects for delivering growth and value to
shareholders.
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2012
Group Company
Notes 2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
--------- --------- -------- ----------------------
Revenue 4 54,383 55,177 - -
Cost of sales (48,240) (48,485) - -
Gross profit 6,143 6,692 - -
Other income 33 168 - -
Listing expenses 5 (3,869) - (3,869) -
Share-based payment
charge 17 (467) - (467) -
Administration expenses (3,537) (5,369) (839) (36)
--------- --------- -------- ----------------------
Operating (loss)/profit 5 (1,697) 1,491 (5,175) (36)
Finance costs - net 6 (9) (15) - -
--------- --------- -------- ----------------------
(Loss)/profit before
taxation (1,706) 1,476 (5,175) (36)
Taxation 7 (999) (400) - -
--------- --------- -------- ----------------------
(Loss)/profit for
year (2,705) 1,076 (5,175) (36)
--------- --------- -------- ----------------------
Other comprehensive
income - - - -
Total comprehensive
(loss)/income for
year (2,705) 1,076 (5,175) (36)
========= ========= ======== ======================
(Loss)/profit and
total comprehensive
income attributable
to:
Equity holders of
the company (2,705) 1,076 (5,175) (36)
(2,705) 1,076 (5,175) (36)
========= ========= ======== ======================
(Loss)/earnings per
share (Sen): 8
Basic and Diluted (12.06) 5.38
========= =========
The results shown above relate entirely to continuing
operations.
STATEMENTS OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2012
Group Company
Notes 2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
--------- -------- -------- -------
Non-current assets
Property, plant and
equipment 11 245,477 57,535 - -
Intangible assets 12 3,423 1,432 - -
Investment in subsidiaries 13 - - 7,760 -
Deferred tax assets 14 297 - -
Fixed deposits 509 500 - -
--------- -------- -------- -------
Total non-current
assets 249,706 59,467 7,760 -
--------- -------- -------- -------
Current assets
Trade and other receivables 15 371 1,298 - 1,000
Amounts due from
parent company 24 17,440 13,915 991 53
Cash and cash equivalents 107 4 71 -
Total current assets 17,918 15,217 1,062 1,053
--------- -------- -------- -------
Total Assets 267,624 74,684 8,822 1,053
========= ======== ======== =======
Equity and Reserves
Share capital 16 7,691 6,060 7,691 -
Share premium 5,208 - 5,208 -
Share-based payments
reserve 17 467 - 467 -
Other reserve 18 (3,060) (3,060) - -
Retained earnings/(losses) 8,317 11,022 (5,211) (36)
--------- -------- -------- -------
Shareholders' Equity 18,623 14,022 8,155 (36)
Non-current liabilities
Borrowings 19 82,045 36,450 - -
Total non-current
liabilities 82,045 36,450 - -
--------- -------- -------- -------
Current liabilities
Trade and other payables 20 134,442 6,941 667 1,089
Income tax payable 2,568 1,939 - -
Amounts due to parent
company 24 22,100 13,727 - -
Borrowings 19 7,846 1,605 - -
Total current liabilities 166,956 24,212 667 1,089
--------- -------- -------- -------
Total Liabilities 249,001 60,662 667 1,089
--------- -------- -------- -------
Total Equity and
Liabilities 267,624 74,684 8,822 1,053
========= ======== ======== =======
The financial statements were approved by Board of Directors on
28 March 2013 and signed on its behalf by:
Datuk Ithnin bin Yacob Hj. Mohamed Nasir bin Abdul Majid
Chairman Chief Executive Officer
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2012
Group Statement of Changes in Equity
Share-
based
Share Share payment Merger Retained Total
capital premium reserve reserve earnings equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
------------------------- ----------------------------- -------- -------- ------------------------------- --------
Balance at
30 September
2011 6,060 - - (3,060) 11,022 14,022
Share-based
payment
charge - - 467 - - 467
Issue of share
capital 1,631 5,708 - - 7,339
Share issue
costs - (500) - - - (500)
Total
comprehensive
income for
year - - - (2,705) (2,705)
------------------------- ----------------------------- -------- -------- ------------------------------- --------
Balance at
30 September
2012 7,691 5,208 467 (3,060) 8,317 18,623
========================= ============================= ======== ======== =============================== ========
Company Statement of Changes in Equity
Share-
based
Share Share payment Retained
capital premium reserve losses Total
RM'000 RM'000 RM'000 RM'000 RM'000
--------- --------- --------- --------- ---------
At date of incorporation - - - - -
Total comprehensive income
for 2011 - - - (36) (36)
--------- --------- --------- --------- ---------
Balance at 30 September
2011 - - - (36) (36)
Share-based payment charge - - 467 - 467
Issue of share capital 7,691 5,708 - - 13,399
Share issue costs - (500) - - (500)
Total comprehensive income
for 2012 - - - (5,175) (5,175)
--------- --------- --------- --------- ---------
Balance at 30 September
2012 7,691 5,208 467 (5,211) 8,155
========= ========= ========= ========= =========
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
Group Company
Notes 2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
------------ ----------- -------- ----------
Cash flows from operating
activities
Operating (loss)/profit (1,697) 1,491 (5,175) (36)
Adjustments for items
not requiring an outlay
of funds:
Depreciation 11 18 4 - -
Share-based payments
charge 17 467 - 467 -
------------ ----------- -------- ----------
Operating cash flow
before changes in working
capital (1,212) 1,495 (4,708) (36)
Decrease/(increase)
in trade and other
receivables 927 (1,298) 1,000 (1,000)
Decrease/(increase)
in net amounts due
from or to parent company 4,848 8,826 (2,638) (53)
Increase/(decrease)
in trade and other
payables 127,501 6,550 (422) 1,089
------------ ----------- -------- ----------
Cash from/(used in)
operations 132,064 15,573 (6,768) -
Interest paid (18) (15) - -
Income tax paid (667) (34) - -
Interest income 9 - - -
------------ ----------- -------- ----------
Net cash from/(used (6,768
in) operating activities 131,388 15,524 ) -
------------ ----------- -------- ----------
Investing activities
Purchase of property,
plant and equipment 11 (187,960) (51,825) - -
Placement of fixed
deposits (9) (500) - -
Payments for development
costs 12 (1,991) (1,432) - -
Net cash used in investing
activities (189,960) (53,757) - -
------------ ----------- -------- ----------
Financing activities
Issue of shares (net
of costs) 16 6,839 - 6,839 -
Issue of shares in
subsidiary prior to - 2,999 -
group reorganisation -
Finance lease payments (888) - - -
Drawdown of term loan 52,739 35,218 - -
Net cash from financing
activities 58,690 38,217 6,839 -
------------ ----------- -------- ----------
Increase/(decrease)
in cash and cash equivalents 118 (16) 71 -
Cash and cash equivalents
at beginning of year (11) 5 - -
Cash and cash equivalents
at end of year 107 (11) 71 -
============ =========== ======== ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1. Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated below.
1.1 Basis of preparation
The financial statements are prepared under the historical cost
convention and on a going concern basis.
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards, as
adopted by the European Union ("IFRS") and in accordance with
applicable company law. The parent company's financial statements
have also been prepared in accordance with IFRS.
The financial statements are presented in Malaysian Ringgits
which is the functional currency of the group. All values are
rounded to the nearest thousand Ringgits (RM'000) except when
otherwise indicated. The exchange rate of Malaysian Ringgits to
Pounds Sterling at 30 September 2012 was GBP1 : RM 4.9391 (RM1 :
GBP0.2025).
1.2 Going concern
During the year ended 30 September 2012 the group made a loss of
RM2.7 million which includes expenses of the AIM listing of RM3.9
million and a charge of RM0.467 million in respect of share-based
payments. At 30 September 2012 the group had cash and cash
equivalents of RM107,000 and pledged fixed deposits of RM509,000.
The operations of the group are currently being financed by funds
raised from equity and debt fund raisings.
During the year, work continued on the construction of the
datacentre superstructure, which is now substantially complete (95%
completion). The term loan obtained for funding of the datacentre
building has been fully drawn down.
At the date of approval of these financial statements, the group
has RM112.5 million of existing payables due and future capital
commitments to complete the datacentre and purchase equipment of
RM41.5 million. Current funding available for these payables and
commitments will come from SME Bank's facility of RM18.5 million
and a government facilitation fund of RM47 million, both of which
were secured subsequent to the year end. As per the Admission
Document of 3 November 2011, the group still has at its disposal
the Cisco Capital leases and credit facilities, pursuant to the
Master Lease Agreement. However, the group is seeking more cost
effective alternatives and the group is currently in negotiations
with various parties, which are still ongoing, to secure the most
favorable financing solutions for the group.
With Teliti's potential and historic track record of raising
finance the directors are confident that the group will be able to
raise sufficient funding in the second quarter of calendar year
2013 to secure the handover of the datacentre to enable the
datacentre to start to generate incremental revenue for the group
in financial year ending 30 September 2014.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1.2 Going concern (continued)
There is no guarantee that the remaining funds required of
RM88.5 million will become available and consequently a material
uncertainty exists that may cast significant doubt on the group's
ability to meet its commitments in relation to the completion of
the datacentre. The directors are however confident that funding
will be available and that the group will have sufficient cash to
fund its datacentre development to completion and to continue its
operations for the foreseeable future, and at least for one year
from the date of approval of these financial statements. The
financial statements have, therefore, been prepared on the going
concern basis and do not include the adjustments that would result
if the group was unable to continue in operation.
1.3 Segmental reporting
The activities of the group are divided into operating segments
in accordance with the requirements of IFRS 8 'Operating Segments'.
Operating segments are identified on the same basis that is used
internally to manage and report on performance and takes account of
the organisational structure of the group based on the various
services of the reportable segments. The activities of the group
are broken down into three operating segments: Services, Solutions
and Datacentre.
Internal management and reporting segment information is
prepared in conformity with the accounting policies adopted for
preparing and presenting the group financial statements.
There was no change in accounting policies compared to previous
periods. Inter-segment receivables and payables, provisions,
income, expenses and profits are eliminated in the column
"Eliminations".
Operating segments are reported in a manner consistent with the
internal reporting provided to the 'chief operating decision-maker'
who is responsible for allocating resources and assessing
performance of the operating segments and which has been identified
as the Board of Directors that make strategic decisions. In order
to assist the decision making process, various measures of segment
result and of segment assets have been set for the different
operating segments. The Services and Solutions segments are managed
on the basis of the profit after taxation. Capital expenditure on
non-current assets is the corresponding measure of segment assets
used to determine how to allocate resources. Further details on the
group's operating segments are shown in note 4 below.
1.4 Basis of consolidation and comparative information presented
The consolidated financial statements incorporate the financial
statements of the company and its subsidiary undertakings. The
financial information of the subsidiaries is prepared for the same
reporting period as the parent company using consistent accounting
policies. Intra-group sales, transactions and results are
eliminated on consolidation.
Business combinations involving entities under common
control
The company was incorporated on 13 November 2009 and separate
financial statements of the company have been prepared for the
financial period from 13 November 2009 (date of incorporation) to
30 September 2011. The company acquired Teliti Services, Teliti
Solutions, Teliti Datacentres and Teliti International (M) Sdn Bhd
(together "the Teliti Group") by means of a share-for-share
exchange as part of a reorganisation on its admission to AIM; this,
under IFRS3 'Business Combinations', has resulted in a business
combination involving entities under common control, where no
acquirer is identified.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1.4 Basis of consolidation and comparative information presented (continued)
As the company acquired other companies, by means of such a
share-for-share exchange, resulting in a business combination
involving entities under common control and where no acquirer is
identified, the "pooling of interests" method of consolidation has
been used. Therefore, the difference between the purchase
consideration and the carrying value of the share capital acquired
is adjusted to equity and the comparative consolidated figures are
stated on a combined basis.
As these are the group's first annual financial statements,
there are no group corresponding amounts. However, in order to
provide meaningful comparative information for the group as the
companies existed under common control before the combination,
corresponding amounts have been prepared as if the group had been
in existence prior to the date of combination on the admission to
AIM. The results shown in the consolidated income statement and the
cash flows shown in the consolidated cash flow statement for the
year ended 30 September 2011 therefore consists of the results and
cash flows of the Teliti Group for that year. The assets,
liabilities and equity shown in the consolidated statement of
financial position as at 30 September 2011 therefore consists of
the assets, liabilities and equity of the Teliti Group as at that
date as if they had been part of the Teliti International group as
at that date.
1.5 Property, plant and equipment
Property, plant and equipment are stated at cost less
depreciation. Depreciation is provided at rates calculated to write
off the cost less estimated residual value of each asset over its
expected useful life, as follows:
Computer, equipment and software Straight line at 20%
Property, plant and equipment are reviewed for impairment losses
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the carrying amount of the asset
exceeds its recoverable amount which is the higher of an asset's
net selling price and value in use.
The residual values, useful life and depreciation method are
reviewed at each financial year 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 are expected in the items of property, plant and
equipment.
Property, plant and equipment is 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 in the financial year in which the
asset is derecognised.
Capital work-in-progress consists of the datacentre building
under construction for intended use within the business. The amount
is stated at cost and no depreciation is charged until the
datacentre is completed.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1.6 Intangible assets
Development expenditures represent group staff and consultancy
costs relating to the development of the datacentre infrastructure
and operations and is recognised as an intangible asset when the
group can demonstrate:
-- The technical feasibility of completing the intangible asset
so that it will be available for use or sale;
-- Its intention to complete and its ability to use or sell the asset;
-- How the asset will generate future economic benefits;
-- The availability of resources to complete the asset;
-- The ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as
an asset, the cost model is applied requiring the asset to be
carried at cost less any accumulated amortisation and accumulated
impairment losses. Amortisation of the development asset will
commence when development is complete and the datacentre is
available for use. The development asset will be amortised over the
period of expected future economic benefit to the group.
Amortisation will be included in the income statement. During the
period of development, the asset is tested for impairment
annually.
1.7 Investments
Investments in subsidiary companies are included in the parent
company's statement of financial position at cost less provision
for impairment in value.
1.8 Impairment of assets
The group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value of money and the risks specific
to the asset. Impairment losses of continuing operations are
recognised in the income statement in those expense categories
consistent with the function of the impaired asset.
1.9 Cash and cash equivalents
Cash and cash equivalents are carried in the statement of
financial position at cost and comprise cash in hand, cash at bank,
deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less. Bank
overdrafts are included within borrowings in current liabilities on
the statement of financial position. For the purposes of the cash
flow statement, cash and cash equivalents also include the bank
overdrafts but does not include cash at bank that has been pledged
as security for bank facilities.
1.10 Trade receivables
Trade receivables are carried at original invoice amount less
provision made for impairment of these receivables. A provision for
impairment of trade receivables is established when there is
objective evidence that the group will not be able to collect all
amounts due according to the original terms of the receivables. The
amount of the provisions for impairment of receivables are included
in the income statement.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1.11 Leasing
Leasing where a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases (e.g. property leases). Payments made under operating leases
are charged to the income statement on a straight-line basis over
the period of the lease.
1.12 Deferred taxation
Deferred income taxes are provided in full, using the liability
method, for all temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
financial statements. Deferred income taxes are determined using
tax rates that have been enacted or substantially enacted and are
expected to apply when the related deferred income tax asset is
realised or the related deferred income tax liability is settled.
The principal temporary differences arise from depreciation on
property, plant and equipment and tax losses carried forward.
Deferred tax assets relating to the carry forward of unused tax
losses are recognised to the extent that it is probable that future
taxable profit will be available against which the unused tax
losses can be utilised.
1.13 Equity instruments
Ordinary shares are classed as equity. Proceeds received from
the issue of ordinary shares above the nominal value is classified
as share premium. Costs directly attributable to the issue of new
shares or share options are shown in equity as a deduction form the
proceeds.
1.14 Financial instruments
Financial assets and financial liabilities are recognised when
the company or group becomes a party to the contractual provisions
of the financial instrument. Financial assets and financial
liabilities are measured initially at fair value plus transactions
costs, except for financial assets and financial liabilities
carried at fair value through profit or loss, which are measured
initially at fair value. Financial assets and financial liabilities
are measured subsequently as described below.
For the purpose of subsequent measurement, financial assets
other than those designated and effective as hedging instruments
are classified into the following categories upon initial
recognition:
1. Loans and receivables;
2. Financial assets as fair value through profit or loss;
3. Held to maturity investments; and
4. Available-for-sale financial assets.
All financial assets except for those at fair value through
profit or loss are subject to a review for impairment at least at
each reporting date. Financial assets are impaired when there is
any objective evidence that a financial asset or a group of
financial assets is impaired.
A financial asset is derecognised where the contractual right to
receive cash flows from the asset has expired or when the financial
assets and all substantial risks and rewards are transferred.
At the reporting date, the company carried only loans and
receivables on its statements of financial position.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1.14 Financial instruments (continued)
Loans and receivables
Loan and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. After initial recognition these are measured at amortised
cost using the effective interest method, less provision for
impairment. Discounting is omitted where the effect of discounting
is immaterial. Gains or losses are recognised in profit or loss
when the loans and receivables are derecognised or impaired, and
through the amortisation process. The company's cash and cash
equivalents, trade and most other receivables fall into the
category of financial instruments.
Loans and receivables are classified as current assets, except
for those having maturity dates later than 12 months after the
reporting date which are classified as non-current.
Financial liabilities
After the initial recognition, a financial liability is
classified as a financial liability at fair value through profit
and loss or other financial liabilities measured at amortised cost
using the effective interest method. A financial liability is
derecognised when the obligation under the liability is
extinguished, discharged, cancelled or expired, or amortised. When
an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the
difference in the respective carrying amount is recognised in
profit or loss.
Other liabilities measured at amortised cost
The company's financial liabilities comprise borrowings and
other payables.
Borrowings are recognised initially at the proceeds received,
net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost using the effective yield method; any
difference between proceeds (net of transaction costs) and the
redemption value is recognised in the income statement over the
period of the borrowings. 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 year
end date.
1.15 Revenue recognition
Revenue is recognised to the extent that it is probable that
economic benefits will flow to the group and the revenue can be
reliably measured. Revenue is measured at the fair value of
consideration received and receivable.
Contract revenue represents revenue earned from information
technology related activities which includes providing information
technology and computer related services, and supplying of
computers and related equipment.
All of the revenue of Teliti Solutions and Teliti Services is
allocated to them from Teliti Computers who invoices the contract
customer for the work performed.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
1.15 Revenue recognition (continued)
The group's parent company, Teliti Computers, holds licenses and
agency agreements permitting it to bid for open tenders issued by
Malaysian government bodies, agencies and government linked
companies or other private companies. Those licenses and agency
agreements are only valid for Teliti Computers. The contracts are
allocated to Teliti Services and Teliti Solutions on a normal
commercial basis and any loss or cost overrun on each contract is
recognised in the company that has carried out the work. The work
is invoiced to the contract customer by Teliti Computers in
accordance with the licence agreement. All amounts due to/from
contract customers are recognised in the balance sheet of Teliti
Computers and collected by Teliti Computers.
Contract revenue in the consolidated statement of comprehensive
income is recognised upon delivery of goods and services rendered
to the contract customers of Teliti Computers. Foreseeable losses,
if any, are provided for in full as and when it can be reasonably
ascertained that the contract will result in a loss.
The contract revenue is recognised by reference to the stage of
completion of the transaction at the end of the reporting period.
The outcome of a transaction is estimated reliably and all the
following conditions are satisfied:
a) the amount of revenue can be measured reliably;
b) the economic benefits associated with the transaction flow to the company;
c) The costs incurred for the transaction and the costs to
complete the transaction can be measured reliably.
1.16 Financial and borrowing expenses
Financial expenses comprise interest payable on bank loans,
finance lease charges and other financial costs and charges.
Interest payable is recognised on an accrual basis.
Interest costs on borrowings to finance the construction of
property, plant and equipment are capitalised as part of the cost
of those assets during the period of time that is required to
complete and prepare the assets for their intended use.
All other borrowing costs are expensed in the year in which they
are incurred.
1.17 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the
group's entities are measured using the currency of the primary
economic environment in which the entity operates ("the functional
currency"). The consolidated financial statements are presented in
Malaysian Ringgit ("RM"), which is the group's presentation
currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the income statement.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
2. New IFRS Standards and Interpretations not yet adopted
At the date of approval of the financial information, a number
of new IFRS standards, amendments and interpretations were not yet
effective for the year ended 30 September 2012, and have not been
applied in preparing the consolidated financial information. None
of these are expected to have a material effect on the consolidated
financial information of the group in future years. These new
standards, amendments and interpretations are effective for
accounting periods beginning on or after the dates shown below:
Standard Description Effective
date
IFRS 10 Consolidated Financial Statements - a 1 Jan 2013
single consolidation model that identifies
control as the basis for consolidation
and applies to all types of entities
IFRS 11 Joint Arrangements -defines the accounting 1 Jan 2013
for joint ventures and joint operations
IFRS 12 Disclosure of Interests in Other Entities 1 Jan 2013
- combines disclosure requirements for
interests in subsidiaries, associates
and joint arrangements
IFRS 13 Fair Value Measurement - defines how fair 1 Jan 2013
value should be measured and disclosed
where required by other IFRS
IFRS 9 Financial Instruments -deals with classification 1 Jan 2015
and measurement of financial assets
IAS19 Employee Benefits - revisions to recognition, 1 Jan 2013
measurement, disclosure
(amended)
IFRS7/IAS Offsetting Financial Assets and Financial 1 Jan 2013/
32 Liabilities - new disclosure requirements
(amended) 1 Jan 2014
3. Significant accounting judgements and estimates
The preparation of financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Judgements
and estimates are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
The resulting accounting estimates may differ from the actual
results. The estimates and assumptions that have a risk of causing
material adjustment to the carrying amounts of assets and
liabilities within the future financial years are as follows:
Impairment of intangible assets
Determining whether intangible assets are impaired requires an
estimation of the recoverable amounts of estimated future cash
flows expected to arise from the assets.
Deferred tax
The group estimates future profitability in arriving at the fair
value of the deferred tax assets and liabilities.
Revenue recognition
The group uses the stage of completion method in accounting for
its contracts to deliver services. Use of the stage of completion
method requires the group to estimate the services performed to
date as a proportion of the total services to be performed.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
3. Significant accounting judgements and estimates (continued)
Depreciation, useful lives and residual values of property,
plant and equipment
The directors estimate the useful lives and residual values of
property, plant and equipment in order to calculate the
depreciation charges. Changes in these estimates could result in
changes being required to the annual depreciation charges in the
income statements and the carrying values of the property, plant
and equipment in the balance sheet.
Judgements
In the process of applying the group's accounting policies,
management has made the following significant judgments, apart from
those involving estimations, which may have a significant effect on
amounts recognised in the financial statements: impairment of
assets (including receivables and property, plant and
equipment).
4. Segment reporting
For the purposes of presenting segment information, the
activities of the group are divided into operating segments in
accordance with IFRS 8 'Operating Segments'. Operating segments are
identified on the same basis that is used internally to manage and
report on performance and takes account of the organisational
structure of the group based on the various services of the
reportable segments. Management regularly review segment
information based on the services provided to its customers such as
provision of IT software solutions specialising in SAP software
("Solutions"), reselling of IBM products, providing maintenance and
support services ("Services") and rental of data centre space
("Data Centre"). All operations are conducted in one geographical
segment, being Malaysia.
The Group's reportable segments under IFRS 8 are as follows:
For year ended
30 September Consolidated Consolidated
2012 Services Solutions Data Centre 2012 2011
RM'000 RM'000 RM'000 RM'000 RM'000
--------- ---------- ------------ ------------- -------------
Revenue 41,483 12,335 565 54,383 55,177
Cost of sales (37,103) (10,710) (427) (48,240) (48,485)
--------- ---------- ------------ ------------- -------------
Gross profit 4,380 1,625 138 6,143 6,692
Other operating
income - 8 25 33 168
Administrative
expenses (1,955) (694) (49) (2,698) (5,333)
Finance costs
(net) - - (9) (9) (15)
--------- ---------- ------------
Segment Result 2,425 939 105 3,469 1,512
--------- ---------- ------------
Corporate
costs (839) (36)
Listing expenses (3,869) -
Share-based
payment expenses (467) -
------------- -------------
(Loss)/profit
before tax (1,706) 1,476
Taxation (999) (400)
------------- -------------
(Loss)/profit
for year (2,705) 1,076
============= =============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
4. Segment reporting (continued)
For year ended Consolidated
30 September 2011 Services Solutions Data Centre 2011
RM'000 RM'000 RM'000 RM'000
--------- ---------- ------------ -------------
Revenue 33,011 21,791 375 55,177
Cost of sales (28,567) (19,637) (281) (48,485)
--------- ---------- ------------ -------------
Gross profit 4,444 2,154 94 6,692
Other operating income - 21 147 168
Administrative expenses (3,305) (1,813) (210) (5,328)
Finance costs (net) - - (15) (15)
--------- ---------- ------------
Segment Result 1,139 362 16 1,517
--------- ---------- ------------
Corporate costs (41)
Profit before tax 1,476
Taxation (400)
-------------
Profit for year 1,076
=============
Major customers
All of the revenue of Teliti Solutions and Teliti Services is
allocated from Teliti Computers who invoices the contract customer
for the work performed. Of the contracts allocated to the Services
and Solutions segments, two contract customers represented more
than 10% of total group revenues during the 2012 financial period.
The Services segment had one customer that represented 22% of that
segment's total revenues. One customer represented 72% of the
revenue of the Solutions segment and 11% of the Services
segment.
Segment profit represents the profit earned by each segment
without allocation of central administration costs, directors'
salaries, and finance costs. This is the measure reported to the
chief operating decision maker for the purposes of resource
allocation and assessment of segment performance.
The segment assets and liabilities at 30 September 2012 and
capital expenditure for the year ended are as follows:
At 30 September Data Central Consolidated
2012 Services Solution Centre assets 2012
RM'000 RM'000 RM'000 RM'000 RM'000
--------- --------- -------- ---------- -------------
Assets and liabilities:
Segment assets 13,697 2,757 250,108 1,062 267,624
Total assets 13,697 2,757 250,108 1,062 267,624
--------- --------- -------- ---------- -------------
Segment liabilities 2,163 677 245,486 675 249,001
Total liabilities 2,163 677 245,486 675 249,001
--------- --------- -------- ---------- -------------
Other segment information:
Amount due from
Teliti Computers 13,695 2,754 - 991 17,440
--------- --------- -------- ---------- -------------
Amount due to Teliti
Computers - - 22,097 3 22,100
--------- --------- -------- ---------- -------------
Depreciation - - 18 - 18
Capital expenditure - - 187,960 - 187,960
--------- --------- -------- ---------- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
4. Segment reporting (continued)
At 30 September Consolidated
2011 Services Solution Data Centre Central assets 2011
RM'000 RM'000 RM'000 RM'000 RM'000
--------- --------- ------------ ----------------- -------------
Assets and liabilities:
Segment assets 11,534 2,332 59,765 1,053 74,684
Total assets 11,534 2,331 59,765 1,053 74,684
--------- --------- ------------ ----------------- -------------
Segment liabilities 1,762 560 57,247 1,093 60,662
Total liabilities 1,762 560 57,247 1,093 60,662
--------- --------- ------------ ----------------- -------------
Other segment information:
Amount due from
Teliti Computers 11,532 2,330 - 53 13,915
--------- --------- ------------ ----------------- -------------
Amount due to Teliti
Computers - - 13,727 - 13,727
--------- --------- ------------ ----------------- -------------
Depreciation - - 4 - 4
Capital expenditure - - 54,647 - 54,647
--------- --------- ------------ ----------------- -------------
5. Operating (loss)/profit
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
-------- ------- ------- -------
The operating profit/(loss)
is stated
after charging/(crediting):
Audit fee:
- statutory audit 160 7 11 -
Depreciation (note 11) 18 4 - -
Listing expenses 3,869 - 3,869 -
Share-based payment (note
17) 467 - 467 -
Employment costs (note
9) 4,326 3,149 - -
Directors' remuneration
(note 10) 782 - 788 -
Loss/(gain) on exchange 10 (23) 10 -
Rental of equipment 235 - - -
======== ======= ======= =======
Listing expenses of RM3.869 million represents costs of the AIM
admission in November 2011.
6. Finance costs - net
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
Overdraft interest 18 15 - -
Finance income (9) - - -
------- ------- ------- -------
9 15 - -
======= ======= ======= =======
Interest of RM5,938,268 has been capitalised and included within
the capital work-in-progress (note 11) and is not included in
finance costs in the income statement.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
7. Taxation
The tax charge is made up as follows:
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
-------- -------- -------- ---------
Current tax:
Current year 925 395 - -
Prior year 371 5 - -
Deferred tax: current
year credit (297) - - -
999 400 - -
======== ======== ======== =========
The group's effective tax rate differs from the standard rate
of corporation tax in Malaysia of 25% (2011: 25%) as follows:
(Loss)/profit before
taxation (1,706) 1,476 (5,175) (36)
======== ======== ======== =========
Income tax on rate 25% (426) 369 (1,294) (9)
Tax effects of:
Non-allowance expenses 88 36 - -
Unrecognised tax losses 1,177 - 1,177 9
Share based payment charge 117 - 117 -
Deferred tax asset recognised (297) 3 - -
Utilisation of deferred
tax assets (31) (13) - -
Current year tax
expenses 628 395 - -
Under provision in prior
year 371 5 - -
Total tax charge 999 400 - -
======== ======== ======== =========
The key factors that may affect future tax charges include the
ability to claim capital allowances in excess of depreciation,
utilisation of unrelieved tax losses and changes in tax
legislation. The group expects to be able to claim capital
allowances in excess of depreciation in future years based on its
capital investment plans.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
8. (Loss)/earnings per share
The calculation for (loss)/earnings per share is shown
below:
2012 2011
(Loss)/profit after taxation attributable
to shareholders (RM'000) (2,705) 1,076
=========== =======
Weighted average number of ordinary shares
('000) 22,429 20,000
=========== =======
Basic (loss)/earnings per share (Sen) (12.06) 5.38
=========== =======
Diluted (loss)/earnings per share (Sen) (12.06) 5.38
=========== =======
The weighted average number of ordinary shares for 2012 and 2011
has been calculated on a "pooling of interests" accounting basis
using the number of shares in issue by the company at the date of
the share-for-share exchange of 20 million for 2011 and with the
number of shares issued by the company after the share-for-share
exchange for 2012.
The diluted weighted average number of shares in issue and to be
issued for 2012 is 22,607,428. The diluted loss per share for 2012
is the same as the basic loss per share because the conversion of
share warrants decreases the basic loss per share and is thus
anti-dilutive.
9. Employees' information
The employee costs of the group, including directors'
remuneration, was as follows:
Group
2012 2011
RM'000 RM'000
------- -------
Salaries and
wages 3,571 2,643
Social securities
contributions 123 48
Defined contribution
plan 224 201
Other benefits 408 257
4,326 3,149
======= =======
Number of staff at
year end 84 88
======= =======
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
9. Employees' information (continued)
The employee costs for Teliti Datacentres included in the
employee costs above, have been capitalised in Intangible Assets
(note 12). The costs will be amortised throughout the useful life
of the datacentre. The employee costs of Teliti Datacentres was as
follows:
2012 2011
RM'000 RM'000
-------- --------
Salaries and
wages 1,022 1,009
Social securities contributions 108 34
Defined contribution plan 6 -
Other benefits 309 166
1,445 1,209
======== ========
Number of staff 15 15
======== ========
10. Directors' emoluments
Group
2012 2011
RM'000 RM'000
-------- --------
Directors' remuneration
Fees, salaries and benefits 788 -
======== ========
The directors' remuneration is made up as follow:
Directors' Directors' Holiday
fees allowances benefit
RM'000 RM'000 RM'000
----------- ------------ ---------
Hj. Mohamed Nasir bin Abdul
Majid 250 250 50
Datuk Ithnin bin Yacob 76 - -
Musa bin Mohd Lazim 13 - -
Rosmida binti Din 13 - -
Maurice Keane 68 - -
Brian Rowbotham 68 - -
----------- ------------ ---------
488 250 50
=========== ============ =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
11. Property, plant and equipment
Group Computers,
equipment Capital Total
and work-in
software progress
RM'000 RM'000 RM'000
------------ ---------- ---------
Cost
At 1 October 2010 - 2,892 2,892
Additions 89 54,558 54,647
------------ ---------- ---------
At 30 September 2011 89 57,450 57,539
Additions - 187,960 187,960
------------ ---------- ---------
At 30 September 2012 89 245,410 245,499
------------ ---------- ---------
Accumulated depreciation
At 1 October 2010 - - -
Charge for year 4 - 4
------------ ---------- ---------
At 30 September 2011 4 - 4
Charge for year 18 - 18
------------ ---------- ---------
At 30 September 2012 22 - 22
------------ ---------- ---------
Net book value
At 30 September 2012 67 245,410 245,477
============ ========== =========
At 30 September 2011 85 57,450 57,535
============ ========== =========
The capital work-in-progress is the cost for construction of the
datacentre building. Included in capital work-in-progress is land
with a carrying amount of RM5,494,441 (2011: RM5,494,441) which has
been charged to a licensed bank as security for banking facility
granted to Teliti Datacentres.
The capital commitment at 30 September 2012 required to complete
the construction of the datacentre is RM41,541,824.
The group started the construction of a datacentre in January
2010. This project is expected to be completed in the fourth
quarter of 2013. The carrying amount of the datacentre at 30
September 2012 was RM245,410,000 (2011: RM57,450,000).
The amount of borrowing costs capitalised during the year ended
30 September 2012 was RM5,938,000 (2011: RM Nil). The rate used to
determine the amount of borrowing costs eligible for capitalisation
was 1.75% to 2.0% per annum plus BLR, which is the effective
interest rate of the specific borrowing.
The above amounts are the group's property, plant &
equipment. The company had no property, plant & equipment.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
12. Intangible assets - Development costs
Development costs consists of group staff costs and consultancy
costs relating to the development of the datacentre infrastructure
and operations. Investment will continue until the datacentre is
ready to commence operations. The costs capitalised to date are as
follows:
Group Company
2012 2011 2012 2011
RM '000 RM'000 RM'000 RM'000
--------- -------- -------- --------
Consultancy 45 - - -
Rental of office and
equipment 722 223
Staffs costs (note
9) 2,656 1,209 - -
At 30 September 3,423 1,432 - -
========= ======== ======== ========
Following initial recognition of the development expenditure as
an asset, the cost model is applied requiring the asset to be
carried at cost less any accumulated amortisation and accumulated
impairment losses. The datacentre is expected to commence
operations in the fourth quarter of financial year 2013 at which
time amortisation of the intangible asset will commence. The
development costs will be amortised throughout the datacentre's
economic useful life to the group, estimated to be 30 years.
The asset is assessed for impairment annually by considering the
technical feasibility of completing the asset, the intention to
complete and ability to use the asset as intended, how the asset
will generate future economic benefits and the availability of
resources to complete the asset. The directors are of the opinion
that no impairment is currently considered necessary.
13. Investments in subsidiaries
Company 2012
RM'000
--------
Cost of shares acquired:
At 1 October 2011 -
Acquisition of subsidiaries
on a share-for-share exchange:
Teliti Services Sdn Bhd 1,818
Teliti Solutions Sdn Bhd 2,121
Teliti Datacentres Sdn Bhd 2,121
--------
6,060
Additional investment in Teliti
Datacentres 1,700
At 30 September 2012 7,760
========
At 30 September 2012, the company had the following
subsidiaries:
Subsidiary companies Nature of business Country of Share capital
incorporation held
Teliti Services Sdn Bhd Hardware reseller Malaysia 100%
Teliti Solutions Sdn Bhd Software reseller Malaysia 100%
Teliti Datacentres Sdn Bhd Datacentres Malaysia 100%
Teliti International (M) Sdn Bhd Dormant Malaysia 100%
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
13. Investments in subsidiaries (continued)
The company's costs of investment of RM6,060,442 shown above
consists of the cost of acquiring Teliti Services Sdn Bhd, Teliti
Solutions Sdn Bhd and Teliti Datacentres Sdn Bhd in November 2011
by means of a share-for-share exchange. For this purpose 19,999,999
ordinary shares of US$0.10 each (RM0.303 using the exchange rate at
the date of share-for-share) were issued to Teliti Computers Sdn
Bhd (note 16). The directors have assessed the carrying value of
the investments in subsidiaries and in their opinion no impairment
is currently necessary.
14. Deferred tax assets
2012 2011
RM'000 RM'000
-------- --------
At 1 October - -
Income statement - credit (note 297 -
7)
-------- --------
At 30 September 297 -
======== ========
The deferred tax asset (net)
represents:
Deferred tax asset (300) -
Deferred tax liabilities 3 -
-------- --------
297
======== ========
The deferred tax assets and liabilities are provided for under
the liability method at the current tax rate in respect of all
temporary differences at the reporting date between the carrying
amount of an asset or liability in the statement of financial
position and its tax base including unabsorbed tax losses and
unutilised capital allowances. Deferred tax assets are recognised
for all deductible temporary differences, unutilised tax losses,
unabsorbed capital allowances and unused tax credits to the extent
that it is probable that taxable profit will be available against
which all the deductible temporary differences, unutilised tax
losses and unabsorbed capital allowances can be utilised.
15. Trade and other receivables
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
-------- -------- -------- --------
Trade receivables 51 53 - -
Other receivables 178 1,104 - 1,000
Deposits 142 141 - -
371 1,298 - 1,000
======== ======== ======== ========
The company's normal trade credit term is 30 days. Other credit
terms are assessed and approved on a case-by-case basis. The ageing
analysis of these trade receivables are as follows:
Gross Impaired Net
RM'000 RM'000 RM'000
-------- --------- -------
2012 - Not past due 51 - 51
2011 - Not past due 53 - 53
The net carrying amount of trade receivables is considered a
reasonable approximation of fair value.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
16. Share capital
2012 2011
RM'000 RM'000
------- -------
Allotted, called up and fully paid
25,284,386 Ordinary shares of US$0.10 each 7,691 -
======= =======
The movements in issued share capital of the company from the
date of incorporation to 30 September 2012 and the related share
premium arising was as follows:
Ordinary Share Share
shares
of capital premium
US$0.10 Nominal
value
Number RM'000 RM'000
----------- --------- ---------
Shares issued on incorporation
and at 1 October 2011 1 - -
* Shares issued on acquisition of subsidiaries 19,999,999 6,060 -
* Shares issued on conversion of loan stock 3,530,000 1,070 1,354
- Shares issued for cash 1,754,386 561 4,354
Costs of share issues - - (500)
At 30 September
2012 25,284,386 7,691 5,208
=========== ========= =========
Teliti International is a company incorporated in the Cayman
Islands with its registered office at Cricket Square, Hutchin
Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands. The
company had an authorised share capital of US$500,000 comprising
50,000,000 ordinary shares of US$0.10 each on incorporation. One
ordinary share was issued fully paid at par value of US$0.10 at
incorporation.
On 10 October 2011, the company issued US$800,000 loan notes
("Loan Notes"). The Loan Notes automatically converted into
3,530,000 ordinary shares of US$0.10 of the company on the date of
admission to the Alternative Investment Market (AIM) of the London
Stock Exchange.
On 26 October 2011, the authorised share capital of the company
increased from US$500,000 to US$5,000,000 by the creation of an
additional 49,500,000 ordinary shares of US$0.10 each.
On 26 October 2011, the company entered into a Share Purchase
Agreement with the Teliti Computers Sdn Bhd to acquire the entire
issued share capital of Teliti Services Sdn Bhd, Teliti Solutions
Sdn Bhd, and Teliti Datacentres Sdn Bhd, companies incorporated in
Malaysia, for a total consideration by way of issue of 19,999,999
ordinary shares of US$0.10 each of the company with a total nominal
value of RM6.060 million (note 13).
On 3 November 2011, the company was successfully admitted to
AIM, as a result the Loan Notes converted into 3,530,000 ordinary
shares of US$0.10 each of the company.
On 14 June 2012, the company issued an additional 1,754,386
ordinary shares of US$0.10 each to raise GBP1 million (c.RM4.9
million). This represented approximately 6.93% of the enlarged
issued share capital at that date.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
17. Share warrants
On 27 October 2011 the company entered into a deed of warrant
with Daniel Stewart, conditional upon admission to AIM, to
subscribe for 2% of the aggregate value of the shares of the
company at the exercise date. The shares are exercisable at any
time up to five years from the date of admission at the Placing
price of GBP0.58. These shares were granted for services rendered
relating to the AIM Admission. The warrant has not yet been
exercised. The number of shares expected to be issued at the year
end is 505,688 (2% of the issued share capital).
Date of grant Number granted Fair Value Expiry date
27 October 2011 505,688 18p 27 October 2016
Using the Black Scholes method, the fair value of these warrants
was calculated to be RM466,667 and the charge was shown as an
expense in the income statement.
Share price at grant date GBP0.58
Exercise price GBP0.58
Expected volatility, per cent 29.8%
Warrant life, years 5
Expected dividends, per cent 0
Risk free interest rate, per cent 3%
Expected volatility is estimated by considering the company's
share price since admission to AIM.
Pursuant to a warrant deed dated 27 October 2011 (the "Warrant
Deed") the company has created
and issued warrants to Teliti Computers for it to subscribe for
such number of Ordinary Shares at the Admission Price (as defined
in the Warrant Deed) as shall equate to up to 25 per cent of the
fully diluted issued share capital of the company as at Admission.
The Teliti Computer warrants shall vest and become exercisable in
two instalments, the first being for 10 per cent of the fully
diluted share capital of the company as at Admission, subject to
the share price of the company (based on a five day average price)
increasing by not less than 50 per cent more than the Admission
Price at any time during the 18 month period following Admission.
The second instalment of the Teliti Computer warrants, shall be for
an additional 15 per cent of the fully diluted share capital of the
company as at Admission if the share price of the company (based on
a five day average price) increases by not less than 100 per cent
more than Admission Price at any time during the 30 month period
following Admission. If, in respect of the first instalment, the
share price increase is not attained during the 18 month period and
therefore the respective instalment has not vested at that time,
such instalment shall vest at the same time as the second
instalment if the share price increase required is attained at any
time during the relevant 30 month period. As these warrants were
not granted in respect of the supply of goods or services, there is
no income statement effect in the group accounts.
Pursuant to a warrant deed dated 30 August 2012 (the "Karvandi
Warrant Deed") the company has created and issued warrants to RBC
Trustees (C1) Limited as trustee of the Karvandi Family Trust to
subscribe for 3,070,175 Ordinary Shares at 12.5p. The warrants are
exercisable within 5 years of the date of the Karvandi Warrant
Deed. As these warrants were not granted in respect of the supply
of goods or services, there is no income statement effect in the
group accounts.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
18. Other reserve
The other reserve arose from the acquisition of Teliti Services,
Teliti Solutions, and Teliti Datacentres during the financial year
by a share-for-share exchange, as follows:
2012 2011
Pooling of interests reserve RM'000 RM'000
-------- --------
Nominal value of shares issued by the company
(note 16) 6,060 6,060
Less: nominal values of share capital of
subsidiaries acquired (3,000) (3,000)
-------- --------
3,060 3,060
======== ========
As the company acquired its subsidiary companies, by means of a
share-for-share exchange, resulting in a business combination
involving entities under common control and where no acquirer is
identified, the "pooling of interests" method of consolidation has
been used. Therefore, the difference between the purchase
consideration and the carrying value of the share capital and any
share premium acquired is adjusted to equity and the comparative
consolidated figures are stated on a combined basis.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
19. Borrowings
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
------- ------- ------- -------
Long term borrowings
Secured
Term loan 81,098 35,218 - -
Finance lease liabilities 947 1,232 - -
------- ------- ------- -------
82,045 36,450 - -
------- ------- ------- -------
Short term borrowings
Secured
Term loan 6,859 - - -
Finance lease liabilities 987 1,590 - -
Bank overdraft - 15 - -
------- ------- ------- -------
7,846 1,605 - -
------- ------- ------- -------
Total borrowings 89,891 38,055 - -
======= ======= ======= =======
The term loan and bank overdraft are secured by the
following:-
Ø A legal charge over a piece of vacant land held under Title No
HS(D) 173679, PT 29470 and HS(D) 173680, PT29471 in Bandar Baru
Enstek, Mukim Labu, Daerah Seremban, Negeri Sembilan;
Ø Pledge against a fixed deposit amounting to RM500,000 for
upfront one (1) month interest;
Ø Corporate guarantee for RM111,506,741 has been executed by the
following corporate shareholders of the company:
Corporate Shareholders Amount
Teliti Computers Sdn Bhd RM111,506,741
NTH Technology Sdn Bhd (shareholder RM111,506,741
of Teliti Computers)
Ø Joint & Several guarantee for RM111,506,741 is executed by
the following persons in their personal capacity:
Director
Mohamed Nasir Bin Abdul
Majid
Ithnin Bin Yacob
The borrowings bear interest rates ranging from 1.75% to 2.0%
per annum plus BLR.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
19. Borrowings (continued)
Details of the terms of repayment on the term loan are as
follow:-
Number of
monthly Monthly Date of commencement
instalments instalment of repayment 2012 2011
RM'000 RM'000 RM'000
Term loan
1 120 61 1 Feb 2013 4,945 4,945
Term loan
2 120 825 1 Feb 2013 67,000 30,273
Term loan
3 120 456 TBC 16,012 -
Finance lease liabilities
Group Company
2012 2011 2012 2011
RM RM RM RM
------ ------ ------ ------
Payables within 1 year 1,167 1,793 - -
Payables after 1 year
but no later than 5
years 1,000 1,280
2,165 3,073 - -
Less: interest charge (231) (251) - -
------ ------
1,934 2,822 - -
====== ====== ====== ======
Present value of finance
lease payables:
- within 1 year 987 1,590 -
- within 1 year but
not later than 5
years 947 1,232 -
1,934 2,822 -
====== ====== ====== ======
The finance lease liabilities are secured on the assets
leased.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
20. Trade and other payables
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
-------- ------- ------- -------
Accruals 715 38 667 1,089
Other payables 133,727 6,903 - -
-------- ------- ------- -------
134,442 6,941 667 1,089
======== ======= ======= =======
Other payables mainly consisted of construction costs payable to
main contractors for the construction of the datacentre building.
The significant increase as at 30 September 2012 was due to the
delayed payments by the group's debt provider to the main
contractor. After the year end date, the debt provider released
RM21 million to the main contractor to settle certain bills.
The directors consider that the carrying value of trade and
other payables approximates to their fair value.
21. Financial instruments
The table below provides an analysis of financial instruments
categories as follows:
(a) Loan and receivables (L&R) and
(b) Other financial liabilities measured at amortised cost
(AC)
Carrying
amount L & R AC
2012 RM'000 RM'000 RM'000
--------- -------- --------
Financial assets
Trade receivables 51 51 -
Other receivables 319 319 -
Cash and bank balances 107 107 -
Amount owing from Teliti
Computers 19,140 191,140
Fixed deposits with licensed
banks 509 509 -
--------- -------- --------
20,126 20,126 -
--------- -------- --------
Financial liabilities
Other payables and accrued
expenses 134,442 - 134,442
Amount owing to Teliti
Computers 22,100 - 22,100
Finance lease payables 1,934 - 1,934
Bank overdraft - - -
Bank borrowings 87,957 - 87,957
--------- -------- --------
246,433 - 246,433
--------- -------- --------
The group has fixed deposits of RM509,000 pledged as security
for bank facilities. As these are pledged accounts they are not
included in the cash and cash equivalents in the consolidated
statement of cash flows and are shown separately on the
consolidated statement of financial position.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
21. Financial instruments (continued)
Carrying
amount L & R AC
2011 RM'000 RM'000 RM'000
--------- -------- -------
Financial assets
Trade receivables 53 53 -
Other receivables 1,245 1,245 -
Cash and bank balances 4 4 -
Amount due from Teliti
Computers 13,915 13,915 -
Fixed deposits with licensed
banks 500 500 -
--------- -------- -------
15,717 15,717 -
--------- -------- -------
Financial liabilities
Other payables and accrued
expenses 6,941 - 6,941
Amount due to Teliti Computers 13,727 - 13,727
Finance lease payables 2,822 - 2,822
Bank overdraft 15 - 15
Bank borrowings 35,218 - 35,218
--------- -------- -------
58,723 - 58,723
--------- -------- -------
Financial risk management objectives and policies
Financial risks
The group is exposed to financial risks arising from its
operations and the use of financial instruments. Financial risk
management policy is established to ensure that adequate resources
are available for the development of the group's business whilst
managing its credit risk, liquidity risk and interest rate risk.
The group operates within clearly defined policies and procedures
that are approved by the board of directors to ensure the
effectiveness of the risk management process.
The main areas of financial risks faced by the group and the
policy in respect of the major areas of treasury activity are set
out as follows:
(a) 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. It is the group's policy to enter into
financial instrument with a diversity of creditworthy
counterparties. The group does not expect to incur material credit
losses of its financial assets or other financial instruments. It
is the group's policy that all customers who wish to trade on
credit terms are subject to credit verification procedures.
Concentration of credit risk exists when changes in economic,
industry and geographical factors similarly affect the group of
counterparties whose aggregate credit exposure is significant in
relation to the group's total credit exposure.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
21. Financial instruments (continued)
(b) Liquidity risk
Liquidity risk is the risk that the group will not be able to
meet their financial obligations as they fall due to shortage of
funds. In managing its exposures to liquidity risk arises
principally from its various payables, the group maintains a level
of cash and cash equivalents and bank facilities deemed adequate by
the management to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when they fall
due.
The group aims at maintaining a balance of sufficient cash and
deposits and flexibility in funding by keeping diverse sources of
committed and uncommitted credit facilities from various banks.
The following are areas of the group's exposure to liquidity
risk:
Total Within 1 2 to 5 years
year
2012 RM'000 RM'000 RM'000
--------- --------- -------------
Unsecured
Other payables 134,442 134,442 -
Amount owing to parent
company 22,100 22,100 -
Finance lease payables 1,934 987 947
--------- --------- -------------
158,476 157,529 947
Secured
Bank borrowings 87,957 6,859 81,098
246,433 164,388 82,045
========= ========= =============
2011
Unsecured
Other payables 6,941 6,941 -
Amount owing to parent
company 13,727 13,727 -
Finance lease payables 2,822 1,590 1,232
--------- --------- -------------
23,490 22,258 1,232
Secured
Bank borrowings 35,218 - 35,218
Bank overdraft 15 15 -
--------- --------- -------------
58,723 22,273 36,450
========= ========= =============
Fair value of financial instruments
The carrying amounts of short term receivables and payables and
cash and cash equivalents approximate their fair value due to the
relatively short term nature of these financial instruments and
insignificant impact of discounting.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
21. Financial instruments (continued)
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of the group's financial instruments will fluctuate
because of changes in market interest rates.
The group's variable rate borrowings are exposed to a risk of
change in cash flows due to changes in interest rates. Short term
receivables and payables are not significantly exposed to interest
rate risk.
The group's interest rate management objective is to manage the
interest expenses consistent with maintaining an acceptable level
of exposure to interest rate fluctuation. In order to achieve this
objective, the group targets a mix of fixed and floating debt based
on assessment of its existing exposure and desired interest rate
profile.
The interest rate profile of the group's significant
interest-bearing financial instruments, based on carrying amount as
at end of the reporting year were as follows:
2012
RM'000
-------
Floating rate instrument
Financial assets
Fixed deposits with licensed banks 509
=======
Financial liabilities
Borrowings 87,957
Fixed rate instrument
Financial liabilities
Finance lease payables 1,934
=======
The group does not account for any fixed rate financial assets
and liabilities through profit or loss, and the group does not
designate derivatives as hedging instruments under a fair value
hedge accounting model. Therefore, a change in interest rate at the
reporting date would not affect profit and loss.
The following table illustrates the sensitivity of profit and
equity to a reasonable possible change in interest rates of +/- 50
basis point ("bp"). These changes are considered to be reasonably
possible based on observation of current market conditions. The
calculations are based on a change in the average market interest
rate for each period, and the financial instruments held at each
reporting date that are sensitive to changes in interest rates. All
other variables are held constant.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
21. Financial instruments (continued)
Profit
for the
year Equity
RM RM
+50 bp +50 bp
--------- ---------
Floating rate instruments
30 September 2012 +437,243 +437,243
========= =========
Fair value of financial instruments
The fair value of other financial assets and liabilities,
together with the carrying amounts shown in the statement of
financial position are as follows:
Carrying
amount Fair value
RM'000 RM'000
--------- -----------
Borrowings 87,957 72,360
========= ===========
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.
Capital management
The group's objectives when managing capital is to maintain a
strong capital base and safeguard the group's ability to continue
as a going concern, so as to maintain investor, creditor and market
confidence and to sustain future development of the business.
The group sets the amount of capital in proportion to its
overall financing structure, i.e. equity and financial liabilities.
The group manages the capital structure and makes adjustments to it
in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the group may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debts.
Total capital managed in the group is the shareholders' funds as
shown in the statement of financial position.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
22. Capital commitments
Group 2012 2011
RM'000 RM'000
--------- ----------
Capital expenditure for the construction
on the datacentre:
- Approved and contracted for
property, plant and equipment 41,541 212,202
========= ==========
The company had no capital commitments at 30 September 2012.
23. Financial commitments
At the year end date the group had the following outstanding
commitments for future minimum lease payments under non-cancellable
operating leases, which fall due:
Land and buildings Plant and machinery
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
Group
Within one year - - 930 1,590
In two to five years - - 947 1,232
----------- ---------- ---------- ----------
- - 1,877 2,822
=========== ================================= ========== ==========
24. Amounts due from/(due to) ultimate parent company
The amount due from/(due to) the ultimate parent company of the
group, Teliti Computers Sdn Bhd ("Teliti Computers"), as at 30
September 2012 is as follows:
Group Company
2012 2011 2012 2011
RM'000 RM'000 RM'000 RM'000
--------- --------- ------- -------
Amount due from Teliti
Computers:
* Teliti International 991 53 991 53
* Teliti Solutions 2,755 2,330 - -
* Teliti Services 13,694 11,532 - -
--------- --------- ------- -------
Total amount due from
Teliti Computers 17,440 13,915 991 53
--------- --------- ------- -------
Amount due to Teliti
Computers
* Teliti Datacentres (22,097) (13,727) - -
* Teliti International (M) S.B (3) - - -
--------- --------- ------- -------
Total amount due to
Teliti Computers (22,100) (13,727) - -
--------- --------- ------- -------
Net balance (due to)/due
from Teliti Computers (4,660) 188 991 53
========= ========= ======= =======
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
24. Amount due from/(due to) ultimate parent company (continued)
Teliti Computers is the ultimate parent company of the group as
it owns 79% of Teliti International.
Teliti Computers holds licenses and agency agreements permitting
it to bid for opened tenders issued by Malaysian government bodies,
agencies and government linked companies or other private
companies. Those licenses and agency agreements are only valid for
Teliti Computers.
All of the revenue of Teliti Solutions and Teliti Services is
allocated to them from Teliti Computers which invoices the contract
customer for the work performed.
The contracts are allocated to Teliti Services and Teliti
Solutions on a normal commercial basis and any loss or cost overrun
on each contract is recognised in the company that has carried out
the work. The work is invoiced to the contract customer by Teliti
Computers in accordance with the licence agreement. All amounts due
to/from contract customers are recognised in the balance sheet of
Teliti Computers and collected by them.
All other operating income is collected by Teliti Computers
whilst the cost of sales incurred, administrative expenses and
payment for income tax to the Malaysian Inland Revenue are paid by
Teliti Computers on behalf of Teliti Solutions and Teliti
Services.
Amounts due from Teliti Computers to the group are unsecured,
bears no interest and are repayable on demand.
Compensation of key management personnel of the Group
Key management personnel of the group are defined as those
persons having authority and responsibility for the planning,
directing and controlling the activities of the group, directly or
indirectly. Key management of the group are therefore considered to
be the directors of the company. There were no transactions with
the key management, other than their emoluments. The remuneration
of key management is set out below in aggregate for the categories
specified in IAS 24 "Related party disclosures".
The following table summarises remuneration paid to key
management personnel:
Group
2012 2011
RM'000 RM'000
Short-term employment benefits 782 -
======= =======
Further information about the remuneration of directors is shown
in note 10 above and in the corporate governance report.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2012
25. Control
The company and group is controlled by Teliti Computers Sdn Bhd,
which owns 79% of the issued share capital of the company.
26. Subsequent events
Subsequent to 30 September 2012, the following events took
place:
On 22 October 2012, Teliti Computers won the Centralize Backup
And Disaster Recovery tender for Kuala Lumpur City Hall for the
value of RM3.75 million. All the revenue for this project will be
allocated to Teliti Services Sdn Bhd.
On 2 November 2012, Teliti Datacentres signed the UKAS's
facilitation fund agreement between Government of Malaysia and Bank
Pembangunan Malaysia for the value of RM47 million.
On 11 December 2012, Teliti Computers won the tender for IBM
AS400 Power 7 Model 750 machine for Agro Bank for the value of
RM3.68 million. All the revenue for this project will be allocated
to Teliti Services Sdn Bhd.
On 13 March 2013, the group secured new funding from SME Bank
for Teliti Datacentres for the value of RM18.5 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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