driving business solutions Century Software Holdings Berhad (Co. No.: A)

Transcription

1 driving business solutions (Co. No.: A) annual report 2011

2 As a technology company, the Group prides itself on being innovative to keep up with advancements in the industry as well as the needs of our customers. After two decades of providing quality, dependable financial management solutions both in Malaysia and the region, the Board of Directors and Management has decided to embark on an exercise to re-brand the corporate logo. The objective of this exercise is to ensure and re-affirm our stakeholders that the Group is constantly growing and keeping with global business trends. Logo Rationale censof as a brand is modern, solid and straight to the point. The corporate logo has been redesigned to be confined in a box, representing stability and confidence. This new logo is formed by triangles which symbolises the building blocks of the Group its people, subsidiaries, history and experiences - all coming together and presenting itself as a unified entity. The triangles also carry with it elements from the old logo, testament that we did not forget our humble beginnings. Lower caps are used throughout the brand name making it friendlier and more approachable. The colour purple is retained because it evokes a myriad of emotions such as passion and sophistication in the target audience.

3 contents 02. Corporate Information 03. Corporate Profile 06. Financial Highlights / Quarterly Performance 07. Awards & Accreditations 08. Group Structure 09. Board of Directors & Key Management Team 12. Profile of Directors 16. Analysis of Shareholdings 18. Chairman s Statement 20. Group Managing Director s Review 22. Corporate Governance Statement 31. Audit Committee Report 33. Internal Control Statement 35. Corporate Social Responsibility Statement 37. Financial Statements 91. Notice of Fourth Annual General Meeting Proxy Form Driving Business Solutions ANNUAL REPORT 2011

4 corporate information BOARD OF DIRECTORS Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (Independent Non-Executive Chairman) Datuk Samsul Bin Husin (Group Managing Director) Tamil Selvan A/L M. Durairaj (Executive Director) Ameer Bin Shaik Mydin (Executive Director) Ang Hsin Hsien (Executive Director) Abdul Mushir Bin Che Chik (Non-Independent Non-Executive Director) Tuan Haji Ab. Gani Bin Haron (Senior Independent Non-Executive Director) Boey Tak Kong (Independent Non-Executive Director) AUDIT COMMITTEE Tuan Haji Ab. Gani Bin Haron (Chairman) Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (Member) Boey Tak Kong (Member) REMUNERATION COMMITTEE Boey Tak Kong (Chairman) Tuan Haji Ab. Gani Bin Haron (Member) Datuk Samsul Bin Husin (Member) NOMINATION COMMITTEE Boey Tak Kong (Chairman) Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (Member) Tuan Haji Ab. Gani Bin Haron (Member) REGISTERED OFFICE Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, Kuala Lumpur Tel no. : Fax no. : COMPANY SECRETARIES Lim Seck Wah (MAICSA No.: ) M. Chandrasegaran A/L S. Murugasu (MAICSA No.: ) AUDITORS Crowe Horwath Level 16, Tower C, Megan Avenue II, 12, Jalan Yap Kwan Seng, Kuala Lumpur Tel no. : Fax no. : SHARE REGISTRAR Mega Corporate Services Sdn Bhd Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, Kuala Lumpur Tel no. : Fax no. : BANKERS CIMB Bank Berhad CORPORATE OFFICE A-8, Block A, Level 8, Sunway PJ 51A, Jalan SS9A/19, Seri Setia, Petaling Jaya, Selangor Darul Ehsan Tel no. : Fax no. : STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad ( Bursa Securities ) Main Market Stock Code : 5195 Stock Name : Censof 02 ANNUAL REPORT 2011

5 corporate profile vision To be a leading global provider of financial management solutions by mission We pledge to devote our expertise towards excellence by: PRoviding innovative business solutions for our customers, Instilling a positive corporate culture that motivates our people to deliver excellence, Delivering sustainable growth and value for stakeholders, Empowering our people to be caring citizens actively contributing to the community. Driving Business Solutions 03

6 corporate profile (cont d) Business Solutions Engine Century Software (Malaysia) Sdn Bhd Financial Management Solutions SOLUTIONS SERVICES System Support BPI Advisory Custom Development Project Management Training Century Integration T-Melmax Sdn Bhd Payment Aggregation Solutions 04 ANNUAL REPORT 2011

7 corporate profile (cont d) PT. Praisindo Teknologi Wealth Management Solutions SERVICES Custom Development Project Management System Support Corporate Web Development Corporate Web Operation Driving Business Solutions 05

8 financial highlights/ quarterly performance PROFIT AND LOSS (RM Million) Revenue Profit Before Taxation Profit After Taxation Profit Attributable to Shareholders BALANCE SHEET (RM Million) Share Capital Reserves Shareholder s Fund Non Controlling Interest Current Liabilities Non-Current Liability Property, Plant and Equipment Other Investments Current Assets RATIO Net Assets Per Share (Sen) Net Earnings Per Share (Sen) Dividend Amount Per Share (Sen) Revenue (RM 000) Profit Before Taxation (RM 000) Shareholders Fund (RM 000) Total Assets (RM 000) 46,000 13, ,000 43,000 40,000 12,000 11,000 46,000 55,000 37,000 45,000 34,000 10,000 36,000 31,000 9,000 35,000 28, , , , Announcement dates of Results Unaudited consolidated results for the 1st quarter ended 31 March 2011 Released on Friday, 20 May 2011 Unaudited consolidated results for the 2nd quarter ended 30 June 2011 Released on Monday, 29 August 2011 Unaudited consolidated results for the 3rd quarter ended 30 September 2011 Released on Monday, 21 November 2011 Unaudited consolidated results for the 4th quarter ended 31 December 2011 Released on Monday, 27 February ANNUAL REPORT 2011

9 awards & accreditations PIKOM ICT Leadership Awards Technopreneur Excellence Award 2011 IBM Framework for Government Certification Ready for IBM Informix Database Software validation NEF-Awani ICT Awards Best Bumiputera Software Product 2010 National Award for Management Accounting SME Star Award 2010 SME Best Practice Award 2009 SME 100 Malaysia s Fast Moving Companies of 2009 Receiving PIKOM Technopreneur Excellence Award Receiving NAfMA award Driving Business Solutions 07

10 group structure Authorised Capital : RM100,000,000 Century Software Holdings Berhad ( A) Paid-Up Capital : RM34,420, ,200,000 Ordinary shares of RM0.10 each Century Software (Malaysia) Sdn Bhd ( U) T Melmax Sdn Bhd ( D) * PT Praisindo Teknologi Financial Management Solutions Division (FMS) Payment Aggregation Solutions Division (PAS) Wealth Management Solutions Division (WMS) Subsidiaries CENTURY SOFTWARE (MALAYSIA) SDN BHD T-MELMAX SDN BHD PT PRAISINDO TEKNOLOGI Equity Interest 100% 100% 60% Year of Incorporation * Century Software Holdings Berhad completed the acquisition of PT Praisindo Teknologi on 15 November Status Core Business BUMIPUTRA/MSC ISO : 2008 FMS BUMIPUTRA/MSC PAS - WMS 08 ANNUAL REPORT 2011

11 board of directors & key management team BOARD OF DIRECTORS Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (Independent Non-Executive Chairman) Datuk Samsul Bin Husin (Group Managing Director) Tamil Selvan A/L M. Durairaj (Executive Director) Ameer Bin Shaik Mydin (Executive Director) Ang Hsin Hsien (Executive Director) Abdul Mushir Bin Che Chik (Non-Independent Non-Executive Director) Tuan Haji Ab. Gani Bin Haron (Senior Independent Non-Executive Director) Boey Tak Kong (Independent Non-Executive Director) KEY MANAGEMENT TEAM Group Corporate Office Datuk Samsul Bin Husin (Group Managing Director) Ameer Bin Shaik Mydin (Executive Director) Mark John Rees (Group Chief Technology Officer) Kularajah A/L M.Thavaratnam (Group Financial Controller) Divisional Heads Tamil Selvan A/L M. Durairaj Century Software (Malaysia) Sdn Bhd (Chief Executive Director) Ameer Bin Shaik Mydin T-Melmax Sdn Bhd (Chief Executive Director) Hazairin PT Praisindo Teknologi (Chief Executive Director) Driving Business Solutions 09

12 board of directors Sitting from left to right: Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (Independent Non-Executive Chairman) Datuk Samsul Bin Husin (Group Managing Director) Ang Hsin Hsien (Executive Director) Standing from left to right: Abdul Mushir Bin Che Chik (Non-Independent Non-Executive Director) Tamil Selvan A/L M. Durairaj (Executive Director) Boey Tak Kong (Independent Non-Executive Director) Tuan Haji Ab. Gani Bin Haron (Senior Independent Non-Executive Director) Ameer Bin Shaik Mydin (Executive Director) 10 ANNUAL REPORT 2011

13 key management team Executive Directors Datuk Samsul Bin Husin (Group Managing Director) Standing from left to right: Ang Hsin Hsien (Executive Director) Tamil Selvan A/L M. Durairaj (Executive Director) Ameer Bin Shaik Mydin (Executive Director) Divisional Heads Datuk Samsul Bin Husin (Group Managing Director) Standing from left to right: Hazairin PT Praisindo Teknologi (Chief Executive Officer) Tamil Selvan A/L M. Durairaj Century Software (Malaysia) Sdn Bhd (Chief Executive Officer) Ameer Bin Shaik Mydin T-Melmax Sdn Bhd (Chief Executive Officer) Driving Business Solutions 11

14 profile of directors Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (68 years old) Independent Non-Executive Chairman Tan Sri Dato Mohd Ibrahim Bin Mohd Zain was appointed as our Independent Non-Executive Chairman on 28 December He is also a member of the Audit and Nomination Committee. Upon his graduation in 1965, he was attached to University Technology MARA (formerly known as Institute of Technology MARA) as a lecturer where he was later appointed as a Council Member/Director, a position he held until October Tan Sri Dato Mohd Ibrahim is also a Director of Brahims Holdings Berhad (formerly known as Tamadam Bonded Warehouse Berhad). He is also the Chairman of Yayasan Arshad Ayub. Previously, he had served as Chief Executive of Amanah International Finance Berhad, Amanah Chase Merchant Bank Berhad and Oriental Bank Berhad, Chairman and Chief Executive Officer of Setron (Malaysia) Berhad, Chairman of Bank Kerjasama Rakyat (M) Berhad, Bescorp Industries Berhad, Pan Malaysian Industries Berhad, Pan Malaysian Holdings Berhad, Pan Malaysia Capital Berhad, Chemical Company of Malaysia Berhad and Kawan Food Berhad, Deputy Chairman of Metrojaya Berhad and a Director of K & N Kenanga Berhad and AMMB Holdings Berhad. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. Datuk Samsul Bin Husin (49 years old) Group Managing Director Datuk Samsul Bin Husin was appointed as the Executive Deputy Chairman on 28 December 2010 and subsequently was redesignated as the Group Managing Director on 26 September He is also a member of the Remuneration Committee. A Chartered Accountant and Certified Financial Planner, Datuk Samsul has over 20 years of experience in accounting and ICT. Datuk Samsul specialises in financial systems, system planning and designing. He started his career in 1986 with the Housing Division, State Planning and Development Unit, Selangor where he received hands-on experience in the planning, designing and the subsequent delivery of a billing system for lowcost housing development projects in the state. In 1987, Datuk Samsul joined the Accountant General s office to hold various positions in spearheading projects such as the enforcement of accounting procedures to the designing of new systems for the enhancement of existing financial management reporting for the office. He brings his vast experience in managing Government projects into the organisation. He also plans, organises and assists in charting the Group s future direction. In December 2011, Datuk Samsul was conferred the Darjah Pangkuan Seri Melaka (D.P.S.M) by the Tuan Yang Terutama Yang di-pertua Negeri Melaka. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. 12 ANNUAL REPORT 2011

15 profile of directors (cont d) Tamil Selvan A/L M. Durairaj (50 years old) Executive Director Mr. Tamil Selvan A/L M. Durairaj was appointed as our Managing Director on 28 December 2010 and was re-designated as the Executive Director on 26 September He was appointed as the CEO of CSM in He qualified as a member of the Chartered Institute of Management Accountants (CIMA) in Mr. Selvan joined the Accountant General Office as a Treasury Accountant in 1987 and was later transferred to the Perak State Secretariat as a Local Government Accountant. He specialises in Financial Management, Cost Accounting for both public and private sectors. This specialisation is coupled with a strong financial analytical skill and vast experience in implementation of various financial management systems in medium to large agencies and corporation. Mr. Selvan leads a team of financial consultants, IT professionals and accountants to deliver all projects in CSM. He also currently oversees our Group s accounting and financial reporting requirements as well as governance compliance of the Group moving forward. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. Ameer Bin Shaik Mydin (48 years old) Executive Director En. Ameer Bin Shaik Mydin was appointed as our Executive Director on 28 December He was appointed as an Executive Director of CSM on 27 March 2002 and brings with him over 20 years of experience. He was appointed as the CEO of T-Melmax Sdn Bhd in He started his career in IT at PanGlobal Sistemaju Sdn Bhd upon graduation. He was involved in sales and marketing of Wang Banking System targeted at the Malaysian banking sector. Since then, he has continued his career in IT at Digital Equipment Corporation, as the Channels Account Manager, managing the value added resellers. En. Ameer then ventured into his Business Management in IT at Applied Business Systems Sdn Bhd, a subsidiary of the then Formis Group, marketing Sun Hardware solutions to the Government sector. He then joined the management team of Kumpulan Netband (MSC) Sdn Bhd, managing both the Government and Commercial business sectors. Prior to this current appointment, En. Ameer was the Business Manager for the Network Business at Unisys (M) Sdn Bhd, involved in business development for the Government Sector. He oversees corporate business and manages business of CSM s large customer base. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. Driving Business Solutions 13

16 profile of directors (cont d) Ang Hsin Hsien (44 years old) Executive Director Ms. Ang Hsin Hsien was appointed as our Executive Director on 28 December She was appointed as the Director, Sales & Marketing of CSM in She has acquired over 18 years of wide IT based experience. As a key person in CSM s overall operations, she focuses on formulating the sales and marketing plan in business solutions for the e-government initiatives. She also manages strategic accounts to maintain supplier-clientele confidence and oversees business development by identifying potential markets. Ms. Ang leads her team to take on a proactive approach in order to maintain sustainable competitive advantages including providing personalised ideas and costeffective solutions to support client s business needs. She has not been convicted of any offence within the past ten years. She does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. Abdul Mushir Bin Che Chik (50 years old) Non Independent Non Executive Director En. Abdul Mushir Bin Che Chik was appointed as our Executive Director on 28 December On 28 March 2011, En. Abdul Mushir was re-designated as Non-Independent Non-Executive Director. He brings with him over 20 years of experience in ICT and financial services having worked for local companies as well as MNCs. En. Mushir started his career in 1985 as a trainee systems engineer at Mesiniaga Berhad. He ascended to a position of Sales Manager in 1990 and eventually became a Senior Marketing Manager prior to leaving for Ericsson Telecommunication Malaysia in 1997, where he assumed the role of General Manager of the Service Provider Division. In 2000, he moved on to Ericsson Telecommunications China as the Director of Mobile Multimedia R&D Division. His long experience in ICT and strong command of Chinese language helped him to excel in his job earning him an advisory role for China Mobile, the leading cellular operator in China. In that capacity, he oversees the evaluation and launching of all mobile multimedia applications for the China market. Ever since he founded TMX in 2002, En. Mushir was involved in the growth of TMX by focusing on the business development and R&D activities. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. 14 ANNUAL REPORT 2011

17 profile of directors (cont d) Tuan Haji Ab. Gani Bin Haron (60 years old) Senior Independent Non-Executive Director Tuan Haji Ab. Gani Bin Haron was appointed as our Independent Non-Executive Director on 28 December He is the Chairman of the Audit Committee and Member of the Remuneration and Nomination Committee. He is a Chartered Accountant of the Malaysian Institute of Accountants. Tuan Haji Gani s broad-based experience and professional expertise spans over 30 years, in senior positions involving financial, management, audit and human resource management for the Accountant General Department of Malaysia. Since 2001, he has taken the role of Director of Accounting Development and Management Division and subsequently Deputy Accountant General of Malaysia. He has since been involved in human resource management for the accounting personnel of the Federal Government and the development of the accounting system for the Federal Government. He is the Director (Independent, Non-Executive) for YLI Holding Berhad, Exim Bank of Malaysia Berhad, Amanah Raya Investment Bank, Amanah Raya Trustee Berhad, Amanah Raya Capital Sdn Bhd and Hajj Finance Company Ltd. Currently, he is also the Audit Committee Chairman for Amanah Raya Investment Bank Berhad, Amanah Raya Trustees Berhad, Export - Import Bank of Malaysia Berhad, and YLI Holdings Berhad. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. Boey Tak Kong (58 years old) Independent Non-Executive Director Mr. Boey Tak Kong was appointed as our Independent Non-Executive Director on 28 December He is the Chairman of the Remuneration and Nomination Committee and a member of the Audit Committee. He is a Fellow member of the Chartered Association of Certified Accountants, United Kingdom, Associate member of the Institute of Chartered Secretaries & Administrators, United Kingdom, Chartered Accountant of the Malaysian Institute of Accountants, Member of the Malaysian Institute of Management and Associate member of the Institute of Marketing Malaysia. Mr. Boey s broad-based experience and professional expertise spans over 23 years in senior management positions involving financial management, internal audit, corporate affairs and overseas business development with six (6) public listed companies with listing in Malaysia, Singapore, United Kingdom, New Zealand and Australia. Presently, he is an approved trainer with Pembangunan Sumber Manusia Berhad and the Managing Director of Terus Mesra Sdn Bhd, a strategic management and leadership development training company. He is also a Director of IJM Land Berhad, Dutch Lady Milk Industries Berhad, Green Packet Berhad, Gadang Holdings Berhad and Permaju Industries Berhad, all listed on Bursa Malaysia Securities Berhad. He has not been convicted of any offence within the past ten years. He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the company. Driving Business Solutions 15

18 analysis of shareholdings ANALYSIS OF SHAREHOLDINGS AS AT 4 MAY 2012 Authorized Capital : RM100,000, Issued and Fully Paid-Up Capital : RM 34,420, Class of Shares : Ordinary Shares of RM0.10 Each Voting Rights : One Vote Per Ordinary Share No. of Shareholders : 1,708 DISTRIBUTION OF SHAREHOLDINGS AS AT 4 MAY 2012 No. of % of No. of % of Category Shareholders Shareholders Shares Shares Less than , , ,001 10, ,333, , , ,023, ,001 less than 5% of issued shares ,709, % and above of issued shares ,110, Total 1, ,200, LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 4 MAY 2012 Direct Indirect No. Names No. of Shares %* No. of Shares %* 1. Censof Sdn Bhd 197,110, Datuk Samsul Bin Husin ,110, (a) 3. Ameer Bin Shaik Mydin ,110, (b) DIRECTORS INTERESTS IN SHARES AS AT 4 MAY 2012 Direct Indirect No. Names No. of Shares % No. of Shares %* 1. Tan Sri Dato Mohd Ibrahim Bin Mohd Zain 1,600, Datuk Samsul Bin Husin ,110, (a) 3. Ameer Bin Shaik Mydin ,110, (b) 4. Tamil Selvan A/L M. Durairaj ,110, (c) 5. Ang Hsin Hsien ,110, (d) 6. Abdul Mushir Bin Che Chik 9,647, Tuan Haji Ab. Gani Bin Haron Boey Tak Kong 290, Notes: (a) * Deemed Interest pursuant to Section 6A of the Act through his interest in Censof Sdn Bhd (b) * Deemed Interest pursuant to Section 6A of the Act through his interest in Censof Sdn Bhd (c) * Deemed Interest pursuant to Section 6A of the Act through his interest in Censof Sdn Bhd (d) * Deemed Interest pursuant to Section 6A of the Act through his interest in Censof Sdn Bhd 16 ANNUAL REPORT 2011

19 analysis of shareholdings (cont d) 30 LARGEST SHAREHOLDERS AS AT 4 MAY 2012 Shareholder Shares % 1 CENSOF SDN BHD 120,000, CENSOF SDN BHD 57,110, TASEC NOMINEES (TEMPATAN) SDN BHD 20,000, EXPEDIENT EQUITY VENTURES SDN BHD 10,080, TASEC NOMINEES (TEMPATAN) SDN BHD 9,647, TASEC NOMINEES (TEMPATAN) SDN BHD 9,434, MALAYSIA VENTURE CAPITAL MANAGEMENT BERHAD 8,749, DB (MALAYSIA) NOMINEE (TEMPATAN) SDN BHD 5,782, M & A NOMINEE (TEMPATAN) SDN BHD 4,247, DB (MALAYSIA) NOMINEE (TEMPATAN) SDN BHD 3,807, OSMAN BIN PERCY KING ABU BAKAR 2,575, LO PEI-CHUN 2,565, CITIGROUP NOMINEES (TEMPATAN) SDN BHD 2,500, KUANG KIM SOON 2,290, ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 2,052, AMSEC NOMINEES (TEMPATAN) SDN BHD 2,050, SINGAPORE ENTERPRISES PRIVATE LIMITED 1,968, MOHD AKOB BIN AHMAD 1,888, DB (MALAYSIA) NOMINEE (TEMPATAN) SDN BHD 1,710, RAJA MOHD NAZRI BIN RAJA ABD MALEK 1,642, MOHD IBRAHIM BIN MOHD ZAIN 1,600, TA NOMINEES (TEMPATAN) SDN BHD 1,119, DB (MALAYSIA) NOMINEE (TEMPATAN) SDN BHD 1,070, TA SECURITIES HOLDINGS BERHAD 1,022, AMANAHRAYA TRUSTEES BERHAD 1,000, CHIN SIEW IM 999, FIGURE TOP LIMITED 963, CIMB COMMERCE TRUSTEE BERHAD 890, HDM CAPITAL SDN BHD 890, HDM NOMINEES (ASING) SDN BHD 880, TOTAL 280,535, Driving Business Solutions 17

20 chairman s statement Dear Shareholders, 18 ANNUAL REPORT 2011

21 chairman s statement (cont d) Performance review For the current financial year under review, the Group registered higher revenue of RM43.34 million compared to the previous year s revenue of RM31.73 million. The substantial increase of 36.6% in comparison to the preceding financial year was attributed to the FMS division being awarded by the Ministry of Finance, the landmark Outcome Based Budgeting with a major portion of the contract sum invoiced during the current financial year. As for the profit before taxation, the Group registered RM9.23 million for the current financial year compared to the previous year profit before taxation of RM12.73 million. The lower profit before taxation of 27.4% in comparison to the preceding financial year was due to the fast tracking of certain major projects that accounted for higher operating cost to support the increased level of activities. Dividend The Board approved and declared an interim dividend of 10% (single-tier) amounting to RM 3.44m in respect for the financial year ending 31 December The interim dividend was paid to the shareholder s on 15 November Business Prospects The Group is confident of achieving better performance for the financial year ending 31 December 2012 based on the market developments and business trends impacting the Group s business divisions as follows:- Financial Management Solutions division (FMS) - the public sector continuous initiatives in upgrading to a higher security and better connectivity information infrastructure to strengthen its efficiency and effectiveness in the public delivery systems provide vast opportunities in the medium and long term period for the FMS business. The on-going Outcome Based Budgeting implementation exercise by the Ministry of Finance will progressively integrate with other Government agencies and local authorities in monitoring and managing its planning effectiveness. Payment Aggregate Solutions division (PAS) - the adoption of e-bayaran payment gateway by the various regulatory authorities enhances the division s long term income stream. The market is expected to be vibrant with exciting opportunities due to the high growth rate of internet banking in Malaysia, supported by Bank Negara Malaysia continuous efforts to improve the payment system infrastructure within the financial community. Wealth Management Solutions division (WMS) - this new acquired subsidiary is a leading wealth management solutions provider in Indonesia with established insurance and financial customers. Its software solution covers the entire back-end system such as portfolio management/ fund accounting and front-end system solution such as unit registry, selling agent and online transactions. With the objective of cross selling between the 2 countries, thus, the prospect s of going global is very encouraging. Appreciation On behalf of the Board, I would like to thank many people, firstly our sincere appreciations to the Directors, Management and Staff of the Group for their dedication, contribution and commitment towards the development and success of the Group over the year. We would also take this opportunity to thank the various government authorities and agencies, bankers, valued customers, suppliers and business associates for their assistance, guidance, contribution and continued support. Finally, I wish to thank our valued shareholders for their confidence in the Board and Management of the Group. Tan Sri Dato Mohd Ibrahim Bin Mohd Zain Independent Non-Executive Chairman Driving Business Solutions 19

22 group managing director s review 2011 was a year of learning for us after our listing on the Main Board of Bursa Malaysia, a true testament to our credibility in the financial management solutions industry. Early in the year, a feather was added to our cap when our solutions were validated and awarded the IBM Industry Framework for Government Certification, making it a home-grown solution of international standards and quality. Receiving the NEF-Awani Best Software Product from Y. Bhg. Dato Seri Najib Razak, Prime Minister of Malaysia in March 2011 reaffirmed recognition from fellow industry players and the Malaysian government. In June, our subsidiary Century Software (M) Sdn. Bhd. was awarded the Outcome Based Budgeting (OBB) project worth RM22.5 million from the Ministry of Finance to implement the budget online system. The contract is a pioneering, first of its kind project in Malaysia to be implemented by 24 government ministries. The OBB process strategically covers a complete budget cycle that includes key functions such as planning, budgeting, monitor and control, and analysis and review. In July 2011, the Group made headlines when it signed a Sale & Purchase Agreement for acquisition of a 60% stake in P.T. Praisindo Teknologi for RP billion or RM4.05 million. The stake was acquired from the then existing major shareholder, P.T. Mahaka Media Tbk, which is listed on the Jakarta Stock Exchange. The acquisition of Praisindo Teknologi marks the Group s expansion into the Indonesian market and is an indication that we have the capability to grow beyond Malaysia, but also regionally as well as internationally. The objective of acquisition is for Century Software to expand into the huge Indonesian market in the fastest way and at the same time, to cross-sell Praisindo Teknologi s products in the Malaysian market. Datuk Samsul Bin Husin (Group Managing Director) In the third quarter of 2011, the Group relocated its corporate headquarters and subsidiaries to a brand new 9-storeyed building in the heart of Petaling Jaya, with aim of better management of resources and increasing efficiency in daily operations within the Group. With two of our subsidiaries, Century Software (M) Sdn. Bhd. and T-Melmax Sdn. Bhd. being MSC Malaysia Status companies, we also started operations at our very own Innovation Centre in the smart city of Cyberjaya. 20 ANNUAL REPORT 2011

23 group managing director s review (cont d) To further solidify our Roadmap to Market Leadership of , and in our efforts to ensure the Group s businesses stay organized and meet the necessary goals to stay profitable, the Management of the Group has put forth a 5-year Strategic Plan, starting in 2012, and by 2016, be a leading global provider of financial management solutions. On the operational level, measurable long and short-term milestones have been spelled out, leading up to the 5 years, covering four major areas of customer, internal processes, people and innovation, and financials. With the ISO 9001:2008 certifications in place for the Group and its subsidiaries, the Group is committed to streamlining operations to promote competence and quality management of working processes. In addition to that, via the implementation of standard of reporting for key managers, this has fostered efficiency, transparency and accountability in our day-to-day operations. Being a major industry player on the home-front and abroad, we recognise the challenges in today s business world, and aim to provide our clients with dependable and quality products, innovative and sustainable solutions, and value-added professional services. All the above plans and strategies in place will provide us with a solid framework as we move forward in 2012, and thus expect the Group to demonstrate better financial results for our stakeholders. Datuk Samsul Bin Husin Group Managing Director Driving Business Solutions 21

24 corporate governance statement INTRODUCTION The Board appreciates the importance of good corporate governance in developing sustainable business growth also acknowledges its role in protecting and enhancing shareholder s value. The Board is further committed to ensure that integrity, transparency, professionalism and accountability are practised throughout the Group. The Board supports the principals and best practices of good governance as set out in the Malaysian Code on Corporate Governance (the Code ) and acknowledges that adopting high standards of corporate governance within the Group and among its subsidiaries is vital to safeguard its stakeholder s interests as well as enhancing its shareholders value. Below, is a description of the Principles of good corporate governance applied by the Group as set out in the Code. A. BOARD OF DIRECTOR S Composition of the Board The Board comprises of an Independent Non-Executive Chairman, a Group Managing Director, a Non-Independent Non Executive Director, three Executive Director s and two Independent Non-Executive Directors. Furthermore, the Board comprises of at least one third of Independent Non-Executive Directors as required by the Listing Requirements of Bursa Securities. The names and profile of the Directors are stated on the Director s profile page of this Annual Report. The members of the Board have a wide range of skills and experience which bring a wealth of expertise to the leadership of the Group. There is no one member of group which dominates the decision making processes that the Board undertakes. Furthermore, the number of Independent Directors ensures that issues of performance, strategy, compliance and resources are discussed and examined in depth in order to take into consideration the long-term interest of the Group s stakeholders. This framework enables the direction of the Group s affair to be firmly in the Board s control. Board Responsibilities The Board has several responsibilities which encompass the following: - to review and adopt a strategic plan for the Group in order to enhance its growth and profitability; - to identify risks and ensure the implementation of suitable systems to manage these risks; - to oversee the Group s business conduct as well as to evaluate if the Group s businesses are properly managed; and - to review the adequacy and the integrity of the Group s internal control systems, management information systems as well as systems for compliance with applicable laws, regulations, directives, rules and guidelines. Board Balance All Independent Non-Executive Directors are independent of management as well as any business or relationship which could interfere with their decision making therefore enabling them to exercise independent judgement. Furthermore, they have the capacity to fully deliberate and examine strategies proposed by the management, therefore safeguarding the longterm interest of the Group s stakeholders. In addition, the roles of the Independent Non-Executive Chairman and the Group Managing Director are separate as well as clearly defined in order to uphold and maintain the balance of authority and power. Board Meetings and Supply of Information to the Board The Board is scheduled to meet quarterly with additional meetings to be convened when urgent matter need to be discussed and approved in between these scheduled meetings. Sufficient notice is given to the Board prior to the meeting in order for them to be present. The board papers are disseminated to all Directors before the meeting, to give sufficient time to them to review and prepare for the meeting. The proceedings are minuted and thereafter confirmed by the Chairman of the meeting. The Directors have access to the Company Secretary and external independent experts who may be engaged at the Group s expense to seek advice and services. 22 ANNUAL REPORT 2011

25 corporate governance statement (cont d) A. BOARD OF DIRECTOR S (cont d) Appointment and Re-election of Directors Pursuant to the Articles of Association of the Company, one-third (or the number nearest to one-third) of the Directors are required to retire from office at each annual general meeting. Futher, all the Directors are required to retire from office at least once in every three (3) years. However, a retiring Director is eligible for re-election at the meeting at which he or she retires. An election of the retiring Directors shall take place every year. Any person appointed as a Director, either to fill a casual vacancy or as an addition to the existing Directors shall hold office only until the conclusion of the next annual general meeting, and shall be eligible for re-election but shall not be taken into account in determining the directors who are to retire by rotation at that meeting. The Board met six (6) times during the financial year ended 31 December Attendance by each member of the Board during the financial year ended 31 December 2011 were as follows:- Meetings Attended (Out of 6 held) Tan Sri Dato Mohd Ibrahim Bin Mohd Zain Independent Non-Executive Chairman 6/6 Datuk Samsul Bin Husin Group Managing Director 5/6 Tamil Selvan A/L M. Durairaj Executive Director 6/6 Ameer Bin Shaik Mydin Executive Director 6/6 Ang Hsin Hsien Executive Director 6/6 Abdul Mushir Bin Che Chik Non-Independent Non-Executive Director 5/6 Tuan Haji Ab. Gani Bin Haron Senior Independent Non-Executive Director 5/6 Boey Tak Kong Independent Non-Executive Director 6/6 Audit Committee The Audit Committee has the Board s authority to: - investigate matters arising; - exercise its full responsibility within the stipulated terms of reference and be given the necessary resources to do so and; - be granted full access to information of the Group. - to ensure the internal control is in place - to assess the independence and objectivity of external and internal auditors. The composition of our Audit Committee is as follows:- Name Designation Directorship Tuan Haji Ab. Gani Bin Haron Chairman Independent Non-Executive Tan Sri Dato Mohd Ibrahim Bin Mohd Zain Member Independent Non-Executive Boey Tak Kong Member Independent Non-Executive The committee s report is detailed in the Audit Committee Report section of this Annual Report. Driving Business Solutions 23

26 corporate governance statement (cont d) A. BOARD OF DIRECTOR S (cont d) Nomination Committee The Nomination Committee has the responsibility of proposing new nominees to the Board. Besides, it has the task of assessing the performance of the Directors on an annual basis. However, the decision as to who shall be appointed lies with the entire Board but after taking into consideration the recommendations of the Nomination Committee. Other than reviewing the performance of the members of the Board, assessing the effectiveness of the Board as an entity as well as the contributions of each individual director, the Nomination Committee reviews the needed skills, experience and core competencies which should be possessed by Non-Executive Directors. New appointments of member are made through a formal and transparent process which is consistent with the Company s Articles of Association and under the supervision of the Board. The appointment as well as the proposed re-appointment/reelection at the Annual General Meeting ( AGM ) is recommended by the Nominating Committee to the Board for its approval. Continuous reviews are made on the effectiveness as a whole, the various Committees of the Board and the contributions of each director. The composition of our Nomination Committee is as follows:- Name Designation Directorship Boey Tak Kong Chairman Independent Non-Executive Tan Sri Dato Mohd Ibrahim Bin Mohd Zain Member Independent Non-Executive Tuan Haji Ab. Gani Bin Haron Member Independent Non-Executive Remuneration Committee The Remuneration Committee is tasked with reviewing the performance of the Executive Directors and then to inform the Board of their recommendations on specific adjustments in remuneration as well as reward payments commensurate the respective contributions of the Executive Directors. The Remuneration Committee also recommends the framework of fees to the Non-Executive Directors. The remuneration, in this case, reflects the experience, responsibilities shouldered as well as the individuals non-involvement in discussions and decision making. The Remuneration Committee is responsible for setting the framework of the Executive Directors remuneration packages and makes recommendations to the Board on the elements of the remuneration and terms of appointment. The Directors concern will abstain from the deliberations and voting in respect of their remuneration. Nevertheless, it is the responsibility of the Board to approve the remuneration of these Directors. The composition of our Remuneration Committee is as follows:- Name Designation Directorship Boey Tak Kong Chairman Independent Non-Executive Tuan Haji Ab. Gani Bin Haron Member Independent Non-Executive Datuk Samsul Bin Husin Member Group Managing Director 24 ANNUAL REPORT 2011

27 corporate governance statement (cont d) A. BOARD OF DIRECTOR S (cont d) Director s Training All Directors have completed the Mandatory Accreditation Programme as prescribed by the Listing Requirements of Bursa Securities. As part of the Continuous Education Programme to keep up to date with new developments Director s are encouraged to participate in seminars, trainings and conferences organised by the relevant regulatory authorities, professional bodies and commercial entities. The objective is to further enhance their skill, knowledge and expertise as well keep up to date with recent development in the industry in order to discharge their duties as Director s. During the financial year under review, the Directors attended the following training programme/courses and/or conferences listed below: Tan Sri Dato Mohd Ibrahim Bin Mohd Zain Datuk Samsul Bin Husin Tamil Selvan A/L M.Durairaj Ameer Bin Shaik Mydin Ang Hsin Hsien Tuan Haji Ab Gani Bin Haron Boey Tak Kong Attended Wacana Bersama Tun Mahathir and ANUGA Trade Fair and Exhibition. Attended MIA-AFA Conference 2011 towards world class excellence by MIA and The ASEAN Federation of Accountants. Attended MIA-AFA Conference 2011 towards world class excellence by MIA and The ASEAN Federation of Accountants. Attended National ICT Conference 2011 by PIKOM. Attended Sales and Pre-Sales enablement by IBM, MIA-AFA Conference 2011 towards world class excellence by MIA and The ASEAN Federation of Accountants and CIO chapter 2011 by PIKOM. Attended the Annual World Islamic Economic Forum, Managing the Risk and Anti-Money Laundering and Counter Terrorism Financing and Key Amendment to Listing Requirement and Corporate Disclosure Guide Attended Annual Conference 2011 on Governing Responsibly; Inevitable Changes, Chindia Rising How China and India Can Help Your Business, ICAA-MICPA Forum; Improving Corporate Governance In Malaysian Capital Markets The Role Of Audit Committee, Corporate Governance Blueprint 2011, Challenges Faced By Accountants As Independent Directors. Encik Abdul Mushir is the only director who has not attended any training in 2011 had an exceptionally committed schedule for However, he has been regularly briefed and updated by the Company Secretary on the regulatory framework and amendments in the Listing Requirements. He will continue to undergo other relevant training programmes to keep abreast with new regulatory developments and requirements in compliance with Bursa Securities Main Market Listing Requirements. Driving Business Solutions 25

28 corporate governance statement (cont d) B. DIRECTORS REMUNERATION Remuneration Policy and Procedures In order to attract and retain Directors of the high calibre, who are pivotal in order to successfully manage the Group, the Code states that the remuneration of the Directors need to be determined. The remuneration for the Executive Directors link reward to corporate and individual performances. The remuneration of Non- Executive Directors, the remuneration reflects the level of experience and responsibilities they assume during the period reviewed. The remuneration made available to all Directors of the Company during the financial year ended 31 December 2011 are as shown below: i. Aggregate Remuneration of Director s categorised into appropriate components: Benefits Directors Salaries in Kind Fees* Allowance Total Executive Director Datuk Samsul Bin Husin 291,200 17,400 35, ,600 Tamil Selvan A/L M. Durairaj 291,200 8,800 30,000 24, ,000 Ameer Bin Shaik Mydin 181,698 6,500 30, ,198 Ang Hsin Hsien 262,080 11,100 30,000 24, ,180 Abdul Mushir Bin Che Chik ** 37,115-36, ,715 Non-Executive Director Tan Sri Dato Mohd Ibrahim Bin Mohd Zain ,000 4,000 62,000 Tuan Haji Ab. Gani Bin Haron ,000 3,500 57,500 Boey Tak Kong ,000 4,000 61,000 Total 1,063,293 43, ,000 60,100 1,497,193 * Independent/Non-Independent Directors fees will be tabled for shareholders approval at the Fourth Annual General Meeting on 26 June ** En. Abdul Mushir Bin Che Chik was appointed as our Executive Director on 28 December On 28 March 2011, En. Abdul Mushir was re-designated as Non-Independent Non-Executive Director. ii. The remuneration paid to the Directors, analysed in the following bands, is as below:- Range of Remuneration (RM) Executive Non-Executive Below 100, , , ANNUAL REPORT 2011

29 corporate governance statement (cont d) C. SHAREHOLDERS Dialogue with Investors and Shareholders It is of utmost importance that the shareholders and investors are informed of the Group s business as well as its corporate developments. The Group recognises this and therefore disseminates information via the Group s annual report, circulars to the shareholders and announcements periodically and adheres to the disclosure requirement of Bursa Securities. In addition shareholders also have access and may obtain the Group s latest announcements via the Investor Relations in the Group s website at censof.com and the Bursa Securities. Shareholders are invited to take part in discussions with the Board with regards to the Group s operations and performance during its annual general meeting which serves as the main platform for dialogue between the management and its shareholders. The management, on its part, will note suggestions and comments put forward by the shareholders for consideration. Tuan Haji Ab. Gani Bin Haron is the appointed Senior Independent Director to whom where concerns may be conveyed. Annual General Meeting (AGM) The Annual General Meeting is the prime forum of dialogue with shareholders. The Notice together with a copy of the Group s Annual Report is sent to Bursa Securities and all shareholders at least twenty one (21) days prior to the meeting as required by the Companies Act 1965 in order to facilitate full understanding and evaluation of the issues involved. During the AGM, the Board presents the progress and performance of the Group as contained in the Annual Report. Shareholders are encouraged to participate and are given every opportunity to raise questions and seek clarification during the session. The Independent Non-Executive Chairman, the Group Managing Director and Board members are available to respond to all shareholders queries. For 2010, the Group s 3rd AGM was held at Eastin Hotel on Thursday on 5 May During which all resolutions were approved and was attended by the Board of Directors, Company Secretary, Auditor and Senior Management and shareholders. The Chairman, Deputy Executive Chairman and Group Managing Director held a press conference immediately after the AGM updating the media representatives on current development and also taking question from the media. As for 2011 the 4th AGM, the Notice and Proxy Forms are enclosed on page 91 of this Annual Report which is scheduled to be held on the 26 June Annual Report The Board s objective is to provide and present a comprehensive assessment of disclosures in the Annual Report to shareholders. In disclosing of this information, the Board is guided by the principles set out in the Listing Requirements. The information covers the areas of business, financials, governance and other key activities of the Group. All contents that form the Annual Report such as the Corporate Governance Statement, Audit Committee Report, Internal Control Statement and Corporate Social Responsibility Statement are all tabled at the Board of Directors meeting for its comments and deliberation before being incorporated into the Annual Report. Date of Release Bursa Securities Deadline AGM Date Annual Report April June May 2011 Annual Report June June June 2012 Driving Business Solutions 27

30 corporate governance statement (cont d) C. SHAREHOLDERS (cont d) Quarterly Briefings and other forms of communication The quarterly briefings are attended by the Group Managing Director, Executive Director s and Corporate Director of the Company. The Company holds quarterly briefings for fund managers, investment analyst, investors and media immediately after each quarter s announcement of financial results of the Group. During this time we provide updates, progress of current development and status of future developments to the investing public and other stakeholders. Compliance Statement The Company is committed in achieving high standards of corporate governance throughout the Group and to the highest level of integrity and ethical standards in all its business dealings. The Board considers that the Company has complied with the principles and best practices as set out in parts 1 and 2 respectively of the Code. D. ACCOUNTABILITY AND AUDIT Financial Reporting It is the responsibility of the Directors to prepare the annual audited accounts. The Board, on its part, ensures that the accounts as well as other financial reports of the Group: - are prepared in accordance with the Approved Accounting Standards and present a balanced and detailed assessment of the Group s position and prospects; - the Group s annual report and its quarterly announcements of results aim to give an updated financial performance of the Group from time to time; and - present a meaningful assessment of all group s performance and prospects to shareholders, investor s and regulatory bodies. Directors Responsibility Statements Under Paragraph 15.26(a) of the Listing Requirement of Bursa Securities, the Boards of Directors are required to issue a statement explaining their responsibilities in the preparation of the annual financial statements. As stipulated in the Companies Act 1965, the Directors will undertake to prepare the financial statements for each financial year. These financial statements aim to give a true and fair account of the Group s state of affairs as well as their results at the end of each financial year. In preparing the financial statements, the Directors have: (i) (ii) Adopted the relevant and appropriate accounting policies consistently; Made judgements and estimates that are reasonable and prudent; (iii) Ensured that all applicable accounting standards have been appropriately and consistently adhered to; and (iv) Prepared the financial statements on a going concern basis after the Directors have made appropriate enquiries that the Company and the Group have the ability to continue operations in the foreseeable future. 28 ANNUAL REPORT 2011

31 corporate governance statement (cont d) D. ACCOUNTABILITY AND AUDIT (cont d) Internal Control It is the responsibility of the Directors to maintain a sound system of internal control which encompasses not only financial controls but also compliance controls. The Group is continuously revealing into the adequacy as well as the integrity of its system of internal controls as control can only provide reasonable but not absolute assurance against loss or mis-statements. Information on the Group s systems of Internal Control is presented in the Internal Control Statement in this Annual Report. Whistle Blowing Policy The company had a structured whistle blowing policy where grievance can be channelled directly to the Chairman of the Audit Committee, Tuan Haji Ab. Gani Bin Haron, who is also a Senior Independent Director. His contact details are available in the website for employees and the public to address their issues. Relationship with External Auditors The Board maintains a transparent as well as professional relationship with the external auditors in order to fulfil the set objectives. E. OTHER ADDITIONAL COMPLIANCE INFORMATION As required by the Listing Requirement of Bursa Securities. Options, Warrants or Convertible Loan Stocks There were no options, warrants or convertible loan stocks issued during the financial year. Depository Receipts Programme The company did not sponsor any depository receipts programme during the financial year. Non-Audit Fees Non-audit fee paid to external auditors for the financial year was RM19, Material Contracts There were no materials contracts entered into by the Company and its subsidiaries during the financial year. Imposition of Sanctions/Penalties There were none as above imposed on the company during the financial year. Profit Guarantee There were no profit guarantee were given during the financial year. Variation in Result There were no material variations in the result for the financial year as compared to the announcement made for the quarter ended 31 December Driving Business Solutions 29

32 corporate governance statement (cont d) E. OTHER ADDITIONAL COMPLIANCE INFORMATION (cont d) Utilisation of Proceeds The gross proceeds of RM 21,390, from the public issue of the Company s shares in conjunction with the listing on the Main Market of Bursa Securities on 31 January 2011 has been utilised as follows:. Amount Utilised Amount Unutilised 31 Dec Dec 2011 Expected time frame Proposed Utilisation RM 000 % RM 000 RM 000 for utilisation Research and 6, ,200 2,800 Within three (3) years Development expenditure from the date of IPO. Business expansion and 4, , Within three (3) years capital expenditure from the date of IPO. Working capital 4, ,000 - Within three (3) years from the date of IPO. Repayment of 4, ,000 - Within six (6) months bank borrowings from the date of IPO. Estimated listing expenses 2, ,500 - Within six (6) months from the date of IPO. 21, ,978 3,412 Recurrent Related Party Transactions There is no recurrent related party transactions entered during the financial year, for the office rental which is within the normal commercial term which does not exceed tenancy period of 3 years. Share Buy-Backs During the financial year, there were no share buy-backs by the Company. 30 ANNUAL REPORT 2011

33 audit committee report Audit Committee 1. Composition The Audit Committee was established by the Board on 28 December The Committee presently comprises of three (3) members of the Board which consists of Non-Executive Directors. Chairman Tuan Haji Ab Gani Bin Haron Independent Non-Executive Members Tan Sri Dato Mohd Ibrahim Bin Mohd Zain Independent Non-Executive Boey Tak Kong Independent Non-Executive 2. Role of Audit Committee The Audit Committee assists, supports and implements the Board s responsibility to oversee the Group s operations in the following manner:- Provides means for review of the Group s processes for producing financial data, its internal controls and independence of the Group s Internal and External Auditors. Reinforces the independence of the Group s External Auditors. Reinforces the objectivity of the Group s Internal Auditors. 3. Key Functions and Responsibilities The key functions and responsibilities of the Audit Committee are as follows:- Financial Reporting To review the quarterly and year-end financial statements, prior to the approval by the Board of Directors, focusing particularly on: - the going concern assumption, - changes in or implementation of major accounting policy changes, - significant and unusual events, - compliance with the applicable approved accounting standards and - other legal and regulatory requirements. Related Party transaction To review any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions or management integrity. Audit Report To prepare and review the annual Audit Committee Report for the Board s approval. This includes the terms of reference, number of meeting held and attended by members and summary of activities for inclusion in the Annual report. External Auditor To review whether there is reason to believe that the external auditors is not suitable for reappointment, to consider the nomination of a person or persons as external auditors and the audit fee and to consider any questions of resignation or dismissal of external auditors. To review external audit plan and scope for the Group. To review the Internal Control Statement for the Group for the inclusion in the Annual report. To review matters arising from audit finding and to be satisfied with appropriate action taken in response to the findings. Internal Control To review the audit plan, evaluation of the system if internal controls, audit report and management letter and management response and any matters that the External Auditors may wish to discuss (in the absence of the management). To ensure that system of internal control are soundly intact, effectively administered and constantly monitored. Driving Business Solutions 31

34 audit committe report (cont d) 3. Key Functions and Responsibilities (cont d) Internal Audit To review the adequacy of the scope of the internal audit function, programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit findings. Other Matters To promptly report such matter to the Bursa Securities if the Audit Committee is of the view that the matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements. 4. Summary of Activities undertaken by the Audit Committee for 2011 The Audit Committee met five (5) times during the financial year ended 31 December Attendance by each member of the Audit Committee during the financial year ended 31 December 2011 are as follows:- Meetings Attended (Out of 5 held) Tuan Haji Ab Gani Bin Haron (Chairman) 4/5 Tan Sri Dato Mohd Ibrahim Bin Mohd Zain (Member) 5/5 Boey Tak Kong (Member) 5/5 The Audit Committee Members were served with the meeting agendas and relevant board papers which were distributed earlier before the meeting. The Company Secretary is the Secretary to all Audit Committee meetings. During the financial year, the activities of the Audit Committee were as follows:- Reviewed the financial statements and unaudited quarterly financial results and announcements of the results before recommending for the Board s approval. Reviewed the scope of audit plan from the Internal Auditors and External Auditors. Reviewed the audit reports and recommendation to improve internal control and management s response thereto. Considered and recommended to the Board the re-appointment of External Auditors and their fee. Review the related party transactions quarterly, if any. 5. Internal Audit Function The Audit Committee is aware of the fact that an independent and adequately resourced internal audit function is essential to assist in obtaining the assurance it requires regarding the effectiveness of the system of internal control. The Board has outsourced its internal audit function to an independent professional service firm, Messrs KPMG Business Advisory Sdn Bhd, The Internal Auditors report to the Audit Committee at least half yearly. Findings arising from the internal audit review together with the level of concern, the Management s response, recommendations and personnel responsible for implementing corrective actions are presented to the Audit Committee for its review. The costs incurred for the internal audit function for the financial year 2011 is RM37, During the period under review, the Internal Auditors carried out the following activities:- Presented and obtained approval from the Audit Committee the annual internal audit plan, its audit strategy and scope of audit work. Performed audits according to the annual internal audit plan, to review the adequacy and effectiveness of the internal control system, compliance with policies and procedures and reported ineffective and inadequate controls and made recommendations to improve their effectiveness. Monitored and followed-up to ensure Management implemented the action plans as agreed. 32 ANNUAL REPORT 2011

35 internal control statement Introduction A listed company is required to maintain an effective system of internal control to safeguard shareholders investment and the Group s assets under the Malaysian Code on Corporate Governance. Accordingly, the Board is pleased to provide the Statement on Internal Control ( Statement ) for the financial year ended 31 December 2011 that was prepared in accordance with the Guidance for Directors of Public Listed Company issued by Bursa Malaysia Securities Berhad which outlines the processes to be adopted by the Board in reviewing the adequacy and integrity of the system of internal control of the Group. Board Responsibilities The Board acknowledges its overall responsibilities for maintaining a sustainable internal control environment to safeguard shareholders interests and the Group s assets; and for reviewing the adequacy and integrity of these systems. As such these systems however, are designed to manage rather than to eliminate the risk of failure to achieve business objectives. Therefore it can only provide reasonable rather than absolute assurance against material misstatement or loss. The process to identify, evaluate and manage the significant risks is a concerted and continuing effort by the Board and Management. Key Internal Control Process In order of ensuring the adequacy and integrity of the internal control system, the Board has established an Internal Board (IB), Strategic Management Team ( SMT ) and a Management Committee ( MC ) to firm up key elements in the internal control framework of the Group. The Board has formalised a reporting structure comprising of the Group Managing Director, Executive Directors and the Management to ensure that the communication of the Group s objectives, financial issues and risk matters are disseminated to all levels of management through meetings from the IB down to SMT and followed on to MC. The Board is firmly in the opinion that the Group consist of qualified professionals with relevant industry experience to manage the operations and business on a day to day basis. Meetings are convened forth nightly on a scheduled and ad hoc basis at IB, SMT and departmental level to strategise action plans, deliberate and resolve operational matters. The Group has the following framework in its core system: - Organisation Structure and Authorisation Procedures Well-defined Organisational structure with clear lines of reporting to the Board, Committees, IB, SMT and MC with distinct responsibilities, authority limits, review and approval procedures and proper segregation of duties which supports the operation of a stable and controlled environment. Certain transactions are set and formalised with authority limits. - Financial Results The financial results are reviewed and recommendations are made to the Board for approval on quarterly basis by the Audit Committee. Upon review the Board would then approve and adopt the financial results of the Group. This is in conjunction with the announcement that needs to be made to Bursa Securities and the Securities commission. - Internal Audit Function The group internal audit function is outsourced to KPMG Business Advisory Sdn Bhd, an independent professional firm, which supports the Audit Committee and by extension, the Board, by providing independent assurance on the effectiveness of the Group s system of internal controls. Driving Business Solutions 33

36 internal control statement (cont d) Key Internal Control Process (cont d) - Operations Review and Monitoring The Group s performance is constantly monitored with management reports which are presented by the SMT during meetings periodically. The review is subjected to the performance of the Group against budget and prior year performance on a monthly basis. Variances are analysed thoroughly and corrective actions are taken where necessary. Best actions are taken to mitigate variance s arose and priorities are placed to enhance performance to meet the budget and objective of the Group. - Human Capital Development and Training Substantial priority is placed on enhancing the quality and ability of employees throughout the year. This is done by planning the training and development for each level. The employees competencies are assessed monthly through the appraisal system and subsequently, potential areas for further development and training are highlighted by the SMT for follow up. Conclusion The Board noted no fraud or material losses during the current financial year as a result of internal control failures. The Board and Management stands firm on implementing continuous measures of improvement and further strengthen the current internal control framework. The Board is also in strong opinion that the system of internal control in place throughout the year under review is sound and effective to safeguard the shareholders investment and Group s asset s. In addition, the Board regards the risks faced by the Group are within acceptable levels to the industry which the Group operates in. 34 ANNUAL REPORT 2011

37 corporate social responsibility statement The Workplace The Group regards its employees as one of its best assets, and as such, places great emphasis on providing a healthy, conducive working environment which in turn will nurture exemplary professionals which share the Group s vision and mission. The Group s corporate values of Caring, Credible, Committed (dubbed the 3Cs) are constantly highlighted to all employees, and they are encouraged to abide by these values in their professional dealings as an employee of the Group. The Management also award two employees annually with the 3C Award, reserved for individuals who showcase exemplary workplace attitude and ethics. New employees joining the Group undertake an Orientation programme to help them settle into the new workplace by meeting key management team of the respective departments, learning about the working ethics of the Group and understanding the revenue pillars and core products offered. The Group takes pride in encouraging lifelong learning by advocating employees to continuously pursue training and education to improve their knowledge and skill set. Employees undertaking relevant training and studies will be allowed to apply for study leave and examination leave. The Group also sets aside an annual budget to develop human capital with on the job training, skill development, workshops and seminar programmes to enhance employees competency. As a result, priority for promotion is usually given to existing employees within the Group, prior to seeking outside talent to fill vacancies. Employee appreciation is a firm practice within the Group. The Annual Trip in 2011 saw staff and Management of the Group touring the island of Bali in Indonesia with the objective of rewarding employees and fostering better relationship amongst colleagues. In addition to the trip, the Group also organizes an Annual Dinner & Telematch, most recently held in Port Dickson. The Group is fully committed to having a good and safe working environment and thus believes that stringent controls of occupational and industrial hazards will secure the safety, health and welfare of employees. The Community Century Software Donates RM10,000 to MyKasih Foundation Century Software visits Rumah Seri Kenangan Old Folks Home Our engagement programmes and activities, carried out in partnership with local communities, industries and government and non-governmental organisations are in line with our mission to ensure that The Group empowers its people to be caring citizens actively contributing to the community. The Group donated RM10,000 in aid of the MyKasih Foundation: Love My Neighbourhood Programme at the Hari Raya Charity Dinner organized by the Federation of Public Listed Companies. The MyKasih Foundation is a non-profit organisation that aims to help less fortunate Malaysians through food aid, counselling, financial literacy and skills training programmes. Driving Business Solutions 35