Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded XOX Bhd (XOX or the Company) for failing to ensure that XOX’s announcement dated 30 August 2013 on the fourth quarterly report for the financial year ended (FYE) 30 June 2013 (4th QR 2013) took into account the adjustments as stated in the Company’s announcement dated 8 November 2013 (other than the adjustment in respect of the credit note from a trade creditor amounting to RM10 million which was received subsequent to the 4th QR 2013).
The failure to take into account the adjustment was in contravention of Rule 9.16(1)(a) of the Bursa Malaysia Securities ACE Market Listing Requirements (ACE LR) where a listed issuer must ensure that each announcement made is factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions.
The public reprimand was imposed pursuant to Rule 16.19(1) of the ACE LR after taking into consideration all facts and circumstances of the matter and upon completion of due process.
XOX is also required to review and ensure the adequacy and effectiveness of its financial reporting function and carry out a limited review on its quarterly report submissions. The limited review must be performed by the Company’s external auditors for four quarterly reports commencing no later from the quarterly report for the financial period ended 30 September 2014. XOX must ensure all its directors and relevant personnel attend a training programme on compliance with the ACE LR pertaining to financial statements.
While Bursa Malaysia Securities has not found any of XOX’s directors to have caused or permitted the breach by XOX, Bursa Malaysia Securities wishes to highlight that it is the duty of the directors to maintain appropriate standards of responsibility and accountability in ensuring compliance of the ACE LR. The Board of Directors at the material time were as follows:
- Seri Abdul Azim bin Mohd Zabidi
- Ng Kok Heng
- Soo Pow Min
- Khoo Chuin Yuen
- Faidzan bin Hassa
- Yeoh Eng Kong
Bursa Malaysia Securities views the contravention seriously and has reminded XOX and its Board of Directors of their obligation to uphold appropriate standards of responsibility and accountability to shareholders and the investing public.
BACKGROUND
XOX reported an unaudited loss after taxation and minority interest of RM3.510 million in XOX’s 4th QR 2013, compared to an audited profit after taxation and minority interest of RM4.593 million in XOX’s annual audited accounts for the FYE 30 June 2013 (AAA 2013) which was announced on 8 November 2013.
The subsequent adjustments in the AAA 2013 included the impairment of trade receivables amounting to RM1.963 million where the auditors had prior to the announcement of the 4th QR 2013 raised their concerns over the recoverability of the same and requested for adequate allowances to be made.
The impairment made subsequently in the AAA 2013 was without any reasonable explanation on the change of circumstances from the issuance of the 4th QR 2013 to the AAA 2013.
The difference of RM1.897 million between XOX’s 4th QR 2013 and AAA 2013 excluding the adjustment in respect of the credit note from a trade creditor amounting to RM10 million represented a variance of approximately 54%.
