Ahmad Nasrul Hakim - Malaysiastock.biz - 2336088093491.pdf...Group Chief Executive Officer, heiTech...

Ahmad Bin Abdul GhaniDirector, Corporate Services

Haji Safiee Bin Haji MohammadExecutive Director

Abdul Halim Bin Md LassimChief Executive Officer, heiTech managed Services Sdn. Bhd.

Ahmad Nasrul Hakim Bin Mohd ZainiChief Financial Officer

www.heitech.com.my

51/

PROFILE OF EXECUTIVE COMMITTEE

DATO’ MOHD HILMEY BIN MOHD TAIBChairman

Dato’ Mohd Hilmey’s profile is contained in the “Profile of Directors” section as set out on page 38 of this Annual Report.

HAJI SAFIEE BIN HAJI MOHAMMADExecutive Director

Haji Safiee’s profile is contained in the “Profile of Directors” section as set out on page 40 of this Annual Report.

HARRIS BIN ISMAIL Group Chief Executive Officer, heiTech Padu Berhad

(aged 52 – malaysian)mBa, Southern California University, USa.

Prior to joining the HeiTech Group in 2000, Harris was involved in various industries including finance and securities, manufacturing, construction and educational services.

Starting as Business Strategist in Padusoft, a wholly owned subsidiary of HeiTech, he was later appointed as Senior Vice President for Corporate Development of HeiTech in 2005 and was later in charge of the non-core IT Business in 2006. After successfully transformed the Group and improved profit contribution, he was appointed as the CEO of HeiTech e*Business Solution Sdn. Bhd. in 2009, focusing on the development of the Homeland Security, Defence, Healthcare and Education Sectors.

At the end of 2011, Harris was appointed as the Group CEO of HeiTech to oversee the development of the HeiTech Group especially on the development of the overseas market.

WAN ZAIDI BIN WAN JAAFARChief Executive Officer, heiTech e*Business Solution Sdn. Bhd.

(aged 53 – malaysian)Bachelor of Science in Education (hons) and major in mathematics, Universiti malaya.

He began his career in Permodalan Nasional Berhad (PNB). In his three decades of service with PNB and HeiTech, he has held several senior positions in both organisations. Wan Zaidi has been directly involved in the transformation programs of the public sector, particularly the Road Transport Department, the Immigration Department and the National Registration Department. Wan Zaidi is currently tasked to lead HeiTech e*Business Solution Sdn. Bhd. (HeB), to explore and create new business areas with internet technologies and through web-based services for the public as well as the private sectors.

ABDUL HALIM BIN MD LASSIMChief Executive Officer, heiTech managed Services Sdn. Bhd.

(aged 41 – malaysian)Bachelor of arts in Social Studies with honours in accountancy Studies from the University of Exeter, United Kingdom.Chartered accountant, malaysian institute of accountants. Certified Public accountant, malaysian institute of Certified Public accountants.

Abdul Halim joined HeiTech in 2000 as Finance Manager responsible in assisting HeiTech during its flotation exercise. Prior to joining HeiTech, Abdul Halim was attached to Hanafiah Raslan Mohammad for five (5) years performing auditing, corporate finance and corporate recovery related assignments. In HeiTech, he served as Chief Financial Officer and Vice President in 2002 and later promoted to Senior Vice President in 2005. In 2008, he was appointed as CEO of HeiTech Managed Services (HMS), focusing on end-to-end ICT infrastructure solutions.

Abdul Halim is a council member of the Malaysian Institute of Certified Public Accountants (MICPA) and also serves as the Chairman of the Young Certified Public Accountants of MICPA.

HeiTech Padu Berhad Annual Report 2012

52/

AHMAD BIN ABDUL GHANIDirector, Corporate Services

(aged 56 – malaysian)Bachelor of arts with honours in Psychology, Universiti Kebangsaan malaysia.

Ahmad has thirty (30) years of experience in human resource management and development across diversified industry including banking, manufacturing, and services multinational companies in Malaysia.

AHMAD NASRUL HAKIM BIN MOHD ZAINI Chief Financial Officer

(aged 36 – malaysian)Chartered accountant, malaysian institute of accountant (mia). CPa australia.Bachelor of Commerce (accounting), University of new South Wales, Sydney, australia.

Nasrul joined HeiTech in 2002 and was appointed as Vice President of Group Finance Services Division in 2008 and later as Chief Financial Officer in 2009. Prior to HeiTech, he had worked with Deloitte Malaysia where he managed financial assurance, business advisory and consulting engagements for clients from manufacturing, property and banking industries. Actively involved in NGOs, he currently acts as an advisor to Dyslexia Association dedicated to enhance the gifts of dyslexic children through information technology.

www.heitech.com.my

53/

ACCOLADES

1) Innovative Company of the Year Award (Information Security) by Cyber Security Malaysia (2012 & 2010)

2) Certificate of Merit at NACRA (2006, 2007, 2010 & 2011)

3) ISO/IEC 20000-1:2011 Information Technology Service Management System (since 2010)

4) Industry Excellence Award (Industrial Products & Technology) at National Annual Corporate Report Awards (NACRA) (2008 & 2009)

5) MIM Silver Award (2008)

6) Frost & Sullivan Malaysia Telecoms Award (2007)

7) ISO/IEC 27001:2005 Information Security Management System Certification (since 2006)

8) Capability Maturity Model Integration (CMMI) Level 3 Certification (since 2006)

9) 3 Stars Award National Quality Control Circle (2003)

10) Best Exhibition Booth Award Minggu Saham Amanah (2002)

11) Enterprise 50 Award (1999 & 2000)

12) MS ISO 9001:2008 Quality Management Systems Certification (since 1998)


54/

Indirectly contributed to the success of our client, Public Service Department in achieving:-

• IT Premier Award for Public Sector (2006) – Pensions Online Workflow Environment System (POWER)

Indirectly contributed to the success of our client, National Registration Department in achieving:-

• ISO/IEC 27001:2005 Information Security Management System Certification (2009)

• IT Premier Award (2000)

Indirectly contributed to the success of our client, Immigration Department of Malaysia in achieving:-

• MS ISO 9002 Certification for passport processing • The Prime Minister’s IT Award (2000) • Best Call Centre Services Award (2000)• Home Ministry Quality Award • IT Premier Award (1999)

Indirectly contributed to the success of our client, Road Transport Department in achieving:-

• PIKOM (Computer Industry’s Association of Malaysia) Award (1997)

• Public Service Innovation Award (1996)• Special Public Service award for IT (1995)

www.heitech.com.my

55/

SIGNIFICANT EVENTS

1 JUNE 2012Academic Visit from UiTM Shah Alam, Selangor and UiTM Dungun, Terengganu (Menara HeiTech Village, Subang Jaya, Selangor)HeiTech was honoured to receive an academic visit from 60 students of UiTM Shah Alam and UiTM Dungun. The visit was aimed to expose students with HeiTech background, working environment and job prospects.

21 JUNE 2012HeiTech Padu Berhad 17th Annual General Meeting (Grand Dorsett Subang Hotel, Subang Jaya, Selangor)In response to the company’s regulatory compliance, HeiTech Padu Berhad held its 17th Annual General Meeting (AGM). The AGM is an event for the shareholders to inquire about the business, operations and activities of the Group.

4 JULY 2012Handover Ceremony of RISO Machine (Sek. Keb. Jengka 18, Pahang)HeiTech sponsored a high-speed digital printer for benefit of more than 2000 students and teachers in Chenor, Pahang.

13 JULY 2012Bowling Tournament (Ampang Bowl, Summit USJ, Selangor)HeiTech organised a bowling tournament that promoted sportsmanship, friendship and fellowship among its staff.

18 JULY 2012HeiTech Cloud Soft Launch (The Summit Hotel, Subang Jaya, Selangor)HeiTech proudly launched its new product, AwanHeiTech. The objective of the event was to create awareness and engage all companies of HeiTech Group to support AwanHeiTech.

26 – 28 JULY 2012HeiTech Padu Berhad 3rd CEO Forum (Pulai Spring, Johor Bahru, Johor)For the year 2012, HeiTech continued to strengthen its business relationship among the Chief Executive Officers (CEO) within HeiTech Group through its 3rd CEO Forum. This event was a platform for the CEO’s to share and understand business activities, p e r f o r m a n c e s , s t r a t e g i e s a n d opportunities of HeiTech Group.


56/

8 AUGUST 2012Majlis Berbuka Puasa Bersama Pelanggan (Kuala Lumpur Convention Centre, Kuala Lumpur)HeiTech organised ‘Majis Berbuka Puasa’ to foster closer relationship between HeiTech and customers.

6 SEPTEMBER 2012Majlis Sambutan Aidilfitri 1HeiTech 1433H (Menara HeiTech Village, Subang Jaya, Selangor)HeiTech organised its Hari Raya open house with the theme “Pulang Ke Desa” for HeiTech’s staff and tenants in Menara HeiTech Village.

14 SEPTEMBER 2012Majlis Sambutan Aidilfitri 1433H bersama Rakan Niaga (Holiday Inn Glenmarie, Shah Alam, Selangor)In the spirit of the festive celebrations, HeiTech hosted a Hari Raya Open House to its 300 partners and vendors.

13 SEPTEMBER 2012Majlis Sambutan Aidilfitri 1433H Bersama Pelanggan (Dewan Sri Siantan, Putrajaya)HeiTech hosted its annual Majlis Sambutan Aidilfitri 1433H as a gesture of appreciation to its customers and business associates for the continuous loyalty and strong support over the year.

8 SEPTEMBER – 17 NOVEMBER 20121HeiTech Futsal League (Ferro Futsal, Subang Jaya, Selangor)1HeiTech Futsal League was a recreational sporting event initiated by HeiTech to foster the spirit of teamwork among staff.

NOVEMBER 2012Blood Donation Drive (Lobby, Menara HeiTech Village, Subang Jaya, Selangor)HeiTech blood donation drive was initiated in collaboration with the National Blood Centre to build the awareness on the importance of blood donation among the staff of HeiTech Padu Berhad.

www.heitech.com.my

57/

SIGNIFICANT EVENTS

12 JANUARY 2013HeiTech Kick-off 2013 (The Summit Hotel, Subang Jaya, Selangor)HeiTech started-off the year with its kick-off event with the theme “Operational Trans fo rmat i on : Spec ia l i sa t i on . Standardisation. Regionalisation”. The event was attended by 500 employees of HeiTech.

8 – 10 FEBRUARY 2013 Technology Update Session for BSN Nationwide Technical and IT Support (The Hyatt Regency Hotel, Kuantan, Pahang)The event was organised for BSN Nationwide Technical and IT Support team to share with customer on HeiTech’s latest product offerings.

26 FEBRUARY 2013HeiTech English Educational Series (HeS) Sharing Session 2012 (Hotel Green Park, Temerloh, Pahang)The aim of HeiTech English Educational Series (HeS) program organised by HeiTech was to identify the advantages of HeS in facilitating the learning of English Language for the benefit of Kelompok Chenor students.

1 MARCH 2013Cambodian Armed Forces Delegates Visit (Menara HeiTech Village, Subang Jaya, Selangor)HeiTech received a special business visit from the Cambodian Armed Forces delegates as a way to promote HeiTech products and services to overseas partner.

18 MARCH 2013Abu Dhabi Police Visit (Menara HeiTech Village, Subang Jaya, Selangor)HeiTech received a special business visit from Abu Dhabi Police to promote HeiTech products and services as well as to strengthen the business relationship with its partner.


58/

16 – 22 MARCH 2013Langkawi International Maritime & Aerospace (Pulau Langkawi, Kedah)HeiTech participated in the Langkawi International Maritime & Aerospace Exibition 2013 (LIMA 2013). HeiTech showcased its Simulated Interactive Maintenance Aid (SIMA) and Integrated Tactical Training Command & Control System (ITACCS).

23 MARCH 2013Visitation from Ministry of Municipal & Rural Affairs, Kingdom of Saudi Arabia (Menara HeiTech Village, Subang Jaya, Selangor)HeiTech rece i ved a v i s i t f r om Ministry of Municipal & Rural Affairs, Kingdom of Saudi Arabia. This visit marks milestones in business and diplomatic relations between HeiTech and the ministry for further business engagement in the future.

17 APRIL 2013Tabung Wira Lahad Datu Cheque Presentation Ceremony (Sri Pentas, Bandar Utama, Selangor)HeiTech successfully raised a total amount of RM10,000 for the Tabung Wira Lahad Datu, in honour of the bravery and sacrifice of Malaysia’s police and armed forces personnel in defending the sovereignty of Malaysia.

www.heitech.com.my

59/

CORPORATE MILESTONES

The Company began its journey as an Electronic Data Processing (“EDP”) Division of Permodalan nasional Berhad (“PnB”).

1994The division was then incorporated under the name of PNB Training and Resort Management Sdn. Berhad, became a wholly-owned subsidiary of PNB.

1995The Company changed its name to PNB Information Technologies Sdn. Berhad (“PNB IT”).

1997The Company underwent a Management-Buy-Out (“MBO”), through Padujade Corporation Sdn. Bhd., acquired 65% of shares from PNB, becoming the holding company of PNB IT.

1998The Company began its metamorphosis into an independent commercial entity. PNB IT was retained as the name of the Company. PNB IT obtained its MS ISO 9001:2000 Quality Management Systems Certification from SIRIM QAS International.

60/


1999The Company changed its name to HeiTech Padu Sdn. Berhad following the strategic transition (“MBO”) and the drive to keep abreast with rapid changes in the competitive global IT business. The Company secured an IT outsourcing contract from PNB.

2000The Company changed its name to HeiTech Padu Berhad (HeiTech), in line with its status as a public listed company. HeiTech began its first trading on the main board of the Kuala Lumpur Stock Exchange (“KLSE”) currently known as Bursa Malaysia Securities Berhad.

2002Operated from its new corporate headquarters, Menara HeiTech Village in USJ 1, Subang Jaya.

Rationalisation of HeiTech Subsidiaries.

2003Launched Employee Share Option Scheme.

Secured the first international project from the Department of Immigration and Emigration Sri Lanka.

2004Diversified its business with the acquisition of Inter-City MPC (M) Sdn. Bhd., a business process outsourcing company.

2005Implementation of Key Results Area and Key Performance Indicators.

2006Ventured into electronic media and content development business through the acquisition of Electronic Media Airtime Services Sdn. Bhd.

HeiTech became the first local IT company to be certified with Information Security Management System (“ISMS”) (ISO/IEC 27001:2005) from SIRIM QAS International.

2007Incorporation of InTech Solutions, a joint venture company in Sri Lanka, to explore IT related business in South Asia.

Expanded its reach in the region by acquiring PT Intercity Kerlipan in Indonesia.

2008Launched of HeiTech’s Tier-IV ready Data Centre by YAB Dato’ Sri Mohd Najib Tun Hj. Abdul Razak, Deputy Prime Minister of Malaysia.

Sale and Leaseback of Menara HeiTech Village.

Strengthen its position as global IT player by acquisition of 10% equity in Saeed LLC, Abu Dhabi, United Arab Emirates (UAE).

2010Enhanced its business portfolio in the Middle East and North Africa by setting up a joint venture company in Dubai, namely HeiTech International LLC (formerly known as Horizon LLC) with 40% equity.

HeiTech collaborated with Microsoft Corp. to explore the possibility of providing state-of-the-art IT based consumer health services in Malaysia.

HeiTech became the first local IT company to adopt Systems Applications and Products (“SAP”) for its internal financial, logistic and human resources systems.

2011Extended its business in the Asia-Oceania region with the acquisition of Cinix1 Pty. Ltd. in Brisbane, Australia.

HeiTech collaborated with Thales Nederland, a leading global technology player in integrated naval systems to explore the possibility of developing Combat Management System for the Royal Malaysian Navy.

Enhanced its regional presence in Thailand, China, Hong Kong, Singapore and Vietnam by the acquisition of 20.1% equity in Grand-Flo Solution Berhad, a leading brand in Enterprise Data Collection and Collation System solutions.

2012Expanded its global reach to Myanmar, Brunei and Ghana by providing system integration services.

61/

www.heitech.com.my

TRADE MARKS

WARNING NOTICENOTICE is hereby given that HEITECH PADU BERHAD GROUP OF COMPANIES (hereinafter referred to as ‘the Proprietor’) is the registered trademark owner and proprietor of all rights in the trademarks depicted below (‘the said trademarks’).

The registrations and applications of the said trademarks in Malaysia are as follows:-

Trade Mark

RegisteredTrade Mark

(Class) Trade Mark Number

Pending Grant Registration

(Class) Application Number

9 03000700

* *

16 03000698

35 03000699

37 03000701

38 03000702

39 03000703

41 03000705

42 03000704

HEITECH

9 03000690

* *

16 03000693

35 03000691

37 03000692

38 03000697

39 03000694

41 03000695

42 03000696

HeiTechVillage16 03000707

* *35 03000706


62/

Trade Mark

RegisteredTrade Mark

(Class) Trade Mark Number

Pending Grant Registration

(Class) Application Number

PaduNet

16 03002862

37 03002863

38 03002849* *

42 03002853

9 03002861

41 03002854

Padu*DMS9 03002856

* *16 03002850

42 03002855

* Denotes all Trade Marks applied are registered and active

TAKE NOTICE that legal proceedings will be commenced against any party exporting, importing, manufacturing, selling, offering for sale, advertising or dealing in the said goods or services bearing the said trade marks not originating from the Proprietor. The Proprietor will not hesitate to make any complaints to the Enforcement Unit of the Ministry of Domestic Trade & Consumer Affairs for raids to be carried out on infringers. The Proprietor shall also lodge complaints with the authorities seeking appropriate remedies under the Trade Descriptions Act 1972.

Trade enquiries regarding genuine goods or services with the said trade marks can be referred to HEITECH PADU BERHAD of Level 15, HeiTech Village, Persiaran Kewajipan, USJ 1, UEP Subang Jaya, P.O. Box 3086, 47509 Selangor Darul Ehsan or care of:-

CHEANG & ARIFFAdvocates & Solicitors

Trademark, Patent and Industrial Design Agents39 COURT @ Loke Mansion

273A, Jalan Medan Tuanku, 50300 Kuala LumpurTel No. 03-2691 0803/ Fax No. 03-2693 4475

E-mail: [email protected](Solicitors for HeiTech Padu Berhad Group of Companies)

www.heitech.com.my

63/

SIMPLIFIED FIVE (5) YEARS GROUP REVIEW

2012RM’000

2011RM’000

2010RM’000

2009RM’000

2008RM’000

REVENUENetwork Services Fees 92,662 84,442 92,767 101,876 98,137System Application and Development 77,822 48,355 51,330 58,675 56,489Sales of Hardware and Software 63,592 39,595 129,834 52,443 65,443Disaster Recovery and Facility Management Services 47,991 45,972 44,302 28,764 30,317Imaging and Record Management Services – – 182 82 478Maintenance of Hardware, Software and Application 83,309 90,161 76,427 112,028 109,940Bulk Mailing Charges 29,152 28,226 23,756 27,393 42,855Television Content Services – – 14,781 11,337 18,376Others 1,001 1,373 531 7,583 36,938

395,529 338,124 433,910 400,181 458,973

2012RM’000

2011RM’000

2010RM’000

2009RM’000

2008RM’000

PROFITABILITYProfit Before Tax (RM’000) 7,936 3,357 17,203 17,295 37,912Profit Before Tax Margin (%) 2.0% 1.0% 4.0% 4.3% 8.3%Profit After Taxation (RM’000) 4,840 6,060 10,341 10,816 31,133Profit Attributable to Shareholders (RM’000) 3,742 6,586 8,892 9,969 29,661Earnings per Share (RM) 0.045**** 0.04**** 0.08*** 0.09** 0.29*

* Based on the weighted average of 100,011,000 ordinary shares of RM1.00 each** Based on the weighted average of 100,428,000 ordinary shares of RM1.00 each*** Based on the weighted average of 100,716,600 ordinary shares of RM1.00 each**** Based on the weighted average of 101,225,000 ordinary shares of RM1.00 each

2012RM’000

2011RM’000

2010RM’000

2009RM’000

2008RM’000

ASSETS EMPLOYEDTotal Assets (RM’000) 530,665 508,791 489,166 463,319 418,974Fixed Assets (RM’000) 218,380 219,472 210,827 249,491 215,241Net Current Assets (RM’000) 95,597 92,334 128,167 47,731 65,673Shareholders’ Fund (RM’000) 206,547 202,855 202,856 208,588 199,874Net Tangible Assets per Share (RM) 1.86+++ 1.89+++ 1.95+++ 1.99+++ 1.88+Share Capital (RM’000) 101,225 101,225 100,716 100,428 100,011

+ Based on paid-up capital of RM100,011,000++ Based on paid-up capital of RM100,428,000+++ Based on paid-up capital of RM100,716,600++++ Based on paid-up capital of RM101,225,000


64/

FIVE (5) YEARS GROUP PERFORMANCE HIGHLIGHTS

0 125000

2012

2011

2010

2009

2008

250000 375000 500000

395,529

338,124

433,910

400,181

458,973

2012

2011

2010

2009

2008

3,742

6,586

8,892

9,969

29,661

0 7000 14000 21000 28000 35000

2012

2011

2010

2009

2008

206,547

202,855

202,856

208,588

199,874

0 44000 88000 132000 176000 220000

2012

2011

2010

2009

2008

7,936

3,357

17,203

17,295

37,912

0 10000 20000 30000 40000

2012

2011

2010

2009

2008

530,665

508,791

489,166

463,319

418,974

0 104000 208000 312000 416000 520000

2012

2011

2010

2009

2008

188,711

191,723

196,119

199,906

187,737

0 40000 80000 120000 160000 200000

REVENUE (RM’000)

PROFIT ATTRIBUTABLE TO SHAREHOLDERS (RM’000)

SHAREHOLDERS’ FUND (RM’000)

PROFIT BEFORE TAXATION (RM’000)

TOTAL ASSETS (RM’000)

NET TANGIBLE ASSETS (RM’000)

65/

www.heitech.com.my

REVIEW OF OPERATIONS

The business of HeiTech Padu Berhad is the realisation of a given potential to its many possibilities. Leveraging on more than a decade of decent track record, experience and extensive knowledge of the local IT industry, HeiTech Padu Berhad (HeiTech) strives and remains strong as one of the nation’s major IT players. Aspiring to become Malaysia’s technology based conglomerate HeiTech today is one of Malaysia’s biggest homegrown IT Company.

At HeiTech, we recognise there’s greater resilience required to weather the business landscape; shaping for greater specialisation in key markets segment, expansion of products and services, building international business foundation and enabling business transformation through technology as key strategies. The business world is a dynamic space: what works today may not be relevant tomorrow. With ICT, the pace is accelerated even more. In today’s market environment, there is no choice but to move fast and be agile. HeiTech offers innovative total solutions in transforming businesses from manually driven processes to automated systems and finally towards an effective and comprehensive information systems which allows critical business decisions to be made more precise and timely. We believe our customers’ success depends on sound technology support and by synergising energies of our skilled people with innovative solutions; we do a lot more for our customers by expanding our knowledge and insights into customers’ needs, integrating solutions, quality delivery of services and accelerating new-product developments. We target to deliver services that will improve communications and allow our customers to realise much greater value from our technology for better growth prospects. When our customers grow, we hope to grow with them. The business environment has altered fundamentally; tomorrow’s landscape will be different, but no less rich in potential for those who are prepared.


66/

We aim to unleash the potentials of our clients by offering the best solutions as we measure our success by the success of our customers. As an attestation of our credentials, we pride ourselves as one of the key players in elevating the Public Sector services to what it is today, by leveraging on our system integration strength and capabilities.

The core business pillars of HeiTech are the systems integration, managed data centre services and managed network. HeiTech has ventured into other emerging businesses such as content development and distribution, data management and processing and electronic commerce. This complimenting business portfolio allows HeiTech to grow towards large scale outsourcing business and hence positioning HeiTech as a Technology Conglomerate providing end-to-end solutions.

SYSTEM INTEGRATION AND APPL ICATIONS DEVELOPMENT (SIAD)We primarily provide custom application development and system integration services to deliver both complete and turnkey solutions to fulfill the needs of our customers. HeiTech has a reputable track record in helping to transform our customers’ critical business processes to be ICT driven. The components of our System Integration Services include:

• Systems Integration and Project Management • Application Development and Maintenance• End-to-end Solutions• Enterprise Application Integration (EAI)• Package Integration• Mobile Application Solutions• Security Solutions• Change Management Consultancy• Business and ICT Consultancy

MANAGED DATA CENTRE SERVICES (MDCS)The epitome of HeiTech’s managed data centre services is the completed state of the art Tier IV Standard Data Centre services at Bukit Jelutong, Shah Alam. The data centre is a critical asset to HeiTech’s Data Centre Services and Business Recovery Services approved by Bank Negara Malaysia.

The Tier IV Standard Data Centre is characterised with redundancy in multiple backup powers, state-of-the art environmental control power, telecommunication lines, comprehensive security, and the ability to withstand severe fire. In addition, the data centre runs on multi-platform and vendor independent environment. This high standard data centre is designed to meet the requirement of many organisations in terms of high quality services, reliability, availability, data integrity, data safety and data security. This shall expand HeiTech’s ability in the outsourcing capabilities and disaster recovery services to better serve HeiTech’s new and existing customers, onshore and offshore.

Our solutions are unique, customised, and scalable and yet secure, combining both business acumen and technical competencies. We call it the I-Sentrix which offers:

• Data Centre Management Services (DCMS)• Business Recovery Management Services (BRMS)• Internet Data Centre Services (IDCS)• Infrastructure Development and Management Services

(IDMS)

MANAGED NETWORK AND COMMUNICATIONS SERVICES (MNCS)HeiTech’s managed network services offer a powerful network services equipped with single point of contact for centralised monitoring, around the clock customer services, Telco independent and seventeen regional service centers nationwide. These comprehensive features allow HeiTech guaranteed Service Level Assurance (SLA) of 99.9%, secured communications, resilience to serve HeiTech’s customer, onshore and offshore.

www.heitech.com.my

67/

MNCS offers solutions to our customers to bridge the gap between the costs and upgrade requirement by giving them access to leading network technologies and management expertise, without high capital expenditure or ongoing investments in technology upgrades. Solutions provided are:

• Managed VPN/MPLS• Managed IPVN/IP Broadband• Managed Broadband Access• Managed CPE / Router• Managed Metro Ethernet & DWDM• Managed VSAT & Wireless• Managed Desktop Management Services• Unified Communication and Collaboration• Consultancy, Planning & Design Services

DATA MANAGEMENT AND PROCESSINGThe data management and processing business provided by one of the subsidiaries, Inter-City MPC Sdn Bhd, (“Inter-City”) has reached its 8th year of operation under HeiTech’s stewardship and continues to provide consistent contribution to the Group. We have since expanded our data management and processing services to Indonesia via PT Inter-City Kerlipan.

The future business plan of Inter-City is the automation of e-channel options to compliment the hard copy data printing services. This will enable the output of data management and processing to be distinguished both physically and electronically.

ELECTRONIC COMMERCEOne of the key elements of Electronic Commerce (e-commerce) is the means for an electronic settlement mechanism that links merchants, financial institutions and online customers especially in the area of micro payments. Through an investment company, Royal Mint Exchange Sdn Bhd, HeiTech is developing the settlement infrastructure for e-commerce.

CONTENT DEVELOPMENT AND DISTRIBUTIONEducational Trend Sdn. Bhd. (“ETSB”) content development and distribution are build on sound development platform strengthen by the educational portal and hosting with noble intention to bridging digital divide.

ICT SECURITY AND SERVICESFrom assessment to implementation, our customers benefit from HeiTech’s seamless integration of services, resulting in a more cost-effective security programs. Our experts develop proactive, multi-approaches that can respond quickly to ever-changing threats and help ensure operational continuity and integrity in crisis. Our offering includes:

• Business Continuity and Availability• Security Consulting, Assessment and Audit Services• Managed Security Services

SOFTWARE RELATED SERVICESHeiTech, in partnership with global software organisations, offers industry-specific applications that meet the expectations of a wide range of customers. Our services in this area include:

• Offshore Software Development• Software Outsourcing & Sub-Development Services• Enterprise Applications Integration



68/

PERFORMANCE REVIEW: FYE 31 DECEMBER 2012This year, HeiTech has chosen “Spreading Our Wings” as the theme for the Annual Report. The theme is apt considering HeiTech is now expanding its business horizons across the borders in its journey to ensure sustainability and growth. This is to ensure HeiTech is well positioned in facing today’s challenging and rapidly changing business environment.

Globally, there are emerging signs of improvements in the economy. Latest economic indicators also suggest further stabilisation in the growth performance in Asia. Notwithstanding these improvements, considerable structural challenges still remain in the advanced economies, which would constrain the prospect for a stronger economic recovery. In particular, several advanced economies will continue to address the issues relating to fiscal sustainability and persistently weak labour market conditions. In the

emerging markets, the highly accommodative monetary policy sustained in the major advanced economies requires close surveillance given the potential impact of excessive global liquidity on asset price inflation.

Despite the challenging global economic environment, Malaysian economy recorded a higher growth of 6.4% in the last quarter of 2012, supported by the continued strong domestic demand and private consumption. Total investment remained robust and was the main driver of growth during the period. The growth also benefited from a significantly lower negative contribution from net exports. On the supply side, most economic sectors recorded improvements in growth during the quarter. Overall, Malaysian economy has expanded by 5.6% for the whole 2012.

www.heitech.com.my

69/


In the ICT environment, in 2012, Malaysia is ranked 29th out of 142 economies, 8th out of 22 Asia-Pacific economies and 2nd in the Asean region on the Networked Readiness Index (NRI). With an index score of 4.8 out of a maximum score of 7.0, Malaysia placed among the top quartile of the world’s most networked ready economies.

When referring to the limited economic and social impacts of ICT in some South-East Asian nations, Malaysia have been very successful at leveraging ICT and the Malaysian Government has been pursuing a long-term plan to achieve high-income status by the end of the decade, with ICT playing a critical role. In the area of government usage of ICT, Malaysia is ranked 6th worldwide. This underscores the Government’s emphasis on the importance of ICT as part of its initiatives and vision.

Government-led effort is a significant factor in ICT’s transformational impact on the economy and the society at large. Hence, individuals and businesses in Malaysia need to step up to the plate to complement the Government’s charge to drive the ICT progress and development.

For the past 2 years, HeiTech was all about managing sustainability within a recuperating economy, saturated market and prudent spending by the Public Sector. Among the many change affecting the ICT industry in Malaysia are the downsizing of new contracts and quantity of development projections and stiff competition. 2011 and 2012 was a “business development” and “looking abroad” year… unlocking the values and unleashing our potentials both locally and internationally. Efforts were focused on realigning the Group’s operations and securing new projects for the years to come.

HeiTech believes that whilst strengthening and reinforcing its core-competency locally, it must also strategically diversify its business portfolio abroad. HeiTech believes that it can leverage on its reputation as a trusted and respected ICT service provider in Malaysia, to spread it wings and competes globally. As a result the year 2012, saw HeiTech traversed foreign shores in providing niche expertise to clients in East Asia, the Middle East, Africa and Europe.

Against the backdrop of a recovering economy, the Group has managed to record better revenue for fiscal year 2012.

For 2012, the Group’s financial performance has been segregated into continuing operations and discontinued operations following its decision to dispose one of its subsidiaries subsequent to the financial year ended 31 December 2012. The subsidiary was reported under the television content services segment in the prior financial year.

In 2012, the Group’s revenue from its continuing operations increased by RM57.4 million or 17% to RM395.5 million as compared to RM338.1 million in 2011. Major portion of the increase is from the network related services, sale of hardware and software and system application and development sectors. These sectors have recorded an increase of RM8.3 million, RM24.0 million and RM29.5 million respectively. Other sectors which recorded better revenue are the disaster recovery and facility management services and bulk mailing charges. The revenue have increased from RM46.0 million and RM28.2 million respectively in 2011 to RM48.0 million and RM29.1 million respectively in 2012. However, the impact of the above was dampened by lower revenue from maintenance charges of RM83.3 million in 2012, as opposed to RM90.1 million in 2011.

Profit Before Tax (PBT) from continuing operations for 2012 improved by 136% from RM3.4 million to RM7.9 million in 2011. Net profit from continuing operations has also improved significantly from RM1.4 million in 2011 to RM5.4 million in 2012.

The revenue recorded from the television content services, which is reported under discontinued operations in 2012 is RM4.9 million, a significant drop from RM15.5 million in 2011. This has resulted in a net loss of RM0.6 million in 2012 as opposed to a net profit of RM4.7 million in prior year for that segment. The substantial reduction is mainly due to the long term television content contracts with a government broadcasting network has expired prior to the financial year ended 2012.

Despite the improvement in the net profit recorded from its continuing operations, the Group’s overall net profit has dropped from RM6.1 million in 2011 to RM4.8 million in 2012 largely due to the impact from the discontinued operations as mentioned in the preceding paragraph.


70/

Revenue (RM’000)

Profit Before Taxation (RM’000)

HeiTech closed 2012 with a PBT margin from continuing operations of 2%, a slight improvement from 2011 of 1%

Our margins were greatly affected by rising direct and operational costs and worsen by sharp decline in profits from network maintenance projects. Historically, our returns has been driven by the success in retaining the loyalty of public sector’s customer while breaking new ground in new areas of business. In these testing times, having the ability to sustain the revenue and maintain a profitable business is an accomplishment by itself.

HeiTech is seeking out more business opportunities for higher-end specialised implementations such as electronic government products and services in niche markets in hope to further enhance the Group’s revenue base. HeiTech has also stepped up its efforts towards improving its operating costs and working capital management.

2012

2011

2010

2009

2008

2007

338,124

395,529

433,910

400,181

458,973

424,017

0 96000 192000 288000 384000 480000

2012

2011

2010

2009

2008

2007

3,357

7,936

17,203

17,295

37,912

25,723

0 8000 16000 24000 32000 40000

www.heitech.com.my

71/


To mitigate this effect, the Group will diversify into niche markets, like that of the Middle East, as well as expand our international collaborations and involvement to generate profits for the years to come. Driven by strategic business expansion decisions, HeiTech actively collaborates with both the commercial sector and government agencies within various countries leveraging on its International Strategic Business Group (ISBG) represented by its partners and international investment companies such as PT HeiTech Intercity Kerlipan in Indonesia, Epic Lanka Pvt Ltd and InTech Solutions Pvt. Ltd. in Sri Lanka, Cinix 1 Pty. Ltd. in Australia, SAAED For Traffic System LLC in Abu Dhabi and HeiTech International LLC in Dubai, United Arab Emirates.

SECTORIAL BUSINESSIn 2012, the Public Sector remains the largest contributor to the revenue at 62%. However, it is lower than 2011 results of 66%. Private Sector has improved from 34% in 2011 to 38%. Major contributor for the 2012’s public sector revenue was the JPJ Revamp project, maintenance of hardware and software for LHDN MLC and maintenance of Bank Negara’s server.

Efforts has been taken to increase the contribution from the private sector and to reduce dependency on the Public Sector. One of the main contributor for Private Sector in 2012 is the BSN Core Banking project.

We remain optimistic for 2013. This optimism is backed by the growing interest shown by enterprises and the public sector in cloud computing and ICT-friendly budget measures.

Furthermore, with the growing number of SMEs needing greater access to information technology, more cost effective cloud computing software, is seen as having great potential to help these SMEs in bridging the digital gap closer with bigger corporations. HeiTech intends to leverage on its expertise and innovative solutions in cloud computing, big data handling, mobility and social media, to propel the Group further to greater heights.

Sectorial Revenue Contribution – Public vs Private Sector

Public

Private

2008 2009

2010 2011

2012

31%

69%

30%

70%

34%

66%

21%

38%

79%

62%


72/

QUALITY OF REVENUEThe quality of revenue is quantified by its recurring or non-recurring nature over a period of more than one year. It is an indicator of sustainability in generating stable revenue of the group. An example of recurring revenue would be the maintenance services for existing customers that employ our system integration services. Non-recurring revenue is such as system integration services.

In 2012, as the total revenue increased by 17%, there is also a shift of the composition of recurring and non-recurring revenues. HeiTech has registered recurring revenue of 64% out of total revenue in respect of 2012, a 10% decrease in terms of proportions from the previous year. This is in proportion to the 8% decrease in maintenance revenue as compared to 2011. However, in terms of quantum, the value of recurring revenue remains unchanged. In 2012, there is an increase by 10% of non-recurring revenue, mainly contributed by the increase in sale of hardware and software and systems application and development revenue. This non-recurring revenue would usually be the entry-point for possible opportunities of new non-recurring revenues and may translate into future recurring revenues on the maintenance of the systems delivered.

Having a good balance between recurring and non-recurring projects is important for the continuous growth of the Group where the non-recurring revenues may lead to potential recurring revenues in future years.

CONTRIBUTION OF BUSINESS ACTIVITIESTo analyse the business activities contribution more simplistically, the core revenue are consolidated into System Integration, Managed Services and others. By this definition, activities are associated through consequential relationship with one another. For example, System Maintenance Services post completion of System Integration and Application Development (SIAD) are included under System Integration.

By breaking the revenue based on the above, it can be concluded that the main driver of the Group is from Systems Integration followed by Managed Services and Other Services. System Integration remains the main contributor yielding RM225 million in 2012. Looking back through the years, System Integration despite facing stiff competition, cyclical demand and the availability of more off-the-shelf solution in the market, it has recorded the highest revenue contribution. In 2012, HeiTech’s System Integration revenue improved by 26% while Managed Services has improved by 8% from 2011, consistent with the increase in total revenue.

Recurring Non-Recurring Revenue Contribution

2008

2009

2010

2011

2012

177282

270

237

249

253

196

89

142

130

0 100 200 300 400 500

Recurring revenueNon-recurring revenue

www.heitech.com.my

73/


The increase in System Integration Services revenue was contributed by various SIAD has works. Revenue from SIAD has improved by 61% from its revenue contribution in 2011. The main contributors are EVG Abu Dhabi project, Sukhoi Enhanced Training Aids System, Jabatan Imigresen Malaysia (JIM) Visa Facilitation Services, and BSN Core Banking project.

Maintenance revenue recorded a decrease by 8% despite being the highest revenue contributor in the systems integration services. This is mainly due to reduction in the project scope for Jabatan Pendaftaran Negara (JPN). However, maintenance is still the main contributor for this business sector.

Trading recorded volatile revenue over the years due to different requirements for hardware and software for one project to another. In 2012, sales of hardware and software increased by 61% mainly contributed from the delivery of hardware and software for BSN Core Banking project.

SYSTEM INTEGRATION SERVICESHeiTech was built on System Integration. Our notable success came from the 3J projects where the Group made its mark as one of the premier system integrator in Malaysia. Arguably, the Group had played a part in opening the door for other home grown system integrator companies by establishing market confidence towards in the local players with our track record. On the other hand, the Group has also created more competitors in the domestic market over the years due to the same reason.

The System Integration business consists of the SIAD, trading of hardware and software and maintenance services. Generally, other than system development, System Integration also requires an upgrade to the hardware and software. This is packaged together to ensure smooth running and delivery of the system. Maintenance services are provided post-development and implementation to ensure the system is operating at its optimum level. Based on the trend within the last five years, Maintenance Services has always been the major contributor to this business.

Revenue Contribution by Business Activities (RM million)

Managed ServicesOthersSystem Integration

0 75 150 225 300

2012

2011

2010

2009

2008

2007

225

178

258

223

232

208

30

30

39

46

98

82

141

130

137

131

129

133


74/

System Integration Revenue Analysis (RM million)

0.0 37.5 75.0 112.5 150.0

2012

2011

2010

2009

2008

64

40

130

52

65

78

48

51

59

56

83

90

76

112

110

MaintenenceSystem Application & DevelopmentTrading

MANAGED SERVICESManaged Services is the Group’s main staple for fixed and recurring revenue. Intrinsically, this business provides a defensive earning to the Group against the more high profile and volatile contribution from System Integration business. Managed Services in 2012 represents 36% of the Groups revenue contribution.

The main contributor is from Network Services which contributed RM93 million in 2012, an increase of 10% from 2011. New contracts with commercial banks and private sectors are the reason for such increase in an effort by the Group to reduce dependency on the public sector.

Managed Services Revenue Analysis (RM million)

0.0 27.5 55.0 82.5 110.0

2012

2011

2010

2009

2008

-

-

0.2

0.1

0.5

93

84

93

102

98

48

46

44

29

30

Disaster RecoveryNetwork ServicesImaging

www.heitech.com.my

75/

CORPORATE RESPONSIbILITY

In the past year, we have continued to focus and align our efforts on fostering relationships with the community at large and the environment.

HeiTech is a firm believer in high social impact endeavours, both in business and community activities. We strongly believe in giving back to the communities in and around us. Being a company that is passionate about growth, not only in its business but also in its stakeholders, we therefore constantly seek to drive growth of those around us.

To ensure sustainable growth in every sense of the word, we continuously seek to provide strong foundations for the development of our people, our stakeholders and our community at large. This intention is translated into Corporate Responsibilities ‘CR’ initiatives and in achieving this end, these initiatives included our community, workplace, marketplace and environment based programmes conducted throughout 2012.

OUR COMMITMENT TO THE COMMUNITYAt HeiTech, we strive to support the creation of communities, which are prosperous, sustainable, educated and healthy. Our business practices have always had the interest of the community at heart.

1. Educational and Youth Development

a) Academic Excellence Programme

Exceptional Student Scholarship Programme

• Established about 5 years ago, the main objective is to identify and assist exceptional students from low-income backgrounds.

• To date, we have 7 recipients selected for the Programme.

• The assistance given in the Programme includes school fees funding, allowances, books and associated school expenses.

Kelompok Chenor Programme

• Established in 2010, this Programme funds 13 primary schools in Chenor, Pahang.

• The intention of this Programme is to improve the educational standards mainly in the rural area.


76/

HeiTech Adopted School

• Established since 2010, the overall objective is to improve the educational standards in rural areas especially among the Year 6 students.

• One of the noteworthy recipients was Sekolah Kebangsaan Kertau (SK Kertau), Maran Pahang which has shown continuous improvement in its UPSR examination results since the Programme was incepted.

• The school benefits from this programme through educational/curricular and financial support including annual contribution and jointly organised UPSR achievement appreciation events with the Parent Teacher Association.

HeiTech English Educational Series (HeS) Programme

• Involving 13 primary schools in Chenor, Pahang.• The objective was to highlight the importance of mastering the

English language primarily to those in the rural areas.

www.heitech.com.my

77/


HeiTech Internship Program

The goal of the Internship Programme was to immerse university students into the dynamic work environment, providing them real life experience of what they will face in the working world by exposing them to the various facets of the organisation in a programme which lasted between six (6) to thirty (30) weeks.

This Programme is designed to match the students’ interest and abilities and to impart pertinent knowledge and direct tangible skills that will help them decide which facet of the ICT industry best fits their career aspirations. The students’ overal l performance is continuously evaluated and they are mentored towards mutually agreed goals.

Educational Visits

• HeiTech opens its doors to tertiary students to expose them to the corporate environment and working world.

• The initiative includes knowledge sharing sessions at our corporate headquarters in Subang Jaya for students from various campuses of UiTM.

2. Social Development and Philanthropy

Blood donation drive

• Held on 28 November 2012 at the Lobby of Menara HeiTech Village. The annual initiative has been conducted since 2001.

• The goal of this programme is to inculcate a sense of social welfare among our people.

Sponsorship and Charitable Causes

• In 2012/2013, HeiTech contributed to a number of schools, universities, NGOs, orphanages etc. One of the beneficiaries is meant for disaster relief that include:-n In the aftermath of the crisis in Lahad

Datu, HeiTech set up the “Tabung HeiTech Bersama Wira Lahad Datu” to raise funds for fallen and injured warriors who stood fast in defending the sovereignty of our country. The contribution was later contributed to Media Prima Berhad as part of its nationwide Tabung Wira Lahad Datu initiative.


78/

OUR COMMITMENT TO THE WORKPLACE We firmly believe that people are the cornerstone of our organisation’s success. In support of our main asset, we have invested in creating a conducive working environment for all our employees. We pride ourselves in providing them with avenues to enhance their personal and professional development. We ensure that competencies of each individual are mapped according to their aptitude. At the same time, we take the necessary measures to retain high calibre individuals who contribute to the growth and bottom line of the organisation. This is in line with our corporate goal to provide rewards based on performance.

1. Human Capital Development

Continuous improvement in Human Capital Development is vital in strengthening an organisation’s competitive edge. Therefore, each employee is encouraged to enhance their skill sets by attending training courses and completing certification exercises. Our personnel development is based on a clearly defined HeiTech Capability Development Framework, where the focus is on developing tangible and intangible competencies, be it leadership, interpersonal and technical skills. Each employee has a clearly defined career path based on the chosen skill sets.

A number of capability development programmes have been embedded into our organisational ideals. The Leadership Development Program (LDP) is one of the programmes which focus on developing leadership skills. Employees are exposed to leadership skills, coaching and engagement exercises. To address the development of technical skills of employees, the necessary development programmes has been chartered out in the standard technical skill roadmap. Employees of the company are encouraged to further develop their skill sets by undergoing professional certifications and accreditations from industry leading principals such as CISCO, SAP and ORACLE.

2. Conducive and safe working environment

We place paramount importance on our employees’ wellbeing; hence we always aim at maintaining a conducive and safe working environment. The formulation and enforcement of HeiTech’s established Occupational Health and Safety (OHS) Policy ensure all employees are aware of their roles and responsibilities in their work environment. Our OHS Policy complies with the Occupational Safety and Health Act 1994 (OSHA 1994) and the Occupational Safety and Health (Safety and Health Committee – SHC) Regulations 1996.

To ensure full compliance, we provide training and awareness programmes on occupational health and safety matters related to manual handling, hazard identification, fire drills, fire fighting and first aid. In addition, we have also organised health awareness programmes such as medical check-ups and talks to foster a health conscious workforce.

3. Work-life balance

It is necessary for an employee to strike a balance between personal endeavours and work obligations. This is key to a workforce that is motivated and committed. HeiTech, in support of fostering a positive and balanced workforce has organised a number of extracurricular activities for its employees. These include:• Bowling tournament• Futsal league• Aerobic classes• Islamic talks ‘ceramah agama’• Corporate privilege for selected hotels

www.heitech.com.my

79/


4. Communication with employees

Two way communications is vital in any organisation to flourish. Updates from the Management and feedbacks from the employees are utilised to form strategies, plans and programme to further the achievements of the organisation. In order to provide effective communications, HeiTech utilises the following channels:• Corporate/Business Updates• Appraisal & Career Development Plan• Employee Retention plans• Award/Recognition programmes • Dual communication platform

THE CHAIRMAN’S AWARD 2012We honour those who have gone above and beyond their duty toward the success of HeiTech. The Chairman’s Award is conferred to individuals or teams that displayed exceptional performance in achieving the company’s objectives. The following are considered when evaluating the recipients for the Award:

• Developing and marketing innovative products/solutions• Achieving excellence in personal/project performance• Enhancing the customer’s overall performance and

achieving optimum customer satisfaction• Executing an endeavor that improves the reputation of

the company

The Chairman’s Award has been divided into four (4) categories:-• Chairman’s Special Appreciation Award• Product Innovation Award• Process Innovation Award• Service Excellence Award

For 2012, the Chairman’s Award was presented to HeiTech Defense System for their success in business development initiatives.

The Chairman’s Innovation Award was given to OSK WAN Project Team from HeiTech Managed Services Sdn Bhd (HMS).

Merit Award were also given to the following recipients:1 HeiTech Exchange Server (HES) Project Team 2 PNB Project Team3 MYGOSSCON 2012 Team4 Visa Malaysia-China (SPPV) Team5 JPA POWER GEN2 System Team6 MyIdentity Citizenship Registry System (CRS) Team 7 Brunei Hajj Management Solution Team8 Ghana Social Security and National Insurance Trust

(SSNIT) Project Team9 JPN Core Business Maintenance Team10 Emirates Vehicle Gate Team


80/

THE LONG SERVICE AWARD 2012We are always humbled by those who have stayed loyal and persevered through the years. In appreciation of those who have dedicated themselves to HeiTech’s success, we have initiated the Long Service Award programme in 2002. This year, 8 employees have received their 30 years of service recognition while 18 more received the recognition for 20 years of service and 48 received for 10 years.

The Long Service Award recipients for 30 years of service are as follows:-

1 Abdul Razak Ahmad2 Mohammad Sultan Abdul Majeed3 Mohd Amin Yem4 Mustafa Kamal Abdul Majid5 Nor’aisha Hassan6 Norshidah Ismail7 Razali Mohd8 Rodzilah Adnan

The Long Service Award recipients for 20 years of service are as follows:-

1 Abd Rahman Abdul Malik2 Ahmad Puzi Abdul Kadir3 Azlan Abdul Hamid4 Che Ngah Ibrahim5 Che Suhaimi Hussain6 Faudziyah Haji Ariffin7 Hasbullah Hussin8 Hasim Simon9 Maliki Mohamed10 Mohd Yaacob Ibrahim11 Nor Azlina Abdul Latiff12 Nor Hasina Hamzah13 Norainon Hamdan14 Norhanim Md Zin15 Normala Mat Nor16 Salwati Mohd Tahir @ Mohamad Taha17 Sulaiman Donik18 Suriana Ali

The Long Service Award recipients for 10 years of services are as follows:-

1 Ahmad Khairi Mohd Salleh2 Ahmad Shahir Mohamed Jalil3 Azlan Shazmi Anwar4 Azman Muhamad5 Azmi Anuar

6 Azzaddin Kamarul Ariffin7 Badrunalina Mohamad Hussin8 Ezdiani Kasmuri @ Shamsuri9 Faizul Hazri Che Hashim10 Farhanah Mohamad Khatib11 Fong Chiok Hin12 Haizam Mohamad13 Halizuan Beiamin14 Irwan Kurnawan Amat Sapuan 15 Ismahadi Ismail16 Jahir Hussain Othman17 Kamarudin Abd Hamid18 Kamsiah Talib19 Khalida Mohd Noor20 Mansor Adam21 Marisa Noranis Mohamad22 Mohamad Siss M. Jamil23 Mohd Amzani Mohd Zin24 Mohd Azahari Abdullah25 Mohd Faizal Ahmad Hosaini26 Mohd Mustaqim Omar27 Mohd Shukeri Sulaiman

www.heitech.com.my

81/


28 Muhammad Abdul Hamid29 Muhammad Hadzrin Abdul Hamid30 Muhammad Shukri Abdul Mutalib31 Norashid Alias32 Norazah Samion33 Norazlina Borhan34 Norazlyna Jamil35 Norhisham Osman36 Nurul Azuan Anuar37 Rizuan Jusoh38 Shahnezal Saad39 Supian Abu Hanipah40 Suraya Zalna Mohd Shith41 Syafrial Jufri42 Syed Amir Syed Abdul Rahman43 Tengku Erni Mazwin Tengku Razman44 Titek Asnina Suyub45 Yusrita Mohamed Yunus46 Zul Imran Abdul Rahaman47 Zulkifli Razalli48 Zurairah Md Tahir

OUR COMMITMENT TO THE MARKETPLACEIn 2012, we actively participated in events that fostered active engagement with stakeholders, and opinion leaders. Our goal in doing so was not only to understand the needs of our stakeholders but also, more importantly, to showcase how our organisation is adapting to the ever-changing nature of the ICT industry.

1. Active engagement with stakeholders

We believe in synergising our capabilities and experience with our industry leading partners’ technologies. Complementing this synergistic relationship is our deep understanding of our customers’ requirements and the industry. This mix, we believe, resulted in excellent delivery to our customers. As such in 2012, HeiTech actively engaged its stakeholders that included customers, partners, suppliers and government regulators.

Event details as below:-

Event : HeiTech Technology Update: Tape Library System

Date : 24 February 2012Partner : OracleAudience : Customers from both public and private

Event : HeiTech Sales Rally: Sell-A-Bration 2012Date : 6-7 March 2012Partner : IBMAudience : HeiTech Sales & Pre-Sales

Event : HeiTech Technology Update: Virtualised Desktop: The Next IT Challenge

Date : 20 March 2012Partner : VMware& Trend MicroAudience : Customers from various industries


82/

Event : HeiTech Executive Update: An Exclusive Look Inside: Big Data Analytics and Social Media

Date : 10 July 2012Partner : IBMAudience : Customers from various industries

Event : HeiTech AM Forum: Raising The BarDate : 5-6 October 2012Partner : HP, VIP TowersAudience : HeiTech Sales & Pre-Sales

Event : 6th Business Continuity Institute’s Local Forum Seminar

Date : 10th April 2012Partner : Business Continuity Management

InstituteRole : Guest speaker

Event : World Continuity CongressDate : 3rd July 2012Partner : BCM Institute SingaporeRole : Guest speaker

Event : CSM Award, Conference and ExhibitionDate : 13th-14th November 2012Partner : CyberSecurity MalaysiaRole : BCM Track Facilitator

OUR COMMITMENT TO THE ENVIRONMENTIn the formulation of our various offerings, we look at various ways to improve efficiency, productivity and optimise cost. This drives us to look at creative and innovative ways to reduce our impact on the environment.

We take a serious stance in improving our environmental policies and performance to tackle problems associated with climate change and biodiversity. Some of the initiatives to support this include:

• Ultra Energy saving devices at data centres which resulted in 60% reduction of monthly incremental energy usage. It is anticipated that energy saving will increase further in the years to come.

• HeiTech observed Earth Hour on Saturday, 23 March 2013; an initiative to promote environmentally sustainable action, through non-utilisation of all non-essential lights for a full one hour beginning 8.30pm – 9.30pm in its main offices.

• HeiTech also launched HeiTech Go Green Campaign on April 2013, an awareness programme on recycling, waste management, energy efficiencies and water conservation for the present and future generations.

www.heitech.com.my

83/

AUDIT COMMITTEE REPORT

The Board of Directors of heiTech Padu Berhad is pleased to present the report of the audit Committee (“Committee”) for the financial year ended 31 December 2012.

From left to right:Tan Sri Dato’ Mohd. Zuki bin Kamaluddin

Chairman (Deceased 17.03.2013)Dato’ Ab. Halim bin Mohyiddin

Tuan Haji Ghazali bin AwangTuan Syed Agel bin Syed Salim

COMPOSITION OF MEMBERSDuring the financial year under review, the Committee comprises of four (4) Non-Executive Directors of the Company, the majority of whom are Independent. The composition of the Committee includes members of the Malaysian Institute of Accountants (MIA) as prescribed in the Accountants Act 1967.

The Committee comprises of the following members:

Name of Committee Members Status of Directorship

Tan Sri Dato’ Mohd. Zuki bin KamaluddinChairman of the Committee

Independent Non-Executive Director

Dato’ Ab. Halim bin Mohyiddin Independent Non-Executive Director

Tuan Haji Ghazali bin Awang Independent Non-Executive Director

Tuan Syed Agel bin Syed Salim Non-Independent Non-Executive Director


84/

• Accountability and audit requirements of the Malaysian Code on Corporate Governance.

2. Functions and Responsibilities

The functions and responsibilities of the Committee are:

a. Financial Reporting

Review of the Group’s quarterly and year-end financial statements prior to deliberation and approval by the Board, focusing on:

• The nature and impact of any changes in accounting policies and practices;

• Significant adjustments;

• The going concern assumptions; and

• Compliance with Financial Report ing Standards, the Listing Requirements of BMSB and other legal requirements.

TERMS OF REFERENCE OF THE COMMITTEE

1. Objectives

The Primary function of the Committee is to assist the Board of Directors in fulfilling the following objectives:

a. Financial transparency and operational efficiency of the Group;

b. Integrity of the financial and operational reporting processes and procedures of the Group; and

c. Compliance with:

• Listing Requirement of the Bursa Malaysia Securities Berhad (BMSB);

• Securities Commission Policies and Guidelines on Issue/Offer of Securities; and

* With the passing of Tan Sri Dato’ Mohd Zuki Bin Kamaluddin, Dato’ Ab. Halim Bin Mohyiddin was appointed as a new Chairman of Audit Committee

www.heitech.com.my

85/


b. Internal Audit

• Review the Internal Audit program and results of the Internal Audit activities, and ensure appropriate actions are taken on the recommendations of the Internal Auditor;

• Review the adequacy of the Internal Audit function, plan, scope, competency and resources, and that it has necessary authority to carry out its work;

• Review the performance of the Internal Audit function;

• Approve the appointment and termination of Head of the Internal Audit; and

• Provide opportunity for internal audit staff members who have resigned to submit their reason.

c. External Audit

• Discuss the nature and scope of the audit with the External Auditor prior to the commencement of audit;

• Discuss issues and observations arising from the interim and final audits, and any matters the auditors may wish to discuss without the attendance of management, whenever deemed necessary;

• Review the External Auditor’s Management Letter and management response; and

• Recommend the nomination or re-appointment of the External Auditors, the audit fee and termination.

d. Related Party Transaction

• Review related party transactions that may arise within the Company or the Group on a quarterly basis.

e. Other Matters

• Consider other function as defined by the Board of Directors.

3. Rights and Authorities

The Board of Directors has empowered the Committee, at the cost of the company, to:a. Investigate any matters within its terms of reference;

b. Obtain the resources which are required to discharge its duties;

c. Secure full and unrestricted access to any information pertaining to the Company;

d. Direct communication channels with the External Auditors, Internal Auditors and Senior Management of the company and its subsidiaries;

e. Obtain independent professional or other advice; and

f. 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.

4. Reporting of Breaches to the Listing Requirement

The Committee shall promptly report to the BMSB, if the Committee is of the view that matters reported to the Board of Directors of the Company have not been satisfactorily resolved resulting to a breach of Listing Requirement.

5. Conduct and Attendance of Meeting

Meetings are conducted on a minimum, four (4) times annually and also as and when required during the financial year. The quorum for a meeting requires at least two (2) Independent Non-Executive Directors to be present.

The Company Secretaries serve as the Secretary to the Committee and provide the necessary administrative and advisory services for the effective functioning of the Committee. Prior to each meeting, the Secretaries will ensure the agenda, minutes of meeting, audit reports, financial reports and supporting papers are distributed to members with sufficient notification.

The Head of Internal Audit and Chief Financial Officer shall attend meetings. Other Board members, Senior Management and employees may attend the meetings upon invitation of the committee.


86/

During the financial year ended 31 December 2012, the Committee met eight (8) times. The attendances of the Committee members are as follows:

Members Status Attendance

Tan Sri Dato’ Mohd. Zuki bin Kamaluddin(Chairman)


6/8

Dato’ Ab. Halim bin Mohyiddin IndependentNon-Executive Director

8/8

Tuan Haji Ghazali bin Awang IndependentNon-Executive Director

8/8

Tuan Syed Agel bin Syed Salim Non-IndependentNon-Executive Director

8/8

SUMMARY OF ACTIVITIESDuring the financial year ended 31 December 2012, the Committee carried its duties as set out in its terms of reference, as follows:

a. Internal Audit

i. Review and approve the Annual Internal Audit Plan;

ii. Review the Internal Audit Reports on significant issues and audit findings, recommendations and management responses;

iii. Discuss on action taken to improve the effectiveness of the Internal Control System in the audit areas;

iv. M o n i t o r t h e i m p l e m e n t a t i o n o f a u d i t recommendations to ensure that all key risks and controls issues are being addressed;

v. Review the Audit Committee Report, Statement on Risk Management and Internal Control and Statement of Corporate Governance for each financial year to be set out in the Annual Report; and

vi. Review Internal Audit performance reports for each financial year to ensure adequacy, performance, progress, achievement and coverage of the Internal Audit function.

b. External Audit

i. Review and discuss with the External Auditor’s audit plan, nature, approach and scope of the audit; and

ii. Review and discuss issues arising from External Auditors’ Management Letter to the Management, Management response and External Auditors’ evaluation of the Internal Control System.

c. Financial Reporting

i. Review quarterly financial statements prior to recommending for consideration and approval by Board of Directors; and

ii. Review the annual financial statements and ensure compliance to the accounting standards and other requirements of relevant authorities.

d. Related Party Transactions

i. Review related party transactions within the Company and Group, including any transactions, procedure or course of conduct that may raise questions of integrity.

www.heitech.com.my

87/


STATE OF INTERNAL CONTROL The Statement on Risk Management and Internal Control furnished on pages from 97 to 100 of the Annual Report provides the overview of the state of internal controls within the Group.

RELATIONSHIP WITH THE EXTERNAL AUDITORThe Group through the Committee has established transparent and appropriate relationship with the External Auditors, to meet their professional requirements. Key features underlying the relationship of the Committee with the External Auditors are included in the Audit Committee’s Terms of Reference. Meetings are held during and after the year end to discuss the findings of the External Auditors and to finalise the results of the Financial Statements.

INTERNAL AUDIT FUNCTIONThe Internal Audit function of HeiTech is carried out by the Audit & Assurance Division which directly reports to the Committee. It provides the Board of Directors with assurance it requires regarding the adequacy, integrity and effectiveness of the system of internal control.

Internal auditing is carried out on a Group basis to ensure consistency in the application of policies and procedures within the Company and the Group. Internal Audit independently reviews the control processes (financial and operational controls) implemented by the management.

A detailed Annual Internal Audit Plan is presented to the Committee for approval. The Internal Audit function adopts risks-based approach following COSO (Committee of Sponsoring Organisation of The Treadway Commission) as the Control Framework for business activity, and CoBIT (Control Objectives for Information and Related Technology) for IT related audit and prepares its audit strategy and plan based on the risk profiles of the major business units and support functions of the Group.

For the financial year ended 31 December 2012, the main activities of the Internal Audit include the following:

a. Prepare Annual Internal Audit Performance Report and Annual Internal Audit Plan for the approval of the Committee;

b. Implement the approved Annual Internal Audit Plan;

c. Assess the adequacy and effectiveness of internal control systems within the Company and the Group;

d. Examine and evaluate the adequacy, effectiveness and efficiency of all financial and operational controls within the Company and Group;

e. Ascertain the adequacy of controls for safeguarding the assets of the Company and where applicable, verify the existence of the assets owned by the Company and the Group;

f. Provide reporting and recommendations to the Management of the Company and/or the Committee and the Board of Directors on the outcome of the audits;

g. Conduct follow up audit to ensure effective and timely resolution of audit issues;

h. Conduct ad-hoc audits upon request by the Committee and Management of the Company;

i. Organize internal audit training programs for Internal Auditors to enhance their audit skills and knowledge; and

j. Keep the Committee informed of the progress of audit activities.

This Audit Committee Report is made in accordance with the resolution of the Board of Directors dated 17 April 2013.


88/

STATEMENT OF CORPORATE GOVERNANCE

INTRODUCTION The Group is always committed in maintaining the highest standard of governance. The Group believes that business sustainability could only be achieved by embedding good governance practices. Realising long term shareholders value without abdicating its duties and responsibilities to its stakeholders would be of prime importance in facilitating the Group’s aspiration in becoming a global technology conglomerate.

The Group is pleased to disclose, in line with the principles and recommendations stipulated in the Malaysian Code on Corporate Governance 2012 (“Code”) and Paragraph 15.25 Bursa Malaysia Securities Berhad Main Market Listing Requirement (“LR”), its corporate governance practices.

THE BOARD OF DIRECTORSThe Board

The Board is composed of individuals selected to ensure that an effective and impartial governance system would be in place and sustainability maintained. The Group acknowledges that in order to have an effective board, there must be a balance. The present composition of the Board consists of one (1) Executive Director and eight (8) Non-Executive Directors.

In conformity with the recommendation set out in the Code, five (5) directors are Independent Non-Executive Directors whilst four (4) are Non-Independent Directors. The Group believes that the present composition will facilitate decision making process in line with good governance practices and provide the Board with the necessary objectivity and scrutiny required in today’s challenging business environment.

Chairman and Chief Executive Officer (CEO)

The independence of the Board to act is further enhanced with the separation of the roles of the Chairman and the CEO. The separation of the two roles provides the essential checks and balances over the Management’s performance, thus strengthening the governance structure of the Group and also improving the accountability and transparency of the Board.

Roles and Responsibilities of the Board

The Board is responsible to ensure the interests of all stakeholders are protected via these 7 specific areas as follows:

• Reviewing and adopting a strategic plan for the Group;• Overseeing the performance of the Management;• Monitoring and managing principal risks in the business;• Ensuring implementation of appropriate internal controls

and mitigation measures;• Succession planning for the Senior Management;• Overseeing the development and implementation of

stakeholder communication policy for the Group; and• Reviewing the adequacy and the integrity of the

management information and internal control system of the Group.

Code of Conduct

In addition to the governance practices already in place, the Directors of the Board are also discharging their duties by observing the code of conduct formulated, to enhance the standard of corporate governance and corporate behaviour in the Group. Such code will provide guidance to the Board in discharging their responsibilities. The Group believes that the Board should always function by adhering to an ethical standard comparable to other corporate player.

Sustainability

The Group is always committed in its effort to ensure its sustainability. The Group believes that by improving and constantly adopting good governance practices, it would be able to weather the tough corporate environment and at the same time protect the stakeholders’ interest. Strategies are in place to ensure its business continuity and the upholding of its corporate social responsibilities.

Whistleblowing Policy

The employees of the Group may raise concerns, in confidence, of any wrongdoing in the financial reporting and other matters in the Group to the Audit Committee. The Audit Committee shall facilitate a proportionate and independent investigation of such matters and also the appropriate action to be taken.

Board of Directors Meeting

The Board meets at least four (4) times a year, on a quarterly basis, and has schedules of matters specifically reserved for decision, such as the approval of corporate plans and budgets, acquisition and disposal of assets that are material to the Group, major investments, changes to Management and control structure of the Group, including key policies, procedures and authority limits. Additional meetings are held as and when required.

www.heitech.com.my

89/


Board meetings are conducted in a manner that encourages open communication, meaningful participation and timely resolution of issues. Decisions are made by consensus after due deliberation. Meeting materials are furnished in advance prior to each Board meeting, to ensure members are well informed before deliberating on any issue.

Details of the Board movement and attendance at meetings for financial year ended 31 December 2012 are set out below:

No Name of Directors Designation66th 67th 68th 69th SP1 SP2 SP3

Attendance23-Feb 16-May 14-Aug 26-Nov 19-Apr 11-Jun 27-Dec

1 Dato Mohd Hilmey bin Mohd Taib

Executive Chairman

/ / / / / / / 7/7

2 Tan Sri Dato’ Mohd Zuki bin Kamaluddin

Deceased 17.03.2013


/ / X X / / X 4/7

3 Dato’ Ab. Halim bin Mohyiddin


/ / / / / / / 7/7

4 Dato’ Mohd Fadzli bin Yusof


/ / / / / / / 7/7

5 Tan Sri Dato Sri Abi Musa Asa’ari bin Mohamed Nor


/ / / / X / / 6/7

6 Syed Agel bin Syed Salim Non-Independent Non-Executive Director

/ / / / X / / 6/7

7 Haji Ghazali bin Awang Independent Non-Executive Director

/ / / X / / / 6/7

8 Tuan Haji Safiee bin Mohammad

Executive Director

/ / / / / / / 7/7

9 Ou Shian Waei Independent Non-Executive Director

/ / / / X / / 6/7

10 Dato’ Dr. Mohamed Ariffin bin Aton

Non-Independent Non-Executive Director

/ / / / / / / 7/7


90/

Access to Information and Advise

The Board is kept updated on the Group’s activities and its operations on a regular basis. Regular and latest updates on regulations and guidelines issued by relevant authorities on corporate matters are also provided to the Board. The Board also have access to all reports on the Group’s activities, both financial and operational in which officers and employees of the Group may brief and present details to the Board, upon request.

The Board may request for an advise from any officer of the Group in relation to any matters connected to the Group. Individual director is also allowed to seek or engage external professional advise at the Group’s expense, in any matters that the Director considers necessary from time-to-time to perform his duties.

Group Company Secretaries

The Company Secretaries are responsible for advising the Board on issues relating to corporate compliance with the relevant laws, rules, procedures and regulations affecting the Board and the Group, as well as on the best practices of governance. They are also responsible for advising the Directors of their obligations and duties to disclose their interest in securities, disclosure of any conflict of interest in transactions prohibition on dealing in securities and restrictions on disclosure of price-sensitive information.

Khaeruddin bin Sudharmin and Ahmad Noor bin Sulong are the Company Secretaries of HeiTech Padu Berhad. They are responsible to effectively manage the meetings of the Board and its Committees. Besides being the Board’s compliance advisors, they are also responsible to escalate all of the Board’s resolution to the Management for its further action.

All Directors have access to the advise and services of the Company Secretaries.

Board Charter

Moving forward and in line with the Code, the Board adopts a board charter as a source of reference and literature for its members in order for them to discharge their duties and responsibilities better. The Charter contains key values, principles and ethos of the Group. Some of the salient features of the Charter are the protocols for accepting new directorships, the division of responsibilities and powers

between the Board and the Management, the Chairman and the CEO and the roles and responsibilities of the Committees established by the Board. The Board Charter is periodically reviewed by the Board and can be accessed on the Group’s corporate website.

Re-election and Re-appointment

A Director shall retire from office once in three (3) years in accordance with Paragraph 7.26 of the LR. In accordance with the said regulation and the Company’s Articles of Association, all appointed directors may hold office until the first Annual General Meeting (“AGM”) subsequent to their appointment and shall be then eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at that AGM.

Pursuant to Section 129(2) of the Companies Act, 1965, the office of a director over the age of seventy (70) years, becomes vacant at every AGM unless he is reappointed by a resolution passed in such AGM of which no shorter notice than that required for the AGM has been given and the majority by which such resolution is passed is not less than three fourth of all members present and voting at such AGM.

On Directors retirement, the Company Secretary(ies) shall advise the Directors that fall within these provisions at the coming AGM. The details of Directors who are due for retirement and eligible for re-election are set out in the Notice of the AGM from pages 2 to 6 of this Annual Report.

Independence of the Board

The Board shall undertake annual assessment on the independence of its members to ensure that all of the independent members are able to bring their objective and independent judgment to the Board. This is important to ensure objectivity in the Board decision making process and also to ensure that the strategies proposed by the Management are fully deliberated upon, and take into account the long term interests not only of the shareholders, but also of the employees, customers, suppliers and the surrounding communities.

www.heitech.com.my

91/


Directors Training

During the financial year 2012, the Directors had attended various training programmes relevant to their duties and responsibilities. The training programmes had enhanced their skills, knowledge and have kept them abreast with the changes in the laws, regulations and current business environment. Among the trainings that they had attended were:

• Bursa Malaysia Half Day Governance Programme – Role of the Audit Committee in Assuring Audit Quality

• Malaysian Code on Corporate Governance

• Competition Act 2010: Key Features & Implications

• Presentation for Board of Directors on Competition Act 2011

• FIDE – Board Risk Management Committee Programme: Managing Risks in Banks

• Scrutinising Financial Statement Fraud and Detection Of Red Flags For Directors and Officers Of PLC’s And Government Regulatory Agencies

• Competition Act 2010

• Personal Data Protection Act 2010

• Whistleblower Protection Act 2010

• FIDE Forum – Roundtable Discussion on Compliance Program

• FIDE Forum – 2012 Edelman Trust Barometer

• MICPA – Understanding Financial Statements (Use of Healthy Scepticism)

• Internal Capital Adequacy Assessment Process (“ICAAP”)

• FIDE – Insurance Insights Programme

• Companies Commission of Malaysia – Managing Corporate Risk and Achieving Internal Control Through Statutory Compliance

• Operational Risk Management

DIRECTORS REMUNERATIONIn compliance with Paragraph 7.23 of the LR of Bursa Malaysia Securities Berhad, the details of the Directors’ remuneration for the financial year ended 31 December 2012, are as follows:

Fees(RM)

Basic Salary (RM)

Bonus(RM)

Benefits in Kind (RM)

Other Emoluments (RM)

Total (RM)

Executive Directors 1,167,612.00 102,070.93 1,269,682.93

Non-Executive Directors 319,095.00 319,095.00

Range of Remuneration (RM) Executive Non-Executive

0-100,000 8

100,001-300,000

300,001-600,000 1

600,001-900,000 1

It is to be noted that during the financial year ended 31 December 2012, Dato’ Mohd Hilmey bin Mohd Taib was an Executive Chairman of the Group.


92/

Board Committees

There are six (6) committees under the purview of the Board i.e. the Audit Committee, Nomination and Remuneration Committee, Employee Share Option Scheme (“ESOS”) Committee, Voluntary Separation Scheme (“VSS”) Committee, Technology Committee and Risk Management Committee. The members of these Committees comply with the criteria for independence provided under the LR. Every Committee has a separate and defined written charter and terms of reference which has been approved by the Board, describing the Committee’s authorities and responsibilities. The Chairperson

of each Committee reports on items discussed and action taken at their meetings to the Board after the conclusion of each meeting. The materials for Committee meetings are furnished timely prior to each Committee meeting to allow the members to prepare and contribute effectively on the deliberation of agendas and items during the meeting. Each Committee reviews its own charter and terms of reference annually and works in hand with the Board to make appropriate adjustment if necessary. The Board may opt to either establish additional committees or maintain existing committees. Members of all Committees of the Board are expected to attend all meetings.

a) Audit Committee


Tan Sri Dato’ Mohd Zuki bin Kamaluddin (Chairman)Deceased 17.03.2013

Independent Non-Executive6/8

Dato’ Ab. Halim bin Mohyiddin Independent Non-Executive 8/8

Haji Ghazali bin Awang Independent-Non Executive 8/8

Syed Agel bin Syed Salim Non Independent-Non Executive 8/8

Details of the composition, terms of reference, and the Audit Committee Report are set out on pages from 84 to 88 of this Annual Report.

b) Nomination and Remuneration Committee


Dato’ Ab. Halim bin Mohyiddin (Chairman)

Independent Non-Executive 2/2

Haji Ghazali bin Awang Independent Non-Executive 2/2

Tan Sri Dato’ Sri Abi Musa Asa’ari bin Mohamed Nor

Independent Non-Executive 2/2

The Nomination and Remuneration Committee (“NRC”) is empowered to review and make recommendations for membership of the Board. The NRC takes into consideration several aspects in considering a membership such as the competencies, commitment, contribution and performance of the candidate. Other than that, the NRC also facilitates the Board’s induction of new members and training programmes for the Directors.

The NRC is taking steps in adhering with the recommendation of the MCCG 2012 in relation to gender diversity and will

select candidates that would be able to fulfil the criteria of integrity and competency with the required skills and expertise.

In relation to the remuneration of the Non-Executive Directors, the criteria used would be based on the knowledge, skills and experiences the Director brings to the Group. The NRC will regularly review and compare the remuneration with peer companies. Independent Directors may not receive, directly or indirectly, any consulting, advisory or other compensatory fees from the Group.

www.heitech.com.my

93/


c) Employee Share Option Scheme (“ESOS”) Committee


Dato’ Ab. Halim bin Mohyiddin (Chairman)

Independent Non-Executive Nil

Haji Ghazali bin Awang Independent Non-Executive Nil

Tan Sri Dato’ Sri Abi Musa Asa’ari bin Mohamed Nor


This Committee was set up to assist the Board in the proper implementation of the ESOS scheme under its By-Laws and Guidelines. This is undertaken with the proper execution of the ESOS, within the defined terms of reference and also with the establishment, amendment and resolution of rules and regulations relating to the scheme and its administration.

d) Voluntary Separation Scheme (“VSS”) Committee


Dato’ Mohd Hilmey bin Mohd Taib (Chairman)

Chairman Nil

Haji Safiee bin Haji Mohammad Executive Director Nil

Haji Ghazali bin Awang Independent Non-Executive Nil

Dato’ Dr. Ariffin bin Aton Non-Independent Non-Executive Nil

The Committee assists the Board in the administration and execution of the VSS scheme for the Group if such need arise.

e) Technology Committee


Haji Safiee bin Haji Mohammad (Chairman)

Executive Director 2/2

Ou Shian Waei Independent Non-Executive 2/2

Dato’ Dr. Ariffin bin Aton Non-Independent Non-Executive 2/2

Harris bin Ismail Group Chief Executive Officer 2/2

This Committee was set up to deliberate on technology direction of the Group as follows:

i) to review, evaluate and decide on the Group’s major technology plans and strategies, including its research and development activities as well as technical and market risks associated with product development and investment;

ii) to monitor and evaluate future trends in technology that can improve the Group’s strategic plans; and

iii) monitoring of overall industry trends and assessing potential new technology markets.


94/

f) Risk Management Committee


Dato’ Mohd Fadzli bin Yusof (Chairman)


Ou Shian Waei Independent Non-Executive Nil

Dato’ Dr. Ariffin bin Aton Non-Independent Non-Executive Nil

The Committee was established on 17 April 2013 after due deliberation during the Special Board of Directors Meeting No. 1/2013 to signify the Group’s commitment in further enhancing the risk management control. The purpose of this Committee was to support improvements in the management and monitoring of the Group’s risk profile and related corporate governance practices. This resulted in a more integrated and structured approach in managing risks inherent in various aspects of the business.

SHAREHOLDERSCorporate Disclosure

The Group recognises the importance of timely and continuing disclosure of information. The Group is in compliance with Bursa Malaysia Securities Bhd Listing Requirement’s disclosure requirement, and also adopts the best practices as provided by the recommendations in the Code to strengthen the engagement and communication with shareholders. Nevertheless, the practice of disclosure of information by the Group is not merely a box ticking exercise but provides its shareholders and other stakeholders with a comprehensive, timely and continuing disclosure of information.

The shareholders of the Group and also the public may obtain all information relevant to their shareholdings and interests through the Group’s official website at www.heitech.com.my. The website contain information and updates on the Group, including public announcements, quarterly results, the Annual Report and also will be updated to include policies, shareholders rights, Board Charter and code of conduct in its commitment with the recommendations of the Code.

The Board will regularly conduct meetings, presentations and events in order to better understand and to have constructive engagements with the shareholders about performance, corporate governance and other matters affecting shareholders’ interests.

Annual General Meeting

The Annual General Meeting is a key avenue where the shareholders may engage directly with the Directors and Senior Management. It is an opportunity for the shareholders to review the Group’s fiscal information for the past year and ask any questions regarding the future business directions, which is highly encouraged by the Board. The Board has taken initiatives for the Group to publish all relevant information in the Group’s website to enable the shareholders to exercise their rights.

Investors Relations

The shareholders and the public may address their queries regarding the Group to the following persons:

i) Haji Safiee bin Haji Mohammad (Executive Director) – Tel: 03-8601 3000 or [email protected]

ii) Ahmad Abdul Ghani (Director, Corporate Services) – Tel: 03-8601 3000 or [email protected]

iii) Ahmad Noor Sulong (Group General Counsel & Company Secretary)

– Tel: 03-8601 3000 or [email protected]

iv) Rosman Mustafa Kamar (for Investor Relation and Shareholders Communication)

– Tel: 03-8601 3000 or [email protected]

www.heitech.com.my

95/


ACCOUNTABILITY AND AUDITFinancial Reporting

The Group acknowledges that one of the core elements of good governance is to adopt the principle of accountability and transparency in its financial reporting. The Group therefore, via the Audit Committee’s scrutiny, complies with the requirement applicable under the Malaysian Approved Accounting Standards Board in preparing the annual and quarterly financial statements. The Audit Committee ensures that the financial and statutory compliance aspects of the audited financial statements and adherence to internal policies and procedures prior to full deliberation at the Board level are strictly followed.

External Auditors

The appointment of external auditors by the Group is guided by the principles of good governance, which are professionalism, transparency and integrity. The Audit Committee reviews and monitors the suitability and independence of the external auditors as well as obtains assurance that the external auditors remain independent and professional throughout the audit engagement processes in accordance with the regulatory and professional requirements.

The functions of the Audit Committee in dealing with the Internal and External Auditors are detailed in Audit Committee Report as set out on pages from 84 to 88 in this Annual Report.

Risk Management and Internal Control

The Board has an overall oversight function for the establishment and continuous development of key policies and procedures to safeguard shareholders’ investments and the Company’s assets by effectively managing risks and internal control of the Group.

The statement of the Group on risk management and internal control system is set out in the Statement on Risk Management and Internal Control on pages from 97 to 100 in this Annual Report.

ADDITIONAL COMPLIANCE INFORMATIONThe following information is provided in compliance with paragraph 9.25 of Bursa Malaysia LR.

i) Options, Warrants or Convertible Securities

The Group did not issue any options, warrants or convertible securities during the financial year ended 31 December 2012.

ii) Imposition of Sanction/Penalties

There were no sanctions and/or penalties imposed on the Group and/or its subsidiary companies, directors or management arising from any significant breach of rules/guidelines/legislation by the relevant regulatory bodies during the financial year ended 31 December 2012.

iii) Material Contracts

Neither Group and/or its subsidiary companies had entered into any material contracts which involved Directors’ and major shareholders’ interest during the financial year ended 31 December 2012, save as disclosed under Disclosure to BMSB on page 101 of the Annual Report.

iv) Non-Audit Fees

The amount of non-audit fees paid to the external auditors by the Group is set out in Note 9 to the financial statements to the year ended 31 December 2012 on page 140 of this Annual Report.

v) Profit Guarantee

There was no profit guarantee given by the Group during the financial year ended 31 December 2012.

vi) Revaluation Policy on Landed Properties

There was no revaluation of properties of the Group done during the financial year ended 31 December 2012.

vii) Share Buy Back

There was no share buy back exercise done during the financial year ended year ended 31 December 2012.

viii) American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) programme

The Group did not sponsor any ADR or GDR program during the financial year ended 31 December 2012.

The statement was duly reviewed and approved by the Board of Directors of HeiTech Padu Bhd on 17th of April 2013.


96/

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTIONPrinciple 6 of the Malaysian Code on Corporate Governance 2012 (“Code”) states that the Board should establish a sound risk management framework and internal control system. In compliance with the provision of Bursa Malaysia Securities Berhad (“BMSB”) Listing Requirements Paragraph 15.26 (b) and Statement on Risk Management and Internal Control : Guidance for Directors of Listed Issuers (“Risk Management and Internal Control Guidance”), the Board of Directors (“the Board”) is committed to establish a sound risk management framework and internal control system, and is pleased to present the following Statement on Risk Management and Internal Control (“SRMIC”), which illustrates the risk management framework and scope of the internal control during the year under review.

BOARD RESPONSIBILITYThe Board acknowledges its responsibility for a sound risk management framework and internal control system to safeguard shareholders’ investments and the Group’s assets. The Board is overall responsible for the key elements needed in maintaining a sound system of risk management and internal control in HeiTech Padu Berhad (“HeiTech”) and subjects the system to a process of regular reviews to ensure its continued relevance, effective and applicable to the changes in the Group’s structure, processes and dynamic business environment. The risk management framework and internal control systems cover, inter alia, financial, organisational, operational, project and compliance controls. As there are limitations that are inherent in any risk management and internal control systems, these systems are designed to manage rather than eliminate risks of failure to achieve the Group’s business objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or loss.

HeiTech risk management and internal control systems do not apply to its associated companies and joint controlled entities, which fall within the control of their majority shareholders. The interests of HeiTech Padu Berhad are served through representation on the board of the respective companies. These representations provide the Board with information for strategic decision making in view of the continuity of the Group’s investment.

www.heitech.com.my

97/


RISK MANAGEMENTThe Board is responsible to ensure and implement appropriate systems to manage risks. The Board ensures that HeiTech’s risks are identified, evaluated, and managed by on-going systems and continuous processes. The Internal Control Structures describe in the following section are functioning and capable of performing the overall risk management framework and internal control system of HeiTech.

Risk management is carried out according to the HeiTech’s defined business process and operations. Reporting, deliberation, resolution and monitoring of risks related initiatives are performed at all level of business unit. Significant operational risks are presented and discussed at the various Management Committee Meeting and strategic risks are deliberated at the Executive Council meeting.

The Board after due deliberation in its Special Board Meeting held on 17 April 2013 to signify the Group’s Commitment in further enhancing our risk management system, had established a Risk Management Committee. The Committee is responsible for the overall oversight, implementation and monitoring of the group-wide Enterprise Risk Management System. Details of the members of the Committee are furnished in the Statement on Corporate Governance at page 95 of the Annual Report.

INTERNAL CONTROL STRUCTURESThe Board is committed in maintaining an effective control structure and environment for the proper conduct of HeiTech’s business operations. The following key Internal Control Structures were implemented to ensure effective control environment and provide key elements needed in maintaining a system of risk management and internal control:

a) Organization structure

• Various Board Committees that are administered by defined terms of reference;

i. the Audit Committee;

ii. the Nomination Committee;

iii. the Remuneration Committee;

iv. the Technology Committee; and

v. Employee Share Option Scheme Committee.

• The Group organization structure that reflects defined Key Result Area and Key Performance Indicators (“KRA/KPIs”).

b) Board and Management meetings

• Board Meetings and a year-end Special Board Meeting that monitors and deliberates the whole spectrum of the Group’s strategic business targets, directions and challenges.

• Executive Committee Meetings that deliberate strategic business direction and review the financial and operational performances of HeiTech in ensuring that business targets are achieved and customers’ requirements are met.

• Management Committee Meetings that review the overall group operation, business and financial performance, execution of group strategic decision, implementation of quality and business processes in ensuring that overall group operation are effectively managed and operated.

• Project Steering Committee Meetings that monitors the projects performance and implementation.

• Technology and Innovation Council Meetings that review, evaluate and decide on HeiTech’s major technology plans and strategies, including monitoring the industry trends and assessing new technology in the markets. This Council also provides platform for nurturing innovation.

• Central Review Committee Meetings that review and evaluate business proposals to ensure that strategic solution, strategic pricing and strategic partnership (with customers and various types of partners) are appropriately considered.

• Technical Steering Committee Meetings that review all projects to ensure the right scope of work and the right duration and effort estimation of the project based on the project risk analysis by central PMO.

• Procurement Committee Meetings that administer and manage the procurement acquisition processes and approval.

• Business review that appraises HeiTech’s business and operational achievements against the business objectives and targets.

c) Audit Committee

• Audit Committee, majority of whom comprises Independent Non-Executive Directors duly executes its duties as defined in the Terms of Reference. Audit Committee regularly reviews, on behalf of


98/

the Board, internal control issues reported by the Internal Auditors and External Auditors, including any significant internal control issues affecting the financial statements.

• Further details of the activities undertaken by the Audit Committee are set out in the Audit Committee Report.

d) Internal Audit (Audit & Assurance)

• Defined KRA/KPIs for the Internal Audit function to manage and oversee the Group operational, strategic and compliance auditing activities during the year under review.

• The Internal Audit function of HeiTech is carried out by the Audit & Assurance Division. The Audit & Assurance Division operates independently of management and reports directly to the Audit Committee. In providing independent and impartial appraisal, the internal auditors are given full, free and unrestricted access to all records, information, property, personnel and other relevant resources within the Group.

• Internal Audit provides independent assessment on HeiTech’s internal control systems and attended the ad-hoc audit review as and when requested by the Audit Committee. All the result of the audit exercise including follow up audit report will be tabled and deliberated at the Audit Committee meeting.

e) Limits of Authority, Policies and Procedures

• Limits of Authority that outlines the authorised signatories’ authority in contractual, financial and procurement approvals and execution.

• Centralised Policies and Procedures of various Divisions, Department, Units and Projects Teams of the Group through the central depository of process management.

f) Quality Management Systems, Certification and Standards

• Achieved and complied with the MS ISO 9001:2008 Quality Management System (“QMS”) certifications since October 1998. The scope of certification covering 11 areas that includes Legal Services, Human Resources Management, Competency Development & Training, Procurement, Audit & Assurance, Corporate Communication,

Wide Area Network, Local Area Network, PNB Data Center Operations, Call Center Operations and PNB Project.

• Achieved and retained with the ISO/IEC 27001:2005 Information Security Management System (“ISMS”) certification since May 2006 for services provided by HeiTech Managed Services. The scope of certification covers Padu*Net Nodes Infrastructure, Business Recovery Management Services, Internet Data Center Services, Desktop Management Services and Call Center Operations Services.

• Achieved and complied with the ISO/IEC 20000:2011 Service Management System (“SMS”) certification since January 2010. The scope of certification covers Wide Area Network (WAN), Local Area Network/Desktop Management, Data Center Services and Helpdesk Support Services.

• Internal Quality audits and follow up audits were performed on all QMS, ISMS and SMS scopes by the pools of certified internal auditors. An annual Surveillance Audit and a Re-certification Audit in every 3 years will be carried out by SIRIM QAS International on these certifications.

• Adoption of structured methodologies for IT Project Management (Project Management Information System, “PROMISE”) and Application Development (Application Development Information System, “ADVISE”) which comply to the Capability Maturity Model® Integration (“CMMI”) Maturity Level 3 certification requirement from Software Engineering Institute (“SEI”). CMMI is a process improvement model that provides guidance for improving organization’s processes and ability to manage the development, acquisition and maintenance of products and services. A monthly compliance assessment is being carried out by the Central PMO.

• The Data Center in HeiTech Village 2 (HTV 2) is designed and maintained in accordance to Uptime Institute Standards on electrical component and Tier IV ready under the Telecommunication Industry Association – Telecommunications Infrastructure Standards for Data Centers (TIA942) on 4 components i.e. Mechanical (cooling system), Electrical (based on Uptime), Architectural (civil & structures) and Network (connectivity for WAN & LAN).

www.heitech.com.my

99/


g) Strategic Planning

• Prepare Business Plan of HeiTech and consolidates Business Plan for all HeiTech Group of Companies. The business plan will be presented, deliberated and approved by the Board of HeiTech.

• Prepare the Operational Master Plan for all HeiTech Group of Companies in order to monitor and review the Company’s performance to ensure that it is according to their target.

• Conduct Knowledge Sharing Session within HeiTech Group of Companies to create synergy among the Companies. The sessions include CEO Forum that was held twice a year.

h) Corporate Development

• Process Improvements and Compliance Assessment initiatives are continuously instituted throughout the HeiTech Group as part of the internal control framework. They are designed to manage risks that may affect the achievement of business objectives and reviewed from time to time to keep up with the changes in the business environment or regulatory guidelines.

• Defined business processes of HeiTech are made available online through http://ipractices.heitech.com.my/hdp/.

• Dedicated Process Management Unit and Workgroup were established as to ensure continuous process improvement, process awareness and process compliance for the organization.

i) Human Capital Management

• A Performance Management mechanism is established based on both Balanced Scorecard System (BSC) and Competency Assessment & Development (CAD). The BSC is defined top-down where business objectives are clearly defined and targets are set for individual employee. Employees are appraised through CAD system where individual competencies are measured against the required job skill, hence identifying the gap on skill of the employee.

• Training and structured development programs either face-to-face or through e-learning are in place for the Board, Management and employees to ensure that employees are competent and adequately trained to enable them to perform their duties and responsibilities effectively.

j) Legal and Regulatory Compliance

• Defined processes, procedures and monitoring mechanism govern the practice and performance of contractual formulation and review.

• Keeping vigilance of any domestic and international legal and regulatory compliance matters that may affect HeiTech’s Business operations.

• Awareness programs and road shows on roles and responsibilities of a service provider and contract management.

k) Communication and Corporate Identity Management

• Defined processes, procedures and guidelines of enforcement through centralized communication process repository.

• Consolidation of Corporate Identity manual into an enhanced Brand Book propagation across the group to create a single, steadfast and clear visual identity and leverage HeiTech brand equity and standardise the visual presentation in all cross media applications.

For the financial year under review, the Board is satisfied that there were no material losses, contingencies or uncertainties incurred as a result of weaknesses in the systems of internal control. The Management continues to take measures to strengthen the risk management and internal control systems.

This Statement on Risk Management and Internal Control has been reviewed by the External Auditors, Messrs. Hanafiah Raslan & Mohamad, in compliance with Recommended Practice Guide (“RPG”) 5 issued by Malaysian Institute of Accountants (“MIA”).

This statement is made in accordance with the resolution of the Board of Directors dated 17 April 2013.


100/

DISCLOSURE TO bURSA MALAYSIA

NO. DATE ANNOUNCEMENT

1 19-3-2013 Change in Audit Committee – Re-designation of Dato’ Abdul Halim as a Chairman Audit Committee

2 18-3-2013 Change in Boardroom

3 18-3-2013 Change in Audit Committee – Departure of Allahyarham Tan Sri Dato’ Zuki bin Kamaluddin

4 13-3-2013 The appointment of HeiTech Padu Berhad for the Maintenance and Technical Support Services of Computer (Hardware and Software) and related Peripherals for Road Transport Department.

5 27-12-2012 Acceptance of the Letter of Award for the Provision of Services of “Master Outsourcing Agreement for IT Services between PNB and HeiTech Padu Berhad for the year 2013-2014

6 07-11-2012 Acceptance of the Letter of Award for the Provision of Maintenance Services for the Main Business ICT for National Registration Department

7 28-9-2012 Acquisition by Inter-City MPC (M) Sdn. Bhd., of 100% Shareholding in Pro Office Sdn. Bhd.

8 21-6-2012 General Meeting: Outcome of Meeting

11 23-5-2012 Circular to Shareholder on Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

12 23-5-2012 Annual Report 2011

13 21-5-2012 Acceptance of the Letter of Award for the Provision of the Replacement and Maintenance Services for Computer Softwares for the Mainframe Computer at the Main and Secondary Data Center for Inland Revenue Board of Malaysia

14 02-5-2012 Acceptance of the Letter of Award for the Extension of Maintenance Services of the Wide Area Network (WAN) for National Registration Department

15 26-4-2012 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

www.heitech.com.my

101/

103 Statement of Directors’ Responsibilities104 Directors’ Report108 Statement by Directors108 Statutory Declaration109 Independent Auditors’ Report111 Statements of Comprehensive Income113 Statements of Financial Position115 Statements of Changes in Equity117 Statements of Cash Flows119 Notes to The Financial Statements182 Supplementary Information

FINANCIAL STATEMENTS

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Under the Companies Act 1965, the Directors are required to prepare financial statements, which disclose a true and fair view of the state of affairs of the Group at the end of each financial year and of their results and cashflow for the year then ended.

The Directors consider that in preparing the financial statements:

the Group applied appropriate and consistent accounting policies; reasonable and prudent judgments and estimates were made; and all applicable MASB Approved Accounting Standards in Malaysia For Entities Other Than Private Entities have been

adhered with.

The Directors are responsible for ensuring that the Group and Company keep proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Group and to 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.

www.heitech.com.my

103/

DIRECTORS’ REPORT

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2012.

PRINCIPAL ACTIVITIESThe principal activities of the Company are the provision of systems integration, network related services, data centre management, disaster recovery services and other information technology related services. Under the Communications and Multimedia Act (CMA) 1998 Framework, the provision of network related services and internet data centre services are licensed as Network Services Provider Individual License (NSP (i)) and Application Service Provider Class License (ASP (c)) respectively.

The principal activities of the subsidiaries are described in Note 16 to the financial statements.

There have been no significant changes in the nature of the principal activities during the financial year.

RESULTS Group Company RM’000 RM’000

Profit from continuing operation, net of tax 5,409 3,178Loss from discontinued operation, net of tax (569) –

Profit for the year, net of tax 4,840 3,178

Profit attributable to:

Owners of the parent 4,563 3,178Non-controlling interests 277 –

4,840 3,178

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDSThe directors do not recommend the payment of any dividend for the current financial year.


104/

DIRECTORSThe names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Mohd. Hilmey bin Mohd. TaibDato’ Ab. Halim bin MohyiddinTuan Syed Agel bin Syed SalimTuan Haji Safiee bin MohammadTuan Haji Ghazali bin AwangDato’ Mohd. Fadzli bin YusofTan Sri Abi Musa Asa’ari bin Mohamed NorOu Shian WaeiDato’ Dr. Mohamed Ariffin bin AtonTan Sri Dato’ Mohd. Zuki bin Kamaluddin (deceased on 18 March 2013)

In accordance with Article 82 of the Company’s Articles of Association, Dato’ Mohd. Hilmey bin Mohd. Taib, Tuan Syed Agel bin Syed Salim and Ou Shian Waei retire from the Board of Directors by rotation at the forthcoming Annual General Meeting. Dato’ Mohd. Hilmey bin Mohd. Taib, Tuan Syed Agel bin Syed Salim and Ou Shian Waei, being eligible, offer themselves for re-election.

DIRECTORS’ BENEFITSNeither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those from the share options granted pursuant under the Employee Share Option Scheme (“ESOS’’).

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 7 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, other than as disclosed in Note 32 to the financial statements and the options to subscribe for shares in the Company of RM1.00 each pursuant to the ESOS as disclosed in Note 31 to the financial statements.

DIRECTORS’ INTERESTSAccording to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares and options over shares in the Company and its related corporations during the financial year were as follows:

Number of ordinary shares of RM1.00 each 1 January 31 December 2012 Bought Sold 2012The CompanyDirect InterestDato’ Mohd. Hilmey bin Mohd. Taib 7,820,184 - - 7,820,184Tuan Haji Safiee bin Mohammad 1,012,045 - - 1,012,045Tan Sri Dato’ Mohd. Zuki bin Kamaluddin 12,500 - - 12,500Tuan Syed Agel bin Syed Salim 12,500 - - 12,500

www.heitech.com.my

105/

DIRECTORS’ REPORT

DIRECTORS’ INTERESTS (CONT’D.) Number of ordinary shares of RM1.00 each 1 January 31 December 2012 Bought Sold 2012The CompanyIndirect Interest*Dato’ Mohd. Hilmey bin Mohd. Taib 30,521,028 - - 30,521,028

* held through Padujade Corporation Sdn. Bhd.

Number of ordinary shares of RM1.00 each 1 January 31 December 2012 Bought Sold 2012Padusoft Sdn. Bhd, a subsidiary of the CompanyDirect InterestDato’ Mohd. Hilmey bin Mohd. Taib 1 - - 1Tuan Haji Safiee bin Mohammad 1 - - 1

Number of options to subscribe for ordinary shares of RM1.00 each pursuant to ESOS 1 January 31 December 2012 Granted Exercised 2012The CompanyDato’ Mohd. Hilmey bin Mohd. Taib 400,000 - - 400,000Tuan Haji Safiee bin Mohammad 450,000 - - 450,000

Dato’ Mohd. Hilmey bin. Mohd. Taib and Tuan Haji Safiee bin Mohammad by virtue of their interest in shares in the Company are also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.

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

EMPLOYEE SHARE OPTION SCHEMEThe HeiTech Padu Employee Share Options Scheme (“ESOS’’) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 18 June 2003. The ESOS was implemented on 30 July 2003 and is to be in force in accordance with by-laws for a period of 10 years from the date of implementation.

The salient features and other terms of the ESOS are disclosed in Note 31 to the financial statements.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of employees, who have been granted options to subscribe for less than 50,000 ordinary shares of RM1.00 each. There are no options granted to employees, other than executive directors, to subscribe for 50,000 or more ordinary shares of RM1.00 each during the financial year.

OTHER STATUTORY INFORMATION(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company

were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts; and


106/

OTHER STATUTORY INFORMATION (CONT'D.)

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

(b) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render:

(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

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

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

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

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

(ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

(f) 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 their obligations as and when they fall due; and

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

SIGNIFICANT EVENTDetails of the significant event are disclosed in Note 11 to the financial statements.

AUDITORSThe auditors, Hanafiah Raslan & Mohamad, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 April 2013.

Dato’ Mohd. Hilmey bin Mohd. Taib Dato’ Ab. Halim bin Mohyiddin

www.heitech.com.my

107/

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169 (15) OF THE COMPANIES ACT, 1965

STATUTORY DECLARATIONPURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965

We, Dato’ Mohd. Hilmey bin Mohd. Taib and Dato’ Ab. Halim bin Mohyiddin, being two of the directors of HeiTech Padu Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 111 to 181 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended.

The information set out in Note 40 to the financial statements have been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 April 2013.

Dato’ Mohd. Hilmey bin Mohd. Taib Dato’ Ab. Halim bin Mohyiddin

I, Ahmad Nasrul Hakim bin Mohd Zaini, being the officer primarily responsible for the financial management of HeiTech Padu Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 111 to 181 are in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Ahmad Nasrul Hakim bin Mohd Zaini at Subang Jaya, Selangoron 17 April 2013 Ahmad Nasrul Hakim bin Mohd Zaini

Before me,


108/

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF HEITECH PADU BERHAD

REPORT ON THE FINANCIAL STATEMENTSWe have audited the financial statements of HeiTech Padu Berhad, which comprise statements of financial position as at 31 December 2012 of the Group and of the Company, and statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 111 to 181.

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 requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is 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 judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 16 to the financial statements, being financial statements that have been included in the consolidated financial statements.

www.heitech.com.my

109/

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF HEITECH PADU BERHAD

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.

Other reporting responsibilities

The supplementary information set out in Note 40 on page 182 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 Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance’’) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other matters

1. As stated in Note 2.2 to the financial statements, HeiTech Padu Berhad adopted Malaysian Financial Reporting Standards on 1 January 2012 with a transition date of 1 January 2011. These standards were applied retrospectively by directors to the comparative information in these financial statements, including the statements of financial position as at 31 December 2011 and 1 January 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended 31 December 2011 and related disclosures. We were not engaged to report on the comparative information and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the year ended 31 December 2012 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially affect the financial position as of 31 December 2012 and financial performance and cash flows for the year then ended.

2. 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.

Hanafiah Raslan & Mohamad Sandra Segaran a/l Muniandy@KrishnanAF: 0002 No. 2882/01/15(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia17 April 2013


110/

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012

Group Company Note 2012 2011 2012 2011 RM’000 RM’000 RM’000 RM’000 Restated Restated

Continuing operationsRevenue 4 395,529 338,124 356,504 296,314Other income 5 12,023 10,949 28,214 14,804

Total revenue 407,552 349,073 384,718 311,118

Employee benefits expense 6 (93,965) (80,238) (28,566) (59,296)Purchase of hardware and software (47,182) (35,153) (56,983) (36,795)Lease line rental (60,185) (46,927) (92,104) (46,885)Maintenance costs (57,606) (39,151) (111,586) (43,213)Bulk mailing processing charges (9,624) (14,481) – –Project implementation costs (56,536) (51,771) (73,417) (55,234)Depreciation 9 (11,794) (11,893) (9,598) (10,232)Other expenses (59,036) (62,530) (5,256) (48,364)

Total expenditure (395,928) (342,144) (377,510) (300,019)

Profit from operations 11,624 6,929 7,208 11,099Finance costs 8 (5,450) (4,875) (5,246) (4,587)Share of results of associates 1,762 1,303 – –

Profit before taxation from continuing operations 9 7,936 3,357 1,962 6,512Income tax (expense)/benefit 10 (2,527) (1,984) 1,216 (1,407)

Profit from continuing operations, net of tax 5,409 1,373 3,178 5,105Discontinued operation(Loss)/profit from discontinued operation, net of tax 11 (569) 4,687 – –

Profit for the year, net of tax 4,840 6,060 3,178 5,105

Other comprehensive (loss)/income:Available for sale investments' fair value movement (340) – (340) –Foreign currency translation (758) 526 – –

Other comprehensive (loss)/income for the year, net of tax (1,098) 526 (340) –

Total comprehensive income for the year 3,742 6,586 2,838 5,105

Profit/(loss) attributable to:Owners of the parent 4,876 1,466 3,178 5,105– Continuing operations (313) 2,578 – –– Discountinued operation 277 2,016 – –

Non-controlling interests 4,840 6,060 3,178 5,105

www.heitech.com.my

111/

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012

Group Company Note 2012 2011 2012 2011 RM’000 RM’000 RM’000 RM’000 Restated Restated

Total comprehensive income attributable to:Owners of the parent 3,692 4,412 2,838 5,105Non-controlling interests 50 2,174 – –

3,742 6,586 2,838 5,105

Earnings per share attributable to owners of the parent (sen per share):Basic 12 4.51 4.00

Diluted 12 4.31 3.82

Earnings per share from continuing operations attributable to owners of the parent (sen per share):Basic 12 4.82 1.45

Diluted 12 4.61 1.38

Earnings per share from discontinued operation attributable to owners of the parent (sen per share):Basic 12 (0.31) 2.55

Diluted 12 (0.30) 2.44

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


112/

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012

Group Company Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Restated Restated

Assets Non-current assets Property, plant and equipment 14 75,064 68,560 71,675 55,439 52,263 58,613Intangible assets 15 28,080 21,646 15,101 12,860 2,957 –Investment in subsidiaries 16 – – – 46,952 45,349 39,247Investment in associates 17 3,445 21,777 2,855 – 13,758 –Other investments 18 15,517 8,026 7,912 15,353 7,862 6,992Lease receivable 23 93,546 98,839 113,260 93,546 98,839 113,260Deferred tax assets 30 2,728 624 24 584 609 80 218,380 219,472 210,827 224,734 221,637 218,192 Current assets Inventories 20 1,523 436 886 – – –Trade and other receivables 19 166,580 158,360 143,649 164,668 141,457 129,464Other current assets 21 52,700 67,327 81,859 50,971 66,159 81,723Cash and bank balances 24 73,005 56,135 47,344 71,075 49,364 36,775Tax recoverable 4,789 7,061 4,601 4,413 6,896 4,235 298,597 289,319 278,339 291,127 263,876 252,197Assets of disposal group classified as held for sale sale 11 13,688 – – – – – 312,285 289,319 278,339 291,127 263,876 252,197 Total assets 530,665 508,791 489,166 515,861 485,513 470,389 Equity and liabilities Current liabilities Loans and borrowings 29 124,021 124,799 10,680 122,674 123,765 9,829Trade and other payables 25 91,242 71,304 138,468 100,314 68,531 137,729Tax payable 608 882 1,024 – – – 215,871 196,985 150,172 222,988 192,296 147,558Liabilities of disposal group classified as held for sale 11 817 – – – – – 216,688 196,985 150,172 222,988 192,296 147,558 Net current assets 95,597 92,334 128,167 68,139 71,580 104,639

www.heitech.com.my

113/

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012

Group Company Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Restated Restated

Non-current liabilitiesDeferred tax liabilities 30 3,145 982 168 – – –Loans and borrowings 29 94,041 97,455 127,630 93,566 96,748 127,054

97,186 98,437 127,798 93,566 96,748 127,054

Total liabilities 313,874 295,422 277,970 316,554 289,044 274,612

Net assets 216,791 213,369 211,196 199,307 196,469 195,777

Equity attributable to equity owners of the parentShare capital 26 101,225 101,225 100,716 101,225 101,225 100,716Share premium 26 16,526 16,526 16,526 16,526 16,526 16,526Retained earnings 27 88,785 84,222 85,721 80,681 77,503 77,941Other reserves 28 11 882 (107) 875 1,215 594

206,547 202,855 202,856 199,307 196,469 195,777Non-controlling interests 10,244 10,514 8,340 – – –

Total equity 216,791 213,369 211,196 199,307 196,469 195,777

Total equity and liabilities 530,665 508,791 489,166 515,861 485,513 470,389



114/

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2012

<------------------------ Attributable owners of the parent ------------------------->Non-distributable Distributable <------------------- Non-distributable -------------------->

Group Note

Totalequity

RM’000

Total equityattributable

to ownersof theparent

RM’000

Sharecapital

(Note 26)RM’000

Sharepremium(Note 26)RM’000

Retainedearnings

(Note 27)RM’000

Total otherreserves

(Note 28)RM’000

Shareoptionsreserve

(Note 28)RM’000

Foreigncurrency

translationreserve

(Note 28)RM’000

Fair valueadjustment

reserve(Note 28)RM’000

Non-controlling

interests

RM’000

Opening balance at 1 January 2012 213,369 202,855 101,225 16,526 84,222 882 1,215 (333) – 10,514Total comprehensive income 3,742 3,692 – – 4,563 (871) – (531) (340) 50Transactions with ownersDividends paid to non-controlling interests (320) – – – – – – – – (320)

Total transactions with owners (320) – – – – – – – – (320)

Closing balance at 31 December 2012 216,791 206,547 101,225 16,526 88,785 11 1,215 (864) (340) 10,244

Opening balance at 1 January 2011 211,196 202,856 100,716 16,526 85,721 (107) 594 (701) – 8,340Total comprehensive income 6,586 4,412 – – 4,044 368 – 368 – 2,174Transactions with ownersIssuance of shares for cash 509 509 509 – – – – – – –Share options granted 621 621 – – – 621 621 – – –Dividends 13 (5,543) (5,543) – – (5,543) – – – – –

Total transactions with owners (4,413) (4,413) 509 – (5,543) 621 621 – – –

Closing balance at 31 December 2011 213,369 202,855 101,225 16,526 84,222 882 1,215 (333) – 10,514


www.heitech.com.my

115/

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2012

<---- Non-distributable ----> Distributable Non-distributable

Company

Totalequity

RM’000

Sharecapital

(Note 26)RM’000


Retainedearnings

(Note 27)RM’000

Totalother

reserves(Note 28)RM’000

Shareoptionsreserve

(Note 28)RM’000


reserve(Note 28)RM’000

Opening balance at 1 January 2012 196,469 101,225 16,526 77,503 1,215 1,215 –Total comprehensive income 2,838 – – 3,178 (340) – (340)

Closing balance at 31 December 2012 199,307 101,225 16,526 80,681 875 1,215 (340)

<---- Non-distributable ---->DistributableNon-

distributable

Company Note

Totalequity

RM’000

Sharecapital

(Note 26)RM’000


Retainedearnings

(Note 27)RM’000

Shareoptionsreserve

(Note 28)RM’000

Opening balance at 1 January 2011 195,777 100,716 16,526 77,941 594Total comprehensive income 5,105 – – 5,105 –

Transactions with ownersIssuance of shares for cash 509 509 – – –Share options granted 621 – – – 621Dividends 13 (5,543) – – (5,543) –

Total transactions with owners (4,413) 509 – (5,543) 621

Closing balance at 31 December 2011 196,469 101,225 16,526 77,503 1,215



116/

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012

Note

Group Company2012

RM’0002011

RM’000Restated

2012RM’000

2011RM’000Restated

Operating activitiesProfit before tax from continuing operations 7,936 3,357 1,962 6,512(Loss)/profit before tax from discontinued operation 11 (499) 6,261 – –

Profit before taxation, total 7,437 9,618 1,962 6,512Adjustments for:

Gain on disposal of property, plant and equipment 5 (49) (139) (49) (79)Interest income– continuing operations 5 (718) (954) (625) (833)– discontinued operation 11 (6) (77) – –Dividend income 5 (2,528) (3,376) (11,458) (7,375)Net fair value loss/(gain) on held for trading

investments 5,9 809 (939) 809 (939)Loss/(gain) on disposal of other investment 5,9 25 (218) 25 (218)Net loss/(gain) on remeasurement to fair value of

retained interest in a former associate 5,9 2,140 – (335) –Net gain on disposal of investment in a subsidiary 5 – – (403) –Share option granted under ESOS 6 – 621 – 621Finance costs– continuing operations 8 5,450 4,875 5,246 4,587– discontinued operation 11 4 40 – –Depreciation– continuing operations 9 11,794 11,893 9,598 10,232– discontinued operation 9 20 44 – –Reversal of impairment loss on:– trade receivables 9 (4,617) (2,115) (4,298) (2,064)– other receivables 9 (1,536) (879) (1,536) (879)Impairment loss on:– trade receivables 9 4,673 4,714 4,183 4,714– other receivables 9 204 988 204 988– intangible assets 9 3,427 – – –Amortisation of intangible assets 9– continuing operations 102 1,743 88 22– discontinued operation – 300 – –Share of results of associates– continuing operations (1,762) (1,303) – –– discontinued operation 11 747 139 – –

Total adjustments 18,179 15,357 1,449 8,777

www.heitech.com.my

117/

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012

Note

Group Company2012

RM’0002011

RM’000Restated

2012RM’000


Operating profit before working capital changes 25,616 24,975 3,411 15,289Changes in working capital(Increase)/decrease in inventories (1,088) 450 – –Increase in receivables (13,958) (21,026) (10,923) (19,454)Decrease in other current assets 19,806 13,692 24,781 15,564Increase/(decrease) in payables 10,630 (45,499) 16,596 (47,555)Total changes in working capital 15,390 (52,383) 30,454 (51,445)

Cash from/(used in) operations 41,006 (27,357) 33,865 (36,156)Interest paid (5,454) (4,915) (5,246) (4,587)Taxes paid (3,866) (5,946) (2,971) (3,597)

Net cash from/(used in) operating activities 31,686 (38,218) 25,648 (44,340)

Investing activitiesPurchase of property, plant and equipment 14 (6,166) (8,405) (1,961) (4,103)Additions to intangible assets 15 – (478) – (437)Interest received 724 1,031 625 833Net dividends received 2,528 3,376 3,008 6,375Proceeds from disposal of property, plant and

equipment 59 736 53 300Proceeds from disposal of an investment – 1,128 – 372Proceeds from disposal of an associate 6,450 – 6,450 –Proceeds from disposal of a subsidiary – – 4,000 –Net cash outflow on acquisition of a subsidiary – (5,734) – (6,102)Purchase of investments (1,022) (17,845) (1,022) (13,845)

Net cash from/(used in) investing activities 2,573 (26,191) 11,153 (16,607)

Financing activitiesProceeds from issuance of ordinary shares – 509 – 509Proceeds from loans and borrowings – 78,717 – 78,717Repayments of loans and borrowings (31,170) (10,782) (31,047) (10,629)Net repayments of obligations under finance leases (2,703) (351) (990) (117)Dividends paid to non-controlling interests (320) – – –Dividends paid – (10,604) – (10,604)

Net cash (used in)/generated from financing activities (34,193) 57,489 (32,037) 57,876

Net increase/(decrease) in cash and cash equivalents 66 (6,920) 4,764 (3,071)Effect of exchange rate changes on cash and cash

equivalents (42) 51 – – Cash and cash equivalents at 1 January 40,475 47,344 33,704 36,775

Cash and cash equivalents at 31 December 24 40,499 40,475 38,468 33,704



118/

NOTES TO THE FINANCIAL STATEMENTS– 31 DECEMBER 2012

1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on Bursa

Malaysia Securities Berhad. The registered office and the principal place of business of the Company is located at Level 15, HeiTech Village, Persiaran Kewajipan, USJ 1, UEP Subang Jaya, 47600 Selangor Darul Ehsan.

The principal activities of the Company are the provision of systems integration, network related services, data centre management, disaster recovery services and other information technology related services. Under the Communications and Multimedia Act (CMA) 1998 Framework, the provision of network related services and internet data centre services are licensed as Network Services Provider Individual License (NSP (i)) and Application Service Provider Class License (ASP (c)) respectively.

The principal activities of the subsidiaries are described in Note 16 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act 1965 in Malaysia. These are the Group and the Company’s first financial statements prepared in accordance with MFRS and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards have been applied.

In the previous years, the financial statements of the Group and the Company were prepared in accordance with Financial Reporting Standards (“FRS”). At the beginning of the current financial year, the Group and the Company adopted MFRS framework for annual periods beginning on or after 1 January 2012 as described fully in Note 2.2.

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

The financial statements are presented in Ringgit Malaysia (“RM’’).

2.2 First-time adoption of Malaysian Financial Reporting Standards (“MFRS’’)

These financial statements, for the year ended 31 December 2012, are the first the Group and the Company have prepared in accordance with MFRS. For periods up to and including the year ended 31 December 2011, the Group and the Company prepared their financial statements in accordance with FRS.

The accounting policies described in the financial statements have been applied in preparing the financial statements of the Group and the Company for the financial year ended 31 December 2012, the comparative information presented in these financial statements for the financial year ended 31 December 2011 and in the preparation of the opening MFRS statement of financial position at 1 January 2011, the Group and the Company’s date of transition to MFRS. The transition to MFRS does not have financial impact to the financial statements of the Group and the Company.

www.heitech.com.my

119/

Notes to the fiNaNcial statemeNts– 31 December 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.2 First-time adoption of Malaysian Financial Reporting Standards (“MFRS’’) (Cont’d.)

There are no adjustments arising from the transition to MFRSs. Accordingly, no additional notes to the financial statements are presented for 1 January 2011.

2.3 Standards issued but not yet effective

The Group and the Company have not adopted the following standards, amendments and interpretation that have been issued but not yet effective:

Description Effective for annual periods beginning on or after

mFrS 101 Presentation of items of Other Comprehensive income 1 July 2012 (amendments to mFrS 101)amendments to mFrS 101: Presentation of Financial Statements 1 January 2013 (annual improvements 2009-2011 Cycle)mFrS 3 Business Combinations (iFrS 3 Business Combinations issued by iaSB 1 January 2013 in march 2004)mFrS 10 Consolidated Financial Statements 1 January 2013mFrS 11 Joint arrangements 1 January 2013mFrS 12 Disclosure of interests in Other Entities 1 January 2013mFrS 13 Fair Value measurement 1 January 2013mFrS 119 Employee Benefits 1 January 2013mFrS 127 Separate Financial Statements 1 January 2013mFrS 128 investments in associates and Joint Ventures 1 January 2013mFrS 127 Consolidated and Separate Financial Statements (iaS 27 as revised by iaSB 1 January 2013 in December 2003)amendment to iC interpretation 2 members’ Shares in Co-operative Entities and 1 January 2013 Similar instruments (annual improvements 2009-2011 Cycle)iC interpretation 20 Stripping Costs in the Production Phase of a Surface mine 1 January 2013amendments to mFrS 7: Financial instruments: Disclosures 1 January 2013 – Offsetting Financial assets and Financial Liabilitiesamendments to mFrS 1: First-time adoption of malaysian Financial reporting Standards 1 January 2013 – Government Loansamendments to mFrS 1: First-time adoption of malaysian Financial reporting Standards 1 January 2013 (annual improvements 2009-2011 Cycle)amendments to mFrS 116: Property, Plant and Equipment 1 January 2013 (annual improvements 2009-2011 Cycle)amendments to mFrS 132: Financial instruments: Presentation 1 January 2013 (annual improvements 2009-2011 Cycle)amendments to mFrS 134: interim Financial reporting 1 January 2013 (annual improvements 2009-2011 Cycle)amendments to mFrS 10: Consolidated Financial Statements: Transition Guidance 1 January 2013amendments to mFrS 11: Joint arrangements: Transition Guidance 1 January 2013amendments to mFrS 12: Disclosure of interests in Other Entities: Transition Guidance 1 January 2013amendments to mFrS 132: Financial instruments: Presentation 1 January 2014 – Offsetting Financial assets and Financial Liabilitiesamendments to mFrS 10, mFrS 12 and mFrS 127: investment Entities 1 January 2014mFrS 9 Financial instruments 1 January 2015


120/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.3 Standards issued but not yet effective (Cont’d.)

The directors expect that the adoption of the above standards and interpretations will have no material impact on the financial statements in the period of initial application except as discussed below:

mFrS 10 Consolidated Financial Statements

MFRS 10 replaces part of MFRS 127 Consolidated and Separate Financial Statements that deals with consolidated financial statements and IC Interpretation 112 Consolidation – Special Purpose Entities.

Under MFRS 10, an investor controls an investee when (a) the investor has power over an investee, (b) the investor has exposure, or rights, to variable returns from its involvement with the investee, and (c) the investor has ability to use its power over the investee to affect the amount of the investor’s returns. Under MFRS 127 Consolidated and Seperate Financial Statements, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

MFRS 10 includes detailed guidance to explain when an investor has control over the investee. MFRS 10 requires the investor to take into account all relevant facts and circumstances.

mFrS 12 Disclosures of interests in Other Entities

MFRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are required. This standard affects disclosures only and has no impact on the Group’s financial position or performance.

mFrS 11 Joint arrangements

MFRS 11 replaces MFRS 131 Interests in Joint Ventures and IC Interpretation 113 Jointly-Controlled Entities - Non-monetary Contributions by Venturers.

The classification of joint arrangements under MFRS 11 is determined based on the rights and obligations of the parties to the joint arrangements by considering the structure, the legal form, the contractual terms agreed by the parties to the arrangement and when relevant, other facts and circumstances. Under MFRS 11, joint arrangements are classified as either joint operations or joint ventures.

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

MFRS 11 removes the option to account for jointly controlled entities (“JCE”) using proportionate consolidation. Instead, JCE that meet the definition of a joint venture must be accounted for using the equity method.

MFRS 11 will be applied in accordance with the relevant transitional provisions set out in MFRS 11. The initial investment as at 1 January 2012 for the purposes of applying the equity method will be measured as the aggregate of the carrying amounts of the assets and liabilities that the Group had previously proportionately consolidated.

mFrS 127 Separate Financial Statements

As a consequence of the new MFRS 10 and MFRS 12, MFRS 127 is limited to accounting for subsidiaries, jointly controlled entities and associates in separate financial statements.

www.heitech.com.my

121/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.3 Standards issued but not yet effective (Cont’d.)

mFrS 128 investments in associates and Joint Ventures

As a consequence of the new MFRS 11 and MFRS 12, MFRS 128 is renamed as MFRS 128 Investments in Associates and Joint Ventures. This new standard describes the application of the equity method to investments in joint ventures in addition to associates.

amendments to mFrS 101: Presentation of items of Other Comprehensive income

(annual improvements 2009-2011 Cycle)

The amendments to MFRS 101 change the grouping of items presented in Other Comprehensive Income. Items that could be reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified. The amendments affect presentation only and have no impact on the Group and the Company’s financial position or performance.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date at fair value and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interests in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree net identifiable assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests in the acquiree (if any), and the fair value of the Group’s previously held equity interests in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out in Note 2.8(a). In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.


122/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.5 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

2.6 Foreign currency

(a) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

(b) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(c) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

www.heitech.com.my

123/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.6 Foreign currency (Cont’d.)

(c) Foreign operations (Cont’d.)

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.

2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Freehold land has an unlimited useful life and therefore is not depreciated. Construction work in progress is not depreciated as the asset is not yet ready for its intended purposes. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets at the following annual rates:

Building 2%Motor vehicles 20%Office equipment, furniture and fittings 10% – 20%Computers and network equipment 25% – 33 1/3%Renovation 15% Machinery 6% – 13%

Assets under construction included in property, plant and equipment are not depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.8 Intangible assets

(a) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.


124/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.8 Intangible assets (Cont’d.)

(a) Goodwill (Cont’d.)

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.6.

Goodwill and fair value adjustments which arose on acquisitions of foreign operations before 1 January 2006 are deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the date of acquisition.

(b) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

research and development costs

Research costs are expensed as incurred. Deferred development costs arising from development expenditures on an individual project are recognised 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 and the ability to measure reliably the expenditures during development. Deferred development costs have a finite useful life and are amortised over the period of expected sales from the related project on a straight line basis.

www.heitech.com.my

125/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.9 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.

2.10 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.

2.11 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.


126/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.11 Associates (Cont’d.)

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.12 Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instruments.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

(i) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that is held primarily for trading purposes are presented as current whereas financial assets that is not held primarily for trading purposes are presented as current or non-current based on the settlement date.

www.heitech.com.my

127/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.12 Financial assets (Cont’d.)

(ii) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(iii) Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

The Group and the Company did not have any held-to-maturity investments during the year ended 31 December 2012.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

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 assets 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 on an available-for-sale equity instrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investment in equity instruments whose fair value cannot be reliably measured is measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.


128/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.12 Financial assets (Cont’d.)

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way of purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

2.13 Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(b) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

www.heitech.com.my

129/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.13 Impairment of financial assets

(c) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, 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.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-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.

2.14 Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and in hand, demand deposits, and short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management, if any.

2.15 Inventories

Inventories comprising consumables are stated at the lower of cost and net realisable value.

Costs incurred in bringing the inventories to their present location and condition are accounted for on a first-in first-out basis.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sales.

2.16 Due from/(to) customers on contracts

Where the outcome of a contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.


130/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.16 Due from/(to) customers on contracts (Cont’d.)

When the total of costs incurred on contracts plus recognised profits (less recognised losses) exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

2.17 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.18 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the 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 liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

(b) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Loans and 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.

www.heitech.com.my

131/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.18 Financial liabilities (Cont’d.)

(b) Other financial liabilities (Cont’d.)

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.19 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.20 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee share option plans

Employees of the Group receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the options at the date on which the options are granted. This cost is recognised in profit or loss, with a corresponding increase in the employee share option reserve over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised at the beginning and end of that period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. The employee share option reserve is transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued, or to treasury shares if the options are satisfied by the reissuance of treasury shares.


132/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.21 Leases

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.23(f).

2.22 Discontinued operation

A component of the Group is classified as “discontinued operation” when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be recovered principally through a sale transaction rather than through continuing use.

Upon classification as held for sale, non current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss.

2.23 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(a) Long term fixed price contracts

Revenue on long term fixed price contracts is recognised based on the percentage of completion method determined on the proportion of costs incurred to date against total estimated costs. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. All anticipated losses on contracts are fully provided for.

(b) Short term contracts

Revenue is recognised upon rendering of services and transfer of significant risks. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due or associated costs.

www.heitech.com.my

133/


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.23 Revenue (Cont’d.)

(c) Sale of goods

Revenue relates to sale of software and hardware is recognised upon the transfer of risks and rewards of ownership of the goods to the customers. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(d) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established.

(e) Information technology professional services

Income is recognised based on net billings to customers for services where no fixed contract sum is agreed up front.

Income is recognised based on percentage of completion method over the period of the contract where a fixed sum has been agreed up front. The percentage of completion is determined by reference to the costs incurred to date to the total estimated costs where the outcome of the projects can be reliably estimated. All anticipated losses are fully provided.

(f) Rental income

Rental income is recognised on accrual basis based on agreed upon rental rates.

(g) Interest income

Interest income is recognised using the effective interest method.

2.24 Income taxes

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

– where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

– in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.


134/

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)2.24 Income taxes (Cont’d.)

(b) Deferred tax (Cont’d.) Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits

and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

– where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

– in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.25 Segment reporting For management purposes, the Group is organised into operating segments based on their products and services

which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 37, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.26 Share capital and share issuance expenses An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company

after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.27 Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence

will be confirmed only by the occurance or non-occurance of uncertain future event(s) not within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of position of the Group.

www.heitech.com.my

135/


3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions

that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amount recognised in the financial statements.

Discontinued operation

On 27 December 2012, the Board of Directors approved to dispose a 55% owned subsidiary, Electronic Media Airtime Services Sdn. Bhd. (“EMAS”) which was previously reported in the television content services segment and, therefore classified it as disposal group for sale. The Board considered the subsidiary met the criteria to be classified as held for sale at the date for the following reasons:

– EMAS is available for immediate sale and a potential buyer is identified in its current condition.

– The sale is expected to complete within 12 months from the reporting date.

For more details on the discontinued operation, refer to Note 11.

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of goodwill

Goodwill and other indefinite life intangibles are tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value in use of the cash-generating units to which goodwill are allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 15.

(b) Deferred tax assets

Deferred tax assets are recognised for unrecognised tax losses, unabsorbed capital allowances and other temporary differences to the extent that it is probable that taxable profit will be available against which unabsorbed capital allowances and other temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The unrecognised tax losses, capital allowances and other temporary differences of the Group was RM13,142,000 (2011: RM22,078,000) as disclosed in Note 30.


136/

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT’D.)3.2 Key sources of estimation uncertainty (Cont’d.)

(c) Recognition of revenue from long term contracts

The Group and the Company recognised long term fixed price contracts revenue and expenses in the income statements by using the stage of completion method. The stage of completion method is determined by the proportion of actual contracts costs incurred for work performed to date against the estimated total contract costs. The Group and the Company estimate total contract costs based on regularly updated project budgets which may, because of their forward looking nature, be subject to some degree of uncertainty.

(d) Deferred development cost

The Group capitalises project development costs incurred as part of requirement in bidding for projects which are considered high in value and strategic to the Group’s business. Significant judgement is required in determining the extent of costs incurred and the recoverability of the development costs. In making the judgement, the Group evaluates based on past experiences, current external economic factors and the progress and development of the contract.

(e) Impairment of loans and receivables

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. The carrying amount of the Group’s and the Company’s loans and receivables at the reporting date is disclosed in Note 19.

4. REVENUE Revenue of the Group and of the Company consist of the following:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Malaysian Communications and Multimedia Commission (MCMC) Licensable Activities

Network related services 92,105 83,799 92,105 83,799Internet data centre services 557 643 557 643

92,662 84,442 92,662 84,442

Other activitiesSale of hardware and software 63,592 39,595 58,360 34,595Maintenance charges 83,309 90,161 80,804 82,725System application and development 77,822 48,355 74,342 48,355Disaster recovery and facility management services 47,991 45,972 47,991 45,972Bulk mailing charges 29,152 28,226 – –Miscellaneous income 1,001 1,373 2,345 225

302,867 253,682 263,842 211,872

Total revenue 395,529 338,124 356,504 296,314

Revenue pertaining to the MCMC Licensable Activities refers to those attributable revenue prescribed under the Communication and Multimedia Act (CMA) 1998 Framework. Under the CMA, the provision of network related services and internet data centre services are licensed as Network Services Provider Individual License (NSP (i)) and Application Service Provider Class License (ASP (c)) respectively.

www.heitech.com.my

137/


5. OTHER INCOME

Group Company2012

RM’0002011

RM’000Restated

2012RM’000


Interest income:– fixed deposits from license banks 718 954 625 833Dividend income:– subsidiaries – – 8,930 3,999– associate – 304 – 304– other investments 2,528 3,072 2,528 3,072Gain on disposal of property, plant and equipment 49 139 49 79Gain on disposal of other investment – 218 – 218Rental income 1,642 1,780 9,510 2,198Net fair value gain on held for trading of investment – 939 – 939Net gain on remeasurement to fair value of retained

interest in a former associate – – 335 –Net gain on disposal of investment in a subsidiary – – 403 –Reversal of allowance for impairment of trade and other

receivables 6,153 2,994 5,834 2,943Others 933 549 – 219

12,023 10,949 28,214 14,804

6. EMPLOYEE BENEFITS EXPENSE

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Wages and salaries 77,472 64,798 21,945 47,360Defined contributions plans and social security contributions 8,831 7,752 3,599 6,076Share options granted under ESOS – 621 – 621Other benefits 7,662 7,067 3,022 5,239

93,965 80,238 28,566 59,296

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting

to RM1,602,000 (2011: RM1,912,000) and RM1,308,000 (2011: RM1,368,000) respectively as further disclosed in Note 7.


138/

7. DIRECTORS’ REMUNERATION The details of remuneration receivable by directors of the Company during the year are as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Executive:Salaries and other emoluments 1,430 1,717 1,168 1,223Defined contribution plan 172 195 140 145

Total executive directors’ remuneration (excluding benefits-in-kind) (Note 6) 1,602 1,912 1,308 1,368

Estimated money value of benefits-in-kind 113 105 102 95

Total executive directors’ remuneration (including benefits-in-kind) 1,715 2,017 1,410 1,463

Non-executive:Fees 305 240 305 240Other emoluments 15 111 15 111

Total non-executive directors’ remuneration 320 351 320 351

Total directors’ remuneration (Note 32) 2,035 2,368 1,730 1,814

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Number of directors2012 2011

Executive directors:RM500,000 – RM550,000 1 –RM550,000 – RM600,000 – 1RM850,000 – RM900,000 1 1

Non-executive directors:Up to RM50,000 8 9

www.heitech.com.my

139/


8. FINANCE COSTS

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Interest expense on:Term loans 2,913 3,280 2,906 3,264Revolving credits 494 342 494 342Bankers’ acceptances 759 63 759 59Obligations under finance leases 92 144 – 73Bank overdrafts 1,045 790 1,045 790Advances from directors of a subsidiary 99 – – –Others 48 256 42 59

5,450 4,875 5,246 4,587

9. PROFIT BEFORE TAXATION FROM CONTINUING OPERATIONS The following items have been included in arriving at profit before tax from continuing operations:

Group Company2012

RM’0002011

RM’000Restated

2012RM’000


Amortisation of intangible assets 102 2,043 88 22– Continuing operations 102 1,743 88 22– Discontinuing operation – 300 – –

Auditors’ remuneration– statutory audit 244 222 125 125

– Continuing operations 224 202 125 125– Discontinuing operation 20 20 – –

– other services 41 28 41 28Office rental 4,740 4,918 4,377 4,097

– Continuing operations 4,596 4,774 4,377 4,097– Discontinuing operation 144 144 – –

Impairment loss on:– trade receivables (Note 19) 4,673 4,714 4,183 4,714– other receivables (Note 19) 204 988 204 988– intangible assets 3,427 – – –

Reversal of impairment loss on:– trade receivables (Note 19) (4,617) (2,115) (4,298) (2,064)– others receivables (Note 19) (1,536) (879) (1,536) (879)

Net fair value loss on held for trading investments 809 – 809 –Depreciation of property, plant and equipment 11,814 11,937 9,598 10,232

– Continuing operations 11,794 11,893 9,598 10,232– Discontinued operation 20 44 – –

Net loss on remeasurement to fair value of retained interest in a former associate 2,140 – – –

Loss on disposal of other investment 25 – 25 –Net realised foreign exchange loss – 249 – 249


140/

10. INCOME TAX EXPENSE/(BENEFIT) Major components of income tax expense/(tax benefit)

The major components of income tax expense/(benefit) for the years ended 31 December 2012 and 2011 are:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Statement of comprehensive income:Current income tax – continuing operations:

Malaysian income tax 3,806 3,716 – 2,801Over provision in prior years (1,324) (1,936) (1,241) (865)

2,482 1,780 (1,241) 1,936

Deferred tax -– continuing operations (Note 30): Relating to origination and reversal of temporary differences (463) (833) (474) (623)Under provision in prior years 508 1,037 499 94

45 204 25 (529)

Income tax attributable to continuing operations 2,527 1,984 (1,216) 1,407Income tax attributable to discontinued operation (Note 11) 70 1,574 – –

Income tax expense/(benefit) recognised in profit or loss 2,597 3,558 (1,216) 1,407

Reconciliations between tax expense/(benefit) and accounting profit/(loss)

The reconciliations between tax expense/(benefit) and the product of accounting profit/(loss) multiplied by the applicable corporate tax rate for the years ended 31 December 2012 and 2011 are as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Profit before taxation from continuing operations 7,936 3,357 1,962 6,512

(Loss)/profit before taxation from discontinued operation (Note 11) (499) 6,261 – –

Accounting profit before taxation 7,437 9,618 1,962 6,512

www.heitech.com.my

141/


10. INCOME TAX EXPENSE/(BENEFIT) (CONT’D.) Reconciliations between tax expense/(benefit) and accounting profit/(loss) (Cont’d.)

The reconciliations between tax expense/(benefit) and the product of accounting profit/(loss) multiplied by the applicable corporate tax rate for the years ended 31 December 2012 and 2011 are as follows: (Cont’d.)

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Taxation at Malaysian statutory tax rate of 25% (2011: 25%) 1,859 2,405 491 1,628Effect of income not subject to tax (637) (844) (2,865) (844)Effect of expenses not deductible for tax purposes 3,947 1,790 2,096 1,394Utilisation of group relief – - (196) -Effect of share of results of associates 254 35 – -Deferred tax assets not recognised during the year 329 1,188 – -Utilisation of previously unrecognised tax losses (2,336) (60) – -Under/(over) provision of deferred tax in prior years– continuing operations 508 1,037 499 94– discontinued operation (15) 4 – –(Over)/under provision of income tax expense in prior years– continuing operations (1,324) (1,936) (1,241) (865)– discontinued operation 12 (61) – –

Income tax expense/(benefit) recognised in profit or loss 2,597 3,558 (1,216) 1,407

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2011: 25%) of the estimated assessable profit/(loss) for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

11. DISCONTINUED OPERATION AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE On 27 December 2012, the Board of Directors of the Company has approved the plan to dispose a 55% owned

subsidiary, Electronic Media Airtime Services Sdn. Bhd. (“EMAS”) which was previously reported in the television content services segment.

As at 31 December 2012, the assets and liabilities related to EMAS have been presented in the statement of financial position as “Assets of disposal group classified as held for sale” and “Liabilities of disposal group classified as held for sale”, and its results are presented separately on the statement of comprehensive income as “Profit from discontinued operation, net of tax”.


142/

11. DISCONTINUED OPERATION AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE (CONT’D.) Statement of financial position disclosures

GroupRM’000

Assets:Property, plant and equipment 65Investments in associates 3,114Intangible asset –Trade and other receivables 9,885Other current assets 114Tax recoverable 409Cash and bank balances 101

Assets of disposal group classified as held for sale 13,688

Liabilities:Trade and other payables 771Borrowings 41Deferred tax liabilities 5

Liabilities of disposal group classified as held for sale 817

Net assets directly associated with disposal group classified as held for sale 12,871

Statement of comprehensive income disclosures

Group2012

RM’0002011

RM’000

Revenue 4,950 15,532Other income– Interest income 6 77– Others – 9

Total revenue 4,956 15,618

Employee benefits expense (508) (633)Television program production costs (3,767) (8,004)Depreciation (Note 9) (20) (44)Other expenses (409) (497)

Total expenditure (4,704) (9,178)

Profit from operations 252 6,440Finance costs (4) (40)Share of results of an associated company (747) (139)

(Loss)/profit before taxation (499) 6,261Income tax expense (Note 10) (70) (1,574)

(Loss)/profit from discontinued operation, net of tax (569) 4,687

www.heitech.com.my

143/


11. DISCONTINUED OPERATION AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE (CONT’D.)Statement of cash flows disclosures

The cash flows attributable to EMAS are as follows:

Group

2012RM’000

2011RM’000

Operating (1,306) 1,875Investing (25) (3,937)Financing (14) (14)

Net cash outflows (1,345) (2,076)

12. EARNINGS PER SHARE(a) Continuing operations

Basic earnings per share are calculated by dividing the profit for the year from continuing operations, net of tax, attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share is calculated by dividing the profit for the year from continuing operations, net of tax, attributable to equity holders of the Company by the adjusted weighted average number of ordinary shares in issue and issuable during the financial year.

The dilutive potential ordinary shares of the Group comprise the employees’ share options. The basis for the maximum number of ordinary shares of RM1.00 each to be issued upon the exercise of share options granted, the latest date for exercise and exercise price are disclosed in Note 31.

The following tables reflect the profit and share data used in the computation of basic and diluted earning per share for the years ended 31 December:

Group

2012RM’000


Profit/(loss) net of tax attributable to owners of the parent:– Continuing operations 4,876 1,466– Discontinued operation (313) 2,578

Total 4,563 4,044


144/

12. EARNINGS PER SHARE (CONT’D.)(a) Continuing operations (Cont’d.)

Group

2012No. ofshares

’000

2011No. ofshares

’000

Weighted average number of ordinary shares in issue for basic earnings per share computation 101,225 101,225

Effect of dilution:Assumed shares issued from the exercise of options at no consideration (’000) 4,631 4,631

Weighted average number of ordinary shares in issue for diluted earnings per share computation 105,856 105,856

Group

2012 2011

Basic earnings per share (sen per share)– Continuing operations 4.82 1.45– Discontinued operation (0.31) 2.55

4.51 4.00

Diluted earnings per share (sen per share)– Continuing operations 4.61 1.38– Discontinued operation (0.30) 2.44

4.31 3.82

(b) Discontinued operation The basic and diluted earnings per share from discontinued operation are calculated by dividing the profit/(loss)

from discontinued operation, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares for basic earnings per share computation and weighted average number of ordinary shares for diluted earnings per share computation respectively. The loss and share data are presented in the tables in Note 12(a).

13. DIVIDENDS

Dividend in respect of year Dividend recognised in year2011

RM’0002010

RM’0002012

RM’0002011

RM’0002010

RM’000

Recognised during the yearInterim2010: 6.7% less 25% taxation, on 100,716,600

ordinary shares (5.03 sen per ordinary share) – 5,061 – – 5,061

Final2010: 7.3% less 25% taxation, on 101,225,300

ordinary shares (5.46 sen per ordinary share) – 5,543 – 5,543 –

– 10,604 – 5,543 5,061

www.heitech.com.my

145/


14. PROPERTY, PLANT AND EQUIPMENT

Freeholdland

RM’000BuildingRM’000

MotorvehiclesRM’000

Machinery,office

equipment,furniture

and fittingsRM’000

Computersand

networkequipment

RM’000Renovation

RM’000

Constructionwork inprogressRM’000

TotalRM’000

GroupCostAt 1 January 2011 11,506 41,994 2,453 33,031 156,593 21,196 – 266,773Additions – 2,527 343 1,327 4,525 383 – 9,105Disposals – (347) (467) (8) (650) – – (1,472)Acquisition of a subsidiary – – 237 132 – – – 369Exchange differences – 74 15 102 – – – 191

At 31 December 2011 and 1 January 2012 11,506 44,248 2,581 34,584 160,468 21,579 – 274,966

Additions 70 680 4,181 2,688 505 10,817 18,941Disposals – – – (1,500) (1,581) (1,367) – (4,448)Attributable to discontinued

operation – – (138) (56) (97) (17) – (308)Exchange differences – (208) (182) (195) – – – (585)

At 31 December 2012 11,506 44,110 2,941 37,014 161,478 20,700 10,817 288,566

Accumulated depreciationAt 1 January 2011 – 9,294 1,883 21,195 148,002 14,724 – 195,098Charge for the year – 3,566 478 857 5,494 1,542 – 11,937Disposals – (15) (319) (112) (429) – – (875)Acquisition of a subsidiary – – 143 50 – – – 193Exchange differences – – 10 43 – – – 53

At 31 December 2011 and 1 January 2012 – 12,845 2,195 22,033 153,067 16,266 – 206,406

Charge for the year 3,566 267 1,717 3,834 2,430 – 11,814Disposals – – – (1,493) (1,581) (1,364) – (4,438)Attributable to discontinued

operation – – (138) (42) (53) (10) – (243)Exchange differences – (4) (3) (30) – – – (37)

At 31 December 2012 – 16,407 2,321 22,185 155,267 17,322 – 213,502

Net carrying amountAt 31 December 2011 11,506 31,403 386 12,551 7,401 5,313 – 68,560

At 31 December 2012 11,506 27,703 620 14,829 6,211 3,378 10,817 75,064


146/

14. PROPERTY, PLANT AND EQUIPMENT (CONT’D.)

Freeholdland

RM’000BuildingRM’000

MotorvehiclesRM’000

Officeequipment,

furnitureand fittings

RM’000

Computersand

networkequipment

RM’000Renovation

RM’000

Constructionwork inprogressRM’000

TotalRM’000

CompanyCostAt 1 January 2011 9,895 38,955 1,558 15,219 152,898 21,590 – 240,115Additions – 40 – 461 3,219 383 – 4,103Disposals – – – – (650) – – (650)

At 31 December 2011 and 1 January 2012 9,895 38,995 1,558 15,680 155,467 21,973 – 243,568

Additions – 24 – 288 1,144 505 10,817 12,778Disposals – – – (1,494) (1,581) (1,367) – (4,442)

At 31 December 2012 9,895 39,019 1,558 14,474 155,030 21,111 10,817 251,904

Accumulated depreciationAt 1 January 2011 – 8,570 1,194 11,440 145,562 14,736 – 181,502Charge for the year – 3,399 290 479 4,518 1,546 – 10,232Disposals – – – – (429) – – (429)

At 31 December 2011 and 1 January 2012 – 11,969 1,484 11,919 149,651 16,282 – 191,305

Charge for the year – 3,399 59 366 3,347 2,427 – 9,598Disposals – – – (1,493) (1,581) (1,364) – (4,438)

At 31 December 2012 – 15,368 1,543 10,792 151,417 17,345 – 196,465

Net carrying amountAt 31 December 2011 9,895 27,026 74 3,761 5,816 5,691 – 52,263

At 31 December 2012 9,895 23,651 15 3,682 3,613 3,766 10,817 55,439

Assets held under finance leases

During the financial year, the Group and the Company acquired property, plant and equipment at aggregate cost of RM18,941,000 (2011: RM9,105,000) and RM12,778,000 (2011: RM4,103,000) respectively of which RM12,775,000 (2011: RM700,000) of the Group and RM10,817,000 (2011: RMNil) of the Company were acquired by means of finance leases. The net carrying amount of property, plant and equipment of the Group and of the Company held under finance lease were RM15,829,000 (2011: RM4,349,000) and RM10,817,000 (2011: RM74,000) respectively.

www.heitech.com.my

147/


14. PROPERTY, PLANT AND EQUIPMENT (CONT’D.)Assets pledged as security

In addition to assets held under finance leases, the net carrying amounts of property, plant and equipment pledged as securities for loans and borrowings (Note 29) are as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Freehold land 9,895 9,895 9,895 9,895Building 2,848 2,916 – –

12,743 12,811 9,895 9,895

15. INTANGIBLE ASSETS

GoodwillRM’000

SecuredcontractRM’000

Softwaredevelopment

costsRM’000

Deferreddevelopment

costs RM'000

TotalRM’000

GroupCostAt 1 January 2011 13,095 11,397 542 – 25,034Additions 5,532 – 478 – 6,010Acquisition of a subsidiary – – 34 – 34Additional in internal development – – – 2,542 2,542Exchange differences – – 2 – 2

At 31 December 2011 and 1 January 2012 18,627 11,397 1,056 2,542 33,622Additional in internal development – – – 9,991 9,991Exchange differences – – (28) – (28)

At 31 December 2012 18,627 11,397 1,028 12,533 43,585

Accumulated amortisation and impairmentAt 1 January 2011 – 9,391 542 – 9,933Amortisation – 2,006 37 – 2,043

At 31 December 2011 and 1 January 2012 – 11,397 579 – 11,976Amortisation – – 102 – 102Impairment 3,427 – – – 3,427

At 31 December 2012 3,427 11,397 681 – 15,505

Net carrying amount31 December 2011 18,627 – 477 2,542 21,646

31 December 2012 15,200 – 347 12,533 28,080


148/

15. INTANGIBLE ASSETS (CONT’D.) Secured contract of the Group relates to the fair value of contracts of a subsidiary recognised upon acquisition of that

subsidiary.

Company Softwaredevelopment

costsRM’000

Deferreddevelopment

costs RM’000

TotalRM’000

CostAt 1 January 2011 617 – 617Additions 437 2,542 2,979

At 31 December 2011 and 1 January 2012 1,054 2,542 3,596Additional in internal development – 9,991 9,991

At 31 December 2012 1,054 12,533 13,587

Accumulated amortisationAt 1 January 2011 617 - 617Amortisation 22 – 22

At 31 December 2011 and 1 January 2012 639 – 639Amortisation 88 – 88

At 31 December 2012 727 – 727

Net carrying amount31 December 2011 415 2,542 2,957

31 December 2012 327 12,533 12,860

Impairment testing of goodwill

Goodwill arising from business combinations has been allocated to three individual cash-generating units (“CGU”) for impairment testing as follows:

2012RM’000

2011RM’000

Computer software development, sales and support 5,532 5,532Mailing and document processing services 7,123 7,123

Television content services 2,545 5,972

15,200 18,627

Key assumptions used in value in use calculations

The recoverable amount of a CGU is determined based on value in use calculations using cash flow projections based on financial budgets approved by management covering a five year period.

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

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average margin achieved in the year immediately before the budgeted year increased for expected efficiency improvements.

www.heitech.com.my

149/


15. INTANGIBLE ASSETS (CONT’D.)(ii) Budgeted growth rate

The management believes that the average growth rates at 6% (2011: 10%) used are consistent with the long term average growth rate of the economy.

(iii) Discount rate

The discount rates used at 3.1% (2011: 3.3%) are pre-tax and reflect specific risks relating to the relevant segments.

Sensitivity to changes in assumptions

With regard to the assessment of value in use of the subsidiaries, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying values of the units to materially exceed their recoverable amounts.

16. INVESTMENTS IN SUBSIDIARIES

Company2012

RM’0002011

RM’000

Unquoted ordinary shares, at cost 52,758 51,155Redeemable convertible preference shares of RM1.00 each 2,140 2,140

54,898 53,295Less: Accumulated impairment losses (7,946) (7,946)

46,952 45,349

NameCountry of

incorporation Principal activities

Effective equity interest (%)

2012 2011

Held by the Company:

Motordata Research Consortium Sdn. Bhd.

Malaysia Development and provision of a centralised parts pricing database for Malaysian insurance industry.

60 60

Educational Trend Sdn. Bhd. Malaysia Development and marketing of computer aided educational software.

77 77

Electronic Media Airtime Services Sdn. Bhd.*

Malaysia Production and supply of contents to broadcasting stations, airtime management, rental of production facilities and other related services.

55 55

Inter-City MPC (M) Sdn. Bhd. Malaysia Provision of mail processing and its related services. 100 100

HeiTech i-Solution Sdn. Bhd. Malaysia Computer software development and marketing of software, contract programming services and product systems integration and other computer related services.

100 100


150/

NameCountry of



2012 2011

Integrated Healthcare Solutions Sdn. Bhd.

Malaysia Provision of a one-stop customer support service centre and consultancy service desks.

100 100

HeiTech E*Business Solutions Sdn. Bhd.

Malaysia Provision of research and development in developing, installing and supporting software for small and medium sized industries.

100 100

HeiTech Defence System Sdn. Bhd.

Malaysia Provision for information and communication technology products and services for the defence industry.

100 100

HeiTech Health Solution Sdn. Bhd.

Malaysia Provision for information and communication technology products and services for the health industry.

100 100

HeiTech Managed Services Sdn. Bhd.

Malaysia Provision of consultancy services, network management, local area network design and installation services.

100 100

Padusoft Sdn. Bhd. Malaysia Dormant. 100 100

Vante Sdn. Bhd. Malaysia Dormant. 100 100

Megacenter System Sdn. Bhd. Malaysia Dormant. 100 100

E-Image Technologies Sdn. Bhd.

Malaysia Dormant. 100 100

PT. Intercity Kerlipan ^,# Indonesia Provision of mail processing and its related services. – 70

Cinix 1 Pty. Ltd. ^ Australia Computer software development, sales and support for the motor body industry.

100 100

Held through Inter-City MPC (M) Sdn. Bhd.:

PT. Intercity Kerlipan ^ Indonesia Provision of mail processing and its related services. 70 –

Held through Electronic Media Airtime Services Sdn. Bhd.:

EMASTV Pte. Ltd. *, ## Singapore Dormant. 100 –

^ The financial statements of PT. Intercity Kerlipan and Cinix 1 Pty. Ltd. are coterminous with those of the Group and audited by firms of chartered accountants other than Hanafiah Raslan & Mohamad.

* Classified as discontinued operation during the current financial year (Note 11).# The ownership in its subsidiary of 70% (2011: 70%) has been transferred from HeiTech Padu Berhad to Inter-City

MPC (M) Sdn. Bhd. during the year.

16. INVESTMENT IN SUBSIDIARIES (CONT’D.)

www.heitech.com.my

151/


16. INVESTMENT IN SUBSIDIARIES (CONT’D.)(a) Acquisition of subsidiaries

HeiTech Padu Berhad

(i) The Company acquired 100% equity interest in Cinix 1 Pty. Ltd. on 21 January 2011 for a total cash consideration of RM6,101,983.

(ii) The Company acquired 100% equity interest in HeiTech Defence System Sdn. Bhd. and HeiTech Health Solution Sdn. Bhd. on 1 January 2011 for a total cash consideration of RM2 respectively.

The acquisition had the following effects on the financial position of the Group as at the end of the year.

The fair values of the identifiable assets and liabilities of Cinix 1 Pty. Ltd. as at the date of acquisition were:

Fair valueRM’000

Carrying amount

RM’000

Plant and equipment 176 176Intangible assets 34 34Trade and other receivables 15 15Cash and bank balances 368 368Trade and other payables (23) (23)

Net identifiable assets 570 570

RM’000

The effect of the acquisition on cash flows is as follows:Total cost of the business combination 6,102Less: Cash and cash equivalents of subsidiary acquired (368)

Net cash outflow on acquisition 5,734

Goodwill arising on acquisitionRM’000

Fair value of net identifiable assets 570Goodwill on acquition (Note 15) 5,532

Cost of business combination 6,102

The directors deem that the fair value of the net identifiable assets of Cinix 1 Pty. Ltd. is equivalent to their carrying amount.

No fair valuation is done for HeiTech Defence System Sdn. Bhd. and HeiTech Health Solution Sdn. Bhd. as the companies were dormant during acquisition.


152/

16. INVESTMENT IN SUBSIDIARIES (CONT’D.)(a) Acquisition of subsidiaries (Cont’d.)

Electronic Media Airtime Services Sdn. Bhd.

The Company acquired 100% equity interest in EMASTV Pte. Ltd. on 22 June 2012 for a total cash consideration of RM5.

(b) Additional investment in subsidiaries

HeiTech Defence System Sdn. Bhd. and HeiTech Health Solution Sdn. Bhd.

During the year, HeiTech Defence System Sdn. Bhd. (“HDS”) and HeiTech Health Solution Sdn. Bhd. (“HHS”), subsidiaries of the Company increased their issued and paid up ordinary share capital from RM2 to RM2,600,000 by way of issuance of 2,599,998 ordinary shares of RM1 each at an issue price of RM1 per ordinary share.

As a result, the Company has increased its investments in HDS and HHS by way of capitalisation of amounts due to the HDS and HHS amounting to RM2,599,998.

17. INVESTMENT IN ASSOCIATES

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Unquoted shares, at cost 575 4,575 400 400Quoted shares, at cost – 13,758 – 13,758Share of post-acquisition reserves 3,445 4,019 – –

4,020 22,352 400 14,158Less: Accumulated impairment losses (575) (575) (400) (400)

3,445 21,777 – 13,758

Fair value of investment in an associate for which there is published price quotation – 13,194 – 13,194

www.heitech.com.my

153/


17. INVESTMENT IN ASSOCIATES (CONT’D.)

NameCountry of



2012 2011

Held by the Company:East Coast Multimedia

Academy Sdn. Bhd. ^Malaysia Dormant. 40 40

Grand-Flo Solution Berhad ^ Malaysia Provision of information technology solutions and investment holding.

– 20.06

Held through subsidiaries:Vantage Point Consulting

Sdn. Bhd.Malaysia Provision of System Application and Products

(“SAP”) contract programming consultance and turnkey project services.

50 50

PlayTV Asia Sdn.Bhd. ^,* Malaysia Provision of digital media services, online TV commercials and digital advertisements.

16.5 16.5

Held through associate:Vantage Point Consulting

(Sg) Pte. Ltd.^Singapore Provision of System Application and Products

(“SAP”) services in the ASEAN region.50 50

^ Audited by firms of chartered accountants other than Hanafiah Raslan & Mohamad.

* Classified as discontinued operation during the current financial year (Note 11).

The financial statements of the associates are coterminous with those of the Group, except for PlayTV Asia Sdn. Bhd. which has a financial year end of 31 March. For the purpose of applying the equity method of accounting, the management accounts for the 12 month period ended 31 December 2012 of this company has been used.

Disposal of an associate

During the financial year, the Company has disposed off its interest in Grand-Flo Solution Berhad for a total consideration of RM6,450,000 by way of cash. As a result, the Company now holds 10.65% equity interest in Grand-Flo Solution Bhd. with a total carrying value of RM7,303,000 as at 31 December 2012 and is now accounted for as a simple investment (Note 18). The remeasurement to fair value of the retained interest in former associate resulted in a loss of RM2,140,000 and a gain of RM335,000 respectively, which have been included in the “Other income” (Note 5) and “Profit before tax” (Note 9) and in the statements of comprehensive income. The Group excludes results relating to Grand-Flo Solution Berhad as shown in the summarised financial information below.


154/

17. INVESTMENT IN ASSOCIATES (CONT’D.) The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by

the Group, is as follows:

2012RM’000

2011RM’000

Assets and liabilities

Total assets 22,991 110,876

Total liabilities 12,563 36,663

Results:Revenue 29,279 97,494

(Loss)/profit for the year (110) 9,480

18. OTHER INVESTMENTS

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Available-for-sale financial assets:Equity instruments (unquoted) 8,214 6,929 8,050 6,765Equity instruments (quoted) 7,303 – 7,303 –

15,517 6,929 15,353 6,765

At fair value through profit or loss:Equity instruments held for trading – 1,097 – 1,097

Total 15,517 8,026 15,353 7,862

www.heitech.com.my

155/


19. TRADE AND OTHER RECEIVABLES

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

CurrentTrade receivablesThird parties 165,868 145,282 148,699 121,888Amounts due from subsidiaries – – 12,202 10,625Amounts due from associates 2,761 3,996 2,761 3,996

168,629 149,278 163,662 136,509Less: Allowance for impairment– Third parties (19,299) (19,243) (15,322) (15,437)– Amounts due from subsidiaries – – (2,003) (2,003)– Amount due from associates (601) (601) (601) (601)

Trade receivables, net 148,729 129,434 145,736 118,468

Other receivablesAmounts due from subsidiaries – – 4,871 5,363Amount due from a corporate shareholder 335 335 335 335Amounts due from associates 500 – –Deposits 5,527 8,492 3,003 2,995Sundry receivables 23,992 32,934 22,271 27,176

29,854 42,261 30,480 35,869Less: Allowance for impairment– Sundry receivables (12,003) (13,335) (11,548) (12,880)

17,851 28,926 18,932 22,989

Total trade and other receivables 166,580 158,360 164,668 141,457Add: Cash and bank balances (Note 24) 73,005 56,135 71,075 49,364

Total loans and receivables 239,585 214,495 235,743 190,821


156/

19. TRADE AND OTHER RECEIVABLES (CONT’D.)(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 day (2011: 30 day) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

The ageing analysis of the Group’s and Company’s trade receivables is as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Neither past due nor impaired 112,916 79,375 107,464 68,4641 to 30 days past due not impaired 11,117 15,493 10,123 14,57831 to 60 days past due not impaired 7,851 5,767 6,444 4,812More than 61 days past due not impaired 16,845 28,799 23,708 32,617

35,813 50,059 40,275 52,007Impaired 19,900 19,844 15,923 16,038

168,629 149,278 163,662 136,509

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and the Company.

None of the Group’s and the Company’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group and the Company have trade receivables amounting to RM35,813,000 (2011: RM50,059,000) and RM40,275,000 (2011: RM52,007,000) respectively that are past due at the reporting date but not impaired.

Trade receivables that were past due but not impaired relate to customers that have a good track record with the Group and the Company. Based on past experience and no adverse information to date, the directors of the Group and of the Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are still considered fully recoverable.

Receivables that are impaired

The Group’s and the Company’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Individually impairedGroup Company

2012RM’000

2011RM’000

2012RM’000


Trade receivables – nominal amounts 19,900 19,844 17,926 18,041Less: Allowance for impairment (19,900) (19,844) (17,926) (18,041)

– – – –

www.heitech.com.my

157/


19. TRADE AND OTHER RECEIVABLES (CONT’D.)(a) Trade receivables (Cont’d.)

Movement in allowance accounts:

Group Company2012

RM’0002011

RM’000Restated

2012RM’000


At 1 January 19,844 17,245 18,041 15,391Charge for the year (Note 9) 4,673 4,714 4,183 4,714Reversal of impairment loss (Note 9) (4,617) (2,115) (4,298) (2,064)

At 31 December 19,900 19,844 17,926 18,041

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) Amounts due from associates

The amounts due from associates are non-trade in nature, non-interest bearing, unsecured and are repayable on demand.

(c) Amounts due from subsidiaries

Company2012

RM’0002011

RM’000

Due from subsidiaries– Interest free 17,073 13,706– Interest bearing @ 4% per annum – 2,282

17,073 15,988

The amounts due from subsidiaries are trade and non-trade in nature. These amounts are unsecured and are repayable on demand.

(d) Due from a corporate shareholder

The amount due from a corporate shareholder is non-trade in nature. This amount is unsecured, non-interest bearing and is repayable on demand.


158/

19. TRADE AND OTHER RECEIVABLES (CONT’D.)(e) Sundry receivables

Other receivables that are impaired

The Group’s other receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Individually impairedGroup Company

2012RM’000

2011RM’000

2012RM’000


Other receivables – nominal amounts 12,003 13,335 11,548 12,880Less: Allowance for impairment (12,003) (13,335) (11,548) (12,880)

– – – –

Movement in allowance accounts:

Group Company2012

RM’0002011

RM’000Restated

2012RM’000


At 1 January 13,335 13,226 12,880 12,771Charge for the year (Note 9) 204 988 204 988Reversal of impairment loss (Note 9) (1,536) (879) (1,536) (879)

At 31 December 12,003 13,335 11,548 12,880

20. INVENTORIES

Group2012

RM’0002011

RM’000

Cost

Consumables 1,523 436

21. OTHER CURRENT ASSETS

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Prepayments 363 1,168 – –Due from customers on contracts (Note 22) 19,922 35,199 18,556 35,199Lease receivable (Note 23) 32,415 30,960 32,415 30,960

52,700 67,327 50,971 66,159

www.heitech.com.my

159/


22. DUE FROM CUSTOMERS ON CONTRACTS

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Contract costs incurred to date 155,033 126,826 153,667 126,826Attributable profits 39,124 38,414 39,124 38,414

194,157 165,240 192,791 165,240Less: Progress billings (174,235) (130,041) (174,235) (130,041)

19,922 35,199 18,556 35,199

Included in the amount due from customers on contracts are:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Contract costs incurred during the year 28,207 49,391 26,841 49,391

The contract costs incurred to date are mainly system development costs.

23. LEASE RECEIVABLE

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

CurrentLease receivable 32,415 30,960 32,415 30,960

Non-currentLease receivable 93,546 98,839 93,546 98,839

125,961 129,799 125,961 129,799

The lease receivable represents the present value of payments receivable from the Government of Malaysia in relation to a build and lease arrangement. The lease to the Government has been ascertained to be a finance lease. In determining the present value, a discount rate of 7.5% has been utilised.

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Total minimum lease receivable 239,741 243,579 239,741 243,579Less: Amount representing unwinding discount (113,780) (113,780) (113,780) (113,780)

Present value of minimum lease receivable 125,961 129,799 125,961 129,799


160/

23. LEASE RECEIVABLE (CONT’D.)

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

The remaining maturities of the lease receivable are as follows:

Not later than 1 year 32,415 30,960 32,415 30,960Later than 1 year but not later than 2 years 64,830 61,920 64,830 61,920Later than 2 years but not later than 5 years 28,716 36,919 28,716 36,919

Present value of minimum lease receivable 125,961 129,799 125,961 129,799Less: Amount due within 12 months (32,415) (30,960) (32,415) (30,960)

Amount due after 12 months 93,546 98,839 93,546 98,839

24. CASH AND CASH EQUIVALENTS

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Cash at banks and in hand 46,635 34,012 45,034 28,663Short term deposits with licensed banks 26,370 22,123 26,041 20,701

Cash and bank balances 73,005 56,135 71,075 49,364

Short term deposits with licensed banks of the Group and of the Company amounting to RM26,370,000 (2011: RM21,511,000) and RM26,041,000 (2011: RM20,701,000) respectively are pledged as securities for borrowings (Note 29).

Deposits with licensed banks earn interests at the respective deposit rates. The weighted average effective interest rate as at 31 December 2012 for the Group and the Company was 2.48% per annum (2011: 2.96%). The maturity period of deposits as at 31 December 2012 for the Group and the Company was 295 days (2011: 260 days).

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following at the reporting date:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Cash and short term deposits:Continuing operations 73,005 56,135 71,075 49,364Discontinued operation 101 – – –

73,106 56,135 71,075 49,364Less: Bank overdrafts (Note 29) (32,607) (15,660) (32,607) (15,660)

40,499 40,475 38,468 33,704

www.heitech.com.my

161/


25. TRADE AND OTHER PAYABLES

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Trade payablesThird parties 71,096 43,130 66,792 39,947Amounts due to subsidiaries – – 20,502 10,885

71,096 43,130 87,294 50,832

Other payablesAmount due to directors of a subsidiary 2,853 2,753 – –Deposits 1,100 1,012 1,100 1,005Accruals 7,159 9,809 4,350 6,557Sundry payables 9,034 14,600 7,570 10,137

20,146 28,174 13,020 17,699

Total trade and other payables 91,242 71,304 100,314 68,531Add: Loans and borrowings (Note 29) 218,062 222,254 216,240 220,513

Total financial liabilities carried at amortised cost 309,304 293,558 316,554 289,044

(a) Third parties

These amounts are non-interest bearing. Trade payables are normally settled on 30 to 90 day (2011: 30 to 90 day) terms.

(b) Amounts due to directors of a subsidiary

The amount due to directors of a subsidiary is unsecured, bear interest at 10% per annum and is repayable on demand. The loans from directors are convertible into 10% Redeemable Preference Shares (RPS) of RM1.00 each of the subsidiary at the rate of 1.00 RPS for every RM1.00 of the loan outstanding.


162/

26. SHARE CAPITAL AND SHARE PREMIUM

Group and CompanyNumber of

ordinaryshare of

RM1 each <------------------- Amount ------------------->Share

Capital(issued and)

fully paid)’000

ShareCapital

(issued and)fully paid)

RM’000

SharepremiumRM’000

Total sharecapital

and sharepremiumRM’000

At 1 January 2011 100,716 100,716 16,526 117,242Issued during the year 509 509 – 509

At 31 December 2011 and 1 January 2012 and 31 December 2012 101,225 101,225 16,526 117,751

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

27. RETAINED EARNINGS Prior to the year assessment 2008, Malaysian companies adopt the full imputation system. In accordance with the

Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the Section 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the Section 108 balance to be locked-in as at 31 December 2008 in accordance with Section 39 of the Finance Act 2007.

The Company did not elect for the irrevocable option to disregard the Section 108 balance as at 31 December 2008. Accordingly the Company may utilise the credit in the Section 108 balance as at 31 December 2008 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007. As at 31 December 2012, the Company has sufficient credit in the Section 108 balance to pay franked dividends out of its entire retained earnings.

www.heitech.com.my

163/


28. OTHER RESERVES

Employee share

option reserve

RM’000

Foreign currency

translation reserve

RM’000


reserveRM’000

TotalRM’000

GroupAt 1 January 2011 594 (701) – (107)Other comprehensive income:Foreign currency translation – 368 – 368

Transactions with owners 594 (333) – 261Grant of equity-settled share options to employees 621 – – 621

At 31 December 2011 1,215 (333) – 882

At 1 January 2012 1,215 (333) – 882Other comprehensive income:

Available for sale investments’ fair value movement – – (340) (340)

Foreign currency translation – (531) – (531)

1,215 (864) (340) 11Transactions with ownersGrant of equity-settled share options to employees – – – –

At 31 December 2012 1,215 (864) (340) 11

CompanyAt 1 January 2011 594 – – 594Transactions with ownersGrant of equity-settled share options to employees 621 – – 621

At 31 December 2011 1,215 – – 1,215

At 1 January 2012 1,215 – – 1,215Other comprehensive income:Available for sale investments’ fair value movement – – (340) (340)

1,215 – (340) 875

Transactions with ownersGrant of equity-settled share options to employees – – – –

At 31 December 2012 1,215 – (340) 875

a) Employee share option reserve

Employee share option reserve represents the equity-settled share options granted to employees (Note 31). The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options.


164/

28. OTHER RESERVES (CONT’D.)b) Foreign currency translation reserve The foreign currency translation reserve represents exchange differences arising from translation of the financial

statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

c) Fair value adjustment reserve Fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial

assets until they are disposed of or impaired.

29. LOANS AND BORROWINGS

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

CurrentSecured:Term loans 28,792 29,507 28,792 29,384Bank overdrafts 19,152 15,660 19,152 15,660Revolving credits 71,124 78,717 71,124 78,717Obligations under finance leases (Note 33(c)) 4,953 915 3,606 4

124,021 124,799 122,674 123,765

Non-currentSecured:Term loans 73,886 96,748 73,886 96,748Bank overdrafts 13,455 – 13,455 –Obligations under finance leases (Note 33(c)) 6,700 707 6,225 –

94,041 97,455 93,566 96,748

Total loans and borrowings 218,062 222,254 216,240 220,513

The remaining maturities of the loans and borrowings as at 31 December are as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Maturity of loans and borrowings:Within one year 124,021 124,799 122,674 123,765More than 1 year and less than 2 years 30,856 53,324 30,513 52,700More than 2 years and less than 5 years 63,185 44,131 63,053 44,0485 years or more – – – –

218,062 222,254 216,240 220,513

Term loans:Term loan 1 89,561 103,422 89,561 103,422Term loan 2 13,117 22,710 13,117 22,710Term loan 3 – 123 – –

102,678 126,255 102,678 126,132

www.heitech.com.my

165/


29. LOANS AND BORROWINGS (CONT’D.)(i) Term loan 1 is drawndown by the Company in relation to the design, built, supply, install, commission and maintain

the Tactical Operational Flight Trainer, the building facilities and the Computer Based Trainer on the contract awarded by the Ministry of Defense of Malaysia. Term loan 1 is secured by assignment of the contract proceeds by the Company.

(ii) Term loan 2 is drawndown by the Company in relation to the construction of a datacentre.

Term loan 2 is secured by the following:– First, second and third legal charge over the freehold land of the Company as disclosed in Note 14 to the

financial statements;– Assignment of all contract proceeds of the Company with the exception of the Government-related contracts.

(iii) Term loan 3 is drawndown by a subsidiary in relation to the construction of a building.

Term loan 3 is secured by the following– Second legal charge over a building of the subsidiary as disclosed in Note 14 to the financial statements;– Assignment of all proceeds of the subsidiary; and– Debenture over the fixed and floating assets of the subsidiary.

Term loans bear interest at respective term loan’s rates. The weighted average effective interest rate of term loans of the Group were 4.24% (2011: 4.51%) per annum. The repayment of the Group’s term loans are due from 2012 to 2015.

Bank overdrafts

Bank overdrafts are secured by negative pledge on all present and future unencumbered assets of the Company. The weighted average effective interest rate of bank overdrafts was 7.47% (2011: 7.52%) per annum.

Revolving credits

Revolving credits are secured by negative pledge on all present and future unencumbered assets of the Company. The weighted average effective interest rate of revolving credits was 3.95% (2011: 4.07%) per annum.


166/

30. DEFERRED TAXATION Deferred tax (assets)/liabilities of the Group and Company relate to the following:

Accelerated capital

allowances RM’000

Other temporary

differences RM’000

TotalRM’000

GroupAt 1 January 2011 (24) 168 144Recognised in profit or loss (599) 803 204

At 31 December 2011 and 1 January 2012 (623) 971 348Recognised in profit or loss 48 (3) 45Attributable to discontinued operation (5) – (5)

At 31 December 2012 (580) 968 388

CompanyAt 1 January 2011 2,529 (2,609) (80)Recognised in profit or loss (786) 257 (529)

At 31 December 2011 and 1 January 2012 1,743 (2,352) (609)Recognised in profit or loss 4 21 25

At 31 December 2012 1,747 (2,331) (584)

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Presented after appropriate offsetting as follows:Deferred tax liabilities 3,145 982 1,747 1,743Deferred tax assets (2,728) (624) (2,331) (2,352)

417 358 (584) (609)

Deferred tax assets have not been recognised in respect of the following items:

Group2012

RM’0002011

RM’000

Unrecognised tax losses 14,342 22,394Unabsorbed capital allowances 93 69

14,435 22,463

The availability of the unrecognised tax losses, unabsorbed capital allowances and other temporary differences for offsetting against future taxable profits of the respective subsidiaries are subject to no substantial changes in shareholdings of those subsidiaries under the Income Tax Act, 1967 and guidelines issued by the tax authority.

www.heitech.com.my

167/


31. EMPLOYEE SHARE OPTION SCHEME The HeiTech Padu Employee Share Option Scheme (ESOS) is governed by the by-laws approved by the shareholders at

an Extraordinary General Meeting held on 18 June 2003.

The main features of the ESOS are as follows:

(a) The ESOS shall be in force from 30 July 2003 for ten offer periods allotted to eligible employees expiring on 13 May 2013.

(b) Eligible employees are employees of the Group including executive directors who have been confirmed in the employment of the Group for one continuous year of service and who fall within the eligibility criteria as set out in the by-laws of the ESOS.

(c) The total number of ordinary shares of the Company offered and allotted under the ESOS shall not exceed in aggregate 10% of the issued and paid up capital of the Company at any point of time during duration of the ESOS or a maximum total 10,000,000 ordinary shares of RM1.00.

(d) The option price for each share shall be determined based on the weighted average market price of the shares of the Company in the Daily Diary issued by the Bursa Malaysia Securities Berhad for the five market days immediately preceding the date of offer, subject to a discount of 10% at the discretion of the ESOS Committee but not less than the par value of the shares.

(e) The option may be exercised in full or such lesser number of ordinary shares provided the number of shares shall be in multiples of 100 shares.

(f) Options granted under the ESOS carry no dividend or voting rights. Shares upon issuance and allotment rank pari passu in all material respect with the existing ordinary shares of the Company.

(g) An executive director of the Company shall only be granted options under the ESOS upon the shareholders of the Company having first approved his allocation of the option shares in a general meeting.

(h) Eligible employees to whom the options have been granted have no right to participate in any other share issue of any other company within the Group.

(i) The number of option shares to be offered to an eligible employees under the ESOS shall be determined at the discretion of the ESOS Committee but shall in no event exceed the Maximum Allowable Allotment.


168/

31. EMPLOYEE SHARE OPTION SCHEME (CONT’D.) The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share

options during the year:

Outstandingat

1 January’000

Number of Share Options<-------------------Movements During the Year------------------->

Outstanding at

31 December’000

Exercisable at

31 December’000

Granted’000

Exercised’000

Forfeited’000

Expired’000

20122011 OptionsExercise Price1.00 2,546 – – – – 2,546 2,546

2010 OptionsExercise Price1.00 2,085 – – – – 2,085 2,085

Total 4,631 – – – – 4,631 4,631

WAEP 1.00 – – – – – –

20112011 OptionsExercise Price1.00 – 3,043 (497) – – 2,546 2,546

2010 OptionsExercise Price1.00 2,097 – (12) – – 2,085 2,085

Total 2,097 3,043 (509) – – 4,631 4,631

WAEP 1.00 – 1.00 – – – –

(i) Details of share options outstanding at the end of the year:

2012 WAEP RM Exercise period

2011 options 1.00 8 June 2011 – 13 May 2013

2010 options 1.00 2 March 2010 – 13 May 2013

(ii) Fair value of share options granted

Option price (RM) 1.00Fair value of share options on 8 June 2011 0.12Weighted average share price (RM) 1.00Weighted average exercise price (RM) 1.09Expected volatility (%) 0.18Risk free rate (%) 4.13Expected dividend yield (%) 7.12

www.heitech.com.my

169/


32. RELATED PARTY DISCLOSURES(a) In addition to the related party information disclosed elsewhere in the financial statements, the following significant

transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

2012RM’000

2011RM’000

GroupServices provided to Permodalan Nasional Berhad (PNB), a corporate shareholder of

the Company:– network related services (4,829) (4,476)

Services provided to Amanah Saham Nasional Berhad, a fund manager of PNB (14,813) (13,026)Interest on loan from a corporate shareholder of a subsidiary – 37Management fees to corporate shareholder of a subsidiary 51 51Sales to a corporate shareholder of a subsidiary (4,949) (15,532)Rental expenses of building to PNB 4,420 4,240

CompanyOffice rental receivable from subsidiaries (364) (418)Rental expenses of building to PNB 4,420 4,240

(b) Compensation of key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly, including any director of the entity.

The remuneration of directors and other members of key management during the year was as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Short-term employee benefits 3,698 4,300 3,425 3,359Defined contribution plan 378 431 346 341

4,076 4,731 3,771 3,700

Included in the total key management personnel is:

2012RM’000

2011RM’000

2012RM’000

2011RM’000

Directors’ remuneration (Note 7) 2,035 2,368 1,730 1,814


170/

33. COMMITMENTS(a) Capital commitments

Capital expenditure as at the reporting date is as follows:

Group and Company2012

RM’0002011

RM’000

Capital expenditureApproved and contracted for:

Property, plant and equipment 532 2,210

Approved but not contracted for:Property, plant and equipment 292 863

(b) Operating lease commitments – as lessee

The Group and the Company have entered into non-cancellable operating lease agreements for the use of building. These leases have average life of between 2 to 10 years with renewal options and right of first refusal included in the contracts. There are no restrictions placed upon the Company by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases (excluding land use rights) at the reporting date are as follows:

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Future minimum lease payments:Not later than 1 year 4,420 5,514 4,420 5,296Later than 1 year and not later than 5 years 18,482 18,454 18,482 18,222Later than 5 years 4,290 8,970 4,290 8,970

27,192 32,938 27,192 32,488

www.heitech.com.my

171/


33. COMMITMENTS (CONT’D.)(c) Finance lease commitments

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Minimum lease payments:Not later than 1 year 5,407 963 3,947 5Later than 1 year and not later than 2 years 4,341 660 3,947 –Later than 2 years and not later than 5 years 3,016 138 2,869 –

Total minimum lease payments 12,764 1,761 10,763 5Less: Future finance charges (1,111) (139) (932) (1)

Present value of hire purchase liabilities 11,653 1,622 9,831 4

Analysis of present value of finance lease liabilities:Not later than 1 year 4,953 915 3,606 4Later than 1 year and not later than 2 years 3,949 624 3,606 –Later than 2 years and not later than 5 years 2,751 83 2,619 –

11,653 1,622 9,831 4Less: Amount due within 12 months (4,953) (915) (3,606) (4)

Amount due after 12 months 6,700 707 6,225 –

The Group and the Company have entered into hire purchase agreements for motor vehicles and equipment as disclosed in Note 14 to the financial statements. The hire purchase payable bore effective interest rate of 1% (2011: 7.0%) per annum.

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group and the Company are exposed to financial risks arising from their operations and the use of financial

instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Group Chief Executive Officer and management. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.


172/

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For the financial assets (including investments and cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Credit risk concentration

At the reporting date, approximately 70% (2011: 78%) of the Group’s trade receivables were due from public sector agencies in Malaysia.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 19. Deposits with banks that are neither past due nor impaired are placed with or entered into with reputable financial institutions with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 19.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group’s and the Company’s overall liquidity risk management is to maintain sufficient levels of cash to meet its working capital requirements. In addition, the Group and the Company strive to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group and the Company raise funding from shareholders, capital markets and financial institutions and balance their portfolio with some short term funding so as to achieve overall cost effectiveness.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contracted undiscounted repayment obligations.

www.heitech.com.my

173/


34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)(b) Liquidity risk (Cont’d.)

On demand or within one year

RM’000

One to five years

RM’000Total

RM’000

2012GroupFinancial liabilities:Trade and other payables 91,242 – 91,242Loans and borrowings 124,021 94,041 218,062

Total undiscounted financial liabilities 215,263 94,041 309,304

CompanyFinancial liabilities:Trade and other payables 100,314 – 100,314Loans and borrowings 122,674 93,566 216,240


2011GroupFinancial liabilities:Trade and other payables 71,304 – 71,304Loans and borrowings 124,799 97,455 222,254


CompanyFinancial liabilities:Trade and other payables 68,531 – 68,531Loans and borrowings 123,765 96,748 220,513


(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings. The Group’s and the Company’s policy is to manage interest cost using a mix of fixed and floating rate borrowings.

Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, the Group’s profit net of tax would have been RM184,000 higher/lower, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings, higher/lower interest income from floating rate loans to related parties, and lower/higher positive fair value of an interest rate swap. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.


174/

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)(d) Foreign exchange risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group operates mainly in Malaysia and transacts predominantly in Ringgit Malaysia. As such, it is not materially exposed to foreign exchange risk.

35. FAIR VALUE OF FINANCIAL INSTRUMENTSA. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not

reasonable approximation of fair value

Group Company

Note

Carryingamount

RM’000

Fairvalue

RM’000

Carryingamount

RM’000

Fairvalue

RM’000

2012Financial assetOther investments (non-current)– Unquoted shares, at costs 18 8,214 * 8,050 *

Financial liabilityLoans and borrowings (non-current)– Term loan 29 73,886 56,463 73,886 56,463

2011Financial assetOther investments (non-current)– Unquoted shares, at costs 18 6,929 * 6,765 *

Financial liabilityLoans and borrowings (non-current)– Term loan 29 96,748 77,920 96,748 77,920

* Other investments (unquoted shares) carried at cost (Note 18)

Fair value information has not been disclosed for the Group’s investments in equity instruments that are carried at cost because fair value cannot be measured reliably. These equity instruments mainly represent ordinary shares in companies that are not quoted on any market. In addition, the variability in the range of reasonable fair value estimates derived from valuation techniques is insignificant. The Group does not intend to dispose of this investment in the foreseeable future.

www.heitech.com.my

175/


35. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D.)B. Determination of fair value Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation

of fair value

The following are the classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note

Trade and other receivables 19Trade and other payables 25Loans and borrowings (current) 29Hire purchase payables (current and non-current) 33(c)

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values due to the relatively short-term nature.

The carrying amounts of loans and borrowings are reasonable approximation of fair value due to the insignificant impact of discounting.

36. CAPITAL MANAGEMENT The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy

capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2012 and 2011.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio at reasonable level. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances.

The debt to equity ratios as at 31 December 2012 and 31 December 2011 are as follows:

Group Company

Note2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Loans and borrowings 29 218,062 222,254 216,240 220,513Trade and other payables 25 91,242 71,304 100,314 68,531Less: Cash and bank balances 24 (73,005) (56,135) (71,075) (49,364)

Net debt 236,299 237,423 245,479 239,680

Equity attributable to owners of the parent, represents total capital 206,547 202,855 199,307 196,469

Capital and net debt 442,846 440,278 444,786 436,149

Gearing ratio 53% 54% 55% 55%


176/

37. SEGMENT INFORMATION For management purposes, the Group is organised into business units based on their products and services, and has

three reportable operating segments as follows:

I. Information technology

II. Mailing and document processing services

III. Television content services. This segment has been classified as a discontinued operation during the financial year (Note 11).

The amounts relating to television content services have been excluded to arrive at amounts shown in the consolidated statement of comprehensive income as they are presented separately in the statement of comprehensive income within one line item, “Profit from discontinued operation, net of tax”.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

www.heitech.com.my

177/


37. SEGMENT INFORMATION (CONT’D.)

Information technology

RM’000

Mailing and

document processing

services RM’000

Television content services

(Discontinued) RM’000

Adjustmentsand

Eliminations RM’000 Notes

Consolidated RM’000

31 December 2012Revenue:External sales 366,377 29,152 4,950 (4,950) 395,529Other income 11,517 506 6 (6) 12,023Inter-segment 11,040 1,711 – (12,751) A –

Total revenue 388,934 31,369 4,956 (17,707) 407,552

Results:Finance costs (5,346) (104) (4) 4 (5,450)Interest income 633 85 6 (6) 718Depreciation and amortisation (9,974) (1,922) (20) 20 (11,896)Other non-cash expenses (5,100) – – – B (5,100)Share of result of associates 1,762 – (747) 747 1,762Profit before tax 11,429 2,912 (499) (5,906) C 7,936

Assets:Investment in associates 3,445 – 3,114 (3,114) 3,445Additions to non-current assets 28,932 – 31 (31) D 28,932Segment assets 554,893 34,342 13,688 (72,258) E 530,665

LiabilitiesSegment liabilities 341,182 8,456 817 (36,581) F 313,874


178/


Information technology

RM’000

Mailing and

document processing

services RM’000

Television content services

(Discontinued) RM’000

Adjustmentsand

Eliminations RM’000 Notes

Consolidated RM’000

31 December 2011Revenue:External sales 309,898 28,226 15,532 (15,532) 338,124Other income 10,771 178 86 (86) 10,949Inter-segment 1,140 1,844 – (2,984) A –

Total revenue 321,809 30,248 15,618 (18,602) 349,073

Result:Finance costs (4,779) (96) (4) 4 (4,875)Interest income 836 118 77 (77) 954Depreciation and amortisation (12,584) (1,052) (44) 44 (13,636)Other non-cash expenses (2,018) – – – B (2,018)Share of result of associates 1,303 – (139) 139 1,303Profit before tax 4,833 3,050 6,261 (10,787) C 3,357

Assets:Investment in associates 17,916 – 3,861 – 21,777Additions to non-current assets 19,794 966 14 (2,763) D 18,011Segment assets 508,857 34,736 14,834 (49,636) E 508,791

LiabilitiesSegment liabilities 308,117 11,167 1,377 (25,239) F 295,422

www.heitech.com.my

179/



Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements.

A Inter-segment revenues are eliminated on consolidation.

B Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:

Note

2012RM’000


Net realised foreign exchange loss 9 – 249Net fair value loss/(gain) on held for trading of investment 5, 9 809 (939)Net loss on remeasurement to fair value of retained interest

in a former associate 9 2,140 –Impairment loss on trade and other receivables 9 4,877 5,702Impairment loss on intangible assets 9 3,427 –Reversal of impairment loss on receivables 9 (6,153) (2,994)

5,100 2,018

C The following items are added to/(deducted from) segment profit to arrive at “profit before tax from continuing operations” presented in the consolidated statement of comprehensive income:

2012RM’000


Revenue from intersegment (4,301) (7,401)Expenses from intersegment (3,866) 1,711Share of results of associates 1,762 1,164Profit before tax, discontinued operation 499 (6,261)

(5,906) (10,787)

D Additions to non-current assets consist of:

2012RM’000


Property, plant and equipment 18,941 9,105Intangible assets 9,991 8,906

28,932 18,011

E The following item is deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2012RM’000

2011RM’000

Inter-segment assets (72,258) (49,636)


180/

37. SEGMENT INFORMATION (CONT’D.)F The following item is deducted from segment liabilities to arrive at total liabilities reported in the consolidated

statement of financial position:

2012RM’000

2011RM’000

Inter-segment liabilities (36,581) (25,239)

38. COMPARATIVES Certain comparative amounts have been reclassified to conform with current year’s presentation.

39. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE The financial statements for the year ended 31 December 2012 were authorised for issue in accordance with a

resolution of the directors on 17 April 2013.

www.heitech.com.my

181/


40. SUPPLEMENTARY INFORMATION – BREAKDOWN OF RETAINED EARNINGS INTO REALISED AND UNREALISED The breakdown of the retained earnings of the Group and of the Company as at 31 December 2012 into realised

and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company2012

RM’0002011

RM’0002012

RM’0002011

RM’000

Total retained profits of the Company and its subsidiaries– Realised 80,829 88,749 80,681 77,503– Unrealised 417 358 – –

Total share of retained profits from associate 81,246 89,107 80,681 77,503– Realised – – – –– Unrealised 3,445 4,073 – –

84,691 93,180 80,681 77,503

Less: Consolidation adjustments 4,094 (8,958) – –

Retained profits as per financial statements 88,785 84,222 80,681 77,503


182/

184 List of Properties185 Analysis of Shareholdings187 Corporate Directory188 Glossary• Form of Proxy

OTHER INFORMATION

LIST OF PROPERTIESAS AT 31 DECEMbER 2012

Location Description Land/Build-upArea

CurrentUsage

Land/Tenure

Net BookValue as at 31.12.2012

Date ofRevaluation

No. 1 Jalan U8/81, Seksyen U8,Bukit Jelutong,40150 Shah Alam, Selangor Darul Ehsan

HS (D) 142708,P.T. No. 17653,Mukim Damansara,Daerah Petaling,Selangor Darul Ehsan

210,830.4 Sq. Ft.

HeiTech Village 2 World Class Data Center and business premise

Freehold RM7.38 Million

6 July 2004

Cyberjaya HS (D) 7091,P.T. No. 12105,Mukim Dengkil,Daerah Sepang,Selangor Darul Ehsan

0.4815 hectares

VacantLand

Freehold RM2.52 Million

6 July 2004


184/

ANALYSIS OF SHAREHOLDINGSAS AT 15 APRIL 2013

ANALYSIS BY SIZE OF HOLDINGS as at 15 April 2013

Size of Holdings

No of Shareholders/

DepositorsHolder

PercentageNo of Shares/

SecuritiesHolding

Percentage1 – 99 209 7.004 9,205 0.0091100 – 1,000 459 15.382 350,770 0.34651,001 – 10,000 1,818 60.9249 6,949,898 6.865810,001 – 100,000 443 14.8458 13,464,682 13.3017100,001 – 5,061,264 53 1.7761 22,241,245 21.9725,061,265 and above 2 0.067 58,209,500 57.5049Total 2,984 100 101,225,300 100

Note:* Stock name/Code = hTPaDU/5028* Total issued Capital = 101,225,300 (inCLUDinG Treasury Shares of 100)* no Consolidation of accounts

INFORMATION ON SUBSTANTIAL SHAREHOLDERS/DEPOSITORS as at 15 April 2013

No Name ID NumberNo of Shares/

SecuritiesHolding

Percentage1 ABB NOMINEE (TEMPATAN) SDN BHD 37645P 30,330,000 29.9629

Pledged Securities Account For Padujade Corporation Sdn Bhd

2 AMANAHRAYA TRUSTEES BERHAD 766894T 27,879,500 27.5421Skim Amanah Saham BumiputeraTotal 58,209,500 57.5049

Note:* Stock name/Code = hTPaDU/5028* Total issued Capital = 101,225,200 (Excluding Treasury Shares of 100)

INFORMATION ON DIRECTORS’ SHAREHOLDINGS/SECURITIES as at 15 April 2013

No Name of DirectorsNo of Shares/

Securities1 Dato’ Ab. Halim bin Mohyiddin 02 Tan Sri Dato’ Sri Abi Musa Asa’ari bin Mohamed Nor 03 Tan Sri Dato’ Mohd Zuki bin Kamaluddin 12,5004 Ghazali bin Awang 05 Dato’ Dr Mohamed Ariffin bin Aton 06 Dato’ Mohd Fadzli bin Yusof 07 Dato’ Mohd Hilmey bin Mohd Taib 7,820,1848 Ou Shian Waei 09 Safiee bin Mohammad 1,012,04510 Syed Agel bin Syed Salim 12,500

8,857,229

Note:* Stock name/Code = hTPaDU/5028* Total issued Capital = 101,225,200 (EXCLUDinG Treasury Shares of 100)# account under nominees

Remarks:The above information reflect Shares/Securities registered directly in the name of the Directors (as shareholders/depositors) only. Kindly take note that you need to adjust the Directors’ Shares/Securities in Table a according to information maintained by you in the register of Directors’ Shareholdings/Securities holdings, as we are not privy to such information and at the figures in the respective shareholding range accordingly.

www.heitech.com.my

185/

ANALYSIS OF SHAREHOLDINGSAS AT 15 APRIL 2013

LIST OF TOP THIRTY (30) SHAREHOLDERS/DEPOSITORS as at 15 April 2013

No Name Shares %

1 ABB Nominee (Tempatan) Sdn Bhd 30,330,000 29.9629Pledged Securities Account for Padujade Corporation Sdn Bhd

2 Amanahraya Trustees Berhad 27,879,500 27.5421Skim Amanah Saham Bumiputera

3 ABB Nominee (Tempatan) Sdn Bhd 4,465,400 4.4114Abb Nominee (Tempatan) Sdn Bhd Pledged Securities Account for Mohd Hilmey Mohd Taib

4 Koperasi Permodalan Felda Malaysia Berhad 2,263,300 2.23595 Mohd Hilmey bin Mohd Taib 1,700,300 1.67976 Mohd Hilmey bin Mohd Taib 1,334,484 1.31837 Safiee bin Mohammad 1,012,045 0.99988 Perbadanan Usahawan Nasional Berhad 894,889 0.88419 Izanee bin Ismail 700,100 0.691610 Wan Zaidi bin Wan Jaafar 500,795 0.494711 Lee Yik Foong 424,600 0.419512 Maybank Nominees (Tempatan) Sdn Bhd 421,000 0.4159

Pledged Securities Account for Lim Wee Chian 13 Cartaban Nominees (Tempatan) Sdn Bhd 375,000 0.3705

AXA Affin General Insurance Berhad 14 Kamsiah binti Abu 360,190 0.355815 Che Ngah bin Ibrahim 339,681 0.335616 Mohd Hilmey bin Mohd Taib 320,000 0.316117 Goh Siang Giang 305,000 0.301318 Jasmi bin Mohd Ismail 304,300 0.300619 Abdul Manaf bin Shariff 302,000 0.298320 Cimsec Nominees (Tempatan) Sdn Bhd 300,000 0.2964

CIMB for S.M Faisal bin S.M Nasimuddin Kamal (PB) 21 Maybank Nominees (Tempatan) Sdn Bhd 271,000 0.2677

Pledged Securities Account for Chong Siew Foon 22 Cheng Mei Wan 261,000 0.257823 Mariam binti Haron 252,405 0.249324 Lim Yoon Che 246,174 0.243225 Maybank Nominees (Tempatan) Sdn Bhd 240,000 0.2371

Pledged Securities Account for Lim Seong Wah & Sons Sdn Bhd

26 R N Muthurajah 225,000 0.222327 Lim Kheng Guan 220,000 0.217328 Yeoh Poh Lee 206,800 0.204329 Ta Nominees (Tempatan) Sdn Bhd 205,700 0.2032

Pledged Securities Account for Phua Lee Ping

30 Lee Oi Kum 205,000 0.2025

Total 76,865,663 75.9353

Note:

* Stock name/Code = hTPaDU/5028* Total issued Capital = 101,225,200 (EXCLUDinG Treasury Shares of 100)


186/

CORPORATE DIRECTORY

HEADQUARTERSHeiTech Padu BerhadLevel 15, HeiTech VillagePersiaran Kewajipan, USJ 1UEP Subang Jaya47600 Selangor Darul EhsanMalaysiaTel : +(603) 8026 8888 +(603) 8601 3000Fax : +(603) 8024 7997www.heitech.com.my

REGIONAL OFFICESJohor – Batu Pahat39/20 Ground FloorJalan Mohd Salleh83000 Batu PahatJohor Darul TakzimTel : +(607) 4351 967Fax : +(607) 4351 967

Johor – Johor BahruGround Floor, No. 56-01Jalan Tun Abdul RazakSusun 1/1, Medan Cahaya80000 Johor BahruJohor Darul TakzimTel : +(607) 2281 964Fax : +(607) 2234 514

KedahGround Floor, No. 1910Jalan Stadium05100 Alor SetarKedah Darul AmanTel : +(604) 7307 521Fax : +(604) 7320 918

KelantanLot 5315 E, Ground FloorJalan Sultan Yahya PetraLundang, 15150Kota BahruKelantan Darul NaimTel : +(609) 7472 789Fax : +(609) 7486 502

MelakaNo. 622, Jalan TMRTaman Melaka Raya75000 MelakaTel : +(606) 2812 544Fax : +(606) 2823 212

Negeri SembilanNo. 6, Betaria Business CentreJalan Durian Emas 2Off Jalan Dato’ Siamang Gagap70100, SerembanNegeri Sembilan Darul KhususTel : +(606) 7625 840Fax : +(606) 7625 840

PahangB-90, Ground FloorJalan Wong Ah Jang25100 KuantanPahang Darul MakmurTel : +(609) 5150 041Fax : +(609) 5148 964

PerakNo. 21, Medan Istana 7Bandar Ipoh Raya30000, IpohPerak Darul RidzuanTel : +(605) 2542 387Fax : +(605) 2542 387

PerlisPejabat Pos BesarJKR 751, Jalan Penjara01670 KangarPerlis Indera KayanganTel : +(604) 977 5648Fax : +(604) 977 5648

Pulau PinangNo. 7, Ground FloorJalan Todak 5Bandar Sunway, Seberang Jaya13600 Seberang PraiPulau PinangTel : +(604) 3996 742Fax : +(604) 3988 048

Sabah – Kota KinabaluLot A, Tingkat 1Pejabat Pos Besar Kota Kinabalu26 Jalan Tun Razak 88670 Kota KinabaluSabahTel : +(6088) 213 377Fax : +(6088) 265 379

Sabah – SandakanLot 9, Block 1Prima SquareMile 4, North Road90716, Sandakan, SabahTel : +(6089) 219 891Fax : +(6089) 219 891

Sabah – TawauTB 552, Block BTacoln Complex91000 TawauSabahTel : +(6089) 756 191Fax : +(6089) 770 832

Sarawak – KuchingNo. 3, Lot 2945 Hock Kui Commercial CentreJalan Tun Ahmad Zaidi Adruce93150 Kuching, SarawakTel : +(6082) 244 067Fax : +(6082) 423 376

Sarawak – MiriLot 1085, Ground FloorJalan Merpati98000 MiriSarawakTel : +(6085) 414 824Fax : +(6085) 428 750

Sarawak – SibuNo. 4, Ground FloorLorong 9, Jalan Kg. Datu96000 Sibu, SarawakTel : +(084) 319 293Fax : +(084) 319 293

TerengganuGround Floor, No. 118DJalan Pejabat20000 Kuala TerengganuTerengganu Darul ImanTel : +(609) 6226 505Fax : +(609) 6226 505

Wilayah Persekutuan Kuala LumpurLot C & D, Level 5Tower 1, Etiqa TwinsNo. 11, Jalan Pinang50450, Kuala LumpurFax : +(603) 2713 7223

www.heitech.com.my

187/

GLOSSARY

Hybrid Client Is a transaction framework and tools that provide common components to rapidly develop a transaction based system

ICT Information and Communications Technology

IP Intellectual Property

ISMS Information Security Management System

ITIL Information Technology Infrastructure Library

LAN Local Area Network

KLSE Kuala Lumpur Stock Exchange

LMS Library Management System

LR Listing Requirement

MBO Management-Buy-Out

MDCS Managed Data Centre Services

MIA Malaysian Institute of Accountants

MICPA Malaysian Institute of Certified Public Accountants

MIM Malaysian Institute of Management

MNCS Managed Network and Communications Services

M.O.B.S Managed Online Back-Up Services

Padu* MSS Managed Security Services

PIKOM Association of the Computer and Multimedia Industry of Malaysia

NACRA National Annual Corporate Report Awards

NGO Non-Governmental Organisation

NPATS Net Profit Attributable to Shareholders

RFID Radio Frequency Identification. It is a method for automated item identification using radio waves

RFID Middleware Software that sits in between RFID devices and enterprise application systems

RMS Record Management System


188/

ROPE Regional Office Professional Engineer

PaaS Platform-as-a-Service

PBT Profit Before Tax

SaaS Software-as-a-Service

SBG Strategic Business Group

SBU Strategic Business Unit

SIAD System Integration and Application Development

SME Small and Medium Enterprise

SAP Systems Applications and Products

SNA System Network Architecture

SNA Client An application system that requires communication to legacy IBM Mainframe, which uses SNAApplication communication protocol

SOA Service Oriented Architecture. It is a design approach based on the concept of services. SOA has the aim to enable interoperability among various systems

TOFT Tactical Operation Flight Training

VSS Voluntary Separation Scheme

WAN Wide Area Network

zEnterprise It is the most powerful commercial IBM Mainframe

www.heitech.com.my

189/

This page has been intentionally left blank.

FORM OF PROXY

I/We (FULL NAME IN BLOCK CAPITALS)

of (FULL ADDRESS)

being (a) member(s) of HEITECH PADU BERHAD (310628-D), hereby appoint(s)

IC No.

of

or failing him IC No.

of

or failing him/her, the Chairman of the meeting as my/our proxy to attend and vote for me/us on my/our behalf at the Eighteenth (18th) Annual General Meeting of the Company to be held at Ballroom Selangor 1, Grand Dorsett Subang Hotel, Jalan SS 12/1, 47500 Subang Jaya, Selangor Darul Ehsan, Malaysia on Wednesday, 26 June 2013, at 10.30 a.m. or any adjournment thereof.

The proxy is to vote on the resolutions set in the Notice of Meeting as indicated with an ‘X’ in the appropriate space below. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion.

RESOLUTIONS FOR AGAINST

RESOLUTION 1 To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2012 together with the Reports of the Directors and Auditors

RESOLUTION 2 To re-elect Dato’ Mohd Hilmey bin Mohd Taib as Director

RESOLUTION 3 To re-elect Tuan Syed Agel bin Syed Salim as Director

RESOLUTION 4 To approve the payment of Directors’ Fees for the financial year ended 31 December 2012

RESOLUTION 5 To re-appoint Messrs. Hanafiah Raslan & Mohamad as Auditors for the ensuing year and to authorise the Directors to fix the remuneration of the Auditors

RESOLUTION 6 To approve the Proposed Amendments to the Articles of Association of the Company

RESOLUTION 7 To approve the Proposed Authority to Issue Shares

RESOLUTION 8 To approve the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

Dated this , 2013 Signature of Member or Affix Common Seal

Notes:-1. A Member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy or proxies to attend and vote in his/her stead. A proxy

may but need not be a member of the Company.2. A Member shall not be entitled to appoint more than two (2) proxies to attend and vote at the Meeting provided that where a member is an authorised

nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act, 1991, it may appoint up to two (2) proxies in respect of each Securities Account it holds with ordinary shares in the Company standing to the credit of the Securities Account.

3. Where a Member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of his shareholdings to be represented by each proxy.

4. Where the appointment is executed by a corporation, it must be either under its Common Seal or the hand of its officer or attorney duly authorised.5. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is guided or notarially certified copy of such power

or authority, must be deposited at the office of the Company’s Registrar: EQUINITI SERVICES SDN BHD, at Level 8, Menara MIDF, 82 Jalan Raja Chulan, 50200 Kuala Lumpur, not less than forty-eight (48) hours before the time appointed for holding the Meeting or at any adjournment thereof.

HeiTech Padu Berhad (310628-D)

Fold here

Your details are being protected under our data protection and privacy effort.

AFFIX STAMP

Equiniti Services Sdn. Bhd.(formerly known as miDF Consultancy and Corporate Services Sendirian Berhad)

Level 8, Menara MIDF82 Jalan Raja Chulan50200 Kuala Lumpur

Fold here

Ahmad Nasrul Hakim - Malaysiastock.biz - 2336088093491.pdf...Group Chief Executive Officer, heiTech...

Documents

Transcript of Ahmad Nasrul Hakim - Malaysiastock.biz - 2336088093491.pdf...Group Chief Executive Officer, heiTech...