REXIT-AnnualReport2014

ANNUAL REPORT 2014

CONTENTS

CORPORATE INFORMATION

CORPORATE PROFILE

PRODUCTS AND SERVICES

CORPORATE STRUCTURE

DIRECTORS PROFILES

CHAIRMANS STATEMENT

MANAGEMENT OVERVIEW

STATEMENT ON CORPORATE GOVERNANCE

ADDITIONAL COMPLIANCE INFORMATION

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

REPORT ON AUDIT COMMITTEE

FINANCIAL STATEMENTS

DETAILS OF LANDED PROPERTY

ANALYSIS OF SHAREHOLDINGS

NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

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2CORPORATE INFORMATION

BOARD OF DIRECTORSDatuk Ng Kam ChiuChairman / Independent Non-Executive Director

Datuk Chung Hon CheongChief Executive Officer / Executive Director

Si Tho Yoke MengChief Operating Officer / Executive Director

Dato Abdul Murad Bin KhalidNon-Independent Non-Executive Director

Kuah Hun LiangIndependent Non-Executive Director

AUDIT COMMITTEEDatuk Ng Kam ChiuChairman / Independent Non-Executive Director

Dato Abdul Murad Bin KhalidMember / Non-Independent Non-Executive Director

Kuah Hun LiangMember / Independent Non-Executive Director

REMUNERATION COMMITTEEDatuk Ng Kam ChiuChairman / Independent Non-Executive Director

Dato Abdul Murad Bin KhalidMember / Non-Independent Non-Executive Director

Datuk Chung Hon CheongMember / Executive Director

NOMINATING COMMITTEEDatuk Ng Kam ChiuChairman / Independent Non-Executive Director

Kuah Hun LiangMember / Independent Non-Executive Director

COMPANY SECRETARIESNg Heng Hooi (MAICSA 7048492)Wong Mee Kiat (MAICSA 7058813)Jane Ong Su Ping (MAICSA 7059946)

CORPORATE OFFICE42, Jalan BM 1/2Taman Bukit Mayang Emas47301 Petaling JayaSelangor Darul EhsanTel: 03-7803 6623 Fax: 03-7803 8896www.rexit.com

REGISTERED OFFICE Lot 6.08, 6th FloorPlaza First NationwideNo. 161 Jalan Tun H.S. Lee50000 Kuala LumpurTel: 03-2072 8100 Fax: 03-2072 8101

PRINCIPAL BANKERSStandard Chartered Bank Malaysia BerhadCIMB Bank Berhad

AUDITORSSekhar & Tan Chartered AccountantsSuite 16-8, Level 16, Lobby BWisma UOA IINo. 21 Jalan PinangP.O. Box 1056850718 Kuala LumpurTel: 03- 2170 2688 Fax: 03-2171 1987

SHARE REGISTRARBina Management (M) Sdn. Bhd. Lot 10, The Highway CentreJalan 51/205, 46050 Petaling JayaSelangor Darul EhsanTel: 03-7784 3922 Fax: 03-7784 1988

STOCK EXCHANGE LISTINGACE Market of Bursa Malaysia Securities Berhad Stock Name : REXITStock Code : 0106

3CORPORATE PROFILE

Rexit Berhad (Rexit) is a company that focuses on delivering solutions and services to the Insurance industry. Rexits intimate knowledge and understanding of the business processes and operations of the industry, its capability to continually identify advances in technology and successfully adapting those for the benefit of its customers have made Rexit the solutions partner of choice.

Rexit has grown from a four-person operation in 1998 into a public-listed company by November 2005. Rexit is currently listed on the ACE market of Bursa Malaysia Securities Bhd.

As a public-listed entity, Rexit not only has the financial capacity to undertake large IT projects but also has the experience of managing large IT infrastructures. It also operates under the stringent requirements of various regulatory bodies ensuring that there is proper corporate governance and prudence in its operations.

Rexit offers several web-based insurance solutions which cater for the front-end marketing and sales functions, as well as the back-end operations and management requirements of insurance companies.

e-Cover Enabling online insurance transactionsRexits business model is the provision of Software as a Service (SaaS) which is based on a pay per use basis. This business strategy has enabled Rexit to be a key partner to the financial and legal services industries. The SaaS model was adopted in order to help companies to address the biggest concerns in IT investments, namely the high capital expenditure, difficulties in retaining IT expertise, the technology risk, and the high costs of operating and maintaining IT systems.

Rexit introduced the e-Cover suite of web-based solutions which provided an on-line system for insurance companies and their intermediaries. Today, with more than 35,000 registered users comprising intermediaries, twelve insurance companies, five banks and telcos, the e-Cover system is one of the largest SaaS e-commerce portals in the country, if not regionally. Insurance transaction data is now entered by the thousands of agents with the e-Cover system instead of relying on the personnel of the insurance companies.

Through a common interface, agents can transact for multi-principals using the multiple devices instead of different terminals and operating environments in the past. Today, the e-Cover portal can be accessed using different browsers like Internet Explorer, Google Chrome, Mozilla Firefox and Safari from various devices running on Windows, Android and Apple iOS. The capability is extended to any location so long as there is access to the Internet. This fits into the business model of providing service anytime, anywhere which most insurance agents operate in.

The e-Cover system is currently deployed in Malaysia, Singapore, Thailand and Hong Kong.

e-PPA Enabling online unit trust investment through EPF

Although Rexits core business is focused on the Insurance industry, it has recognized the opportunities in expanding its business model in the other financial services sector.

In 2009, Rexit expanded the SaaS model to include the Malaysian unit trust industry following our appointment by the Federation of Investment Managers Malaysia (FIMM) as the third party administrator for electronic submissions by their member companies to the Employees Provident Fund (EPF). The application known as the e-Pelaburan Pilihan Ahli (e-PPA) system is an industry platform for the submission of unit trust investment and redemption applications which are settled electronically using the EPF members contributions. The e-PPA system provides a closed loop process involving the unit trust companies, the EPF and their nominated bank for all processes within a turnaround time of less than 3 days.

The e-PPA system is adopted by all FIMM as well as non-FIMM member companies.

4CORPORATE PROFILE

InfoGuardian Enabling online legal documentationRexit has further broadened its SaaS solutions with the introduction of the InfoGuardian Work Management Suite (InfoGuardian). InfoGuardian is an integrated workflow, case management and document management system specially designed for the financial and legal services industries, to provide and facilitate an on-line information sharing environment for multiple users within and outside customer organizations.

InfoGuardian provides key tools that enable quick and informed business decisions and promotes transparency between the various parties involved in any work process. The InfoGuardian Suite can be easily adapted for various industries.

InfoGuardian is used by an international Islamic bank and a local bank together with their panel of legal firms and property valuation firms.

Overseas OperationsRexit International Sdn Bhd, a MSC Malaysia status company was formed to develop and market Rexits solutions and services internationally. It is well placed to reinforce our presence through our existing customers in Hong Kong, Singapore and Thailand. The implementation of these projects means that our software has undergone the process of localization in these countries. This further enhances the marketability and the acceptability of our products and services in these markets.

We will continue our efforts to market our e-Cover to the regional market with local strategic partners in the market identified. The local partners with a comprehensive knowledge of the local business environment will be in the best position to provide the necessary linkages to the government and the business sectors.

In order for the Group to continuously stay ahead in the competitive information technology business and to provide new and enhanced software solutions to meet the needs of our customers, Rexit has set up Rexit Software (Guangzhou) Co Ltd for the purpose of carrying out research and development for our overseas projects. Furthermore, the setting up of this base will provide the Group with the availability of additional resources for projects in the region.

Recognition and AwardsRexit Software and Rexit International were granted MSC (Multimedia Super Corridor) Malaysia Company Status by the Malaysian Multimedia Development Corporation Sdn Bhd in 2004 and 2008 respectively.

Rexit Software won the Asia Pacific ICT Alliance (APICTA) Merit Awards for the local and international Best of Financial Applications categories in 2006.

Furthermore, as part of Rexits continuous improvement strategy, Rexit has achieved the Capability Maturity Model Integration (CMMI) rating (Level 3) in December 2008. Rexit won the Malaysian Business-CIMA Enterprise Governance Awards 2010 for the ACE Market category in October 2010.

5PRODUCTS AND SERVICES

Rexit offers a broad range of solutions and services specifically for the Insurance and Financial Services industries that want to benefit from implementing secured e-commerce.

Our products support the entire spectrum of insurance processes and operations spanning from the external sales and marketing processes through the various distribution channels which include agents, brokers and banks through to the internal operations that involve the management of intermediaries and service providers, policy administration, underwriting, customer services, claims management, compliance, reinsurance, etc.

Rexit also has the capacity to provide solutions and data management services for large scale nationwide implementations and support various government initiatives.

Our primary products are:

InfoGuardianEnabling online legal documentation

e-PPAEnabling online unit trust investments through EPF

e-CoverEnabling online insurance transactions

e-PPA, an online system used by all approved unit trust companies in Malaysia to submit

investment and redemption applications to the EPF whenever EPF members invest in

the selected unit trusts using their EPF contributions.

e-Cover, an online insurance transaction system that enables a business to deliver products and services electronically and within a short time-to-market. It is available 24x7 anywhere. The shared services model adopted significantly reduces the cost of

ownership.

InfoGuardian, an integrated workflow, case management and document management system that provides and facilitates an on-line information sharing

environment for multiple users within and outside customer organizations.

6CORPORATE STRUCTURE

100 % Rexit International Sdn Bhd

100 % Rexit Solutions Sdn Bhd

Rexit (M) Sdn BhdRexit (M) Sdn Bhd100 %

100 % Rexit Software Sdn Bhd

100 % Rexit Software (Guangzhou) Co Ltd

49 % Reward-Link.com Sdn Bhd

7DIRECTORS PROFILES

Mr. Kuah Hun Liang Dato Abdul MuradBin Khalid

Datuk ChungHon Cheong

Datuk Ng Kam ChiuMr. Si ThoYoke Meng

DATUK NG KAM CHIU 68 years of age, MalaysianChairman / Independent Non-Executive Director

YBhg Datuk Ng was appointed to the Board on 2 September 2005. He holds a Bachelor of Social Science (Honours) degree from the University of Singapore and a Masters in Public Administration degree from the University of Southern California (Washington D.C.). He started his career with the Malaysian Administrative and Diplomatic Service in 1970 and worked in the Penang State Secretarys Office. He has served in the National Institute of Public Administration, the Prime Ministers Department, the Road Transport Department, and the Ministry of Science, Technology and Environment. He retired from the civil service in 2002.

YBhg Datuk Ng is the Chairman of the Audit Committee, Nominating Committee and Remuneration Committee. He attended all the four (4) Board meetings held in the financial year ended 30 June 2014.Committee. He attended all the four (4) Board meetings held in the financial year ended 30 June 2013.

DATO ABDUL MURAD BIN KHALID 60 years of age, MalaysianNon-Independent Non-Executive Director

YBhg Dato Abdul Murad was appointed to the Board on 17 October 2007. He holds a Diploma in Accounting and Bachelor of Economics (Honours) from the University of Malaya. He is a Member of Malaysian Institute of Chartered Public Accountants. He started his career with Bank Negara in 1976 as an Administrative Officer and appointed as Assistant Governor in 1994 until his resignation in 1999. He joined RHB Bank Berhad in January 1999 as Executive Director until his resignation in September 1999. He currently sits on the Board of several private limited companies.

YBhg Datuk Abdul Murad is a Member of the Audit Committee and Remuneration Committee. He attended all the four (4) Board meetings held in the financial year ended 30 June 2014.

8DIRECTORS PROFILES

KUAH HUN LIANG 53 years of age, MalaysianIndependent Non-Executive Director

Mr. Kuah was appointed to the Board on 17 December 2007. He holds a Bachelor of Science (Hons) degree in Applied Economics from the University of East London. Mr. Kuah has more than 30 years experience in the financial markets. He started his banking career in Public Bank Berhad in 1983. He joined Deutsche Bank AG in 1989 where he served as a Treasurer and was then promoted as the Managing Director and Head of Global Markets. He gained extensive experience in the field of trading and sales, as well as debt and equity capital markets during his tenure as the Head of Global Markets. In 2000, he was appointed as an Executive Director of Deutsche Bank (M) Berhad and promoted to be the Chief Executive Officer in 2002 and held the position till September 2006. Mr. Kuah was a former Treasurer and Director of Malaysian-German Chamber of Commerce and Chairman of Star Publications (Malaysia) Berhad. He has also served as a member of the Quality Assurance Committee for Financial Sector Talent Enrichment Programme (FSTEP), part of Institut Bank-Bank Malaysia and managed by Bank Negara Malaysia.

He is currently the Independent Non-Executive Director of Alliance Investment Bank Berhad, Alliance Bank Malaysia Berhad and MPHB Capital Berhad.

Mr. Kuah is a member of the Audit Committee and Nominating Committee. He attended all the four (4) Board meetings held in the financial year ended 30 June 2014.

DATUK CHUNG HON CHEONG 53 years of age, MalaysianChief Executive Officer / Executive Director

YBhg Datuk Chung was appointed to the Board on 2 September 2005. He started his involvement in IT in the early 80s with Computer Information Systems Sdn Bhd, a bureau services company providing data processing services for insurance companies. He then left to join System Maju Sdn Bhd, a Wang Computers distributor, a company specializing in IT hardware and software. In 1985, he co-founded Power Computer Supplies Sdn Bhd, a company principally involved in software development for general insurance companies. He subsequently sold his shares in this venture in 1996. From 1996 to 2001, he was involved in providing general consultancy services. In 2002, he was appointed Managing Director of Rexit Solutions Sdn Bhd (Rexit Solutions) and subsequently in 2003, he acquired Rexit Solutions through Rexit Venture Sdn Bhd (Rexit Venture). With great vision and leadership, he is recognised in the general insurance industry and is also a key factor in steering the steady growth of Rexit Group to become a respected software company in the IT industry.

YBhg Datuk Chung currently sits on the Board of Tenaga Nasional Berhad.

He is the Chairman of the Options Committee and a Member of the Remuneration Committee. He attended all the four (4) Board meetings held in the financial year ended 30 June 2014.

9DIRECTORS PROFILES

SI THO YOKE MENG 53 years of age, MalaysianChief Operating Officer / Executive Director

Mr. Si Tho was appointed to the Board on 2 September 2005. He started his career in the early 80s with Komputer Usaha Sdn Bhd, which he contributed vastly in development and project management. In 1987, he joined Power Computer Supplies Sdn Bhd, a company principally involved in software development for general insurance companies, where he was involved in managing, planning, directing and monitoring IT development activities. From 1996 to 2001, he was involved in providing general consultancy services. In 2001, he joined ETSC Dotcom Sdn Bhd (now known as e-Resource.com Sdn Bhd), a company involved in conducting research and development in RFID applications. The company successfully developed the electronic locate, identify and track engine (e-LIT engine), an RFID-based application which was tested in collaboration with University Sains Malaysia with commendable results. In 2002, he was appointed the Executive Director of Rexit Solutions and subsequently acquired Rexit Solutions through Rexit Venture in 2003. His vision and leadership is essential in establishing and managing the Rexit Group.

Mr. Si Tho is a Member of the Options Committee. He attended all the four (4) Board meetings held in the financial year ended 30 June 2014.

NotesNone of the Directors have any family relationship with any director and/or major shareholder of the Company.None of the Directors have any conflict of interest with the Company.None of the Directors have been convicted for offences within the past 10 years.

10

CHAIRMANS STATEMENT

Dear Shareholders,

On behalf of the Board of Directors of Rexit Berhad, I am pleased to present the Annual Report and the audited financial statements of the Group for the financial year ended 30 June 2014 (FY2014).

Overview

The year under review was indeed demanding and challenging for our e-Cover products and services. To stay relevant and remain profitable, the Group positions itself to be readily able to respond effectively and efficiently to the anticipated and actual structural changes in the insurance industry and the financial institutions. Continuous and aggressive marketing of the Groups products and services to new customers and the development of new areas of focus for our e-Cover necessitates the increase in direct costs. Despite the turbulent and tough operating conditions, the Group managed to deliver a decent performance and I am confident that the Group will stay profitable for the next financial year.

As anticipated the new ruling by the Employment Provident Funds (EPF) that cuts contributors investments in unit trusts had a significant impact of lowering the revenue contribution of our e-PPA project. The Management believes this is temporary and EPF transactions will improve once the policy becomes more certain.

The Group is targeting to launch the e-Cover motor insurance for the Malaysian Motor Insurance Pool (MMIP) this year. MIMP is a high risk insurance pool that is run collectively by the insurance industry under the orders of the regulators of the industry. MMIP provides an avenue for vehicle owners that finds difficulty in securing cover to purchase their motor insurance policy. This service to MMIP is provided on user pay per transaction and would upon implementation generate positive recurrent revenue for the Group.

Financial Performance

For the FY2014, the Groups revenue, mainly derived from software as a service subscription and transaction fees, value added hardware and system software sales was recorded at RM11.991 million. This is 13% decrease when compared to RM13.776 million recorded in the preceding year. The Groups profit before tax decreased to RM3.480 million which is 27% decrease when compared to RM4.779 million in the last financial year. The Groups profit after tax decreased to RM3.405 million compared to RM4.754 million in the previous year.

For the FY2014, the Group purchased a total 1,327,400 ordinary shares from the open market. As of 30 June 2014, the Group holds a total of 7,555,200 Rexits shares in its Treasury.

Dividend

The total dividend for the FY2014 is 40 percent or 4 sen per ordinary share of RM0.10. The total dividend payout amounted to 7.281 million.

11

CHAIRMANS STATEMENT

Prospects

The e-Cover motor insurance for MMIP is targeted to be launched this year. The attraction for clients to MMIP will be the 24 X 7 availability of the service and providing an avenue for vehicle owners to purchase motor insurance which is mandatory. The Group is expending resources to attract and train the people in the industry to use this e-Cover for MMIP. The quantum of annual recurring revenue will depend on the number of transactions once the e-Cover for MMIP is implemented successfully. I anticipate that the e-Cover for MMIP will contribute positively to the Groups revenue and profit.

To ensure successful implementation of InfoGuardian to our second bank client, intensive training was conducted to all potential users in the country. Currently, there are more than 600 legal firms and more than 120 property valuation companies registered as users of the InfoGuardian system. It is expected to generate recurring revenue for the Group. The Group strongly believes that there is great potential for InfoGuardian in the country and in the region.

The e-PPA will continue to contribute recurring revenue to the Group albeit in a smaller amount. The Management believes this is temporary and EPF transactions will improve once the policy becomes more certain.

The Governments plan to fully liberalize motor tariffs will spur more intense competition amongst the insurance companies. Offers for more innovative products and effective and efficient service delivery to meet customers requirements would be the order of the day in a deregulated market. The Groups experience in providing e-Cover services in a deregulated environment to an insurance company in Singapore will put us in good stead to exploit the potential opportunities by offering proven quality services to the industry.

Taking into consideration that the domestic market will be characterized by rapid changes and be more demanding in 2015, the Group believes that the prospects of Rexit for the next financial year would remain challenging.

Research and Development

Prioritizing recurring revenue generating projects remains the focus in all the Groups research and development efforts. Continuous enhancement and development of new applications for the financial and financial related services industry leveraging on our e-Cover infrastructure remains top priority. For FY2014, the Group expended more than 2 million in R&D.

Corporate Social Responsibility

Human resources are the Groups greatest assets. Building a corporate culture which emphasizes team work for more efficient and effective results, the Group organized a team building session for its employees. Recognizing that the Goods and Services Tax to be implemented early 2015 will have an impact on the Group, our employees and the community, a training session was conducted. Management and employees would be in a better position in their respective communities to address the impact of GST.

The Group aims to attract the best talents and retain them by providing the appropriate opportunities such as formal training and on the job training as part of their personal and professional development.

12

CHAIRMANS STATEMENT

Corporate Governance

The Board of Director places strong emphasis in maintaining high standards of corporate governance as it is our responsibility to protect and maximize shareholders value and to ensure the sustainability of the Groups business. The Statement of Corporate Governance highlighting the measures taken is in the Annual Report.

Appreciation

On behalf of the Board of Director, I would like to convey my thanks and appreciation to the management and employees for the hard work, loyalty, dedication and commitment in assisting the Group to weather out the challenging times. My sincere thanks goes out to all our customers, business associates and shareholders for your invaluable support.

Datuk Ng Kam Chiu PJN, KMN.Chairman

13

MANAGEMENT OVERVIEW

Financial Performance

For the FY 2014, the Rexit Group achieved a profit after tax of RM3.405 million on recorded revenue of RM11.991 million, mainly attributable to reduction in subscription and transaction fees. Profit after tax has also decreased in line with the reduction in revenue.

Group Prospects

The Rexit Group will continue to strengthen its core competencies in further developments to the e-Cover products and services, improvement in operational efficiency, and to extend its marketing efforts in the Asia Pacific region. We have identified the following as the main areas of growth:

(a) e-CoverRexit has been increasing its efforts to introduce its e-Cover non-motor products to our existing customers. The current challenging economic situation has created opportunities for Rexit to engage our customers for the implementation of additional products, as a result of the insurance companies looking at ways to further improve their operational efficiency. Nevertheless, the continuing consolidation of the local insurance industry presents a challenging operating landscape for the Company.

In addition to leveraging on our existing customers, Rexit is actively exploring opportunities in the Asia Pacific region with potential partners to market our products and services in these markets. The successful adoption of the e-Cover system in Hong Kong, Singapore and Thailand is very significant as it provided the Group with the opportunity to localize the e-Cover system to meet the respective countrys industry requirements.Rexit will be launching the e-Cover for the Malaysian Motor Insurance Pool (MMIP) this year. This is a significant achievement for Rexit as MMIP is the high risk insurance pool that is run collectively by the insurance industry under the orders of the regulators of the industry. MMIP provides an avenue for vehicle owners that have difficulties in securing covers to purchase their motor insurance policies. This service to MMIP is provided on a pay-per-use basis and its implementation will generate positive recurring revenue for the Group.

Rexit has successfully implemented e-PPA for the Federation of Investment Managers Malaysia (FIMM) in 2010, and its usage has since been expanded to include non-FIMM member companies.The e-PPA continues to contribute to Rexits revenue in the current financial year and will continue to contribute positively to Rexits revenue on a sustainable basis in the coming years.

Taking into consideration the domestic and regional economic environment which is expected to be more volatile in 2015, the Group believes that the prospects of Rexit for the next financial year would remain challenging.

(b) e-PPA

One of InfoGuardian customers, an international Islamic bank has further expanded its use of the system to its Security Documentation Department. Furthermore, additional legal firms and property valuation firms have joined the program resulting in a wider collaboration network for financial institutions. The bank is looking to expand the usage of InfoGuardian to other types of external service provider e.g. debt collection agencies.

Rexit has also successfully implemented InfoGuardian for a local bank and its panel of legal firms. Rexit is confident that with the recent contract, InfoGuardian will be able to boost its future revenues, as businesses look to improve their profitability through better efficiency.

(c) InfoGuardian

14

MANAGEMENT OVERVIEW

Research & Development

The Rexit Groups research and development efforts are to expand and extend the e-Cover services to the financial services sector and other segments of e-commerce by leveraging on the large 24 x 7 secured e-Cover infrastructure. Furthermore, continuous software development work is being undertaken to introduce an e-Cover mobile version to cater to the growing number of Apple and Android device users, some of which have already been launched.

Rexit Software (Guangzhou) Co Ltd is currently carrying out the development for our overseas projects. The additional resources from this base, can be made available for any projects in the region to ensure a more efficient and timely delivery of projects.

Capability Maturity Model Integration

The Rexit Group has attained its Capability Maturity Model Integration (CMMI) Level 3 rating. CMMI is a process-improvement approach that provides organizations with the essential elements of effective processes. It facilitates an enterprise-wide process improvement that provides a set of best practices that addresses productivity, performance, costs, and stakeholders satisfaction.

The CMMI initiative will ensure better streamlining of our software development processes leading to greater efficiencies in our deliveries.

Training

The Rexit Group continues to invest in human capital through our in-house and external courses. All these are targeted at the rapid development of our staff in line with the expansion of the Group.

Our staff are provided training in all the key aspects of our operations like technical knowledge, soft skills training, project management skills, etc. which are in the form of classroom learning, as well as on-the-job training.

Corporate Governance

Rexit will continue to strive on improving its financial performance during these challenging and volatile economic conditions, while conforming to set standards and practices which contribute towards enhancing the effectiveness of the organization. We will continue to place strong emphasis on business and corporate governance principles and best practices, including risk management and internal control, communications and adherence to regulations, strategic management, and financial and operational performance.


The Board of Directors (the Board) is committed in ensuring good corporate governance is practiced throughout the Group as a fundamental part of discharging its fiduciary responsibilities to protect and enhance shareholders value and the financial performance of the Group.

The Board is pleased to disclose below the Company and its subsidiaries (Group)s application of the Principles and Recommendations of the Malaysian Code on Corporate Governance 2012 (Code) throughout the financial year.

PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD

Clear functions and Roles and Responsibilities of the Board

The Boards main responsibility is to lead and manage the Group in an effective manner including developing strategic directions and objectives in line with its vision and missions, implement plans and supervise the conduct of the Groups business as a whole. The Boards role is to provide leadership of the Group within a framework of prudent and effective controls whilst ensuring risks are consistently assessed and controlled.

The Board conducts ongoing review and evaluation of the Groups strategic plans to ensure the Groups focus is in line with the constantly evolving market conditions as well as identifying new businesses and opportunities. The Board also ensures that an adequate system of internal controls is in place and adopts appropriate measures to mitigate any foreseeable and/or unexpected risks. In addition, the Board also focuses on succession planning for senior management, investor relations programme and shareholders communication policy.

Board Charter

The Board Charter sets out the composition and balance, roles and responsibilities and processes of the Board and is to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members.

The Board Charter shall be reviewed by the Board as and when required to ensure its relevance in assisting the Board to discharge its duties with the changes in the corporate laws and regulations that may arise from time to time and to remain consistent with the Board's objectives and responsibilities.

The Board Charter is published on the Companys website at www.rexit.com

Code of Conduct and Ethics

The Board acknowledges the importance of establishing a healthy corporate culture and has formalised in writing a Code of Conduct and Ethics for the Board, which sets out the standards of good behaviour by underscoring the core ethical values that are vital for their business decisions.

Sustainability of Business

The Board recognises the need for the Companys strategy to include sustainability on the operations. A sustainability process would help the Company to set goals, measure its performance and manage changes in its business. The effort would continue to be monitored by the Board in helping to shape the Companys strategy and policy and ultimately to improve the overall performance.

15


Supply of Information

The Board recognises that the decision making process is highly dependent on the quality of information furnished. As such, in discharging their duties, the Directors have full and timely access to all information concerning the Company and the Group. Prior to each Board meeting, the agenda together with relevant reports and Board papers would be circulated to all Directors in sufficient time to enable effective discussions and decision making during Board meetings.

All Board members have access to the advice and services of the Company Secretaries and senior management. The Board, whether as a full board or in their individual capacity, in the furtherance of their duties, may seek independent professional advice in discharge of their duties and responsibilities at the Companys expense.

PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD

Board Composition

The Board currently has five (5) members comprising two (2) Executive Directors, two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The Chairman of the Board is an Independent Non-Executive Director. The current composition of the Board is in compliance with the ACE Market Listing Requirements (Listing Requirements) of Bursa Malaysia Securities Berhad (Bursa Securities), which states that at least 2 directors or 1/3 of the board of directors, whichever is higher, must be independent directors. The Board members, with different background and specialisation, collectively bring with them a wide range of experience and expertise to lead and control the Company. With their intimate knowledge of the Groups business, all Board members are committed to take on the primary responsibilities to direct towards successful growth of the Company and ultimately the enhancement of long-term shareholders value.

Re-election of Directors

The Companys Articles of Association provides that at each Annual General Meeting, one-third (1/3) of the Directors for the time being shall retire from office and an election of Directors shall take place provided always that each Director shall retire at least once in every three (3) years but shall be eligible for re-election. Any Director appointed during the year shall hold office only until the next Annual General Meeting and then be eligible for re-election.

The following Directors shall retire at the forthcoming Tenth Annual General Meeting of the Company. Being eligible, they have offered themselves for re-election:-

(a) Dato Abdul Murad Bin Khalid (b) Mr. Kuah Hun Liang

A brief description on the profile of each Director and their respective attendance in Board Meetings are presented in the Annual Report.

16


Board Committees

The Board has established and delegated specific responsibilities to four (4) Committees of the Board, which operate within clearly defined written Terms of Reference. The various Committees report the outcome of their meetings to the Board, which are then incorporated in the Boards minutes. Details of the membership, objectives, duties and responsibilities, authorities and meetings are set out below:

1. Audit Committee

The Audit Committee reviews issues of accounting policy and presentation for external financial reporting, monitors the work of the internal audit function and ensures that an objective and professional relationship is maintained with the external auditors. Its principal function is to assist the Board in maintaining a sound system of internal control. The Committee has full access to the auditors both internal and external who, in turn, have access at all times to the Chairman of the Committee. The Committee meets with the external auditors without any executive present at least twice a year.

The Audit Committee Report is presented on page 27 to page 29 of the Annual Report.

2. Remuneration Committee

The Remuneration Committee is delegated the responsibility to review and recommend to the Board the remuneration packages and terms of employment of the Executive Directors. The Board as a whole determines the remuneration of Non-Executive Directors with individual Director abstaining from decisions in respect of their individual remuneration.

The policy practiced on Directors remuneration by the Remuneration Committee is to provide the remuneration packages necessary to attract, retain and motivate Directors of the quality required to manage the business of the Company and to align the interest of the Directors with those of the shareholders.

The Remuneration Committee comprises the following members: -

Datuk Ng Kam Chiu

Dato Abdul Murad Bin Khalid

Datuk Chung Hon Cheong

Chairman - Independent Non-Executive Director

Member - Executive Director

Member - Non-Independent Non-Executive Director

Members Designation

The Remuneration Committee convened one (1) meeting during the financial year to review and recommend the Executive Directors remuneration packages.

The aggregate remuneration of the Directors of the Group for the financial year ended 30 June 2014 is as follows:-

Fees

Salaries and Allowances

Total

0

834,598

834,598

96,000

96,000

0

96,000

930,598

834,598

Remuneration Executive Directors(RM)Non-Executive Directors

(RM)Total(RM)

17


The number of directors whose total remuneration from the Company falls within the following band for the financial year ended 30 June 2014 is as follows:-

On the non-disclosure of detailed remuneration of each Director, the Board is of the view that the transparency of Directors remuneration has been sufficiently dealt with by the band disclosure presented in this Statement.

Below RM50,000

RM350,001 - RM400,000

RM400,001 - RM450,000

0

1

1

3

0

0

Range of Remuneration Executive Directors Non-Executive Directors

3. Nominating Committee

The Nominating Committee is delegated the responsibility to ensure a formal and transparent procedure for the appointment of new directors to the Board. The Nominating Committee will review and assess the proposed appointment of new directors, and thereupon make the appropriate recommendations to the Board for approval.

In addition, the Nominating Committee is also responsible for reviewing candidates for appointment to the Board Committees and making appropriate recommendations to the Board for approval. It is also tasked with assessing the competencies and effectiveness of the Board, the Board Committees and the performance of individual directors ensuring that the required mix of skills and experience are present on the Board.

The Nominating Committee comprises the following members: -

Datuk Ng Kam Chiu

Kuah Hun Liang


Member - Independent Non-Executive Director

Members Designation

The Nominating Committee convened one (1) meeting during the financial year and the following activities were carried out:-

(i)

(ii)

Although the Board supports the initiative to include women representation on the Board to achieve boardroom diversity, it does not intend to formalise any specific target on women Directors as it believes that the Company should be on-boarding Directors who bring with them the requisite skills and experience to enable the Company realise its corporate strategies and objectives.

Assessing the effectiveness of the Board, Board Committees and the contribution of each director, taking into consideration the required mix of skills, knowledge and expertise and experience and other requisite qualities including core competencies contributed by Non-Executive Directors. All assessment and evaluation is properly documented.

Reviewing and recommended the re-election of Directors who retire by rotation.

18


PRINCIPLE 3 REINFORCE INDEPENDENCE OF THE BOARD

There is a clear division of responsibilities between the Chairman and the Chief Executive Officer to ensure a balance of authority and power. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Chief Executive Officer is responsible for the Groups operations and implementation of Board policies and making operational decisions. The presence of independent directors fulfills a pivotal role in corporate accountability with their unbiased and independent views, advice and judgement to take into account of the long term interests of the shareholders, employees, customers and the Groups business associates, which ensure that no one individual dominates the decision of the Board.

Annual Assessment of Independent Director

On an annual basis, the Board carries out an assessment of the independence of its independent directors. When assessing independence, the Board focuses on the independent directors background, family relationships and considers whether the independent director can continue to bring independent and objective judgment to board deliberations.

During the financial year, the Board carried out the assessment and is satisfied with the level of independence demonstrated by the Independent Directors and their ability to act in the best interest of the Company.

Tenure of Independent Directors

As a matter of policy, the Board has established that the tenure of Independent Directors shall not exceed a cumulative term of twelve (12) years. The Board believes that this tenure provides a balance of effectiveness and independence that is appropriate for the Group.

The Independent Non-Executive Director may continue to serve on the Board beyond the twelve (12) years tenure provided the Independent Non-Executive is re-designated as a Non-Independent Director. Where the Board is of the view that the Independent Non-Executive Director can continue beyond the twelve (12) years tenure, it must justify and seek shareholders approval.

Options Committee

The Options Committee is entrusted with the responsibility of overseeing the administration of the Companys Employees Share Option Scheme (ESOS) in accordance with the ESOS By-Laws to determine participation eligibility, option offers and share allocation and to attend to such other matters as may be required.

The Options Committee comprises the following members:

The Company has not granted any option to its employees under the ESOS.

4.


Si Tho Yoke Meng

Chan Shih Fei

Chairman - Executive Director

Member - Chief Financial Officer

Member - Executive Director

Members Designation

19


PRINCIPLE 4 FOSTER COMMITMENT OF DIRECTORS

Time Commitment and Directorship in other companies

The Board meets at least four (4) times a year at quarterly intervals with additional meetings to be convened as and when required. During the financial year ended 30 June 2014, the Board convened four (4) meetings, with details on the attendance of Directors listed below: -

Directors of the Company do not hold more than five (5) directorships in public listed companies and there is no restriction on number of directorships in non-public listed companies, as stipulated in the Listing Requirements.

The Directors observe the recommendation of the Code that they are required to notify the Chairman of the Board before accepting any new directorships and to indicate the time expected to be spent on the new appointment. Generally, Directors are at liberty to accept other Board appointments so long as such appointments are not in conflict with the business of the Company and do not adversely affect the Directors performance as a member of the Board.

Datuk Ng Kam Chiu


Si Tho Yoke Meng


Kuah Hun Liang

4/4

4/4

4/4

Board Members Attendance

4/4

4/4

20

Directors Training

All the Directors of the Company have completed the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors will continue to participate in relevant training programmes to keep abreast with the latest developments in the information technology industry, corporate governance and regulatory changes so that they would be able to discharge their duties as directors effectively.

For the year ended 30 June 2014 and up to the date of this report, the courses attended by certain of the Directors include:

Datuk Ng Kam Chiu


Si Tho Yoke Meng


Kuah Hun Liang

GST and its implementation



Name Programme Attended



The Company Secretary regularly updates the Board on changes to Listing Requirements and other relevant guidelines/legislation at Board meetings. The External Auditors also briefed the Board members on changes to the Malaysian Financial Reporting Standards that would affect the Groups financial statements during the financial year under review. The Directors will continue to undergo relevant training programmes to further enhance their skills and knowledge in the discharge of their stewardship role.

PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING BY THE COMPANY

Financial Reporting Standards

The Board has overall responsibility for the quality and completeness of the financial statements of the Company and the Group, both on a quarterly and full year basis, and has a duty to ensure that those financial statements are prepared based on appropriate and consistently applied accounting policies, supported by reasonably prudent judgment and estimates and in accordance to the applicable financial reporting standards.

The Audit Committee plays a crucial role in assisting the Board to scrutinize the information for disclosure to shareholders to ensure material accuracy, adequacy and timeliness.

Independence of External Auditors

The Audit Committee undertakes an annual review of the suitability and independence of the external auditors. The External Auditors have confirmed that they were, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements. The External Auditors can be engaged to perform non-audit services that are not perceived to be in conflict with their role as External Auditors.

Having assessed their performance, the Audit Committee is satisfied with the competence and independence of the External Auditors and had recommended to the Board, upon which the shareholders approval will be sought at the forthcoming Annual General Meeting of the Company.

PRINCIPLE 6 RECOGNISE AND MANAGE RISK OF THE GROUP

Establish a sound framework to manage risks

The Board acknowledges its responsibilities of setting up and maintaining an effective system in ensuring a proper risk management environment. In achieving this, the Board has ensured that the system of internal control has taken into account the process of identifying key risks, the likelihood of occurrence and materiality. The Board believes that the internal control systems and procedures provide reasonable but not absolute assurance that assets are safeguarded, transactions are authorised and recorded properly and that material errors and irregularities are either detected or minimised to prevent recurrence.

The Company Secretary regularly updates the Board on changes to Listing Requirements and other relevant guidelines/legislation at Board meetings. The External Auditors also briefed the Board members on changes to the Malaysian Financial Reporting Standards that would affect the Groups financial statements during the financial year under review. The Directors will continue to undergo relevant training programmes to further enhance their skills and knowledge in the discharge of their stewardship role.

PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING BY THE COMPANY

Financial Reporting Standards

The Board has overall responsibility for the quality and completeness of the financial statements of the Company and the Group, both on a quarterly and full year basis, and has a duty to ensure that those financial statements are prepared based on appropriate and consistently applied accounting policies, supported by reasonably prudent judgment and estimates and in accordance to the applicable financial reporting standards.

The Audit Committee plays a crucial role in assisting the Board to scrutinize the information for disclosure to shareholders to ensure material accuracy, adequacy and timeliness.

Independence of External Auditors

The Audit Committee undertakes an annual review of the suitability and independence of the external auditors. The External Auditors have confirmed that they were, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements. The External Auditors can be engaged to perform non-audit services that are not perceived to be in conflict with their role as External Auditors.

Having assessed their performance, the Audit Committee is satisfied with the competence and independence of the External Auditors and had recommended to the Board, upon which the shareholders approval will be sought at the forthcoming Annual General Meeting of the Company.

PRINCIPLE 6 RECOGNISE AND MANAGE RISK OF THE GROUP

Establish a sound framework to manage risks

The Board acknowledges its responsibilities of setting up and maintaining an effective system in ensuring a proper risk management environment. In achieving this, the Board has ensured that the system of internal control has taken into account the process of identifying key risks, the likelihood of occurrence and materiality. The Board believes that the internal control systems and procedures provide reasonable but not absolute assurance that assets are safeguarded, transactions are authorised and recorded properly and that material errors and irregularities are either detected or minimised to prevent recurrence.


21


Internal Audit function to report directly to the Audit Committee

The internal auditors perform its functions with impartiality, proficiency and due professional care. It undertakes regular monitoring of the Groups key controls and procedures, which is an integral part of the Groups system of internal control.

The internal audit reports are presented to the Audit Committee for its review and deliberation. The Audit Committee will be briefed on the progress made in respect of each recommendation, and of each corrective measure taken as recommended by the audit findings. The internal auditors report directly to the Audit Committee to ensure independency.

Details of the Groups internal control systems and the state of internal controls are further elaborated under the Statement on Risk Management and Internal Control, which has been reviewed by the Companys external auditors, provided separately on pages 25 to 26 of this Annual Report.

PRINCIPLE 7 ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

Corporate Disclosure Policy

The Board practices timely disclosure of material information to shareholders of the Company. The Board is supported by qualified and competent company secretaries in ensuring such disclosures are done timely and accurately in accordance with the Listing Requirements of Bursa Securities. The Executive Directors have been delegated with the authority to approve all announcements for release to Bursa Securities.

Usage of information technology for effective dissemination of information.

The annual reports, press releases, quarterly results and any announcements on material corporate exercises are the primary modes of disseminating information on the Groups business activities and financial performance. The Board ensures that shareholders are kept fully informed through information provided on the Companys website at www.rexit.com.

PRINCIPLE 8 STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS

Shareholders participation at general meetings

The Company encourages its shareholders to attend the Annual General Meeting (AGM). The Annual Report and Notice of the AGM are sent to all shareholders in accordance with the provisions of the Listing Requirements. The Notice of AGM is also published in a national newspaper. The Notice would include explanatory statements for proposed resolutions to facilitate understanding and evaluation of issues involving the shareholders.

The AGM is the primary forum for the Directors to communicate with shareholders. The Board provides opportunities for shareholders to raise questions pertaining to issues in the Annual Report, corporate developments in the Group, the resolutions being proposed and the business of the Group.

22


Poll voting

The Chairman of the Meeting would inform the shareholders, proxies and corporate representatives on their rights to demand for a poll vote at the commencement of the general meeting for any resolution in accordance with the Articles of Association of the Company.

Effective communication and engagements with shareholders

The Board recognises the importance of an effective communication channel between the Board and shareholders. The Companys website is updated regularly with the latest corporate developments of the Group and is accessible to shareholders, investors and the public. Shareholders may also send their queries to the Companys Executive Director, Mr. Si Tho Yoke Meng at [email protected] or the Chief Financial Officer, Ms. Chan Shih Fei, at [email protected].

STATEMENT ON DIRECTORS RESPONSIBILITY

The Directors are required under the Companies Act, 1965 (the Act) to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the Group and the results and cash flows of the Company and of the Group for that period.

Hence, the Directors have ensured that the financial statements have been prepared in accordance with applicable accounting standards in Malaysia, the requirements of the Act and other statutory requirements. In preparing the financial statements, the Directors have applied appropriate accounting policies on a consistent basis and made judgments and estimates that are reasonable and prudent.

The Directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy the financial position of the Group and the Company to enable them to ensure that the financial statements comply with the Act. The Directors have overall responsibility for taking such steps towards safeguarding the assets of the Group and to prevent and detect fraud and other irregularities.

This statement is made in accordance with a resolution of the Board dated 10 October 2014.

23

24

ADDITIONAL COMPLIANCE INFORMATION

Share Buy-backThe following are the Share Buy-back transactions during the year ended 30 June 2014. All shares have been maintained as treasury shares and there has been no resale of the Companys treasury share nor have there been any shares cancelled during the year under review.

1.

Monthlybreakdown2013/2014

No. of Sharesbought back

LowestPrice(RM)

HighestPrice(RM)

AveragePurchase

Price(RM)

TotalPurchase Price

(RM)AugustSeptemberFebruaryMayTotal

834,000201,500100,000191,900

1,327,400

0.2400.2650.4100.390

0.2650.2700.4200.400

0.2530.2680.4150.395

213,27554,24241,49676,144385,157

Options, Warrants or Convertible SecuritiesThe Company did not issue any options, warrants or convertible securities for the financial year ended 30 June 2014.

Depository Receipt ProgrammeThe Company did not sponsor any depository receipt programme during the financial year ended 30 June 2014.

Imposition of Sanctions and / or PenaltiesThere were no sanctions and/or penalties imposed on the Company and/or its subsidiaries, Directors or Management by relevant regulatory bodies during the financial year ended 30 June 2014.

Non-Audit FeesThere were no non-audit fees paid to the external auditors, Messrs. Sekhar & Tan or corporation affiliated to the auditors firm by the Company during the financial year ended 30 June 2014.

Profit GuaranteeThere was no profit guarantee given by the Company during the financial year ended 30 June 2014.

Material ContractsThere were no material contracts entered into by the Company and/or its subsidiaries during the financial year ended 30 June 2014 that involves the interest of Directors and/or major shareholders.

Recurrent Related Party Transactions (RRPT)There were no recurrent related party transactions entered into by the Company and/or its subsidiaries during the financial year ended 30 June 2014.

2.

3.

4.

5.

6.

7.

8.

25

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL

INTRODUCTION

In accordance with The Malaysian Code on Corporate Governance 2012, listed companies are required to maintain a sound system of risk management and internal control to safeguard shareholders investments and Groups assets.

Paragraph 15.26(b) of the Listing Requirements of the Bursa Securities for the ACE Market requires the Board of Directors of listed companies to include in their annual report a statement about the state of internal control of the listed entity as a group.

In recognizing the importance of good corporate governance practices, the Board of Directors of Rexit is committed to maintaining a sound system of risk management and internal control to safeguard shareholders investments and the Groups assets and is pleased to provide the following statement.

RESPONSIBILITIES

The Board asserts the importance of a sound risk management and internal control system which covers financial, organizational, operational and compliance control. The Board also affirms its overall responsibility for the Groups systems of internal control and systems of compliance with applicable law, regulations, rules, directives and guidelines and reviews the adequacy and effectiveness of the risk management and internal control system from time to time.

A review on the adequacy and effectiveness of the risk management and internal control system has been undertaken and the Board is satisfied that the risk management and internal control system in place is adequate and effective. However, because of the limitations that are inherent in any systems of internal control, those systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

The Board resolves that the management of core risks is an integral and critical part of the day-to-day operations of the Group. The experience, knowledge and expertise to identify and manage such risks throughout the financial year under review enables the Group to make cautious, mindful and well-informed decisions through formulation and implementation of requisite action plans and monitoring regime which are imperative in ensuring the accomplishment of the Groups objectives.

SYSTEMS OF INTERNAL CONTROL

The following key processes have been established in reviewing the adequacy and integrity of the Groups system of internal control:

Clear Lines of Accountability & Reporting Within the Organisation Key responsibilities and accountability in the organizational structure is clearly defined, with clear reporting lines up to the Board and to Management. Established delegation of authority sets out the appropriate authority levels for decision-making, including matters requiring Board approval.

Formalised & Documented Policies and ProceduresInternal policies and procedures which are set out in a series of clearly documented standard operating manuals covering a majority of areas within the Group are maintained and subject to review as and when necessary.Financial PerformanceThe preparation of periodic and annual results and the state of affairs, as published to shareholders, are reviewed and approved by the Board. The full year financial statements are also audited by the external auditors.

26

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL

The Audit CommitteeThe Audit Committee comprises non-executive directors all of whom bring with them a wide variety of experience. The Audit Committee has full and unimpeded access to both the internal as well as external auditors.

The Audit Committee operating within its Terms of Reference and ensuring that there are effective risk monitoring and compliance procedures to provide the level of assurance required by the Board.

The Audit Committee, on behalf on the Board, regularly reviews and holds discussions with Management on the actions taken on internal risk management and control issues identified in reports prepared by the internal auditors, the external auditors and the Management.

INTERNAL AUDIT

The Internal Audit function of the Group is undertaken by the Internal Audit Department (IAD) established to assist the Audit Committee and the Board in reviewing the system of risk management and internal control of the Company in line with the Listing Requirements of Bursa Malaysia Securities Berhad for the ACE Market and Malaysian Code on Corporate Governance.

In supporting the Rexit Group to accomplish its objectives, the roles of the IAD are:To provide an effective and value added internal process compliance audit function focusing on operational processes and practices;

To provide an independent, objective appraisal and consulting mechanism designed to add value to improve the Companys operations;

To provide management the required information to enhance the effectiveness of project management, improve software processes and documentation currently in place and to instill good governance practices by all staff;

To maintain records in Central Repository where process documents are stored for reference;

To facilitate, monitor and verify that the processes, procedures and guidelines are clearly documented and defined to meet the requirements of the Capability Maturity Model Integration (CMMI);To independently ascertain and implement the findings and proposals raised by Bank Negara Malaysia (BNM) during BNMs audit.

ADEQUACY AND EFFECTIVENESS OF THE GROUPS RISK MANAGEMENT FRAMEWORK AND INTERNAL CONTROL SYSTEM

The Board has received assurance from the Chief Executive Officer and Chief Financial Officer that the Groups risk management and internal control is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group and its subsidiaries for the financial period ended 30 June 2014.

Pursuant to the above, the Board is of the view that the risk management framework and internal control system are satisfactory and no material weakness and/or reported shortfall in the risk management framework and internal control system has resulted and/or give rise to any material loss, contingency and/or uncertainty during the financial year under review.

The Group continues to take necessary measures to ensure that the system of risk management and internal control is in place and functions effectively.


MEMBERSHIP

The Audit Committee (the Committee) comprises the following members:

Datuk Ng Kam Chiu


Kuah Hun Liang


Member - Non-Independent Non-Executive Director

Member - Independent Non-Executive Director

Members Designation

TERMS OF REFERENCE

Composition

The Committee shall be appointed from amongst the Board and shall comprise of at least three (3) members. All Committee Members must be non-executive directors with a majority of independent directors. All Committee Members should be financially literate and at least one (1) member must be a member of the Malaysian Institute of Accountants (MIA); or possess such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad. The Chairman shall be an independent director. If a Committee Member for any reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board shall within three (3) months of the event, appoint such number of new members as may be required to make up the minimum number of three (3) members.Meetings

The Committee shall meet at least four (4) times a year, with due notice of issues to be discussed, and should record its conclusion in discharging its duties and responsibilities. The head of finance, the head of internal audit and a representative of the external auditors should normally attend meetings. Other board members may attend meetings upon invitation of the Committee. The Committee shall have the authority to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, at least twice a year. The quorum for a meeting shall be two (2) members, provided that the majority of members present at the meeting shall be independent.

Authority

The Committee shall have explicit authority to investigate any matter within its terms of reference, the resources to do so, and full and unrestricted access to information. The Committee should be able to obtain independent professional or other advice and to invite outsiders with relevant experience to attend, if necessary.

Duties and Responsibilities

To consider the appointment of the external auditors and any question of resignation or dismissal;

To discuss with the external auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;

To review the quarterly and year-end financial statements of the board, focusing particularly on:

any change in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; and compliance with accounting standards and other legal requirements.

(a)

1.

2.

3.

4.

(b)

(c)

27

28


Datuk Ng Kam Chiu


Kuah Hun Liang

4/4

4/4

4/4

Members Attendance

To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management where necessary);To review the external auditors management letter and managements response;

To review with the external auditors: their audit plan; evaluation of the system of internal controls and management information systems; and audit report;

To do the following, in relation to the internal audit function:review the adequacy of the scope, function, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function; review any appraisal or assessment of the performance of members of the internal audit function; approve any appointment or termination of senior staff members of the internal audit function; and take cognisance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.

To review any related party transactions and conflict of interest situation that may arise within the Company or Group; and

To consider and review the major findings of internal investigations and managements response.

(d)

(e)(f)

(g)

(h)

(i)

a)b)

c)

d)

e)f)

MEETINGS AND SUMMARY OF ACTIVITIES

During the financial year ended 30 June 2014, a total of four (4) meetings were held and the details of attendance are set out below:-

The activities undertaken by the Committee during the financial year were as follows: -

Reviewed the external auditors audit planning memorandum;

Reviewed the unaudited quarterly financial results, audited financial statements and annual report which are recommended for the Boards approval;

Reviewed the issues and results arising from external audit and the resolutions of such issues highlighted;

Reviewed the internal audit plan and reports and assessed the internal auditors findings and the managements response;

Reviewed related party transactions entered into by the Group; and

Considered the re-appointment of the external auditors and make recommendation to the Board for approval.

29


INTERNAL AUDIT FUNCTION

The Company recognises that an internal audit function is essential to ensure the effectiveness of the Groups system of internal control and is an integral part of the risk management process. The Head of Internal Auditor Department reports directly to the Committee on a quarterly basis by presenting the internal audit plans and reports.

The following activities were carried out during the financial year:-

Conducted internal audit reviews in accordance with the internal audit plan;

Reviewed compliance with internal policies, procedures and standards and assessing the adequacy and effectiveness of the Groups internal controls; and

Reported the results of internal audits and made recommendations for improvements.

The cost incurred for the Internal Audit Department for the financial year 2014 amounted to RM86,630.

(i)(ii)

(iii)

FINANCIAL STATEMENTSYear Ended 30 June 2014

DIRECTORS REPORT

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

INDEPENDENT AUDITORS REPORT

STATEMENTS OF FINANCIAL POSITION

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

STATEMENTS OF CHANGES IN EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

Page

Page

Page

Page

Page

Page

31

35

35

36

38

39

40

42

44

Page

Page

Page

31

DIRECTORS REPORT

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2014.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding whilst those of its subsidiary companies are disclosed in note 6 to the financial statements.

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

RESULTS

Group CompanyRM RM

3,404,978 5,552,167

Profit after taxation

DIVIDENDS

Dividends paid, declared or proposed by the Company since the end of the previous financial year were:

in respect of the year ended 30 June 2014:First interim tax exempt dividend of 20% per ordinary share,paid on 8 January 2014

Second interim tax exempt dividend of 20% per ordinary share,paid on 18 March 2014.

The directors do not recommend the payment of any final dividend in respect of the current financial year.

RESERVES AND PROVISIONS

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

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and are satisfied that were no bad and doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render it necessary to write off bad debts or to make an allowance for doubtful debts.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Company were written down to an amount that they might be expected to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

RM

3,641,401

3,639,4007,280,801

32

DIRECTORS REPORT

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:

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

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

(i)

(i)

(ii)

(ii)

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

In the opinion of the directors:

the results of the operations of the Group and of the Company for the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature other than the impairment loss of RM2,472,783 recognised at the Company level in respect of the investment in a subsidiary company disclosed in note 6 to the financial statements.

there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

TREASURY SHARES

The shareholders of the Company granted a mandate to the Company to repurchase its own shares at the Annual General Meeting held on 30 October 2008. The shareholders mandate was subsequently renewed at the 9th Annual General Meeting held on 22 November 2013. The directors of the Company are committed to enhance the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interest of the Company and its shareholders.

During the financial year, the Company repurchased 1,327,400 of its issued share capital from the open market. The average price paid for the shares repurchased was RM0.29 per share. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

As at 30 June 2014, the Company held as treasury shares a total of 7,555,200 of its 181,778,133 issued ordinary shares. Such treasury shares are held at a carrying amount of RM3,264,176.

No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

DIRECTORS REPORT

DIRECTORS

The directors who served since the date of the last report are:

Datuk Ng Kam ChiuDatuk Chung Hon CheongSi Tho Yoke MengDatoAbdul Murad Bin KhalidKuah Hun Liang

Shareholdings registeredin the name of the directors

Other shareholdings in which directorsare deemed to have an interest

SoldAt

30.6.2014 Bought SoldAt

30.6.2014 BoughtAt

1.7.2013 The Company At

1.7.2013

Datuk NgKam Chiu Datuk ChungHon Cheong Kuah HunLiang Si Tho YokeMeng DatoAbdulMurad BinKhalid

268,000

223,334

18,057,300

5,900,000

- -

-

-

- -

-

- -

-

-

-

-

-

-

-

-

-

-

-

-

--

1,000,000

268,000

223,334

18,057,300

6,900,000

6,100

71,361,227

71,361,227

20,690,000

6,100

71,361,227

71,361,227

20,690,000

No. of ordinary shares of RM0.10 each

By virtue of their substantial interests in the shares of the Company, Datuk Chung Hon Cheong and Mr. Si Tho Yoke Meng are also deemed to have interests in the shares of its subsidiary companies to the extent the Company has an interest during the financial year.

Other than the above, none of the other directors holding office at the end of the financial year had any interest in shares in the Company and its related companies during the financial year.

DIRECTORS' BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year, was the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

The directors holding office at the end of the financial year and their interests in shares in the Company and its related companies, as recorded in the register of directors shareholdings were as follows:

33

34

DIRECTORS REPORT

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

The registered office of the Company is located at Lot 6.08, 6th Floor, Plaza First Nationwide, No. 161, Jalan Tun H.S. Lee, 50000 Kuala Lumpur.

The principal place of business of the Company is located at No. 42, Jalan BM 1/2, Taman Bukit Mayang Emas, 47301 Petaling Jaya, Selangor Darul Ehsan.

AUDITORS

The auditors, Sekhar & Tan, have indicated their willingness to accept re-appointment.

Signed in accordance with a resolution of the directors,

..........................................................................

Datuk Chung Hon Cheong ..........................................................................

Si Tho Yoke Meng

Kuala LumpurDate: 10 October 2014

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STATEMENT BY DIRECTORS

We, Datuk Chung Hon Cheong and Si Tho Yoke Meng, being directors of REXIT BERHAD do hereby state that in the opinion of the directors, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 June 2014 and of their financial performance and cash flows for the financial year ended on that date and are properly drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The information set out in note 32 to the financial statements have been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed in accordance with a resolution of the directors,

..........................................................................


..........................................................................

Si Tho Yoke Meng

Kuala LumpurDate: 10 October 2014

STATUTORY DECLARATION

I, Chan Shih Fei, the officer primarily responsible for the financial management of REXIT BERHAD do solemnly and sincerely declare that the accompanying financial statements are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed )Chan Shih Fei a t Kuala Lumpur in Wilayah )Persekutuan on 10 October 2014 ) ..........................................................................

Chan Shih Fei

Before me,

Commissioner for Oaths

INDEPENDENT AUDITORS REPORT[Company No. 668114 K] [Incorporated in Malaysia]

TO THE MEMBERS OF REXIT BERHAD

Report on the Financial Statements

We have audited the financial statements of Rexit Berhad, which comprise the statements of financial position as at 30 June 2014 of the Group and the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 38 to 85.

Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of financial statements that 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, and for such internal control as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys 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 Companys 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 have been properly 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 of 30 June 2014 and of their financial performance and cash flows for the year then ended.

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INDEPENDENT AUDITORS REPORT[Company No. 668114 K] [Incorporated in Malaysia]

TO THE MEMBERS OF REXIT BERHAD

Report on Other Legal and Regulatory Requirements

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

In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and the subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act;

We have considered the financial statements and the auditors report of the subsidiary company of which we have not acted as auditors, and which is indicated in note 6 to the financial statements;

We are satisfied that the financial statements of all the subsidiary companies that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes; and

The auditors reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

(a)

(b)

(c)

(d)

Other Reporting Responsibilities

The supplementary information set out in note 32 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part

REXIT-AnnualReport2014

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