ASIAEP BHD · ASIAEP BHD (Company No. 253387-W) ... Analysis of Shareholdings 74 List of Properties 78 ... Hong Leong Bank Berhad CIMB Bank Berhad

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ASIAEP BHD (Company No. 253387-W)

asiaEP Annual Report 2009

Contents

Page

Chairman’s Statement 02

Corporate Information 04

Our Chairman and Managing Director 05

Profile of Directors 06

Statement of Corporate Governance 08

Additional Compliance Information 12

Audit Committee Report 14

Statement on Internal Control 16

Financial Statements 17

Analysis of Shareholdings 74

List of Properties 78

Share Buy Back Statement 79

Notice of Annual General Meeting 83

Statement Accompanying Notice of AGM 86

Proxy Form 87

asiaEP Annual Report 2009 2


Tan Sri Dato’ (DR) Abdul Aziz Bin Abdul RahmanChairman

Dear Shareholders,On behalf of the Board of Directors, Ihave the pleasure of presenting theAnnual Report and FinancialStatements of asiaEP Berhad and itsGroup of Companies for the financialyear ended 28 February 2009.

The past year has been a year of challenge for the Group.The global economy is facing a more diff icult set ofcircumstances than before. The global financial crisisthat began last year in the US sub-prime mortgage marketare spreading to other major economies.

For financial year ended 28 February 2009, the Group posteda net loss of RM7.679 million compared with net profit ofRM7.059 million for financial year ended 29 February 2008.

Research & Development

During the financial year ended 28 February 2009, the Group invested RM6.296 million in Research and Development.

The Group will continue to develop its online business model and improve the quality of its product offerings through productdevelopments and updated versions of existing products with enhanced features to meet various business requirements of itscustomers.

Industry Outlook

Changes brought about by macro factors in this region, such as the global economic downturn, rising energy and raw materialprices and inflation, have made it more difficult for all businesses particularly for the ICT business.

The impact of the downturn of global economy will continue to affect our customers and our business in the near future. Whilstthese may change the economic dynamics of Malaysia versus other countries in the long-run, we do believe that Malaysia’seconomy will continue to be vigorous in the long-term.

Chairman’s Statement

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Chairman’s Statement (continued)

Current Year Prospects

The Company will undertake the following proposals for the financial year ending 28 February 2010 to raise RM14m toRM17m .

(i) Proposed renounceable two-call rights issue of up to 293,037,675 new ordinary shares of RM0.10 each in asiaEPon the basis of 1 Rights Share for each existing ordinary share of RM0.10 each in asiaEP held on an entitlement dateto be determined later, together with:

(a) bonus issue of up to 293,037,675 new asiaEP Shares on the basis of 1 Bonus Share for each Rights Sharesubscribed; and

(b) issuance of up to 293,037,675 new free detachable warrants on the basis of 1 Warrant foreach Rights Share subscribed,

with the Rights Share at an indicative issue price of RM0.10 each, of which the indicative first call of RM0.06 for eachRights Share is payable in cash on application and the second call of RM0.04 for each Rights Share is to be capitalisedfrom asiaEP’s share premium account;

(ii) Proposed increase in authorised share capital of asiaEP from RM50,000,000 comprising 500,000,000 asiaEPShares to RM150,000,000 comprising 1,500,000,000 asiaEP Shares and

(iii) Proposed amendments to the Memorandum and Articles of Association of asiaEP,

The proceeds will be utilized for repayment of bank borrowings, purchase of computer equipments and peripherals,marketing and promotion, working capital and defrayment of expenses relating to the Proposals.

With the above proposals, the Company will be better equipped to face the financial crisis.

The Board expects the financial performance of the Group to be challenging for the financial year ending 28 February2010.

Lastly, I would like to inform all concerned that in view of my age I have made the decision to slow down in my corporateactivities and in this regard I shall not offer myself for reelection as a Director of the Company at the coming AnnualGeneral Meeting.

I thank the management and all the shareholders for their support during my tenure of office as Chairman of theCompany and I sincerely hope the Company will be even more successful in the future.

Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul RahmanChairman



Registered OfficeNo. 18 & 20 Jalan TK 2/1CTaman Kinrara Seksyen 247100 Puchong SelangorMalaysiaTel : 603 - 8075 6213 (hunting line)Fax: 603 - 8070 5668

Company SecretariesMary Margret A/P V. PellySin May Peng

AuditorsBaker Tilly Monteiro HengChartered Accountants22-1, Monteiro & Heng Chambers,Jalan Tun Sambanthan 3,50470 Kuala LumpurMalaysia

Share RegistrarSectrars Services Sdn Bhd28-1 Jalan Tun Sambathan 3Brickfields 50470 Kuala LumpurTel : 603 - 2274 6133Fax : 603 - 2274 1016

Principal BankersMalayan Banking BerhadHong Leong Bank BerhadCIMB Bank Berhad(formerly know as Bumiputra- Commerce Bank Berhad)

Affin Bank Berhad

AdviserRHB Investment Bank BerhadLevel 10, Tower OneRHB CentreJalan Tun Razak50400 Kuala LumpurMalaysia

Stock Exchange ListingMESDAQ MarketBursa Malaysia Securities Berhad

Websitewww.asiaEP.com

Corporate InformationCorporate Information

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Dr Tan Boon NuntManaging Director

Our Chairman and Managing Director

Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul RahmanChairman



Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul RahmanChairman/ Independent Non-Executive DirectorMalaysian, Aged 76

Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul Rahman was appointed to the Board of the Company as the Non-Executive Chairman and an Independent Non-Executive Director on 8 July 2003.

A lawyer by profession with multiple doctorates obtained from University Utara Malaysia, Tan Sri who hasmore than 39 years of experience in managing public and private corporations both locally and abroad is awell respected individual among the business and professional fraternity. Some of the organisations whichTan Sri has been involved in previously include Malaysian Airlines System Berhad (Managing Director &CEO), Sessions Court (Magistrate & President), ABACUS (Chairman), International Council of the CharteredInstitute of Transport (President). He also sits on the Board of Maju Perak Holdings Bhd & BTM ResourcesBhd.

Tan Sri Dato’ (Dr) Abdul Aziz does not have any family relationship with any other Directors and / or substantialshareholders of the Company or any conflict of interest with the Company. He has not been convicted of anyoffences in the last ten (10) years, other than traffic offences (if any).

Dr Tan Boon NuntManaging Director/ Chief Executive OfficerMalaysian, Aged 51

Dr Tan Boon Nunt was appointed to the Board of the Company in 1992. He was subsequently appointed asthe Managing Director and Chief Executive Officer in 2002. He is the co-founder of the Company as well asTopclass Access Sdn Bhd (TASB). Dr Tan achieved his doctorate in Management from Greenwich Universityof Australia in 2000.

He started his career as a media planner in the publication industry for more than eleven (11) years. Beforefounding the Company, he was the Managing Director of Better Living Sdn Bhd, a trading house, for fiveyears prior to 1992. Dr Tan was awarded the 2002 Ernst & Young Entrepreneur of the Year Award forInformation & Communication Technology.

Dr Tan does not have any family relationship with any Director and / or substantial shareholder of theCompany or any conflict of interest with the Company. He has not been convicted of any offences in the lastten (10) years, other than traffic offences (if any).

Madam Lee Suet HongExecutive Director/ Chief Operating OfficerMalaysian, Aged 53

Madam Lee Suet Hong was appointed to the Board of the Company in 1992. She was subsequently appointedas the Executive Director and Chief Operating Officer in 2002. She is also the co-founder of the Company aswell as TASB. She graduated with a Diploma in Business Studies and Management from The London Collegeof Business Studies in 1979. She obtained her MBA, majoring in E-Marketing from the Greenwich Universityof Australia in 2002.

Madam Lee started her career as a Personal Assistant to the Managing Director of Atkinson Pte Ltd inLondon from 1978 to 1979. She held senior management and administrative positions in several publiclisted companies before joining the company.

Madam Lee does not have any family relationship with any Director and / or substantial shareholders of theCompany or any conflict of interest with the Company. She has not been convicted of any offences in the lastten (10) years, other than traffic offences (if any).

Profile of Directors

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Mr. Khor Chai TianIndependent Non-Executive DirectorMalaysian, Aged 47

Mr. Khor Chai Tian was appointed to the Board of the Company as an Independent Non-Executive Directoron 13 December 2007. He obtained a Bachelor of Economics Degree(Honours) from University of Malayaand M.B.A from Asia International Open University, Macau.

He was Executive Director of Hunza Consolidation Berhad from 1995 to 2004. Currently, he is an ExecutiveDirector of Master Advisory Services Sdn Bhd and Oceanpac Sdn Bhd.

Mr. Khor does not have any family relationship with any Director and / or substantial shareholders of theCompany or any conflict of interest with the Company. He has not been convicted of any offences in the lastten (10) years, other than traffic offences (if any).

Mr. Lim Ghim ChaiIndependent Non-Executive DirectorMalaysian, Aged 34

Mr. Lim Ghim Chai was appointed to the Board of the Company as an Independent Non-Executive Directoron 11 April 2008.

He graduated with a Bachelor of Commerce (Accounting) Degree from La Trobe University at Melbourne,Australia and is a member of Malaysian Institute of Accountants and Malaysian Insurance Institute. Heobtained membership of Certified Practising Accountant of CPA Australia in year 2003.

Mr. Lim worked as a Financial Accountant in Acer Technologies (M) Sdn. Bhd. from year 2000 to 2001 andwas a Financial Analyst in Agilent Technologies (M) Sdn Bhd in year 2001. Thereafter, he worked as anAccountant in Lorry Commercial Logistic Sdn Bhd in year 2002.

He was a Partner and also a Director in a professional firm providing services of taxation, business planningconsultancy, company accounting and company secretarial from years 2003 until 2006.

Currently, Mr. Lim is a Partner, Managing Director and Executive Director and also Shareholder of a fewcompanies in the business of Interior Design, Property Development and Recycling.

Mr. Lim does not have any family relationship with any Director and / or substantial shareholders of theCompany or any conflict of interest with the Company. He has not been convicted of any offences in the lastten (10) years, other than traffic offences (if any).

Profile Directors (continued)



The Board of Directors acknowledges the importance of adopting high standards of corporate governance within theCompany. Good corporate governance is a fundamental part of the Company’s responsibility to protect, realize andenhance long-term shareholders’ value and the financial performance of the Company.

The Statement below sets out how the Company has applied the Key Principles of the Malaysian Code on CorporateGovernance for the financial year ended 28 February 2009.

a) BOARD OF DIRECTORS

The Board of Directors consists of five (5) dedicated members, comprising of Chairman / Independent Non-Executive Director, CEO/Managing Director, Executive Director, two Independent Non-Executive Directors.

The Company complied with the Listing Requirements of Bursa Malaysia Securities Bhd (Bursa Malaysia) for theMesdaq Market (Listing Requirements) which states that a listed company must have at least two directors or onethird of the Board of Directors, whichever is the higher, whom are independent.

There is a clear division of responsibilities between the Chairman / Independent Non-Executive Directorand the Managing Director to ensure clear and definitive segregation of duties, balance of power and authority.

The Independent Non-Executive Directors are independent of management and free from any business orother relationship that could materially interfere with the exercise of their independent judgement.

i) Board Meetings

Since the Company’s previous financial year end, the Board has met six (6) times for the financial yearended 28 February 2009. The Board meetings have always gathered full attendance of its members.

The records of attendance of each Director at Board Meetings held during the financial year ended 28February 2009 are disclosed below:

Director (s) Number of Meeting(s) attended PercentageTan Sri Dato’(Dr) Abdul Aziz Bin Abdul Rahman 7 out of 7 100%Dr Tan Boon Nunt 7 out of 7 100%Madam Lee Suet Hong 7 out of 7 100%Mr. Khor Chai Tian 6 out of 7 85.71%Mr. Lim Ghim Chai 6 out of 7 85.71%

ii) Supply Of Information

The Directors have full and timely access to information concerning the Company. Agenda of meetingsand discussion papers are circulated prior to Board meetings to allow the Directors time to study andevaluate the matters to be discussed.

The Directors have unrestricted access to the advice and services of the Company Secretariesand senior management in the Company and may obtain independent professional advice at theCompany’s expense in order to discharge their duties effectively.

iii) The Board and Board Committees

To assist the Board in the discharge of its duties effectively, the Board has delegated specific functionsto certain Committees, namely the Nomination Committee, Remuneration Committee and AuditCommittee, each operating within its clearly defined terms of reference. The Chairman of the variousCommittees will report to the Board on the outcome of the Committee meetings.

iv) Nomination Committee

This Committee was formed on 16 February, 2004, consisting of the Chairman, Tan Sri Dato’ (Dr)Abdul Aziz Bin Abdul Rahman (Chairman / Independent Non-Executive Director) and Mr Khor ChaiTian (Independent Non-Executive Director).

Statement of Corporate Governance

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The primary function of the Nomination Committee is to identify and recommend to the Board,technically competent persons of integrity with a strong sense of professionalism to be appointed tothe Board.

The Nomination Committee will assess the suitability of an individual to be appointed to the Boardby taking into account the individual’s other commitments, resources and time available for input tothe Board before recommendation is made for the Board’s approval. The Committee shall reviewannually the required mix of skills and experience and other qualities and competencies of itsDirectors and shall review the composition, structure and size of the Board.

Two Nomination Committee Meetings were held from April 2008 to May 2009 in dischanging theirduties and responsibilities.

v) Remuneration Committee

The Remuneration Committee was established on 16 February, 2004 and its members are :Chairman : Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul Rahman (Independent Non- ExecutiveDi rec to r ) , Madam Lee Suet Hong (Execu t i ve D i rec to r ) and Mr . Khor Cha i T ian(Independent Non-Executive Director).

The Committee is responsible for recommending to the Board from time to time, the remunerationframework and package of the Executive Directors of the Company in all forms to commensuratewith the respective contributions of the Executive Directors. Executive Directors are to abstain fromdeliberations and voting on the decision in respect of their own remuneration packages.

The Board as a whole decides on the remuneration of Non-Executive Directors, including the Non-Executive Chairman. The individuals concerned should abstain from discussion on their ownremuneration packages. The shareholders at the Annual General Meeting (AGM) approvethe Directors’ fees.

Two Remuneration Committee Meetings were held from May 2008 to May 2009 in dischanging theirduties and responsibilities.

- Review and recomend to the board the remuneration package of Executive Directors for finanacial year ended 28 February 2009.

b) DIRECTORS’ REMUNERATION

The Directors are satisfied that the current levels of remuneration are in line with the responsibilitiesas undertaken by directors.

A summary of the remuneration of the Directors for the financial year under review, distinguishingbetween Executive and Non-Executive Directors in aggregate with categorization into appropriatecomponents is set out below:

Directors’ Remuneration Executive Non-executive Directors Total

Directors’ Fee (RM’000) - 83 83 Salaries and Other Emoluments (RM’000) 816 - 816

The number of Directors whose remuneration falls into the following bands are:-

Remuneration Range Executive Director Non Executive Director

Below RM50,000 - 3 RM350,001-RM400,000 2 -

The Board is of the view that the above disclosure, without divulging respective Directors’ individualremuneration, is sufficients.



vi) Training for Directors

All the Directors have attended the Mandatory Accreditation Programme (MAP) conducted by theResearch Institute of Investment Analysts Malaysia, an affiliate of Bursa Malaysia.

The Board has assessed the training needs of the Directors and encourages the Directors to attend anyrelevant programme to further enhance their knowledge to enable them to discharge their responsibilitymore effectively.

During the financial year under review the directors were updated on new regulatory and statutory requirements.

vii) Appointment and Re-election

In accordance with the Company’s Articles of Association, all new Directors are subject to electionat the AGM following their first appointment.

In every year, one-third of the Directors or if their number is not three or a multiple of three, then thenumber nearest to one-third, shall retire by rotation from office and seek re-election at each AGM andthat each Director shall retire from office at least once in every three years and shall be eligible forre-election.

c) SHAREHOLDERS

i) Relations with Shareholders and Investors

The Company acknowledges the significance of being accountable to its shareholders and investors andas such, has maintained active communication and feedback policy from institutional investors, shareholdersand the public generally. All shareholders, including private investors, have an opportunity to participate indiscussion with the Board on matters relating to the Company’s operation and performance at the Company’sAGM. Alternatively, they may obtain the Company’s latest announcements such as quarterly financial resultsfrom the Bursa Malaysia’s website (www.bursamalaysia.com).

ii) Annual General Meeting (AGM)

The AGM is the principal forum for dialogue with public shareholders. The shareholders are encouraged toparticipate in the open question and answer sessions in the AGM in which they may raise questions on theresolutions being proposed at the meeting and the financial performance and business operation in general.

d) ACCOUNTABILITY AND AUDIT

i) Financial Reporting

The Directors have taken reasonable steps to provide a balanced and understandable assessment of theCompany’s financial performance and prospects. In this respect, the Audit Committee assists the Board tooversee of the Company’s financial reporting process and the quality of the financial reporting.

ii) Statement of Directors’ in Relation to the Financial Statements

The Directors are responsible for the preparation of the Annual Audited Financial Statements which give atrue and fair view of the state of affairs of the Company and will ensure that they are presented in accordancewith the provisions of the Companies Act, 1965 and the applicable approved accounting standards inMalaysia.

In the preparation of the financial statements for the year ended 28 February 2009, the Directors are satisfiedthat the Company had used appropriate accounting policies that are consistently applied and supported byreasonable and prudent judgement and estimates.

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iii) Internal Control

The Board recognises the importance of internal control systems whereby shareholders’ investment and theCompany’s assets can be safeguarded. As at to date, the Board is comfortable with the current internalcontrols which are in place. The Board will improve the internal controls of the Company should the Boardbecome aware of any weaknesses.

iv) External Auditors

The Board has established a transparent relationship with the external auditors through the Audit Committee,which has been accorded with the power to communicate directly with the external auditors towards ensuringcompliance with the accounting standards and other related regulatory requirements.

v) Statement Of Compliance with the Best Practices of the Case

The Company is committed to achieve high standards of corporate governance throughout the Group and thehighest level of integrity and ethical standards in all of its business dealings.

The Board will continue to strive for full compliance with the Malaysian Code of Corporate Governance in thecoming financial year.



1. CONFLICT OF INTEREST

None of the Directors have any family relationship with other Directors or major shareholders of the Company.

2. CONVICTIONS FOR OFFENCES

None of the Directors have been convicted for offences within the past ten (10) years other than traffic offences, ifany.

3. SHARE BUY BACKS

The Company purchased 3,423,300 of its ordinary shares from the open market at an average RM0.194 per share.

The total consideration paid for the repurchase including transaction costs was RM669,025.84 and this was financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

4. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

There were no options, warrants or convertible securities issued by the Company during the financial year.

5. AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY (GDR) PROGRAMME

During the financial year under review, the Company did not sponsor any ADR or GDR programmes.

6. IMPOSITION OF SANCTIONS / PENALTIES

There were no sanctions and/or penalties imposed on the Company, directors or management by the relevantregulatory bodies during the financial year under review.

7. NON-AUDIT FEES

There was no non-audit fees paid to the External Auditors, Messrs Baker Tilly Monteiro Heng during the financialyear ended 28 February 2009.

8. PROFIT ESTIMATE, FORECAST OR PROJECTION

There is no material variance between the results for the financial year and the unaudited results previouslyannounced by the Company. The Company did not issue any profit estimate, forecast or projections for the financialyear.

9. MATERIAL CONTRACTS

There were no material contracts entered into by the Company/or its subsidiaries involving Director’s or majorshareholders’ interest, during the financial year under review.

Additional Compliance Information

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10. PROFIT GUARANTEE

During the year, there was no profit guarantee given by the Company.

11. CONTRACTS RELATING TO LOAN

During the financial year under review, there were no contracts relating to loan by the Company involving Directorsand major shareholders.

12. REVALUATION OF LANDED PROPERTIES

The Company does not have a revaluation policy on landed properties.

13. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES OR PRACTICES

The Group was actively involved in corporate social responsibilty activities or practices during the financialyear ended 28 February 2009.

During the financial year, the management encouraged the staff to recycle paper and reduce the storageof paper and documents.

The Group interacts responsibly with our shareholders, suppliers, customers, government departments,regulators and industry associations in a number of ways, such as supporting the market with goodproducts, engaging in ethical procurement practices, maintaining quality of its service and businessofferings and compliance with the relevant regulations and obligations.

We are also committed to career development of our management and support staff, by sponsoring key personnelfor training and seminars.

14. RECURRENT RELATED PARTY TRANSACTIONS STATEMENT

During the financial year, the Company did not enter into any recurrent related party transactions ofrevenue or trading nature.



Audit Committee Report

COMPOSITION

Members of the Committee shall be determined by the Board of Directors and shall be composed of no fewerthan 3 members and all the members must be non-executive directors, with a majority of them beingindependent directors. The Chairman of the Audit Committee shall be an independent director & non-executivedirector.

The members of the Committee possess the requisite qualification and experience that meet the prescribedrequirements of Bursa Malaysia Securities Berhad for the MESDAQ Market from time to time in force.

No Alternate Director or Chief Executive Officer shall be appointed as a member of the audit Committee.

The Audit committee comprise the following:-

Members

Mr. Khor Chai Tian (Chairman) Independent and Non-Executive DirectorTan Sri Dato’ (DR) Abdul Aziz Bin Abdul Rahman Independent and Non-Executive Director/ChairmanMr. Lim Ghim Chai Independent and Non-Executive Director

TERMS OF REFERENCE OF AUDIT COMMITTEE

Chairman

The Chairman of the Committee must be an independent Director. In the absence of the Chairman, themembers shall elect any one of the members present at the meeting to be Chairman of the meeting.

MEETINGS

The committee shall meet at least 4 times a year with 2 members in attendance to form a quorum.

SECRETARY

The Company Secretary shall be the Secretary of the Committee.

QUORUM

In order to form a quorum in respect of a meeting of an audit committee, the majority of members present mustbe independent directors.

MEETINGS

The Executive Directors, Accountant, Representative of the internal auditors may be present in any meetingupon the invitation of the Committee.

AUTHORITY

The Committee is authorised by the Board to investigate any matter within its terms of reference.

The Committee shall have the resources and shall be allowed to obtain independent professional or otheradvice as deemed necessary to assist the Committee in fulfilling its responsibilities at the cost of the Company.The Committee shall have full and unrestricted access to the Chief Executive Officer and any informationpertaining to the Company. The Committee shall also have direct communication channels with the externalauditors and person(s) carrying out the internal audit function or activity.

Whenever necessary, the Committee may also convene meetings with the external auditors, the_internalauditors or both, without the attendance of the other directors and employees of the Company

Audit Committee Report

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MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

There were no material contracts entered into by the Company or its subsidiaries, which involved the interests of theDirectors and substantial shareholders during the financial year.

VARIATION IN RESULTS

There were no significant variations between the audited results for the financial year and the unaudited resultspreviously announced.

RECURRENT RELATED PARTY TRANSACTION

Details of Recurrent Related Party Transactions of revenue or trading nature are disclosed in the Notes to the FinancialStatements.

SUMMARY OF ACTIVITIES OF THE COMMITTEE DURING THE FINANCIAL YEAR ENDED 28 FEBRUARY 2009

During the financial year under review, the Committee convened five (5) meetings. Details of attendance are asfollows:-

Committee Members No. of meetings attended

Mr. Khor Chai Tian 5/5Tan Sri Dato (DR) Abdul Aziz B. Abdul Rahman 5/5Mr. Lim Ghim Chai (appointed on 11/4/2008) 5/5

STATEMENT VERIFYING ALLOCATION OF OPTIONS

The Committee has reviewed and verified that the allocation of share options pursuant to the Employees Share OptionScheme (ESOS) for the financial year ended 28 February 2009 was made in accordance with the criteria as set out inthe By-Laws of the Company’s ESOS.

There were no options granted to any of the non-executive directors of the company.

Internal Audit Function

The Group has outsourced its internal audit function to a professional consulting firm. The internal audit function istherefore independent of the activities of the Group and performs its duties with impartiality, objectivity and dueprofessional care.

Audit Committee Report (continued)

DUTIES

The duties of the Audit Committee are :-• to report to the Board of Directors after review the following :-• the audit plan with the external auditors;• the evaluation of the internal control system with the external auditors;• the external auditors’ audit report and any management letter from the external auditors to the Company

and the management’s response to such letter;• the assistance given by the employees of the Company to the external auditor;• the adequacy of the scope, functions, competency and resources of the internal audit function and that

it has the necessary authority to carry out its work;• the internal audit programme, processes, the results of the internal audit programme, processes or

investigation undertaken and whether or not appropriate action is taken on the recommendations ofthe internal audit function,

• the quarterly results and year end consolidated financial statements, prior to the approval by theboard of directors, focusing particularly on:-(i) changes in or implementation of major accounting policy changes;(ii) significant and unusual events; and(i i i) compliance with accounting standards and other legal requirements;

• any related party transaction and potential conflict of interest situation that may arise within the listedcompany or group including any transaction, procedure or course of conduct that raises questions ofmanagement integrity;

• to recommend to the board the nomination, appointment or reappointment of the external auditors andany question of their resignation and termination; and

• to perform any other duties as may be agreed by the Committee and the Board of Directors



INTRODUCTION

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internalcontrols to safeguard shareholders’ investments and the Group’s assets. The Bursa Malaysia Securities Berhad’s(“Bursa Securities”) Revamped Listing Requirements require directors of public listed companies to include a statementin their annual reports on the state of their internal controls. The Bursa Securities’ Statement on Internal Control:Guidance for Directors of Public Listed Companies (“Guidance”) provides guidance for compliance with theserequirements.

The Board of Directors is pleased to present the Statement on Internal Control of the Group which outlines the keyelements of internal control for the year ended 28 February 2009. This statement has been prepared in accordance withthe Guidance and the Listing Requirements of Bursa Securities.

RESPONSIBILITY OF THE BOARD

The Board is ultimately responsible for the Group’s system of internal control which includes financial, compliance andoperational controls of the Group. The Board also recognises its responsibility for reviewing the adequacy and integrityof the system of internal control to safeguard shareholders’ investments and the Group’s assets.

RISK MANAGEMENT FRAMEWORK

The Executive Directors with assistance of the management are continuously identifying, evaluating and managingsignificant business risks that affect the day-to-day operations of the Group.

The Audit Committee, on behalf of the Board, considers the effectiveness of the operation of the internal controlprocedures in the Group during the financial year. The Audit Committee reviews internal control issues identified bymanagement and evaluates the adequacy and effectiveness of the Group’s risk management and internal controlsystem.

In accordance with the Malaysia Code on Corporate Governance, the Group has appointed an external professionalfirm as internal auditor in March 2008. The Internal Audit function reports directly to the Audit Committee, carries outregular review of business process to assess the effectiveness of internal controls and highlights any significant riskthat may adversely affect the Group. Whenever necessary, the Audit Committee reviews and discusses with keymanagement on the issues brought up by the Internal Audit function.

KEY ELEMENTS

The key elements of the Group’s internal control system include the following:

- There is a clearly defined delegation of responsibility to the Management and operating units to ensure properidentification of accountability and segregation of duties.

- Policy guidelines, procedures and authority limits are established for Executive Directors and management withinthe Group in respect of the day-to-day operations, acquisitions and disposal of assets.

- There are standard operating policies and procedures which are set out and communicated to all levels of theorganisation.

- Regular Board and Management Meetings are held where information is provided to the Board and Managementcovering financial performance and operation.

CONCLUSION

The Board is of the opinion that based on the current level of activities, the Group’s system of internal control isadequate, and the Management will continue to take measures to strengthen the control environment. This statmentwas made in accordance with a resolution of the Board of Directors.

Statement on Internal Control

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Contents Page

Directors’ Report 1 - 6

Financial statements

Balance Sheet 7 - 8

Income Statement 9

Statement of Changes in Equity 10 - 12

Cash Flow Statement 13 - 15

Notes to the Financial Statements 16 - 51

Statement by Directors 52

Statutory Declaration 53

Report of the Auditors 54 - 55

Financial Statements

REPORTS AND FINANCIAL STATEMENTSFOR THE YEAR ENDED 28TH FEBRUARY 2009

ASIAEP BHD.(Incorporated in Malaysia)

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Company No. 253387 - W

asiaEP BHD.

(Incorporated in Malaysia)

DIRECTORS' REPORT

The directors hereby submit their report together with the audited financial statements of the

Group and of the Company for the financial year ended 28th February 2009.

PRINCIPAL ACTIVITIES

The Company is principally engaged in providing e-commerce solutions and developing an e-

market place for both local and international enterprises. The principal activities of its

subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant

changes in the nature of these principal activities during the financial year.

RESULTS

Group Company

RM'000 RM'000

Net loss for the financial year (7,679) (1,998)

DIVIDEND

No dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the financial year ended

28th February 2009.

RESERVES AND PROVISIONS

All material transfers to and from reserves and provisions during the financial year have been

disclosed in the financial statements.

BAD AND DOUBTFUL DEBTS

Before the income statements and balance sheets of the Group and of the Company were made out,

the directors took reasonable steps to ascertain that action had been taken in relation to the writing

off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that

all known bad debts had been written off and adequate allowance had been made for doubtful

debts.

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At the date of this report, the directors are not aware of any circumstances that would render the

amount written off for bad debts, or the amount of the allowance for doubtful debts in the financial

statements of the Group and of the Company inadequate to any substantial extent.

CURRENT ASSETS

Before the income statements and balance sheets of the Group and of the Company were made out,

the directors took reasonable steps to ensure that any current assets, other than debts, which were

unlikely to be realised in the ordinary course of business, their values as shown in the accounting

records of the Group and of the Company had been written down to an amount that they might be

expected to be realised.

At the date of this report, the directors are not aware of any circumstances that would render the

values attributed to the current assets in the financial statements of the Group and of the Company

misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen

which render adherence to the existing methods of valuation of assets or liabilities of the Group

and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:-

(i) any charge on the assets of the Group and of the Company that has arisen since the end of

the financial year which secures the liabilities of any other person, or

(ii) any contingent liability in respect of the Group and of the Company that has arisen since the

end of the financial year.

No contingent liability or other liability of the Group and of the Company has become enforceable,

or is likely to become enforceable within the period of twelve months after the end of the financial

year which, in the opinion of the directors, will or may substantially affect the ability of the Group

and of the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt

with in this report or the financial statements of the Group and of the Company that would render

any amount stated in the financial statements misleading.

3


ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company for the financial year were not, in

the opinion of the directors, substantially affected by any item, transaction or event of a material

and unusual nature.

No item, transaction or event of a material and unusual nature has arisen in the interval between

the end of the financial year and the date of this report which is likely to affect substantially the

results of the operations of the Group and of the Company for the financial year in which this

report is made.

ISSUE OF SHARES AND DEBENTURES

The Company did not issue any shares or debentures during the financial year.

TREASURY SHARES

The shareholders of the Company, by an ordinary resolution passed at the Extraordinary General

Meeting held on 28th May 2007, approved the plan of the Company to buy-back from the open

market of up to 10% of the Company’s issued and paid-up ordinary share capital at any point in

time through Bursa Malaysia Securities Berhad (“Proposed Share Buy-Back”).

During the financial year, the Company repurchased 2,083,400 of its issued share capital from the

open market at an average price of RM0.17 per share. The total consideration paid for the

repurchase including transaction costs was RM344,943/-. The shares repurchased are being held

as treasury shares in accordance with Section 67A of the Companies Act, 1965.

Further relevant details are disclosed in Note 15 to the financial statements.

ISSUE OF WARRANTS

The Company did not issue any warrants during the financial year.

Details of the warrants are set out in Note 14 to the financial statements.

4


EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

At an Extraordinary General Meeting held on 23rd August 2004, the Company’s shareholders

approved the establishment of an ESOS of up to 15% of the issued share capital of the Company,

to eligible Executive Directors and employees of the Group (“the Scheme”). The Scheme was set

to expire on 27th August 2007 (“Date of Expiry”).

However, prior to the Date of Expiry, on 20th August 2007 the Company approved the proposal

to extend the existing scheme for a further period of up to 3 years from the date of expiry

(“Extended Scheme”). The Extended Scheme shall be implemented in accordance with the terms

of the Company’s By-Laws of the ESOS Scheme.

No options were granted to any person to take up unissued shares or debentures of the Company

during the financial year.

Details of the ESOS are set out in Note 12 to the financial statements.

The persons to whom the options have been granted have no right to participate by virtue of the

options in any share issue of any other companies.

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date

of this report are:-

YB Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul Rahman

Dr. Tan Boon Nunt

Lee Suet Hong

Khor Chai Tian

Lim Ghim Chai

Low To Fong (resigned on 11.04.2008)

5


DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings kept by the Company under Section 134 of

the Companies Act, 1965, the interests of those directors who held office at the end of the financial

year in shares and warrants in the Company during the financial year ended 28th February 2009

are as follows:-

Number of ordinary shares of RM0.10 each

At At

1.3.2008 Bought Sold 28.2.2009

Shareholdings in the Company

YB Tan Sri Dato’(Dr) Abdul Aziz

Bin Abdul Rahman 100,000 - - 100,000

Dr. Tan Boon Nunt 9,374,260 100,000 - 9,474,260

Lee Suet Hong 13,723,760 - (13,723,500) 260

Shareholdings in which directors

have deemed interests through

Topclass Access Sdn. Bhd.

Dr. Tan Boon Nunt 18,562,509 - - 18,562,509

Lee Suet Hong 18,562,509 - - 18,562,509

Warrants 2006/2011

At

1.3.2008

Bought

Exercised

At

28.2.2009

Dr. Tan Boon Nunt 2,166,716 - - 2,166,716

Lee Suet Hong 1,333,383 - - 1,333,383

Other than as disclosed above, none of the directors in office at the end of the financial year had

any interest in shares and warrants in the Company and its related corporations during the

financial year.

DIRECTORS' BENEFITS

Since the end of the previous financial year, no director of the Company has received or become

entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments

received or due and receivable by the directors shown in the financial statements) by reason of a

contract made by the Company or a related corporation with the director or with a firm of which

the director is a member, or with a company in which the director has a substantial financial

interest.

6


DIRECTORS' BENEFITS (Continued)

Neither during nor at the end of the financial year was the Company or any of its related

corporations a party to any arrangement, whose object was to enable the directors to acquire

benefits by means of the acquisition of shares in, or debentures of, the Company or any other body

corporate apart from the director’s entitlements to subscribe for new ordinary shares in the

Company under the ESOS of the Company.

SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR

Significant events during and after the financial year are disclosed in Note 29 to the financial

statements.

AUDITORS

The auditors, Messrs Baker Tilly Monteiro Heng, have expressed their willingness to continue in

office.

On behalf of the Board,

……………………………..

DR. TAN BOON NUNT

Director

……………………………..

LEE SUET HONG

Director

Kuala Lumpur

Date: 26th May 2009

7


asiaEP BHD.


BALANCE SHEETS AS AT 28TH FEBRUARY 2009

2009 2008 2009 2008

Note RM'000 RM'000 RM'000 RM'000

ASSETS

Non-current assets

Property, plant and equipment 4 28,976 32,118 1,727 2,242

Prepaid land lease payments 5 475 480 475 480

Investment in subsidiaries 6 - - 1,466 1,466

Intangible assets 7 32,723 30,721 12,468 13,739

62,174 63,319 16,136 17,927

Current assets

Trade receivables 8 1,644 3,940 1,124 3,940

Other receivables, deposits and

prepayments 9 117 301 114 197

Amount owing by subsidiaries 10 - - 53,965 47,099

Short term investments 11 - 1,049 - 1,049

Tax recoverable 5 - 5 -

Cash and bank balances 531 2,314 485 1,871

2,297 7,604 55,693 54,156

TOTAL ASSETS 64,471 70,923 71,829 72,083

EQUITY AND LIABILITIES

Equity attributable to equity holders

of the Company

Share capital 12 24,532 24,532 24,532 24,532

Reserves 13 37,144 45,668 44,544 46,887

Shareholders' funds 61,676 70,200 69,076 71,419

Minority interest - - - -

Total equity 61,676 70,200 69,076 71,419

Group Company

8


asiaEP BHD.


BALANCE SHEETS AS AT 28TH FEBRUARY 2009 (Continued)

2009 2008 2009 2008

Note RM'000 RM'000 RM'000 RM'000

Non-current liabilities

Hire purchase liabilities 16 226 23 226 23

Deferred tax liabilities 17 239 127 239 127

465 150 465 150

Current liabilities

Trade payables 18 24 24 24 24

Other payables and accruals 19 673 452 631 442

Hire purchase liabilities 16 129 41 129 41

Short term borrowing 20 1,504 - 1,504 -

Tax payable - 56 - 7

2,330 573 2,288 514

Total liabilities 2,795 723 2,753 664

TOTAL EQUITY AND LIABILITIES 64,471 70,923 71,829 72,083

Group Company

The accompanying notes form an integral part of these financial statements.

9


asiaEP BHD.


INCOME STATEMENTS

FOR THE FINANCIAL YEAR ENDED 28TH FEBRUARY 2009

2009 2008 2009 2008

Note RM'000 RM'000 RM'000 RM'000

REVENUE 21 5,831 15,049 4,963 15,016

Cost of services (1,692) (2,378) (1,687) (1,898)

GROSS PROFIT 4,139 12,671 3,276 13,118

Other operating revenue 228 55 224 49

Administrative expenses (11,921) (5,472) (5,324) (4,704)

Other operating expenses - - - (691)

Operating (loss)/profit (7,554) 7,254 (1,824) 7,772

Finance expense

- hire purchase interest (7) (5) (7) (5)

- overdraft interest (55) - (55) -

(LOSS)/PROFIT BEFORE

TAXATION 22 (7,616) 7,249 (1,886) 7,767

TAXATION 23 (63) (190) (112) (141)

NET (LOSS)/PROFIT FOR THE

FINANCIAL YEAR (7,679) 7,059 (1,998) 7,626

Attributable to:

Equity holders of the Company (7,679) 7,059 (1,998) 7,626

Minority interest - - - -

Net profit for the financial year (7,679) 7,059 (1,998) 7,626

(Loss)/Earnings per share attributable to

ordinary equity holders of the

Company: 24

Basic (sen) (3.30) 3.01

Diluted (sen) N/A 2.63

Group Company


10


asiaEP BHD.


STATEMENTS OF CHANGES IN EQUITY


Share

Share ESOS Translation Warrant Premium Retained Treasury Minority Total

Group Capital Reserve Reserve Reserve Reserve Profits Shares Total Interest Equity

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1st March 2007 21,707 210 (112) 446 15,917 18,162 - 56,330 - 56,330

Issue of shares

- exercise of options 911 (470) - - 788 - - 1,229 - 1,229

- options expense charged

during the financial year - 260 - - - - - 260 - 260

- warrants exercised 1,914 - - (127) 3,956 - - 5,743 - 5,743

Purchase of treasury shares - - - - - - (324) (324) - (324)

Exchange differences - - (97) - - - - (97) - (97)

Net profit for the financial year - - - - - 7,059 - 7,059 - 7,059

At 29th February 2008 24,532 - (209) 319 20,661 25,221 (324) 70,200 - 70,200

Attributable to equity holders of the Company

Non-distributable Distributable

11


asiaEP BHD.



FOR THE FINANCIAL YEAR ENDED 28TH FEBRUARY 2009 (Continued)

Share

Share ESOS Translation Warrant Premium Retained Treasury Minority Total

Group Capital Reserve Reserve Reserve Reserve Profits Shares Total Interest Equity

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 29th February 2008 24,532 - (209) 319 20,661 25,221 (324) 70,200 - 70,200

Purchase of treasury shares - - - - - - (345) (345) - (345)

Exchange differences - - (495) - - (5) - (500) - (500)

Net loss for the financial year - - - - - (7,679) - (7,679) - (7,679)

At 28th February 2009 24,532 - (704) 319 20,661 17,537 (669) 61,676 - 61,676

Attributable to equity holders of the Company


12


asiaEP BHD.




Share

Share ESOS Translation Warrant Premium Retained Treasury

Company Capital Reserve Reserve Reserve Reserve Profits Shares Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1st March 2007 21,707 210 - 446 15,917 18,605 - 56,885

Issue of shares

- exercise of options 911 (470) - - 788 - - 1,229

- options expense charged

during the financial year - 260 - - - - - 260

- warrants exercised 1,914 - - (127) 3,956 - - 5,743

Purchase of treasury shares - - - - - - (324) (324)

Net profit for the financial year - - - - - 7,626 - 7,626

At 29th February 2008 24,532 - - 319 20,661 26,231 (324) 71,419

Purchase of treasury shares - - - - - - (345) (345)

Net loss for the financial year - - - - - (1,998) - (1,998)

At 28th February 2009 24,532 - - 319 20,661 24,233 (669) 69,076


The accompanying notes form an integral part of these financial statements

13


asiaEP BHD.


CASH FLOW STATEMENTS


2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM

OPERATING ACTIVITIES:

(Loss)/Profit before taxation (7,616) 7,249 (1,886) 7,767

Adjustments for:

Amortisation

- intellectual property 1,175 1,146 1,175 1,146

- development costs 3,110 720 330 350

- prepaid land lease payments 5 5 5 5

Waiver of debt - - - 158

Bad debt recovered (216) - (216) -

ESOS expenses - 260 - 260

Currency realignment (506) (55) - -

Impairment loss on investment in a subsidiary - - - 533

Interest expense 62 5 62 5

Interest income (12) (55) (8) (49)

Depreciation 3,708 1,163 395 652

Loss on winding up of subsidiary 29 - - -

Development cost written off 11 91 - -

Property, plant and equipment written off 419 1 - -

169 10,530 (143) 10,827

Changes In Working Capital:

Receivables 2,696 879 3,115 898

Payables 221 205 189 205

Development costs paid (1,752) (1,273) (114) (208)

Tax paid (12) (9) (12) (9)

Net Operating Cash Flow 1,322 10,332 3,035 11,713

CASH FLOWS FROM

INVESTING ACTIVITIES:

Purchase of property, plant and equipment (5,167) (18,911) (4,982) (254)

Interest income 12 55 8 49

Loss on winding up of subsidiary (29) - - -

Net Investing Cash Flow (5,184) (18,856) (4,974) (205)

Group Company

14


asiaEP BHD.




2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM

FINANCING ACTIVITIES:

Interest expense (62) (5) (62) (5)

Repayment of hire purchase liabilities (61) (42) (61) (42)

Advances to subsidiaries - - (1,532) (19,987)

Drawndown of short term borrowing 1,504 - 1,504 -

Proceeds from the exercise of options - 1,229 - 1,229

Proceeds from the warrants exercised - 5,743 - 5,743

Purchase of company's own shares (345) (324) (345) (324)

Net Financing Cash Flow 1,036 6,601 (496) (13,386)

NET CHANGE IN CASH AND

CASH EQUIVALENTS (2,826) (1,923) (2,435) (1,878)

EFFECT ON EXCHANGE RATE CHANGES

ON OPENING CASH (6) (32) - -

CASH AND CASH EQUIVALENTS AT THE

BEGINNING OF THE FINANCIAL YEAR 3,363 5,318 2,920 4,798

CASH AND CASH EQUIVALENTS AT

THE END OF THE FINANCIAL YEAR 531 3,363 485 2,920

ANALYSIS OF CASH AND CASH

EQUIVALENTS:

Short term investments - 1,049 - 1,049

Cash and bank balances 531 2,314 485 1,871

531 3,363 485 2,920

Group Company

During the financial year, the Group and the Company acquired property, plant and equipment

totalling to RM5,519,000/- (2008 : RM18,911,000/-) and RM5,334,000/- (2008 : RM254,000/-)

respectively of which RM470,000/- (2008 : RMNil) were acquired under hire purchase

arrangements. Cash payments of RM118,000/- (2008 : RMNil) were made towards the hire

purchase liabilities.


15


asiaEP BHD.




Winding up of a wholly owned subsidiary, asiaEP China Co. Ltd.

On 16th September 2008, the Company announced that its wholly-owned subsidiary, asiaEP China

Co. Ltd. (“asiaEP China”), a company incorporated in the People’s Republic of China (“PRC”)

had applied to the relevant authority in the PRC to be voluntarily wound-up. In this connection,

asiaEP China had on 25th March 2008 appointed a firm of Certified Public Accountants in

Shanghai, PRC to submit the statement of affairs of asiaEP China to the relevant authorities.

The effects of the winding up of the subsidiary on the financial position of the Group as at 28th

February 2009 are as follows:-

2009

RM'000

Cash and bank balances 29

Net assets disposed 29

Cash proceeds -

Loss on winding up of the subsidiary 29

Cash outflow arising on winding up:-

Cash proceeds -

Cash and cash equivalent of subsidiary 29

29

The effects of the winding up of the subsidiary on the financial results of the Group are as

follows:-

2009

RM'000

Revenue -

Administrative expenses -

-

16


asiaEP BHD.


NOTES TO THE FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The Company is principally engaged in providing e-commerce solutions and developing an e-

market place for both local and international enterprises. The principal activities of its

subsidiaries are disclosed in Note 6 to the financial statements. There have been no

significant changes in the nature of these principal activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia,

and listed on the MESDAQ Market of Bursa Malaysia Securities Berhad.

The registered office and the principal place of business of the Company are both located at

No. 18 & 20, Jalan TK 2/1C, Taman Kinrara Seksyen 2, 47100 Puchong, Selangor Darul

Ehsan.

The financial statements are expressed in Ringgit Malaysia and all values are rounded to the

nearest thousand (RM’000) except when otherwise indicated.

The financial statements were authorised for issue by the board of directors in accordance

with a resolution of the directors on 26th May 2009.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance

with the Financial Reporting Standards (“FRS”) and the provisions of the Companies Act,

1965 in Malaysia.

The financial statements of the Group and of the Company have been prepared under the

historical cost basis, except as disclosed in the significant accounting policies in Note 2.3 to

the financial statements.

The preparation of financial statements in conformity with FRS requires the use of certain

critical accounting estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosures of contingent assets and liabilities at the date of the financial

statements, and the reported amounts of the revenue and expenses during the reported

financial period. It also requires directors’ best knowledge of current events and actions, and

therefore actual results may differ.

The areas involving a higher degree of judgement of complexity, or areas where assumptions

and estimates are significant to the financial statements are disclosed in Note 3 to the

financial statements.

17


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.2 New and Revised FRS, Amendments to FRS and IC Interpretations

(a) Adoption of Revised FRS, Amendments to FRS and IC Interpretations

The Group and the Company had adopted the following revised FRS, amendments to

FRS and IC Interpretations (“IC Int”) that are relevant to their operations and are

mandatory for the current financial year:-

Revised FRS

FRS 107 Cash Flow Statements

FRS 111 Construction Contracts

FRS 112 Income Taxes

FRS 118 Revenue

FRS 120 Accounting for Government Grants and Disclosure of Government

Assistance

FRS 134 Interim Financial Reporting

FRS 137 Provisions, Contingent Liabilities and Contingent Assets

Amendments to FRS

FRS 121 The Effects of Changes in Foreign Exchange Rates – Net Investment

in a Foreign Operation

IC Interpretations

IC Int 1 Changes in Existing Decommissioning, Restoration & Similar

Liabilities

IC Int 2 Members’ Shares in Co-operative Entities & Similar Instruments

IC Int 5 Rights to Interests arising from Decommissioning, Restoration &

Environmental Rehabilitation Funds

IC Int 6 Liabilities arising from Participating in a Specific Market – Waste

Electrical & Electronic Equipment

IC Int 7 Applying the Restatement Approach under IAS 29 Financial

Reporting in Hyperinflationary Economics

IC Int 8 Scope of FRS 2

The adoption of the above revised FRS, amendments to FRS and IC Int did not result

in any substantial changes in the Group’s and the Company’s accounting policies, and

have any material impact on the results and the financial positions of the Group and of

the Company.

18



2.2 New and Revised FRS, Amendments to FRS and IC Interpretations (Continued)

(b) FRS and IC Interpretations that are issued, not yet effective and have not been

early adopted

The Group and the Company have not adopted the following new FRS and IC Int that

have been issued as at the date of authorisation of these financial statements but are

not yet effective for the Group and the Company:-

Effective for

financial periods

beginning on

or after

New FRS

FRS 4 Insurance Contracts 1 January 2010

FRS 7 Financial Instruments : Disclosures 1 January 2010

FRS 8 Operating Segments 1 July 2009

FRS 139 Financial Instruments : Recognition and

Measurement

1 January 2010

IC Int

IC Int 9 Reassessment of Embedded Derivatives 1 January 2010

IC Int 10 Interim Financial Reporting and Impairment 1 January 2010

Other than FRS 139, the directors do not anticipate that the application of the above

new FRS and IC Int, when they are effective, will have a material impact on the results

and the financial position of the Group and of the Company.

The Group and the Company has applied the transitional provision in FRS 139.103AB

which exempts entities from disclosing the possible impact arising from the initial

recognition of this standard on the financial statements of the Group and of the

Company as required by paragraph 30(b) of FRS 108.

2.3 Significant Accounting Policies

The following accounting policies have been used consistently in dealing with items which

are considered material in relation to the financial statements:-

(a) Subsidiaries and Basis of Consolidation

The consolidated financial statements include the financial statements of the Company

and its subsidiaries made up to the end of the financial year. The financial statements

of the parent and its subsidiaries are all drawn up to the same reporting date.

19



2.3 Significant Accounting Policies (Continued)

(a) Subsidiaries and Basis of Consolidation (Continued)

Subsidiaries are entities over which the Group has the power to exercise control over

the financial and operating policies so as to obtain benefits from their activities,

generally accompanying a shareholding of more than one half of the voting rights. The

existence and effect of potential voting rights that are currently exercisable or

convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are consolidated using the purchase method of accounting. Under the

purchase method of accounting, subsidiaries are fully consolidated from the date on

which control is transferred to the Group and are de-consolidated from the date that

control ceases. The cost of an acquisition is measured as the fair value of the assets

acquired, equity instruments issued and liabilities and contingent liabilities incurred or

assumed at the date of exchange, plus costs directly attributable to the acquisition.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a

business combination are measured initially at their fair values at the date of

acquisition, irrespective of the extent of any minority interest. The excess of the cost

of the acquisition over the fair value of the Group’s identifiable net assets acquired at

the date of acquisition is reflected as goodwill. See the accounting policies Note

2.3(c)(i) on goodwill. If the cost of acquisition is less than the fair value of the net

assets of the subsidiary acquired, the difference is recognised directly in the income

statement.

Intra-group transactions, balances and unrealised gains on transactions within the

Group are eliminated in full on consolidation and the consolidated financial statements

reflect external transactions only. Unrealised losses resulting from intra-group

transactions are also eliminated on consolidation unless costs cannot be recovered.

The unrealised losses are considered an impairment indicator of the asset transferred.

When necessary, adjustments are made to the financial statements of the subsidiaries

to ensure consistency of accounting policies with those adopted by the Group.

The gain or loss on disposal of a subsidiary is the difference between net disposal

proceeds and the Group’s share of its net assets as of the date of disposal including the

cumulative amount of any exchange differences that relate to the subsidiary and is

recognised in the consolidated income statements.

(b) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and

impairment losses, if any. Cost includes expenditure that is directly attributable to the

acquisition of the asset. When significant parts of an item of property, plant and

equipment have different useful lives, they are accounted for as separate items of

property, plant and equipment.

20




(b) Property, Plant and Equipment and Depreciation (Continued)

The cost of replacing part of an item of property, plant and equipment is recognised in

the carrying amount of the item if it is probable that the future economic benefits

embodied within the part will flow to the Group and its cost can be measured reliably.

The costs of the day-to-day servicing of property, plant and equipment are recognised

in the financial statements as incurred.

Depreciation of property, plant and equipment is provided on the straight line basis to

write off the cost of each asset to its residual value over their estimated useful lives, at

the following annual rates:-

Leasehold buildings 2%

Motor Vehicles 20%

Computer equipment 20%

Office equipment 10%

Furniture and fittings 10%

Renovation 20%

The residual values, useful lives and depreciation methods of assets are reviewed, and

adjusted if appropriate at each balance sheet date to ensure that the amounts, method

and period of depreciation are consistent with previous estimates and the expected

pattern of consumption of the future economic benefits embodied in these items of

property, plant and equipment.

Fully depreciated assets are retained in the accounts until the assets are no longer in

use.

At each balance sheet date, the Group assesses whether there is any indication of

impairment. If such indications exist, an analysis is performed to assess whether the

carrying amount of the asset is fully recoverable. A write down is made if the carrying

amount exceeds the recoverable amount. See accounting policy Note 2.3(k) on

impairment of assets.

An item of property, plant and equipment is derecognised upon disposal or when no

future economic benefits are expected from its use or disposal. Any gain or loss

arising on derecognition of the asset is included in the income statement in the financial

year the asset is derecognised.

(c) Intangible Assets

(i) Goodwill on consolidation

Goodwill represents the excess of the cost of business combination over the fair

value of the Group’s share of the identifiable net assets at the date of acquisition.

21




(c) Intangible Assets (Continued)

(i) Goodwill on consolidation (Continued)

Following the initial recognition, goodwill is measured at cost less accumulated

impairment losses. Goodwill is reviewed for impairment annually or more

frequently if events or changes in circumstances indicate that the carrying value

may be impaired. Impairment losses on goodwill are not reversed. Gains and

losses on the disposal of an entity include the carrying amount of goodwill

relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment

testing. The allocation is made to those cash-generating units or groups of cash-

generating units that are expected to benefit from the synergies of the business

combination in which the goodwill arose. See accounting policy Note 2.3(k) on

impairment of assets.

(ii) Research and development costs

All research costs undertaken with the prospect of gaining new scientific or

technical knowledge and understanding are recognised in the income statement

as incurred.

Expenditure on development activities, whereby research findings are applied to

a plan or design for the production of new or substantively improved products

and processes, is capitalised and deferred only when the Group can demonstrate

the technical feasibility of completing the intangible asset so that it will be

available for use or sale, its intention to complete and its ability to use or sell the

asset, how the asset will generate future economic benefits, the availability of

resources to complete the project and the ability to measure reliably the

expenditure during the development. Product development expenditure which do

not meet these criteria are expensed when incurred.

The expenditure capitalised includes cost of materials, direct labour and an

appropriate proportion of overheads. Other development expenditure is

recognised in the income statement as an expense as incurred.

Capitalised development costs, considered to have finite useful lives, are stated

at cost less any impairment losses and are amortised using the straight line basis

over the commercial lives of the underlying products, not exceeding a period of 5

years. Impairment is assessed whenever there is an indication of impairment and

the amortisation period and method are also reviewed at least at each balance

sheet date.

The recoverable amount of development costs not yet available for use are

measured annually, irrespective of whether there is any indication that it may be

impaired. See accounting policy Note 2.3(k) on impairment of assets.

22




(c) Intangible Assets (Continued)

(iii) Intellectual property

Intellectual property consists of the exclusive rights of an online platform

system, including the intellectual property trademarks, copyright, source

programmes and associated documentation. This expenditure is capitalised as it

is able to generate future economic benefits to the Group.

The intellectual property is amortised and recognised as an expense based on the

forecasted income stream so as to reflect the pattern in which the asset’s

economics benefits are consumed by the Group over fifteen years.

(d) Investments

Investments in subsidiaries are stated at cost less impairment losses, if any. Where

there is an indication of impairment, the carrying amount of the investment is reviewed,

and if found to be in excess of the recoverable amount, it is written down immediately

to its recoverable amount. The policy of the recognition and measurement of

impairment losses is in accordance with Note 2.3(k) to the financial statements.

On disposal of an investment, the difference between net disposal proceeds and its

carrying amount is charged or credited to the income statement.

(e) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when

identified. An estimate is made for doubtful debts based on a review of all outstanding

amounts as at the balance sheet date.

(f) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the

future, whether or not billed to the Group.

(g) Taxation

The tax expense in the income statement represents the aggregate amount of current

tax and deferred tax included in the determination of net profit or loss for the year.

Current tax is the expected amount of income taxes payable in respect of the taxable

profit for the year and is measured using the tax rates that have been enacted or

substantively enacted at the balance sheet date, and adjustment of tax payable in

respect of the previous year.

23




(g) Taxation (Continued)

Deferred tax is provided for, using the liability method, on temporary differences at the

balance sheet date between the tax bases of assets and liabilities and their carrying

amounts in the financial statements. In principle, deferred tax liabilities are recognised

for all taxable temporary differences and deferred tax assets are recognised for all

deductible temporary differences, unused tax losses and unused tax credits to the extent

that it is probable that taxable profit will be available against which the deductible

temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is not recognised if the temporary difference arises from goodwill or from

the initial recognition of an asset or liability in a transaction which is not a business

combination and at time of the transaction, affects neither accounting profit nor taxable

profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when

the asset is realised or the liability is settled, based on tax rates that have been enacted

or substantively enacted at the balance sheet date. Deferred tax is recognised in the

income statement, except when it arises from a transaction which is recognised directly

in equity, in which case the deferred tax is also charged or credited directly in equity, or

when it arises from a business combination that is an acquisition, in which case the

deferred tax is included in the resulting goodwill.

(h) Foreign Currencies

The individual financial statements of each entity in the Group are measured using the

currency of the primary economic environment in which the entity operates (“the

functional currency”). The financial statements are presented in Ringgit Malaysia,

which is the Group’s functional currency and presentation currency.

(i) Foreign currency translation

Transactions in foreign currencies are translated into Ringgit Malaysia at rates

of exchange ruling at transaction dates. Monetary assets and liabilities

denominated in foreign currencies at the balance sheet date are translated into

Ringgit Malaysia at the foreign exchange rates ruling at that date. Exchange

differences arising from the settlement of foreign currency transactions and from

the translation of foreign currency monetary assets and liabilities are included in

the income statement.

Non-monetary items are measured in term of historical cost in a foreign currency

or translated using the exchange rates as at the date of the initial transaction.

Non-monetary items measured at fair value in foreign currency are translated

using the exchange rates at the date when the fair value was determined.

24




(h) Foreign Currencies (Continued)

(ii) Financial statement of foreign operation

The Group’s foreign entities are those operations that are not an integral part of

the operations of the Group. Income statements of foreign entities are translated

into Ringgit Malaysia at average exchange rates for the financial year and the

balance sheets are translated at exchange rates ruling at the balance sheet date.

Exchange differences arising from the retranslation of the net investment in

foreign entities are taken up in Exchange Translation Reserve in shareholders’

equity. On disposal of the foreign entity, such translation differences are

recognised in the income statement as part of the gain or loss on disposal.

(i) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will

flow to the Group and the revenue can be reliably measured. The following specific

recognition criteria must also be met before revenue is recognised.

(i) Sales of Goods and Services Rendered

Revenue is measured at the fair value of the consideration received or receivable

for the sale of goods and services in the ordinary course of the Group’s activities

and is recognised in the income statement when the significant risks and rewards

of ownership of the goods have been transferred to the buyer and when the

services are rendered.

(ii) Interest Income

Interest income is recognised on the accrual basis.

(j) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become

a party to the contractual provisions of the instruments. The particular recognition

methods adopted are disclosed in the individual accounting policy associated with each

item.

Financial instruments are classified as liabilities or equity in accordance with the

substance of the contractual arrangement. Interest, dividends, gains and losses relating

to a financial instrument classified as liability are reported as expense or income.

Distributions to holders of financial instruments classified as equity are charged

directly to equity. Financial instruments are offset when the Company has a legally

enforceable right to set off the recognised amounts and intends either to settle on a net

basis, or to realise the asset and settle the liability simultaneously.

25




(k) Impairment of Assets

The carrying amount of assets, other than deferred tax assets and non-current assets

(or disposal group) held for sale, are reviewed at each balance sheet date to determine

whether there is any indication of impairment. If any such indication exists, the asset’s

recoverable amount is estimated to determine the amount of impairment loss.

For goodwill, intangible assets that have an indefinite useful life and intangible assets

that are not yet available for use, the recoverable amount is estimated at each balance

sheet date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, the recoverable amount is

determined on an individual asset basis unless the asset does not generate cash flows

that are largely independent of those from other assets. If this is the case, the

recoverable amount is determined for the cash-generating unit (“CGU”) to which the

asset belongs to. Goodwill acquired on a business combination is, from the acquisition

date, allocated to each of the Group’s CGUs, or groups of CGUs, that are expected to

benefit from the synergies of the combination, irrespective of whether other assets or

liabilities of the Group are assigned to those units or groups of units.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less cost

to sell and its value in use. In assessing value in use, the estimated future cash flows

are discounted to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risk specific to the asset.

Where the carrying amounts of an asset exceed its recoverable amount, the asset is

considered impaired and is written down to its recoverable amount. Impairment losses

recognised in respect of a CGU or groups of CGUs are allocated first to reduce the

carrying amount of any goodwill allocated to those units or groups of units and then, to

reduce the carrying amount of the other assets in the unit or groups of units on a pro-

rata basis.

An impairment loss is recognised in the income statement in the period in which it

arises.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment

loss for an asset other than goodwill is reversed if, and only if, there has been a change

in the estimates used to determine the asset’s recoverable amount since the last

impairment was recognised. The carrying amount of an asset other than goodwill is

increased to its revised recoverable amount, provided that this amount does not exceed

its carrying amount that would have been determined (net of amortisation or

depreciation) had no impairment loss been recognised for the asset in prior years. A

reversal of impairment loss for an asset other than goodwill is recognised in the income

statement.

26




(l) Borrowing Costs

Borrowing costs are charged to the income statement as an expense in the period in

which they are incurred.

(m) Employee Benefits

(i) Short term employee benefits

Wages, salaries, bonuses, social security contribution and non-monetary benefits

are recognised as an expense in the financial year in which the associated

services are rendered by the employees. Short-term accumulating compensated

absences such as paid annual leave are recognised when services are rendered by

employees that increase their entitlement to future compensated absences. Short

term non-accumulating compensated absences sick leave, maternity and

paternity leave are recognised when absences occur.

(ii) Post-employment benefits

The Group contributes to the Employees’ Provident Fund, the national defined

contribution plan. The contributions are charged to the income statement in the

period to which they are related. Once the contributions have been paid, the

Group has no further payment obligations.

(iii) Share-based compensation

The Company operates its Employees’ Share Option Scheme (“ESOS”), an

equity-settled, share-based compensation plan for employees of the Group which

allows the Group’s employees to acquire ordinary shares of the Company. The

total fair value of share options granted to employees is recognised as an

employee cost with a corresponding increase in the share option reserve within

equity over the vesting period and taking into account the probability that the

options will vest. The fair value of share options is measured at grant date,

taking into account, if any, the market vesting conditions upon which the options

were granted but excluding the impact of any non-market vesting conditions.

Non-market vesting conditions are included in the assumptions about the number

of options that are expected to become exercisable on the vesting date.

At each balance sheet date, the Company revises its estimates of the number of

options that are expected to become exercisable on the vesting date. It

recognises the impact of the revision of original estimates, if any, in the income

statement, and a corresponding adjustment to equity over the remaining vesting

period. The equity amount is recognised in the share option reserve until the

option is exercised, upon which it will be transferred to the share premium

account, or until the option expires, upon which it will be transferred directly to

retained earnings.

27




(m) Employee Benefits (Continued)

(iii) Share-based compensation (Continued)

The proceeds received net of any directly attributable transaction costs are

credited to share capital (nominal value) and share premium when the options

are exercised.

(n) Leases

(i) Finance Lease

Assets financed by hire purchase arrangements which transfer substantially all

the risks and rewards of ownership to the Group are capitalised as property,

plant and equipment, and the corresponding obligations are treated as liabilities.

The assets so capitalised are depreciated in accordance with the accounting

policy on property, plant and equipment. Finance charges are charged to the

income statement over the periods of the respective agreements to give a

constant periodic rate of charge on the remaining hire-purchase and lease

liabilities.

(ii) Operating Lease

Leases of assets were a significant portion of the risks and rewards of ownership

are retained by the lessor are classified as operating leases. Operating lease

payments are recognised as an expense on a straight line basis over the term of

the relevant lease. The aggregate benefit of incentives provided by the lessor is

recognised as a reduction of rental expense over the lease term on a straight line

basis.

In the case of a lease of land and buildings, the minimum lease payments or the

up-front payments made are allocated, whenever necessary, between the land

and the buildings elements in proportion to the relative fair values for leasehold

interests for the land element and the buildings element of the lease at the

inception of the lease. The up-front payments relating to the land element

represents prepaid lease payment and are amortised to the income statement on a

straight line basis over the lease term.

(o) Share Capital

(i) Ordinary shares

Ordinary shares are recorded at the nominal value and the consideration in

excess of nominal value of shares issued, if any, is accounted for as share

premium. Both ordinary shares and share premium are classified as equity.

28




(o) Share Capital (Continued)

(i) Ordinary shares (Continued)

Dividends on ordinary shares are recognised as liabilities when proposed or

declared before the balance sheet date. A dividend proposed or declared after the

balance sheet date, but before the financial statements are authorised for issue, is

not recognised as a liability at the balance sheet date.

Cost incurred directly attributable to the issuance of the shares are accounted for

as a deduction from share premium, if any, otherwise it is charged to the income

statement. Equity transaction costs comprise only those incremental external

costs directly attributable to the equity transaction which would otherwise have

been avoided.

(p) Segmental Information

Segment reporting is presented for enhanced assessment of the Group’s risks and

returns. A business segment is a group of assets and operations engaged in providing

products or services that are subject to risks and returns that are different from those

of other business segments. A geographical segment is engaged in providing products

or services within a particular economic environment that is subject to risks and

returns that are different from those components.

The primary reporting segment information is in respect of geographical segment. No

business segment is prepared as the Group’s activities are predominantly in one

industry.

Segment revenue, expense, assets and liabilities are those amounts resulting from the

operating activities of a segment that are directly attributable to the segment and the

relevant portion that can be allocated on a reasonable basis to the segment. Segment

revenue, expense, assets and segment liabilities are determined before intra-group

transactions are eliminated as part of the consolidation process, except to the extent

that such intra-group balances and transactions are between group enterprises within a

single segment. Inter-segment pricing is based on similar terms as those available to

other external parties.

Segment assets and liabilities do not include income tax assets and liabilities

respectively.

Segment capital expenditure is the total cost incurred during the period to acquire

segment assets that are expected to be used for more than one period.

(q) Cash and Cash Equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise cash in

hand, bank balances, demand deposits, other short-term and highly liquid investments

that are readily convertible to known amounts of cash and which are subject to an

insignificant risk of changes in value.

29


3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the directors and are based on

historical experience and other factors, including expectations of future events that are

believed to be reasonable under the circumstances.

The key assumption concerning the future and other key sources of estimation uncertainty at

the balance sheet date, that have a significant risk of causing a material adjustment to the

carrying amounts of assets and liabilities within the next financial year are as stated below:-

(i) Useful lives of property, plant and equipment

The Group estimates the useful lives of property, plant and equipment based on the

period over which the assets are expected to be available for use. The estimated useful

lives of property, plant and equipment are reviewed periodically and are updated if

expectations differ from previous estimates due to physical wear and tear, technical or

commercial obsolescence and legal or other limits on the use of the relevant assets.

In addition, the estimation of the useful lives of property, plant and equipment are

based on internal technical evaluation and experience with similar assets. It is

possible, however, that future results of operations could be materially affected by

changes in the estimates brought about by changes in factors mentioned above. The

amounts and timing of recorded expenses for any period would be affected by changes

in these factors and circumstances. A reduction in the estimated useful lives of the

property, plant and equipment would increase the recorded expenses and decrease the

non-current assets.

(ii) Impairment of property, plant and equipment

The Group assess impairment of assets whenever the events or changes in

circumstances indicate that the carrying amount of an asset may not be recoverable i.e.

the carrying amount of the asset is more than the recoverable amount.

Recoverable amount is measured at the higher of the fair value less cost to sell for that

asset and its value-in-use. The value-in-use is the net present value of the projected

future cash flow derived from that asset discounted at an appropriate discount rate.

Projected future cash flows are based on the Group’s estimates calculated based on

historical, sector and industry trends, general market and economic conditions, changes

in technology and other available information.

As at balance sheet date, the directors of the Company are of the opinion that there is

no impact resulting from the impairment review by the management.

30


3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

(iii) Recoverability of receivables

The Group makes allowances for doubtful debts based on an assessment of the

recoverability of receivables. Allowances are applied to receivables where events or

changes in circumstances indicate that the carrying amounts may not be recoverable.

Management specifically analysed historical bad debts, customer concentrations,

customer creditworthiness, current economic trends and changes in customer payment

terms when making a judgement to evaluate the adequacy of the allowance for doubtful

debts of receivables. Where the expectation is different from the original estimate,

such difference will impact the carrying value of receivables.

(iv) Impairment of investment in subsidiaries

The Group carried out the impairment test based on a variety of estimation including

the value-in-use of the cash generating unit. Estimating the value-in-use requires the

Group to make an estimate of the expected future cash flows from the cash generating

unit and also to choose a suitable discount rate in order to calculate the present value

of those cash flows. The carrying amounts of the Company’s investment in

subsidiaries as at 28th February 2009 was RM1,466,000/- (2008 : RM1,466,000/-)

(v) Impairment of intangible assets

The Group carried out the impairment test based on a variety of estimation including

the value-in-use of the cash generating unit. Estimating the value-in-use requires the

Group to make an estimate of the expected future cash flows from the cash operating

unit and also to choose a suitable discount rate in order to calculate the present value

of those cash flows. The carrying amounts of the Group and the Company’s intangible

assets as at 28th February 2009 was RM32,723,000/- (2008 : RM30,721,000/-) and

RM12,468,000/- (2008 : RM13,739,000/-) respectively.

(vi) Income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgement

is required in determining the capital allowances and deductibility of certain expenses

during the estimation of the provision for income taxes. There are many transactions

and calculations for which the ultimate tax determination is uncertain during the

ordinary course of business. Where the final tax outcome of these matters is different

from the amounts that were initially recorded, such differences will impact the income

tax and deferred income tax provisions in the period in which such determination is

made.

31


4. PROPERTY, PLANT AND EQUIPMENT

Furniture

Leasehold Motor Computer Office and

Group Buildings Vehicles Equipment Equipment Fittings Renovation Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2009

Cost

At 1st March 2008 580 765 46,031 1,198 838 1,108 50,520

Additions - - 5,519 - - - 5,519

Written off - - (4,146) (18) (92) (617) (4,873)

Currency alignment - - - - 5 15 20

At 28th February 2009 580 765 47,404 1,180 751 506 51,186

Accumulated

Depreciation

At 1st March 2008 40 641 16,028 409 379 905 18,402

Depreciation for the

financial year 6 72 7,849 119 82 123 8,251

Written off - - (3,727) (18) (92) (617) (4,454)

Currency alignment - - - - 3 8 11

At 28th February 2009 46 713 20,150 510 372 419 22,210

Net Book Value at

28th February 2009 534 52 27,254 670 379 87 28,976

2008

Cost

At 1st March 2007 580 765 27,329 1,047 785 1,116 31,622

Additions - - 18,702 153 56 - 18,911

Written off - - - (2) - - (2)

Currency alignment - - - - (3) (8) (11)

At 29th February 2008 580 765 46,031 1,198 838 1,108 50,520

Accumulated

Depreciation

At 1st March 2007 34 569 9,980 293 296 758 11,930


financial year 6 72 6,048 117 84 149 6,476

Written off - - - (1) - - (1)

Currency alignment - - - - (1) (2) (3)

At 29th February 2008 40 641 16,028 409 379 905 18,402

Net Book Value at

29th February 2008 540 124 30,003 789 459 203 32,118

32


4. PROPERTY, PLANT AND EQUIPMENT (Continued)

Furniture

Leasehold Motor Computer Office and

Company Buildings Vehicles Equipment Equipment Fittings Renovation Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2009

Cost

At 1st March 2008 580 765 3,918 1,195 809 1,018 8,285

Additions - - 5,334 - - - 5,334

Written off - - (3,697) (18) (92) (617) (4,424)

Transfers - - (5,334) - - - (5,334)

At 28th February 2009 580 765 221 1,177 717 401 3,861

Accumulated

Depreciation

At 1st March 2008 40 641 3,720 407 367 868 6,043


financial year 6 72 138 118 76 105 515

Written off - - (3,697) (18) (92) (617) (4,424)

At 28th February 2009 46 713 161 507 351 356 2,134

Net Book Value at

28th February 2009 534 52 60 670 366 45 1,727

2008

Cost

At 1st March 2007 580 765 3,873 1,042 753 1,018 8,031

Additions - - 45 153 56 - 254

At 29th February 2008 580 765 3,918 1,195 809 1,018 8,285

Accumulated

Depreciation

At 1st March 2007 34 569 3,338 291 289 738 5,259


financial year 6 72 382 116 78 130 784

At 29th February 2008 40 641 3,720 407 367 868 6,043

Net Book Value at

29th February 2008 540 124 198 788 442 150 2,242

33


4. PROPERTY, PLANT AND EQUIPMENT (Continued)

Group and Company

Included in property, plant and equipment of the Group and of the Company are motor vehicles

and computer equipment acquired under hire purchase instalment plans with a total net book

value of RM14,964/- (2008 : RM59,854/-) and RM454,333/- (2008 : RMNil) respectively.

Depreciation charged during the financial year for certain computer equipment of the Group

and of the Company amounting to RM4,543,000/- (2008 : RM5,313,000/-) and RM120,000/-

(2008 : RM132,000/-) respectively have been capitalised as development costs.

5. PREPAID LAND LEASE PAYMENTS

2009 2008

RM'000 RM'000

Cost

At the beginning of the financial year 527 527

Additions - -

At the end of the financial year 527 527

Accumulated Amortisation

At the beginning of the financial year 47 42

Amortisation for the financial year 5 5


Net Book Value 475 480

Group and Company

6. INVESTMENT IN SUBSIDIARIES

2009 2008

RM'000 RM'000

Unquoted shares, at cost 1,466 1,999

Less: Impairment loss - (533)

1,466 1,466

Company

34


6. INVESTMENT IN SUBSIDIARIES (Continued)

Details of the subsidiaries are as follows:-

Name of Company

Country of

Incorporation

Effective

Equity

Interest

Principal Activities

2009 2008

% %

asiaEP China Co. Ltd. China - 100 Voluntarily wound up

asiaEP Hong Kong

Ltd.*

Hong Kong 100 100 Dormant – Intended principal

activity is to provide e-

commerce solutions and

develop an e-market place.

asiaEP eMarketplace

Sdn. Bhd.

Malaysia 100 100 Dormant – Intended activity is

to provide e-commerce

solutions and e-market

platform.

Defined Search Sdn.

Bhd.

Malaysia 100 100 To provide internet search

engine services.

Smart Infra Sdn. Bhd.

(formerly known as

Exportmate Sdn. Bhd.)

Malaysia 100 100 Dormant – Intended activity

is to provide online

marketing solutions.

* the subsidiary is audited by another firm of chartered accountants other than Baker

Tilly Monteiro Heng.

Winding up of wholly owned subsidiary, asiaEP China Co. Ltd.

On 16th September 2008, the Company announced that its wholly-owned subsidiary, asiaEP

China Co. Ltd. (“asiaEP China”), a company incorporated in the People’s Republic of China

(“PRC”) had applied to the relevant authority in the PRC to be voluntarily wound up. In this

connection, asiaEP China had on 25th March 2008 appointed a firm of Certified Public

Accountants in Shanghai, PRC to submit the statement of affairs of asiaEP China to the

relevant authorities.

35


7. INTANGIBLE ASSETS

Development Intellectual

Group Costs Property Total

RM'000 RM'000 RM'000

2009

Cost

At 1st March 2008 19,923 16,500 36,423

Additions 6,296 - 6,296

Written off (13) - (13)

Exchange differences 2 - 2

At 28th February 2009 26,208 16,500 42,708


At 1st March 2008 1,571 4,131 5,702

Amortisation for the financial year 3,110 1,175 4,285


At 28th February 2009 4,679 5,306 9,985

Net Book Value at 28th February 2009 21,529 11,194 32,723

2008

Cost

At 1st March 2007 13,430 16,500 29,930

Additions 6,586 - 6,586


Exchange differences (2) - (2)

At 29th February 2008 19,923 16,500 36,423


At 1st March 2007 851 2,985 3,836

Amortisation for the financial year 720 1,146 1,866

At 29th February 2008 1,571 4,131 5,702


36


7. INTANGIBLE ASSETS (Continued)

Development Intellectual

Company Costs Property Total

RM'000 RM'000 RM'000

2009

Cost

At 1st March 2008 2,571 16,500 19,071

Additions 2,471 - 2,471

Transfers (2,237) - (2,237)

At 28th February 2009 2,805 16,500 19,305


At 1st March 2008 1,201 4,131 5,332


At 28th February 2009 1,531 5,306 6,837


2008

Cost

At 1st March 2007 2,231 16,500 18,731

Additions 340 - 340

At 29th February 2008 2,571 16,500 19,071


At 1st March 2007 851 2,985 3,836


At 29th February 2008 1,201 4,131 5,332


37


7. INTANGIBLE ASSETS (Continued)

Intellectual Property (“IP”) of the Group costing RM16.5 million represents the exclusive

rights to an online platform system, acquired from one of the Directors on 16 August 2002.

The IP constitutes a trademark, copyrights, source programmes and associated

documentation.

The IP has an estimated economic life of fifteen years and will be amortised and recognised

as an expense based on the forecasted revenue stream so as to reflect the pattern in which

the asset’s economic benefits are consumed by the company.

Included in the additions of the development costs of the Group and of the Company are

depreciation charge for certain computer equipment of RM4,543,000/- (2008 :

RM5,313,000/-) and RM120,000/- (2008 : RM132,000/-) respectively.

8. TRADE RECEIVABLES

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

Trade receivables 2,029 4,541 1,509 4,541

Less: Allowance for doubtful debts (385) (601) (385) (601)

1,644 3,940 1,124 3,940

Group Company

The Group’s normal trade credit terms range from 30 to 90 days. Other credit terms are

assessed and approved on a case by case basis.

9. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

Other receivables 31 127 31 29

Deposits 59 53 56 47

Prepayments 27 121 27 121

117 301 114 197

Group Company

38


10. AMOUNT OWING BY SUBSIDIARIES

The amount owing by subsidiaries represents advances and payments made on behalf, which

is unsecured, interest free and has no fixed terms of repayment.

11. SHORT TERM INVESTMENTS

2009 2008

RM'000 RM'000

Placement in repo - 1,049

Group and Company

12. SHARE CAPITAL

Number

of shares

Number

of shares

Unit RM'000 Unit RM'000

Ordinary shares of RM0.10 each

Authorised:

At the beginning/end of the

financial year 500,000 50,000 500,000 50,000

Issued and fully paid:

At the beginning the financial year 245,318 24,532 217,074 21,707

Issued during the financial year

- exercise of options - - 9,102 911

- warrants exercised - - 19,142 1,914

- - 28,244 2,825

At the end of the financial year 245,318 24,532 245,318 24,532

Group and Company

2009 2008

39


12. SHARE CAPITAL (Continued)

Employees’ Share Option Scheme (“ESOS”)

The salient terms of the scheme are as follows:-

(a) Eligible employees and Executive Directors must be at least eighteen (18) years of age

and must have been confirmed on the date of offer.

(b) The option is personal to the grantee whilst he is in employment of any company in

the Group and is non-assignable.

(c) The exercise price shall be discounted by not more than 10% from the weighted

average of the market price of the Shares as shown in the daily official list issued by

the Bursa Malaysia Securities Berhad for the five (5) trading days immediately

preceding the respective dates of the offer in writing to the grantee or at the par value

of the ordinary shares of the Company, whichever is higher.

(d) The option granted may be exercised at any time within a period of three (3) years

from the date of offer of the option or such shorter period as may be specifically

stated in the offer upon giving notice in writing. In the event that duration of the

option shall be renewed, the Date of Expiry of the option shall be that Date of Expiry

as so extended or renewed.

(e) The options granted may be exercised in full or in lesser number of ordinary shares

provided that the number shall be in multiples of 100 shares.

Other provisions are stipulated in the Company’s By-Laws of ESOS Scheme.

On 20th August 2007, the Company approved the proposal to extend the existing ESOS

Scheme for a further period of up to 3 years from the Date of Expiry on 27th August 2007

(“Extended Scheme”). As at 28th February 2009, there were no options granted to any

person to take up unissued shares or debentures of the financial year under this Extended

Scheme.

13. RESERVES

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

Non-distributable

Share premium reserve 20,661 20,661 20,661 20,661

ESOS reserve - - - -

Translation reserve (704) (209) - -

Warrant reserve (Note 14) 319 319 319 319

Distributable

Treasury shares (Note 15) (669) (324) (669) (324)

Retained profits 17,537 25,221 24,233 26,231

37,144 45,668 44,544 46,887

Group Company

40


14. WARRANT RESERVE

On 16th February 2006, the Company issued 66,861,390 new warrants, for cash at an issue

price of RM0.01 per warrant arising from the renounceable Rights Issue which were

constituted by a Deed Poll dated 3rd April 2006.

Number of warrants 2006/2011

Issue

Date

Expiry

Date

Exercise

Price

RM per

Warrant

At the

beginning

of

Financial

Year

Issued

Exercised

At the

end of

Financial

Year

19.6.2006 18.6.2011 0.30 47,719,390 - - 47,719,390

2009 2008

RM'000 RM'000

Balance at the beginning of the financial year 319 446

Less: Warrants exercised during the financial year - (127)

Balance at the end of the financial year 319 319

Group and Company

The new warrants are listed on Bursa Malaysia Securities Bhd.. Each new warrant entitles

its registered holder, at any time from the date of its issue up to and including 18th June

2011, to subscribe for one new ordinary shares of RM0.10 each in the Company at an

exercise price of RM0.30 per share which is subject to adjustments under the terms set out

in the Deed Poll.

15. TREASURY SHARES

At the Extraordinary General Meeting held on 28th May 2007, the shareholders of the

Company authorised the directors of the Company to buy back the Company’s own shares

based on the following terms:-

(i) The number of shares to be purchased shall not exceed ten percent (10%) of the issued

and paid-up share capital of the Company at any given point in time.

(ii) The share buy-back will be financed through internally generated funds and/or

external borrowings. The funds to be allocated by the Company for the share buy-

back will be made wholly out of retained profits and/or the share premium account.

The account to be utilised shall not exceed the total audited retained profits and share

premium account of the Company.

41


15. TREASURY SHARES (Continued)

(iii) The Company may retain the shares purchased as treasury shares, or to cancel the

shares purchased or a combination of both as defined under Section 67A of the

Companies Act, 1965. The purchased shares held as treasury shares may either be

distributed as share dividends, resold on Bursa Malaysia Securities Berhad in

accordance with the relevant rules of Bursa Malaysia Securities Berhad or

subsequently cancelled. The distribution of treasury shares as share dividends may be

applied as a reduction of retained profits or share premium account of the Company

subject to applicable prevailing laws.

During the financial year, the details of the shares purchased were as follows:-

No. of Unit cost Total

Shares Purchased Shares Lowest Highest Average Consideration

Unit RM RM RM RM

March 386,500 0.150 0.190 0.170 65,423

April 37,000 0.175 0.185 0.180 6,566

May 155,900 0.165 0.175 0.170 26,962

June 1,460,900 0.150 0.180 0.165 240,379

July 43,100 0.120 0.140 0.130 5,613

2,083,400 0.166 344,943

All the shares purchased during the financial year were retained as treasury shares in

accordance with Section 67A of the Companies Act, 1965.

16. HIRE PURCHASE LIABILITIES

2009 2008

RM'000 RM'000

Minimum hire purchase payment

- not later than one year 152 47

- later than one year and not later than five years 243 20

395 67

Less: Future interest charges (40) (3)

Present value of hire purchase liabilities 355 64

Current 129 41

Non-current 226 23

355 64

Group and Company

The hire purchase liabilities are effectively secured on the rights of the assets under hire

purchase.

42


17. DEFERRED TAX LIABILITIES

2009 2008

RM'000 RM'000

At the beginning of the financial year 127 -

Transfer to income statement 112 127


Representing the tax effect of:-

Temporary differences between net book value and

corresponding tax written down value 239 127

Group and Company

18. TRADE PAYABLES

The normal credit term granted to the Group is 30 days.

19. OTHER PAYABLES AND ACCRUALS

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

Other payables 338 276 309 274

Accruals 335 176 322 168

673 452 631 442

Group Company

20. SHORT TERM BORROWING

The short term borrowing consists of Cash Line-i facilities granted by a bank and is

repayable on demand within 2 years.

The short term borrowing is secured against the following:

(a) First charge for RM1,500,000/- over 2 units of two storey shopoffices of the

premises; and

(b) Joint and Several guarantee of the directors for RM1,500,000/- in their personal

capacity.

The short term borrowing bears interest at rate of 7.75% per annum.

43


21. REVENUE

Revenue represents the invoiced value of products and services rendered, net of discounts.

22. (LOSS)/PROFIT BEFORE TAXATION

(Loss)/Profit before taxation has been arrived at:-

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

After charging:-

Amortisation

- intellectual property 1,175 1,146 1,175 1,146

- development costs 3,110 720 330 350

- prepaid land lease payments 5 5 5 5

Audit fee

- current year 38 38 28 26

- prior year 7 4 5 4

Depreciation 3,708 1,163 395 652

Directors' remuneration

- fees 83 46 83 46

- salaries and allowances 816 460 816 460

- Employees' Provident Fund 86 37 86 37

Development cost written off 10 91 - -

ESOS expenses - 260 - 260

Impairment loss on investment in a

subsidiary - - - 533

Interest expense 62 5 62 5

Loss on winding up of subsidiary 29 - - -

Property, plant and equipment written off 419 1 - -

Rental of premises 25 68 25 51

Staff costs

- Employees' Provident Fund 110 169 110 169

- salaries and wages 522 635 522 635

- other staff related costs 246 215 246 215

Waiver of debt - - - 158

And crediting:-

Bad debts recovered 216 - 216 -

Interest income 12 55 8 49

Group Company

Staff costs of the Group and of the Company amounting to RM452,812/- (2008 :

RM824,838/-) and RM113,343/- (2008 : RM208,923/-) respectively have been capitalised

as development costs.

44


23. TAXATION

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

Tax expense

- current year - (62) - (13)

- prior years 49 (1) - (1)

Deferred tax expense

- current year 9 87 9 87

- prior years (121) (214) (121) (214)

(112) (127) (112) (127)

(63) (190) (112) (141)

Group Company

The income tax rate is calculated at the Malaysian statutory rate of 25% (2008 : 26%) of

the estimated taxable profit for the fiscal year.

A reconciliation of income tax expense applicable to profit before income tax expense at the

statutory income tax rate to income tax expense at the effective income tax rate of the Group

and the Company are as follows:-

2009 2008 2009 2008

RM'000 RM'000 RM'000 RM'000

(Restated)

(Loss)/Profit before taxation (7,616) 7,249 (1,886) 7,767

Taxation at applicable tax rate 1,904 (1,957) 472 (2,097)

Tax effects arising from

- tax incentive - pioneer status - 2,783 - 2,775

- depreciation charges capitalised as

development costs 1,106 1,399

- non-deductible expenses (1,183) (685) (462) (632)

- underaccrual in prior year (73) (214) (122) (214)

- origination of deferred tax assets

not recognised in the financial statements (1,817) (1,429) - -

- deferred tax recognised at

different tax rate - (87) - 27

Tax expense for the financial year (63) (190) (112) (141)

Group Company

45


23. TAXATION (Continued)

The deferred tax assets have not been recognised for the following items:

2009 2008

RM'000 RM'000

Property, plant and equipment (27,194) (29,805)

Unutilised capital allowances 35,423 30,764

8,229 959

Potential deferred tax assets 2,057 240

Group

24. EARNINGS PER SHARE

(a) Basic Earnings Per Share

Basic earnings per share of the Group is calculated by dividing the net (loss)/profit for

the financial year of RM7.679 million (2008 : RM7.059 million) by the weighted

average number of 232,911,228 (2008 :234,398,812) ordinary shares in issue during

the financial year.

(b) Diluted Earnings Per Share

For the diluted earnings per share calculation, the weighted average number of

ordinary shares in issue is adjusted to assume conversion of all dilutive potential

ordinary shares. The Company has ESOS and warrants that can potentially be

converted into ordinary shares.

Group

2008

Net profit for the financial year (RM'000) 7,059

Weighted average number of ordinary shares in issue ('000) 234,399

Adjustment for share options ('000) 3,617

Adjustment for warrants ('000) 30,646

Adjusted weighted average number of ordinary

shares in issue ('000) 268,662

Diluted earnings per share (sen) 2.63

No disclosure is required in the income statement for the current financial year, since the

loss per share was anti-dilutive.

46


25. CONTINGENT LIABILITIES

The Group is contingently liable for the following:-

The Company has commenced legal action against an IT company and on an individual for

infringement of copyright and passing off in relation to the Company’s business. An interim

injunction has been obtained by the Company restraining the defendants from further

infringement. The defendants have filed their defence and counter claimed. Both the

Company and the defendants have sought unliquidated damages in their respective claims.

The solicitors representing the Company are of the view that the Defendants do not have a

valid counter-claim against the Company. Further, the defendants have not pursued the

counter-claim since the grant of the injunction in 2000. The solicitors had via a letter dated

16th May 2005 confirmed that the suit is still pending and may take 2 to 5 years to reach

trial stage. To date, the solicitors have not received any instruction from the Company to

file a Notice for Case Management to move the case towards trial.

26. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Identification of Related Parties

Parties are considered to be related to the Group if the Group has the ability, directly

or indirectly, to control the party or exercise significant influence over the party in

making financial and operational decisions, or vice versa, or where the Group and the

party are subject to common control. Related parties may be individuals or other

entities.

Related parties of the Group include:-

(i) Direct subsidiaries; and

(ii) Key management personnel which comprise persons (including the directors of

the Company) having the authority and responsibility for planning, directing

and controlling the activities of the Company directly or indirectly.

(b) The remuneration of the key management personnel during the financial year is as

follows:-

2009 2008

RM'000 RM'000

Short term employee benefits 1,053 634

Post-employment benefits

- defined contribution plan 102 52

Share-based payment - 37

Group and Company

47


26. SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)

(b) The remuneration of the key management personnel during the financial year is as

follows:- (Continued)

2009 2008

RM'000 RM'000

Directors' remuneration

- fees 83 46

- salaries and allowances 816 460

- Employees' Provident Fund 86 37

985 543

Company

(c) The directors and other members of key management of the Group and the Company

have been granted the following number of options under the ESOS as follows:-

2009 2008

At the beginning of the financial year - 1,450

Exercised - (1,270)

Forfeited - (180)

At the end of the financial year - -

Group and Company

The share options were granted on the same terms and conditions as those offered to other

employees of the Group.

27. SEGMENTAL REPORTING

Segment reporting is presented in respect of the Group’s business and geographical

segments. The primary format, geographical segments by location of customer, is based on

the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well

as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the year to acquire property,

plant and equipment.

48


27. SEGMENTAL REPORTING (Continued)

Business Segments

No business segmental reporting is prepared as the Group’s activities are predominantly in

one industry.

Geographical Segments

People's

Republic Hong

Malaysia of China Kong Total

2009 RM'000 RM'000 RM'000 RM'000

Revenue 5,831 - - 5,831

Total assets 44,962 - 19,509 64,471

Total liabilities 1,027 - 25 1,052

Capital expenditure 5,519 - - 5,519

Depreciation 8,225 - 26 8,251

2008

Revenue 15,049 - - 15,049

Total assets 54,419 28 16,476 70,923

Total liabilities 540 - - 540

Capital expenditure 18,911 - - 18,911

Depreciation 6,450 - 26 6,476

28. FINANCIAL INSTRUMENTS

(a) Financial Risk Management and Objectives

The Group seeks to manage effectively the various risks namely credit, liquidity,

foreign currency and interest rate risks to which the Group is exposed to in its daily

operations.

(i) Credit risk

The management has a credit procedure in place to monitor and minimise the

exposure of default. Trade receivables are monitored on an ongoing basis.

As at balance sheet date, there were no significant concentrations of credit risk

in the Group except for amount owing by subsidiaries as disclosed in Note 10 to

the financial statements. The maximum exposure to credit risk for the Group is

represented by the carrying amount of each financial instrument.

49


28. FINANCIAL INSTRUMENTS (Continued)

(a) Financial Risk Management and Objectives (Continued)

(ii) Liquidity risk

The Group actively manages its debt maturity profile, operating cash flows and

the availability of funding so as to ensure that all financing, repayment and

funding needs are met. As part of its overall prudent liquidity management, the

Group maintains sufficient level of cash and cash equivalents to meet its

working capital requirement.

(iii) Foreign currency risk

The Group operates apart from Malaysia, in Hong Kong and is exposed to the

Hong Kong Dollar. Foreign currency denominated assets and liabilities give

rise to foreign exchange exposure. The Group’s policy is to manage all its

foreign financial assets and liabilities using the best available foreign currency

exchange rates where applicable.

(iv) Interest rate risk

The Group’s primary interest rate risk relates to interest-bearing debt as at 28th

February 2009. The investment in financial asset is mainly short term in nature

and is not held for speculative purposes.

Effective interest rates

Effective Between

Interest Within 1 to 5 > 5

Group and Company Rate 1 Year Years Years Total

% RM'000 RM'000 RM'000 RM'0002009

Financial Asset

Placement in Repo - - - - -

Financial Liability

Hire purchase liabilities 4.49 - 6.73 129 226 - 355

2008

Financial Asset

Placement in Repo 2.70 - 3.25 1,049 - - 1,049

Financial Liability

Hire purchase liabilities 5.82 - 7.21 41 23 - 64

(b) Fair Values

(i) Recognised financial instruments

In the opinion of the directors, there were no significant differences between the

fair values and the book values of the financial assets and financial liabilities.

50


28. FINANCIAL INSTRUMENTS (Continued)

(b) Fair Values (Continued)

(ii) Unrecognised financial instruments

There were no unrecognised financial instruments in the balance sheet as at

28th February 2009.

The nominal/notional amount and net fair value of contingent liabilities (as

disclosed in Note 25 to the financial statements) are not recognised in the

balance sheet as at 28th February 2009 as it is not practicable to make a

reliable estimate due to the uncertainties of timing, costs and eventual outcome.

29. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR

(i) Proposed Acquisition of General Perfect Sdn. Bhd.

On 20th November 2007, the Company had entered into a conditional Sale and

Purchase Agreement (“SPA”) to acquire 80% equity interest in General Perfect Sdn.

Bhd. (“GP”) for a total consideration of RM23.2 million (“Proposed Acquisition”).

The principal activities of GP are eCommerce system research and development,

eMarket place deployment, online eCommerce, kiosk eCommerce, maintenance and

service provider of software to operate payment kiosk system and vending machines to

include electronic prepaid solution, provision of mobile airtime, prepaid call vouchers,

internet access, transportation, entertainment and others.

The Company had entered into an agreement with the vendors to extend the date of

fulfillment of all the conditions precedent as provided in the SPA for another three

months from 19th May 2008.

On 19th November 2008, RHB Investment Bank Berhad on behalf of the Company

announced that the Company and the vendors of General Perfect Sdn. Bhd. had

mutually agreed to terminate the Proposed Acquisition. This is in view of the non-

fulfilment of certain conditions precedent within the timeframe stipulated and the

prevailing challenging global economic outlook.

(ii) Proposed Rights Issue

On 27th March 2009, the Company announced that it proposed to issue renounceable

two-call rights issue of up to 293,037,675 new ordinary shares of RM0.10 each in

asiaEP (“Rights Shares”) on the basis of 1 Rights Share for each existing ordinary

share of RM0.10 each in asiaEP (“asiaEP Shares”) held on an entitlement date to be

determined later, together with:

(a) Bonus issue of up to 293,037,675 new asiaEP Shares (“Bonus Shares”) on the

basis of 1 Bonus Share for each Rights Share subscribed; and

51


29. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR

(Continued)

(ii) Proposed Rights Issue (Continued)

(b) Issuance of up to 293,037,675 new free detachable warrants (“Warrants”) on

the basis of 1 Warrant for each Rights Share subscribed,

with the Rights Share at an indicative issue price of RM0.10 each, of which the

indicative first call of RM0.05 for each Rights Share is payable in cash on application

and the second call of RM0.05 for each Rights Share is to be capitalised from

asiaEP’s share premium account.

(iii) Proposed Increased In Authorised Share Capital

On 27th March 2009, the Company announced that it proposed to increase the

authorised share capital of asiaEP from RM50,000,000/- comprising 500,000,000

asiaEP Shares to RM150,000,000/- comprising 1,500,000,000 asiaEP Shares.

52


asiaEP BHD.


STATEMENT BY DIRECTORS

We, DR. TAN BOON NUNT and LEE SUET HONG, being two of the directors of asiaEP

Bhd., do hereby state that in the opinion of the directors, the accompanying financial statements

set out on pages 7 to 51 are properly drawn up in accordance with Financial Reporting Standards

and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of

the financial position Group and of the Company as at 28th February 2009 and of the results and

cash flows of the Group and of the Company for the financial year ended on that date.

On behalf of the Board,

...............................................

DR. TAN BOON NUNT

Director

..............................................

LEE SUET HONG

Director

Kuala Lumpur

Date : 26th May 2009

53


asiaEP BHD.


STATUTORY DECLARATION

I, YEONG WENG SEONG, being the officer primarily responsible for the financial

management of asiaEP Bhd., do solemnly and sincerely declare that to the best of my knowledge

and belief, the accompanying financial statements set out on pages 7 to 51 are correct, and I make

this solemn declaration conscientiously believing the same to be true, and by virtue of the

provisions of the Statutory Declarations Act, 1960.

...............................................

YEONG WENG SEONG

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory

on 26th May 2009.

Before me,

...................................................

Zulkifla Mohd Dahlim

License No. : W 541

Commissioner for Oaths

54


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

asiaEP BHD.


Report on the Financial Statements

We have audited the financial statements of asiaEP Berhad, which comprise the balance sheets as

at 28th February 2009 of the Group and of the Company, and the income statements, statements

of changes in equity and cash flow statements of the Group and of the Company for the financial

year then ended, and a summary of significant accounting policies and other explanatory notes, as

set out on pages 7 to 51.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these

financial statements in accordance with Financial Reporting Standards and the Companies Act,

1965 in Malaysia. This responsibility includes designing, implementing and maintaining internal

controls relevant to the preparation and fair presentation of financial statements that are free from

material misstatement, whether due to fraud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with approved standards on auditing in Malaysia. Those

standards require that we comply with ethical requirements and plan and perform the audit to

obtain reasonable assurance as to whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on our judgement,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, we consider internal controls relevant to

the Company’s preparation and fair presentation of the financial statements in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by the directors, as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

55


Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial

Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 28th February 2009 and of their

financial performance and cash flows for the financial year then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the

following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be

kept by the Company and its subsidiaries of which we have acted as auditors have been

properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statement and the auditors’ report of the subsidiary of

which we have not acted as auditors, which are indicated in Note 6 to the financial

statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated

with the Company’s financial statements are in form and content appropriate and proper for

the purposes of the preparation of the financial statements of the Group and we have

received satisfactory information and explanations required by us for those purposes.

(d) The audit reports on the financial statements of the subsidiaries did not contain any material

qualifications or any adverse comments made under Section 174(3) of the Act.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section

174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume

responsibility to any other person for the content of this report.

Baker Tilly Monteiro Heng Heng Ji Keng

No. AF 0117 No. 578/05/10 (J/PH)

Chartered Accountants Partner

Kuala Lumpur

Date: 26th May 2009



Type of shares : Ordinary shares of RM 0.10 each

Voting rights : One vote per shareholder on a show of handsOne vote per ordinary share on a poll

Number of shareholders : 5,537

Analysis of Shareholdings

Size of Holdings No of Holders % of Holders No of Shares %

Less than 100100 - 1,0001,001 - 10,00010,001 - 100,000100,001 - Less than 5% ofissued shares5% and above of issued share

Total

853327,958

16,196,63380,521,861

107,270,980

41,000,000

245,318,285

0.000.136.60

32.8243.73

16.71

100

Analysis of Shareholdings as at 20 May 2009

18374

2,6622,147 333

3

5,537

List of Substantial Shareholders as Per Register of Substantial Shareholders

Name Direct % Indirect %

Topclass Access Sdn. Bhd (TASB)

Dr. Tan Boon Nunt

Lee Suet Hong

41, 250, 020

9,474,260

260

-

17.05

17.05

17.05

3.92

0.00

-

41, 250, 020 *

41, 250, 020 *

Direct & deemed interest of Director

Name Direct % Indirect % Esos % Warrant %

* Deemed interested by virtue of their shareholding in TASB pursuant to Section 6A of the Companies Act, 1965.

Dr. Tan Boon Nunt

Lee Suet Hong

Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul Rahman

Khor Chai Tian

Lim Ghim Chai

3.92

0.00

0.04

-

-

41, 250, 020 *

41, 250, 020 *

-

-

-

17.05

17.05

-

-

-

-

-

-

-

-

-

-

-

-

-

2,166,716

1,333,383

-

-

-

4.54

2.79

-

-

-

9,474,260

260

100,000

-

-

0.336.75

48.0838.78

6.01

0.05

100

75



List of Top 30 shareholdersName No. of Shares Held %

M&A Nominee (Tempatan) Sdn. Bhd.For Topclass Access Sdn Bhd (M&A)

CIMB Group Nominees (Tempatan) Sdn. Bhd. Lee Suet Hong For Topclass Access Sdn. Bhd. (17876 Peta)

CIMB Group Nominees (Tempatan) Sdn. Bhd. Tan Boon Nunt For Topclass Access Sdn. Bhd. (3977 Peta)

Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Tan Boon Nunt

Lee Suat Yean

asiaEP Berhad Share Buy Back Account

Ku Lian Sin

Chia Yong Kiang

Kee Ngeng Hong

Lee Chai Eng

Lau Kheng Tong

Goh Chye Hong

Yap Kon Hin

Liang Chee Kong

Lim Kean Hwa

Ng Chye Choo

Ho Chee Sheong

Sim Seow Heng

Cimsec Nominees (Tempatan) Sendirian Berhad Exempt An For CIMB-GK securities Pte Ltd (Retail Clients)

Gan Surt Neo

asiaEP Berhad Share Buy Back Account

Public Nominees (Tempatan) Sendirian Berhad Pledged Securities Account For Lian Man Hoong (E-SS2)

Teong Peck Joo

Chew Kim Ying

Oon Teik Hock

Eng Cheng Teng @ Vun Chen Teng

Wan Rozita Binti Mohamed Ismail

Tan Chong Keat

Fuziah Binti Ali

Hsu May Hwa

Total

15, 000, 000

13, 000, 000

13, 000, 000

9, 374, 260

4, 980, 000

2,683, 700

1, 800, 000

1, 406, 000

1,384, 000

1,300, 000

1,263, 000

1,224, 200

1, 200, 000

1, 070, 000

1, 060, 000

1, 022, 000

1, 000, 000

1, 000, 000

819, 000

788, 800

739, 600

730, 400

711, 000

700, 000

700, 000

620, 000

620, 000

611, 000

600, 000

600, 000

81, 007, 060

6.11

5.30

5.30

3.82

2.03

1.09

0.73

0.57

0.56

0.53

0.51

0.50

0.49

0.44

0.43

0.42

0.41

0.41

0.33

0.32

0.30

0.30

0.29

0.29

0.29

0.25

0.25

0.25

0.24

0.24

33.02

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Analysis of Shareholdings as at 20 May 2009



Analysis of warrant holdings

Size of holdings No of Holders % No of warrants %

Less than 100100 - 1,0001,001 - 10, 00010,001 - 100,000100,001 - Less than 5% ofissued warrants5% and above ofissued warrants

Total

6,09557,693

3,365,96315,292,13025,354,534

3, 642, 975

47, 719, 390

0.010.127.05

32.0553.13

7.63

100

Analysis of warrant holdings as at 20 May 2009

12674

541421

76

1

1, 239

10.175.97

43.6633.98

6.13

0.08

100

77



List of Top 30 warrant holders

Name No. of warrant held %

Topclass Access Sdn. Bhd.

EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Tan Boon Nunt (SFC)

Topclass Access Sdn Bhd

Oon Teik Hock

Goh Chye Hong

EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Lee Suet Hong (SFC)

Toh Bee Hiang

RHB Capital Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Wong Chan Thong (CEB)

Ta Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Tan Siew Tin

Mayban Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Eng Beng Lan

Wong Ah Yong

Gan Tiong Huat

Hong Ai Kok

Ambank (M) BerhadPledged Securities Account For Wong Ah Yong (SMART)

Low Chew Thiam

SJ Sec Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Ang Siew Im (SMT)

HDM Nominees (Asing) Sdn. Bhd.UOB Kay Hian Pte Ltd for Lee Kah Kiam

Harjinder Singh A/L Kuldip Singh

Mayban Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Liang Chee Hoo

Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Yeo Boon Yong (E-TSA)

Lim Kean Hwa

Hsu May Hwa

Matheswaran Rajagopal

Moo Kim Wa

Lin Onn Lee

Hii Yu Guan

Ta Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Chew Saa Kok

Tan Siew Tin

Amsec Nominees (Tempatan) Sdn. Bhd.Ambank (M) Berhad For Cheang Yoong Tat (SMART)

Cimsec Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Yap Yit Chang (Taman Semarak)

Total

3, 642, 975

2, 166, 666

1, 688, 636

1, 450, 000

1, 340, 000

1, 333, 333

890, 000

703,000

674, 000

672, 000

610, 000

500, 000

490, 000

430, 600

354, 000

343, 000

339. 000

335, 000

325, 900

308, 900

300, 033

300, 000

300, 000

300, 000

280, 500

277, 000

256, 300

256, 000

250, 000

250, 000

21,366,843

7.63

4.54

3.54

3.04

2.81

2.79

1.87

1.47

1.41

1.41

1.28

1.05

1.03

0.90

0.74

0.72

0.71

0.70

0.68

0.65

0.63

0.63

0.63

0.63

0.59

0.58

0.54

0.54

0.52

0.52

44.78

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Analysis of warrant holdings as at 20 May 2009



Description/existing use

3rd Floor,Corner-Shop lot/Commercial

Single-storeysemi-detached

house/residential

Double-storeyshop-office

Double-storeyshop-office

Date ofAcquisition/Price

24 Nov 2001RM 67,400

12 April 2002RM 180,000

6 July 2004RM 430,000

6 July 2004RM 430,000

Age ofBuildings/Land Area

5 year/ 784 sq ft

48 years/2942 sq ft

12 years/1540 sq ft

12 years/1540 sq ft

Tenure

Leaseholdfor99 years,expiringon14 June2092

Leaseholdfor99 years,expiringon12 July2056



List of Properties

Auditednet bookvalueas at28 February2009 (RM’000)

59

159

399

399

Landed property

Registered owner/title/ Address

Unit 553-3A,3rd FloorMetro Ipoh Baru,Perak(Master Title Nos:HS(D)KA 27098,27099, 27100,27101, 27105 andPT No. 123928 inthe Mukin of HuluKinta, District ofKinta, State ofPerak)

35, Jalan 8/18,Petaling Jaya46050 Selangor(H.S. (D) 124476,Lot No. PT 35,Road 8/18, BandarPetaling Jaya,District of PetalingJaya)

18, Jalan TK2/1C, TamanKinrara Seksyen 2,47100 Puchong, SelangorDarul Ehsan, Malaysia

20, Jalan TK2/1C, TamanKinrara Seksyen 2,47100 Puchong, SelangorDarul Ehsan, Malaysia

79



1. INTRODUCTION

At the Company’s EGM held on 28 May 2007 a shareholders’ mandate was obtained for the Company toundertake a Share Buy-back of up to 10% of the Company’s issued and paid-up share capital (“ProposedShare Buy-back”). Pursuant to the Listing Requirements of Bursa Securities, the authority to undertake theShare Buy-back shall lapse at the conclusion of the forthcoming AGM unless the authority is renewed. Themandate was renewed at the 14th AGM held on 27 July 2007 and 15th AGM held on 25 June 2008.

Consequently, the Company had on 29 May 2009 announced to Bursa Securities that the Company proposesto seek its shareholders’ approval to renew the mandate for the Company to purchase such number ofordinary shares of RM0.10 each in the Company (“ASIAEP Shares”) representing up to 10% of its issued andpaid-up share capital at the forthcoming 16th AGM.

2. DETAILS OF THE PROPOSED SHARE BUY-BACK

The Company proposes to seek the mandate from its shareholders to purchase such number of ASIAEPShares representing up to a maximum of 10% of the Company’s issued and paid-up share capital at anypoint of time, subject to compliance with Section 67A of the Act, Listing Requirements, any prevailing laws,orders, requirements, rules, regulations and guidelines issued by the relevant authorities (“Prevailing Law”)at the time of purchase.

2.1 Retained Earnings and Share Premium Account

The maximum amount of funds to be utilized for the Proposed Share Buy-back shall not exceedthe aggregate of the retained earnings and the share premium account of the Company. Theaudited Retained Earnings and Share Premium Account of the Company as at 28 February2009 were as follows:-

RM’000Retained Earnings 24,233Share Premium Account 20,661Total: 44,894Less: 3,423,300 Treasury Share (669)

Limit of maximum funds available for Proposed Share Buy-back 44,225

2.2 Source of Funds

The Proposed Share Buy-back will be financed through internally generated funds and/orexternal borrowings, the actual amount to be utilized will depend on the number of ASIAEPShares to be purchased, the price of ASIAEP Shares and the availability of funds at the time ofpurchase.

In the event that borrowings are used for the Proposed Share Buy-back, the amount of borrowingswill depend on the amount of ASIAEP Shares to be purchased by the Company and theappropriate borrowing capacity of the Company. The Company’s net cash flow may be affectedto the extent of the interest costs associated with any borrowings. The Board will ensure that theCompany is able to meet the repayment of such borrowings, if any.

SHARE BUY BACK STATEMENT

IN RELATION TO THE

PROPOSED SHARE BUY-BACK OF UP TO TEN PER CENT (10%) OFTHE ISSUED AND PAID-UP SHARE CAPITAL OF ASIAEP



2.3 The Company had purchased 2,083,400 of its shares during the financial year ended 28 February2009 and retained it as treasury shares.

3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK

The Proposed Share Buy-Back is expected to stabilise the supply and demand of asiaEP’s Shares, whichmay subsequently have a favourable impact on the Company’s share price. A reduced capital base as aresult of cancellation of purchased Shares will also have the effect of increasing the earnings per share ofasiaEP, thereby making the Shares more attractive to investors. Purchased Shares held as treasury sharesmay also result in potential gains if resold at prices higher than purchase prices thus realising potentialcapital appreciation on the Shares. Shareholders may also be rewarded by way of distribution of the treasuryshares as dividends.

The Board will be prudent with any purchase of its own Shares that it may undertake, taking into considerationthe interest of asiaEP and its group of companies as well as its shareholders.

4. POTENTIAL ADVANTAGES AND DISADVANTAGES FOR THE PROPOSED SHARE BUY-BACK

4.1 Advantages

The Proposed Share Buy-Back will enhance the EPS of asiaEP. This is expected to have apositive impact on the market price of asiaEP Shares which in turn will benefit the shareholdersof asiaEP.

If the purchased Shares are retained as treasury shares, asiaEP may realize potential gainswhen the treasury shares are resold on the market of Bursa Securities. Alternatively, the treasuryshares may be distributed to shareholders of asiaEP by way of dividends.

4.2 Disadvantages

The Proposed Share Buy-Back can only be made out of retained profits and/or share premiumavailable. This would result in the reduction of the amount available for distribution of dividendto the shareholders of asiaEP.

The financial resources utilized in the Proposed Share Buy-Back will divert the Company frompursuing investment opportunities which may yield higher return.

5. PUBLIC SHAREHOLDING SPREAD

As at 20 May 2009, the issued and paid-up share capital of the Company was RM24,531,828.50 Comprising245,318,285 ordinary shares of RM0.10 each and its public shareholding spread was 79.03%. Assuming theshare buy-back of ten percent (10%) of the issued and paid-up share capital of the Company is carried out infull and retained as Treasury Shares, and the number of ordinary shares held by the substantial shareholders,Directors and persons connected to the substantial shareholders and/or Directors remain unchanged, theproforma public shareholding spread of the Company will be approximately 22.97%.

6. FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK

The financial effects of the Proposed Share Buy-back are set out below:-

6.1 Share capital

The issued and paid-up share capital of ASIAEP will be decreased if shares purchased arecancelled.

81



The proforma effect of the Proposed Share Buy-back on the issued and paid-up share capital ofthe Company assuming ASIAEP buys and subsequently cancels up to 10% of the existing issuedand paid-up share capital as at 20 May 2009 is as follows:-

No. of Issued Shares

As at 20 May 2009 245,318,28510% of Shares to be cancelled (24,531,829)

Upon completion of the purchase and cancellation 220,786,457

However, the Proposed Share Buy-back will not have any effect on the issued and paid-upshare capital of the Company if the purchased shares are retained as treasury shares, areresold or are distributed to its shareholders.

6.2 EPS

The effect of the Proposed Share Buy-back on the EPS of the Group will depend on the purchaseprices and the number of shares purchased. If the shares so purchased are treated as TreasuryShares, the extent of the effect on the earnings of the Group will depend on the actual sellingprice, the number of Treasury Shares resold and the effective gain or interest savings arisingtherefrom.

6.3 N A

If the shares are cancelled, it will reduce the NA per share of the Company if the purchase priceexceeds the audited NA per share of the Company at the relevant point in time and will increasethe NA per share of the Company if the purchase price is less than the audited NA per share of theCompany at the relevant point in time.

For shares so purchased which are retained as Treasury Shares, upon its resale, the NA of theCompany will increase assuming that a gain has been realised. The quantum of the increase in NAwill depend on the actual selling price of the Treasury Shares and the number of Treasury Sharesresold.

6.4 Working Capital

The Proposed Share Buy-back is likely to reduce the working capital of the Group, the quantum ofwhich will depend on the purchase price, the actual number of shares bought back and any associatedcosts incurred in making the purchase.

For shares so purchased which are kept as treasury shares, upon its resale, the working capital ofthe Company will increase. Again, the quantum of the increase in the working capital will dependon the actual selling price of the treasury shares and the number of treasury shares resold.

6.5 Dividends

The Proposed Renewal of Authority for Share Buy-back may reduce the amount of distributablereserves available for payment of dividend in the immediate future.



7. IMPLICATIONS RELATING TO THE CODE

As at 20 May 2009, the substantial shareholders, held a total of 50,724,540 ordinary shares representingapproximately 20.97% of the issued and paid-up share capital of ASIAEP.

The Proposed Share Buy-back , if carried out in full, will result in the equity interests of substantial shareholdersto increase to 22.97% assuming that their total shareholdings in ASIAEP remain unchanged.

Based on the shareholdings of the other shareholders of ASIAEP as at 20 May 2009, none of their shareholdingswill exceed 33% of the total voting shares of ASIAEP in the event that ASIAEP implements the Proposed ShareBuy-back in full.

In the circumstances, the Proposed Share Buy-back has no implications on ASIAEP’s shareholders under theCode.

8. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the Directors and major shareholders of the Company and/or persons connected with them, have anyinterest, direct or indirect (other than as a shareholder of the Company), in the Proposed Share Buy-back and/or resale of Treasury Shares.

9. DIRECTORS’ RECOMMENDATION

Your Board, having considered all aspects of the Proposed Share Buy-back, is of the opinion that the ProposedShare Buy-back is in the best interest of the Company and accordingly, they recommend that you vote in favourof the Ordinary Resolution for the Proposed Share Buy-back to be tabled at the forthcoming AGM.

(The rest of this page is intentionally left blank)

83



NOTICE IS HEREBY GIVEN THAT the Sixteenth Annual General Meeting of the Company will be held at SuteraRoom, CYBERVIEW LODGE RESORT & SPA, Persiaran Multimedia, 63000 Cyberjaya, Selangor Darul EhsanMalaysia on Friday, 26 June 2009, at 10.00 a.m. to transact the following businesses:-

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Notice of Annual General Meeting

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended28 February 2009 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ Fees for the financial year ended 28 February 2009.

3. To consider and if thought fit, to pass the following resolutions:-

3.1. ““That Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman who retires pursuant toSection 129 of the Companies Act, 1965 and does not seek re-appointment, shallnot be re-appointed as Director of the Company.”

3.2. ““That Ms Lee Suet Hong who retires pursuant to Article 90 of the Company’sArticles of Association, be and is hereby re-elected a Director of the Company.”

4. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company andto authorise the Directors to fix their remuneration.

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following ordinary resolutions:-

5. Authority to issue shares

“THAT, subject always to the Companies Act, 1965, the Articles of Association of theCompany and approvals of the relevant governmental and/or regulatory authorities,approval be and is hereby given for the Directors to exercise, pursuant to Section 132D ofthe Companies Act, 1965, the power to issue shares in the Company from time to time andupon such terms and conditions and for such purposes as the Directors may deem fitprovided that the aggregate number of shares issued pursuant to this resolution does notexceed ten per centum (10%) of the total issued share capital of the Company and thatsuch approval shall continue in force until the conclusion of the next Annual GeneralMeeting of the Company.”



Resolution 76. Proposed Renewal of Authority to Purchase Company’s Own Shares (“Proposed Share Buy-Back)

“THAT, subject to the Companies Act, 1965, the Articles of Association of the Companyand the approvals of all relevant governmental and/or regulatory authorities, theCompany be and is hereby authorised to purchase such amount of ordinary shares ofRM0.10 each in the Company (“Proposed Share Buy-Back) as may be determined bythe Directors of the Company from time to time through Bursa Malaysia SecuritiesBerhad (“Bursa Securities”) upon such terms and conditions as the Directors of theCompany may deem fit in the interest of the Company provided that the aggregatenumber of shares purchased pursuant to this resolution does not exceed ten per cent(10%) of its issued and paid-up share capital and the 10% shall always take intoaccount any of the Proposed Share Buy-Back backed by an equivalent amount ofaudited retained profits and/or share premium of the Company. Upon purchase by theCompany of its own shares, the purchased shares will be cancelled or retained astreasury shares or both and/or dealt with in accordance with the relevant prevailingstatutory provisions and guidelines.

7. To transact any other business for which due notice shall have been given.

BY ORDER OF THE BOARD

Mary Margret A/P V. Pelly (LS 04402)Sin May Peng (MAICSA 7018354)Secretaries

Selangor Darul Ehsan

Dated : 4 June 2009

85



NOTES:-

A proxy may but does not need to be a Member of the Company and the provisions of Section 149(1)(b) of theCompanies Act, 1965 need not be complied with.

To be valid this form duly completed must be deposited at the office of the Company or such place as isspecified for that purpose in the notice convening the meeting not less than 48 hours before the time for holdingthe meeting.

A Member shall be entitled to appoint more than one proxy to attend and vote at the same meeting.

Where a Member appoints more than one proxy, the appointments shall be invalid unless he specifies theproportion of his holding to be represented by each proxy.

If the appointor is a corporation, this form must be executed under its common seal or under the hand of itsattorney.

Explanatory notes on special business

1. Authority to issue shares

The proposed Ordinary Resolution, under item (5), if passed, will empower the Directors to issue shares in theCompany up to an amount not exceeding 10% of the total issued share capital of the Company for suchpurposes as the Directors consider would be in the interest of the Company. In order to avoid any delay andcosts involved in convening a general meeting, it is thus appropriate to seek members’ approval.

2. Proposed Renewal of Share Buy-Back

The proposed Ordinary Resolution, under item (6), if passed, will give the Directors of the Company authority topurchase its own shares up to 10% of the issued and paid-up share capital of the Company. This authority,unless revoked or varied by the shareholders of the Company in general meeting, will expire at the conclusionof the next Annual General Meeting.



Pursuant to Rule 8.36(2) of the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market

Further to the details of the individuals who are standing for re-election as Directors

The Directors retiring are

1. Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul Rahman who retires pursuant to Section 129 of the Companies Act,1965.

2. Madam Lee Suet Hong who retires pursuant to Article 90 of the Company’s Articles of Association.

Their details are set out in the Directors’ Profile which appear on pages 6 and 7 of this Annual Report, while theirsecurity holdings in the Company and its subsidiaries (if any) are disclosed on pages 5 of the Audited FinancialStatements.

Statement Accompanying Notice of Annual General Meeting

Notice of Annual General Meeting (continued)

87



ASIAEP BERHAD(Company No. : 253387-W)(Incorporated In Malaysia)

I/We, ………… ….……..………………………………NRIC No. :…………………………...............................….

of……………………….………………………………………………………………………..............................…..

……………………..…………………………………………………………………………...........................………

being a member/members of the abovenamed Company, hereby appoint……………………................………………………………………..……of………………………………………………..………….…or failing him, theChairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the Annual GeneralMeeting of the Company to be held at Sutera Room, CYBERVIEW LODGE RESORT & SPA, Persiaran Multimedia,63000 Cyberjaya, Selangor Darul Ehsan Malaysia on Friday, 26 June 2009 at 10.00 a.m. and at any adjournmentthereof in the manner indicated below :-

Resolutions Number For Against

Adoption of Financial Statements and Reports 1

Directors’ fees 2

Re-appointment/ Re-election of Directors of the Company:-

-Tan Sri Dato’ (Dr) Abdul Aziz Bin Abdul Rahman 3

- Ms Lee Suet Hong 4

Re-Appointment of Auditors - Baker Tilly Monteiro Heng 5

Authority to issue shares pursuant to Section 132D 6

Proposed Renewal of Share Buy-Back Authority 7

Please indicate with an “X” in the appropriate box against the resolution how you wish your proxy to vote. Ifno instruction is given, this form will be taken to authorise the proxy to vote at his/her discretion.

Number of Shares ………………………

CDS No. ……………............................…

……………………….……..….……..…........ …………………………..……..….……..….Date : Signature

Notes:-A proxy may but does not need to be a Member of the Company and the provisions of Section 149(1)(b) of theCompanies Act, 1965 need not be complied with.

To be valid this form duly completed must be deposited at the office of the Company or such place as is specified for thatpurpose in the notice convening the meeting not less than 48 hours before the time for holding the meeting.

A Member shall be entitled to appoint more than one proxy to attend and vote at the same meeting.

Where a Member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportionof his holding to be represented by each proxy.

Proxy FormProxy Form



fold this line for sending

Second fold here

Third fold here

asiaEP BERHAD (Co No: 253387-W)

18 & 20, Jalan TK2/ 1C, Taman Kinrara

Seksyen 2, 47100 Puchong

Selangor Darul Ehsan, Malaysia

Af f i x

Stamp

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ASIAEP BHD · ASIAEP BHD (Company No. 253387-W) ... Analysis of Shareholdings 74 List of Properties 78 ... Hong Leong Bank Berhad CIMB Bank Berhad