Enriching Lives Around the World Iris Corporation Berhad (302232-X)
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IRIS CORPORATION BERHAD (302232-X) annual report 2012 enriching lives around the world IRIS CORPORATION BERHAD (302232-X) IRIS SMART TECHNOLOGY COMPLEX TECHNOLOGY PARK MALAYsiA BUKIT JALIL 57000 KUALA LUMPUR, MALAYsiA TEL +603 8996 0788 FAx +603 8996 0441 www.iris.com.my LIST OF CONTENTS CORPORATE REVIEW CORPORATE PROFILE 02 GLOBAL PRESENCE 03 CHAIRMAN’S STATEMENT 06 OPERATIONS REVIEW 14 GROUP FINANCIAL SUMMARY 24 CORPORATE INFORMATION 25 CORPORATE STRUCTURE 26 AWARDS AND RECOGNITION 27 PROFILE OF DIRECTORS 30 KEY MANAGEMENT TEAM 35 CORPORATE SOCIAL RESPONSIBILITIES 36 CALENDAR OF EVENTS 38 STATEMENT ON CORPORATE GOVERNANCE 42 AUDIT COMMITTEE REPORT 46 STATEMENT ON INTERNAL CONTROL 50 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 52 ADDITIONAL COMPLIANCE INFORMATION 53 FINANCIAL STATEMENTS DIRECTORS’ REPORT 56 STATEMENT BY DIRECTORS 63 STATUTORY DECLARATION 64 INDEPENDENT AUDITORS’ REPORT 65 STATEMENTS OF FINANCIAL POSITION 67 STATEMENTS OF COMPREHENSIVE INCOME 69 STATEMENTS OF CHANGES IN EQUITY 70 STATEMENTS OF CASH FLOWS 72 NOTES TO THE FINANCIAL STATEMENTS 74 OTHER INFORMATION STATISTICS ON SHAREHOLDINGS 146 NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING 156 STATEMENT ACCOMPANYING NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING 160 PROXY FORM IRIS is the preferred supplier of sustainable products and solutions that benefit the world’s citizens – our goal is to continually strengthen our positions in the sectors of trusted identification, payment and transportation, agriculture and food security, environment and renewable energy, and affordable, green building materials. As a leading technology innovator and integrator in increasingly competitive and demanding environments, we are fortifying our core competencies towards value- added innovations that increase efficiency, provide wider international reach and spur robust earnings growth. bringing solutions to life By designing innovative solutions to enrich lives around the world, IRIS is fast becoming a leading global IRIS Corporation Berhad, pioneer of provider of solutions for transportation the world’s first electronic passport and payments, food security and and national multi-application smart agro technology, waste management, card with the implementation of environment and renewable energy, the Malaysian ePassport in March property development and industrialised 1998 and MyKAD - the Malaysian building systems. Government Multi Purpose Card in April 2001, was founded in 1994. From its corporate headquarters in Kuala Within 8 short years, IRIS became a Lumpur, Malaysia, IRIS collaborates with public company with its listing on the its global network of industry partners ACE market of Bursa Malaysia. to deliver solutions that aim to add trust, simplicity, value and security to a An MSC-status technology innovator with growing portfolio of clients with diverse roots in trusted identification, IRIS is needs and concerns across the globe. CORPORATE actively building a sustainable business agenda which reflects its core values of PROFILE passion, agility, genuineness, innovative spirit and caring nature. Bahamas Canada NORTH AMERICA 02 03 19 nations 44.3 million PrOVIDED TRUSTED IDENTITY AS AT JUNE 2012, WE HAVE SOLUTIONS TO 19 COUNTriES DELIVERED MORE THAN acrOss VariOUS CONTINENTS 44.3 MILLION PIECES OF ePassPORT AND/OR INLAY TO 13 COUNTriES 57 million AS AT JUNE 2012, WE HAVE DELIVERED MORE THAN 57 175,500 MiLLION PIECES OF eID AND/OR 175,500 CONTacT/ CarD-basED DriVING LicENSES CONTacTLEss carD READErs SOLD TO 28 COUNTriES GLOBAL PRESENCE Bangladesh Bhutan Cambodia Malaysia Maldives Myanmar New Zealand South Korea Thailand EUROPE, MIDDLE EAST & AFRICA ASIA PACIFIC Bahrain Egypt Italy Nigeria Senegal Somalia Tanzania Turkey Iris CORPOraTION BERHAD ANNUAL REPORT 2012 BRINGING SOLUTIONS TO LIFE TRUSTED IDENTIFICATION PAYMENT AND TRANSPORTATION FOOD AND AGRO TECHNOLOGY EnVIRONMENT AND RENEWABLE EnERGY KOTO InDUSTRIALISED BUILDING SYSTEMS securing personal credentials Our ePassport, eVisa and eID products and solutions are securely identifying people around the world I am pleased to report 10 years of Excellence that IRIS Corporation On 25 July 2011, we celebrated the 10th anniversary of IRIS as a public Berhad (“IRIS”) has listed company. For the past decade, achieved another IRIS showed strong growth and is set successful financial year to continue this momentum of growth for the future. Our exponential growth in 2012. I am especially has been the result of our focus on proud of the way our core competencies; diversification into team worked together to technology related businesses and a significant global presence. We achieved drive increased revenue revenue growth of 12.9 times, profit and solid profitability before taxation growth of 6.8 times and in a competitive global Shareholders’ funds enhanced by 3 times as compared to year 2002. economic climate. Group Results CHAIRMAN’S As a result of the recent change in the Company’s financial year end from 31 STATEMENT December to 31 March, this report will encapsulate activities and results of a 15-month period, from 1 January 2011 to 31 March 2012. There is no basis for comparison this year as it is a one-off anomaly resulting from the change in the financial year-end (“FYE”). For the 15-month period ended 31 March 2012, IRIS once again delivered commendable results, achieving a revenue of RM483.8 million mainly by sustained demand for Trusted Identification and implementation of Automatic Fare Collection System (“AFC”) in Payment and Transportation. The Group’s performance was particularly strong in the overseas market, the 15 months overseas revenue increased to RM221.0 million from 12 months of RM124.4 million registered in FYE 2010. Growth was driven by delivery of new contracts secured in FYE 2011 such as Tanzania eID project & Turkey ePassport Inlays project and strong demand from existing contracts from Nigeria, Senegal, USA, Bahamas and Bangladesh. 06 07 TOP LEFT: IRIS eLABELS FOR PassPORT AND TraVEL Visa TOP riGHT: IRIS RENEWAL KIOSK FOR AUTOMATED PassPORT RENEwaL Our domestic market continues to Enriching Lives Around the reVENUE* provide us with a steady base of recurring World income. The 15 months domestic market At IRIS, we believe in a balanced, recognized revenue of RM262.8 million sustainable approach to our business by from 12 months of RM241.6 million pioneering new innovations and solutions registered in FYE 2010, the drop in to enrich the quality of life around the GROWTH comparative revenue was mainly due to world for our collective future. This core the completion of National Fuel Subsidy element is integrated throughout our value 12.9 times Project in FYE 2010. chain and new business ventures. The tag line is used for our 10-year anniversary Resulting from the higher revenue, IRIS annual report as it reflects IRIS’ passion, recorded a Profit before Tax of RM58.1 our first innovation to the world, ePassport. million and Profit after tax of MR 40.8 million. This significant improvement was The advent of the world’s first ePassport largely due to higher profit contributions from IRIS, heralds a global revolution in grOss prOfiT* from ePassport projects both domestic the issuance of secure travel documents, and international and our on-going cost border security, authentication of people, management exercise. and identity management. This single innovation demonstrates our passion and In line with the improved performance, ability to meet the demands of an evolving GROWTH profit attributable to shareholders digital society in an increasingly borderless grew to RM43.7 million, translating to and connected world. 8.3 times basic earnings per share of 2.91 sen. The 15-month financial period ended That same passion sparked the 31 March 2012 marks a truly exciting introduction of other value products that milestone for IRIS in its 10th anniversary increase convenience and trust. IRIS as a public listed company in Malaysia. innovations such as multi-application eID card, automated border control, smart devices, ePassport renewal kiosk, modern * 10-YEAR COMPARISON farming methodologies, renewable energy – A Comparison Between systems and green building materials Fy 2002 and Fy 2012 continue to transform the way we work, travel, bank, shop, and communicate. Iris CORPOraTION BERHAD ANNUAL REPORT 2012 BRINGING SOLUTIONS TO LIFE Enriching Lives Around the Corporate Developments World (Cont’d) Corporate proposals reported during the Our Rimbunan Kaseh Project : financial year under review were: Making Rural Space Sustainable is the demonstration of IRIS’ core values 1. On 23 May 2011, IRIS acquired 700 and our core competencies working in ordinary shares representing 70% of tandem to make a difference by doing Epoch Energy Technology Sdn. Bhd. things differently. Rimbunan Kaseh began (Formerly known as Ritz Ringgit Sdn. as a corporate responsibility pledge to Bhd.) of RM1.00 each for a total cash assist rural communities in improving consideration of RM700.00. their standard of living but has since evolved into a revenue generator for IRIS - 2. On 25 May 2011, IRIS Agrotech developing thriving farming communities in Sdn. Bhd., a subsidiary of IRIS many rural locations across the nation. had acquired 50 ordinary shares representing 50% of Ubud Tower Sdn. IRIS is extremely proud to pledge its total Bhd. of RM1.00 each for a total cash commitment to the Rimbunan Kaseh consideration of RM50.00. CHAIRMAN’S Project which addresses the National Key Result Areas (NKRA) of Government 3. On 6 June 2011, IRIS had acquired STATEMENT