table of contents - silverlake axissilverlake axis ltd 6 annual report 2012 financial highlights...

TABLE OF CONTENTS

02 Corporate Information

03 Customers Across Asia & Beyond

04 Chairman’s Statement

06 Financial Highlights

08 Operations and Financial Review

12 Board of Directors

18 Management Team

20 Corporate Governance Statement

28 Other Information

30 Financial Statements

121 Statistics of Shareholdings

123 Notice of Annual General Meeting

Enclosed Form of Proxy

2SILVERLAKE AXIS LTDANNUAL REPORT 2012

GOH PENG OOIGroup Executive Chairman

DR. KWONG YONG SINGroup Managing Director

YBHG. DATUK SULAIMAN BIN DAUDNon-Executive Director

ONG KIAN MINIndependent Non-Executive Director

YBHG. TAN SRI DATO’ DR. LIN SEE-YANIndependent Non-Executive Director

LIM KOK MINIndependent Non-Executive Director

REGISTERED OFFICE

Clarendon House2 Church StreetHamilton HM 11BermudaTel : 013 1441 295 5950Fax : 013 1441 292 4720

MAIN OFFICE

Lot 5.04, 5th FloorMenara 1, Faber TowersJalan Desa BahagiaTaman Desa58100 Kuala LumpurMalaysiaTel : 603 7983 2288Fax : 603 7983 6555

SHARE REGISTRAR

BERMUDA

Codan Services LimitedClarendon House2 Church StreetHamilton HM 11Bermuda

SHARE TRANSFER AGENT

SINGAPORE

Boardroom Corporate & Advisory Services Pte Ltd50 Raffles Place#32-01Singapore Land TowerSingapore 048623Tel : 65 6536 5355Fax : 65 6536 1360

JOINT COMPANY SECRETARIES

Tan Min-LiHoong Lai Ling

AUDITORS

Ernst & Young Kuala Lumpur, Malaysia Chartered Accountants Audit Partner : Phang Oy Lin (with effect from financial year ended 30 June 2012)

CORPORATE INFORMATION


CUSTOMERS ACROSS ASIA & BEYOND

The Group’s Silverlake Axis Software and Services Solutions are delivering operational excellence and enabling business transformations at over 100 organisations across Asia, including 40% of the top 20 largest banks in South East Asia.


CHAIRMAN’S STATEMENT

Dear Fellow Shareholders,On behalf of the Board of Directors, I am pleased to present to you the Annual Report of the Group for the financial year ended 30 June 2012.

A RECORd YEAR IN FY2012

I am pleased to report that the Group achieved a record financial performance both in terms of revenue and profitability in FY2012. Group revenue grew 31% to RM400.0 million and net profit attributable to shareholders increased 41% to RM162.3 million. These results confirmed our strategy in 2010 of acquiring the Silverlake Solutions Group and QR Group which broadened our suite of business enterprise software solutions and services for the financial services, retail, logistic industries and the digital economy. During the financial year, we had successfully completed and integrated the acquisition of Isis International Group (“ISIS”) to position us to extend and transform our payment and digital economy solutions capability.

Our record performance was broad based and growth was registered in all our 5 core business activities. With the record amount of software and implementation services contracts secured in 2010 and 2011, progressive work on these contracts resulted in approximately RM202 million being recognised under “Software licensing” and “Software project services” in FY2012. As the contracts were progressively rolled-out in the various countries, we also benefited from the sale of IBM computer hardware under “Sale of software and hardware products”. The recurrent “Maintenance and enhancement services” benefited from new maintenance contracts during the financial year.


CHAIRMAN’S STATEMENT (cont’d)

To reward shareholders for the record performance, the Board of Directors has recommended a final tax exempt cash dividend of 0.80 Singapore cents per share. Inclusive of this, the total dividend declared for FY2012 amounted to 1.90 Singapore cents per ordinary share, an increase of 65% over FY2011.

dIgITAl ECONOMY – SYMMETRY AT WORk

By now you would have noticed the phrase “Symmetry At Work” under our Silverlake logo. There has been considerable work done by well-known scholars and mathematicians on the principles and manifestations of symmetry. At Silverlake, we apply Group and Category theoretic thinking and practices for realising Symmetry At Work.

The highly competitive and connected market place has created a demand for Digital Economy Solutions to meet the increasingly dynamic and complex business requirements of businesses serving consumers across boundaries and industries. This convergence into a Digital Economy has created the need for adaptive, scalable and resilient business solutions which Silverlake has a proven track record of delivering and innovating. Silverlake’s ability to deliver and innovate has enabled our customers and business partners to achieve their objectives of connectedness, convergence and continuity in a digital economy ecosystem. We are well positioned to be the partner of choice to power the necessary transformations for fulfilling our existing and new customers’ digital economy ambitions.

PROSPECTS

In reviewing our prospects, I acknowledge the financial challenges currently faced by Europe. As there are no easy or quick solutions, we expect the global economic uncertainties to prevail for the rest of 2012. Fortunately for us, we conduct our businesses in Asia and most of the Asian economies are still expected to register growth in the second half of 2012. With financial institutions and major companies in Asia expected to continue investing in IT to maintain as well as improve on their competitive position, the Group would have ample business opportunities to pursue in the next 12 months.

Having recognised approximately RM202 million of Software licensing and Software project services in FY2012, the Group will continue to work on the software and implementation services contracts on hand in the new financial year FY2013. The Group will continue to benefit from the stable and growing recurrent revenue stream from maintenance and enhancement services. With the strong business flow, we have reasons to be optimistic of our business prospects in FY2013.

A WORd OF THANkS

The record performance in FY2012 was made possible by the dedication and hard work of our management and staff. On behalf of the Board, I would like to thank them for their efforts and also to encourage them to meet the challenges in FY2013 with confidence. I thank my fellow Directors for their continuous guidance and support during the year. I would also like to express my appreciation to all our customers, shareholders, bankers and business associates for their continuing support in FY2012.

Goh Peng OoiGroup Executive Chairman27 September 2012


FINANCIAL HIGHLIGHTS

Restated Financial Year Ended 30 June 2009 2010 2011 2012 1. Financial Results (RM million) Revenue 173.4 175.8 305.4 400.0 Gross Profit 106.0 110.3 182.8 217.5 EBITDA 96.6 85.7 145.0 190.7 Profit Before Tax 92.4 75.2 131.8 179.8 Net Profit 81.0 63.5 115.3 162.3

2. Financial Positions (RM million) Share Capital 151.3 151.3 151.3 151.3 Shareholders’ Fund 161.5 163.4 213.0 297.6 Total Assets 204.3 282.0 319.6 400.4

3. Financial Ratio Gross Profit Margin (%) 61% 63% 60% 54% Net Profit Margin (%) 47% 36% 38% 41% Return on Equity (%) 50% 39% 54% 55% Current Assets / Current Liabilities (Times) 2.5 1.3 2.1 3.1

4. Per Share (RM sen) Basic Earnings Per Share 3.82 3.04 5.50 7.72 Net Assets Per Share 7.72 7.81 10.13 14.18

5. Dividends (SGD cents) Dividends Per Share 0.60 1.70 1.15 1.90


450

400

350

300

250

200

150

100

50

0

173.

4

175.

8

305.

4

400.

02009 2010 2011 2012

250

200

150

100

50

0

106.

0

110.

3

182.

8

217.

5

100%

80%

60%

40%

20%

0%

Revenue (RM ‘m) Gross Profit (RM ‘m) Gross Profit Margin (%)

180

160

140

120

100

80

60

40

20

0

81.0

162.

3

350

300

250

200

150

100

50

0

161.

5

163.

4

213.

0

297.

6

Shareholders’ Fund (RM ‘m) Return on Equity (%)

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0

2.0

1.5

1.0

0.5

0

Net Profit (RM ‘m) Net Profit Margin (%)

Basic Earnings Per Share (RM sen) Dividends Per Share (SGD cents)

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%

47% 50%39%

54%55%

36% 38%41%

61% 63% 60%54%

3.823.04

5.50

7.72

0.60

1.70

1.15

1.90

63.5

115.

3

2009 2010 2011 2012

2009 2010 2011 2012 2009 2010 2011 2012

2009 2010 2011 2012 2009 2010 2011 2012

FINANCIAl HIgHlIgHTS (cont’d)


FINANCIAl PERFORMANCE REVIEW

OvERvIEw

FY2012 was a successful year as we move into an exciting and dynamic growth phase for the Group in powering the digital economy. Despite a challenging business environment clouded by global economic uncertainties, group revenue grew 31% to RM400.0 million and profit attributable to shareholders increased 41% to RM162.3 million. Our return on equity in FY2012 stood at 55%.

Since FY2010, the Group has made several acquisitions to broaden our suite of business enterprise software solutions and services offerings. This in turn has contributed to our steady growth. In FY2012, we completed the acquisition of Isis International Group (“ISIS”), an established digital economy enabler specialising in the payment and integration technology platform. The acquisition expanded the breadth and depth of our existing portfolio of software solutions and services with proven enterprise payment and integration platform capabilities.

REvENUE

Revenue for FY2012 was RM400.0 million, an increase of 31% over FY2011. In FY2012, software licensing, software project services and sale of software and hardware products recorded strong growth due to a thriving order book of software and implementation services contracts secured in 2010 and 2011.

Revenue from software project services and software licensing increased from RM98.4 million and RM51.4 million to RM139.0 million and RM63.3 million respectively due to the progressive work done on the software and implementation services contracts on hand. Sale of software and hardware products increased from RM8.0 million to RM33.3 million due to two large sales recorded during the financial year. Recurrent revenue from maintenance and enhancement services enjoyed steady growth from renewals and new maintenance contracts.

FY2012 REvENUE

RM400.0m

FY2012 GROSS PROFIT

RM217.5m

FY2012 NET PROFIT

RM162.3m

OPERATIONS & FINANCIAL REVIEW

“Group revenue grew 31% to RM400.0 million and profit attributable to shareholders increased 41% to RM162.3 million. Our return on equity in FY2012 stood at 55%. ”


PROFITABIlITY

With the increase in revenue, gross profit rose 19% to RM217.5 million in FY2012. Compared with FY2011, gross profit margin declined 6% due to a change in the revenue mix, with a significant increase in the contributions from the lower margin software project services and sales of software and hardware products.

Selling and distributions costs increased from RM7.2 million to RM7.8 million due to additional marketing expenses from the consolidation of ISIS. In contrast, administrative expenses declined 12% to RM33.4 million. Higher administrative expenses in FY2011 was due to a RM8.4 million charge on grant of shares awards pursuant to the Silverlake Axis Ltd. Performance Share Plan (“PSP”). The decrease was moderated by additional expenses from the consolidation of ISIS and unrealised foreign exchange loss.

The Group’s share of profit of associates of RM1.4 million in FY2012 compared favourably to the share of loss of associates of RM10.5 million in FY2011. The high share of loss of associates in FY2011 was mainly due to the loss from Unifisoft Holdings Ltd. arising from pre-IPO restructuring costs and share of loss from e-Petrol Silverswitch Sdn. Bhd. arising from the impairment of its intangible assets.

With the revenue growth, lower operating costs and share of profit from associate, net profit of the Group rose 41% to RM162.3 million with a corresponding improvement in net profit margin to 41%.

FINANCIAl POSITION

The Group continued to maintain a healthy financial position. Group operations generated healthy net cash inflows of RM138.2 million in FY2012. The Group recorded net increase in cash and cash equivalents of RM19.9 million after the payment of dividends and the acquisition of ISIS.

Boosted by the strong cash inflow from operations, cash and bank balances totaled RM97.6 million at the financial year end. While total current assets rose to RM253.5 million, total current liabilities declined to RM80.9 million, further improving the liquidity position.

Following the completion of the acquisition of ISIS on 1 July 2011, the fair values of identifiable assets and goodwill related to the acquisition lifted the Group’s non-current assets to RM146.9 million. Total non-current liabilities were also higher due to the remaining 25% cash consideration of RM11.2 million which is payable 24 months after the completion of the acquisition.

OPERATIONS & FINANCIAl REVIEW (cont’d)


OPERATIONS REVIEW

The Group is a leading provider of digital economy solutions and services for major organisations in Banking and Financial Services, Payments, Retail and Logistics businesses. The Group’s Silverlake Axis Software and Services Solutions are delivering operational excellence and enabling business transformations at over 100 organisations across Asia, including 40% of the top 20 largest banks in South East Asia.

The Group’s sources of revenue, in the order of their percentage contribution to total revenue in FY2012, are Maintenance and Enhancement Services, Software Project Services, Software Licensing, Sale of Software and Hardware Products and Credit Card Processing.

Maintenance and enhanceMent ServiceS

Since the acquisition and successful integration of the Silverlake Solutions Group in FY2010, maintenance and enhancement services have remained the key revenue contributor to the Group. In FY2012, maintenance and enhancement services contributed RM147.2 million, an increase of 12% compared with RM131.0 million in the previous financial year, and representing 37% of group revenue.

The revenue growth was attributed to new maintenance contracts and project enhancement contracts secured from existing customers in Malaysia, Indonesia and Singapore. In one of the project enhancement contracts, the Group assisted the customer to streamline and optimize technical resources, standardize processes to improve risk management as well as achieve high uptime for businesses. In addition, the Group was engaged by Singapore-based customers to implement enhancements to meet the G3 GIRO Transformation Project requirements.

The maintenance services provide the Group with a stable and steadily growing recurrent revenue stream. During FY2012, majority of the maintenance contracts were renewed. The Group also secured new maintenance contracts from major banks in Singapore and Brunei during the financial year.

OPERATIONS & FINANCIAL REVIEW (cont’d)

revenue contribution by business activities


Software Project ServiceS

Revenue from the Group’s second largest contributor, software project services, grew 41% to RM139.0 million in FY2012. The growth was attributed to the progressive work performed on the software and implementation services contracts secured in 2010 and 2011, including projects from the CIMB Group and a Singapore-based regional bank.

Besides completing the Thanachart-Siam City Bank and Hong Leong-EON Bank Merger Integration Projects, the Group also successfully completed SIBS Core Banking Projects for CIMB Thailand and CIMB Singapore in FY2012. In addition, the Group successfully implemented a SIBS standardisation project and commenced a SIBS Hubbing project for two Singapore-based regional banks during the financial year. During the financial year, the Group secured new software and implementation services contracts, including Malaysia Building Society Berhad’s Core Banking Project. Software LicenSing

Revenue from software licensing increased 23% to RM63.3 million in FY2012 and remained the third largest revenue contributor, accounting for about 16% of the Group’s total revenue. The revenue growth was driven by a thriving order book of software and implementation services contracts secured in 2010 and 2011.

SaLe of Software and hardware ProductS

The sale of software and hardware products compliments the software and implementation services operation. In FY2012, the Group recorded two large sales of hardware products related to software contracts with two banks in Malaysia. As a result, revenue of this business segment recorded the highest percentage growth of 316% from RM8.0 million in FY2011 to RM33.3 million in FY2012. This boosted the proportion of the business segment’s contribution from 3% to 8% of total revenue.

credit card ProceSSing

The Group’s credit card processing operation is conducted through Silverlake Japan Ltd., a wholly-owned subsidiary in Japan that provides outsource processing of credit cards issuing, acquiring and loans by its customers. In FY2012, revenue from credit card processing remained stable and had benefited from the strengthening of the Japanese Yen against Ringgit Malaysia.

OPERATIONS & FINANCIAL REVIEW (cont’d)


BOARD OF DIRECTORS

GOH PENG OOI Group Executive Chairman

Mr. Goh Peng Ooi was appointed as the

Group Executive Chairman of Silverlake

Axis Ltd (“the Company”) on 23 May 2006.

Prior to that, he was the Non-Executive

Chairman of the Company since 2002. He

founded Silverlake Group in 1989 and has

built it to become an established provider

of an advanced, state of the art universal

integrated banking solution. Silverlake

Group has grown by leaps and bounds

and at present, its offices and customers

are located in over 13 countries across

Asia Pacific. Silverlake Group has earned

many industry recognitions including the

‘IBM Star Stream Award’ in 1997, the ‘IBM

iSeries Director’s Award for the Best Global

On-Demand Banking Implementation’ in

2003, ‘IBM’s Asia Pacific Excellence Award

for Regional System Integrators (SIs) and

Independent Software Vendors (ISVs)’

in 2005, ‘IBM iSeries General Manager’s

Award’ in 2005 and ‘IBM Partner World

Beacon Awards’ in 2005 and 2006.

Mr. Goh was bestowed the Technology

Entrepreneur Award Malaysia 2005. This

Entrepreneur Award Program, organised

by Ernst & Young, serves to recognise

world-class entrepreneurs and provides a

benchmark for entrepreneurial excellence.

Prior to Silverlake Group’s formation, Mr.

Goh had worked with IBM Malaysia. He

held several senior positions over his 9 years

career at IBM, his last being Marketing

Manager for Banking and Finance Industry.

Mr. Goh has a keen interest in Science and

Mathematics and obtained his Bachelor

of Engineering (Major in Electronics) at

the University of Tokyo on a Mombusho

Scholarship in 1980.


BOARd OF dIRECTORS (cont’d)

dR. kWONg YONg SINGroup Managing Director

Dr. Kwong Yong Sin was appointed as

the Group Managing Director in 2005. He

was previously a Non-Executive Director

of the Company and the Managing

Director of Silverlake Corporation from

2003 to 2005 and Connectif Commerce

Sdn Bhd from 2001 to 2005. Prior to

joining Silverlake Corporation, he was a

Partner/Vice President of Ernst & Young

Global Consulting and Cap Gemini Ernst

& Young for 11 years from 1989 to 2000.

He was the Senior Manager and Head

of IT Consulting for Coopers & Lybrand

(South East Asia) from 1984 to 1989. Prior

to that, he was Senior Systems Analyst

for Pacific Power (Australia) from 1979

to 1983. He has more than 30 years of

experience in Information Technology,

Business Transformation and Solution

Implementation in Financial Services,

Utilities and Technology Industries. He has a

Bachelor of Commerce (Honours) from the

University of New South Wales (Australia)

and Ph.D in Information Systems. He is a

Certified Practicing Accountant Australia.



YBHG. DATUK SULAIMAN BIN DAUDNon-Executive Director

Datuk Sulaiman bin Daud was appointed

a Director in 2003. Datuk began his career

with Malaysian Tobacco Company Berhad

(now British American Tobacco Company

Berhad) in 1968 and was the Deputy Chief

Executive/Executive Director when he left in

1992. He was a Director of the Agricultural

Bank of Malaysia for 2 years and later

became the Chairman for the bank for four

terms of 8 years. Under his leadership, the

Bank was transformed into a corporatised

entity, today known as AGRO Bank. He was

the Chairman of Ranhill Power Berhad, and

Director of Malaysia Nasional Insurance

Berhad and Pharmaniaga Berhad. He

is currently a Director of Konsortium

Transnasional Berhad, Director of Wijaya

Baru Global Berhad and Chairman of

Malaysia Packaging Industry Berhad. He is

also Chairman and Director of a number of

private companies in Malaysia and abroad

in various industries. He has a Diploma of

Agriculture and MBA and is an Advanced

Management Graduate of Standford-

Insead in Fontainbleau, France. He now

spends a considerable part of his time

developing business prospects in Asean

and in the Middle East.


ONG KIAN MINIndependent Non-Executive Director

Mr. Ong Kian Min was appointed a

Director in 2003. Mr. Ong is concurrently

an Advocate and Solicitor practicing as

a consultant with Drew & Napier LLC, a

Senior Advisor with Alpha Advisory Pte.

Ltd., an independent corporate advisory

group providing advice to companies and

businesses in the Asia Pacific region and

CEO of Kanesaka Sushi Private Limited, a

company set up to invest in and operate

Japanese sushi restaurants in the region.

He was called to the Bar of England and

Wales in 1988, and to the Singapore

Bar the following year. In the course of

his 20 years of legal practice, his main

areas of practice have been corporate

and commercial law, such as, mergers

& acquisitions, capital markets, IPOs,

divestments, restructuring and corporate

finance. He is also an Independent Director

and Chairman of the Audit Committee of

a number of public companies listed on the

SGX-ST. He was awarded the President’s

Scholarship and Singapore Police Force

Scholarship in 1979, and holds a Bachelor

of Laws (Honours) external degree from

the University of London and a Bachelor

of Science (Honours) degree from the

Imperial College of Science & Technology

in England. Mr. Ong was an elected

Member of the Singapore Parliament from

1997 to 2011.



YBHG. TAN SRI DATO’ DR. LIN SEE-YANIndependent Non-Executive Director

Tan Sri Dato’ Dr. Lin See-Yan was

appointed a Director in 2003. Tan Sri

is currently an independent strategic

and financial consultant. Prior to 1998,

he was Chairman and Chief Executive

Officer of the Pacific Bank Group and for

14 years previously, Deputy Governor of

Bank Negara Malaysia (Central Bank of

Malaysia). Tan Sri is currently a member

of the Prime Minister’s Economic Council

Working Group and Governor of the Asian

Institute of Management in Manila as well

as Director of Monash University Sunway

Campus Malaysia. Tan Sri sits on the Boards

of a number of publicly listed and private

companies in Malaysia, Singapore and

Indonesia, and is also Chairman Emeritus

of Harvard University’s Graduate School

Alumni Association Council in Cambridge

(USA) and President of the Harvard Club of

Malaysia. He is also Professor of Economics

(Adjunct) at Universiti Utara Malaysia

and Professor (Adjunct) of Business &

International Finance at Universiti Malaysia

Sabah. Tan Sri is a British Chartered

Scientist and a UK Chartered Statistician.

He holds 3 post-graduate degrees from

Harvard University (including a Ph.D in

Economics) where he was a Mason Fellow

and Ford Scholar. Tan Sri is an Eisenhower

Fellow and Fellow of the IMF Institute in

Washington D.C., the Royal Statistical

Society in London, the Institute of Bankers

Malaysia, the Malaysia Insurance Institute,

the Malaysian Institute of Management,

and the Malaysia Economic Association.

He is also a Distinguished Fellow of the

Institute of Strategic and International

Studies in Malaysia.



LIM KOK MINIndependent Non-Executive Director

Mr. Lim Kok Min was appointed a Director

in 2006. He is currently Chairman of

both the Gas Supply Pte Limited and the

Singapore Institute of Directors. He is the

immediate past Chairman of the Building

and Construction Authority and of Senoko

Power Limited. He was the Executive

Deputy Chairman of LMA International

NV until end of December 2010, Deputy

Chairman of NTUC FairPrice Cooperative

until end of September 2011 and Vice

Chairman of the Singapore Institute of

Management until May 2012. He was

previously Managing Director of Pan-

United Corporation Limited, JC-MPH Ltd

and Chief Executive Officer of Cold Storage

Holding Limited. He now sits on the boards

and Audit, Remuneration and Nominating

Committees of several listed and non-

listed companies. He was also a former

member of the Securities Industry Council

and the Corporate Governance Council,

and a former director/Council Member

of both the Singapore International

Chamber of Commerce and the Singapore

Confederation of Industries. He is currently

Chairman of the OECD Asian Network on

Corporate Governance for State Owned

Enterprises and a member of the Singapore

Companies Act Review Committee. An

Economics Honours graduate from the

University of Malaya, Mr. Lim has more than

45 years of extensive senior management

and over 30 years of board experience in

the Asia-Pacific region.



MANAGEMENT TEAM

GOH PENG OOIGroup Executive Chairman

DR. KWONG YONG SINGroup Managing Director LEE CHEEN SIONG

EVP, SIBS Channel Product Development & Solutions

Mr. Lee joined the Group since 2000 and has been focusing and implementing the Branch Delivery and channels in the region. He was appointed as EVP in June 2012. Prior to this, he was the country manager for Silverlake Axis in Beijing, China. He graduated from Tunku Abdul Rahman College with a Bachelor of Science Degree in Information Systems from Campbell University, USA. Mr. Lee has 17 years of experience in the banking software industry.

LAU SIOW LINGSenior EVP, Structured Services Management and Operations

Ms. Lau joined the Group in 2010. She holds a degree in Computer Science from the University of Lousiana. She has 26 years of working experience in the IT industry, particularly in the areas of sales and marketing. She joined IBM Malaysia in 1985 and gained in-depth knowledge relating to the installation of IBM iSeries and SIBS. In 2001, she joined Silverlake as vice-president.

HIDETOSHI NEDAManaging Director of Silverlake Japan Limited

Mr. Neda joined the Group in 2009. He is responsible for the development of the Japanese credit card processing market. He is also responsible for the research and development of Process Re-engineering & Quality Control for the Group. In his 21 years’ experience in the Credit Card and Retail Banking industries, Mr. Neda played a lead role in the Japan credit card market by developing new credit card products, payment products and services. These business products were successfully implemented in MasterCard, Citibank N.A., Shinsei Bank, Tokyo Star Bank and SBI Group.


YAU SIEW MOISenior EVP, SIBS Core Product Development & Solutions

Ms. Yau joined the Group in 2006 and is responsible for the product development of SIBS. She was previously the Executive Vice President with Silverlake System Sdn Bhd. During her 21 years in the banking software industry, Ms. Yau has developed universal lending products which have been successfully implemented in banks across Asia Pacific and the Middle East.

SEE CHUANG THUANManaging Director of QR Technology - Retail and Logistics Management

Mr. See graduated from University Malaya in 1978 with a Bachelor of Science, majoring in mathematics, whereupon he joined IBM Malaysia and held various sales and management positions over 16 years. In 1994, Mr. See joined the QR Group as an executive director and in 2002, he took over the helm of QR Group, as its managing director.

SANJEEV DHAR Senior EVP, Digital Economy and Payment Solutions

Mr. Dhar joined the Group in 2011 and is responsible for the enterprise payment and integration technology platform business represented by the flagship EPOne & VCOS Solutions. He holds a Bachelor’s degree in Computer Technology. He was a Senior Vice President of Isis International Pte. Ltd. since 1996. He has over 17 years of experience in the banking technologies, financial systems and digital banking infrastructure.

WONG YOK KOON Senior EVP, SIBS Core and Integration Product Development & Solutions

Ms. Wong is responsible for the integration development of Silverlake Axis Integrated Banking Solution (SIBS). Prior to joining the Group in 2006, she was a Senior Executive Vice President with Silverlake System Sdn Bhd with responsibilities in the design and development of new solutions. Ms. Wong has over 20 years of experience in the banking software industry.

HOONG LAI LINGSenior EVP, Administration and Finance

Ms. Hoong joined the Group in 2002 and is responsible for overseeing the Group’s financial, accounting and administrative functions. She is a qualified accountant from the Malaysian Institute of Certified Public Accountants. She was previously an accountant with Silverlake System Sdn Bhd and trained in PricewaterhouseCoopers Malaysia.

MANAgEMENT TEAM (cont’d)


CORPORATE GOVERNANCE STATEMENT

Audit Remuneration Nominating Board of Directors Committee Committee Committee

Name No. of No. of No. of No. of No. of No. of No. of No. of meetings meetings meetings meetings meetings meetings meetings meetings held attended held attended held attended held attended

Goh Peng Ooi 5 5 - - - - 1 1

Dr. Kwong Yong Sin 5 5 - - - - - -

YBhg. Datuk Sulaiman bin Daud 5 5 - - - - 1 1

Ong Kian Min 5 5 4 4 1 1 1 1

YBhg. Tan Sri Dato’ Dr. Lin See-Yan 5 4 4 4 1 1 1 1

Lim Kok Min 5 5 4 4 1 1 1 1

All Directors are updated regularly on the changes in Company policies, board process, corporate governance and best practices in compliance with the relevant legislation and regulations including the Listing Manual of the SGX-ST.

The Board of Directors of Silverlake Axis Ltd (the“Board”) recognises the importance of corporate governance in ensuring greater transparency, protecting the interests of its shareholders as well as strengthening investors’ confidence in its management and financial reporting and is committed to maintaining a high standard of corporate governance within the Group in line with the Code of Corporate Governance issued by the Corporate Governance Council.

The Board adopts practices based on the Code of Corporate Governance 2005 (the “Code”) and the amendments to the Mainboard Listing Rules (“Listing Rules”) which came into effect on 29 September 2011 as announced by the Singapore Exchange Limited Securities Trading (“SGX-ST”) to strengthen corporate governance practices and foster greater corporate disclosure, where it is applicable and practical to the Group.

The main corporate governance practices that were in place during the financial year ended 30 June 2012 are set out below: BOARd MATTERS

Principle 1: The Board’s Conduct of Affairs

Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board holds meetings on a regular basis throughout the year to review the Group’s performance and approve the Group’s key strategic plans, as well as major investments and disposals, declarations of dividends, appointment of new Directors and funding decisions. The Board is also responsible for the overall corporate governance of the Group.

The Board conducts regular scheduled meetings and 5 meetings were held in the last financial year. When circumstances require, ad-hoc meetings are arranged. Board meetings are mostly conducted in Singapore and attendance by Directors was regular. The attendances of the Directors at meetings of the Board and Board Committees, as well as the frequency of such meetings, are as follows:

Attendance at Meetings


Principle 2: Board Composition and guidance

There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

The Board currently comprises six members, two Executive Directors, one Non-Executive Director and three Independent Non-Executive Directors. Key information regarding the Directors can be found under the Board of Directors’ profile section of this annual report. The independence of each Independent Director is reviewed by the Nominating Committee (“NC”) annually and upon notification by an Independent Director of a change in circumstances based on the criteria for independence as defined in the Code.

The current Board, with Independent Directors making up half of the Board, complies with the Code’s requirement that at least one-third of the Board should be made up of Independent Directors. Certain functions have been delegated to various Board Committees, in particular, the Audit Committee (“AC”), Nominating Committee (“NC”) and Remuneration Committee (“RC”), all of which are chaired by an Independent Director.

The NC is of the view that the Board has a strong independent element ensuring objectivity in the exercise of judgment on corporate affairs independently from the Management. The NC is also of the view that no individual or small group of individuals dominates the Board’s decision making process.

The Board is of the view that taking into account the nature and scope of the Company’s operations, the current board size of six Directors is appropriate.

The Board considers that its Directors represent a mix of industry knowledge, business network and extensive business and management experience. This balance is important in ensuring that the strategies proposed by the executive Management are fully discussed and examined, taking into account the long term interests of the Group.

To-date, none of the Independent Directors of the Company has been appointed as a Director of the Company’s principal subsidiaries. The Board and the Management are of the view that the current Board structures in the principal subsidiaries are well organized and constituted.

The Board and the Management will from time to time review the Board structures of the principal subsidiaries and will make an appropriate corporate decision to consider the appointment of the Independent Director into the principal subsidiaries.

Principle 3: Role of Chairman and Managing director

There should be a clear division of responsibilities at the top of the company – the working of the Board and the executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

Mr. Goh Peng Ooi is the Group’s Executive Chairman and Dr. Kwong Yong Sin is the Group’s Managing Director, responsible for the day-to-day management of the Company. The Board believes that a division of responsibility between the Chairman and the Managing Director is necessary for the Company. The Chairman assumes responsibility for the management of the Board and the Managing Director is the most senior executive in the Company and bears executive responsibility over the business decisions set by the Board and operational decisions of the Group. In respect of the Board meetings, the Chairman ensures that Board meetings are held regularly. The agenda is set by the Managing Director and approved by the Chairman. The Chairman and the Managing Director review Board papers before they are presented to the Board and ensure that the Board members are provided with complete, accurate and timely information. Mr. Goh and Dr. Kwong are not related.

The Board is of the view that having segregated the role of the Chairman of the Board and the Managing Director, as well as having the AC, NC and RC chaired by an Independent Director, there is sufficient balance of power and authority on the Board. The Board is also of the view that, although the Chairman and the Managing Director are both part of management, it is not necessary at present to appoint a lead independent director as the independent directors, who form half the Board, are able to ensure objectivity and independence in the Board’s deliberations and decisions.

CORPORATE gOVERNANCE STATEMENT (cont’d)


Principle 4: Board Membership

There should be a formal and transparent process for the appointment of new directors to the Board.

The Company believes that Board renewal must be an ongoing process, to ensure good governance and to maintain relevance to the business and the changing needs of the Company. The Company’s Bye-Laws require one-third of Directors (excluding the Managing Director) to retire and be subjected to re-election by the shareholders at every Annual General Meeting (“AGM”). In other words, no Director shall stay in office for more than 3 years without being re-elected by the shareholders except for the Managing Director who is not required to submit himself for retirement and re-election.

The NC has recommended that the Directors retiring by rotation under the Bye-Laws at the forthcoming AGM be nominated for re-election and the Board has accepted the recommendation.

The NC currently comprises Mr. Ong Kian Min, Mr. Goh Peng Ooi, YBhg. Datuk Sulaiman bin Daud, YBhg. Tan Sri Dato’ Dr. Lin See-Yan and Mr. Lim Kok Min, with Mr. Ong Kian Min as the Chairman. Mr. Ong Kian Min, YBhg. Tan Sri Dato’ Dr. Lin See-Yan and Mr. Lim Kok Min are Independent Directors.

The responsibilities of the NC are to (i) review the nomination for appointments and re-appointments of members of the Board and the various Board Committees for the purpose of proposing such nomination to the Board for approval having regard to the individual’s experience, contributions and performance, (ii) determine annually whether or not a Director is independent, (iii) assess on whether or not a Director is able to and has been adequately carrying out his duties as a Director, and (iv) oversee the appointment and induction process of new Directors.

New directors are normally appointed by way of a Board Resolution, after the NC has approved their nomination. The NC will consider the Company’s current Board in term of its size, composition, collective skills and experience and diversity. Potential candidates are selected through internal resources, referrals from existing Directors and/or external search. Candidates should possess relevant experience and have the calibre to contribute to the Group and its businesses, and will complement the skills and competencies and attributes of the existing Board and the requirements of the Group. The candidate must be a person of integrity and must be able to commit sufficient time and attention to the affairs of the Company, especially if he is serving on multiple Boards.

Principle 5: Board Performance

There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

The NC will use its best efforts to ensure that Directors appointed to the Board possess the relevant background, experience and knowledge to enable balanced and well-considered decisions to be made.

A formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board will be undertaken by the NC annually based on the performance criteria approved by the Board. The assessment is based on criteria such as relationship with the Company, experience in being a director and various competencies and knowledge and wealth of experience. The Board’s performance will also be reviewed informally by the NC, with inputs from the other Board members and the Managing Director.

Principle 6: Access to Information

In order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis.

In order to ensure that the Board is able to fulfill its responsibilities, the Management is required to provide complete and adequate information to the Board in a timely manner on affairs and issues that require the Board’s decision as well as ongoing reports relating to the operational and financial performance of the Company and the Group.



The Board has separate and independent access to the Senior Management and the Company Secretary at all times. Should Directors, whether as a group or individually, need independent professional advice, a professional advisor will be appointed upon direction by the Board and approved by the Managing Director, to render the advice. The cost of such professional advice will be borne by the Company.

The Company Secretary attends all board and Board Committees’ meetings and is responsible for the compliance of the board procedures. It is the Company Secretary’s responsibility to ensure that the Company complies with all rules and regulations that are applicable to the Company.

REMUNERATION MATTERS

Principle 7: Procedures for developing Remuneration Policies

There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

Principle 8: level and Mix of Remuneration

The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

Principle 9: disclosure on Remuneration

Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.

The RC was established to review the remuneration of the Executive Directors and key executives of the Company and to provide a greater degree of objectivity and transparency in determining the remuneration of the Executive Directors and key executives.

The RC currently comprises YBhg. Tan Sri Dato’ Dr. Lin See-Yan, Mr. Ong Kian Min and Mr. Lim Kok Min, all of whom are Independent Non-Executive Directors, with YBhg. Tan Sri Dato’ Dr. Lin See-Yan as Chairman of the RC.

The RC will review and recommend to the Board a framework of remuneration for the Directors and key executives, and determine specific remuneration packages for the Chairman and the Managing Director. The recommendations of the RC should be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind are covered by the RC.

The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the RC will take into consideration industry practices and norms in compensation in addition to the Company’s relative performance to the industry and performance of the individual Directors. No Director will be involved in deciding his own remuneration.

The Executive Directors have entered into service agreements with the Company. The service agreement covers the terms of employment, specifically salary and other benefits. The remuneration of Non-Executive Directors is determined by his contribution to the Company, taking into account factors such as effort and time spent as well as his responsibilities on the Board. The Board will recommend the remuneration of the Non-Executive Directors for shareholders’ approval at the AGM.

directors’ Remuneration

The Executive Directors’ remuneration consists of their salary, performance shares allowances and benefits-in-kind. All Directors’ fees are subject to the approval of the shareholders at the AGM.



The basis of allocation of the number of share options to the Directors takes into account the Directors’ contributions and his additional responsibilities at Board Committees. During the financial year, no share options were granted to any of the Directors.

The band of remuneration of each individual Director and the mix of remuneration by percentage (%) for the financial year under review are as follows:

Base/Fixed Salary Directors Fees Other Benefits(1) TotalName (%) (%) (%) (%)

S$250,001 to S$500,000 Dr. Kwong Yong Sin 86 9 5 100 Below S$250,000 Goh Peng Ooi 51 42 7 100YBhg. Datuk Sulaiman bin Daud - 100 - 100Ong Kian Min - 100 - 100YBhg. Tan Sri Dato’ Dr. Lin See-Yan - 100 - 100Lim Kok Min - 100 - 100

Note:(1) Other benefits are inclusive of benefit-in-kind.

Remuneration of key Employees

Currently, there are eight key executives (who are not Directors of the Company) in the Group. The details of remuneration paid to the eight key executives for the financial year under review are as follows:

S$250,001 to S$500,000Wong Yok KoonYau Siew MoiHidetoshi Neda

Below S$250,000Lau Siow LingSee Chuang ThuanHoong Lai LingSanjeev DharLee Cheen Siong

There is no employee in the Group who is an immediate family member of the CEO or any other Directors of the Company.

Performance Share Plan

The Silverlake Axis Ltd Performance Share Plan (“PSP”) was approved by the Company’s shareholders at the Special General Meeting held on 28 October 2010 under which awards (“Awards”) of fully-paid shares will be issued free of charge to eligible employees and Non-Executive Directors of the Company and its subsidiaries, provided certain prescribed performance targets are met.

The aggregate number of shares which may be available for Awards under the PSP, when aggregated with the aggregate number of shares available under any other share-based schemes of the Company, will not exceed 5% of the total issued shares of the Company (excluding treasury shares) from time to time. The PSP shall continue in force at the discretion of the PSP Committee, subject to the maximum period of 10 years commencing on 28 October 2010. The PSP Committee comprises Mr. Goh Peng Ooi, YBhg. Tan Sri Dato’ Dr. Lin See-Yan, Mr. Ong Kian Min and Mr. Lim Kok Min.

During the financial year, no PSP shares were awarded.



ACCOUNTABILITY AND AUDIT

Principle 10: Accountability

The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.

The Board believes that it should promote best practices in order to build an excellent business for the shareholders as they are accountable to shareholders for the Company’s and the Group’s performance.

The Board is mindful of its obligation to provide timely and full disclosure of material information in compliance with the statutory reporting requirements. Price sensitive information is first publicly released, after the review by the Board, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Since FY2004, the Company has adopted quarterly reporting as required by the Listing Manual of the Singapore Exchange Securities Trading Limited. Financial results and annual reports will be announced or issued within legally prescribed periods.

Principle 11: Audit Committee

The Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties.

The Audit Committee (“AC”) is currently made up of three Independent Non-Executive Directors, all of whom have the appropriate accounting experience or related financial management expertise. Mr. Ong Kian Min chairs the AC. The other two members are YBhg. Tan Sri Dato’ Dr. Lin See-Yan and Mr. Lim Kok Min.

The AC holds periodic meetings and reviews primarily the following, where relevant, with the Executive Directors and External Auditors:

(a) review issues of accounting policies and presentation for external financial reporting;(b) review with External Auditors on their audit plans;(c) review the External Auditors’ reports and the letter to Management and Management’s response;(d) review the assistance given by the Management to the External Auditors;(e) review the scope and results of the internal audit function;(f) review the quarterly, half-yearly and full year financial statements of the Company and the Group, including announcements

relating thereto before their submission to the Board of Directors for approval;(g) nominate External Auditors for appointment;(h) review the Group’s compliance with such functions and duties as may be required under the relevant statutes or the SGX-ST’s Listing

Manual and by such amendments made thereto from time to time;(i) review interested person transactions; and(j) review the remuneration packages of employees who are related to the Directors and/or substantial shareholders.

In addition to the above, the AC will meet with the External Auditors, in the absence of the Management at least once a year. The AC has the power to conduct or authorise investigations into any matters within its terms of reference. The AC also has full access to and the co-operation of the Management. The External Auditors have unrestricted access to the AC.

The AC has incorporated a whistle blowing policy into the Company’s internal control procedures to provide a channel for staff to report in good faith and in confidence, without fear of reprisals, concerns about suspected fraud, corruption, dishonest practices or other similar matters. The objective of the policy is to ensure an independent investigation of such matters and for appropriate follow-up action.

The Company’s External Auditors carry out, in the course of their annual statutory audit, a review of the effectiveness of the Company’s internal controls, which will include financial, operational and compliance controls, to the extent of the scope of audit as laid out in the audit plan. Material non-compliance and internal control weaknesses noted during the audit and the auditors’ recommendations to address such non-compliance and weaknesses are reported to the AC. Thereafter, the recommendations by the External Auditors are followed up by Management.

CORPORATE GOVERNANCE STATEMENT (cont’d)


The AC has reviewed the independence of the Company’s external auditors and is satisfied with the independence and objectivity of the external auditors. The aggregate amount of fees paid to the external auditors of the Company and subsidiaries for audit services FY2012 was RM744,000. The non-audit services provided by the Company’s external auditors for the financial year ended 30 June 2012 relates to tax services and advisory services in relation to contract with HNA Group Co., Ltd., and fees paid amounted to RM182,877.

Both the AC and Board have reviewed the appointment of different auditors for its subsidiaries and/or significant associated companies and are satisfied that the appointment of different auditors would not compromise the standard and effectiveness of the audit of the Company. The Company is in compliance with Rule 712 and Rule 715 of the Listing Rules in relation to the appointment of its auditor and in compliance with Rule 716 of the Listing Rules in relation to its independent auditors.

The AC has recommended the re-appointment of Messrs Ernst & Young as auditors of the Company to the Board.

Principle 12: Internal Controls

The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

Although the Board acknowledges that it is responsible for the overall internal control framework, it also recognises that no cost effective internal control system will preclude all errors and irregularities. A system is designed to manage rather than to eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The AC, on behalf of the Board, has reviewed the effectiveness of the internal control system put in place by the Management and is satisfied that there are adequate internal controls in the Company.

Based on the internal controls established and maintained by the Group, work performed by the internal auditors and external auditors (in the course of their annual statutory audit), and reviews performed by the Management and the Board, the Board with the concurrence of the AC, is of the opinion that the Group’s internal controls, addressing financial, operational and compliance risks, which the Group considers relevant and material to its operations, were adequate for the financial year ended 30 June 2012.

Principle 13: Internal Audit

The company should establish an internal audit function that is independent of the activities it audits.

The Company has an internal audit function that is responsible for reviewing, monitoring and assessing the system of internal control and is independent of activities it audits. The Internal Auditors team is expected to meet the standards set by nationally or internationally recognized professional bodies.

The Internal Auditors review the effectiveness of the key internal controls, including financial, operational and compliance controls on an ongoing basis. The Internal Auditors report directly to the AC. The AC reviews the internal audit plan, the scope and findings of internal audit procedures.

Recognising the importance of the internal audit function, the AC believes that the Company’s current internal audit function is adequate and will continue to assess, procure and allocate resources for the discharge and performance of this role.

Risk Management

The Company regularly reviews and improves its business and operational activities to take into account the risk management perspective. The Company seeks to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The Company reviews all significant control policies and procedures and highlights all significant matters to the AC.



COMMUNICATION WITH SHAREHOldERS

Principle 14: Communication with Shareholders

Companies should engage in regular, effective and fair communication with shareholders.

Principle 15: greater Shareholder Participation

Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

The Company recognises the importance of regular, effective and timely communication with the shareholders.

The Company does not practice selective disclosure. In line with continuous obligations of the Company pursuant to the SGX-ST’s Listing Manual, it is the Board’s policy that all shareholders should be equally informed, on a timely basis, of all major developments that will or expect to have impact on the Company or the Group.

Shareholders are encouraged to attend the AGM to stay informed of the Company’s goals and strategies and to ensure a high level of accountability. Notice of AGM will be dispatched to shareholders, together with explanatory notes or a circular on items of special business, on a timely basis in accordance with the legal requirements. The Board welcomes questions from shareholders who have an opportunity to raise issues either informally or formally before or at the AGM. The Chairmen of the Audit, Remuneration and Nominating Committees, will be available at the meeting to answer those questions relating to their work.

The Board is satisfied that shareholders have been given the opportunity to participate effectively and to vote at AGMs.

dEAlINgS IN SECURITIES

The Company has adopted practices in relation to dealings in the Company’s securities pursuant to the SGX-ST’s Listing Manual that are applicable to all its officers. Its officers are not allowed to deal in the Company’s shares during the period commencing two weeks before the announcement of the Group’s quarterly results and one month before the announcement of the Group’s full year results and ending on the date of the announcement of the results.

Directors and executives are also expected to observe insider trading laws at all times even when dealing with securities within the permitted trading period.



1. RECURRENT INTERESTEd PERSON TRANSACTIONS OF A REVENUE OR TRAdINg NATURE

In compliance with Rule 920 of the SGX-ST’s Listing Manual, the aggregate value of recurrent interested person transactions of revenue or trading nature conducted during the financial year ended 30 June 2012 by the Group in accordance with the shareholders’ mandates were as follows:

Aggregate value of all interested person transactions during the financial year under review Aggregate value of all interested (excluding transactions less than person transactions conducted SGD100,000 and transactions under shareholders’ mandate conducted under shareholders’ pursuant to Rule 920 (excluding Name of interested person mandate pursuant to Rule 920) transactions less than SGD100,000) 01-07-2011 to 30-06-2012 01-07-2011 to 30-06-2012 RM RM

Companies associated to Mr. Goh Peng Ooi (“Silverlake Entities”)

- Old Mandates (1) - Revenue from Silverlake Entities - 3,299,549 - New Mandates (2) - Revenue from Silverlake Entities - 60,972,277 - Service fees to Silverlake Entities - (69,013,770) - Ancillary Transactions (3) - Revenue from Silverlake Entities - 10,199,741 - Service fees to Silverlake Entities - - - Non-Mandate (4) - Revenue from Silverlake Entities 315,299 -

(1) Old Mandates refers to the Master License Reseller Agreement (“MLRA”), Master Services Agreement (“MSA”) and Master Reseller Agreement (“MRA”) Shareholders’ Mandates for Interested Person Transactions approved by the shareholders on 31 October 2007.

(2) New Mandates refers to the Master License Agreement (“MLA”) and Master Services Agreement (“MSA”) Shareholders’ Mandates for Interested Person Transactions approved by the shareholders on 24 October 2008.

(3) The Ancillary Transactions were approved by the shareholders at the Company’s Special General Meeting on 28 January 2010. Under the Restructuring Arrangement, pending the novation and/or assignment of SSB Contracts to the Silverlake Solutions Limited and its subsidiaries (“SSB Group”), Silverlake Entities and Silverlake Innovation Parties Sdn. Bhd. and its subsidiaries (“SIP Group”) are required to hold all monies and benefits arising under the applicable SSB Contracts as bare trustee for the SSB Group and to remit such monies and benefits to the SSB Group in accordance with the terms of the Restructuring Arrangements.

(4) The Non-Mandate revenue was revenue from the Annual Maintenance Agreement between QR Group and Silverlake Entities which was signed before the acquisition of the QR Group and was effective until 30 June 2012.

OTHER INFORMATION


2. MATERIAl CONTRACTS

There were no material contracts including contracts relating to a loan entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interest except as disclosed in the financial statements.

3. dISClOSURES IN RElATION TO THE COMPANY’S UNdERTAkINgS TO THE SgX-ST

In accordance with its terms of reference and undertakings given to the SGX-ST, the Audit Committee has reviewed all Interested Person Transactions between the Company and Silverlake Entities and is satisfied that the Interested Person Transactions comply with the shareholders’ mandates granted by the shareholders at the Annual General Meeting of the Company held on 18 October 2011.

The ageing of amounts owing from the Silverlake Entities as at 30 June 2012 was as follows:

Name of related parties Total Due 0-30 days 31-90 days 91-180 days 181-360 days > 360 days RM RM RM RM RM RM Transactions conducted under the New Mandates: Silverlake Entities (1) 22,411,894 22,411,894 - - - -

Ancillary Transactions

Silverlake Entities (2) 2,877,065 2,877,065 - - - -

Non-trade Transactions Silverlake Entities 4,254 4,254 - - - -

Grand Total 25,293,213 25,293,213 - - - -

(1) The Audit Committee confirms that collections from the Silverlake Entities were within the mandated terms.

(2) Under the Restructuring Arrangement, pending the novation and/or assignment of SSB Contracts to the SSB Group, Silverlake Entities and SIP Group are required to hold all monies and benefits arising under the applicable SSB Contracts as bare trustee for the SSB Group and to remit such monies and benefits to the SSB Group in accordance with the terms of the Restructuring Arrangements.

OTHER INFORMATION (cont’d)

FINANCIAL STATEMENTS

32 Directors’ Report

35 Statement By Directors

36 Independent Auditors’ Report

37 Consolidated Income Statement

38 Consolidated Statement of Comprehensive Income

39 Statement of Financial Positions

41 Consolidated Statement of Changes in Equity

43 Consolidated Statement of Cash Flows

45 Notes to the Financial Statements


The directors are pleased to present their report together with the audited consolidated financial statements of Silverlake Axis Ltd. (the Company) and its subsidiaries (collectively, the Group) and the statement of financial position of the Company for the financial year ended 30 June 2012.

1. Directors

The directors of the Company in office at the date of this report are:

Goh Peng Ooi Dr. Kwong Yong Sin Ong Kian Min YBhg. Datuk Sulaiman bin Daud YBhg. Tan Sri Dato’ Dr. Lin See-Yan Lim Kok Min

2. ArrAngementtoenAbleDirectorstoAcquireshAres

Except as disclosed in the financial statements, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares of the Company or any other body corporate.

3. Directors’interestsinshAres

The following directors, who held office at the end of the financial year, had an interest in shares of the Company and its related corporations as stated below:

Direct interest Deemed interest At the At the At the At the beginning of end of beginning of end of

Name of director financial year financial year financial year financial year

Ordinary shares of the CompanyGoh Peng Ooi - - 1,570,236,346 1,589,636,346Dr. Kwong Yong Sin 6,810,000 6,810,000 300,000 300,000

Ordinary shares of the holding company (Intelligentsia Holding Ltd.)

Goh Peng Ooi 3,882,254 3,882,254 - -

There was no change in any of the abovementioned interests between the end of the financial year and 21 July 2012.

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares or share options of the Company, or of related corporations, either at the beginning of the financial year, or at the end of the financial year.

4. Directors’contrActuAlbenefits

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

DIRECTORS’ REPORT


5. significAnteventsDuringthefinAnciAlyeAr

Details of significant events are disclosed in Note 34 to the financial statements.

6. shAreoptionscheme

The ESOS Scheme in respect of unissued ordinary shares in the Company was approved by the shareholders on 9 January 2003 in conjunction with the Company’s listing on the Singapore Exchange Securities Trading Limited. The ESOS Scheme became effective on 9 January 2003 for a duration of 10 years, terminating on 9 January 2013.

The principal features of the ESOS Scheme are as follows:

(a) Eligible persons are confirmed full-time employees of the Company, its subsidiaries and associates and the ultimate holding company and its subsidiaries, who have attained the age of 21 years, independent non-executive directors of the Company and executive directors of the Company, its subsidiaries and associates and the ultimate holding company and its subsidiaries.

(b) The ESOS Scheme is administered by the ESOS Committee comprising three directors of the Company, namely Mr. Ong Kian Min, YBhg. Datuk Sulaiman bin Daud and YBhg. Tan Sri Dato’ Dr. Lin See-Yan.

(c) The maximum number of new shares to be offered shall not exceed 5% of the total issued share capital of the Company (excluding treasury shares) from time to time. The maximum number of shares available to Intelligentsia Holding Ltd. (ultimate holding company) and its subsidiaries is 20% of the shares available under the ESOS Scheme.

(d) The option price shall be the price equal to (“Market Price Option”) or not more than 20% discount (“Incentive Option”) to the average of the prices for the last five consecutive days immediately preceding the grant of the option.

(e) Each option shall be exercisable, in the case of a Market Price Option, from the 1st anniversary to the 10th anniversary of the offering date. In the case of Incentive Option, the option shall be exercisable from the 2nd anniversary to the 10th anniversary of the offering date. In the case of persons not holding a salaried office, the option shall expire on the 5th anniversary for both the Market Price and Incentive Option.

(f) Shares arising from the exercise of options pursuant to the ESOS Scheme are subject to the Memorandum and Bye-Laws of the Company and rank pari passu in all respect with the then existing issued shares.

(g) The ESOS Scheme shall continue in operation for a maximum of 10 years commencing on the date on which the ESOS Scheme is adopted by the Company in the general meeting, which was held on 9 January 2003, subject to any extension as may be approved by the shareholders in general meeting and the relevant authorities.

There were no options granted in the current and previous financial years.

Directors’report(cont’d)


7. performAnceshAreplAn

The Silverlake Axis Ltd Performance Share Plan (“PSP”) was approved by the Company’s shareholders at the Special General Meeting held on 28 October 2010 under which awards (“Awards”) of fully-paid shares will be issued free of charge to eligible employees and non-executive directors of the Company and its subsidiaries, provided certain prescribed performance targets are met.

The aggregate number of shares which may be available for Awards under the PSP, when aggregated with the aggregate number of shares available under any other share-based schemes of the Company, will not exceed 5% of the total issued shares of the Company (excluding treasury shares) from time to time. The PSP shall continue in force at the discretion of the PSP Committee, subject to the maximum period of 10 years commencing on 28 October 2010. The PSP Committee comprises Mr. Goh Peng Ooi, YBhg. Tan Sri Dato’ Dr. Lin See-Yan, Mr. Ong Kian Min and Mr. Lim Kok Min.

There were no PSP shares awarded in the current financial year. During the previous financial year, 10,250,000 PSP shares were awarded and vested on 21 January 2011, of which 6,250,000 shares were awarded to a Director, Dr. Kwong Yong Sin.

Except as disclosed above, no Directors or employees of the Group have received 5% or more of the total number of shares available under the PSP. Details of the PSP are disclosed in Note 20(e) to the financial statements.

8. treAsuryshAres

During the financial year, the Company purchased 3,636,000 shares pursuant to the share purchase mandate approved by shareholders on 18 October 2011. These shares were acquired by way of market acquisition for a total consideration of RM3,107,654 and are held as treasury shares by the Company. Further details are disclosed in Note 20(c) to the financial statements.

9. AuDitcommittee(“Ac”)

Information on the functions and activities of the AC are disclosed in the Corporate Governance Statement.

10. AuDitors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

On behalf of the board of directors:

Goh PeNG ooi Dr. KwoNG YoNG SiN DIRECTOR DIRECTOR

27 September 2012

Directors’report(cont’d)


In the opinion of the directors,

(i) the consolidated financial statements of the Group and the statement of financial position of the Company together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 30 June 2012 and the results of the business, changes in equity and cash flows of the Group for the year then ended, and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the board of directors:

Goh PeNG ooi Dr. KwoNG YoNG SiNDIRECTOR DIRECTOR

27 September 2012

STATEMENT BY DIRECTORS


INDEPENDENT AUDITORS’ REPORT tomembersofsilverlAkeAxisltD.

reportonthefinAnciAlstAtements

We have audited the accompanying consolidated financial statements of Silverlake Axis Ltd. and its subsidiaries (collectively, the Group), set out on pages 37 to 120, which comprise the statement of financial positions of the Group and the Company as at 30 June 2012, the consolidated statement of changes in equity and consolidated income statement, consolidated statement of comprehensive income and consolidated statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair consolidated income statement and statements of financial positions to maintain accountability of assets.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2012 and the results, changes in equity and cash flows of the Group for the year ended on that date.

othermAtters

This report is made solely to the members of the Company, as a body, and for no other purpose. We do not assume responsibility to any other person for the content of this report.

erNSt & YouNGAF: 0039Chartered AccountantsKuala Lumpur, Malaysia27 September 2012


CONSOLIDATED INCOME STATEMENTforthefinAnciAlyeArenDeD30June2012

2012 2011 Note rM rM

revenue 3 400,016,887 305,380,128 Cost of sales (182,519,850) (122,560,760)

Gross profit 217,497,037 182,819,368 other items of income Interest income 4 616,026 325,479 Other income 5 1,791,107 4,457,969 other items of expenses Selling and distribution costs (7,793,757) (7,201,105) Administrative expenses (33,445,574) (37,900,055) Finance costs 6 (265,826) (271,092) Share of profit/(loss) of associates 1,443,793 (10,474,537)

Profit before tax 7 179,842,806 131,756,027 Income tax expense 9 (17,584,493) (16,487,795)

Profit for the year 162,258,313 115,268,232

Profit for the year attributable to: Owners of the Parent 162,258,313 115,268,232

Earnings per share attributable to the equity holders of the Parent: - Basic and diluted (sen) 10 7.72 5.50

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME forthefinAnciAlyeArenDeD30June2012

2012 2011 Note rM rM

Profit for the year 162,258,313 115,268,232

other comprehensive income/(loss): Foreign currency translation gain/(loss) 3,444,552 (4,751,497) Actuarial gain/(loss) on defined benefit plans 27 57,857 (644,572)

other comprehensive income/(loss) for the year, net of tax 3,502,409 (5,396,069)

total comprehensive income for the year 165,760,722 109,872,163

total comprehensive income for the year attributable to: Owners of the Parent 165,760,722 109,872,163



Group Company As at As at 2012 2011 1 July 2010 2012 2011 1 July 2010 Note rM rM rM rM rM rM

Assets

Non-current assetsProperty, plant and equipment 11 10,661,662 10,331,644 11,837,442 11,511 15,984 5,022 Intangible assets 12 70,834,358 26,925,889 36,764,185 - - - Investments in subsidiaries 13 - - - 1,723,871,286 1,612,486,346 1,608,907,743 Investments in associates 14 64,467,863 72,021,630 84,804,930 9,027,000 77,541,760 83,353,760 Deferred tax assets 25 940,808 314,203 220,240 - - -

146,904,691 109,593,366 133,626,797 1,732,909,797 1,690,044,090 1,692,266,525

Current assetsAmounts due from customers for contract work-in-progress 15 6,481,691 10,280,882 404,619 - - - Trade and other receivables 16 120,667,217 121,283,094 90,802,985 3,718 - - Advance maintenance cost 315,612 43,862 7,334,157 - - - Prepayments 1,434,704 441,829 1,061,472 49,750 69,693 34,311 Dividend receivable - - - - - 24,989,000 Amount due from a subsidiary 17 - - - 565,562 - - Amounts due from related parties 17 25,293,213 2,731,765 15,832,567 - - - Loan to a subsidiary 18 - - - 11,459,288 8,146,859 5,508,802 Loan to an associate 18 735,000 735,000 735,000 735,000 735,000 735,000 Tax recoverable 886,243 1,046,118 48,030 - - - Cash and bank balances 19 97,645,981 73,441,479 32,149,503 5,462,965 34,265,268 679,883 253,459,661 210,004,029 148,368,333 18,276,283 43,216,820 31,946,996

total assets 400,364,352 319,597,395 281,995,130 1,751,186,080 1,733,260,910 1,724,213,521

STATEMENT OF FINANCIAL POSITIONS AS AT 30 JUNE 2012



stAtementoffinAnciAlpositionsAsAt30June2012(cont’d)

Group Company As at As at 2012 2011 1 July 2010 2012 2011 1 July 2010 Note rM rM rM rM rM rM

equity and liabilities

equity attributable to owners of the parentShare capital 20(a) 151,271,159 151,271,159 151,271,159 151,271,159 151,271,159 151,271,159 Share premium 20(b) 28,315,358 28,315,358 22,216,916 1,464,873,114 1,464,873,114 1,458,774,672 Treasury shares 20(c) (13,505,152) (10,397,498) (12,734,498) (13,505,152) (10,397,498) (12,734,498) Foreign currency translation reserve 21(a) (7,821,594) (11,266,146) (6,514,649) - - - Capital reserve 21(b) 466,828 466,828 466,828 - - - Merger deficit 22 (119,765,286) (119,765,286) (119,765,286) - - - Retained profits 258,629,821 174,373,056 128,471,744 118,995,990 106,902,332 81,535,787 total equity 297,591,134 212,997,471 163,412,214 1,721,635,111 1,712,649,107 1,678,847,120

Non-current liabilitiesLoans and borrowings 23 2,461,470 3,066,301 2,888,605 - - - Deferred tax liabilities 25 6,028,449 884,703 1,539,976 - - - Other payable 26 11,171,684 - - 11,171,684 - - Provision for defined benefit liabilities 27 2,189,886 1,968,993 - - - -

21,851,489 5,919,997 4,428,581 11,171,684 - -

Current liabilitiesAmounts due to customers for contract work-in-progress 15 8,020,951 38,623,374 45,782,831 - - - Trade and other payables 26 20,165,859 17,532,668 16,274,423 850,570 935,024 914,430 Provision for defined benefit liabilities 27 155,830 10,592 - - - - Advance maintenance fees 16,363,859 20,138,111 20,425,659 - - - Dividend payable - - 24,645,869 - - 24,645,869 Loans and borrowings 23 997,430 881,030 2,300,552 - - - Amounts due to subsidiaries 17 - - - 17,366,184 19,676,779 19,806,102 Amounts due to related parties 17 27,191,793 18,539,508 581,237 - - -Income tax payable 8,026,007 4,954,644 4,143,764 162,531 - -

80,921,729 100,679,927 114,154,335 18,379,285 20,611,803 45,366,401

total liabilities 102,773,218 106,599,924 118,582,916 29,550,969 20,611,803 45,366,401 Net current assets/(liabilities) 172,537,932 109,324,102 34,213,998 (103,002) 22,605,017 (13,419,405) total equity and liabilities 400,364,352 319,597,395 281,995,130 1,751,186,080 1,733,260,910 1,724,213,521



CONSOLIDATED STATEMENT OF CHANGES IN EqUITYforthefinAnciAlyeArenDeD30June2012

Foreign currency Share Share treasury translation Capital Merger Distributable2011 capital premium shares reserve reserve deficit retained (Note 20(a)) (Note 20(b)) (Note 20(c)) (Note 21(a)) (Note 21(b)) (Note 22) profits totalGroup Note rM rM rM rM rM rM rM rM

At 1 July 2010 151,271,159 22,216,916 (12,734,498) (6,514,649) 466,828 (119,765,286) 128,471,744 163,412,214 Profit for the year - - - - - - 115,268,232 115,268,232 Other comprehensive loss for the year - - - (4,751,497) - - (644,572) (5,396,069) total comprehensive income for the year - - - (4,751,497) - - 114,623,660 109,872,163

Contributions by and distributions to owners

Distribution of shares under Performance Share Plan 20(e) - - 2,337,000 - - - - 2,337,000 Gain on reissuance of treasury shares 20(b) - 6,098,442 - - - - - 6,098,442 Dividends on ordinary shares 28 - - - - - - (68,722,348) (68,722,348)

total transactions with owners in their capacity as owners - 6,098,442 2,337,000 - - - (68,722,348) (60,286,906)

At 30 June 2011 151,271,159 28,315,358 (10,397,498) (11,266,146) 466,828 (119,765,286) 174,373,056 212,997,471



consoliDAteDstAtementofchAngesinequity(cont’d)FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Foreign currency Share Share treasury translation Capital Merger Distributable2012 capital premium shares reserve reserve deficit retained (Note 20(a)) (Note 20(b)) (Note 20(c)) (Note 21(a)) (Note 21(b)) (Note 22) profits totalGroup Note rM rM rM rM rM rM rM rM

At 1 July 2011 151,271,159 28,315,358 (10,397,498) (11,266,146) 466,828 (119,765,286) 174,373,056 212,997,471

Profit for the year - - - - - - 162,258,313 162,258,313 Other comprehensive income for the year - - - 3,444,552 - - 57,857 3,502,409total comprehensive income for the year - - - 3,444,552 - - 162,316,170 165,760,722

Contributions by and distributions to owners

Purchase of treasury shares 20(c) - - (3,107,654) - - - - (3,107,654) Dividends on ordinary shares 28 - - - - - - (78,059,405) (78,059,405)

total transactions with owners in their capacity as owners - - (3,107,654) - - - (78,059,405) (81,167,059)

At 30 June 2012 151,271,159 28,315,358 (13,505,152) (7,821,594) 466,828 (119,765,286) 258,629,821 297,591,134



CONSOLIDATED STATEMENT OF CASH FLOWSforthefinAnciAlyeArenDeD30June2012

Group 2012 2011 Note rM rMoperating activities (Note 35)

Profit before tax 179,842,806 131,756,027 Adjustments for: Amortisation of intangible assets 12 9,044,055 9,460,305 Impairment loss on intangible assets 12 - 1,646,189 Write off of intangible assets 7 2,585 - Depreciation of property, plant and equipment 11 1,571,994 3,502,485 Write off of property, plant and equipment 7 194,171 380 Net gain on disposal of property, plant and equipment 5 (1,578) (107,046) Loss on deemed disposal of investment in an associate 7 - 2,308,763 Impairment loss on financial assets - trade receivables 7 80,868 114,753 Bad debts written off 7 519,067 - Reversal of impairment loss on trade receivables 5 (5,000) - Unrealised foreign

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