Tan Sri Datuk Asmat bin KamaludinChairman & Independent Non Executive Director

Aged 61, Malaysian. Independent, Non Executive Directorand Chairman since 3 December 2002. Tan Sri Asmat holdsa Bachelor of Arts in Economics from the University of Malayaand a Diploma in European Economic Integration from theUniversity of Amsterdam.

Tan Sri Asmat has vast experience of over 35 years in variouscapacities in the public service and his last position in thepublic service was as the Secretary General of the Ministry ofInternational Trade and Industry, a position he held between1992 and 2001. He has served as Economic Counselor forMalaysia in Brussels and worked with several internationalbodies such as ASEAN, the World Trade Organisation andAsia-Pacific Economic Co-operation, representing Malaysia inrelevant negotiations and agreements. While in the MalaysianGovernment service, Tan Sri has also been actively involved inseveral national organisations such as Permodalan NasionalBerhad, Johor Corporation, the Small and Medium ScaleIndustries Corporation (SMIDEC) and Malaysia External TradeDevelopment Corporation (MATRADE).

He is currently Chairman of UMW Holdings Berhad and Vice-Chairman of YTL Cement Berhad. He also serves on the Boardof Carlsberg Brewery Malaysia Berhad, Commerce-AssetHolding Berhad, Lion Industries Corporation Berhad,Malaysian Pacific Industries Berhad, Matsushita ElectricCompany (Malaysia) Berhad & Group, Pemodalan NasionalBerhad, Scomi Group Berhad and Salwan CorporationBerhad & Group. Tan Sri has attended all five of the BoardMeetings held in the financial year ended 31 December2004.

Board of Directors & Profiles

Dato’ Azman YahyaGroup Chief Executive

Aged 41, Malaysian. Non-independent, Executive Directorsince 15 October 2002. He graduated with a first classhonours degree in Economics from the London School ofEconomics and Political Science and is a member of the Instituteof Chartered Accountants in England and Wales, theMalaysian Institute of Accountant and a fellow of the MalaysianInstitute of Banks.

Dato’ Azman is the founder and Group Chief Executive ofSymphony House Berhad.

Prior to this, Dato’ Azman was appointed by the Governmentof Malaysia in 1998 to set-up and head Danaharta, thenational asset management company and subsequentlybecame its Chairman until 2003, He was also the Chairman ofthe Corporate Debt Restructuring Committee which was set-upby Bank Negara Malaysia to mediate and assist in the debtrestructuring of viable companies until its closure in 2002.

His previous career path include auditing with KPMG inLondon, finance with the Island & Peninsular Group andinvestment banking with Bumiputra Merchant Bankers andAmanah Merchant Bank, the latter as the Chief Executive.

Outside his professional engagements, Dato’ Azman is activein public service. He serves as a member of the SecuritiesCommission Capital Market Advisory Council, Bursa MalaysiaSecurities Market Consultative Panel and the National Councilfor Scientific Research and Development. He also previouslyserved as a member of the Malaysian Steering Committee onBank Restructuring and the advisory panels of the MalaysianFinancial Sector Masterplan and Malaysia Venture CapitalManagement Berhad. Dato’ Azman sits on the Boards of anumber of Government Linked Corporations includingKhazanah Nasional Berhad, the investment arm of theMalaysian Government, Malaysian Airline System Berhad,PLUS Expressways Berhad and Pharmaniaga Berhad. He isalso a Director of Scomi Group Berhad and Kuala LumpurBusiness Club.

Abdul Hamid Sheikh MohamedExecutive Director

Aged 39, Malaysian. Non-Independent, Executive Directorsince 3 December 2003. He is a Fellow of the Association ofChartered Certified Accountants.

Encik Hamid is the Executive Director overseeing the holdingcompany and the Managed Services Division of the SymphonyGroup. He is also a Director of Vsource Asia Berhad andother private companies under the Symphony Group.

Immediately preceding his appointment at Symphony, he wasthe Chief Financial Officer of the Kuala Lumpur StockExchange (KLSE), now known as Bursa Malaysia Berhad.He joined the KLSE in 1998 as Senior Vice President in chargeof the Strategic Planning & International Affairs Division andwas promoted to Deputy President (Strategy and Development)in 2002. He was re-designated to Chief Financial Officer in2003. During his five years with the KLSE Group, he helddiverse roles and had experience in strategy, corporatefinance, business transformation, finance and administration,treasury, external affairs and public relations. He led the KLSE’sacquisitions of KLOFFE and COMMEX and their merger toform MDEX, and the acquisition of MESDAQ. He also led theKLSE’s demutualisation exercise.

He started his career in the accounting firm Messrs Lim Ali &Co. / Arthur Young, before moving on to merchant bankingwith Bumiputra Merchant Bankers Berhad. He later moved onto the Amanah Capital Malaysia Berhad Group, aninvestment banking and finance group, where he led thecorporate planning and finance functions until 1998 when hejoined the KLSE.

Chin Jit PyngExecutive Director

Aged 48, Malaysian. Non-Independent, Executive Directorsince 27 February 2004. He obtained his Bachelor of Sciencedegree majoring in Computer Studies from BrightonPolytechnic (UK) and is a member of the British ComputerSociety, a prestigious and world-renowned computerprofessional body incorporated by Royal Charter in 1984.

Mr Chin oversees the Information Technology Division of theGroup. He was professional engaged with IBM for more thanthirteen years, where he was responsible for a number ofstrategic project implementations, including projects for thenational telecommunications company as well as the biggestcommercial bank in Malaysia gaining specifically, in-depthknowledge of electronic banking services and branchautomation and generally, knowledge on the banking andfinance applications software sector.

In 1996, Mr Chin together with his partners founded GlobalInnovative Management Partners-ACT Sdn Bhd, now known asSymphony Global Sdn Bhd. Within a few years of itsinception, the Company propelled itself to become one of theleaders in IT infrastructure and system integration services, aswell as a provider of computer software for the banking andfinance industry, with clientele from major local banks.

Since April, 2002, he served as the Senior Director andmember of the Executive Committee of Bolton Berhad. He alsosits on the Board of PanGlobal Berhad.

21

20

Tan Sri Datuk Asmat bin KamaludinChairman & Independent Non Executive Director

Aged 61, Malaysian. Independent, Non Executive Directorand Chairman since 3 December 2002. Tan Sri Asmat holdsa Bachelor of Arts in Economics from the University of Malayaand a Diploma in European Economic Integration from theUniversity of Amsterdam.

Tan Sri Asmat has vast experience of over 35 years in variouscapacities in the public service and his last position in thepublic service was as the Secretary General of the Ministry ofInternational Trade and Industry, a position he held between1992 and 2001. He has served as Economic Counselor forMalaysia in Brussels and worked with several internationalbodies such as ASEAN, the World Trade Organisation andAsia-Pacific Economic Co-operation, representing Malaysia inrelevant negotiations and agreements. While in the MalaysianGovernment service, Tan Sri has also been actively involved inseveral national organisations such as Permodalan NasionalBerhad, Johor Corporation, the Small and Medium ScaleIndustries Corporation (SMIDEC) and Malaysia External TradeDevelopment Corporation (MATRADE).

He is currently Chairman of UMW Holdings Berhad and Vice-Chairman of YTL Cement Berhad. He also serves on the Boardof Carlsberg Brewery Malaysia Berhad, Commerce-AssetHolding Berhad, Lion Industries Corporation Berhad,Malaysian Pacific Industries Berhad, Matsushita ElectricCompany (Malaysia) Berhad & Group, Pemodalan NasionalBerhad, Scomi Group Berhad and Salwan CorporationBerhad & Group. Tan Sri has attended all five of the BoardMeetings held in the financial year ended 31 December2004.

Board of Directors & Profiles

Dato’ Azman YahyaGroup Chief Executive

Aged 41, Malaysian. Non-independent, Executive Directorsince 15 October 2002. He graduated with a first classhonours degree in Economics from the London School ofEconomics and Political Science and is a member of the Instituteof Chartered Accountants in England and Wales, theMalaysian Institute of Accountant and a fellow of the MalaysianInstitute of Banks.

Dato’ Azman is the founder and Group Chief Executive ofSymphony House Berhad.

Prior to this, Dato’ Azman was appointed by the Governmentof Malaysia in 1998 to set-up and head Danaharta, thenational asset management company and subsequentlybecame its Chairman until 2003, He was also the Chairman ofthe Corporate Debt Restructuring Committee which was set-upby Bank Negara Malaysia to mediate and assist in the debtrestructuring of viable companies until its closure in 2002.

His previous career path include auditing with KPMG inLondon, finance with the Island & Peninsular Group andinvestment banking with Bumiputra Merchant Bankers andAmanah Merchant Bank, the latter as the Chief Executive.

Outside his professional engagements, Dato’ Azman is activein public service. He serves as a member of the SecuritiesCommission Capital Market Advisory Council, Bursa MalaysiaSecurities Market Consultative Panel and the National Councilfor Scientific Research and Development. He also previouslyserved as a member of the Malaysian Steering Committee onBank Restructuring and the advisory panels of the MalaysianFinancial Sector Masterplan and Malaysia Venture CapitalManagement Berhad. Dato’ Azman sits on the Boards of anumber of Government Linked Corporations includingKhazanah Nasional Berhad, the investment arm of theMalaysian Government, Malaysian Airline System Berhad,PLUS Expressways Berhad and Pharmaniaga Berhad. He isalso a Director of Scomi Group Berhad and Kuala LumpurBusiness Club.

Abdul Hamid Sheikh MohamedExecutive Director

Aged 39, Malaysian. Non-Independent, Executive Directorsince 3 December 2003. He is a Fellow of the Association ofChartered Certified Accountants.

Encik Hamid is the Executive Director overseeing the holdingcompany and the Managed Services Division of the SymphonyGroup. He is also a Director of Vsource Asia Berhad andother private companies under the Symphony Group.

Immediately preceding his appointment at Symphony, he wasthe Chief Financial Officer of the Kuala Lumpur StockExchange (KLSE), now known as Bursa Malaysia Berhad.He joined the KLSE in 1998 as Senior Vice President in chargeof the Strategic Planning & International Affairs Division andwas promoted to Deputy President (Strategy and Development)in 2002. He was re-designated to Chief Financial Officer in2003. During his five years with the KLSE Group, he helddiverse roles and had experience in strategy, corporatefinance, business transformation, finance and administration,treasury, external affairs and public relations. He led the KLSE’sacquisitions of KLOFFE and COMMEX and their merger toform MDEX, and the acquisition of MESDAQ. He also led theKLSE’s demutualisation exercise.

He started his career in the accounting firm Messrs Lim Ali &Co. / Arthur Young, before moving on to merchant bankingwith Bumiputra Merchant Bankers Berhad. He later moved onto the Amanah Capital Malaysia Berhad Group, aninvestment banking and finance group, where he led thecorporate planning and finance functions until 1998 when hejoined the KLSE.

Chin Jit PyngExecutive Director

Aged 48, Malaysian. Non-Independent, Executive Directorsince 27 February 2004. He obtained his Bachelor of Sciencedegree majoring in Computer Studies from BrightonPolytechnic (UK) and is a member of the British ComputerSociety, a prestigious and world-renowned computerprofessional body incorporated by Royal Charter in 1984.

Mr Chin oversees the Information Technology Division of theGroup. He was professional engaged with IBM for more thanthirteen years, where he was responsible for a number ofstrategic project implementations, including projects for thenational telecommunications company as well as the biggestcommercial bank in Malaysia gaining specifically, in-depthknowledge of electronic banking services and branchautomation and generally, knowledge on the banking andfinance applications software sector.

In 1996, Mr Chin together with his partners founded GlobalInnovative Management Partners-ACT Sdn Bhd, now known asSymphony Global Sdn Bhd. Within a few years of itsinception, the Company propelled itself to become one of theleaders in IT infrastructure and system integration services, aswell as a provider of computer software for the banking andfinance industry, with clientele from major local banks.

Since April, 2002, he served as the Senior Director andmember of the Executive Committee of Bolton Berhad. He alsosits on the Board of PanGlobal Berhad.

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20

Khairil Anuar AbdullahIndependent Non Executive Director

Aged 54, Malaysian. Independent, Non-Executive Directorsince 25 November 2002. Encik Khairil holds a Bachelor ofEconomics from the University of Malaya and obtained aMaster of Business Administration from Harvard BusinessSchool, US. He is a Fellow of the Malaysian Institute of Banks.

His career spanned a diverse range of government andcorporate experience in the Economic Planning Unit of thePrime Minister’s Department from 1973 to 1982, the GuthrieGroup of Companies from 1983 to 1987, Batu LintangRubber Company (re-listed on the Bursa Malaysia SecuritiesBerhad as Advance Synergy Berhad) and Arthur D Little from1988 to 1992. In 1993, he joined the Securities Commissionat its inception as Director for Policy and Development. Hisportfolio included regulations and law reform, productdevelopment, economic research, information technology, theSecurities Industry Development Centre, accounting standardsand Islamic capital market development. He also served onthe advisory committee of the Bursa Malaysia Depository SdnBhd, the Board of the Labuan Offshore Financial ServicesAuthority and chaired a working group on the regulation ofsecondary markets of the Emerging Markets Committee of theInternational Organisation of Securities Commission (IOSCO).In 1996, he was a member of Bank of International Settlement/ IOSCO Task Force on clearing and settlement.

He then went on to serve as Executive Chairman of MalaysianExchange of Securities Dealing & Automated Quotation Bhd(MESDAQ), Malaysia’s securities exchange catering to highgrowth and technology companies in 1997 until it mergedwith the Kuala Lumpur Stock Exchange in 2002.

Currently he serves as an independent, non-executive directorof The Media Shoppe Berhad and Kuwait Finance House (M)Bhd and is Chairman of VisDynamics Holdings Berhad.

Dato’ Dr Tawfiq AymanIndependent Non Executive Director

Aged 58, Malaysian. Independent, Non-Executive Directorsince 25 November 2002. Dato’ Dr Ayman graduated witha Bachelor of Economics from the University of Malaya andobtained a Master of Arts in Finance, Master of Arts inEconomics and Ph.D in Finance from the Wharton BusinessSchool, University of Pennsylvania, US.

He began his career in the banking industry as FinancialController with Citibank Berhad from 1978 to 1980. From1980 to 1985, he set-up the lending procedure andguidelines for long-term loans to the shipping industry andheaded the lending operations of Bank Industri Berhad.Onwards from 1986 to 1994, he held various positions atUnited Malayan Banking Corporation Berhad includingsetting-up and heading the Bank’s UK Operations andsetting-up and heading the Corporate Banking division of theBank from 1986 to 1994.

He currently serves as a Director of AZAIR Sdn Bhd.

Foo San KanIndependent Non Executive Director

Aged 56, Malaysian. Non Executive Director since 7 February2003, designated as Independent Non Executive Director on25 February 2005. Mr Foo is a Chartered Accountant of theMalaysian Institute of Accountants. He is also a member of theMalaysian Institute of Certified Public Accountants, a Fellow ofthe Institute of Chartered Accountants in England & Wales, aswell as the Malaysian Institute of Taxation.

He was the Country Managing Partner of Ernst & YoungMalaysia from 1997 to 2002 before he retired as a practisingaccountant. He has 34 years of experience in the accountingprofession, the last 29 years of which were spent in variouspositions in Ernst & Young including stints in several offices inEast and West Malaysia. During the course of his career, hewas involved in various industry sectors including financialservices, energy, manufacturing, plantations, property,construction, leisure and entertainment. His professionalexperience covers almost all aspects of the accountingprofession, including audit, receivership, liquidation, taxation,secretarial, corporate advisory and management consultancyand all services related to the Labuan Offshore FinancialServices Authority (LOFSA).

He is currently a director of Salcon Berhad, OSK VenturesInternational Berhad, listed on the Main Board and MESDAQof Bursa Malaysia Securities Berhad respectively, OSK TrusteesBerhad (formerly known as OSK-Signet Trustees Berhad) andseveral private limited companies in Malaysia.

Lim Yen Haat Non-independent Non Executive Director

Aged 49, Malaysian. Non-independent, Non-ExecutiveDirector since 27 February 2004. Mr Lim graduated with adegree in Mechanical Engineering from University of Surrey,England in 1977.

Mr Lim was the Deputy Managing Director of Bolton Berhadsince August 1981 and was re-designated as SeniorExecutive Director in charge of Property & InvestmentDivision on 26th April, 2002. He is a member of theExecutive Committee of Bolton Berhad. Mr Lim was aDirector and then Joint Managing Director of Kedah CementHoldings Berhad from 1990 to 1999. He was appointed asDirector of Kejora Harta Bhd on 16 May, 1997.

Mr Lim has over twenty years of experience in propertydevelopment and ten years in the cement industry.

Board of Directors & Profiles (continued)

23

None of the Directors, with the exception of Dato’ Azman Yahya andMr Lim Yen Haat, has any family relationship with any other directorand/or major shareholder or has any conflict of interest withSymphony House Berhad.

Dato’ Azman Yahya and his spouse Datin Normah Hashim aresubstantial shareholders of Symphony House Berhad.

Mr Lim Yen Haat has family relationships with certain majorshareholders of Bolton Berhad. Bolton Berhad is also a substantialshareholder of Symphony House Berhad.

None of the Directors has been convicted of offences within the pastten years (other than traffic offences, if any).

22

Khairil Anuar AbdullahIndependent Non Executive Director

Aged 54, Malaysian. Independent, Non-Executive Directorsince 25 November 2002. Encik Khairil holds a Bachelor ofEconomics from the University of Malaya and obtained aMaster of Business Administration from Harvard BusinessSchool, US. He is a Fellow of the Malaysian Institute of Banks.

His career spanned a diverse range of government andcorporate experience in the Economic Planning Unit of thePrime Minister’s Department from 1973 to 1982, the GuthrieGroup of Companies from 1983 to 1987, Batu LintangRubber Company (re-listed on the Bursa Malaysia SecuritiesBerhad as Advance Synergy Berhad) and Arthur D Little from1988 to 1992. In 1993, he joined the Securities Commissionat its inception as Director for Policy and Development. Hisportfolio included regulations and law reform, productdevelopment, economic research, information technology, theSecurities Industry Development Centre, accounting standardsand Islamic capital market development. He also served onthe advisory committee of the Bursa Malaysia Depository SdnBhd, the Board of the Labuan Offshore Financial ServicesAuthority and chaired a working group on the regulation ofsecondary markets of the Emerging Markets Committee of theInternational Organisation of Securities Commission (IOSCO).In 1996, he was a member of Bank of International Settlement/ IOSCO Task Force on clearing and settlement.

He then went on to serve as Executive Chairman of MalaysianExchange of Securities Dealing & Automated Quotation Bhd(MESDAQ), Malaysia’s securities exchange catering to highgrowth and technology companies in 1997 until it mergedwith the Kuala Lumpur Stock Exchange in 2002.

Currently he serves as an independent, non-executive directorof The Media Shoppe Berhad and Kuwait Finance House (M)Bhd and is Chairman of VisDynamics Holdings Berhad.

Dato’ Dr Tawfiq AymanIndependent Non Executive Director

Aged 58, Malaysian. Independent, Non-Executive Directorsince 25 November 2002. Dato’ Dr Ayman graduated witha Bachelor of Economics from the University of Malaya andobtained a Master of Arts in Finance, Master of Arts inEconomics and Ph.D in Finance from the Wharton BusinessSchool, University of Pennsylvania, US.

He began his career in the banking industry as FinancialController with Citibank Berhad from 1978 to 1980. From1980 to 1985, he set-up the lending procedure andguidelines for long-term loans to the shipping industry andheaded the lending operations of Bank Industri Berhad.Onwards from 1986 to 1994, he held various positions atUnited Malayan Banking Corporation Berhad includingsetting-up and heading the Bank’s UK Operations andsetting-up and heading the Corporate Banking division of theBank from 1986 to 1994.

He currently serves as a Director of AZAIR Sdn Bhd.

Foo San KanIndependent Non Executive Director

Aged 56, Malaysian. Non Executive Director since 7 February2003, designated as Independent Non Executive Director on25 February 2005. Mr Foo is a Chartered Accountant of theMalaysian Institute of Accountants. He is also a member of theMalaysian Institute of Certified Public Accountants, a Fellow ofthe Institute of Chartered Accountants in England & Wales, aswell as the Malaysian Institute of Taxation.

He was the Country Managing Partner of Ernst & YoungMalaysia from 1997 to 2002 before he retired as a practisingaccountant. He has 34 years of experience in the accountingprofession, the last 29 years of which were spent in variouspositions in Ernst & Young including stints in several offices inEast and West Malaysia. During the course of his career, hewas involved in various industry sectors including financialservices, energy, manufacturing, plantations, property,construction, leisure and entertainment. His professionalexperience covers almost all aspects of the accountingprofession, including audit, receivership, liquidation, taxation,secretarial, corporate advisory and management consultancyand all services related to the Labuan Offshore FinancialServices Authority (LOFSA).

He is currently a director of Salcon Berhad, OSK VenturesInternational Berhad, listed on the Main Board and MESDAQof Bursa Malaysia Securities Berhad respectively, OSK TrusteesBerhad (formerly known as OSK-Signet Trustees Berhad) andseveral private limited companies in Malaysia.

Lim Yen Haat Non-independent Non Executive Director

Aged 49, Malaysian. Non-independent, Non-ExecutiveDirector since 27 February 2004. Mr Lim graduated with adegree in Mechanical Engineering from University of Surrey,England in 1977.

Mr Lim was the Deputy Managing Director of Bolton Berhadsince August 1981 and was re-designated as SeniorExecutive Director in charge of Property & InvestmentDivision on 26th April, 2002. He is a member of theExecutive Committee of Bolton Berhad. Mr Lim was aDirector and then Joint Managing Director of Kedah CementHoldings Berhad from 1990 to 1999. He was appointed asDirector of Kejora Harta Bhd on 16 May, 1997.

Mr Lim has over twenty years of experience in propertydevelopment and ten years in the cement industry.

Board of Directors & Profiles (continued)

23

None of the Directors, with the exception of Dato’ Azman Yahya andMr Lim Yen Haat, has any family relationship with any other directorand/or major shareholder or has any conflict of interest withSymphony House Berhad.

Dato’ Azman Yahya and his spouse Datin Normah Hashim aresubstantial shareholders of Symphony House Berhad.

Mr Lim Yen Haat has family relationships with certain majorshareholders of Bolton Berhad. Bolton Berhad is also a substantialshareholder of Symphony House Berhad.

None of the Directors has been convicted of offences within the pastten years (other than traffic offences, if any).

22

Management Team

Symphony House Berhad

From left: Zeti Marziana Muhamed (Manager, Group Corporate Affairs), Abdul Hamid Sheikh Mohamed (Executive Director), Nik Mohamed Fahmy Nik Fauzi (Manager, Group Internal Audit & Risk Management), Dato’ Azman Yahya (Group Chief Executive), Ahmad Zulqarnain Che Onn (Senior Manager, Group Corporate Services), Wong Pei Ling (Manager, Group Legal Services & Compliance), Sivabalan Pathmanathan (Manager, Group IT), Shirley Fong (Manager, Group Finance)

25

Management Committee

Dato’ Azman Yahya(Group Chief Executive)

Abdul Hamid Sheikh Mohamed(Executive Director)

Jasmy Ismail (Chief Executive – IT Services)

Chin Jit Pyng(Executive Director)

Robin Chew(Chief Executive – Share Issuanceand Registration Services)

Jack Cantillon(Chief Executive – Vsource Asia)

24

Management Team

Symphony House Berhad

From left: Zeti Marziana Muhamed (Manager, Group Corporate Affairs), Abdul Hamid Sheikh Mohamed (Executive Director), Nik Mohamed Fahmy Nik Fauzi (Manager, Group Internal Audit & Risk Management), Dato’ Azman Yahya (Group Chief Executive), Ahmad Zulqarnain Che Onn (Senior Manager, Group Corporate Services), Wong Pei Ling (Manager, Group Legal Services & Compliance), Sivabalan Pathmanathan (Manager, Group IT), Shirley Fong (Manager, Group Finance)

25

Management Committee

Dato’ Azman Yahya(Group Chief Executive)

Abdul Hamid Sheikh Mohamed(Executive Director)

Jasmy Ismail (Chief Executive – IT Services)

Chin Jit Pyng(Executive Director)

Robin Chew(Chief Executive – Share Issuanceand Registration Services)

Jack Cantillon(Chief Executive – Vsource Asia)

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27

From left: Leong Oi Wah (Director, Corporate Secretarial – Symphony Incorporations), Yong Chee Leong (Director, Accounting – SymphonyIncorporations), Robin Chew (Chief Executive – Share Issuance and Registration Services), Lai Sin Kee (Senior Manager – Symphony Capital), Abdul Hamid Sheikh Mohamed (Executive Director), Ahmad Zulqarnain Che Onn (Senior Manager – Symphony Capital), Abdul Nasir Ahmad Daud (Director, Marketing & Compliance – Symphony Share Registrars)

Not Present: Selina Ng (Director, Operations – Symphony Share Registrars)

Stephen StonefieldChairman

Abdul HamidSheikh MohamedDirector

Jasmy IsmailDirector

Jack CantillonChief Executive

Dennis SmithDirector

Managed Services

Vsource Asia BerhadBoard of Directors

Vsource Senior Management, on location

From left: Shahruddin Noah (Director, Technology & Services – Symphony Global Technologies), Wendy Lee (Director, Finance – Symphony Global),Alan Tey (General Manager – Symphony Netcom Solutions), Chin Jit Pyng (Executive Director), Cyril Tan (Chief Executive – Symphony Xen Solutions),Ang Poo Lin (Chief Technology Officer – Symphony Global), Jasmy Ismail (Chief Executive – IT Services), Nordin Saisi (Director, Sales & Marketing –Symphony Global), Khairul Shahrin Khalid (General Manager – Symphony BCSIS), Lau Yoong Hung (Director, Projects – Symphony Global)

Not present: Tay Hock Seng (Chief Operations Officer, Symphony Global), Kerri Tan (Director, Global Operations – Symphony Xen Solutions), Annie Tee (Director, Global Strategy – Symphony Xen Solutions)

Information Technology Services

Chew Seong Aun (General Manager, Malaysia), John Wright (General Manager, Taiwan), Takashi Koteresawa (General Manager, Japan)

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27

From left: Leong Oi Wah (Director, Corporate Secretarial – Symphony Incorporations), Yong Chee Leong (Director, Accounting – SymphonyIncorporations), Robin Chew (Chief Executive – Share Issuance and Registration Services), Lai Sin Kee (Senior Manager – Symphony Capital), Abdul Hamid Sheikh Mohamed (Executive Director), Ahmad Zulqarnain Che Onn (Senior Manager – Symphony Capital), Abdul Nasir Ahmad Daud (Director, Marketing & Compliance – Symphony Share Registrars)

Not Present: Selina Ng (Director, Operations – Symphony Share Registrars)

Stephen StonefieldChairman

Abdul HamidSheikh MohamedDirector

Jasmy IsmailDirector

Jack CantillonChief Executive

Dennis SmithDirector

Managed Services

Vsource Asia BerhadBoard of Directors

Vsource Senior Management, on location

From left: Shahruddin Noah (Director, Technology & Services – Symphony Global Technologies), Wendy Lee (Director, Finance – Symphony Global),Alan Tey (General Manager – Symphony Netcom Solutions), Chin Jit Pyng (Executive Director), Cyril Tan (Chief Executive – Symphony Xen Solutions),Ang Poo Lin (Chief Technology Officer – Symphony Global), Jasmy Ismail (Chief Executive – IT Services), Nordin Saisi (Director, Sales & Marketing –Symphony Global), Khairul Shahrin Khalid (General Manager – Symphony BCSIS), Lau Yoong Hung (Director, Projects – Symphony Global)

Not present: Tay Hock Seng (Chief Operations Officer, Symphony Global), Kerri Tan (Director, Global Operations – Symphony Xen Solutions), Annie Tee (Director, Global Strategy – Symphony Xen Solutions)

Information Technology Services

Chew Seong Aun (General Manager, Malaysia), John Wright (General Manager, Taiwan), Takashi Koteresawa (General Manager, Japan)

26

2 9

To assist the Board in retaining full and effective control of theCompany through reviews in the Meetings, the Boarddeliberates on a formal agenda and schedule of mattersarising for approval or notation. During the financial yearended 31 December 2004, the Board reviewed anda p p roved, amongst other matters, the Gro u p ’s 3-year strategicplan and annual business plan, as well as the financial re s u l t sand perf o rmance of the Gro u p ’s businesses. The Board alsoreviews and approves the acquisition and disposal of assets orinvestment of the Company and its subsidiaries that arematerial to the Gro u p .

A summary of the attendance of each Director at the BoardMeetings held during the financial year under review are asf o l l o w s :

D i re c t o r s Status of Dire c t o r s h i p Meetings Attended %

Tan Sri Datuk Asmat Kamaludin C h a i rm a n 5 / 5 1 0 0Independent Non-Executive Dire c t o r

Dato’ Azman Ya h y a G roup Chief Executive 5 / 5 1 0 0Non-Independent Executive Dire c t o r

Abdul Hamid Sheikh Mohamed Executive Dire c t o r 5 / 5 1 0 0Non-Independent Executive Dire c t o r

Chin Jit Pyng Executive Dire c t o r 3 / 4 7 5(appointed 27 February 2004) Non-Independent Executive Dire c t o r

Foo San Kan Non-Independent Non-Executive* 5 / 5 1 0 0D i re c t o r

Lim Yen Haat Non-Independent Non-Executive 4 / 4 1 0 0(appointed 27 February 2004) D i re c t o r

Khairil Anuar Abdullah Independent Non-Executive Dire c t o r 5 / 5 1 0 0

Dato’ Dr Tawfiq Ay m a n Independent Non-Executive Dire c t o r 3 / 5 6 0

Krishnan A/L C K Menon Independent Non-Executive Dire c t o r 1 / 1* * 1 0 0(resigned on 6 April 2004)

N o t e s :

* Foo San Kan was re-designated as an Independent Non-Executive Director with effect from 25 February 2005.* * Krishnan A / L C K Menon attended 1 Board meeting prior to his resignation from the Board.

The agenda for each Board meeting, together with detailedB o a rd papers and supporting documents are circulated to allB o a rd members for their prior review in advance of themeeting dates, to enable the Directors to make well-inform e ddecisions on matters arising at the Board meetings. Minutes ofe v e ry Board meeting are circulated to each Director for theirp e rusal prior to confirmation of the Minutes at the followingB o a rd meeting.

In furtherance of their duties, every member of the Board hasfull, unrestricted and timely access to all necessary inform a t i o n ,whether as a Board in whole or in their individual capacities.The Directors also have direct access to the advice ands e rvices of the Company Secretaries who are responsible forensuring that Board pro c e d u res as well as statutory and

Statement on Corporate GovernanceFor the financial year ended 31 December 2004

I N T R O D U C T I O N

The Board of Directors of Symphony House Berhad (“theB o a rd”) is pleased to re p o rt that during the financial yearended 31 December 2004, it had practised good corporateg o v e rnance in directing and managing the business affairs ofthe Company and its subsidiaries (“the Group”) thus,d i s c h a rging its principal responsibility of protecting andenhancing long-term shareholders’ value and the interests ofother stakeholders.

To w a rds achieving the aforesaid objective, the Board iscommitted to ensuring that the highest standards of corporateg o v e rnance are consistently observed by the Group, not onlyby due observance of the Principles and Best Practices onCorporate Governance as set out in the Malaysian Code onCorporate Governance, but also to put in place stringentparameters and measures for adherence by the Management.By upholding integrity and professionalism in its managementof the affairs of the Group, the Board aims to enhance businesse fficacy and corporate accountability.

BOARD OF DIRECTORS

B o a rd Composition and Balance

The Board believes that an effective Board is determined by itscomposition. The Board has a well-balanced compositionwhich, at the end of the financial year under re v i e w, comprisedeight (8) Members, three (3) of whom are of Executive capacityand five (5) are Non-Executive Directors. Three (3) of the Non-Executive Directors are independent as defined under the ListingR e q u i rements of Bursa Malaysia Securities Berhad. The pro f i l e sof the Directors are presented on the Board of Directors andP rofiles section of this Annual Report

The Directors of the Company are professionals and personsof calibre with diverse backgrounds, expertise and experiencein various fields such as business, technical, financial andpublic services, which enable them to bring insightful depthand diversity to the leadership of the business. Theappointment of Independent Directors who are not members ofthe management are to ensure that they are free of anyrelationship which could interf e re with the exercise ofindependent judgment or ability to act in the best interests ofthe Company. These Independent Directors play an import a n trole in providing independent judgment and objectivep a rticipation in the decision-making process of the Board. TheExecutive Directors, who have good knowledge of thebusiness, are responsible for implementing the corporatestrategies and charged with the management of day-to-day

operations of the business. The Non-Executive Dire c t o r scomplement the skills and experience of the Executive Dire c t o r sin the formulation of policies and strategies through theirknowledge and experience of relevant business sectors.

The Chairman, who is an Independent Non-Executive Dire c t o r,has separate and distinct responsibilities from the Group ChiefExecutive. The Chairman plays a pivotal role in ensuring thatthe Directors are properly briefed on the business andoperations of the Group and encourages healthy debate onissues arising at Board meetings, whilst the Group ChiefExecutive is responsible for the day-to-day operations of theG ro u p ’s businesses, which includes the implementation ofstrategies and policies adopted by the Board. The separationof powers, combined with the presence of three (3)Independent Directors, ensures a balance of power andauthority and provides a safeguard against the exercise ofu n f e t t e red power in decision-making.

Main Duties and Responsibilities of the Board

The Board plays an important role in defining the scope ofcorporate governance within the Group. The Board is of theopinion that it is able to effectively lead and control theCompany and the Group through the discharge of thefollowing re s p o n s i b i l i t i e s :

• Review and adopt the Gro u p ’s medium and long-termstrategic and business plans;

• Oversee the conduct of the Gro u p ’s business operationsand perf o rm a n c e ;

• Identify and effectively manage the principal risksa ffecting the Gro u p ;

• Review the adequacy and integrity of the Gro u p ’s intern a lc o n t rol systems;

• Implement succession planning for business continuity;• Maintain effective communication with stakeholders

including shareholders and the general public.

B o a rd Meetings and Supply of Information to theB o a rd

B o a rd Meetings are held at quarterly intervals with additionalmeetings taking place as and when necessary. During thefinancial year under re v i e w, the Board held four (4) re g u l a rmeetings and one (1) Special Board Meeting. All deliberationsand conclusions of the Board are clearly and accuratelyre c o rded by the Company Secretaries. The Minutes are thenc o n f i rmed by the Board and signed as correct re c o rds of thep roceedings thereat by the Chairm a n .

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To assist the Board in retaining full and effective control of theCompany through reviews in the Meetings, the Boarddeliberates on a formal agenda and schedule of mattersarising for approval or notation. During the financial yearended 31 December 2004, the Board reviewed anda p p roved, amongst other matters, the Gro u p ’s 3-year strategicplan and annual business plan, as well as the financial re s u l t sand perf o rmance of the Gro u p ’s businesses. The Board alsoreviews and approves the acquisition and disposal of assets orinvestment of the Company and its subsidiaries that arematerial to the Gro u p .

A summary of the attendance of each Director at the BoardMeetings held during the financial year under review are asf o l l o w s :

D i re c t o r s Status of Dire c t o r s h i p Meetings Attended %

Tan Sri Datuk Asmat Kamaludin C h a i rm a n 5 / 5 1 0 0Independent Non-Executive Dire c t o r

Dato’ Azman Ya h y a G roup Chief Executive 5 / 5 1 0 0Non-Independent Executive Dire c t o r

Abdul Hamid Sheikh Mohamed Executive Dire c t o r 5 / 5 1 0 0Non-Independent Executive Dire c t o r

Chin Jit Pyng Executive Dire c t o r 3 / 4 7 5(appointed 27 February 2004) Non-Independent Executive Dire c t o r

Foo San Kan Non-Independent Non-Executive* 5 / 5 1 0 0D i re c t o r

Lim Yen Haat Non-Independent Non-Executive 4 / 4 1 0 0(appointed 27 February 2004) D i re c t o r

Khairil Anuar Abdullah Independent Non-Executive Dire c t o r 5 / 5 1 0 0

Dato’ Dr Tawfiq Ay m a n Independent Non-Executive Dire c t o r 3 / 5 6 0

Krishnan A/L C K Menon Independent Non-Executive Dire c t o r 1 / 1* * 1 0 0(resigned on 6 April 2004)

N o t e s :

* Foo San Kan was re-designated as an Independent Non-Executive Director with effect from 25 February 2005.* * Krishnan A / L C K Menon attended 1 Board meeting prior to his resignation from the Board.

The agenda for each Board meeting, together with detailedB o a rd papers and supporting documents are circulated to allB o a rd members for their prior review in advance of themeeting dates, to enable the Directors to make well-inform e ddecisions on matters arising at the Board meetings. Minutes ofe v e ry Board meeting are circulated to each Director for theirp e rusal prior to confirmation of the Minutes at the followingB o a rd meeting.

In furtherance of their duties, every member of the Board hasfull, unrestricted and timely access to all necessary inform a t i o n ,whether as a Board in whole or in their individual capacities.The Directors also have direct access to the advice ands e rvices of the Company Secretaries who are responsible forensuring that Board pro c e d u res as well as statutory and

Statement on Corporate GovernanceFor the financial year ended 31 December 2004

I N T R O D U C T I O N

The Board of Directors of Symphony House Berhad (“theB o a rd”) is pleased to re p o rt that during the financial yearended 31 December 2004, it had practised good corporateg o v e rnance in directing and managing the business affairs ofthe Company and its subsidiaries (“the Group”) thus,d i s c h a rging its principal responsibility of protecting andenhancing long-term shareholders’ value and the interests ofother stakeholders.

To w a rds achieving the aforesaid objective, the Board iscommitted to ensuring that the highest standards of corporateg o v e rnance are consistently observed by the Group, not onlyby due observance of the Principles and Best Practices onCorporate Governance as set out in the Malaysian Code onCorporate Governance, but also to put in place stringentparameters and measures for adherence by the Management.By upholding integrity and professionalism in its managementof the affairs of the Group, the Board aims to enhance businesse fficacy and corporate accountability.

BOARD OF DIRECTORS

B o a rd Composition and Balance

The Board believes that an effective Board is determined by itscomposition. The Board has a well-balanced compositionwhich, at the end of the financial year under re v i e w, comprisedeight (8) Members, three (3) of whom are of Executive capacityand five (5) are Non-Executive Directors. Three (3) of the Non-Executive Directors are independent as defined under the ListingR e q u i rements of Bursa Malaysia Securities Berhad. The pro f i l e sof the Directors are presented on the Board of Directors andP rofiles section of this Annual Report

The Directors of the Company are professionals and personsof calibre with diverse backgrounds, expertise and experiencein various fields such as business, technical, financial andpublic services, which enable them to bring insightful depthand diversity to the leadership of the business. Theappointment of Independent Directors who are not members ofthe management are to ensure that they are free of anyrelationship which could interf e re with the exercise ofindependent judgment or ability to act in the best interests ofthe Company. These Independent Directors play an import a n trole in providing independent judgment and objectivep a rticipation in the decision-making process of the Board. TheExecutive Directors, who have good knowledge of thebusiness, are responsible for implementing the corporatestrategies and charged with the management of day-to-day

operations of the business. The Non-Executive Dire c t o r scomplement the skills and experience of the Executive Dire c t o r sin the formulation of policies and strategies through theirknowledge and experience of relevant business sectors.

The Chairman, who is an Independent Non-Executive Dire c t o r,has separate and distinct responsibilities from the Group ChiefExecutive. The Chairman plays a pivotal role in ensuring thatthe Directors are properly briefed on the business andoperations of the Group and encourages healthy debate onissues arising at Board meetings, whilst the Group ChiefExecutive is responsible for the day-to-day operations of theG ro u p ’s businesses, which includes the implementation ofstrategies and policies adopted by the Board. The separationof powers, combined with the presence of three (3)Independent Directors, ensures a balance of power andauthority and provides a safeguard against the exercise ofu n f e t t e red power in decision-making.

Main Duties and Responsibilities of the Board

The Board plays an important role in defining the scope ofcorporate governance within the Group. The Board is of theopinion that it is able to effectively lead and control theCompany and the Group through the discharge of thefollowing re s p o n s i b i l i t i e s :

• Review and adopt the Gro u p ’s medium and long-termstrategic and business plans;

• Oversee the conduct of the Gro u p ’s business operationsand perf o rm a n c e ;

• Identify and effectively manage the principal risksa ffecting the Gro u p ;

• Review the adequacy and integrity of the Gro u p ’s intern a lc o n t rol systems;

• Implement succession planning for business continuity;• Maintain effective communication with stakeholders

including shareholders and the general public.

B o a rd Meetings and Supply of Information to theB o a rd

B o a rd Meetings are held at quarterly intervals with additionalmeetings taking place as and when necessary. During thefinancial year under re v i e w, the Board held four (4) re g u l a rmeetings and one (1) Special Board Meeting. All deliberationsand conclusions of the Board are clearly and accuratelyre c o rded by the Company Secretaries. The Minutes are thenc o n f i rmed by the Board and signed as correct re c o rds of thep roceedings thereat by the Chairm a n .

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Statement of Corporate Governance (continued)

4. Bonus or Incentive SchemeAny bonus or incentive scheme remuneration for theG roup Chief Executive is reviewed by the RemunerationCommittee and approved by the Board, whereas thebonus or incentive schemes of other Executive Dire c t o r sa re determined by the Group Chief Executive as part oftheir annual perf o rmance re v i e w.

5. Employee Share Option Scheme (“ESOS”)The ESOS allocation for all Directors and employees ofthe Group including the Non-Executive and ExecutiveD i rectors are determined by the Option Committee incompliance with the ESOS By-Laws approved by theB o a rd of Directors and share h o l d e r s .

The details of the remuneration of the Directors of theCompany for the financial year under review are as follows:

BOARD COMMITTEES

The Board has established various Board and ManagementCommittees to assist the Board in the running of the Group. Thefunctions and terms of re f e rence of the Committees, as well asthe authority delegated by the Board to these committees, havebeen clearly defined by the Board .

Details of the Board Committees for the financial year underreview are as follows:

Audit Committee

The Board is assisted by the Audit Committee, whichwas formed on 3 December 2002, whose roles and functionsa re set out in the Audit Committee Report section of this AnnualR e p o rt. The Audit Committee comprises three (3) members,

Basic Salaries, B e n e f i t s -D i re c t o r s Bonus and EPF F e e s i n - k i n d To t a l E S O S

R M R M R M (no. of share s )

N o n - e x e c u t i v e

Tan Sri Datuk Asmat Kamaludin – 4 0 , 0 0 0 – 4 0 , 0 0 0 5 0 0 , 0 0 0

Dato’ Dr. Tawfiq Ay m a n – 2 5 , 0 0 0 – 2 5 , 0 0 0 2 5 0 , 0 0 0 *

Khairil Anuar Abdullah – 2 5 , 0 0 0 – 2 5 , 0 0 0 2 5 0 , 0 0 0

Foo San Kan – 2 5 , 0 0 0 – 2 5 , 0 0 0 2 5 0 , 0 0 0

Lim Yen Haat – 1 6 , 9 2 0 * * – 1 6 , 9 2 0 2 5 0 , 0 0 0

Krishnan A/L C K Menon – 6 , 2 3 0 * * – 6 , 2 3 0 –

T O TA L – 1 3 8 , 1 5 0 – 1 3 8 , 1 5 0 1 , 5 0 0 , 0 0 0

E x e c u t i v e

Dato’ Azman Ya h y a 2 7 0 , 0 0 0 2 5 , 0 0 0 – 2 9 5 , 0 0 0 3 , 5 0 0 , 0 0 0

Abdul Hamid Sheikh Mohamed 5 4 0 , 4 0 0 2 5 , 0 0 0 – 5 6 5 , 4 0 0 2 , 4 0 0 , 0 0 0

Chin Jit Pyng 9 3 8 , 4 0 0 1 6 , 9 2 0 * * 3 , 6 0 0 9 5 8 , 9 2 0 2 , 4 0 0 , 0 0 0

T O TA L 1 , 7 4 8 , 8 0 0 6 6 , 9 2 0 3 , 6 0 0 1 , 8 1 9 , 3 2 0 8 , 3 0 0 , 0 0 0

N o t e s :* Options lapsed upon resignation as Director on 1 March 2005* * Pro-rated fees from their respective dates of appointment/resignation

re g u l a t o ry re q u i rements relating to the duties andresponsibilities of the Directors are complied with. In addition,the Directors are also empowered to seek independente x t e rnal professional advice at the expense of the Company,should they consider it necessary in the course of their duties.

Appointment and Re-Election of Board Members

The proposed appointment of new member(s), resignation ofexisting member(s), as well as the proposed re-election of theD i rectors are approved by the Board upon the re c o m m e n d a t i o nof the Nomination Committee.

Pursuant to Article 104 of the Company’s Articles ofAssociation, at every Annual General Meeting of the Company,one third (1/3) of the Directors or if the number is not three (3)or a multiple of three (3), then the nearest one-third (1/3) of theD i rectors shall re t i re from office but shall be eligible for re -election. All Directors shall re t i re from office once at least everyt h ree (3) years. For the financial year ended 31 December2004, the Company has complied with Article 104, with theresignation and re-election of Tan Sri Datuk Asmat Kamaludinand Dato’ Azman Yahya at the Second Annual GeneralMeeting held on 28 April 2004.

Pursuant to Section 129(2) of the Companies Act, 1965,D i rectors who are over seventy (70) years of age are re q u i re dto submit themselves for reappointment annually. None of theD i rectors of the Company has attained the age of seventy (70)years for the financial year under re v i e w.

The Board, through its delegation to the Nomination Committee,has set up and implemented the process for the assessments ofits Chairman, the individual Board Members and the Board asa whole. For the financial year ended 31 December 2004, theB o a rd has, through the Nomination Committee, reviewed theskills mix and experience of its individual Directors, assessed thee ffectiveness of the Board as a whole and made an assessmentof the perf o rmance of the Chairman.

Continuous Training of Directors

The Board believes that continuous training for the Directors isi m p o rtant to enable them to discharge their duties eff e c t i v e l y.As such, the Directors were encouraged to attend varioustraining programmes and seminars to ensure that they are kepta b reast on various issues pertaining to the constantly changinge n v i ronment within which the business of the Group operates,p a rticularly in areas of corporate governance and re g u l a t o ryc o m p l i a n c e .

For the financial year under re v i e w, all the Directors of theCompany have attended and successfully completed theM a n d a t o ry Accreditation Programme (“MAP”) conducted bythe Research Institute of Investment Analyst Malaysia(“RIIAM”). The Directors have also attended variousContinuing Education Programmes (“CEP”) accredited byBursa Malaysia Securities Berhad which includes courses thatrelate to corporate governance and re g u l a t o ry compliance,risk awareness, strategic enterprise, corporate updates,accounting and financial matters.

Pursuant to the repeal of Guidance Note 10, applicable forcompanies listed on the MESDAQ Market, with effect fro m1 January 2005, the Board shall on continuous basis, evaluateand determine the training needs of its Directors. The subjectmatter of training must be one that aids the respective Dire c t o r sin the discharge of their duties as directors. Notwithstandingthe repeal of Guidance Note 10, all Directors are still re q u i re dto accumulate the requisite minimum number of 48 CEP pointsfor the calendar year 2004 and a circular notification on thisre q u i rement has been sent to all the Directors.

Remuneration of Directors

The Remuneration Committee reviews annually the perf o rm a n c eof the Executive Directors and the Group Chief Executive. Itf u rnishes the recommendations to the Board on the re m u n e r a t i o nand benefits package as well as other terms and conditions ofs e rvice that reflect their respective contributions for the year, intandem with the Gro u p ’s corporate objectives and strategy.

D i rectors’ Remuneration Package

The remuneration package of the Directors comprises some orall of the following:

1. D i rectors’ FeesD i rectors’ Fees payable to Non-Executive and ExecutiveD i rectors are reviewed by the Remuneration Committeeand determined by the Board with the approval from thes h a reholders at the Annual General Meeting.

2. Salaries and Benefits-in-kindThe basic salary and other benefits relating to the Schemeof Service of the Executive Directors are reviewed by theRemuneration Committee and approved by the Board .

3. EPF Employer’s ContributionThe EPF Employer’s Contribution for the ExecutiveD i rectors are determined by the Remuneration Committeeand approved by the Board .

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Statement of Corporate Governance (continued)

4. Bonus or Incentive SchemeAny bonus or incentive scheme remuneration for theG roup Chief Executive is reviewed by the RemunerationCommittee and approved by the Board, whereas thebonus or incentive schemes of other Executive Dire c t o r sa re determined by the Group Chief Executive as part oftheir annual perf o rmance re v i e w.

5. Employee Share Option Scheme (“ESOS”)The ESOS allocation for all Directors and employees ofthe Group including the Non-Executive and ExecutiveD i rectors are determined by the Option Committee incompliance with the ESOS By-Laws approved by theB o a rd of Directors and share h o l d e r s .

The details of the remuneration of the Directors of theCompany for the financial year under review are as follows:

BOARD COMMITTEES

The Board has established various Board and ManagementCommittees to assist the Board in the running of the Group. Thefunctions and terms of re f e rence of the Committees, as well asthe authority delegated by the Board to these committees, havebeen clearly defined by the Board .

Details of the Board Committees for the financial year underreview are as follows:

Audit Committee

The Board is assisted by the Audit Committee, whichwas formed on 3 December 2002, whose roles and functionsa re set out in the Audit Committee Report section of this AnnualR e p o rt. The Audit Committee comprises three (3) members,

Basic Salaries, B e n e f i t s -D i re c t o r s Bonus and EPF F e e s i n - k i n d To t a l E S O S

R M R M R M (no. of share s )

N o n - e x e c u t i v e

Tan Sri Datuk Asmat Kamaludin – 4 0 , 0 0 0 – 4 0 , 0 0 0 5 0 0 , 0 0 0

Dato’ Dr. Tawfiq Ay m a n – 2 5 , 0 0 0 – 2 5 , 0 0 0 2 5 0 , 0 0 0 *

Khairil Anuar Abdullah – 2 5 , 0 0 0 – 2 5 , 0 0 0 2 5 0 , 0 0 0

Foo San Kan – 2 5 , 0 0 0 – 2 5 , 0 0 0 2 5 0 , 0 0 0

Lim Yen Haat – 1 6 , 9 2 0 * * – 1 6 , 9 2 0 2 5 0 , 0 0 0

Krishnan A/L C K Menon – 6 , 2 3 0 * * – 6 , 2 3 0 –

T O TA L – 1 3 8 , 1 5 0 – 1 3 8 , 1 5 0 1 , 5 0 0 , 0 0 0

E x e c u t i v e

Dato’ Azman Ya h y a 2 7 0 , 0 0 0 2 5 , 0 0 0 – 2 9 5 , 0 0 0 3 , 5 0 0 , 0 0 0

Abdul Hamid Sheikh Mohamed 5 4 0 , 4 0 0 2 5 , 0 0 0 – 5 6 5 , 4 0 0 2 , 4 0 0 , 0 0 0

Chin Jit Pyng 9 3 8 , 4 0 0 1 6 , 9 2 0 * * 3 , 6 0 0 9 5 8 , 9 2 0 2 , 4 0 0 , 0 0 0

T O TA L 1 , 7 4 8 , 8 0 0 6 6 , 9 2 0 3 , 6 0 0 1 , 8 1 9 , 3 2 0 8 , 3 0 0 , 0 0 0

N o t e s :* Options lapsed upon resignation as Director on 1 March 2005* * Pro-rated fees from their respective dates of appointment/resignation

re g u l a t o ry re q u i rements relating to the duties andresponsibilities of the Directors are complied with. In addition,the Directors are also empowered to seek independente x t e rnal professional advice at the expense of the Company,should they consider it necessary in the course of their duties.

Appointment and Re-Election of Board Members

The proposed appointment of new member(s), resignation ofexisting member(s), as well as the proposed re-election of theD i rectors are approved by the Board upon the re c o m m e n d a t i o nof the Nomination Committee.

Pursuant to Article 104 of the Company’s Articles ofAssociation, at every Annual General Meeting of the Company,one third (1/3) of the Directors or if the number is not three (3)or a multiple of three (3), then the nearest one-third (1/3) of theD i rectors shall re t i re from office but shall be eligible for re -election. All Directors shall re t i re from office once at least everyt h ree (3) years. For the financial year ended 31 December2004, the Company has complied with Article 104, with theresignation and re-election of Tan Sri Datuk Asmat Kamaludinand Dato’ Azman Yahya at the Second Annual GeneralMeeting held on 28 April 2004.

Pursuant to Section 129(2) of the Companies Act, 1965,D i rectors who are over seventy (70) years of age are re q u i re dto submit themselves for reappointment annually. None of theD i rectors of the Company has attained the age of seventy (70)years for the financial year under re v i e w.

The Board, through its delegation to the Nomination Committee,has set up and implemented the process for the assessments ofits Chairman, the individual Board Members and the Board asa whole. For the financial year ended 31 December 2004, theB o a rd has, through the Nomination Committee, reviewed theskills mix and experience of its individual Directors, assessed thee ffectiveness of the Board as a whole and made an assessmentof the perf o rmance of the Chairman.

Continuous Training of Directors

The Board believes that continuous training for the Directors isi m p o rtant to enable them to discharge their duties eff e c t i v e l y.As such, the Directors were encouraged to attend varioustraining programmes and seminars to ensure that they are kepta b reast on various issues pertaining to the constantly changinge n v i ronment within which the business of the Group operates,p a rticularly in areas of corporate governance and re g u l a t o ryc o m p l i a n c e .

For the financial year under re v i e w, all the Directors of theCompany have attended and successfully completed theM a n d a t o ry Accreditation Programme (“MAP”) conducted bythe Research Institute of Investment Analyst Malaysia(“RIIAM”). The Directors have also attended variousContinuing Education Programmes (“CEP”) accredited byBursa Malaysia Securities Berhad which includes courses thatrelate to corporate governance and re g u l a t o ry compliance,risk awareness, strategic enterprise, corporate updates,accounting and financial matters.

Pursuant to the repeal of Guidance Note 10, applicable forcompanies listed on the MESDAQ Market, with effect fro m1 January 2005, the Board shall on continuous basis, evaluateand determine the training needs of its Directors. The subjectmatter of training must be one that aids the respective Dire c t o r sin the discharge of their duties as directors. Notwithstandingthe repeal of Guidance Note 10, all Directors are still re q u i re dto accumulate the requisite minimum number of 48 CEP pointsfor the calendar year 2004 and a circular notification on thisre q u i rement has been sent to all the Directors.

Remuneration of Directors

The Remuneration Committee reviews annually the perf o rm a n c eof the Executive Directors and the Group Chief Executive. Itf u rnishes the recommendations to the Board on the re m u n e r a t i o nand benefits package as well as other terms and conditions ofs e rvice that reflect their respective contributions for the year, intandem with the Gro u p ’s corporate objectives and strategy.

D i rectors’ Remuneration Package

The remuneration package of the Directors comprises some orall of the following:

1. D i rectors’ FeesD i rectors’ Fees payable to Non-Executive and ExecutiveD i rectors are reviewed by the Remuneration Committeeand determined by the Board with the approval from thes h a reholders at the Annual General Meeting.

2. Salaries and Benefits-in-kindThe basic salary and other benefits relating to the Schemeof Service of the Executive Directors are reviewed by theRemuneration Committee and approved by the Board .

3. EPF Employer’s ContributionThe EPF Employer’s Contribution for the ExecutiveD i rectors are determined by the Remuneration Committeeand approved by the Board .

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Statement of Corporate Governance (continued)

C O M M U N I C ATION WITH INVESTORS ANDS H A R E H O L D E R S

Dialogue with Investors

A p a rt from the Board ’s primary duty to provide accountability,the Group continues to recognise the importance ofmaintaining transparency in its dealings with its investors ands h a reholders as it ensures that market credibility and investors’confidence are maintained. As part of the Gro u p ’s eff o rts toestablish constructive investor relations, the Group continuouslye n s u res that the dissemination of material information is doneto promulgate timeliness, clarity, completeness and accuracy inthe disclosure of information, which will in turn enables h a reholders and investors to make informed investmentdecisions. Various channels of communication are employed top romote effective dissemination of information. The Board alsohas nominated the Chairman, who is an Independent Non-Executive Director as the Senior Dire c t o r, available to discussany matters or issues with investors and share h o l d e r s .

Besides the key channels of communication through the AnnualR e p o rt, general meetings and announcements to BursaMalaysia Securities Berhad as well as analyst and mediabriefings, there is also continuous eff o rt to enhance the Gro u p ’swebsite at www. s y m p h o n y.com.my as a channel ofcommunication and information dissemination.

General Meetings

The Annual General Meeting (“AGM”) remains the principalf o rum for communication and dialogue with shareholders, inwhich the Board re p o rts on its stewardship to the share h o l d e r sand accounts for the Company’s and the Gro u p ’sp e rf o rmance. The AGM provides the opportunity forinteraction amongst shareholders, Directors and Management,w h e re the shareholders are at liberty to raise questions on theAGM agenda.

At the AGM, the Chairman of the Board presents amongstother matters, a comprehensive review of the Gro u p ’s financialp e rf o rmance and business plans as well as projected futurep e rf o rmance. The Chairman also encourages shareholders top a rticipate in the question and answer session. Other Dire c t o r sand re p resentatives of the Management are also present at theAGM to assist the Chairman, where re q u i red, to respond tos h a reholders’ queries during the meeting.

A C C O U N TABILITY AND AUDIT

Financial Report i n g

The Board is committed to provide a balanced, timely andc o m p rehensive assessment of the Company’s and the Gro u p ’sfinancial position and prospects by ensuring quality financialre p o rting to its stakeholders, in part i c u l a r, to share h o l d e r s ,investors and re g u l a t o ry authorities. They are kept abreast ofthe Company’s and the Gro u p ’s financial position during they e a r, through the quarterly financial results announcement.

Q u a rterly and annual financial statements are reviewed anddeliberated upon by the Audit Committee to ensure the qualityof financial re p o rting and adequacy of such information, priorto submission to the Board for its appro v a l .

The Statement of Directors’ Responsibility in relation to theFinancial Statements is presented on the section immediatelyp roceeding the Dire c t o r ’s Report and Financial Statements ofthis Annual Report .

I n t e rnal Contro l

The Board acknowledges its overall responsibility to maintaina system of internal controls that provides re a s o n a b l eassurance of effective and efficient operations, legal andre g u l a t o ry compliance as well as adherence to intern a lpolicies and pro c e d u res. The Gro u p ’s system of intern a lc o n t rols is designed to provide reasonable assurance againstrisks of material errors, frauds or losses occurring. During they e a r, the Board has, through the Risk Management Committee,c a rried out ongoing process of identifying, evaluating andmanaging key operational and financial risks affecting theG ro u p .

The effectiveness of the Gro u p ’s system of internal controls isreviewed periodically by the Audit Committee. The re v i e wcovers the financial, operational and compliance controls aswell as risk management. For the financial year under re v i e w,the Board considers that the system of internal contro l sinstituted throughout the Group is sound and sufficient tos a f e g u a rd shareholders’ investments and the Company’sassets. Continuous risk management eff o rts have been made toenhance the adequacy and integrity of the Gro u p ’s system ofi n t e rnal contro l s .

F u rther details of the Gro u p ’s system of internal controls are setout in the Statement of Internal Contro l .

the majority of whom are Independent Non-ExecutiveD i re c t o r s :

• Khairil Anuar Abdullah (Chairm a n )• Dato’ Dr Tawfiq Ay m a n *• Foo San Kan (appointed to replace Krishnan A / L

C K Menon who resigned on 6 April 2004)

*Lim Yen Haat (Non-Independent Non-Executive Director) wasappointed onto the Audit Committee on 2 March 2005 following theresignation of Dato’ Dr Tawfiq Ayman on 1 March 2005.

The Audit Committee met four (4) times during the course of thefinancial year ended 31 December 2004.

Nomination Committee

The Nomination Committee was formed on 6 Febru a ry 2003and is responsible for ensuring that the Board has thea p p ropriate balance and size, and the re q u i red skills mix,experience and other core competencies; and is alsoresponsible for considering and recommending theappointment of new Directors to the Board. The NominationCommittee comprises three (3) members, all of whom areIndependent Non-Executive Dire c t o r s :

• Tan Sri Datuk Asmat Kamaludin (Chairm a n )• Dato’ Dr Tawfiq Ay m a n *• Khairil Anuar Abdullah

*Foo San Kan (Independent Non-Executive Director) was appointedonto the Nomination Committee on 2 March 2005 following theresignation of Dato’ Dr Tawfiq Ayman on 1 March 2005.

The terms of re f e rence of the Nomination Committee are asfollows :

i To consider and recommend suitable persons forappointment as Directors of Symphony House Berh a d ;

ii To consider and recommend Directors for appointment asmembers of committee of the Board ;

iii To assess the effectiveness of the Board of Directors, thecommittees of the Board and each Individual Director ofSymphony House Berh a d ;

iv To consider and recommend measures to upgrade thee ffectiveness of the Board and committees of the Board ;

v To annually review the re q u i red mix of skills andexperience and other qualities, including corecompetencies, which Non-Executive Directors shouldbring to the Board ;

vi To consider and recommend a policy re g a rding the periodof service of Executive and Non-Executive Dire c t o r s ;

vii To consider and recommend solutions on issues of conflictof interest affecting Directors;

viii Such other functions as may be delegated by the Boardf rom time to time; and

ix To consider and recommend training or skills upgrade forD i rectors in furtherance of their duties as appro p r i a t e .

The Nomination Committee met once during the course of thefinancial year ended 31 December 2004.

Remuneration Committee

The Remuneration Committee was formed on 6 Febru a ry 2003and is responsible for recommending to the Board thecompensation and benefits package and salary scale, the basisfor bonus and salary increments for the executives of the Gro u p .The objective of the Remuneration Committee is to attract andretain high calibre executives needed to run and manage theCompany successfully. The Remuneration Committee is alsoresponsible for recommending to the Board the re m u n e r a t i o nand benefits package and the terms and condition of service ofthe Group Chief Executive. The remuneration package of Non-Executive Directors is also reviewed by the Committee andrecommended to the Board there a f t e r. The RemunerationCommittee comprises three (3) members, the majority of whoma re Independent Non-Executive Dire c t o r s :

• Tan Sri Datuk Asmat Kamaludin (Chairm a n )• Foo San Kan• Khairil Anuar Abdullah (appointed to replace Krishnan

A / L C K Menon who resigned on 6 April 2004)

The terms of re f e rence of the Remuneration Committee are asf o l l o w s :

i Subject to item (ii) below:• To review and recommend to the Board the

compensation and benefits package and salaryscale for executives of the Symphony House Gro u p ;

• To review and recommend to the Board the basis forthe annual bonus and salary increment forexecutives of the Symphony House Gro u p ;

ii To review and recommend to the Board the compensationand benefits package and the terms and conditions ofs e rvice of the Group Chief Executive and ExecutiveD i rectors; and

iii To review and recommend to the Board the re m u n e r a t i o nfor Non-Executive Directors of the Company.

The Remuneration Committee met once during the course ofthe financial year ended 31 December 2004.

32

3 3

Statement of Corporate Governance (continued)

C O M M U N I C ATION WITH INVESTORS ANDS H A R E H O L D E R S

Dialogue with Investors

A p a rt from the Board ’s primary duty to provide accountability,the Group continues to recognise the importance ofmaintaining transparency in its dealings with its investors ands h a reholders as it ensures that market credibility and investors’confidence are maintained. As part of the Gro u p ’s eff o rts toestablish constructive investor relations, the Group continuouslye n s u res that the dissemination of material information is doneto promulgate timeliness, clarity, completeness and accuracy inthe disclosure of information, which will in turn enables h a reholders and investors to make informed investmentdecisions. Various channels of communication are employed top romote effective dissemination of information. The Board alsohas nominated the Chairman, who is an Independent Non-Executive Director as the Senior Dire c t o r, available to discussany matters or issues with investors and share h o l d e r s .

Besides the key channels of communication through the AnnualR e p o rt, general meetings and announcements to BursaMalaysia Securities Berhad as well as analyst and mediabriefings, there is also continuous eff o rt to enhance the Gro u p ’swebsite at www. s y m p h o n y.com.my as a channel ofcommunication and information dissemination.

General Meetings

The Annual General Meeting (“AGM”) remains the principalf o rum for communication and dialogue with shareholders, inwhich the Board re p o rts on its stewardship to the share h o l d e r sand accounts for the Company’s and the Gro u p ’sp e rf o rmance. The AGM provides the opportunity forinteraction amongst shareholders, Directors and Management,w h e re the shareholders are at liberty to raise questions on theAGM agenda.

At the AGM, the Chairman of the Board presents amongstother matters, a comprehensive review of the Gro u p ’s financialp e rf o rmance and business plans as well as projected futurep e rf o rmance. The Chairman also encourages shareholders top a rticipate in the question and answer session. Other Dire c t o r sand re p resentatives of the Management are also present at theAGM to assist the Chairman, where re q u i red, to respond tos h a reholders’ queries during the meeting.

A C C O U N TABILITY AND AUDIT

Financial Report i n g

The Board is committed to provide a balanced, timely andc o m p rehensive assessment of the Company’s and the Gro u p ’sfinancial position and prospects by ensuring quality financialre p o rting to its stakeholders, in part i c u l a r, to share h o l d e r s ,investors and re g u l a t o ry authorities. They are kept abreast ofthe Company’s and the Gro u p ’s financial position during they e a r, through the quarterly financial results announcement.

Q u a rterly and annual financial statements are reviewed anddeliberated upon by the Audit Committee to ensure the qualityof financial re p o rting and adequacy of such information, priorto submission to the Board for its appro v a l .

The Statement of Directors’ Responsibility in relation to theFinancial Statements is presented on the section immediatelyp roceeding the Dire c t o r ’s Report and Financial Statements ofthis Annual Report .

I n t e rnal Contro l

The Board acknowledges its overall responsibility to maintaina system of internal controls that provides re a s o n a b l eassurance of effective and efficient operations, legal andre g u l a t o ry compliance as well as adherence to intern a lpolicies and pro c e d u res. The Gro u p ’s system of intern a lc o n t rols is designed to provide reasonable assurance againstrisks of material errors, frauds or losses occurring. During they e a r, the Board has, through the Risk Management Committee,c a rried out ongoing process of identifying, evaluating andmanaging key operational and financial risks affecting theG ro u p .

The effectiveness of the Gro u p ’s system of internal controls isreviewed periodically by the Audit Committee. The re v i e wcovers the financial, operational and compliance controls aswell as risk management. For the financial year under re v i e w,the Board considers that the system of internal contro l sinstituted throughout the Group is sound and sufficient tos a f e g u a rd shareholders’ investments and the Company’sassets. Continuous risk management eff o rts have been made toenhance the adequacy and integrity of the Gro u p ’s system ofi n t e rnal contro l s .

F u rther details of the Gro u p ’s system of internal controls are setout in the Statement of Internal Contro l .

the majority of whom are Independent Non-ExecutiveD i re c t o r s :

• Khairil Anuar Abdullah (Chairm a n )• Dato’ Dr Tawfiq Ay m a n *• Foo San Kan (appointed to replace Krishnan A / L

C K Menon who resigned on 6 April 2004)

*Lim Yen Haat (Non-Independent Non-Executive Director) wasappointed onto the Audit Committee on 2 March 2005 following theresignation of Dato’ Dr Tawfiq Ayman on 1 March 2005.

The Audit Committee met four (4) times during the course of thefinancial year ended 31 December 2004.

Nomination Committee

The Nomination Committee was formed on 6 Febru a ry 2003and is responsible for ensuring that the Board has thea p p ropriate balance and size, and the re q u i red skills mix,experience and other core competencies; and is alsoresponsible for considering and recommending theappointment of new Directors to the Board. The NominationCommittee comprises three (3) members, all of whom areIndependent Non-Executive Dire c t o r s :

• Tan Sri Datuk Asmat Kamaludin (Chairm a n )• Dato’ Dr Tawfiq Ay m a n *• Khairil Anuar Abdullah

*Foo San Kan (Independent Non-Executive Director) was appointedonto the Nomination Committee on 2 March 2005 following theresignation of Dato’ Dr Tawfiq Ayman on 1 March 2005.

The terms of re f e rence of the Nomination Committee are asfollows :

i To consider and recommend suitable persons forappointment as Directors of Symphony House Berh a d ;

ii To consider and recommend Directors for appointment asmembers of committee of the Board ;

iii To assess the effectiveness of the Board of Directors, thecommittees of the Board and each Individual Director ofSymphony House Berh a d ;

iv To consider and recommend measures to upgrade thee ffectiveness of the Board and committees of the Board ;

v To annually review the re q u i red mix of skills andexperience and other qualities, including corecompetencies, which Non-Executive Directors shouldbring to the Board ;

vi To consider and recommend a policy re g a rding the periodof service of Executive and Non-Executive Dire c t o r s ;

vii To consider and recommend solutions on issues of conflictof interest affecting Directors;

viii Such other functions as may be delegated by the Boardf rom time to time; and

ix To consider and recommend training or skills upgrade forD i rectors in furtherance of their duties as appro p r i a t e .

The Nomination Committee met once during the course of thefinancial year ended 31 December 2004.

Remuneration Committee

The Remuneration Committee was formed on 6 Febru a ry 2003and is responsible for recommending to the Board thecompensation and benefits package and salary scale, the basisfor bonus and salary increments for the executives of the Gro u p .The objective of the Remuneration Committee is to attract andretain high calibre executives needed to run and manage theCompany successfully. The Remuneration Committee is alsoresponsible for recommending to the Board the re m u n e r a t i o nand benefits package and the terms and condition of service ofthe Group Chief Executive. The remuneration package of Non-Executive Directors is also reviewed by the Committee andrecommended to the Board there a f t e r. The RemunerationCommittee comprises three (3) members, the majority of whoma re Independent Non-Executive Dire c t o r s :

• Tan Sri Datuk Asmat Kamaludin (Chairm a n )• Foo San Kan• Khairil Anuar Abdullah (appointed to replace Krishnan

A / L C K Menon who resigned on 6 April 2004)

The terms of re f e rence of the Remuneration Committee are asf o l l o w s :

i Subject to item (ii) below:• To review and recommend to the Board the

compensation and benefits package and salaryscale for executives of the Symphony House Gro u p ;

• To review and recommend to the Board the basis forthe annual bonus and salary increment forexecutives of the Symphony House Gro u p ;

ii To review and recommend to the Board the compensationand benefits package and the terms and conditions ofs e rvice of the Group Chief Executive and ExecutiveD i rectors; and

iii To review and recommend to the Board the re m u n e r a t i o nfor Non-Executive Directors of the Company.

The Remuneration Committee met once during the course ofthe financial year ended 31 December 2004.

32

3 5

Relationship with Auditors

The Board maintains a transparent and pro f e s s i o n a lrelationship with the Gro u p ’s auditors, through the AuditCommittee. The committee is conferred with the authority tod i rectly liaise with both the external and internal auditors of theG roup. The Board, may seek the external auditors’p rofessional advice in ensuring compliance with appro p r i a t eaccounting standards and relevant provisions of theCompanies Act, 1965. It is a policy of the Audit Committeethat it meets with external auditors without any ExecutiveD i rectors and the Management present, at least once a year.

OTHER COMPLIANCE INFORMATION

Imposition of Sanctions and/or Penalties

During the financial year under re v i e w, there were no sanctionsor penalties imposed on the Company and its subsidiaries,D i rectors or Management by any re g u l a t o ry body.

Material Contracts Involving Directors andSubstantial Share h o l d e r s

The Company and its subsidiaries had not entered into anymaterial contracts which involved the interests of the Dire c t o r sor substantial shareholders, either still subsisting at the end ofthe financial year, or which were entered into since the end ofthe previous financial year.

Variation in Results

T h e re were no significant variations between the auditedresults for the financial year and the unaudited re s u l t sp reviously announced.

R e c u rrent Related Party Transaction of Revenue orTrading Nature

The list of significant related party transactions are disclosed inthe Notes to the Financial Statements. A breakdown of thea g g regate value of the re c u rrent related party transactions ofa revenue or trading nature for which shareholders’ mandatewas obtained on 28 April 2004 are set out in the table below:

Related Part y ( i e s ) Relationship with the N a t u re of Transaction with Actual Value (RM)Symphony Gro u p Symphony Gro u p 31 December 2004

*Malaysian Plantations Bolton Berhad is a Substantial P rovision of inform a t i o n 4 , 3 6 6 , 9 8 3B e rhad Group of S h a reholder of Symphony technology project re l a t e dCompanies (“MPlant House Berh a d s e rvices by SymphonyG ro u p ) ” Global Sdn Bhd to the

MPlant Gro u p .

**Silverlake Group of Goh Peng Ooi was a Director of P rovision of IT related serv i c e s 7 , 1 6 6 , 5 9 8Companies Symphony Global Sdn Bhd by Symphony Global Sdn Bhd(“Silverlake Gro u p ” ) ("SGSB" ) and Silverlake Systems to the Silverlake Gro u p

Sdn Bhd. He resigned from Symphony Global Sdn Bhdon 19 January 2004.

*SGI Edu Centre Sdn Bhd Chin Jit Pyng was a Director of Renting of office space located 4 5 , 3 0 6SGI Edu and resigned on at Block G, Lot No. 3A11,19 Febru a ry 2004. Phileo Damansara, Petaling

Jaya, from Peringkat AlamGoh Peng Ooi was a Director and Sdn Bhd, a subsidiary ofSubstantial Shareholder of SGI Edu Symphony Global Sdn Bhd.as at 23 March 2004. He was a Director of Symphony Global Sdn Bhd and resigned on 19 January 2004.

N o t e s :* transactions were entered into with Alliance Bank Malaysia Bhd.* * transactions were entered into with Axis Systems Sdn Bhd and Silverlake System Sdn. Bhd.

Statement of Internal ControlFor the financial year ended 31 December 2004

INTRODUCTION

The Listing Requirements of Bursa Malaysia places strongemphasis on Corporate Governance to ensure that the Boardof Directors of public-listed companies maintain a sound systemof internal control to safeguard shareholders’ investments andcompany’s assets. In compliance with the aforementionedobligation, the Board of Directors of Symphony House Berhadis pleased to present the following statement which outlines thenature and scope of internal controls that affected the Groupduring the financial year under review.

BOARD RESPONSIBILITY

The Board recognises the importance of sound internal controlsand risk management practices towards implementation ofgood corporate governance. The Board affirms its overallresponsibility for the Group’s system of internal controls andrisk management, and reviewing the adequacy and integrity ofthose processes. However, it also recognises that due toinherent limitations, the Group’s system of internal control isdesigned to manage rather than eliminate the risk of failure toachieve corporate objectives. Accordingly, the Board is also ofthe view that the Group’s system of internal control can onlyp rovide reasonable but not absolute assurance againstmaterial misstatement or loss. The internal controls, financial orotherwise, should provide reasonable assurance regarding theachievement of the Group’s objectives in:

• Effectiveness and efficiency of operations• Reliability and transparency of financial information• Compliance with laws and regulations• Safeguarding the company’s assets• Realising the Group’s strategic objectives• Optimising the returns to and protecting the interest of

stakeholders

The Board believes that the review on the adequacy andeffectiveness of the system of internal control is a concertedand continuing process. Such reviews are conducted throughthe various committees established by the Board and

Management. The Board has, through the Risk ManagementCommittee, carried out an ongoing process of identifying,evaluating, monitoring and managing the key operational andfinancial risks affecting the achievement of its corporateobjectives throughout the year, whereas the effectiveness of thesystem of internal controls is reviewed periodically by the AuditCommittee. The Audit Committee review covers the financial,operational, compliance controls and risk management.

STRATEGIC ENTERPRISE-WIDE RISK MANAGEMENTFRAMEWORK

Organisations strive to ensure that key risks have beenidentified and robust internal controls are in place to managethe risks. To this endeavour, the Group has established andmaintained a Strategic Enterprise-wide Risk ManagementFramework not only as compliance tool but, more importantly,as a performance management tool to achieve its corporateobjectives. The Board believes that risk management shouldnot be viewed in isolation as it is very much part of strategicplanning initiatives. It also believes that risk managementshould also be balanced, taking into consideration the causeand effect of the essential components of the organisation.With adequate risk management, the Group will be able tomaximise opportunities to reach our full potential.

Management is responsible for creating a risk awarenessculture and the provision of the necessary knowledge and skillsets for the implementation of risk management. Continuousrisk management efforts have been made to improve thepolicies, processes, people and structures within the Group. Anindependent external consultant was engaged to assist theGroup in developing a structured risk management profile andimplementation of risk management best practices for all keybusiness units under the Group. By adopting the scorecardapproach, key risks, its possible impact and likelihood ofo c c u rrence are identified, analysed and prioritised.Management action plans to mitigate these risks are reviewedand endorsed by the Risk Management Committee andsubsequently by the Audit Committee and the Board.

34

Statement of Corporate Governance (continued)

3 5

Relationship with Auditors

The Board maintains a transparent and pro f e s s i o n a lrelationship with the Gro u p ’s auditors, through the AuditCommittee. The committee is conferred with the authority tod i rectly liaise with both the external and internal auditors of theG roup. The Board, may seek the external auditors’p rofessional advice in ensuring compliance with appro p r i a t eaccounting standards and relevant provisions of theCompanies Act, 1965. It is a policy of the Audit Committeethat it meets with external auditors without any ExecutiveD i rectors and the Management present, at least once a year.

OTHER COMPLIANCE INFORMATION

Imposition of Sanctions and/or Penalties

During the financial year under re v i e w, there were no sanctionsor penalties imposed on the Company and its subsidiaries,D i rectors or Management by any re g u l a t o ry body.

Material Contracts Involving Directors andSubstantial Share h o l d e r s

The Company and its subsidiaries had not entered into anymaterial contracts which involved the interests of the Dire c t o r sor substantial shareholders, either still subsisting at the end ofthe financial year, or which were entered into since the end ofthe previous financial year.

Variation in Results

T h e re were no significant variations between the auditedresults for the financial year and the unaudited re s u l t sp reviously announced.

R e c u rrent Related Party Transaction of Revenue orTrading Nature

The list of significant related party transactions are disclosed inthe Notes to the Financial Statements. A breakdown of thea g g regate value of the re c u rrent related party transactions ofa revenue or trading nature for which shareholders’ mandatewas obtained on 28 April 2004 are set out in the table below:

Related Part y ( i e s ) Relationship with the N a t u re of Transaction with Actual Value (RM)Symphony Gro u p Symphony Gro u p 31 December 2004

*Malaysian Plantations Bolton Berhad is a Substantial P rovision of inform a t i o n 4 , 3 6 6 , 9 8 3B e rhad Group of S h a reholder of Symphony technology project re l a t e dCompanies (“MPlant House Berh a d s e rvices by SymphonyG ro u p ) ” Global Sdn Bhd to the

MPlant Gro u p .

**Silverlake Group of Goh Peng Ooi was a Director of P rovision of IT related serv i c e s 7 , 1 6 6 , 5 9 8Companies Symphony Global Sdn Bhd by Symphony Global Sdn Bhd(“Silverlake Gro u p ” ) ("SGSB" ) and Silverlake Systems to the Silverlake Gro u p

Sdn Bhd. He resigned from Symphony Global Sdn Bhdon 19 January 2004.

*SGI Edu Centre Sdn Bhd Chin Jit Pyng was a Director of Renting of office space located 4 5 , 3 0 6SGI Edu and resigned on at Block G, Lot No. 3A11,19 Febru a ry 2004. Phileo Damansara, Petaling

Jaya, from Peringkat AlamGoh Peng Ooi was a Director and Sdn Bhd, a subsidiary ofSubstantial Shareholder of SGI Edu Symphony Global Sdn Bhd.as at 23 March 2004. He was a Director of Symphony Global Sdn Bhd and resigned on 19 January 2004.

N o t e s :* transactions were entered into with Alliance Bank Malaysia Bhd.* * transactions were entered into with Axis Systems Sdn Bhd and Silverlake System Sdn. Bhd.

Statement of Internal ControlFor the financial year ended 31 December 2004

INTRODUCTION

The Listing Requirements of Bursa Malaysia places strongemphasis on Corporate Governance to ensure that the Boardof Directors of public-listed companies maintain a sound systemof internal control to safeguard shareholders’ investments andcompany’s assets. In compliance with the aforementionedobligation, the Board of Directors of Symphony House Berhadis pleased to present the following statement which outlines thenature and scope of internal controls that affected the Groupduring the financial year under review.

BOARD RESPONSIBILITY

The Board recognises the importance of sound internal controlsand risk management practices towards implementation ofgood corporate governance. The Board affirms its overallresponsibility for the Group’s system of internal controls andrisk management, and reviewing the adequacy and integrity ofthose processes. However, it also recognises that due toinherent limitations, the Group’s system of internal control isdesigned to manage rather than eliminate the risk of failure toachieve corporate objectives. Accordingly, the Board is also ofthe view that the Group’s system of internal control can onlyp rovide reasonable but not absolute assurance againstmaterial misstatement or loss. The internal controls, financial orotherwise, should provide reasonable assurance regarding theachievement of the Group’s objectives in:

• Effectiveness and efficiency of operations• Reliability and transparency of financial information• Compliance with laws and regulations• Safeguarding the company’s assets• Realising the Group’s strategic objectives• Optimising the returns to and protecting the interest of

stakeholders

The Board believes that the review on the adequacy andeffectiveness of the system of internal control is a concertedand continuing process. Such reviews are conducted throughthe various committees established by the Board and

Management. The Board has, through the Risk ManagementCommittee, carried out an ongoing process of identifying,evaluating, monitoring and managing the key operational andfinancial risks affecting the achievement of its corporateobjectives throughout the year, whereas the effectiveness of thesystem of internal controls is reviewed periodically by the AuditCommittee. The Audit Committee review covers the financial,operational, compliance controls and risk management.

STRATEGIC ENTERPRISE-WIDE RISK MANAGEMENTFRAMEWORK

Organisations strive to ensure that key risks have beenidentified and robust internal controls are in place to managethe risks. To this endeavour, the Group has established andmaintained a Strategic Enterprise-wide Risk ManagementFramework not only as compliance tool but, more importantly,as a performance management tool to achieve its corporateobjectives. The Board believes that risk management shouldnot be viewed in isolation as it is very much part of strategicplanning initiatives. It also believes that risk managementshould also be balanced, taking into consideration the causeand effect of the essential components of the organisation.With adequate risk management, the Group will be able tomaximise opportunities to reach our full potential.

Management is responsible for creating a risk awarenessculture and the provision of the necessary knowledge and skillsets for the implementation of risk management. Continuousrisk management efforts have been made to improve thepolicies, processes, people and structures within the Group. Anindependent external consultant was engaged to assist theGroup in developing a structured risk management profile andimplementation of risk management best practices for all keybusiness units under the Group. By adopting the scorecardapproach, key risks, its possible impact and likelihood ofo c c u rrence are identified, analysed and prioritised.Management action plans to mitigate these risks are reviewedand endorsed by the Risk Management Committee andsubsequently by the Audit Committee and the Board.

34

Statement of Corporate Governance (continued)

3 7

The risk framework adopted by the Board to monitor andreview the effectiveness of the system of internal controls for thefinancial year under review are stated below:

• A Strategic Enterprise-wide Risk Management Frameworkhas continuously been practiced to assist the Board inmanaging its risks more effectively. The framework, whichis subject to regular review, is designed to provide anongoing process for identifying, evaluating andmanaging significant risks faced by the Group.

• In tandem with the implementation of a Control Self-Assessment process, the Group has also restructured theRisk Management Committee to ensure that the riskframework is implemented effectively and standards ofinternal control are continuously adhered to. In thiscontext, the Board has entrusted the Risk ManagementCommittee to ensure that there is an ongoing system ofrisk identification and assessment within each businessunit and to provide reasonable assurance to the Board onthe adequacy and integrity of the internal control systemon periodic basis.

• Formalisation of a Group Risk Management Process,which outlines the risk management scorecard’s updatingand reporting process for the Group and offers guidanceto employees on risk management issues.

• Nomination of key management personnel of therespective business units at the Risk ManagementCommittee to prepare action plans and address any riskand control issues.

• Appointment of Risk/Process Owner and Risk Managerfor respective business units within the Group to lead,coordinate and implement risk management initiatives.

The above risk management framework facilitates andenhances the ability of the Board and Management to managerisks within defined risk parameters and risk standards. Inaddition the framework also manages potential risks in the

light of changes in risk profile experienced by the industry andGroup.

CONTROL SELF-ASSESSMENT

Central to the Group’s Internal Control and Risk ManagementFramework is its Control Self-Assessment process, which wasestablished during the financial year under review. The processis a recognised and flexible management tool for acquiringinformation about business process risks, while empoweringthe risk owners to undertake responsibility and mitigate thoserisks. Each business unit is re q u i red to document themanagement and mitigating action plan for each significantrisk. Risk assessment and evaluation form an integral part ofthe annual strategic planning cycle. The Board, as part of theannual strategic review, considers and approves the Group’srisk structure.

THE AUDIT COMMITTEE AND INTERNAL AUDIT

During the financial year under review, the Group InternalAudit Function carried out periodic audit reviews based on theinternal audit plan approved by the Audit Committee toevaluate and re p o rt on the adequacy, integrity andeffectiveness of the Group’s overall system of internal controlimplemented throughout the Group. The Strategic RiskManagement Framework approach adopted enables theGroup Internal Audit Function to apply a risk-based approachin its review with the primary objective of further improvingand enhancing the Group’s existing system of internal control.The Audit Committee reviews the reports from the internal andexternal auditors on a regular basis and present such auditfindings and its recommendations to the Board.

OTHER KEY INTERNAL CONTROLS

The Board is committed to maintaining a strong controlstructure and environment to facilitate the proper conduct of theGroup’s businesses and operations. The current system ofinternal control has within it, the following key elements:

• Organisational Structure

The Group has in place an organisational structure that isaligned to business efficacy and operationalrequirements, with clearly defined lines of accountabilityand delegated authority. The Board is the pinnacle of thecorporate governance structure of the Group. The Boardis assisted not only by the Executive Management team,but also by independent Board committees such as theAudit, Nomination and Remuneration Committees as wellas the Risk Management Committee in specific areas forenhance internal control and corporate governance.

• Executive Review

There have been active participation by the ExecutiveDirectors in the day-to-day running of business operations,and regular dialogue with senior management of therespective business units. Scheduled managementmeetings are held regularly to identify, discuss andresolve business and operational issues.

• Policies, Procedures and Financial AuthorityLimits

The parameters of delegated authority are defined andset out in written policies and procedures, includingfinancial authority limits, to ensure a clear line ofresponsibility and accountability among the business unitsof the Group.

• Strategic Business Planning, Budgeting andReporting

A Group strategic business planning process is in placewhere the financial planning is correlated to the Group’sstrategic business plans. Financial perf o rmance isregularly compared against budgetary parameters, withexplanations of major variances, reviews of internal andexternal factors contributing to performance, and anaccount of management actions taken to improve results.

• Investment Appraisal

Major investment proposals on mergers and acquisitionsas well as long-term business investments are thoroughlyreviewed and appraised by the Board.

• Insurance and Physical Safeguards

Adequate insurance provision and security measures onmajor assets of the Group are provided to ensure that it issufficiently safeguarded against any mishap that willresult in material losses to the Group.

• Performance Management System

A structured Performance Management System has beendeveloped as a means to instil a performance culturewithin the Group and to align operations with corporateobjectives as well as employees’ interest with theshareholders.

WEAKNESS IN INTERNAL CONTROLS THAT RESULT INMATERIAL LOSSES

Management identified minor internal control weaknessesduring the year, all of which are being addressed. No majorinternal control weaknesses were identified nor did any of thereported weaknesses result in material losses or contingenciesrequiring disclosure in the Group Annual Report. Managementcontinues to take measures to strengthen the contro lenvironment.

Statement of Internal Control (continued)

36

3 7

The risk framework adopted by the Board to monitor andreview the effectiveness of the system of internal controls for thefinancial year under review are stated below:

• A Strategic Enterprise-wide Risk Management Frameworkhas continuously been practiced to assist the Board inmanaging its risks more effectively. The framework, whichis subject to regular review, is designed to provide anongoing process for identifying, evaluating andmanaging significant risks faced by the Group.

• In tandem with the implementation of a Control Self-Assessment process, the Group has also restructured theRisk Management Committee to ensure that the riskframework is implemented effectively and standards ofinternal control are continuously adhered to. In thiscontext, the Board has entrusted the Risk ManagementCommittee to ensure that there is an ongoing system ofrisk identification and assessment within each businessunit and to provide reasonable assurance to the Board onthe adequacy and integrity of the internal control systemon periodic basis.

• Formalisation of a Group Risk Management Process,which outlines the risk management scorecard’s updatingand reporting process for the Group and offers guidanceto employees on risk management issues.

• Nomination of key management personnel of therespective business units at the Risk ManagementCommittee to prepare action plans and address any riskand control issues.

• Appointment of Risk/Process Owner and Risk Managerfor respective business units within the Group to lead,coordinate and implement risk management initiatives.

The above risk management framework facilitates andenhances the ability of the Board and Management to managerisks within defined risk parameters and risk standards. Inaddition the framework also manages potential risks in the

light of changes in risk profile experienced by the industry andGroup.

CONTROL SELF-ASSESSMENT

Central to the Group’s Internal Control and Risk ManagementFramework is its Control Self-Assessment process, which wasestablished during the financial year under review. The processis a recognised and flexible management tool for acquiringinformation about business process risks, while empoweringthe risk owners to undertake responsibility and mitigate thoserisks. Each business unit is re q u i red to document themanagement and mitigating action plan for each significantrisk. Risk assessment and evaluation form an integral part ofthe annual strategic planning cycle. The Board, as part of theannual strategic review, considers and approves the Group’srisk structure.

THE AUDIT COMMITTEE AND INTERNAL AUDIT

During the financial year under review, the Group InternalAudit Function carried out periodic audit reviews based on theinternal audit plan approved by the Audit Committee toevaluate and re p o rt on the adequacy, integrity andeffectiveness of the Group’s overall system of internal controlimplemented throughout the Group. The Strategic RiskManagement Framework approach adopted enables theGroup Internal Audit Function to apply a risk-based approachin its review with the primary objective of further improvingand enhancing the Group’s existing system of internal control.The Audit Committee reviews the reports from the internal andexternal auditors on a regular basis and present such auditfindings and its recommendations to the Board.

OTHER KEY INTERNAL CONTROLS

The Board is committed to maintaining a strong controlstructure and environment to facilitate the proper conduct of theGroup’s businesses and operations. The current system ofinternal control has within it, the following key elements:

• Organisational Structure

The Group has in place an organisational structure that isaligned to business efficacy and operationalrequirements, with clearly defined lines of accountabilityand delegated authority. The Board is the pinnacle of thecorporate governance structure of the Group. The Boardis assisted not only by the Executive Management team,but also by independent Board committees such as theAudit, Nomination and Remuneration Committees as wellas the Risk Management Committee in specific areas forenhance internal control and corporate governance.

• Executive Review

There have been active participation by the ExecutiveDirectors in the day-to-day running of business operations,and regular dialogue with senior management of therespective business units. Scheduled managementmeetings are held regularly to identify, discuss andresolve business and operational issues.

• Policies, Procedures and Financial AuthorityLimits

The parameters of delegated authority are defined andset out in written policies and procedures, includingfinancial authority limits, to ensure a clear line ofresponsibility and accountability among the business unitsof the Group.

• Strategic Business Planning, Budgeting andReporting

A Group strategic business planning process is in placewhere the financial planning is correlated to the Group’sstrategic business plans. Financial perf o rmance isregularly compared against budgetary parameters, withexplanations of major variances, reviews of internal andexternal factors contributing to performance, and anaccount of management actions taken to improve results.

• Investment Appraisal

Major investment proposals on mergers and acquisitionsas well as long-term business investments are thoroughlyreviewed and appraised by the Board.

• Insurance and Physical Safeguards

Adequate insurance provision and security measures onmajor assets of the Group are provided to ensure that it issufficiently safeguarded against any mishap that willresult in material losses to the Group.

• Performance Management System

A structured Performance Management System has beendeveloped as a means to instil a performance culturewithin the Group and to align operations with corporateobjectives as well as employees’ interest with theshareholders.

WEAKNESS IN INTERNAL CONTROLS THAT RESULT INMATERIAL LOSSES

Management identified minor internal control weaknessesduring the year, all of which are being addressed. No majorinternal control weaknesses were identified nor did any of thereported weaknesses result in material losses or contingenciesrequiring disclosure in the Group Annual Report. Managementcontinues to take measures to strengthen the contro lenvironment.

Statement of Internal Control (continued)

36

3 9

Audit Committee ReportFor the financial year ended 31 December 2004

MEMBERSHIP AND MEETING

The Audit Committee presently comprises three (3) members ofthe Board of which two (2) are Independent Non-ExecutiveD i rectors and one (1) is a Non-Independent Non-ExecutiveD i re c t o r. During the financial year under re v i e w, the

Committee held four (4) meetings. The meetings werea p p ropriately stru c t u red through the use of agenda. Themembers of the Audit Committee and the attendance at themeetings during the financial year are stated below:

D i re c t o r s Status of Dire c t o r s h i p Meetings Attended %

Khairil Anuar Abdullah (Chairman) Independent Non-Executive Director 4/4 100

Foo San Kan Non-Independent Non-Executive Director* * 3/3* 100

Dato’ Dr. Tawfiq Ayman* * * Independent Non-Executive Director 3/4 75

Krishnan A/L C K Menon Independent Non-Executive Director 1/1 100

Notes:* Foo San Kan was appointed onto the Audit Committee following the resignation of Krishnan A/LC K Menon on 6 April 2004* * Foo San Kan was re-designated as an Independent Non-Executive Director with effect from 25 February 2005* * * Lim Yen Haat (Non-Independent Non-Executive Director) was appointed onto the Audit Committee on 2 March 2005 following the

resignation of Dato’ Dr. Tawfiq Ayman on 1 March 2005

The Group Chief Executive and the Company Secre t a ry werealso in attendance by invitation. Representatives of the extern a lauditors, Messrs. Ernst & Young, the independent extern a lconsultant, the Head of Finance, the Head of Internal Audit aswell as other senior management personnel also attended themeetings upon invitation by the Audit Committee.

TERMS OF REFERENCE

The Committee was established on 3 December 2002 to actas a Committee of the Board of Directors, with the terms ofre f e rence as set out on the section immediately following thisR e p o rt .

S U M M A RY OF ACTIVITIES DURING THE FINANCIALY E A R

During the financial year, the Committee carried out its dutiesin accordance with its term of re f e rence. The main activitiesu n d e rtaken by the Committee were as follows:

• Reviewed the external auditors’ scope of work and auditplans for the year. Prior to the audit, re p resentatives fro mthe external auditors presented their audit strategy andp l a n .

• Reviewed with the external auditors the results of theaudit, the audit re p o rt and the management letter,including management’s re s p o n s e .

• Consideration and recommendation to the Board fora p p roval of the audit fees payable to the extern a la u d i t o r s .

• Reviewed the independence, objectivity and eff e c t i v e n e s sof the external auditors and the service pro v i d e d ,including non-audit services.

• Reviewed the internal audit re p o rts, which highlighted theaudit issues, recommendations and management‘sresponse. Discussed with Management, actions taken toi m p rove the system of internal control based oni m p rovement opportunities identified in the internal auditre p o rt s .

• Reviewed the effectiveness of the Strategic Enterprise-wide Risk Management Framework and risk assessmentre p o rts. Significant risks issues were summarised andcommunicated to the Board for consideration andre s o l u t i o n .

• Reviewed the application of corporate govern a n c eprinciples and the extent of the Gro u p ’s compliance withthe best practices set out under the Malaysian Code onCorporate Governance for the purpose of preparing theCorporate Governance Statement and Statement onI n t e rnal Control pursuant to the Listing Requirements of theBursa Malaysia Securities Berhad.

• Reviewed the Annual Report and the audited financialstatements of the Company and the Group prior to thesubmission to the Board for their consideration anda p p roval. The review was to ensure that the auditedfinancial statements were drawn in accordance with thep rovisions of the Companies Act, 1965 and theapplicable MASB Approved Accounting Standards. Anysignificant issues resulting from the audit of the financialstatements by the external auditors were deliberated.

• Reviewed the quarterly unaudited financial re s u l t sannouncements of the Company and the Group beforerecommending them to the Board for its approval. Thereview and discussion of these announcements wereconducted with the Head of Finance.

Non-Executive Dire c t o r s Amount of options Amount of options Balance as ato ff e re d e x e rc i s e d* 31 December 2004

(no. of share s ) (no. of share s ) (no. of share s )

Tan Sri Datuk Asmat Kamaludin 5 0 0 , 0 0 0 – 5 0 0 , 0 0 0

Dato’ Dr. Tawfiq Ay m a n 2 5 0 , 0 0 0 * * – 2 5 0 , 0 0 0

Khairil Anuar Abdullah 2 5 0 , 0 0 0 – 2 5 0 , 0 0 0

Foo San Kan 2 5 0 , 0 0 0 – 2 5 0 , 0 0 0

Lim Yen Haat 2 5 0 , 0 0 0 – 2 5 0 , 0 0 0

Krishnan A/L C K Menon – – –

T O TA L 1 , 5 0 0 , 0 0 0 – 1 , 5 0 0 , 0 0 0

N o t e s :* In compliance with Rule 7.38 of the Listing Requirements of Bursa Malaysia Securities Berhad which states that Non-Executive Directors must

not sell, transfer or assign shares obtained through the exercise of options offered to him pursuant to a share scheme for employees w i t h i none (1) year from the date of offer of such options.

* * Options lapsed upon resignation as director on 1 March 2005

• In respect of the quarterly and year end financialstatements, reviewed the Company’s compliance with theListing Requirements of Bursa Malaysia Securities Berh a d ,MASB and other relevant legal and re g u l a t o ryre q u i re m e n t s .

• Reviewed related party transactions entered into by theCompany and the Group to ensure that such transactionsa re undertaken on the Gro u p ’s normal commercial term sand that the internal control pro c e d u res with re g a rds tosuch transactions are suff i c i e n t .

• Reviewed the implementation and allocation of theG ro u p ’s Employee Share Option Scheme (“ESOS”), asbeing in compliance with the criteria set out in the ListingR e q u i rements of Bursa Malaysia Securities Berhad and ina c c o rdance with the ESOS By-Laws as approved by theB o a rd of Directors and share h o l d e r s .

INTERNAL AUDIT FUNCTION

In discharging its duties, the Audit Committee is well support e dby the Group Internal Audit Unit together with an independente x t e rnal consultant to undertake the necessary activities toenable the Committee to discharge its functions eff e c t i v e l y.

The internal audit function is independent of the activities oroperations of other operating units. The principal role is tou n d e rtake independent, regular and systematic reviews of thesystems of internal control so as to provide re a s o n a b l eassurance that such a system continues to operate satisfactorilyand eff e c t i v e l y. It is the responsibility of Internal Audit top rovide the Audit Committee with independent and objective

re p o rts on the state of internal control of the various operatingunits within the Group and the extent of compliance of the unitswith the Gro u p ’s established policies and pro c e d u res as wellas relevant statutory re q u i re m e n t s .

F u rther details of the activities of the internal audit function areset out in the Statement on Internal Control.

S TATEMENT BY THE AUDIT COMMITTEE IN RELAT I O NTO THE ESOS ALLOCAT I O N

Symphony House Berhad had implemented an EmployeeS h a re Option Scheme (“ESOS”) in the financial year underre v i e w.

Pursuant to Rule 7.35 of the Listing Requirements of BursaMalaysia Securities Berhad for the MESDAQ Market, the AuditCommittee confirms that the allocation to the employeespursuant to the ESOS implemented throughout the Group on 9July 2004, has been made to eligible employees ina c c o rdance with the Listing Requirements of Bursa MalaysiaSecurities Berhad and the ESOS By-Laws as approved by theB o a rd of Directors and shareholders on 25 June 2004.

With the assistance of the Group Internal Audit Unit, averification exercise was carried out for the financial yearended 31 December 2004 and the Audit Committee issatisfied that the allocation of options pursuant to the ESOSduring the financial year ended 31 December 2004, havecomplied with the criteria set out in the ESOS By-Laws.

The breakdown of the options off e red to and exercised byNon-Executive Directors pursuant to the ESOS in respect of thefinancial year are as follows:

38

3 9

Audit Committee ReportFor the financial year ended 31 December 2004

MEMBERSHIP AND MEETING

The Audit Committee presently comprises three (3) members ofthe Board of which two (2) are Independent Non-ExecutiveD i rectors and one (1) is a Non-Independent Non-ExecutiveD i re c t o r. During the financial year under re v i e w, the

Committee held four (4) meetings. The meetings werea p p ropriately stru c t u red through the use of agenda. Themembers of the Audit Committee and the attendance at themeetings during the financial year are stated below:

D i re c t o r s Status of Dire c t o r s h i p Meetings Attended %

Khairil Anuar Abdullah (Chairman) Independent Non-Executive Director 4/4 100

Foo San Kan Non-Independent Non-Executive Director* * 3/3* 100

Dato’ Dr. Tawfiq Ayman* * * Independent Non-Executive Director 3/4 75

Krishnan A/L C K Menon Independent Non-Executive Director 1/1 100

Notes:* Foo San Kan was appointed onto the Audit Committee following the resignation of Krishnan A/LC K Menon on 6 April 2004* * Foo San Kan was re-designated as an Independent Non-Executive Director with effect from 25 February 2005* * * Lim Yen Haat (Non-Independent Non-Executive Director) was appointed onto the Audit Committee on 2 March 2005 following the

resignation of Dato’ Dr. Tawfiq Ayman on 1 March 2005

The Group Chief Executive and the Company Secre t a ry werealso in attendance by invitation. Representatives of the extern a lauditors, Messrs. Ernst & Young, the independent extern a lconsultant, the Head of Finance, the Head of Internal Audit aswell as other senior management personnel also attended themeetings upon invitation by the Audit Committee.

TERMS OF REFERENCE

The Committee was established on 3 December 2002 to actas a Committee of the Board of Directors, with the terms ofre f e rence as set out on the section immediately following thisR e p o rt .

S U M M A RY OF ACTIVITIES DURING THE FINANCIALY E A R

During the financial year, the Committee carried out its dutiesin accordance with its term of re f e rence. The main activitiesu n d e rtaken by the Committee were as follows:

• Reviewed the external auditors’ scope of work and auditplans for the year. Prior to the audit, re p resentatives fro mthe external auditors presented their audit strategy andp l a n .

• Reviewed with the external auditors the results of theaudit, the audit re p o rt and the management letter,including management’s re s p o n s e .

• Consideration and recommendation to the Board fora p p roval of the audit fees payable to the extern a la u d i t o r s .

• Reviewed the independence, objectivity and eff e c t i v e n e s sof the external auditors and the service pro v i d e d ,including non-audit services.

• Reviewed the internal audit re p o rts, which highlighted theaudit issues, recommendations and management‘sresponse. Discussed with Management, actions taken toi m p rove the system of internal control based oni m p rovement opportunities identified in the internal auditre p o rt s .

• Reviewed the effectiveness of the Strategic Enterprise-wide Risk Management Framework and risk assessmentre p o rts. Significant risks issues were summarised andcommunicated to the Board for consideration andre s o l u t i o n .

• Reviewed the application of corporate govern a n c eprinciples and the extent of the Gro u p ’s compliance withthe best practices set out under the Malaysian Code onCorporate Governance for the purpose of preparing theCorporate Governance Statement and Statement onI n t e rnal Control pursuant to the Listing Requirements of theBursa Malaysia Securities Berhad.

• Reviewed the Annual Report and the audited financialstatements of the Company and the Group prior to thesubmission to the Board for their consideration anda p p roval. The review was to ensure that the auditedfinancial statements were drawn in accordance with thep rovisions of the Companies Act, 1965 and theapplicable MASB Approved Accounting Standards. Anysignificant issues resulting from the audit of the financialstatements by the external auditors were deliberated.

• Reviewed the quarterly unaudited financial re s u l t sannouncements of the Company and the Group beforerecommending them to the Board for its approval. Thereview and discussion of these announcements wereconducted with the Head of Finance.

Non-Executive Dire c t o r s Amount of options Amount of options Balance as ato ff e re d e x e rc i s e d* 31 December 2004

(no. of share s ) (no. of share s ) (no. of share s )

Tan Sri Datuk Asmat Kamaludin 5 0 0 , 0 0 0 – 5 0 0 , 0 0 0

Dato’ Dr. Tawfiq Ay m a n 2 5 0 , 0 0 0 * * – 2 5 0 , 0 0 0

Khairil Anuar Abdullah 2 5 0 , 0 0 0 – 2 5 0 , 0 0 0

Foo San Kan 2 5 0 , 0 0 0 – 2 5 0 , 0 0 0

Lim Yen Haat 2 5 0 , 0 0 0 – 2 5 0 , 0 0 0

Krishnan A/L C K Menon – – –

T O TA L 1 , 5 0 0 , 0 0 0 – 1 , 5 0 0 , 0 0 0

N o t e s :* In compliance with Rule 7.38 of the Listing Requirements of Bursa Malaysia Securities Berhad which states that Non-Executive Directors must

not sell, transfer or assign shares obtained through the exercise of options offered to him pursuant to a share scheme for employees w i t h i none (1) year from the date of offer of such options.

* * Options lapsed upon resignation as director on 1 March 2005

• In respect of the quarterly and year end financialstatements, reviewed the Company’s compliance with theListing Requirements of Bursa Malaysia Securities Berh a d ,MASB and other relevant legal and re g u l a t o ryre q u i re m e n t s .

• Reviewed related party transactions entered into by theCompany and the Group to ensure that such transactionsa re undertaken on the Gro u p ’s normal commercial term sand that the internal control pro c e d u res with re g a rds tosuch transactions are suff i c i e n t .

• Reviewed the implementation and allocation of theG ro u p ’s Employee Share Option Scheme (“ESOS”), asbeing in compliance with the criteria set out in the ListingR e q u i rements of Bursa Malaysia Securities Berhad and ina c c o rdance with the ESOS By-Laws as approved by theB o a rd of Directors and share h o l d e r s .

INTERNAL AUDIT FUNCTION

In discharging its duties, the Audit Committee is well support e dby the Group Internal Audit Unit together with an independente x t e rnal consultant to undertake the necessary activities toenable the Committee to discharge its functions eff e c t i v e l y.

The internal audit function is independent of the activities oroperations of other operating units. The principal role is tou n d e rtake independent, regular and systematic reviews of thesystems of internal control so as to provide re a s o n a b l eassurance that such a system continues to operate satisfactorilyand eff e c t i v e l y. It is the responsibility of Internal Audit top rovide the Audit Committee with independent and objective

re p o rts on the state of internal control of the various operatingunits within the Group and the extent of compliance of the unitswith the Gro u p ’s established policies and pro c e d u res as wellas relevant statutory re q u i re m e n t s .

F u rther details of the activities of the internal audit function areset out in the Statement on Internal Control.

S TATEMENT BY THE AUDIT COMMITTEE IN RELAT I O NTO THE ESOS ALLOCAT I O N

Symphony House Berhad had implemented an EmployeeS h a re Option Scheme (“ESOS”) in the financial year underre v i e w.

Pursuant to Rule 7.35 of the Listing Requirements of BursaMalaysia Securities Berhad for the MESDAQ Market, the AuditCommittee confirms that the allocation to the employeespursuant to the ESOS implemented throughout the Group on 9July 2004, has been made to eligible employees ina c c o rdance with the Listing Requirements of Bursa MalaysiaSecurities Berhad and the ESOS By-Laws as approved by theB o a rd of Directors and shareholders on 25 June 2004.

With the assistance of the Group Internal Audit Unit, averification exercise was carried out for the financial yearended 31 December 2004 and the Audit Committee issatisfied that the allocation of options pursuant to the ESOSduring the financial year ended 31 December 2004, havecomplied with the criteria set out in the ESOS By-Laws.

The breakdown of the options off e red to and exercised byNon-Executive Directors pursuant to the ESOS in respect of thefinancial year are as follows:

38

4 1

D u t i e s

The duties of the Audit Committee shall include the following:

i To review the adequacy and effectiveness of riskmanagement, internal control and governance systems;

ii To review and recommend to the Board of Directors theCorporate Governance Statement and Statement onI n t e rnal Control in relation to internal control and themanagement of risk included in the Annual Report ;

iii To consider the appointment, resignation and dismissal ofi n t e rnal and external auditors and their respective auditf e e s ;

iv To review the nature and scope of the audit with thei n t e rnal and external auditors before the auditc o m m e n c e s ;

v To review the quarterly and annual financial statements ofthe Company and the Group focusing on matters set outb e l o w, and thereafter to submit them to the Board :

• any changes in accounting policies and practices• significant adjustments arising from the audit• the going concern assumption• the compliance with accounting standards and

re g u l a t o ry re q u i rements

vi To discuss problems and re s e rvations arising from theinterim and final audits, and any matter the extern a lauditors may wish to discuss;

vii To review the audit re p o rts pre p a red by the internal ande x t e rnal auditors, the major findings and managementresponses there t o ;

viii To review the adequacy of the scope, functions andre s o u rces of the internal auditors and whether it has then e c e s s a ry authority to carry out its work;

i x To consider the re p o rt, major findings and management’sresponse thereto on any internal investigations carried outby the internal auditors;

x To review any appraisal or assessment of thep e rf o rmance of the internal auditors;

x i To be informed of any resignation of executives in thei n t e rnal and management audit department and top rovide the resigning executive an opportunity to submithis/her reason for re s i g n a t i o n ;

x i i To review the evaluation of the systems of internal contro lwith the auditors;

x i i i To review the assistance given by the Company’s andG ro u p ’s employees to the auditors;

x i v To review related party transactions entered into by theCompany and the Group to ensure that such transactionsa re undertaken on the Gro u p ’s normal commercial term sand that the internal control pro c e d u res with re g a rds tosuch transactions are sufficient; and

x v Any such other functions as may be agreed by theCommittee and the Board .

Terms of Reference of the Audit Committee

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

The terms of re f e rence of the Audit Committee are as follows:

O b j e c t i v e

The primary function of the Audit Committee is to assist theB o a rd of Directors in reviewing the adequacy and integrity ofthe Gro u p ’s processes for producing financial data, its intern a lc o n t rol systems, including systems for compliance withapplicable laws, regulations, rules, directives and guidelines.In addition, the Committee also provides a forum for dialoguewith the Company’s external and internal auditors andre i n f o rces the independence of the Gro u p ’s external auditors.

M e m b e r s h i p

The Audit Committee shall be appointed by the Board fro mamongst their number and shall consist of not less than thre e(3) members, a majority of whom shall be Independent Non-Executive Directors and at least one of the Committee membersshall be a member of the Malaysian Institute of Accountants orone of the associations of accountants specified in Part II of the1st Schedule of the Accounts Act 1967. The Chairman of theCommittee shall be an Independent Non-Executive Dire c t o rappointed by the Board .

Meeting and Minutes

Meetings shall be held not less than four (4) times a year. TheG roup Chief Executive, Head of Finance, Internal Auditor anda re p resentative of the external auditors shall normally beinvited to attend the meetings. Other members of the Boardmay attend the meetings upon invitation of the Committee. Atleast once a year, the Committee shall meet the extern a lauditors without any executive directors present. Minutes ofeach meeting shall be kept and distributed to each member ofthe Committee and of the Board. The Chairman of theCommittee shall re p o rt on each meeting to the Board. TheS e c re t a ry to the Committee shall be the Company Secre t a ry.

A u t h o r i t y

The Committee is authorised by the Board:

i To investigate any activity within its terms of re f e rence andshall have unrestricted access to both the internal ande x t e rnal auditors and to all employees of the Gro u p ;

ii To have the re s o u rces in order to perf o rm its duties as setout in its terms of re f e re n c e ;

iii To have full and unrestricted access to inform a t i o np e rtaining to the Company and the Gro u p ;

iv To have direct communication channels with the intern a land external auditors;

v To obtain external legal or other independent pro f e s s i o n a ladvice necessary in furtherance of their duties;

vi Notwithstanding anything contrary here i n b e f o re stated,the Committee does not have executive powers and shallre p o rt to the Board of Directors on matters considere dand its recommendations thereon, pertaining to theCompany and the Gro u p .

R e s p o n s i b i l i t y

W h e re the Committee is of the view that a matter re p o rted byit to the Board of Directors has not been satisfactorily re s o l v e dresulting in a breach of the MESDAQ Market ListingR e q u i rements, the Committee has the responsibility andauthority to promptly re p o rt such matters to the MESDAQMarket of the Bursa Malaysia Securities Berhad.

Review of the Composition of the Committee

The term of office and perf o rmance of the Committee and eachof the members shall be reviewed by the Board of Directors atleast once every three (3) years to determine whether theCommittee and its members have carried out their duties andresponsibilities in accordance with their terms of re f e re n c e .

40

4 1

D u t i e s

The duties of the Audit Committee shall include the following:

i To review the adequacy and effectiveness of riskmanagement, internal control and governance systems;

ii To review and recommend to the Board of Directors theCorporate Governance Statement and Statement onI n t e rnal Control in relation to internal control and themanagement of risk included in the Annual Report ;

iii To consider the appointment, resignation and dismissal ofi n t e rnal and external auditors and their respective auditf e e s ;

iv To review the nature and scope of the audit with thei n t e rnal and external auditors before the auditc o m m e n c e s ;

v To review the quarterly and annual financial statements ofthe Company and the Group focusing on matters set outb e l o w, and thereafter to submit them to the Board :

• any changes in accounting policies and practices• significant adjustments arising from the audit• the going concern assumption• the compliance with accounting standards and

re g u l a t o ry re q u i rements

vi To discuss problems and re s e rvations arising from theinterim and final audits, and any matter the extern a lauditors may wish to discuss;

vii To review the audit re p o rts pre p a red by the internal ande x t e rnal auditors, the major findings and managementresponses there t o ;

viii To review the adequacy of the scope, functions andre s o u rces of the internal auditors and whether it has then e c e s s a ry authority to carry out its work;

i x To consider the re p o rt, major findings and management’sresponse thereto on any internal investigations carried outby the internal auditors;

x To review any appraisal or assessment of thep e rf o rmance of the internal auditors;

x i To be informed of any resignation of executives in thei n t e rnal and management audit department and top rovide the resigning executive an opportunity to submithis/her reason for re s i g n a t i o n ;

x i i To review the evaluation of the systems of internal contro lwith the auditors;

x i i i To review the assistance given by the Company’s andG ro u p ’s employees to the auditors;

x i v To review related party transactions entered into by theCompany and the Group to ensure that such transactionsa re undertaken on the Gro u p ’s normal commercial term sand that the internal control pro c e d u res with re g a rds tosuch transactions are sufficient; and

x v Any such other functions as may be agreed by theCommittee and the Board .

Terms of Reference of the Audit Committee

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

The terms of re f e rence of the Audit Committee are as follows:

O b j e c t i v e

The primary function of the Audit Committee is to assist theB o a rd of Directors in reviewing the adequacy and integrity ofthe Gro u p ’s processes for producing financial data, its intern a lc o n t rol systems, including systems for compliance withapplicable laws, regulations, rules, directives and guidelines.In addition, the Committee also provides a forum for dialoguewith the Company’s external and internal auditors andre i n f o rces the independence of the Gro u p ’s external auditors.

M e m b e r s h i p

The Audit Committee shall be appointed by the Board fro mamongst their number and shall consist of not less than thre e(3) members, a majority of whom shall be Independent Non-Executive Directors and at least one of the Committee membersshall be a member of the Malaysian Institute of Accountants orone of the associations of accountants specified in Part II of the1st Schedule of the Accounts Act 1967. The Chairman of theCommittee shall be an Independent Non-Executive Dire c t o rappointed by the Board .

Meeting and Minutes

Meetings shall be held not less than four (4) times a year. TheG roup Chief Executive, Head of Finance, Internal Auditor anda re p resentative of the external auditors shall normally beinvited to attend the meetings. Other members of the Boardmay attend the meetings upon invitation of the Committee. Atleast once a year, the Committee shall meet the extern a lauditors without any executive directors present. Minutes ofeach meeting shall be kept and distributed to each member ofthe Committee and of the Board. The Chairman of theCommittee shall re p o rt on each meeting to the Board. TheS e c re t a ry to the Committee shall be the Company Secre t a ry.

A u t h o r i t y

The Committee is authorised by the Board:

i To investigate any activity within its terms of re f e rence andshall have unrestricted access to both the internal ande x t e rnal auditors and to all employees of the Gro u p ;

ii To have the re s o u rces in order to perf o rm its duties as setout in its terms of re f e re n c e ;

iii To have full and unrestricted access to inform a t i o np e rtaining to the Company and the Gro u p ;

iv To have direct communication channels with the intern a land external auditors;

v To obtain external legal or other independent pro f e s s i o n a ladvice necessary in furtherance of their duties;

vi Notwithstanding anything contrary here i n b e f o re stated,the Committee does not have executive powers and shallre p o rt to the Board of Directors on matters considere dand its recommendations thereon, pertaining to theCompany and the Gro u p .

R e s p o n s i b i l i t y

W h e re the Committee is of the view that a matter re p o rted byit to the Board of Directors has not been satisfactorily re s o l v e dresulting in a breach of the MESDAQ Market ListingR e q u i rements, the Committee has the responsibility andauthority to promptly re p o rt such matters to the MESDAQMarket of the Bursa Malaysia Securities Berhad.

Review of the Composition of the Committee

The term of office and perf o rmance of the Committee and eachof the members shall be reviewed by the Board of Directors atleast once every three (3) years to determine whether theCommittee and its members have carried out their duties andresponsibilities in accordance with their terms of re f e re n c e .

40

43

financial statements

54 Consolidated Balance Sheet

57 Consolidated Cash Flow Statement

55 Consolidated Income Statement

56 Consolidated Statement of Changes in Equity

53 Report of the Auditors

59 Balance Sheet

52 Statutory Declaration

60 Income Statements

52 Statement by Directors

61 Statement of Changes in Equity

44 Directors' Report

62 Cash Flow Statement

63 Notes to the Financial Statements

Statement of Directors’ Responsibility in Relation to the Financial StatementsFor the financial year ended 31 December 2004

The Companies Act, 1965 requires that the Directors preparefinancial statements for each financial year which give a trueand fair view of the state of affairs of the Company and of theGroup as at the end of the financial year, which will alsoinclude the profit and loss and cash flows of the Company andof the Group for the financial year then ended.

The financial statements of the Company and the Group for thefinancial year ended 31 December 2004 are set out on pages44 to 105 of this Annual Report.

In preparing those financial statements, the Directors have:

• adopted appropriate accounting policies and thenapplied them consistently;

• made judgments and estimates that are reasonable andprudent;

• ensured that applicable accounting standards have beenfollowed, subject to any material departures which shallbe disclosed and explained in the financial statements;and

• prepared the financial statements on a going concernbasis unless it is inappropriate to presume that theCompany and the Group will continue to be in business.

The Directors are responsible for keeping proper accountingrecords which disclose with reasonable accuracy, at any time,the financial position of the Company and of the Group, whichwill enable them to ensure that the financial statements complywith the Companies Act, 1965. The Directors are alsoresponsible for taking reasonable steps to safeguard the assetsof the Company and of the Group and, in that context, to haveproper regard to the establishment of appropriate systems ofinternal control with a view to prevent and detect fraud andother irregularities.

The Directors consider that they have pursued the actionsnecessary to meet their responsibilities as set out in thisStatement.