Annual Report IFCA MSC Berhad ( T) IFCA MSC Berhad (Co. No T)

Transcription

1 Wisma IFCA, No 19, Jalan PJU 1/42A, Dataran Prima, Petaling Jaya, Selangor Darul Ehsan, Malaysia Tel: Fax: URL: IFCA MSC Berhad (Co. No T) Asia Africa Annual Report 2015 IFCA MSC Berhad ( T) Annual Report 2015

2 Annual Report 2015 Contents Page Corporate Profile 2 Corporate Information 3 Chairman s Statement 4-5 Financial Highlights 6 Directors Profile 7 9 Corporate Presence 10 Notice of Annual General Meeting Corporate Governance Statement Additional Compliance Information Audit Committee Report Statement of Risk Management & Internal Control Corporate Social Responsibility Disclosure Audited Financial Statements List of Properties 132 Shareholding Statistics Proxy Form

3 IFCA MSC BERHAD (Co. No T) IFCA is a business software solution company specializing in the Property industry for 29 years. Established in 1987, the company has a talent pool of over 500 staff across all IFCA offices in Asia and South Africa. IFCA, an acronym for Information for Competitive Advantage is the motto to provide innovative and strategic software solution for the Property industry. Over the years, it has developed its software to meet the needs of property developers and property managers. These properties cover shopping malls, chain stores, residential, industrials, commercials, resorts, hotels and recreational sport clubs. Our Technology Excellence Centers are located in Malaysia and China, providing best of breed technology and industry domain expertise to deliver competitive solutions for our customers. These customers include our iconic industry leaders and titans, to mid-range, and to boutique property developers and property managers. With decades of staff dedication and commitment, IFCA property software has served over a thousand satisfied customers. IFCA the company and the software have gained multiple industry awards and recognitions. These include Technology Fast 500 Asia Pacific, APICTA Award, IBM, Microsoft, PIKOM-Computimes Technopreneur of The Year to name a few. Today, IFCA is public listed as IFCA MSC Berhad in the Bursa Malaysia. IFCA has a strong balance sheet and zero borrowing to meet its long term objective - To be a Global Business Software Organization in the Property industry. To be a Global Business Software Organization in the Property industry. To deliver world-class Products and services To exceed expectation on customer service and satisfaction To empower, retain and reward competent employees To enhance shareholders value 2

4 Annual Report 2015 Executive Directors Yong Keang Cheun (Executive Chairman cum Chief Executive Officer) Yong Kian Keong (Deputy Chairman) Chow Chee Keng (Finance Director) Non Executive Independent Directors Chew See Chiew Hoe Kah Soon Ooi Bee Bee Ngian Siew Siong Company Secretaries Yap Kim Sing (LS ) Wong Kam Khan (MIA No.3153) Audit Committee Chew See Chiew (Chairman) Hoe Kah Soon Ooi Bee Bee Auditors UHY, Kuala Lumpur Office Suite 11.05, Level 11 The Gardens South Tower Mid Valley City, Lingkaran Syed Putra Kuala Lumpur Principal Bankers Hong Leong Bank Berhad OCBC Bank (Malaysia) Berhad Registrar Insurban Corporate Services Sdn Bhd 149, Jalan Aminuddin Baki Taman Tun Dr. Ismail Kuala Lumpur T F Registered Office 24B, Persiaran Zaaba Taman Tun Dr. Ismail Kuala Lumpur T F Business Office Wisma IFCA, 19 Jalan PJU 1/42A Dataran Prima, Petaling Jaya Selangor Darul Ehsan Malaysia T F Stock Exchange Listing Bursa Malaysia Securities ACE Market Stock Codes Bursa Malaysia:0023 Reuters:IFCA.KL Bloomberg:IFCA MK Website 3

5 IFCA MSC BERHAD (Co. No T) Dear Valued Shareholders, On behalf of the Board of Directors, it gives me great pleasure to present IFCA MSC Berhad s ( IFCA or the Company ) and its group of companies ( the Group ) Annual Report and audited financial statements for the financial year ended 31 December In spite of the persistently challenging operating environment, I am pleased to announce that the Group continues to deliver modest growth in FY2015. Riding the Waves Malaysia grappled with severe headwinds on economic front last year, following unanticipated global commodity price drop, currency depreciation as well as declining oil prices. The Malaysian economy achieved moderated Gross Domestic Products ( GDP ) of 5.0 percent in 2015, moderating from a 6.0 percent growth reported in Despite the challenging operating environment, Malaysia s information technology investments managed to persevere and recorded positive growth in For 2016, analysts believe that the sector will be driven by positive new enhancements, with one of the key drivers for change being asset enhancement activities undertaken in The Group managed to record positive revenue and earnings growth in 2015, even in the challenging operating environment due to the GST and weak consumer sentiment. Our customers remain at the forefront of our focus. Meeting the challenges of value-creation in this digital era requires new approaches to business. At IFCA, we are continuously innovating and identifying new business models, products and services within the connected digital economy to empower our customers to deliver business excellence. Leveraging on our digital solutions capabilities in Property and E-Commerce, we are creating new business models for our customers to help them achieve inclusive and sustainable growth with the set-up of Property365 Sdn Bhd. This Company will transform the E-Commerce industry in the property segment. Financial Performance The Group total revenue increased to RM101.6 million in FY2015, an increase of 13.9% as compared to RM89.2 million in FY2014. Consequently, the Group recorded profit after tax and non-controlling interest of RM21.6 million compared to RM20.8 million last year. The growth in revenue and profit after tax and non-controlling interest were mainly contributed by yearly increase in our software as a service ( SaaS ) business segment. Building on these positive results, the Group s financial position has been augmented with shareholders funds registering an increase of 32.8% to RM94.5 million. At the end of the financial year, the Group s cash reserve stood at RM67.4 million, an increase of 35.3% compared to RM49.8 million in the prior year. For 29 years, our core business of providing enterprise software solutions for the property industry, have truly made us a property software maven. Future Prospects The Group continues to see challenges with the current economic environment and modest opportunities for FY2015. Our unbilled projects in hand, total almost RM25.3 million as at year end Our strong and active presence in China has been felt by the local market which now spanned 8 major Chinese cities covering each geographical location. With local expertise and resources together with close supervision, we are making sure the groups interest are being harness fully in this land of Billion. In addition, we have acquired PT IFCA Consulting Indonesia and have incorporated a new Company, PT IFCA Property365 Indonesia to further enhance our roadmap in Indonesia. While market conditions are increasingly more challenging in Asia, we remain cautiously optimistic that our resilient business model will enable us to effectively address the business opportunities in our core markets. We have a comprehensive suite of mission critical software and services to deliver end-to-end solutions in facilitating transformational changes for our customers in property development and many other industries in a digital economy. In the near term, we will focus our resources on existing as well as potential new customers within ASEAN and adjacent markets to capitalise on our strong track record here. At the same time, we are developing newer markets with the potential to contribute significantly over the longer term, such as North Asia and the Australia and New Zealand markets. 4

6 Annual Report 2015 IFCA has set-up Property365 Sdn Bhd to enter the e-commerce business with an electronic property portal named Property365.my, and have launched it in early Quarter to gain visibility and foothold. Property365.my is a digital platform that serves as a marketplace for all new residential properties. It is designed with an online booking feature to help property developers market and sell their projects smarter and faster. Potential property buyers can register their interest and access all the information on their preferred projects as well as register and proceed to book their preferred units through this platform. To fulfil that mission and to help property developers sell faster, better, and smarter, we also created a unique Agent e- marketplace to enable property developers to empower and equip thousands of professional real-estate agents nationwide and internationally to market and sell their projects, anytime, anywhere, on any device. Corporate Exercise At the beginning of 2016, the Group has completed the acquisition of 100% equity interest in PT IFCA Consulting Indonesia. This acquisition came with an average profit guarantee of RM4 million per annum from calendar year 2016 to The purchase consideration of RM32.0 million was satisfied through a combination of cash amounting to RM16.0 million and the issuance of 16,000,000 new ordinary shares of RM0.10 each in IFCA shares at an issue price of RM1.00 per IFCA share. Taking consideration of the market size and our market leadership in Indonesia, the completion of this exercise will contribute positively to the Group. Dividend The Group has for the second time adopted the dividend policy. With effect from this financial year, the Group will distribute at least 20% of the consolidated profit after taxation and non-controlling interests in respect of any financial year to its shareholders. The Group has proposed a dividend of 1 sen per share to the shareholders. This represents a pay-out of 28% of its profit after taxation. Board Changes I would like to welcome our newly appointed Independent & Non-Executive Director, Mr. Ngian Siew Siong who joined the Board on 27 July Similar welcome is extended to our former Chief Financial Officer, Mr. Chow Chee Keng (Daniel) who was appointed as Finance Director with effect from 1 January The profile of both new directors are displayed on page 9 of this annual report. I look forward to a long and fruitful working relationship with our new Directors, and am confident that their experience will be of great value to the Company. Appreciation On behalf of the Board, I would like to take this opportunity to extend our appreciation to the entire management and staff of IFCA. Their splendid efforts and contributions throughout the year, has contributed to the significant achievement for the Group. A sincere thank you also goes out to our valued shareholders for their continued trust and confidence in us. Last but not least, our highest appreciation to all our business partners and cherished customers, for extending your invaluable support to us as your trusted solution provider. Yong Keang Cheun Executive Chairman 19 April

7 IFCA MSC BERHAD (Co. No T) FINANCIAL HIGHLIGHTS Summarised Statement of Comprehensive Income ~ Year Ended 31 December (RM'000) Revenue 37,665 45,931 52,007 89, ,624 Profit/(Loss) Before Tax (2,345) 3,527 1,897 25,384 25,753 Profit/(Loss) After Tax & Non-Controlling Interest (2,676) 3,479 1,728 20,770 21,603 Summarised Statement of Financial Position As at 31 December (RM'000) Property, Plant & Equipment 8,391 9,061 9,303 9,169 9,412 Investment Properties Deferred Development Costs 4,488 3,967 5,206 13,257 19,560 Other Non-Current Assets 1, Total Non-Current Assets 14,588 13,889 15,087 22,915 29,541 Current Assets 42,812 44,395 46,925 69,707 91,263 TOTAL ASSETS 57,400 58,284 62,012 92, ,804 Shareholders' Equity 40,634 46,659 47,495 71,118 94,474 Minority Interest (41) (276) (350) Total Equity 40,593 46,383 47,145 71,558 94,844 Non-Current Liabilities ,870 3,782 Current Liabilities 15,865 11,276 14,423 19,194 22,178 Total Liabilities 16,807 11,901 14,867 21,064 25,960 TOTAL EQUITY AND LIABILITIES 57,400 58,284 62,012 92, ,804 sen sen sen sen sen Basic earnings/(loss) per share (0.66) Net assets per share Total Revenue (RM'000) Profit/(Loss) After Tax & Non-Controlling Interest (RM'000) ,007 45,931 37, ,624 89,241 25,000 20,000 15,000 20,770 21,603-50, , ,000 Shareholders' Equity (RM'000) 10,000 5,000 3,479 1, ,118 94,474 - (5,000) (2,676) ,495 46,659 40,634 70,000 Cash & Bank Balance (RM'000) 67,396-20,000 40,000 60,000 80, ,000 Total Assets (RM'000) 60,000 50,000 49, ,804 92,622 40,000 30,000 25,870 32,368 34, ,012 20, ,284 57,400-50, , ,000 10,

8 Annual Report 2015 Appointed to the Board on 20 November 1997, Mr. Yong Keang Cheun is the founder of the IFCA Group. He also co-founded of the Group s current major shareholder - IFCA Software (Asia) Sdn Bhd ( IFCA Software ) in He obtained his Master Degree in Computer Science from the University of Manitoba, Canada, and started his career as an IT consultant with Arthur Andersen in Malaysia. With more than 27 years of experience in the ICT industry, he has been involved in many aspects of the software business, including product development, business development and project implementation. He is responsible for developing the overall strategies and policies for the IFCA Group, and has been involved in the research and development of the Groups products. He assumed his current position in 1997, following an internal restructuring exercise that resulted in the transfer of IFCA Software s business operations to the Company. His visionary and entrepreneurial acumen has won him a series of personal and corporate accolades, including PIKOM s Technopreneur of the Year and Key Industry Leader, Ernst & Young s Entrepreneur of the Year, and Deloittes Technology Fast Track 500. He is the brother of Mr. Yong Kian Keong, an Executive Deputy Chairman and a substantial shareholder of the Company. He does not hold any other directorship in any public listed company. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any. Appointed to the Board on 20 November 1997, Yong Kian Keong is the Group Managing Director of the IFCA Group. He is responsible for the overall day-to-day management of the Group's business operations, particularly in the sales and marketing areas. He joined IFCA Software (Asia) Sdn Bhd ( IFCA Software ), the current major shareholder of the Company, in 1990 and was involved in its business operations. In 1997, he assumed his present position following an internal restructuring exercise, which resulted in the transfer of IFCA Software's business operations to the Company. He was instrumental in assisting the Group in achieving its current customer base and market share. He also played a major role in developing the Group s expansion in the overseas markets and its international business partnership program. He is the brother of Mr. Yong Keang Cheun, the Executive Chief Officer of the Company and a substantial shareholder of the Company. He does not hold any other directorship in any public listed company. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any. 7

9 IFCA MSC BERHAD (Co. No T) - Mr. Chew See Chiew was appointed to the Board on 3 February He also serves as Chairman of the Audit Committee and as a member of the Remuneration Committee of the Company. He holds a Bachelor Degree in Accountancy from the University of Technology, Australia and is a Chartered Accountant. He obtained his professional CPA accreditation in Australia. He has extensive experience in finance, accountancy, corporate planning and the property development industry in private companies as well as public listed companies. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. He does not hold any other directorship in any public listed company. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any. - Mr. Hoe Kah Soon was appointed to the Board on 22 January He also sits on the Audit Committee of the Company. He holds a Bachelor of Accounting Degree from University Malaya, with a first class honours. After graduation in 1982, he joined Arthur Andersen (Audit Division) where he successfully completed his MACPA examinations. In 1984, he transferred to its Consulting Division (which eventually became Accenture) and was admitted to global partnership in At Accenture (until 2005), he specializes in program managing large scale business systems integration projects. He also assumed several leadership positions including Country Managing Partner Taiwan, Accenture Global People Matters (HR) advisory committee and Head of Malaysia Resources Operating Group. He is currently a free-lance business advisor. Currently he also serves as an independent non-executive director of Diversified Gateway Solutions Berhad and Ireka Corporation Berhad. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any. OOI BEE BEE, 56, Malaysian Independent Non-Executive Director Ms. Ooi Bee Bee was appointed to the Board on 3 February She also sits on the Audit Committee of the Company and is a member of the Remuneration Committee of the Company. She holds a Bachelor of Arts Degree and Postgraduate Diploma in Computer Science from University of Malaya. She also has The London Chamber of Commerce and Industry Intermediate Stage Certificate for book-keeping. She served in IFCA Group from 1987 to During her tenure in IFCA, she was involved in research and development, customer services, project management and overseas offices operations in Thailand, Indonesia, Philippines and China. She has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. She does not hold any other directorship in any public listed company. Within the last 10 years, she has not been convicted for any offences other than traffic offences, if any. 8

10 Annual Report Ngian Siew Siong was appointed to the Board on 27 July He hold a BSc in Civil Engineering from the University of Leeds, UK. He started his career with the Civil Service of the Malaysia Government in In 1979 he moved to the private sector in the Property Development industry by joining the MBF property Group. In 1985 he joined the Sunway Group to set up the property development division. Under his leadership, the property development division known as Sunway City Berhad became a leading and award winning property developer in Malaysia. He retired in 2012 as its Managing Director. He was the past Chairman of Real Estate & Housing Developer Association, Selangor and currently a Council Member of Real Estate & Housing Developer Association Malaysia. He is currently an independent and non-executive director of Nam Long Investment Corporation, a Vietnamese property development company listed in the Hanoi Stock Exchange. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any. Mr. Chow joined IFCA MSC Berhad since 2007 and was appointed to the Board on 1 January Prior to the appointment, he served as Chief Financial Officer of IFCA MSC Berhad. Currently, he oversees the financial and treasury functions of the Group. He is a fellow member of the Association of Chartered Certified Accountants (ACCA), United Kingdom and a member of Malaysian Institute of Accountants (MIA). Mr. Chow is also a certified professional trainer and facilitator (CPTF) accredited by the University Malaya Centre for Continuing Education and conducts seminars and trainings at public events on a regular basis. He has extensive working experience in financial reporting, taxation and corporate planning in several public listed companies across various industries including information technology, property and construction. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any. 9

11 IFCA MSC BERHAD (Co. No T) 1. Push Technology Sdn Bhd 100% 2. IFCA Solutions Sdn Bhd 85.17% 3. Property365 Sdn Bhd 85.71% 4. Network Online Sdn Bhd 85.17% 5. IFCA Systems (Penang) Sdn Bhd 99.99% 6. IFCA Systems (JB) Sdn Bhd 99.99% 7. IFCA Consulting (Sarawak) Sdn Bhd 99.99% 8. IFCA Consulting (Sabah) Sdn Bhd 60% 9. SmartHR Sdn Bhd 100% 10. IFCA Affiliate (Philippines) 11. IFCA Affiliate (Indonesia) 12. IFCA Affiliate (Singapore) IFCA Guangzhou Technology Co., Ltd 100% 14. Jingyou Information Technology (Shanghai) co., Ltd 100% 15. Jingyou Information Technology - Chengdu Branch 16. Jingyou Information Technology - Fu Zhou Branch 17. Jingyou Information Technology - Nanjing Branch 18. Jingyou Information Technology - Beijing Branch 19. IFCA (Wuhan) Technology Co Ltd 100% 20. Jingyou Information Technology - Xi An Branch 21. Effica Technology (Pty) Limited 100% 22. IFCA International Limited 100%

12 Annual Report 2015 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of IFCA MSC Berhad ( the Company ) will be held at the Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, Kuala Lumpur on Thursday, 26 May 2016 at 2.30 p.m. to transact the following business:- As Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 31 December 2015 together with the Reports of the Directors and Auditors thereon. 2. To declare a final single-tier dividend of 1.0 sen per ordinary share for the financial year ended 31 December To re-elect the following Directors who retire pursuant to Article 85 of the Company s Articles of Association: (i) Chew See Chiew (ii) Ooi Bee Bee (iii) Yong Kian Keong 4. To re-elect the following Directors who retire pursuant to Article 90 of the Company s Articles of Association: (i) Chow Chee Keng (ii) Ngian Siew Siong 5. To approve the payment of Directors fees of RM139, for the financial year ended 31 December To re-appoint Messrs UHY as Auditors of the Company and to authorise the Directors to fix their remuneration. Please refer to Note 2 Resolution 1 Resolution 2 Resolution 3 Resolution 4 Resolution 5 Resolution 6 Resolution 7 Resolution 8 As Special Business To consider and, if thought fit, to pass the following Ordinary Resolutions, with or without modifications:- 7. Proposed Share Buy-Back Renewal Proposed Renewal of Shareholders Mandate to Enable the Company to Purchase up to Ten Percent (10%) of its Issued and Paid-up Share Capital ( Proposed Renewal of the Share Buy- Back Authority ) Resolution 9 THAT subject to the Companies Act, 1965 (the Act ), rules, regulations and orders made pursuant to the Act, provisions of the Company s Memorandum and Articles of Association and the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( Listing Requirements ) and any other relevant authority, the Company be and is hereby authorised to purchase and/or hold such amount of ordinary shares of RM0.10 each in the issued and fully paid-up share capital of the Company through Bursa Securities upon such terms and conditions as the Directors may deem fit and in the best interest of the Company provided that:- (a) the aggregate number of shares so purchased and/or held pursuant to this ordinary resolution ( Purchased Shares ) does not exceed ten percent (10%) of the total issued and fully paidup capital of the Company at any point in time; and (b) the maximum amount of funds to be allocated for the Purchased Shares shall not exceed the aggregate of the retained profits and/or share premium of the Company; 11

13 IFCA MSC BERHAD (Co. No T) AND THAT the Directors be and are hereby authorised to decide at their discretion either to retain the Purchased Shares as treasury shares (as defined in Section 67A of the Act) and/or to cancel the Purchased Shares and/or to retain the Purchased Shares as treasury shares for distribution as share dividends to the shareholders of the Company and/or be resold through Bursa Securities in accordance with the relevant rules of Bursa Securities and/or cancelled subsequently and/or to retain part of the Purchased Shares as treasury shares and/or cancel the remainder and to deal with the Purchased Shares in such other manner as may be permitted by the Act, rules, regulations, guidelines, requirements and/or orders of Bursa Securities and any other relevant authorities for the time being in force AND THAT the Directors be and are hereby empowered to do all acts and things (including the opening and maintaining of a central depositories account(s) under the Securities Industry (Central Depositories) Act, 1991 and to take all such steps and to enter into and execute all commitments, transactions, deeds, agreements, arrangements, undertakings, indemnities, transfers, assignments and/or guarantees as they may deem fit, necessary, expedient and/or appropriate in the best interest of the Company in order to implement, finalise and give full effect to the Proposed Share Buy-Back Authority with full powers to assent to any conditions, modifications, variations (if any) as may be imposed by the relevant authorities; AND FURTHER THAT the authority conferred by this ordinary resolution shall be effective immediately upon passing of this ordinary resolution and shall continue in force until the conclusion of the next annual general meeting ( AGM ) of the Company or the expiry of the period within which the next AGM of the Company is required by law to be held (whichever is earlier), unless earlier revoked or varied by ordinary resolution passed by the shareholders of the Company at a general meeting, but shall not prejudice the completion of purchase(s) by the Company before that aforesaid expiry date and in any event in accordance with the provisions of the Listing Requirements and other relevant authorities. 8. To transact any other ordinary business of which due notice has been duly given in accordance with the Companies Act, NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the shareholders at the Eighteenth Annual General Meeting to be held on 26 May 2016, a single-tier final dividend of 1.0 sen per ordinary share for the financial year ended 31 December 2015 will be paid on 15 July 2016 to Depositors registered in the Record of Depositors at the close of business on 31 May A Depositor shall qualify for entitlement to the dividend only in respect of: (a) Shares transferred into the Depositor s Securities Account before 4.00 p.m. on 31 May 2016 in respect of transfers; and (b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad. By Order Of The Board Wong Kam Khan (MIA 3153) Yap Kim Sing (LS 01376) Company Secretaries 29 APRIL

14 Annual Report 2015 Notes: 1. Notes on Appointment of Proxy. a) A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote on his stead. A proxy need not be a member of the Company. There shall be no restriction as to the qualification of a proxy and the provisions of Section 149(1) (a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company. b) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under the corporation s Seal or under the hand of an officer or attorney duly authorised. c) Where a member appoints more than one (1) proxy to attend the same meeting, such appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. d) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ), it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said securities account. e) Where a member of the Company is an exempt authorised nominee as defined under the SICDA, which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. f) Where the authorised nominee or an exempt authorised nominee appoints two (2) or more proxies, the proportion of the shareholdings to be represented must be specified in the instrument appointing the proxies. g) The instrument appointing a proxy or proxies duly completed must be deposited at the Registered Office of the Company situated at 24B, Persiaran Zaaba, Taman Tun Dr. Ismail, Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting i.e. on or before p.m., Tuesday, 24 May h) A depositor whose name appears in the Record of Depositors as at 18 May 2016 shall be regarded as a Member of the Company and be entitled to attend this Annual General Meeting or appoint a proxy to attend and vote on his behalf. 2. Audited Financial Statement for the financial year ended 31 December 2015 The Audited Financial Statement in Agenda item no. 1 is meant for discussion only as the provision of Section 169(1) of the Companies Acts 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this item on the Agenda is not put forward for voting. Explanatory Notes on Special Business: 1. Ordinary Resolution 9 Proposed Renewal of the Share Buy-Back Authority Ordinary Resolution 9, if passed will enable the Company to utilise any of its surplus financial resources to purchase its own shares through Bursa Securities up to ten percent (10%) of the issued and paid-up capital of the Company. This authority will, unless revoked or varied at a General Meeting, expire at the conclusion of the next AGM of the Company. Further information on the Proposed Renewal of the Share Buy-Back Authority are set out in the Statement to Shareholders of the Company which is dispatched together with the Company s Annual Report for the year ended Statement Accompanying Notice of Annual General Meeting Pursuant to Rule 8.29 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad 1. Details of individuals who are standing for election as Directors No individual is seeking election as a Director at the forthcoming Eighteenth Annual General Meeting of the Company ( 18 th AGM ) 13

15 IFCA MSC BERHAD (Co. No T) Statement On Corporate Governance The Board of Directors ( the Board ) of IFCA MSC Bhd ( IFCA or the Company ) recognises the importance of upholding good corporate governance in the discharge of its duties and responsibilities to uphold shareholders confidence and enhance shareholders value consistent with the principles and best practices set out in the Malaysian Code on Corporate Governance 2012 ( the Code ). The Board will continuously evaluate the Group s corporate governance practices and procedures, and where appropriate will adopt and implement the best practices as enshrined in the Code to the best interest of the shareholders of the Company. The statement below sets out the manner in which the Group has applied the key principles and the extent of its compliance with the best practices set out in the Code throughout the financial year under review pursuant to Rule of the ACE Market Listing Requirements of Bursa Securities ( Listing Requirements ). THE BOARD OF DIRECTORS The Board assumes responsibility for leading and controlling the Group. The Board has the overall responsibilities for corporate governance, risk management, internal controls, strategic direction, succession planning, formulation of policies and overseeing the investment and business of the Group. In carrying out its functions, the Board has delegated specific responsibilities to three Board Committees, namely Audit Committee, Nomination Committee and Remuneration Committee. These committees have the authority for their own specific issues and their recommendations are reported back to the Board. A.1 Board Balance The current Board of Directors consists of seven (7) members, comprising three (3) Executive Directors who is the Executive Chairman, the Deputy Chairman and the Finance Director and four (4) Independent Non-Executive Directors. The Company thus complies with Rule of the Listing Requirements whereby at least two (2) or one-third (1/3) of the Board of Directors, whichever is higher, are independent directors. The Chairman and Chief Executive Officer is responsible for running the Board and ensuring that all Directors receive sufficient and reliable information on financial and non-financial matters to enable them to participate actively in Board decisions whilst the Chief Executive Officer is responsible over the operating units, organisation effectiveness and implementation of the Board s policies and decisions. The Company is led by a Board comprising members with a wide range of business, financial, technical and consulting experience. This depth and diversity in expertise and perspectives as reflected in the Directors Profile on pages 7 to 9 of this Annual Report bring vital ingredients necessary for the Company s strategic direction and guidance in the Management of the various business activities undertaken by the Group. The Board shares a common goal of providing the best total integrated software solutions for our clients in various industries. With the overall responsibility for the Company s strategic direction, the Board always strives to give due attention to matters pertaining to corporate strategy development and alignment, business operational execution and performance monitoring within the context of both internal and external factors in the marketplace. The size and composition of the Board reflects a balance of executive and non-executive directors who are reputable and professional person of caliber in the business environment to provide leadership and exercise control of the Group. The independent non-executive directors provide an unbiased and independent judgment to ensure a balanced an impartial Board decision making process. Mr. Chew See Chiew, who is also the chairman of the Audit Committee, is identified as a senior Independent Non- Executive Director to whom concerns may be conveyed. 14

16 Annual Report 2015 Corporate Governance Statement (cont d) A.2 Board Meeting and Supply of Information to the Board The Board meets on a quarterly interval, at least four (4) times a year with additional meetings convened as and when required. During the financial year ended 31 December 2015, five (5) Board meetings were held and the attendance of Board members is as follows:- Directors Number of Meetings Attended Percentage of Attendance Yong Keang Cheun 5/5 100% Yong Kian Keong 5/5 100% Chew See Chiew 5/5 100% Hoe Kah Soon 5/5 100% Ooi Bee Bee 5/5 100% Ngian Siew Siong (appointed on 27 Jul 2015) 2/2 100% Chow Chee Keng (appointed on 1 Jan 2016) n/a n/a The Directors have full and timely access to all information pertaining to the Group s business and affairs to enable them to discharge their duties. Senior management are invited to attend the Board meetings to explain and clarify matters as required. The agenda for every meeting together with a full set of Board papers containing information relevant to the business of the meetings are circulated to the Directors for their perusal in advance usually 7 days before the meeting date. This is to allow the Directors to have sufficient time to review and consider the agenda items before the Board meeting and to obtain further explanations or clarifications, where necessary. The proceedings and resolutions reached at each Board meeting are documented in the minutes and signed by the Deputy Chairman of the next Board meeting. Besides Board meetings, the Board exercises control on matters that require Board s approval through circulation of Directors Resolutions. These documents are kept at the registered office. All Directors have access to all information within the Company as well as the advice and services of the Company Secretaries who are qualified professionals, whether as a full Board or in their individual capacity to assist them in their decision making. When necessary, Directors may also obtain independent professional advice at the Company s expense to enable the directors to discharge their duties with adequate knowledge on the matters being deliberated. A.3 Directors Training and Continuing Education All the Directors appointed to the Board have completed the Mandatory Accreditation Program as prescribed by the Listing Requirements of Bursa Malaysia Securities Berhad. The Directors remain committed to undergoing further continuing education training programs to upgrade and enhance their business acumen and professionalism in discharging their duties to the Group. At every Board meeting, all Directors were briefed on the latest developments of the Group s business and operations to enhance and ensure that they have a comprehensive understanding on the Group s operations to enable them to discharge their responsibilities effectively and to keep abreast with developments in the market place. For any new appointees to the board, a familiarization program on operations of the Group will be arranged for. 15

17 IFCA MSC BERHAD (Co. No T) Corporate Governance Statement (cont d) The following Board members have attended relevant courses/seminars during the financial year ended 31 December 2015 as detailed below: Name of Directors Yong Keang Cheun Yong Kian Keong Chew See Chiew Hoe Kah Soon Ooi Bee Bee Ngian Siew Siong Chow Chee Keng Courses Attended Bank of Singapore Market Outlook Regional Corporate Outlook 2015 Property 365 e-market place Property 365 e-market place Property 365 e-market place Bank of Singapore Market Outlook Credit Suisse Funds Seminar Property 365 e-market place Property 365 e-market place Mandatory Accreditation Programme for Directors of PLCs Regional Corporate Outlook 2015 GST Health Check Detecting and Preventing Unintentional Error Malaysia GST Compliance Conference: Unraveling Post-Implementation Complexities A.4 Re-election of Directors In accordance with the Company s Articles of Association, an election of directors shall take place each year. All Directors shall retire from office once at least in each three (3) years, but shall be eligible for re-election. Any Director appointed during the year is required to retire and seek re-election by shareholders at the first AGM following his appointment. Directors over seventy (70) years of age are required to submit themselves for reappointment annually in accordance with the Section 129 (6) of the Companies Act, A.5 Reinforce Independence The Non-Executive Directors are not employees of the Group and do not participate in the day to day management of the Group. The Non-Executive Directors are independent directors and are able to express their views without any constraint. This strengthens the Board which benefits from the independent views expressed before any decisions are taken. None of the current independent board members had served the company for more than nine (9) years as per the recommendations of the Code. Should the tenure of an independent director exceed nine (9) years, shareholders approval will be sought at a General Meeting or if the services of the director concerned are still required, the director concerned will be re-designated as a non-independent director. B. Directors Remuneration The determination of the remuneration for Non-executive Directors is decided by the Board as a whole. The remuneration of Executive Directors is the purview of the Remuneration Committee who will evaluate and recommend to the Board. Individual directors concerned have abstained from discussing and deciding on their own remuneration. The Directors fee including Non-Executive Directors if any, have to be endorsed by the Board and would seek approval from the shareholders of the Company at the Annual General Meeting. The compensations for Non- Executive Directors are linked to their experience and level of responsibility taken. B.1 Remuneration Committee In line with the Best Practices of the Code, the Board has established a Remuneration Committee with a majority of them being independent non-executive directors. 16

18 Annual Report 2015 Corporate Governance Statement (cont d) Directors Remuneration (cont d) The present members of the Remuneration Committee of the Company are: Chairman Chew See Chiew (Independent Non-Executive Director) Members Ooi Bee Bee (Independent Non-Executive Director) Yong Keang Cheun (Non Independent Executive Director) The Remuneration Committee is principally responsible for assessing and reviewing the remuneration packages of the Executive Directors including their fees and subsequently furnishes recommendations to the Board on specific adjustments in remuneration to commensurate with the respective contributions of the Directors. The functions of the Remuneration Committee are: a) Recommend to the board the framework of executive remuneration and its cost, and the remuneration package for each executive director, taking into account the performance of the individual, the inflation price index and information from independent sources on the rates of salary for similar jobs in selected group of comparable companies. b) To reimburse reasonable expenses incurred by the directors in course of their duties as directors. c) To review and determine the bonus scheme for executive directors depending on various performance measurements of the Group. d) To review and determine the other benefits in kind for the executive directors. e) To review annually the executive directors service contracts. B.2 Details of Directors Remuneration The details of directors remuneration for the financial year ended 31 December 2015 are as follows: Category Fee RM Salaries & other emoluments RM Total RM Executive Directors 28,000 2,066,400 2,094,400 Non-executive Directors 111, ,500 Total 139,500 2,066,400 2,205,900 The Directors remuneration within the following bands is as follows: Range of Remuneration Number of Executive Directors Number of Non-Executive Directors Below RM50,000-4 RM700,001 RM750, RM1,550,001 RM1,650, The Board is of the view that the detailed remuneration disclosure of each director is not disclosed as the information will not add significantly to the understanding and evaluation of the Group s corporate governance. 17

19 IFCA MSC BERHAD (Co. No T) Corporate Governance Statement (cont d) C. Communication with Shareholders and Investors C.1 Relationship with Shareholders The Board recognises the need for transparency and accountability to the Company s shareholders as well as regular communication with its shareholders, stakeholders and investors on the performance and major developments in the Company. The Company ensures that timely releases of the quarterly financial results, press releases and corporate announcements are made to its shareholders and investors, which are clear, unambiguous, succinct, accurate and contains sufficient and relevant information. Chairman shall inform shareholders of their right to demand a poll vote at each general meeting. The Group also maintains a website whereby information can be obtained. C.2 Annual General Meeting The Annual General Meeting ( AGM ) represents the principal forum for dialogue and interaction with all the shareholders of the Company. At the AGM, the Board provides opportunities for shareholders to participate in the question and answer session where all Directors as well as the external auditors are present to respond to the shareholders questions during the AGM. The Company values feedback from its shareholders and encourages them to actively participate in discussion and deliberations. D. Accountability and Audit D.1 Financial Reporting The Board has a responsibility and aims to provide and present a fair and balanced assessment of the Group s financial performance and its prospects. The financial statements of the Company are drawn up in accordance with the requirements of the applicable accounting standards in Malaysia and provision of the Companies Act, With assistance from the Audit Committee, the Board oversees the Group s financial reporting processes and the quality of its financial reporting. D.2 Internal Control The Board is overall responsible for maintaining a sound system of internal controls and risk management practises to safeguard shareholders investment and Group s assets. The Statement on Risk Management and Internal Control as set out on page of the Annual Report provides an overview of the state of internal controls within the Group. D.3 Relationship with Auditors Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group s auditors, in seeking professional advice and ensuring compliance with the applicable accounting standards and statutory requirements in Malaysia. From time to time, the auditors will highlight to the Audit Committee and the Board of Directors on matters that require the Audit Committee s and Board s attention and action. The Audit Committee has been explicitly accorded the power to communicate directly with both the External Auditors and Internal Auditors. Annual appointment or reappointment of the external auditor is via shareholders resolution at the AGM on the recommendation of the Board. E. Statement of Compliance with the Code The Board is committed to ensure high standards of corporate governance and to their best ability and knowledge complied with the Best Practices set out in the Code. 18

20 Annual Report 2015 Additional Compliance Information (Pursuant to Bursa Malaysia ACE Market Listing Requirements) 1. Share Buy-Back During the financial year 2015, the Company bought back 10,000 shares from the open market as follows: Month No. of Shares Consideration Highest Price Lowest Price Weighted Average (RM) (RM) (RM) Price (RM) November 10,000 9, All the shares purchased by the Company were retained as treasury shares. There were no treasury shares resold or cancelled during the financial year. As at 31 December 2015, a total of 10,000 shares were held as treasury shares. 2. Options, Warrants or Convertible Securities During the financial year, there were total 90,812,400 units of warrants converted into ordinary shares. 3. Depository Receipt Programme There were no Depository Receipt Programme sponsored by the Company during the financial year. 4. Imposition of Sanctions and/or Penalties There were no sanctions and/or penalties imposed on the Company and/or its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year. 5. Non-Audit Fee There was non-audit fees amounting to RM 30, paid to the External Auditors, Messrs UHY during the financial year ended 31 December Variation in Results There were no variances of 10% or more between the audited results for the financial year and the unaudited results announced. 7. Profit Guarantee There was no profit guarantee given by the Company during the financial year. 8. Material Contract During the financial year under review, there was no material contract other than those in the ordinary course of business entered into by the Company and/or its subsidiaries involving Directors and/or major shareholders interest. 9. Revaluation Policy of Landed Properties The revaluation policy in relation to landed and investment properties is set out in Note 3(e) of the notes to the Financial Statements on page 66 to 67 of this Annual Report. 10. Recurrent Related Party Disclosures ( RRPTS ) of a Revenue or Trading Nature Disclosure to this effect was set out in Note 35 of the Financial Statements on Page 111 to 112 of this Annual Report. 11. Share Options Offered To Non-executive Directors There were no share options granted to non-executive directors during the year ended 31 December

21 IFCA MSC BERHAD (Co. No T) Additional Compliance Information (Cont d) (Pursuant to Bursa Malaysia ACE Market Listing Requirements) 12. Corporate Social Responsibility ( CSR ) The CSR Disclosure statement was set out on Page 27 to 28 of this Annual Report. 13. Utilisation of Rights Issue Proceeds There were no rights issue proceeds during the year ended 31 December

22 Annual Report 2015 AUDIT COMMITTEE REPORT 1. Membership and Attendance During the financial year ended 31 December 2015, the Audit Committee met five (5) times and the details of attendance of each member are as follows:- Name of Director No. of meetings attended Chew See Chiew (Chairman / Independent Non-Executive Director) 5/5 Hoe Kah Soon (Member / Independent Non-Executive Director) 5/5 Ooi Bee Bee (Member / Independent Non-Executive Director) 5/5 2. Summary of Activities The Audit Committee carried out its duties as set out in the terms of reference below for the year The principal activities undertaken by the Audit Committee during the financial period were as follows:- Reviewed the unaudited quarterly financial results, cash flows and financial positions and recommended to the Board for consideration and approval for announcement to the public. Reviewed the annual audited financial statement, Directors and Auditors Reports and other significant accounting issues arising from the financial year ended 31 December 2015 audit. Reviewed the external auditors plan for the year ended 31 December Reviewed the internal audit reports and audit status presented by the Internal Auditors. Reviewed the Corporate Governance Statement, Audit Committee Report and Statement on Risk Management and Internal Control and recommended to the Board for consideration and approval for inclusion in the 2015 annual report. Conducted two (2) meetings with the External Auditors without the presence of executive directors and management. 3. Internal Audit Function The Group s internal audit function are outsourced to an independent professional firm, Crowe Horwath Governance Sdn Bhd, which reports to the Audit Committee and assists the Audit Committee in discharging its duties and functions by providing an independent and objective assessment on the organisation s management, operations records, accounting policies and internal controls. The Audit Committee adopted a risk based approach to identify any major deficiency in the internal controls and aligned the year s Internal Audit Plan to this approach. During the year under review, the Internal auditor: I. Reviewed the adequacy and effectiveness of internal controls over the business operations of the subsidiaries located in Johor Bahru and Penang. II. Followed up on findings and ensure that management action plans from previous reviews are carried out. The costs incurred on the outsourced internal audit function for the financial year ended 31 December 2015 was RM30, (2014 : RM 30,000.00) TERMS OF REFERENCE 1. Objective The principal objective of the Committee (as a committee of the Board) is to assist the Board in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting and internal control. 2. Reporting Responsibility The Committee will report to the Board on the nature and extent of the functions performed by it and may make such recommendations to the Board on any audit and financial reporting matters as it may think fit. 21

23 IFCA MSC BERHAD (Co. No T) AUDIT COMMITTEE REPORT (Cont d) 3. Composition of Audit Committee The Audit Committee ( Committee ) shall be appointed by the Board of Directors ( Board ), and shall fulfill the following requirements: I. The Committee shall consist of no fewer than three (3) members; II. III. All members of the Committee shall be non-executive director, with a majority of them being independent directors; All members of the Committee should be financially literate; IV. No alternate director shall be appointed as a member of the Committee; V. The appointment of a Committee member terminates when the member ceases to be a Director; VI. In the event that a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced below three (3), the Board shall, within three (3) months of that event, appoint such number of new members as may be required to make up the minimum of three (3) members; VII. The Chairman of the Committee shall be an Independent Non-Executive Director appointed by the Board and shall report on each meeting of the Committee to the Board; VIII. The Board shall review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference. 4. Authority of the Committee The Committee in the course of discharging its duties, is authorised to: I. investigate any matter within its terms of reference; II. have the Internal Audit Function report directly to the Committee; III. have the resources which are required, at the Company s expense to perform its duties including appointing an internal audit outsourcing party; IV. have full and unrestricted access to any information pertaining to the Company and its subsidiary companies for the purpose of discharging its functions and responsibilities; V. have direct communication channels with the external auditors, person(s) carrying out the internal audit function of activity and any employee(s) of the Group; VI. obtain outside legal or other independent professional advice it considers necessary and reasonable for the performance of its duties; VII. convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary; VIII. have the right to pass resolutions by a simple majority of vote from the Committee and that the Chairman shall have the casting vote should a tie arise; IX. The Chairman of the Audit Committee shall have access on a continuous basis to senior management, such as the Chairman, the Chief Executive Officer, the Head of Finance, the Head of Internal Audit and the external auditors in order to be keep informed of matters affecting the Company. 22

24 Annual Report 2015 AUDIT COMMITTEE REPORT (Cont d) 5. Duties and Responsibilities The duties and responsibilities of the Committee shall be: I. To consider the nomination or appointment of the external auditors, the terms of engagement, the audit fee and any questions of resignation or dismissal; II. To review the external auditors audit plan and scope of the annual audit or other examinations for the Company and the Group; III. To review the external auditors and/or internal auditors audit report, management letter and management s response; IV. To review with the external auditors with regard to problems and reservations arising from interim and final audits and any matter the external auditors may wish to discuss (in the absence of management where necessary); V. To determine the extent of cooperation and assistance given by the employees to the external auditors; VI. To review any financial information for publication, including the quarterly and annual financial statements before submission to the Board, focusing on: a. Any changes in or implementation of major accounting policies changes and practices b. Significant and unusual events c. Significant adjustments and issues arising from the audit d. The going concern assumption e. Compliance with approved accounting standards and other legal requirements VII. To review the adequacy of independence, competency, scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work; VIII. To review the internal audit program, processes, scope, and results of the audit program, processes or investigation undertaken and ensure that appropriate action is taken on the recommendations of the internal audit function; IX. To review the assessment of the performance of members of the internal audit function, approve the appointment or termination of Head of the internal audit function and provide resigning member an opportunity to submit his/her reasons for doing so and /or the performance of the outsource internal audit service provider; X. To review any related party transaction entered by the Group to ensure it is within normal commercial terms and any potential conflict of interest situations that may arise within the Company or Group including any transactions, procedure or course of conduct that raises questions of Management integrity; XI. To consider the major findings of internal investigations authorised by the Board and Management s response; XII. To report to the Bursa Malaysia Securities Berhad where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements; XIII. To review the adequacy of the Risk Management policies and procedures; XIV. To undertake any other activities as may be agreed to by the Committee and the Board. 23

25 IFCA MSC BERHAD (Co. No T) AUDIT COMMITTEE REPORT (Cont d) 6. Meetings and Quorum The Committee shall meet at least four (4) times a year or more frequently as circumstances dictate. The Committee shall convene a meeting if requested to do so by any member, the Board or the internal or external auditors to consider any matter within the scope and responsibilities of the Committee. The members of the Committee may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting. All decisions shall be decided on a show of hands or by a majority of votes. A resolution in writing signed and approved by a majority of the Committee and who are sufficient to form a quorum shall be valid and effective as if it had been passed at a meeting of the Committee duly called and constituted. The Head of Finance and Head of Internal Audit Function and representatives of the external auditors shall normally be invited to attend the meetings. The Committee may also invite non-member directors and employees to attend any of its meeting to assist in resolving and clarifying matters, where necessary. The Committee shall meet with the external auditors at least twice a year, without executive board members present. The majority of members present must be independent non-executive directors to form a Quorum and the number of independent non-executive directors shall not be less than two (2). 24

26 Annual Report 2015 Statement of Risk Management & Internal Control The Code requires listed companies to maintain a sound system of internal controls to safeguard shareholders investments and the Group s assets. The Board is pleased to include a statement on the state of the Group s risk management and internal control during the financial year under review. The statement is prepared in accordance with Paragraph 15.26(b) of the Listing Requirements, Paragraph 15.26(b) and released Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers. Board Responsibility The Board acknowledges its overall responsibility for reviewing the adequacy and integrity of the Group s system of internal controls, identifying principal risks and establishing an appropriate control environment and framework to manage risks. However, the effectiveness of the Group s system of internal control is designed to manage rather than to eliminate the risk of failure to achieve business objectives. Accordingly, the Group s system of internal control can only provide reasonable but not absolute assurance against material misstatement or loss. The Board either directly or via the Audit Committee, have an on-going process for identifying, evaluating and managing the significant risks of the Group with the management. The Board has received assurance from the Managing Director and Chief Executive Officer that the Group s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group. The Board is of the view that the risk management and internal control system in place for the year under review and up to the date of issuance of the financial statements is adequate and effective to safeguard the shareholders investment, the interests of customers, regulators, employees and the Group s assets. Audit Committee The Audit Committee reviews the adequacy and effectiveness of the Group s systems of internal control as well as reviewing issues identified by the internal auditors. The Audit Committee also ensures that there is continuous effort by management to address and resolve areas where control weaknesses exist. All audit findings, recommendations and management actions are rigorously deliberated upon during Audit Committee meetings before reporting to the Board. Quarterly reports to the Audit Committee track the progress towards completion of all corrective actions taken on issues highlighted by the Group Internal Audit. The Audit Committee reviews the quarterly results of the Group and if satisfied recommends adoption of such results to the Board. Internal Audit The Group outsources the internal audit function to an independent professional firm. The firm is appointed by Audit Committee and reports directly to the Audit Committee. Its role is to provide the Audit Committee with regular assurance on the continuity, integrity and effectiveness of the internal control system through regular monitoring and review of the internal control framework and management processes. The internal audit firm prepares audit plans for presentation to the Audit Committee for approval wherein the scope of work encompasses management and operational audit of functions in the Group. During the financial year under review, an internal audit and a follow-up review were performed on Human Resources Department and the area of Information Technology General Control. Recommendations were made to improve the system of internal controls to the Audit Committee on the mentioned areas. 25

27 IFCA MSC BERHAD (Co. No T) Statement of Risk Management & Internal Control (cont d) Other Key Internal Control Elements The Group has in place an organisational structure that is aligned to business and operational requirements, with clearly defined lines of accountability. Clear delegation of authority through well-defined limit of authority and approval. The Board meets on a regular basis to review the performance and operations of the Group. Active involvement by the Chief Executive Officer and Executive Director in the day-to-day business operations of the Group including weekly operational and management meetings to identify, discuss and resolve business and operational issues. Monthly review of management accounts by key personnel including the Chief Executive Officer and Executive Director. The management accounts are also presented to the Board and Audit Committee during the respective meetings on quarterly basis. Provision of training and development to enhance the competitiveness and capability of our staff members. Board Assurance and Limitation For the financial year under review, there were no significant internal control deficiencies or material weaknesses resulting in material losses or contingencies requiring disclosure in the Annual Report. The Board is of the view that the existing system of the internal control is adequate. Nevertheless, the Board recognises that the development of internal control system is an ongoing process. Therefore, in striving for continuous improvement, the Board will continue to take appropriate action plans to further enhance the Group s system of internal control. Review of the Statement by External Auditors The external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report of the Group for the year ended 31 December 2015 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and effectiveness of the risk management and internal control system. This statement is made in accordance with the resolution of the Board of Directors dated 19 April

28 Annual Report 2015 Corporate Social Responsibility IFCA Group believes that effective corporate social responsibility can deliver benefits to its business and, in turn, to its shareholders, by enhancing reputation and business trust, relationship with regulators, staff motivation and attraction to talent, customer preference and loyalty, the goodwill of local communities and long term shareholder value. The Group will always endeavor to discharge its corporate social responsibility diligently to the environment, the marketplace, its employees, the shareholders, the community and other stakeholders alike. BUSINESS ENVIRONMENT Although the Group does not operate in an environmentally sensitive business, we recognize its duty to minimize its impact on the environment. The Group has identified opportunities to reuse and recycle or minimize the resources it consumes as the Group believes in caring for the environment through efficient utilization and recycling of resources. During the financial year, the management encourages staff to recycle paper and reduce the storage of paper and documents. We also encourage paperless meetings. We educated the staff on the importance of energy conservation such as instilling good habits of switching off lights and air-conditioning during lunch time or when they are out from office. To maximize the benefits of ICT and to reduce papers consumption, the Group had been practicing e-leave and e-claims in its human resources administration. MARKETPLACE IFCA Group employees is expected to maintain the highest standards of propriety, integrity and conduct in all their business relationships and the Group is held to the same standard in its compliance with all applicable legal and regulatory requirements. We ensure that stakeholders are kept informed of the Group s performance and have open channels for dialogues during our annual general meetings and feedback on our corporate website. The Group will also support the market with good products, engaging in ethical procurement practices, and maintaining quality of its service and business offerings. WORKPLACE The Group considers it s dedicate and hardworking employees as the most valuable asset. We believe training and development is important in developing and upgrading skills, knowledge and attitudes to ensure optimal performance. We constantly provide in-house and external training programs to enhance and increase employees job-related skills, knowledge and experience. We also continually reward and recognize employees for their outstanding efforts and performance during the year. We strive to maintain a safe and healthy working environment for all the employees. 27

29 IFCA MSC BERHAD (Co. No T) DIVERSITY The Group currently does not have a policy on diversity of the workforce in terms of gender, age and ethnicity. However, the Board provides equal opportunity to suitable candidates who has the skills, experience, competency and other qualities regardless of gender. The profile of the Group s workforce as at 31 December 2015 are as follows: Age Group 20 to to to and above Grand Total Female Top Management Senior Management Others Male Top Management Senior Management Others Grand Total GENDER DIVERSITY 11.37% ETHNIC DIVERSITY 3.34% 62.54% 37.46% Female Male 1.51% 45.48% 38.29% Chinese Foreigner Indian Malay Other 28