Posted on 2 December 2013 - 05:40am
Ee Ann Nee
KUALA LUMPUR (Dec 2, 2013): : Censof Holdings Bhd expects the implementation of the goods and services tax (GST) to give “substantial” boost to its net profit in the forthcoming financial year ending Dec 31, 2014 (FY14) as businesses move towards GST compliance software.
Its group managing director Datuk Samsul Husin said while the change in taxation regime will present its challenges to many companies, Censof is poised to benefit from the GST initiative where it sees a lot of opportunities.
“There is a lot of upgrade, consultancy and training that need to be done. We estimate each client will spend about RM200,000 to RM300,000 (to be ready for GST compliance) and that will affect (improve) our bottomline for next year,” he told a press conference after the group’s EGM here on Friday, adding that Censof currently has 80 to 100 clients.
“We see a lot of potentials in getting new clients who need GST compliance software, especially from small and medium enterprises (SMEs) and government agencies,” said its executive director Tamil Selvan Durairaj.
“Our main focus are local councils, federal statutory bodies, state agencies and that potential alone could be substantial in terms of revenue. On top of that, we also have our existing clients,” he added.
Tamil Selvan pointed to the incentives and grants given by the government under Budget 2014 to facilitate companies to change to a GST-ready solution.
Under Budget 2014, a training grant of RM100 million will be provided to businesses that send their employees for GST training in 2013 and 2014.
In addition, financial assistance amounting to RM150 million will be provided to SMEs for the purchase of accounting software in 2014 and 2015.
Tamil Selvan cited accounting software providers in Australia that saw 300,000 new sales in the year when GST was implemented there, adding that the potential also lies in GST advisory services as billings and processes need to be changed.
The prospects of Censof is also positive with its expansion via the promotion of the group’s financial management systems into regional countries, new line of business being its outcome based budgeting (OBB) project and ICT training for users of the OBB system.
Samsul said it is targeting 20% overseas contribution by end of FY14 from 10% currently, mainly driven by its Indonesian business.
He added that the group will venture into regional countries, focusing on Myanmar, Indonesia, Philippine as well as Dubai.
“We’re going to submit a RM300 million tender for a government financial information system in the Philippines,” Samsul said. Its orderbook currently stands at RM50 million, consisting of existing projects and recurring revenue.
Earlier at the meeting, Censof shareholders approved its proposed issuance of redeemable convertible notes (RCN), which will enable the group to raise funds to acquire a 45.03% stake in Time Engineering Bhd and to repay borrowings.
Samsul has also been re-designated to acting group managing director and group CEO of Time Engineering from his position as director effective Nov 28, 2013.
He said more executives from Censof will be appointed to the board of Time Engineering soon.