Hmm, I'm not sure about the accounting entries and the high capex.
Here's what I understand from the company's past transactions.
In 2005 and 2010, the company made major acquisitions through the issuance of shares. In both cases, no cash was spent and the acquisitions were accounted for using "pooling-of-interests" methods.
The new consolidated accounts
The thing about the "pooling-of-interests" method is that it assumes the companies have been historically been operating together as one, and their assets and liabilities are simply added up to form the consolidated accounts.
In the new consolidated entity's equity account however, the "share capital" and "share premium" line items cannot be just added up simply. This is because most likely both companies have different figures of par value and premia for their shares, and the consolidated accounts need to be presented as if only one company has existed all the while.
Therefore, with the assumption that the consolidated entity has been operating as one all the time, the share capital will take the form of the parent company (usually the acquirer). The new issued shares will be accounted for as if they have existed before. Here's a working example.
Share capital of Acquirer: $10,000 (10000 shares at $1 par each)
Share capital of Acquiree: $2,000 (637 shares of $3.14 par each)
If we assume 10,000 shares of the acquirer were issued for the acquisition,
Share capital of new consolidated entity: $20,000 (20,000 shares at $1 par each)
But since no cash was actually injected into the new consolidated entity upon issuance of the new shares for the acquisition, the equity account will be adjusted for using a "merger deficit/reserve" line item to balance out the increase under "share capital". In this case,
Merger deficit = $10,000 + $2,000 - $20,000 = -$8,000
Other line items in the equity account are also added up together so that at the end of the day, the net asset account of the new consolidated entity's balance sheet balances with its new consolidated assets and liabilities.
The new parent company account
As for the parent company, its accounts also need to be adjusted to reflect the increase in shares issued. In Silverlake Axis's case, the reason why the net assets are substantially higher is because the company is forced to put a price on the value of the shares issued. Remember, when the acquisition was made, no cash changed hands so nobody can say what the true book value of the acquisition was.
Nevertheless, accounting rules dictate that a figure be placed on it. I'm not 100 percent certain how they place a value on the new shares issued, but I suspect that it is derived by valuing the issued shares at their market prices, at the time when they were issued. Take for example the case of the Silverlake Axis's 2010 acquisition. At the time of the conclusion of the acquisition and issuance of shares, the share price was about S$0.34 per share.
No. of shares issued: 1.025B
Market price of 1 share: S$0.34
Market value of shares issued: S$0.34 X 1.025B = S$348.5M or RM820M
Therefore, this RM820M will be recorded in asset account through "investment in subsidiaries" and balanced through the "share capital" (RM70M) and "share premium" (RM750M) lines.
"Pooling-of-interest" method vs Purchase method
"Pooling-of-interest" method results in lower reported net assets and higher reported earnings. This is because firstly, no goodwill is recorded on the balance sheet of the new consolidated entity, to account for the difference between the market value of the shares issued (Market price paid) and the net asset value of the acquired company (book value of net assets gained). Secondly, since there is no goodwill, there will not be any impairment or amortization of goodwill that can bring down your reported earnings on the income statement.
This is the "advantage" of using the "pooling-of-interest" method and why it was popular until it was disallowed. Yes, as far as I know, the purchase method is the only method now allowed for accounting of acquisitions and mergers, even if there is only issuance of shares and no cash is exchanged. This rule was supposedly implemented in 2005 or 2006, so I'm unsure why Silverlake Axis was allowed to use "pooling-of-interest" and frankly, I'm a bit lazy to dig out the reasons now
Silverlake Axis's amazing ROE
As far as I know, Silverlake Axis's high returns on equity are legitimate. Well, that's as far as you believe the reported net earnings represent the true owner's earnings of the company. In reality, owner's earnings are likely significantly lower than the reported earnings because (a) changes in working capital are not accounted for and (b) money spent on acquisitions are not accounted for. Here, I refer not to the share dilution effects of the all-share acquisitions, but rather, the money they spent on buying stakes in associates, which are recorded under "investments in associates". And Silverlake has spent quite a bit on associates since listing (about RM70M cash). The dilution of shareholders is another matter altogether.
Other than that, it shouldn't be surprising that the company has high return ratios since it is a software company. Capital expenditure is usually only for labour (programming skills) and computers.
Disclaimer: I'm not a professional accountant. You should use these comments as a starting point for your self-discovery.