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2009 edition Model PERS Financial Statements

FOREWORD In 2007, AXP issued Model Financial Statements for Financial Reporting Standards (“FRS”) and received encouraging responses from customers and other Audit Practitioners. It was also suggested that we should prepare Model Financial Statements for Private Entity Reporting Standards (“PERS”) as well. In response, and as part of our mission to assist Audit Practitioners to resolve contemporary issues, we have therefore prepared Model Financial Statements for PERS (“Model FS (PERS)”). Our aim is to assist both our existing auditing clients and other Audit Practitioners and companies to audit and/or prepare statutory financial statements that are in compliance with prevailing financial reporting and disclosure requirements of the Companies Act 1965 (“CA”) and Malaysian PERS. The MASB issued Exposure Draft 52 Private Entity Reporting Standards in 2006, and IASB issued Exposure Draft of the proposed International Financial Reporting Standards for Small and Medium-sized Entities (“IFRS for SMEs”) in 2007. On 9 July 2009, IASB issued IFRS for SMEs. However, MASB’s revised PERS has not been finalised at the date of publishing our Model FS (PERS). Thus, our Model FS (PERS) are prepared on the basis of existing MASB Approved Accounting Standards for Private Entities. Our Model FS (PERS) are based on a fictitious group of companies called Model Group Sdn. Bhd. and its subsidiaries for the financial year ended 31 December 2009. We trust that you will find this publication a useful reference point when you are auditing or preparing statutory financial statements in compliance with PERS. While every effort has been made to ensure that our Model FS (PERS) demonstrates all the possible presentation and disclosure requirements of the PERS, it should not be used as a substitute for the laws, regulations and existing body of PERS. However, should you have any questions on the application of any of the statutory or financial reporting requirements not presented in this publication, you are welcomed to contact our Technical Support Unit for assistance.

REFERENCES IN THIS PUBLICATION To the left of each disclosure items, references are made to CA or PERS. Requirements under the CA are shown with “CA”, and requirement under Ninth Schedule of the CA are shown with “CA9”. If the disclosures are required under both CA and PERS, references are only made to PERS. Where there are alternative applications allowed under the PERS, we have also presented the alternative disclosures throughout this publication for your reference.

SCOPE OF THIS PUBLICATION Our Model FS (PERS) covers PERS issued by the MASB applicable to all accounting periods commencing on or after 1 January 2009, as follows: PERS

Descriptions

MASB 1 Presentation of Financial Statements MASB 2 Inventories MASB 3 Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies MASB 4 Research and Development Costs MASB 5 Cash Flow Statements MASB 6 The Effects of Changes in Foreign Exchange Rates

PERS

Descriptions

MASB 7 Construction Contracts MASB 9 Revenue MASB 10 Leases MASB 11 Consolidated Financial Statements and Investments in Subsidiaries MASB 12 Investments in Associates MASB 14 Depreciation Accounting MASB 15 Property, Plant & Equipment MASB 16 Financial Reporting of Interests in Joint Venture MASB 19 Events after the Balance Sheet Date MASB 20 Provisions, Contingent Liabilities & Contingent Assets MASB 23 Impairment of Assets MASB 25 Income Taxes MASB 27 Borrowing Costs MASB 29 Employee Benefits MASB 31 Accounting for Government Grants and Disclosure of Government Assistance MASB 32 Property Development Activities IAS 25 Accounting for Investments MAS 5 Accounting for Aquaculture However, our Model FS (PERS) does not include the presentation and disclosure requirements of: PERS Descriptions MASB 28 Discontinuing Operations MASB 30 Accounting and Reporting by Retirement Benefit Plans IAS 29 Financial Reporting in Hyperinflationary Economies IB-1 Preliminary and Pre-operating Expenditure AXP has exercised professional due care and diligence in the preparation of our Model FS (PERS). However, the information contained herein is intended to be a general guide. While every effort has been made to ensure accuracy, no liability is accepted by AXP or any member of AXP on any grounds whatsoever to any party in respect of any errors or omissions, or any action or omission to act a result of the information contained in our Model FS (PERS).

ABOUT US AXP was formed in 2005 by a team of qualified accountants with years of extensive experience in both the public practice and commercial sector. Through extensive research and development since 2001 under both its predecessor and AXP, we have successfully developed in-house a wide range of IT tools and solutions for Audit Practitioners. Besides being able to optimise the business value of IT in the audit practice, our products also possess enhanced features and updates that are in full compliance with the requirements of the prevailing FRS and PERS.

ABOUT THE EDITORIAL TEAM The editorial team of this publication consists of both AXP’s Technical Adviser and Business Partners, who jointly possess a vast experience in financial reporting and wide exposure to the accounting industry in general. The profile of each team member is as follows: Keith Farmer, FCA, B.A., Technical Adviser of AXP, holds an honours degree in Economics and became a Fellow of the Institute Chartered of Accountants in England and Wales (“ICAEW”) in January 1983. He taught in London at the London School of Accountancy and Emile Woolf College and at the University of Essex until he came to Asia in early 1994. He has been based in Asia ever since. His specialist subject is Financial Accounting. He has conducted courses for both students and practitioners in many parts of the world, including the UK, Malaysia, Singapore, Hong Kong, Kenya, and Mauritius for both private colleges and the Association of Chartered Certified Accountants (“ACCA”). His students have consistently won numerous prizes in the ACCA examinations. Whilst Keith is justifiably proud of individual student performance, his key aim is to convey a fundamental understanding of the basic principles and concepts which underlie financial accounting and a detailed knowledge and application of the requirements of accounting standards. This is based on the three core principles of education: instruction, demonstration and experience. Understanding is important, in fact it is a prerequisite to developing the level of knowledge required to sit examinations with confidence and inspires individuals to achieve far more than they ever expected in far less time than they ever anticipated. In furtherance of achieving his aim, Keith has recently embarked upon a three point strategy. Firstly, he is writing a series of books, primarily aimed at students, covering consolidation and accounting standards which contain numerous progressive worked examples. Secondly, he is currently engaged in developing a series of DVD's which, together with the books, will form an integral part of a new co-ordinated learning package. Finally, in the near future, this learning package will be extended to a structured continuing professional development programme. Ivan Er Soon Lock, C.A.(M), FCCA, B.Com(NZ), is a member of the Malaysian Institute of Accountants (“MIA”) and a fellow member of ACCA. Ivan first joined Deloitte KassimChan (“DKC”) in 1997 as an audit assistant, and subsequently became an Audit Manager. He left DKC in 2003 to join Horwath, another international public practice. At Horwath, he was soon promoted to become an Audit Principal. His experience includes managing the audit and the corporate finance functions and the setting up of the business improvement division of the practice, assisting companies listing on the stock exchange by providing consultancy services on listing exercise and financial management, advising on good accounting and internal control systems to a wide range of companies, provision of technical training on FRS and PERS and conducting due-diligence review on companies in Malaysia and China. Currently, he is also an independent director of a company listed on the MESDAQ Market of the Bursa Malaysia. Eric Chia Kok Haur, C.A.(M), C.A.(NZ), B.Com(Hons), is a member of the MIA and New Zealand Institute of Chartered Accountants (“NZICA”). Eric started his career as an audit assistant with DKC in 1997. He was an Assistant Audit Manager when he left the firm to join KPMG Singapore in 2000. He was also an Assistant Audit Manager at KPMG, where he served until 2003. From KPMG, he moved on to H W Kuah & Co., another public practice in Singapore, as the Audit Manager. Eric is well-versed with the financial reporting environment of both Malaysia and Singapore. In addition, as he has spearheaded major audit assignments in China, he is also familiar with China financial reporting requirements. His experience includes managing audit and due diligence assignments, monitoring the budgetary function of the practice, provision of advisory services for corporate exercises and corporate governance matters, preparation and review of published financial statements, including those of significantly large groups of companies, and conducting training on technical subjects.

CONTACT US AXP Technical Support Unit Corporate Headquarters 83A, Jalan Emas Satu, Taman Sri Skudai, 81300 Johor Bahru, Johor, Malaysia. Tel: 1300-882 AXP (1300-882 297) or 607-557 5722 Fax: 607-557 7697 Central Malaysia C-2-16, SME Technopreneur Centre Cyberjaya, 2270, Jalan Usahawan 2, 63000 Cyberjaya, Selangor, Malaysia. Tel: 1300-882 AXP (1300-882 297) or 603-8315 6168 Fax: 603-8315 6198 Singapore Blk 4008, Ang Mo Kio Ave 10, #01-10A, TechPlace 1, Singapore 569625. Tel: 65-6876 7297 Fax: 65-6454 7660

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111333000000---888888222---AAAXXXPPP (((111333000000---888888222---222999777))) Copyright © 2007 - 2009. All rights reserved. AXP Solutions Sdn. Bhd. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without the prior written permission of the publisher. However, written permission need not be obtained from the publisher if it is used internally within the Firm.

PERS Ref. 1.46(a) MODEL GROUP SDN. BHD. (Company No. 12345678-A)

(Incorporated in Malaysia) AND ITS SUBSIDIARIES

TABLE OF CONTENTS

Page No.

Report of the Directors 1 – 5

Statement by the Directors 6

Statutory Declaration 6

Independent Auditors’ Report to the Members 7 – 8

Financial Statements

Balance Sheets 9 – 10

Income Statements – Expenses Classified by Function 11

Income Statements – Expenses Classified by Nature 12

Statements of Changes in Equity 13 – 14

Cash Flow Statements – Indirect Method 15 – 16

Notes to the Financial Statements

General Information 17

Basis of Preparation 17

Significant Accounting Policies 17 – 26

Property, Plant and Equipment 27 – 30

Investment Property 30 – 31

Land Held for Development 31

Goodwill 32

Other Intangible Assets 33 – 34

Subsidiaries 34 – 36

Investment in Associates 36 – 38

Investment in Jointly-Controlled Entities 38 – 39

Other Investments 39

Deferred Tax Assets/Liabilities 40 – 41

Property Development Costs 41 – 42

Inventories 42

Trade and Other Receivables 43

Gross Amount Due from Customers 43

Fixed Deposits with Licensed Banks 44

Cash and Bank Balances 44

Trade and Other Payables 44

Gross Amount Due to Customers 45

Hire Purchase and Finance Lease Payables 45

Bank Overdrafts and Other Bank Borrowings 46

Provisions 46 – 47

Share Capital 47 – 48

Share Premium 48

Revaluation Reserves 48

Translation Reserves 49



Page No.

Retained Profits 49

Retirement Benefit Obligation 49 – 51

Revenue 52

Profit Before Tax 52 – 55

Income Tax Expense 55 – 56

Dividends 56

Acquisition of Subsidiary 57 – 58

Disposal of Subsidiary 59

Purchases of Property, Plant and Equipment 59

Cash and Cash Equivalents 60

Commitments 60 – 61

Contingent Liabilities 61 – 62

Events Subsequent to the Balance Sheet Date 62

Authorisation for Issue of the Financial Statements 62



REPORT OF THE DIRECTORS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009

1

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

Group and the Company for the financial year ended 31 December 2009.

169(6)(b) PRINCIPAL ACTIVITIES

The principal activities of the Company are that of investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 9 to the Financial Statements. There have been no significant changes in the nature of the activities during the financial year.

169(6)(c) RESULTS

THE GROUP THE COMPANY

RM RM

Profit for the financial year before minority interest 6,998,600 171,854 Less: Minority interest (156,807) -

Net Profit for the financial year

6,841,793

171,854

169(6)(p)

In the opinion of the directors, the results of the operations of the Group and the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

169(6)(h) DIVIDENDS

On 1 April 2009, the Company paid a 10% final tax exempt dividend (total dividend of RM1,105,020) in respect of the previous financial year. The net dividend per share was 10 sen. On 31 August 2009, the directors declared a 10% interim tax exempt dividend (total dividend of RM1,132,020) in respect of the current financial year. The dividend was paid to the shareholders registered on 31 October 2009. The net dividend per share was 10 sen. The directors have proposed a 10% final tax exempt dividend in respect of the current financial year. The dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting and has not been included as a liability in the financial statements. Total dividend payable is RM1,132,020, and the net dividend per share is 10 sen.

If the Company did not declare dividends:

No dividends have been paid or declared since the end of the previous financial year. The directors do not recommend that a dividend to be paid in respect of the current financial year.

169(6)(d) RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions except as disclosed in the Financial Statements.





2

CA Ref. 169(6)(e) SHARES AND DEBENTURES

During the financial year, the authorised share capital of the Company has been increased to 50,000,000 ordinary shares by the creation of 10,000,000 ordinary shares of RM1 each.

During the financial year, the Company has issued the following shares:

Date of Issue No. of Shares Issued Issue Price Purposes

6 March 2009 20,000 RM2.70 Increase working capital 1 June 2009 250,000 RM4.00 Part finance the acquisition of a subsidiary The new shares issued rank pari passu in respect of the distribution of dividends and repayment of

capital with the existing shares. The Company did not issue any debentures during the financial year.

If the Company did not issue any new shares or debentures:

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

169(11), (12) SHARE OPTIONS No options have been granted by the Company to any parties during the financial year to take up

unissued shares of the Company. No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. At the end of the financial year, there were no unissued shares of the Company under options.

169(6)(a) DIRECTORS

The directors who held office since the date of the last report are: Ser L. T. Lian K. K. Mohd. bin R. Z. Gi J. Q. Ran H. P. Hija bin B. T. Yan D. V. Wen M. X. The L. P. (Appointed on 1 July 2009)





3

CA Ref. DIRECTORS’ BENEFITS

169(6)(f) 169(8)

During and at the end of the financial year, no arrangements subsisted to which the Company or its subsidiaries is a party, with the object or objects of enabling directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements or the fixed salary of a full-time employee of the Company) 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.

169(6)(g) DIRECTORS’ INTERESTS

According to the register of directors’ shareholding, the interests of directors in office at the end of the financial year in the ordinary shares of the Company and its related corporations during the financial year are as follows:

No. of Ordinary Shares of RM1 each

At 1.1.2009 (or date of appointment)

Bought

Sold

At 31.12.2009

Direct Interest in holding company – Be Competent Sdn. Bhd.

Ordinary Shares Ser L. T. 1,000,000 - - 1,000,000 Lian K. K. 600,000 - - 600,000 Mohd. bin R. Z. 400,000 - - 400,000 Gi J. Q. 200,000 - - 200,000

Direct Interest in a subsidiary – AXP Property Sdn. Bhd.

Ordinary Shares The L. P. 20,000 - (20,000) - Deemed Interest in the Company Ordinary Shares Ser L. T. 7,000,000 500,000 - 7,500,000 Lian K. K. 7,000,000 500,000 - 7,500,000 Mohd. bin R. Z. 7,000,000 500,000 - 7,500,000 The L. P. - 250,000 - 250,000





4

CA Ref. No. of Ordinary Shares of RM1 each

At 1.1.2009 (or date of appointment)

Bought

Sold

At 31.12.2009

Direct Interest in the Company Ordinary Shares Ser L. T. 4,145 359 - 4,504 Lian K. K. 3,273 458 - 3,731 Mohd. bin R. Z. 40,000 4,000 (2,000) 42,000 Ran H. P. 2,041 1,076 (246) 2,871 Hija bin B. T. 50,010 6,781 - 56,791 The L. P. 216,000 100,000 - 316,000 None of the other directors in office at the end of the financial year held any shares in the

Company or in any related corporations during the financial year ended 31 December 2009.

OTHER STATUTORY INFORMATION

169(6)(i) 169(6)(k)

Before the income statements and the balance sheets of the Group and the Company were made out, the directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing-off of bad debts and the making of allowance for doubtful debts, and have satisfied themselves that all known bad debts had been written-off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to be realised at their book values in

the ordinary course of business have been written down to their estimated realisable values.

169(6)(j) 169(6)(l)(i) 169(6)(l)(ii) 169(6)(o)

As of the date of this report, the directors are not aware of any circumstances:

(a) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate to any substantial extent in the financial statements of the Group and the Company; or

(b) which would render the values attributed to current assets in the financial statements of the

Group and the Company misleading; or (c) which have arisen which render adherence to the existing method of valuation of assets or

liabilities of the Group and the Company misleading or inappropriate; or (d) not otherwise dealt with in this report or financial statements which would render any

amount stated in the financial statements of the Group and the Company misleading.





5

CA Ref. 169(6)(m) 169(6)(n)

As of the date of this report, there does not exist: (a) any charge on the assets of the Group and the Company which has arisen since the end of

the financial year and secures the liability of any other person; or (b) any contingent liability of the Group and the Company which has arisen since the end of the

financial year. No contingent or other liability 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 the Company to meet its obligations as and when they fall due.

169(6)(q)

In the opinion of the directors, 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 operations of the Group and the Company for the succeeding financial year.

169(10) HOLDING COMPANY

The Company is a subsidiary of Be Competent Sdn. Bhd., a company incorporated in Malaysia, which is also regarded by the directors as the ultimate holding company.

AUDITORS

The retiring auditors, Messrs. Auditors & Co., have indicated their willingness to be re-appointed in accordance with Section 172(2) of the Companies Act, 1965.

Signed on behalf of the Board

in accordance with a resolution of the directors,

Ser L T

Ser L. T.

Lian K K

Lian K. K. Kuala Lumpur

31 January 2010



6

CA169(15) STATEMENT BY THE DIRECTORS Pursuant to Section 169 (15) of the Companies Act, 1965

The directors of Model Group Sdn. Bhd. state that, in their opinion, the financial statements set

out on page 9 to 62 are drawn up in accordance with the provisions of the Companies Act, 1965 and the MASB Applicable Approved Accounting Standards for Private Entities in Malaysia so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2009 and of the results of their businesses and the cash flows of the Group and the Company for the financial year ended on that date.

Signed on behalf of the Board in accordance with a resolution of the directors,

Ser L T

Ser L. T.

Lian K K

Lian K. K. Kuala Lumpur

31 January 2010 CA169(16) STATUTORY DECLARATION

Pursuant to Section 169 (16) of the Companies Act, 1965 I, Gi J. Q., the director primarily responsible for the financial management of Model Group Sdn.

Bhd., do solemnly and sincerely declare that the financial statements set out on page 9 to 62 are, in my opinion, 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.

Subscribed and solemnly declared by )

the above named Gi J. Q. at ) Gi J Q

KUALA LUMPUR on 31 January 2010 ) Before me,

Commissioner for Oaths

__________________________________ COMMISSIONER FOR OATHS

7

RPG 4 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MODEL GROUP SDN. BHD. (Company No.: 12345678-A) (Incorporated in Malaysia)

CA Ref. 174(2)(a)

Report on the Financial Statements

We have audited the financial statements of Model Group Sdn. Bhd., which comprise the balance sheets as at 31 December 2009 of the Group and the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 9 to 62.

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 Private Entity Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control 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 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 judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control 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.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Private Entity 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 the Company as at 31 December 2009 and of their financial performance and cash flows for the financial year then ended.

8

CA Ref. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

MODEL GROUP SDN. BHD. (Company No.: 12345678-A) – Cont’d (Incorporated in Malaysia)

174(2)(b) 174(2)(c)(ii) 174(2)(c)(iii)

174(2)(c)(iv)

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 have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 9 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 qualification or any adverse comment 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.

Auditors & Co. Hu G E

Auditors & Co.

(AF – 99999)

Chartered Accountants

Kuala Lumpur

31 January 2010

Hu G. E.

No. 9999/88/10 (J)

Partner of the Firm



9

1.8(a)

1.46(b),(c)

2009 2008 2009 2008

1.46(d),(e) Note RM RM RM RM

1.53 NON CURRENT ASSETS

1.66(a) Property, plant and equipment 4 9,716,982 6,538,764 3,267 4,070

1.67 Investment property 5 6,305,303 4,506,445 - -

32.51 Land held for development 6 965,719 102,622 - -

1.66(b) Goodwill 7 4,790,350 3,828,841 - -

1.66(b) Other intangible assets 8 4,163,426 4,222,640 - -

1.66(d) Subsidiaries 9 - - 12,319,649 11,335,974

1.66(d),12.38 Investment in associates 10 1,484,315 1,240,119 23,093 23,093

1.66(d)

Investment in jointly-controlled

entities 11 1,205,535 650,153 - -

1.66(d) Other investments 12 437,765 610,291 19,370 17,952

1.66(i) Deferred tax assets 13 10,985 31,164 - -

29,080,380 21,731,039 12,365,379 11,381,089

1.53 CURRENT ASSETS

32.51(c) Property development costs 14 1,191,144 137,830 - -

1.66(e) Inventories 15 393,798 770,136 - -

1.66(f) Trade and other receivables 16 1,036,917 1,271,984 3,471,675 5,415,978

7.43(a) Gross amount due from customers 17 101,398 108,183 - -

32.50(d)(i) Accrued billings 31,008 65,374 - -

1.66(d) Other investments 12 96,802 155,781 5,068 52,090

1.66(g) Fixed deposits with licensed banks 18 206,625 271,791 - -

1.66(g) Cash and bank balances 19 97,305 215,132 128 214

3,154,997 2,996,211 3,476,871 5,468,282

1.53 CURRENT LIABILITIES

1.66(h) Trade and other payables 20 1,880,738 1,113,302 340,478 329,113

7.43(b) Gross amount due to customers 21 3,211 1,453 - -

32.50(d)(ii) Progress billings 228,605 74,075 - -

1.66(i) Current tax liabilities 34,598 68,272 - -

1.66(k)

Hire purchase and finance lease

payables 22 56,966 53,476 - -

1.66(g) Bank overdrafts 23 280,316 324,225 36,068 44,396

1.66(k) Other bank borrowings 23 2,397,013 2,095,412 195,501 152,939

1.66(j) Provisions 24 163,358 165,268 - -

5,044,805 3,895,483 572,047 526,448

NET CURRENT ASSETS / (LIABILITIES) (1,889,808) (899,272) 2,904,824 4,941,834

27,190,572 20,831,767 15,270,203 16,322,923

BALANCE SHEETS

AS AT 31 DECEMBER 2009




10

1.8(a)

1.46(b),(c)

2009 2008 2009 2008


FINANCED BY:

1.66(m) CAPITAL AND RESERVES

1.66(m) Share capital 25 11,320,200 11,050,200 11,320,200 11,050,200

1.66(m) Share premium 26 1,242,500 458,500 1,242,500 458,500

1.66(m) Revaluation reserves 27 642,254 557,002 - -

1.66(m) Translation reserves 28 943,706 685,440 - -

1.66(m) Retained profits 29 8,969,699 4,357,983 2,707,503 4,772,689

Shareholders' Equity 23,118,359 17,109,125 15,270,203 16,281,389

1.66(l) Minority interest 2,461,253 2,304,446 - -

1.53 NON CURRENT LIABILITIES

1.66(i) Deferred tax liabilities 13 1,174,856 929,279 - -

1.66(k)

Hire purchase and finance lease

payables 22 91,622 105,812 - -

1.66(k) Other bank borrowings 23 247,290 265,977 - 41,534

1.66(j) Provisions 24 30,449 44,888 - -

1.67 Retirement benefit obligation 30 66,743 72,240 - -

1,610,960 1,418,196 - 41,534

27,190,572 20,831,767 15,270,203 16,322,923

BALANCE SHEETS - Cont'd

AS AT 31 DECEMBER 2009




11

1.8(b)

1.46(b),(c)

2009 2008 2009 2008


1.75(a) Revenue 31 23,743,683 19,326,112 381,809 291,722

1.82 Cost of sales (12,966,796) (11,656,606) - -

1.75 Gross profit 10,776,887 7,669,506 381,809 291,722

1.82 Other income 352,383 345,597 107,585 117,737

1.82 Distribution costs (618,208) (663,922) - -

1.82 Administrative expenses (2,140,037) (1,014,755) (265,406) (251,828)

1.82 Other expenses (764,448) (625,671) (13,761) (2,060)

1.75(b) Profit from operations 7,606,577 5,710,755 210,227 155,571

1.75(c) Finance costs (234,750) (256,549) (30,504) (24,262)

1.75(d),12.39 Share of profit of associates 275,354 89,460 - -

Share of profit of jointly-controlled

entities 631,116 499,541 - -

1.75 Profit before tax 32 8,278,297 6,043,207 179,723 131,309

1.75(e) Income tax expense 33

- Company and subsidiaries (1,154,309) (1,149,001) (7,869) -

- share of tax expense in associates (49,654) (19,681) - -

- share of tax expense in jointly-

controlled entities (75,734) (74,931) - -

(1,279,697) (1,243,613) (7,869) -

Profit after tax 6,998,600 4,799,594 171,854 131,309

Minority interest (156,807) (129,530) - -

1.75(i) Profit For The Financial Year 6,841,793 4,670,064 171,854 131,309


INCOME STATEMENTS - Expenses Classified by Function




12

1.8(b)

1.46(b),(c)

2009 2008 2009 2008


1.75(a) Revenue 31 23,743,683 19,326,112 381,809 291,722

1.80 Other income 336,627 345,597 107,585 117,737

1.80

Changes in inventories of finished

goods and work in progress 268,393 (493,001) - -

1.80 Raw materials and consumable used (46,289) (68,739) - -

7.40(b) Contract costs recognised (1,352,588) (1,166,701) - -

32.50(b) Property development costs recognised (8,010,989) (5,145,983) - -

1.80 Staff costs (490,010) (342,001) (58,975) (38,305)

1.80,14.15(c) Depreciation expense (1,228,514) (876,403) (469) (492)

1.80 Amortisation charges (1,832,375) (1,503,955) - -

Impairment losses recognised (40,007) (16,187) - -

Impairment losses reversed 15,756 - - -

1.80 Other expenses (3,757,110) (4,347,984) (219,723) (215,091)

1.75(b) Profit from operations 7,606,577 5,710,755 210,227 155,571

1.75(c) Finance costs (234,750) (256,549) (30,504) (24,262)

1.75(d),12.39 Share of profit of associates 275,354 89,460 - -

Share of profit of jointly-controlled

entities 631,116 499,541 - -

1.75 Profit before tax 32 8,278,297 6,043,207 179,723 131,309

1.75(e) Income tax expense 33

- Company and subsidiaries (1,154,309) (1,149,001) (7,869) -

- share of tax expense in associates (49,654) (19,681) - -

- share of tax expense in jointly-

controlled entities (75,734) (74,931) - -

(1,279,697) (1,243,613) (7,869) -

Profit after tax 6,998,600 4,799,594 171,854 131,309

Minority interest (156,807) (129,530) - -

1.75(i) Profit For The Financial Year 6,841,793 4,670,064 171,854 131,309


INCOME STATEMENTS - Expenses Classified by Nature




13

1.8(c)

1.46(b),(c)

1.86(e),(f)

Share

Capital

Share

Premium

Revaluation

Reserves

Translation

Reserves

Retained

Profits Total

1.46(d),(e) THE GROUP Note RM RM RM RM RM RM

Balance at 1 January 2008 11,045,200 450,000 553,718 454,049 1,896,959 14,399,926

1.86(b) Revaluation of landed property - - 3,284 - - 3,284

1.86(b) Exchange differences on translation of foreign entities - - - 231,391 - 231,391

1.86(a) Profit for the financial year - - - - 4,670,064 4,670,064

1.86(d) Dividends 34 - - - - (2,209,040) (2,209,040)

1.86(d) Issue of shares 25 & 26 5,000 8,500 - - - 13,500

Balance at 31 December 2008 11,050,200 458,500 557,002 685,440 4,357,983 17,109,125

1.86(b) Revaluation of landed property - - 92,215 - - 92,215

1.86(b) Exchange differences on translation of foreign entities - - - 258,266 - 258,266

1.86(a) Profit for the financial year - - - - 6,841,793 6,841,793

1.86(d) Dividends 34 - - - - (2,237,040) (2,237,040)

1.86(d) Issue of shares 25 & 26 270,000 784,000 - - - 1,054,000

Transfer to retained profits on disposal - - (6,963) - 6,963 -

Balance at 31 December 2009 11,320,200 1,242,500 642,254 943,706 8,969,699 23,118,359

STATEMENTS OF CHANGES IN EQUITY




14

1.8(c)

1.46(b),(c)

1.86(e),(f)

Share

Capital

Share

Premium

Retained

Profits Total

1.46(d),(e) THE COMPANY Note RM RM RM RM

Balance at 1 January 2008 11,045,200 450,000 6,850,420 18,345,620

1.86(a) Profit for the financial year - - 131,309 131,309

1.86(d) Dividends 34 - - (2,209,040) (2,209,040)

1.86(d) Issue of shares 25 & 26 5,000 8,500 - 13,500

Balance at 31 December 2008 11,050,200 458,500 4,772,689 16,281,389

1.86(a) Profit for the financial year - - 171,854 171,854

1.86(d) Dividends 34 - - (2,237,040) (2,237,040)

1.86(d) Issue of shares 25 & 26 270,000 784,000 - 1,054,000

Balance at 31 December 2009 11,320,200 1,242,500 2,707,503 15,270,203

STATEMENTS OF CHANGES IN EQUITY - Cont'd




15

1.8(d)

1.46(b),(c)

2009 2008 2009 2008


5.10, 5.18(b) CASH FLOWS FROM OPERATING ACTIVITIES

5.18(b) Profit before tax 8,278,297 6,043,207 179,723 131,309

5.20(b),(c) Adjustments for:

Allowance for doubtful debts 9,438 13,578 - -

Amortisation charges 1,832,375 1,503,955 - -

Bad debts written off 2,512 1,081 - -

Defined benefits plan expense 37,693 31,270 - -

Depreciation of property, plant and equipment 1,228,514 876,403 469 492

Dividend income (1,718) (2,105) - -

Gain on disposal of investment property (2,659) (173) - -

Gain on disposal of land held for development (14) - - -

Gain on disposal of other investments (64,242) (15,914) (24,474) 5,011

(Gain)/Loss on disposal of subsidiary (1,459) - 293,051 -

(Gain)/Loss on disposal of property, plant and equipment (760) (1,088) (152) 28

Impairment losses 40,007 16,187 - -

Interest expense 234,750 256,549 30,504 24,262

Interest income (657) (718) - -

Inventories written down to net realisable value 31,250 45,303 - -

Provision for legal costs 347 - - -

Provision for warranties 113,718 91,634 - -

Reversal of allowance for doubtful debts (348) (732) - -

Reversal of impairment losses (15,756) - - -

Reversal of inventories written down (14,694) (21,600) - -

Reversal of provision for warranties (72,911) (31,695) - -

Share of profit of associates (275,354) (89,460) - -

Share of profit of jointly-controlled entities (631,116) (499,541) - -

Unrealised loss on foreign exchange 90,459 79,948 - -

Operating profit before changes in working capital 10,817,672 8,296,089 479,121 161,102

5.20(a) Decrease/(increase) in property development costs 347,396 (302,533) - -

5.20(a) Decrease in bank balances held under H.D.A. 119,905 23,019 - -

Decrease/(increase) in inventories 811,629 (130,215) - -

5.20(a) Decrease in trade and other receivables 83,436 179,842 1,944,303 2,056,317

Increase/(decrease) in trade and other payables 746,796 (504,553) 11,365 (69,504)

Cash generated from operations 12,926,834 7,561,649 2,434,789 2,147,915

Contributions to defined benefits plan (43,190) (41,540) - -

5.35 Income taxes paid (969,178) (765,940) (7,869) -

5.31 Interest paid (235,464) (256,917) (30,504) (24,262)

Interest received 657 718 - -

Utilisation of provisions (57,503) (60,078) - -

Net cash from operating activities 11,622,156 6,437,892 2,396,416 2,123,653


CASH FLOW STATEMENTS




16

1.8(d)

1.46(b),(c)

2009 2008 2009 2008


5.10, 5.16 CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of land held for development (215,536) (115,822) - -

5.39 Acquisition of subsidiary, net of cash acquired 35 (1,299,748) - (500,000) -

Advance to associates (18,496) (50,782) - -

5.39 Disposal of subsidiary, net of cash disposed off 36 423,004 - 223,274 -

5.31 Dividend income 1,718 2,105 - -

Interest paid (325) (642) - -

Proceeds from disposal of investment property 48,325 4,000 - -

Proceeds from disposal of land held for development 405 - - -

Proceeds from disposal of other investments 633,737 473,561 180,078 37,842

Proceeds from disposal of property, plant and equipment 18,739 31,450 1,329 586

Purchases of investment property (1,000,000) (45,089) - (513)

Purchases of other intangible assets, net of grant (1,380,954) (1,501,746) - -

Purchases of other investments (337,990) (632,780) (110,000) (135,712)

5.43 Purchases of property, plant and equipment 37 (3,708,324) (594,536) (677) (1,088)

Net cash used in investing activities (6,835,445) (2,430,281) (205,996) (98,885)

5.10, 5.17 CASH FLOWS FROM FINANCING ACTIVITIES

5.31 Dividends paid (2,237,040) (2,209,040) (2,237,040) (2,209,040)

Issuance of shares 54,000 13,500 54,000 13,500

5.23 Proceeds from other short term borrowings 10,921,954 9,950,329 4,950,965 3,950,491

Proceeds from term loans 495,043 594,032 45,909 32,012

Repayments of hire purchase and finance lease (409,908) (506,969) - -

5.23 Repayments of other short term borrowings (11,418,268) (10,469,787) (4,879,198) (3,753,950)

Repayments of term loans (2,211,628) (1,329,049) (116,814) (45,059)

Net cash used in financing activities (4,805,847) (3,956,984) (2,182,178) (2,012,046)

Net (decrease)/increase in cash and cash equivalents (19,136) 50,627 8,242 12,722

Cash and cash equivalents at beginning of financial year (17,323) (67,950) (44,182) (56,904)

Cash and cash equivalents at end of financial year 38 (36,459) (17,323) (35,940) (44,182)


CASH FLOW STATEMENTS - Cont'd




1.8(e) 1.46(b),(c)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009

17

1. GENERAL INFORMATION 1.102(a) 1.102(b) 1.102(c) 1.102(d) 1.46(d)

The Company is a private limited company incorporated and domiciled in Malaysia. The registered office and principal place of business is located at 83A, Jalan Emas 1, Taman Sri Skudai, 81300 Johor Bahru, Johor. The principal activities of the Company are that of investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 9. There have been no significant changes in the nature of the activities during the financial year. The Company is a subsidiary of Be Competent Sdn. Bhd., a company incorporated in Malaysia, which is also regarded by the directors as the ultimate holding company of the Company. The number of employees of the Group and the Company as at 31 December 2009 are 35 and 3 (2008: 30 and 2) respectively. The financial statements of the Group and the Company are reported in Ringgit Malaysia (RM).

2. BASIS OF PREPARATION 1.91(a)

The financial statements have been prepared in accordance with the MASB Applicable Approved Accounting Standards for Private Entities in Malaysia and the provisions of the Companies Act, 1965.

3. SIGNIFICANT ACCOUNTING POLICIES 1.97(a) The financial statements have been prepared on the historical cost basis, except for the revaluation

of certain assets. The principal accounting policies adopted are set out below:

11.11 11.6

11.44, 11.47(c)

11.26

11.21

Consolidation The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Investments in subsidiaries are stated in the Company’s financial statements at cost, less impairment losses, if any.

The results of subsidiaries acquired or disposed of during the financial year are included in the consolidated financial statements from the acquisition date or up to the effective date of disposal, where appropriate. Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances.

All intragroup balances, transactions, income and expenses are eliminated in full on consolidation.

15.78(a)

Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any, except for freehold land and buildings.



1.8(e) 1.46(b),(c)


18

15.78(a) 15.34 15.43 15.44 15.45 14.15(a),(b) 15.78(b),(c) 15.59 15.74

Assets stated at valuation Freehold land and buildings are stated at their revalued amount, being its fair value at the date of revaluation, less subsequent accumulated depreciation and subsequent impairment losses, if any. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. Any revaluation increase arising from the revaluation is credited to revaluation reserves account, except when the increase is recognised in the income statements to the extent that it reverses a revaluation decrease of the same asset previously recognised in income statements. Any revaluation decrease arising from the revaluation is recognised in income statements, except when the decrease is debited to the revaluation reserves account to the extent of any credit balance existing in the revaluation reserves account in respect of that asset. Revaluation surplus is transferred directly to retained profits when the asset is retired or disposed of. Except for freehold land and assets under construction, depreciation is provided on a straight-line method so as to write off the cost or valuation of the assets over their estimated useful lives, as follows: Buildings 50 years Plant and machinery 10 years Motor vehicles 5 years Equipment, furniture and fittings 3 ~ 5 years The residual values and the useful lives of assets, if significant, are reviewed at each balance sheet. The gain or loss arising from the disposal or retirement of an asset, determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, are recognised in income statements. Depreciation of an asset begins when it is ready for its intended use.

IAS25 Investment Property

Investment property, principally comprising of property held to earn rentals or for capital appreciation or both, are held for long term rental yields and are not occupied by the Group. Investment property is carried at market value determined annually by external independent valuers. Any revaluation increase arising from the revaluation is credited to revaluation reserves account, except when the increase is recognised in the income statements to the extent that it reverses a revaluation decrease of the same asset previously recognised in income statements. Any revaluation decrease arising from the revaluation is recognised in income statements, except when the decrease is debited to the revaluation reserves account to the extent of any credit balance existing in the revaluation reserves account in respect of that asset. Revaluation surplus is transferred directly to retained profits when the asset is retired or disposed of.



1.8(e) 1.46(b),(c)


19

Property Development Activities

32.50(a)

Land held for property development is carried at cost less any accumulated impairment losses and is classified as non-current asset where no development activities are carried out or where development activities are not expected to be completed within the normal operating cycle. Property development costs comprise all costs that are directly attributable to development activities including costs associated with the acquisition of land, costs related directly to a specific property development activity and costs attributable to the development activities in general and can be allocated to the project. When the development and construction activities have commenced and the financial outcome of the development activities can be reliably estimated, property development revenue will be recognised for the development unit sold and determined by reference to the stage of completion of the development activity at the balance sheet date. Stage of completion is determined based on the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs. When the outcome of a property development activity cannot be estimated reliably, property development revenue is recognised only to the extent of property development costs incurred that it is probable will be recoverable and property development costs are recognised as an expense in the financial year in which they are incurred. An expected loss on the property development activity is recognised as an expense immediately (including costs to be incurred over the defects liability period). Inventories of unsold completed development units are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Goodwill Goodwill arising on the acquisition of a subsidiary, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets and liabilities, is initially measured at cost and recognised as an asset. Goodwill is subsequently measured at cost less accumulated amortisation and accumulated impairment losses, if any. Goodwill is amortised using the straight line method over its estimated useful life of 15 years. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the income statements on disposal. Goodwill arising on the acquisition of an associate or an equity-accounted jointly controlled entity is included within the carrying amount of the investment and is assessed for impairment as part of the investment.

Other Intangible Assets

4.30(a)

Expenditure incurred on research activities is recognised in income statements as and when it is incurred.



1.8(e) 1.46(b),(c)


20

4.30(b),(c)

Other intangible assets with finite useful lives are stated at cost less accumulated amortisation and accumulated impairment losses, if any. Other intangible assets are amortised on a straight-line method over their estimated useful lives, as follows: Software development costs 5 years Patents and trademarks 10 years

12.3 12.6 12.6 12.22 12.31

Investments in Associates An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Investments in associates are stated in the Company’s financial statements at cost, less impairment losses, if any. Investments in associates are accounted for in the Group’s consolidated financial statements using equity method until the date the Group ceases to have significant influence over the associates. Under the equity method, the investments in associates are initially recognised at cost and the carrying amount is increased or decreased to recognise the investor’s share of the results of the investees after the date of acquisition, less impairment losses, if any. Losses of associates in excess of the Group’s interest in the associates, include any long-term interests that form part of the Group’s net investment in the associates, are not recognised. Profits or losses on transactions entered between the Group and the associates are eliminated to the extent of the Group’s interest in the associates.

16.3 16.50

Investments in Joint Ventures A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. Investment in jointly-controlled entities are accounted for in the Group’s consolidated financial statements using equity method until the date the Group ceases to have joint control.

IAS 25 Other Investments

Other non-current investments are stated at cost less impairment losses, if any. Other current investments are stated at the lower of cost and net realisable value.

23 Impairment of Assets

At each balance sheet date, the Group and the Company assess whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amounts of the assets are estimated. When it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimate the recoverable amount of the cash-generating unit to which the asset belongs.



1.8(e) 1.46(b),(c)


21

Recoverable amount is the higher of the net selling price and 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 risks specific to the asset. If the recoverable amount of an asset (or a cash-generating unit) is less than its carrying amount, an impairment loss is recognised to reduce the carrying amount to its recoverable amount. An impairment loss for a cash-generating unit is firstly allocated to reduce the carrying amount of goodwill allocated to the cash-generating unit, and then, to the other non-current assets of the unit pro rata on the basis of the carrying amount of each non-current asset in the unit. An impairment loss is recognised immediately in income statements, unless it reverses a previous revaluation, in which case it is treated as a revaluation decrease. An impairment loss recognised in prior financial periods for an asset, other than goodwill, is reversed if there has been a change in the estimates used to determine the asset’s recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation if no impairment loss had been recognised, and is recognised immediately in income statements, unless it reverses a previous revaluation, in which case it is treated as a revaluation increase.

6.9 6.11(a) 6.11(b),(c)

Foreign Currency ~ Foreign Currency Transactions Transactions in foreign currencies are initially translated at the exchange rate at the dates of the transactions. At the balance sheet date, foreign currency monetary assets and liabilities are translated into Ringgit Malaysia at the exchange rate ruling at that date. Exchange differences arising on the settlement or translation of monetary items are recognised in income statements. Non-monetary assets and liabilities measured at historical cost in a foreign currency are translated using exchange rates at the date of the transactions. Non-monetary assets and liabilities measured at fair value in a foreign currency are translated using exchange rates at the date when the fair value was determined.

6.17

Foreign Currency ~ Net Investment in a Foreign Operation Exchange differences arising on the monetary items that, in substance, forms part of the Company’s net investment in a foreign operation are recognised in the Company’s income statements. In the consolidated financial statements, such exchange differences are reclassified to equity only if the monetary items are denominated in either the reporting currency of the Company or the foreign operation. Deferred exchange differences are recognised in income statements on disposal of the investment.

6.39 6.47

Foreign Currency ~ Foreign Entity Assets and liabilities of a foreign entity are translated into Ringgit Malaysia using the exchange rate ruling at the balance sheet date. Income and expenses are translated using exchange rate approximates to those ruling at the date of the transactions. All resulting exchange differences are recognised in equity.



1.8(e) 1.46(b),(c)


22

6.48 On the disposal of a foreign entity, cumulative deferred exchange differences are recognised in the consolidated income statements as part of the gain or loss on sale.

2.37(a)

Inventories Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour costs and overheads, where applicable, that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the First-in First-out method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

MAS5.38 (b)

Aquaculture inventories are valued at the lower of cost and net realisable value. Aquaculture inventories are inventories of the identifiable cost units and consist of the aggregate costs of materials, direct farm labour and production overheads and other costs incurred in nurturing the species cultured to their saleable condition. Net realisable value is estimated based on the most reliable evidence available at the time the estimates are made as to what the inventories are expected to realise upon completion of the cycle.

Receivables

Receivables are measured at anticipated realisable values. Appropriate allowances for estimated irrecoverable amounts are recognised in income statements.

Construction Contract

7.40(c) 7.40(d) 7.40(c) 7.40(c) 5.36

When the outcome of a construction contract activity can be estimated reliably, contract revenue and contract costs associated with the construction contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date. Stage of completion is determined based on the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. When the outcome of a construction contract cannot be estimated reliably, contract revenue are recognised only to the extent of contract costs incurred that it is probable will be recoverable and contract costs are recognised as an expense in the financial year in which they are incurred. Contract revenue also includes variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they can be measured reliably. An expected loss on the construction contract is recognised as an expense immediately.

Cash and Cash Equivalents

5.45 Cash and cash equivalents comprise cash and bank balances, short-term deposits and other short-term, highly liquid investments that are readily convertible to a known amount of cash with an insignificant risk of changes in value. For the purpose of the cash flow statements, cash and cash equivalents are presented net of bank overdrafts.

Payables

Payables are stated at cost which is the consideration to be paid in the future for goods and services rendered.



1.8(e) 1.46(b),(c)


23

Interest-Bearing Liabilities

Interest-bearing liabilities are recognised initially at cost, and subsequently measured at amortised cost with any difference between proceeds and the settlement and redemption value recognised in income statements over the period of borrowing on an effective interest basis.

Hire Purchase and Finance Lease Payables

10.8 10.22 10.28

Hire purchase and leases of property, plant and equipment, which are classified as finance lease, where substantially all the risks and benefits incidental to the ownership of the assets, but not the legal ownership, are transferred to the Group and the Company. Assets under hire purchase and finance lease are depreciated on a straight-line basis over the shorter of the hire and lease terms or their useful lives. Hire purchase and finance lease interest is recognised as an expense in income statements over the lease period so as to give a constant periodic rate of interest on the outstanding liability at the end of each accounting period. All other leases are classified as operating lease and the lease rentals are recognised as an expense in income statements on a straight-line basis over the lease periods.

Provisions

20.15 A provision is recognised when the Group and the Company have a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Provisions are recognised based on a reliable estimate of the amount of the obligation.

Equity

Equity issued by the Company is recognised at the proceeds received, net of direct issue costs.

Government Grants

31.40 31.30

Government grants are recognised when there is reasonable assurance that the Group and the Company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised as income on a systematic basis over the periods necessary to match them with the related costs which they are intended to compensate. Government grants related to assets are presented in the balance sheets by setting up the grant as deferred income while government grant related to income is presented as a credit in income statements separately. Alternative presentation format for government grants: Government grants related to assets are presented in the balance sheets by deducting the grant in arriving at the carrying amount of the asset, while government grants related to income are deducted against the related expenses.

8.36(a) Revenue

Revenue from sales of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.



1.8(e) 1.46(b),(c)


24

MAS5.38(a)

Revenue from rendering of services is measured by reference to the stage of completion of the transaction at the balance sheet date. Interest income is recognised using the effective interest method, and accrued on a time basis. Royalty income, licence fee income and property rental income are recognised on an accrual basis in accordance with the substance of the relevant agreement. Dividend income is recognised when the shareholder’s rights to receive payment is established. Income of aquaculture products is determined based on the project approach by matching costs and revenues of each individual production cycle. Revenue is recognised at the point of sale.

Short-term Employment Benefits

29.11 29.12 29.15 29.18

Short-term employment benefits, such as wages, salaries and social security contributions, are recognised as an expense in the financial year in which the associated services are rendered by employees of the Group and the Company. Short-term accumulating compensated absences, such as paid annual leave, are recognised when the employees render services that increase their entitlement to future compensated absences. Non-accumulating compensated absences, such as sick and medical leaves, are recognised when the absences occur. The expected cost of accumulating compensated absences is measured as the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet date. Profit-sharing and bonus plans are recognised when the Group and the Company have a present legal or constructive obligation to make payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when, and only when the Group and the Company have no realistic alternative but to make the payments.

Defined Contribution Plan

29.46 Contributions to the statutory pension scheme are recognised as an expense in income statements in the financial year to which they relate.

Defined Benefit Plan

29.125(a) 29.125(a)

The Group operates a funded Retirement Benefit Plan (the Plan) for its eligible employees. Contributions to the Plan are made quarterly and are charged to income statements so as to spread the cost of the Plan over the employees’ working lives in the Group. The Group’s obligations under the Plan are determined based on triennial actuarial valuations where the amounts of benefits that the employees have earned in return for their services in the current and prior financial years are estimated. The present values of the Plan’s obligations and the related current service and any past service cost are determined using the Projected Unit Credit Method.



1.8(e) 1.46(b),(c)


25

29.93 29.97 29.55 29.114

Actuarial gains and losses are recognised as income or expense if the net cumulative unrecognised actuarial gains and losses at the end of the previous reporting period exceed 10% of the greater of the present value of the obligation and the fair value of Plan assets at the balance sheet date. Past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, the Plan, the past service cost is recognised immediately. The Plan recognised in the balance sheets is the net total of the present value of the Plan adjusted for unrecognised actuarial gains or losses, unrecognised past service cost, minus the fair value of Plan assets. Any asset resulting from the computation is stated at the lower of the amount determined or the total of any cumulative unrecognised actuarial losses and past service cost, and the present value of available refunds and reductions in future contribution to the Plan. Gains or losses on the curtailment or settlement of the Plan are recognised when the curtailment or settlement occurs.

Termination Benefits

29.138 29.145

Termination benefits are recognised when the Group and the Company are demonstrably committed to terminate the employment of the employees before the normal retirement date or provide termination benefits as a result of an offer made for voluntary redundancy. Termination benefits in relation to the offer made for voluntary redundancy is measured based on the number of employees expected to accept the offer.

Borrowing costs

27.29(a) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset when the expenditures for the asset and borrowing costs are being incurred, and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended during any extended periods in which active development is interrupted and ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. All other borrowing costs are recognised as an expense in income statements in the financial year in which they are incurred.

Income Tax

25 Income tax comprises of current tax and deferred tax. Current tax and deferred tax are charged or credited to equity if the tax relates to items that are credited or charged directly to equity. Current tax liabilities are measured based on the amounts expected to be paid, using the tax rates that have been enacted or substantially enacted by the balance sheet date.



1.8(e) 1.46(b),(c)


26

Deferred tax is provided in full, using the liability method, on temporary differences which are the differences between the carrying amount in the financial statements and the corresponding tax base of an asset or liability at the balance sheet date. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Deferred tax liabilities and assets are not recognised if the temporary differences arise from goodwill and for initial recognition of assets or liabilities that affect neither accounting profit nor taxable profit. Deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the entity expects to recover or settle the carrying amounts of its assets and liabilities and are measured using the tax rates that have been enacted or substantially enacted by the balance sheet date. The carrying amount of the deferred tax assets are reviewed at each balance sheet date, and the carrying amount is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be utilised. The reduction is reversed to the extent that it becomes probable that sufficient taxable profit will be available.



1.8(e) 1.46(b),(c)


27

4. PROPERTY, PLANT AND EQUIPMENT

Freehold

Land# Buildings #

Plant and

Machinery

Motor

Vehicles

Equipment,

Furniture and

Fittings

Properties

Under

Construction * Total

THE GROUP RM RM RM RM RM RM RM

Cost / Valuation

15.78(d) At 1 January 2009 1,429,010 2,549,121 1,546,950 2,303,021 769,504 905,695 9,503,301

15.78(e)(i) Additions 59,178 2,000,393 238,652 1,594,500 45,960 325,943 4,264,626

15.78(e)(iii) Acquistion of a subsidiary 65,073 59,605 - 295,950 79,605 - 500,233

15.78(e)(iv) Revaluation surplus 97 342 - - - - 439

15.78(e)(ii) Disposals (102) (650) (239) (32,012) (32,011) - (65,014)

15.78(e)(ii) Disposal of a subsidiary (3,215) (65,913) (1,324,041) (932,085) (76,904) - (2,402,158)

15.78(e)(ix) Reclassification - 134,607 - - - (134,607) -

IAS25 Transfer from investment properties - 543,924 - - - - 543,924

IAS25 Transfer to investment properties - - - - - (78,954) (78,954)

15.78(e)(viii) Exchange differences on consolidation 123 349 - 65,954 3,201 - 69,627

15.78(d) At 31 December 2009 1,550,164 5,221,778 461,322 3,295,328 789,355 1,018,077 12,336,024

Accumulated depreciation and impairment losses

15.78(d) At 1 January 2009 - 436,905 1,247,864 1,068,521 211,247 - 2,964,537

15.78(e)(v) Impairment losses recognised - - 2,046 - - - 2,046

15.78(e)(iv) Reversal of impairment losses - - (303) - - - (303)

15.78(e)(ii) Disposals - (130) (120) (20,194) (26,591) - (47,035)

15.78(e)(ii) Disposal of a subsidiary - (34,978) (903,048) (569,403) (54,921) - (1,562,350)

15.78(e)(vii) Depreciation charge - 176,854 39,985 878,774 132,901 - 1,228,514

15.78(e)(viii) Exchange differences on consolidation - 87 - 32,910 636 - 33,633

15.78(d) At 31 December 2009 - 578,738 386,424 1,390,608 263,272 - 2,619,042

Carrying Amounts

15.78(d) At 31 December 2008 1,429,010 2,112,216 299,086 1,234,500 558,257 905,695 6,538,764

15.78(d) At 31 December 2009 1,550,164 4,643,040 74,898 1,904,720 526,083 1,018,077 9,716,982

15.78(a) # At 2009 valuation

* Disclosure requirement under MASB 15.79(c)

15.78(e) Note: Comparative information is not required to be presented



1.8(e) 1.46(b),(c)


28

THE COMPANY

Equipment, Furniture and Fittings

RM Cost 15.78(d) At 1 January 2009 5,351 15.78(e)(i) Additions 677 15.78(e)(ii) Disposals (1,133)

15.78() At 31 December 2009 4,895

Accumulated depreciation 15.78(d) At 1 January 2009 1,281 15.78(e)(ii) Disposals (122) 15.78(e)(vii) Depreciation charge 469

15.78(d) At 31 December 2009 1,628

Carrying amounts 15.78(d) At 31 December 2008 4,070

15.78(d) At 31 December 2009 3,267

15.78(e) Note: Comparative information is not required to be presented.

23.119 In 2009, the Group carried out a review of the recoverable amount of the Group’s assets located in

United Kingdom following an unexpected change in marketing plan. Based on the assessment, an impairment loss of RM2,046 (2008: RM Nil) was recognised during the financial year. These assets are used by the software segment. The recoverable amounts of the assets have been determined based on their value in use. The discount rate used for the current estimate was 6%. The discount rate used when the recoverable amount of these assets was previously estimated in 2008 was 5%.

15.82 Freehold land and buildings of the Group were revalued at 31 December 2009 by Messrs. Valuer & Co., an independent professional valuer, based on the open market values on an existing use basis. The revaluation surplus of RM439 (2008: RM3,459) has been transferred to revaluation reserves accounts of the Group.

15.82 Had the freehold land and buildings been carried at historical cost less accumulated depreciation

and accumulated impairment losses, if any, the carrying amount of the freehold land and buildings of the Group would have been as follows:


2009 2008 2009 2008

RM RM RM RM

Freehold land 1,264,180 1,143,123 - - Buildings 3,781,201 1,859,101 - -

5,045,381

3,002,224

-

-



1.8(e) 1.46(b),(c)


29

If the entity availed itself for the transitional provision when the MASB first adopted IAS 16 PPE: 15.84 15.85

Freehold land and buildings of the Group and the Company were revalued in 1995 by an independent professional valuer based on the open market values on an existing use basis. As the Group and the Company have availed themselves of the transitional provision when the MASB first adopted IAS 16 Property, Plant and Equipment, the freehold land and buildings are stated on the basis of their 1995 valuations and do not adopted a policy of revaluation. Due to the absence of historical records, the Group and the Company are not able to determine the carrying amounts of the property, plant and equipment that would have been recognised had the assets been carried under the cost model.

15.79(a) 10.26(a)

The carrying amounts of the property, plant and equipment under hire purchase and finance lease of the Group are as follows:


2009 2008 2009 2008

RM RM RM RM

Plant and machinery 28,594 92,021 - - Motor vehicles 487,490 143,932 - -

516,084

235,953

-

-

15.79(a)

The Group has pledged the following property, plant and equipment to licensed banks to secure banking facilities granted to the Group:


2009 2008 2009 2008

RM RM RM RM

Freehold land 49,390 65,138 - - Buildings 60,302 87,194 - -

109,692

152,332

-

-

The entities are encouraged, but not required, to disclose the following information: 15.83(a) The carrying amounts of temporarily idle property, plant and equipment of the Group are as

follows:


2009 2008 2009 2008

RM RM RM RM

Plant and machinery 10,400 38,100 - - Equipment, furniture and fittings 5,400 6,800 - -

15,800

44,900

-

-



1.8(e) 1.46(b),(c)


30

15.83(b) The gross carrying amounts of fully depreciated property, plant and equipment of the Group are as follows:


2009 2008 2009 2008

RM RM RM RM


48,100

100,100

-

-

15.83(c) The carrying amounts of property, plant and equipment of the Group which have been retired from active use are as follows:


2009 2008 2009 2008

RM RM RM RM


95,000

93,000

-

-

15.83(d) The fair value of property, plant and equipment of the Group, which are measured using cost

model amounting to RM2,256,900, is RM3,360,500.

IAS 25 5. INVESTMENT PROPERTY THE

GROUP THE

COMPANY RM RM

At 1 January 2008 4,464,418 - Additions 45,089 - Disposals (3,827) - Exchange gain on consolidation 765 -

At 31 December 2008 4,506,445 - Additions 1,000,000 - Acquisition of a subsidiary 1,217,852 - Revaluation surplus 91,798 - Disposals (45,666) - Exchange loss on consolidation (156) - Transfer from property, plant and equipment 78,954 - Transfer to property, plant and equipment (543,924) -

At 31 December 2009

6,305,303

-



1.8(e) 1.46(b),(c)


31

The fair value of the investment property of the Group at 31 December 2009 is determined by a valuation carried out by Messrs. Valuer & Co., an independent professional valuer, based on the open market values on an existing use basis. Messrs. Valuer & Co. have relevant recognised professional qualification and have recent experience in valuing properties in the relevant locations.

The Group has pledged investment property with carrying amount of RM3,983,000 (2008:

RM1,198,000) to licensed banks to secure banking facilities granted to the Group.

If the entity availed itself for the transitional provision when MASB first adopted IAS 16 PPE: Investment property of the Group was revalued in 1995 by an independent professional valuer

based on the open market values on an existing use basis. As the Group has availed themselves of the transitional provision when MASB first adopted IAS 16 Property, Plant and Equipment, the investment property is stated on the basis of their 1995 valuations and does not adopt a policy of revaluation.

6. LAND HELD FOR DEVELOPMENT THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM Cost 32.51(a) At beginning of the financial year 117,180 60,327 - - 32.51(b)(i) Additions 215,536 115,822 - - 32.51(b)(i) Acquisition of a subsidiary 1,495,060 - - - 32.51(b)(ii) Disposals (391) - - - 32.51(b)(iii) Transfer to property development costs (861,666) (58,969) - -

32.51(a) At end of the financial year 965,719 117,180 - -

Accumulated impairment losses 32.51(a) At beginning of the financial year (14,558) - - - 32.51(b)(iv) Impairment losses recognised - (14,558) - - 32.51(b)(iv) Reversal of impairment losses 14,558 - - -

32.51(a) At end of the financial year - (14,558) - -

Carrying amounts 32.51(a)

At end of the financial year

965,719

102,622

-

-

32.52(b) Land held for development with carrying amounts of RM657,890 (2008: RM102,622) were pledged

to licensed banks to secure banking facilities granted to the Group.



1.8(e) 1.46(b),(c)


32

7. GOODWILL

THE GROUP RM

Cost At 1 January 2008 6,701,026 Exchange loss on consolidation (119,218)

At 31 December 2008 6,581,808 Exchange gain on consolidation 205,128 Acquisition of a subsidiary 1,397,252 Eliminated on disposal of a subsidiary (176,930)

At 31 December 2009 8,007,258

Amortisation At 1 January 2008 2,310,308 Exchange gain on consolidation (28,392) Amortisation charge 471,051

At 31 December 2008 2,752,967 Exchange loss on consolidation 34,691 Amortisation charge 391,289

At 31 December 2009 3,178,947

Impairment losses At 1 January 2009 - Impairment losses recognised 37,961

At 31 December 2009 37,961

Carrying amount

At 31 December 2008

3,828,841

At 31 December 2009

4,790,350



1.8(e) 1.46(b),(c)


33

8. OTHER INTANGIBLE ASSETS 4.30(e) Software

Development Costs

Patents and Trademarks

Total THE GROUP RM RM RM

Cost At 1 January 2008 5,204,374 364,867 5,569,241 Acquisition of a subsidiary - - - Exchange gain on consolidation - 159 159 Additions 1,403,020 98,726 1,501,746

At 31 December 2008 6,607,394 463,752 7,071,146 Additions net of government grant

receipt of RM230,000 for software development costs

1,304,054

76,900

1,380,954 Exchange gain on consolidation - 43 43 Disposals - - -

At 31 December 2009 7,911,448 540,695 8,452,143

Amortisation and Impairment Losses At 1 January 2008 1,724,307 90,274 1,814,581 Impairment losses recognised - 986 986 Exchange loss on consolidation - 35 35 Amortisation charge 986,504 46,400 1,032,904

At 31 December 2008 2,710,811 137,695 2,848,506 Exchange loss on consolidation - 20 20 Impairment losses reversed - (895) (895) Disposals - - - Amortisation charge 1,387,016 54,070 1,441,086

At 31 December 2009 4,097,827 190,890 4,288,717

Carrying amounts

At 31 December 2008

3,896,583

326,057

4,222,640

At 31 December 2009

3,813,621

349,805

4,163,426

31.40(b) 31.40(c)

Government grant related to assets is deducted in arriving at the carrying amount of the assets During the financial year, a subsidiary obtained a government grant under the Research & Development Grant Scheme up to a maximum of RM1 million on the approved research and development expenditures incurred. The government grant granted is subject to the fulfilment of the condition that the percentage of the knowledge workers should attain 20% of the total workforce of the said subsidiary by 30 June 2010. The subsidiary has, subsequent to the financial year, achieved this condition.



1.8(e) 1.46(b),(c)


34

31.25 The reconciliation of the amortisation before and after deduction of related government grant recognised as income is as follows:


2009 2008 2009 2008

RM RM RM RM

Amortisation charge before deduction of

the grant

1,441,086

1,032,904

-

- Effect of the grant on the amortisation

charge (the approved research and development project is still on-going)

-

-

-

-

Amortisation charge for the financial year

1,441,086

1,032,904

-

-

The carrying amount of other intangible assets whose title is restricted is RM290,000 (2008:

RM310,000). The carrying amount of other intangible assets pledged as securities for liabilities is RM540,000 (2008: RM500,000).

9. SUBSIDIARIES THE COMPANY

2009 2008

RM RM

11.32 Investments in subsidiaries 12,320,305 11,336,630 Less: Impairment loss recognised (656) (656)

12,319,649

11,335,974



1.8(e) 1.46(b),(c)


35

11.47(a) Details of the Company’s subsidiaries as at 31 December 2009 are as follows:

Name of Subsidiaries

Country of Incorporation

Principal activities

Proportion of ownership interest

Proportion of voting power held

% %

AXP Holdings Sdn. Bhd. Malaysia Investment holding 100 100 AE R & D Sdn. Bhd. Malaysia Research & development 100 100 AE S & I Sdn. Bhd. Malaysia Marketing of software 100 100 AXP Technical Sdn. Bhd. Malaysia Publisher of newsletters 100 100 AXP Land Sdn. Bhd. Malaysia Property investment and

development 100 100

AXP Property Sdn. Bhd. Malaysia Property investment and development

100 100

AXP Building Sdn. Bhd. Malaysia Construction contractor 100 100 AXP Aquaculture Sdn.

Bhd. Malaysia Aquaculture products 100 100

AE (BVI) Limited * British Virgin Island

Investment holding 100 100

AE S & I Pte. Ltd. * Republic of Singapore

Marketing of software 100 100

AE S & I Limited * Hong Kong SAR Marketing of software 100 100 AE S & I (NZ) Limited * New Zealand Marketing of software 80 80 AE S & I (PRC) Co., Ltd. * People’s Republic

of China Marketing of software 60 60

AE S & I (UK) Limited * United Kingdom Marketing of software 90 90 AE S & I (America) Inc. * United States Marketing of software 90 90 AE S & I (Japan) Inc. * Japan Marketing of software 70 45

CA174(2) (c)(i)

* The financial statements of these subsidiaries are audited by the associate firms of Auditors & Co. in the respective countries.

11.47(b)(ii) Although the Group holds not more than half of the voting power in AE S & I (Japan) Inc., the Company has the power to cast the majority of votes at meetings of the Board of Directors and the control of the entity is by the Board. Thus, AE S & I (Japan) Inc. is controlled by the Company and the financial statements of that company are included in the consolidated financial statements.

11.47(b)(iii) The Group owns 51% of equity interest in SERP (Asia-Pacific) Pte. Ltd., a company incorporated in the Republic of Singapore. However, by virtue of an agreement with the other investor, the Group does not have control nor significant influence over that company as the other investor has the power to govern the financial and operating policies as well as the power to appoint or remove the majority of the members of the Board of Directors and the control of the entity is by the Board. Consequently, the investment is recognised as other investments of the Group.



1.8(e) 1.46(b),(c)


36

When the Company elects not to prepare consolidated financial statements in accordance with MASB 11.8, if the Company is a wholly-owned subsidiary of another company, which is also incorporated in Malaysia, the following disclosure is required:

11.8 The Company does not present consolidated financial statements in accordance with MASB 11.8 as the Company is a wholly-owned subsidiary of Be Competent Sdn. Bhd., a company incorporated in Malaysia and produces consolidated financial statements. The consolidated financial statements of Be Competent Sdn. Bhd., which include the financial statements of the Company, are obtainable from 83A, Jalan Emas 1, Taman Sri Skudai, 81300 Johor Bahru, Johor.

10. INVESTMENT IN ASSOCIATES THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

Cost of investment in: Unquoted associates 350,000 350,000 23,093 23,093 Quoted associate 628,900 628,900 - - Share of post-acquisition profit, net of

dividend received

406,214

180,514

-

- Loan to associates 99,201 80,705 - -

1,484,315

1,240,119

23,093

23,093

Market value of quoted associate

693,000

642,900

-

-

12.37(a) Details of the Group’s associates as at 31 December 2009 are as follows:

Name of Associates

Country of Incorporation

Principal activities

Proportion of ownership interest

Proportion of voting power held

% %

AXP (S) Limited * Republic of Singapore Investment holding and software consultancy services

35 35

SERP Sdn. Bhd. Malaysia Marketing of SERP 25 18 AE (HK) Limited Hong Kong SAR Investment holding

and software consultancy services

40 40

AE (NZ) Limited New Zealand Dormant 30 30 AE Co., Ltd. People’s Republic of

China Manufacturer of computer hardware

40 40

* The share capital of this associate is quoted on Catalist of Stock Exchange of Singapore.



1.8(e) 1.46(b),(c)


37

Although the Group holds less than 20% of the voting power in SERP Sdn. Bhd., the Group exercises significant influence by virtue of the Group’s right in participation in the policy-making processes.

Although the Group holds 25% in SERP Pte. Ltd., a company incorporated in the Republic of Singapore, the Group does not have significant influence over SERP Pte. Ltd. as the Group has only one representative on the Board of Directors out of six directors. Consequently, the investment is recognised as other investments of the Group.

The financial statements of AE Co., Ltd. are made up to 30 September to coincide with the financial year-end of another investor of AE Co., Ltd., which is incorporated in United States, due to the statutory requirements in United States. For the purpose of applying the equity method of accounting, the financial statements of AE Co., Ltd. for the financial year ended 30 September 2009 have been used, and appropriate adjustments have been made for significant transactions between 30 September 2009 and 31 December 2009.

As a result of the borrowings’ terms and conditions, the loan to SERP Sdn. Bhd. of RM47,809 (2008: RM47,201) is subordinate to the borrowings obtained from an offshore bank.

12.38(a) The following amounts are the Group’s share of the investments in associates:

THE GROUP

2009 2008

RM RM

Assets and Liabilities Total Assets 2,160,986 1,805,703

Total Liabilities 775,872 646,289

Group’s share of associates’ net assets

1,385,114

1,159,414

Results Revenue 3,104,983 1,309,042

Profit For The Financial Year

536,820

213,850

Group’s share of associates’ profit for the financial year

225,700

69,779



1.8(e) 1.46(b),(c)


38

12.39 The Group has discontinued recognition of its share of losses of AE (HK) Limited as the share of accumulated losses of the associate has exceeded the Group’s interest in that associate. The unrecognised share of losses of AE (HK) Limited are as follows:

THE GROUP

2009 2008

RM RM

Group’s unrecognised share of losses: At beginning of the financial year 775,000 430,000 Current year 453,000 345,000


1,228,000

775,000

11. INVESTMENT IN JOINTLY-CONTROLLED ENTITIES THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

Cost of investment in unquoted shares 300,000 300,000 - - Share of post-acquisition profit, net of

dividend received

905,535

350,153

-

-

1,205,535

650,153

-

-

16.60 Details of significant jointly-controlled entities of the Group are as follows:

Name of Jointly-Controlled Entities Country of Incorporation and Residence

Proportion of ownership interest held by the Group

(%) Held though subsidiaries 2009 2008

AXP-China Co., Ltd. People’s Republic of China 50 50 AXP-Singapore Pte. Ltd. Republic of Singapore 40 40

16.60 The following amounts are the Group’s share of the investment in jointly-controlled entities:

THE GROUP

2009 2008

RM RM

Assets and Liabilities Non-current assets 895,795 743,900 Current assets 615,202 126,906

Group’s Share of Total Assets 1,510,997 870,806



1.8(e) 1.46(b),(c)


39

THE GROUP

2009 2008

RM RM

Non-current liabilities 98,003 86,048 Current liabilities 207,459 134,605

Group’s Share of Total Liabilities 305,462 220,653

Group’s Share of Net Assets 1,205,535 650,153

Group’s Share of Results Revenue 2,450,785 1,968,054 Operating Expenses (1,819,669) (1,468,513)

Profit Before Tax 631,116 499,541 Income Tax Expense (75,734) (74,931)

Profit After Tax

555,382

424,610

IAS 25 12. OTHER INVESTMENTS


2009 2008 2009 2008

RM RM RM RM Non-current: Quoted investments at cost: Shares outside Malaysia 74,065 69,880 - - Shares in Malaysia 332,940 454,511 19,370 17,952 Unquoted investments at cost: Shares in Malaysia 30,760 85,900 - -

437,765

610,291

19,370

17,952

Current Quoted investments at cost: Shares outside Malaysia 17,796 45,099 - - Shares in Malaysia 79,006 110,682 5,068 52,090

96,802

155,781

5,068

52,090

Market value of quoted investments –

published price

Shares outside Malaysia 105,800 135,768 - - Shares in Malaysia 466,782 693,301 31,412 83,210

The market value of quoted investments is based on quoted market prices at the balance sheet date.



1.8(e) 1.46(b),(c)


40

13. DEFERRED TAX ASSETS / LIABILITIES 25.79(f) The following are the movements of deferred tax assets and liabilities (before offsetting): Charge (credit) to Acquisition Disposal

THE GROUP At 1

January Income Statement Equity

Exchange difference

of subsidiary

of subsidiary

At 31 December

2009 RM RM RM RM RM RM RM

Deferred tax assets Provisions 58,844 (4,610) - - - - 54,234 Employees benefits 24,890 3,641 - - 3,268 (512) 31,287 Unused tax losses 52,035 344 - 10 - - 52,389

135,769 (625) - 10 3,268 (512) 137,910

Deferred tax liabilities Properties 1,024,538 196,104 22 39,085 71,847 (37,825) 1,293,771 Trade receivables 9,346 (1,452) - 25 321 (230) 8,010

1,033,884 194,652 22 39,110 72,168 (38,055) 1,301,781

2008 Deferred tax assets Provisions 53,273 5,571 - - - - 58,844 Employees benefits 22,100 2,790 - - - - 24,890 Unused tax losses 51,769 286 - (20) - - 52,035

127,142 8,647 - (20) - - 135,769

Deferred tax liabilities Properties 724,746 325,286 175 (25,669) - - 1,024,538 Trade receivables 9,226 151 - (31) - - 9,346

733,972 325,437 175 (25,700) - - 1,033,884



1.8(e) 1.46(b),(c)


41

25.72 Deferred tax assets and liabilities are offset when the Group and the Company have a legally enforceable right to set off current tax assets against current tax liabilities and deferred tax relate to income taxes levied by the same taxation authority on the same taxable entity. The amounts of deferred tax assets and liabilities, after appropriate offsetting, are included in the balance sheet, as follows:


2009 2008 2009 2008

RM RM RM RM

Deferred tax assets 10,985 31,164 - -

Deferred tax liabilities 1,174,856 929,279 - -

25.79(e) The following temporary differences have not been recognised:


2009 2008 2009 2008

RM RM RM RM Deductible temporary differences 40,300 32,200 - - Unused tax losses 23,900 34,900 - -

64,200

67,100

-

-

25.26, 37 Deferred tax assets are not recognised for the above temporary differences as it is not probable that

future taxable profit will be available against which the deductible temporary differences and unused tax losses can be utilised by the Group as the future profit streams are unpredictable. However, the unused tax losses may be carried forward indefinitely.

14. PROPERTY DEVELOPMENT COSTS THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM 32.50(c)(i) At beginning of the financial year: Land 53,856 23,010 - - Development costs 83,974 130,952 - - 137,830 153,962 - - Add: 32.50(c)(iv)

Transfer from land held for development

861,666

58,969

-

-

Acquisition of subsidiary 987,342 - - - 32.50(c)(ii) Development costs incurred 8,645,329 5,234,942 - - Less: 32.50(c)(iv) Completed properties transferred to

inventories

(456,237)

(83,126)

-

-



1.8(e) 1.46(b),(c)


42


2009 2008 2009 2008

RM RM RM RM 32.50(c)(iii) Costs recognised as expenses in

income statements:

32.50(c)(iii) Prior financial years (2,973,797) (80,934) - - 32.50(c)(iii) Current financial year (6,010,989) (5,145,983) - - (8,984,786) (5,226,917) 32.50(c)(i)


1,191,144

137,830

-

-

32.50(c)(i) Property development costs at end of the financial year represent: Land 440,604 53,856 - - Development costs 750,540 83,974 - -

1,191,144

137,830

-

-

32.52(b)

Property development costs with a net carrying amount of RM786,911 (2008: RM137,830) were pledged to licensed banks to secure banking facilities granted to the Group.

2.37(b) 15. INVENTORIES


2009 2008 2009 2008

RM RM RM RM At cost: Raw materials - 108,682 - - Work-in-progress - 36,772 - - Finished goods - 457,480 - - Aquaculture inventories 33 75 - - Building materials 11,420 10,640 - - Publications 57 58 - -

32.48 Unsold completed development units 311,621 33,756 - -

323,131 647,463 - -

2.37(c) At net realisable value: Finished goods - 87,321 - - 32.48 Unsold completed development units 70,667 35,352 - -

70,667 122,673 - -

393,798

770,136

-

-

2.37(f) Inventories of the Group with a carrying value of RM82,288 (2008: RM69,108) have been pledged to licensed banks for bank facilities granted to certain subsidiaries.



1.8(e) 1.46(b),(c)


43

16. TRADE AND OTHER RECEIVABLES THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

1.72 Trade receivables 827,105 1,071,588 - - Less: Allowance for doubtful debts (69,392) (63,377) - -

Net trade receivables 757,713 1,008,211 - - 1.72 Other receivables, deposits and

prepayments:

- Other receivables 189,973 158,352 3,534 2,424 - Deposits 38,637 39,194 189 321 - Prepayments 50,594 66,227 43 27

279,204 263,773 3,766 2,772 Amounts due from subsidiaries: 1.72

- trade nature - - 765,394 593,201 - non-trade nature and unsecured - - 2,702,515 4,820,005 - Less: Allowance for doubtful debts - - - -

- - 3,467,909 5,413,206

1,036,917

1,271,984

3,471,675

5,415,978

Included in trade receivables of the Group is RM143,682 (2008: RM284,791) owing by companies in

which certain directors of the Company have interests.

Included in other receivables of the Group is RM12,730 (2008: RM32,905) owing by companies in which certain directors of the Company have interests. The outstanding amount is unsecured, interest-free and has no fixed terms of repayments.

7.43 17. GROSS AMOUNT DUE FROM CUSTOMERS THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM 7.41(a) Aggregate contract costs incurred to date 2,393,904 1,650,960 - - 7.41(a) Add: Attributable profits recognised 703,586 461,986 - - 7.41(a) Less: Expected losses recognised (10,395) (8,267) - -

3,087,095 2,104,679 - -

Less: Progress billings (2,985,697) (1,996,496) - -

101,398

108,183

-

-

7.41(c) Retentions included in trade receivables 69,294 80,933 - -



1.8(e) 1.46(b),(c)


44

18. FIXED DEPOSITS WITH LICENSED BANKS Fixed deposits amounting to RM3,540 (2008: RM3,540) are pledged to licensed banks for bank

facilities granted to the Group. 19. CASH AND BANK BALANCES


2009 2008 2009 2008

RM RM RM RM Cash on hand and at bank 40,340 38,262 128 214 Cash at bank held under Housing

Development Account

56,965

176,870

-

-

97,305

215,132

128

214

32.50(e) Cash at bank held under Housing Development Account are opened and maintained under Section

7A of the Housing Development (Control and Licensing) Act 1966. 132.60(a) 20. TRADE AND OTHER PAYABLES THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

1.72 Trade payables 1,396,016 568,165 - - 1.72 Other payables and accruals:

- Other payables 218,900 304,254 179,936 123,902 - Accruals 262,611 239,430 239 320 7.41(b) - Advances received from contract

customers

3,211

1,453

-

-

484,722 545,137 180,175 124,222 Amounts due to subsidiaries: 1.72

- trade nature - - - - - non-trade nature and unsecured - - 160,303 204,891

- - 160,303 204,891

1,880,738

1,113,302

340,478

329,113

Included in trade payables of the Group is RM439,792 (RM290,012) owing to companies in which

certain directors of the Company have interests.

Included in other payables of the Group is RM43,905 (RM46,711) owing to companies in which certain directors of the Company have interests. The outstanding amount is unsecured, interest-free and has no fixed terms of repayments.



1.8(e) 1.46(b),(c)


45

7.43 21. GROSS AMOUNT DUE TO CUSTOMERS THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM 7.41(a) Aggregate contract costs incurred to date 76,960 33,911 - - 7.41(a) Add: Attributable profits recognised 8,056 5,966 - - 7.41(a) Less: Expected losses recognised (3,095) - - -

81,921 39,877 - -

Less: Progress billings (78,710) (38,424) - -

3,211

1,453

-

-

7.41(c) Retentions included in trade receivables 7,472 6,279 - -

22. HIRE PURCHASE AND FINANCE LEASE PAYABLES THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

10.26(b) Minimum lease payments - not later than 1 year 64,326 59,872 - - - later than 1 year and not later than 5

years

98,467

114,297

-

- - later than 5 years 364 2,769 - -

163,157 176,938 - - Future finance charges (14,569) (17,650) - -

Present value of hire purchase and finance lease payables

148,588

159,288

-

-

10.26(b) Present value of hire purchase and finance lease payables is analysed as follows:

- not later than 1 year 56,966 53,476 - -

- later than 1 year and not later than 5 years

91,293

103,502

-

-

- later than 5 years 329 2,310 - -

91,622 105,812 - -

148,588

159,288

-

-

10.26(c) The Group obtains finance lease and hire purchase facilities to finance certain of its plant and machinery and motor vehicles. The average remaining lease term is 4 years as at 31 December 2009. Implicit interest rate of the finance lease and hire purchase are fixed at the date of the agreement, and the amount of lease payments are fixed throughout the lease period. The Group has the option to purchase the assets at the end of the agreement with minimum purchase considerations. There is no significant restriction clauses imposed on the finance lease and hire purchase arrangements.



1.8(e) 1.46(b),(c)


46

23. BANK OVERDRAFTS AND OTHER BANK BORROWINGS THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

BANK OVERDRAFTS - Secured 179,756 221,126 36,068 44,396 - Unsecured 100,560 103,099 - -

280,316

324,225

36,068

44,396

OTHER BANK BORROWINGS 1.73(f) Non-current Liabilities Term loans: - Secured 247,290 265,977 - 41,534 - Unsecured - - - -

247,290 265,977 - 41,534

Current Liabilities Secured: - term loans 504,598 662,922 40,751 70,122 - revolving credits 1,715,425 1,148,796 154,750 82,817 - other short-term trade facilities 12,744 120,183 - - Unsecured: - term loans 46,182 22,755 - - - other short-term trade facilities 118,064 140,756 - -

2,397,013 2,095,412 195,501 152,939

2,644,303

2,361,389

195,501

194,473

The secured bank overdrafts and other bank borrowings of the Group and the Company are secured by a legal charge over the Group’s and the Company’s landed properties, fixed and floating charges over assets of certain subsidiaries and guaranteed by the Company.

The entities are encouraged, but not required, to disclose the following information:

5.50(a) At the balance sheet date, the Group has undrawn committed credit facilities of RM758,100 (2008: RM449,700) where all the precedent conditions had been met.

24. PROVISIONS Warranties Legal Costs Total

THE GROUP RM RM RM 20.85(a) At 1 January 2009 210,156 - 210,156 20.85(b) Additions 113,718 347 114,065 20.85(c) Utilisations (57,503) - (57,503) 20.85(d) Reversals (72,911) - (72,911)

20.85(a) At 31 December 2009 193,460 347 193,807

20.85 Note: Comparative information is not required to be presented.



1.8(e) 1.46(b),(c)


47


2009 2008 2009 2008

RM RM RM RM

Represent: - Current liability 163,358 165,268 - - - Non-current liability 30,449 44,888 - -

193,807

210,156

-

-

20.86

Warranties Provision for warranties is made based on the management’s best estimate of the expenditure required, based on past experience of similar products and services, to be incurred during the warranty periods.

20.86

Legal Costs During the financial year, a supplier of a subsidiary took legal action against the said subsidiary seeking damages, including interest costs and legal costs incurred and to be incurred, from the said subsidiary for the delay in making payments, but the subsidiary disputes liability due to the quality of the products supplied by the supplier did not meet its requirement. However, its lawyer advises that it is probable that the subsidiary will be found liable. A provision has been set up to recognise further costs associate with settling the supplier.

1.74(a) 25. SHARE CAPITAL

THE GROUP AND THE COMPANY

2009 2008 2009 2008

Number of Shares RM RM

Authorised: At beginning of the financial year 40,000,000 40,000,000 40,000,000 40,000,000 Created during the financial year 10,000,000 - 10,000,000 -


50,000,000

40,000,000

50,000,000

40,000,000

Issued and fully paid: At beginning of the financial year 11,050,200 11,045,200 11,050,200 11,045,200 Issued during the financial year 270,000 5,000 270,000 5,000


11,320,200

11,050,200

11,320,200

11,050,200

During the financial year, the authorised share capital of the Company has been increased to

50,000,000 ordinary shares by the creation of 10,000,000 ordinary shares of RM1 each.



1.8(e) 1.46(b),(c)


48

During the financial year, the Company has issued the following shares:

Date of Issue No. of Shares Issued Issue Price Purposes

6 March 2009 20,000 RM2.70 Increase working capital 1 June 2009 250,000 RM4.00 Part finance the acquisition of a subsidiary The new shares issued rank pari passu in respect of the distribution of dividends and repayment of

capital with the existing shares. 1.74(b) 26. SHARE PREMIUM Share premium arose from issue of ordinary shares in excess of its par value, as follows:

THE GROUP

AND THE COMPANY

Date RM

1 January 2005 Issue of 300,000 shares at an issue price of RM2.50 450,000 1 October 2008 Issue of 5,000 shares at an issue price of RM2.70 8,500 6 March 2009 Issue of 20,000 shares at an issue price of RM2.70 34,000 1 June 2009 Issue of 250,000 shares at an issue price of RM4.00 as part of

the consideration for the acquisition of a subsidiary

750,000

1,242,500

1.74(b) 27. REVALUATION RESERVES 15.82(g)

Revaluation reserves arose from the revaluation of landed property of the Group. Revaluation reserves are not available for distribution as dividends to the Company’s shareholders.

THE GROUP

THE COMPANY

RM RM

At 1 January 2008 553,718 - Revaluation surplus 3,459 - Deferred tax liability on revaluation surplus (175) -

At 31 December 2008 557,002 - Revaluation surplus 92,237 - Deferred tax liability on revaluation surplus (22) - Transfer to retained profits on disposal (6,963) -

At 31 December 2009

642,254

-



1.8(e) 1.46(b),(c)


49

1.74(b) 28. TRANSLATION RESERVES Translation reserves arose from the exchange differences on translation of foreign operations. 1.74(b) 29. RETAINED PROFITS Effective 1 January 2008, the Company is given the option to make an irrevocable election to move

to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act, 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December 2013. The Company has elected to continue to use its tax credit under Section 108 of the Income Tax Act, 1967. Accordingly, during the transitional period, the Company may utilise the credit in the Section 108 balance as at 31 December 2007 to distribute cash dividend payments to ordinary shareholders as defined under the Finance Act, 2007. At the balance sheet date, subject to the agreement by the Inland Revenue Board: 1. the Company has sufficient tax credit under Section 108 (6) of the Income Tax Act, 1967 to

frank the payment of dividends out of all its retained profits. 2. the Company has a balance of RM2,827,515 (2008: RM5,064,555) in the tax exempt account to

declare tax exempt dividends. If the Company does not have sufficient tax credit to frank the payment of dividends, the disclose the following information: Subject to the agreement by the Inland Revenue Board, the Company has sufficient tax credit under Section 108 (6) of the Income Tax Act, 1967 to frank the payment of dividends up to RM659,887 (2008: RM422,950) of its retained profits. The Company is required to pay an additional tax of RM573,373 (2008: RM1,217,927) to frank the payment of dividends out of all its retained profits.

30. RETIREMENT BENEFIT OBLIGATION 29.125 (b) & (c)

The Group operates a funded Retirement Benefit Plan (the Plan) for its eligible employees in Malaysia. The amount recognised in the balance sheet of the Plan is as follows:


2009 2008 2009 2008

RM RM RM RM Present value of funded obligations 238,547 203,796 - - Less: Fair value of plan assets (145,158) (106,589) - -

93,389 97,207 - - Unrecognised actuarial losses (22,192) (20,283) - - Unrecognised past service cost (4,454) (4,684) - -

Net liabilities recognised in balance sheet

66,743

72,240

-

-



1.8(e) 1.46(b),(c)


50

29.125(e) Changes in the fair value of the plan assets are as follows:


2009 2008 2009 2008

RM RM RM RM At beginning of the financial year 106,589 69,409 - - Expected return 5,216 4,749 - - Actuarial gains 431 212 - - Contributions made 43,190 41,540 - - Benefits paid (10,268) (9,321) - -


145,158

106,589

-

-

29.125(d) The plan assets is analysed as follows: Equity instruments 76,938 46,493 - - Cash and cash equivalents 22,279 13,541 - - Landed properties 45,592 46,124 - - Other assets 349 431 - -

145,158

106,589

-

-

29.125(g)

The actual return on plan assets was RM5,647 (2008: RM4,961).

29.125(d) None of the above plan assets is owned by the Group and the Company. The Group and the Company do not occupy any of the above properties or use any of the above assets.

29.125(e) A reconciliation of the present value of funded obligations in the balance sheet is as follows:


2009 2008 2009 2008

RM RM RM RM At beginning of the financial year 203,796 178,538 - - Actuarial losses 2,340 2,112 - - Current service cost 24,875 17,883 - - Expected interest cost 17,804 14,584 - - Benefits paid (10,268) (9,321) - -


238,547

203,796

-

-



1.8(e) 1.46(b),(c)


51

29.125(f) Total expense recognised in income statements, included in the administrative expenses (expenses by function) or employee benefits expenses (expenses by nature) are as follow:


2009 2008 2009 2008

RM RM RM RM Current service cost 24,875 17,883 - - Expected interest cost 17,804 14,584 - - Expected return on plan assets (5,216) (4,749) - - Expected return on reimbursement right

recognised as an asset

-

-

-

-

Actuarial losses - 3,210 - -

Past service cost 230 342 - -

Effect on curtailment or settlement - - - -

37,693

31,270

-

-

29.125(h) The principal actuarial assumptions used as at the balance sheet date are as follows:


2009 2008 2009 2008

% % % % Discount rate 4 4 - -

Expected rate of return on plan assets 5 5 - -

Expected rate of return on reimbursement right recognised as an asset

-

-

-

-

Expected rate of salary increases 5 5 - -

Medical cost trend rate 8 8 - -



1.8(e) 1.46(b),(c)


52

31. REVENUE THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

8.36(b)(i) Sales of goods 202,548 278,170 - - 8.36(b)(ii) Rendering of services 786,938 734,376 - - 7.40(a) Contract revenue 1,591,278 1,172,589 - - 32.50(b) Property development revenue 10,013,736 6,932,479 - - 8.36(b)(iii) Interest income 2,768 4,159 17 20 8.36(b)(iv) Royalty income 2,748,944 2,621,434 - - 8.36(b)(v) Dividend income 78,147 91,445 291,768 236,914 Licence fee income 8,118,606 7,404,662 - - Management fee income - - 89,949 54,609 IAS25 Rental income from investment property 200,718 86,798 75 179

23,743,683

19,326,112

381,809

291,722

32. PROFIT BEFORE TAX

a) Profit before tax is stated after charging / (crediting):


2009 2008 2009 2008

RM RM RM RM

CA9.1(j) Allowance for doubtful debts: - related parties - - - - - other than related parties 9,438 13,578 - - 4.30(b) Amortisation of goodwill included in

other expenses #

391,289

471,051

-

- CA9.1(f) Amortisation of other intangible assets

included in: #

- cost of sales 1,241,168 918,276 - - - other expenses 199,918 114,628 - - CA9.1(q) Auditors’ remunerations 250,900 250,700 25,000 20,000 CA9.1(j) Bad debts written off 2,512 1,081 - - 15.78(f) Compensation for impaired property,

plant and equipment

(1,203)

-

-

- 7.40(b) Contract costs recognised # 1,352,588 1,166,701 - - 2.40(a) Cost of inventories recognised as expense 171,678 380,226 - - CA9.1(o) Directors’ remunerations: - fees 180,000 120,000 - - - salaries, bonuses and allowances 231,450 201,300 - - - defined contribution plan 25,500 23,540 - - 8.36(b)(v) Dividend income (1,718) (2,105) - - 1.83, 14.15(c)

Depreciation of property, plant and equipment #

1,228,514

876,403

469

492



1.8(e) 1.46(b),(c)


53


2009 2008 2009 2008

RM RM RM RM

6.42(a) Exchange loss (gain): - realised - unrealised

48,903 90,459

(50,490) 79,948

5,605

-

4,930

- CA9.1(h) (Gain) / Loss on disposal of: - property, plant and equipment (760) (1,088) (152) 28 - investment property (2,659) (173) - - - land held for development (14) - - - - other investments (64,242) (15,914) (24,474) 5,011 - subsidiary (1,459) - 293,051 - 31.30 Government grant deducted against

promotional expenses (Note c)

(100)

-

-

- 31.30 Government grant recognised as other

income (Note c)

(100)

-

-

- CA9.1(g) Hire of plant and machinery 2,500 5,890 - - 8.36(b)(iii) Interest income from bank deposits (657) (718) - - 2.40(c) Inventories written down to net realisable

value

31,250

45,303

-

- 23.115(a) Impairment losses recognised, included in

other expenses, of: # - goodwill - property, plant and equipment - land held for development - other intangible assets

37,961 2,046

- -

- 643

14,558 986

- - - -

- - - -

32.50(b) Property development costs recognised # 8,010,989 5,145,983 - - 20.85(b) Provision for legal costs 347 - - - 20.85(b) Provision for warranties 113,718 91,634 - - CA9.1(g) Rental of premises 3,769 2,090 - - 4.30(b) Research and development costs

expensed off

39,895

19,998

-

- CA9.1(j) Reversal of allowance for doubtful debts (348) (732) - - 23.115(b) Reversal of impairment losses, included

in other income, of: # - property, plant and equipment - land held for development - other intangible assets

(303) (14,558)

(895)

- - -

- - -

- - -

2.40(d) Reversal of inventories written down* (14,694) (21,600) - - 20.85(d) Reversal of provision for warranties (72,911) (31,695) - - 1.83 Staff costs (Note d) # 490,010 342,001 58,975 38,305

2.17(e) * Inventories written down in prior financial year have been reversed during the financial year as

the management has successfully secured a higher sales amount for those slow-moving inventories.

2.40(b) # These items are disclosed on the face of the income statements if the entity chooses to present income statements by the nature of expenses.



1.8(e) 1.46(b),(c)


54

27 b) Finance costs


2009 2008 2009 2008

RM RM RM RM Interest expense on: Term loans 55,439 62,288 10,172 12,716 Bank overdrafts 28,322 23,411 4,914 5,432 Hire purchase 6,966 7,226 - - Finance lease 7,652 8,026 - - Other short-term bank borrowings 137,410 156,608 15,418 6,114 235,789 257,559 30,504 24,262

Less interest expenses capitalised under: Property, plant and equipment (325) (642) - - Property development costs (714) (368) - -

(1,039) (1,010) - -

Amount charged to income statements

234,750

256,549

30,504

24,262

Finance costs capitalised as part of the cost of the qualifying assets arose from funds that are

borrowed generally. The finance costs capitalised are determined by applying a capitalisation rate of 7% (2008: 7.5%) to the expenditures on that asset.

c) Government Grants

31.40(b) *1 If the government grant related to income is presented as a credit in the income statements

During the financial year, a subsidiary obtained a grant of RM10,000 in respect of approved promotional expenditure for promoting Malaysian brands overseas. The grant is presented as a component of the other income on the income statements.

31.40(b) 31.30

*2 If the government grant related to income is deducted in reporting the related expense During the financial year, a subsidiary obtained a grant of RM10,000 in respect of approved promotional expenditure for promoting Malaysian brands overseas. The grant is deducted in reporting the related promotional expenditures, included in other expenses:


2009 2008 2009 2008

RM RM RM RM

Promotional expenses before deduction of

grant

17,456

6,891

-

- Grant recognised (10,000) - - -

Promotional expenses after deduction of grant

7,456

6,891

-

-



1.8(e) 1.46(b),(c)


55

d) Staff costs


2009 2008 2009 2008

RM RM RM RM

Salaries, bonuses and allowances 351,696 226,717 53,742 34,489 29.47 Contribution to defined contribution plan 37,123 26,378 4,385 3,299 Expenses on defined benefits plan 37,693 31,270 - - 29.147 Termination benefits 769 - - - Other employees benefits 62,729 57,636 848 517

490,010

342,001

58,975

38,305

33. INCOME TAX EXPENSE THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM 25.77 Current tax expense 25.78(a) Current year - Malaysia 655,499 580,664 7,869 10,239 CA9.1(l) - payable outside Malaysia 300,457 256,348 - - Share of tax expense in - associates 49,654 19,681 - - - jointly-controlled entities 75,734 74,931 - - 1,081,344 931,624 7,869 10,239 25.78(b) Under (over) provision in prior years 3,076 (4,801) - (10,239)

1,084,420 926,823 7,869 -

Deferred tax expense 25.78(c) Temporary differences 193,176 316,790 - - 25.78(d) Changes in tax rates 2,101 - - -

195,277 316,790 - -

Total income tax expense

1,279,697

1,243,613

7,869

-



1.8(e) 1.46(b),(c)


56

25.79(c)(i) The income tax expense is reconciled to the accounting profit at the applicable tax rate as follows:


2009 2008 2009 2008

RM RM RM RM

Profit before tax 8,278,297 6,043,207 179,723 131,309

Tax at domestic income tax of 28% (2008:

28%) #

2,317,923

1,692,098

50,322

36,767 Tax effects of:

25.79(d) Changes in tax rates for certain overseas subsidiaries

2,101

-

-

-

Non-taxable income (31,114) (36,767) (57,549) (44,301) Non-deductible expenses 417,659 420,692 15,096 17,773 Tax incentives (1,057,267) (608,738) Utilisation of previously unrecognised

tax losses

(276)

(127)

-

- Differential tax rate for: - small & medium companies in Malaysia (200) (200) - - - subsidiaries in foreign countries (359,806) (218,544) - - - property gain tax (12,399) - - - Under (over) provision in prior years 3,076 (4,801) - (10,239)

Total income tax expense

1,279,697

1,243,613

7,869

-

# Assumption tax rate

34. DIVIDENDS 1.85 1.74(c) 19.11

On 1 April 2009, the Company paid a 10% final tax exempt dividend (total dividend of RM1,105,020) in respect of the previous financial year. The net dividend per share was 10 sen. On 31 August 2009, the directors declared a 10% interim tax exempt dividend (total dividend of RM1,132,020) in respect of the current financial year. The dividend was paid to the shareholders registered on 31 October 2009. The net dividend per share was 10 sen. The directors have proposed a 10% final tax exempt dividend in respect of the current financial year. The dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting and has not been included as a liability in the financial statements. Total dividend payable is RM1,132,020, and the net dividend per share is 10 sen.



1.8(e) 1.46(b),(c)


57

11.47(b) 35. ACQUISITION OF SUBSIDIARY On 1 June 2009, the Company acquired the entire equity interest in AXP Property Sdn. Bhd., a

company incorporated in Malaysia and principally engaged in property investment and development, for a total consideration of RM1,500,000. The goodwill arising from the acquisition of AXP Property Sdn. Bhd. is attributable to the anticipated profitability of the acquired business and synergy expected to arise from the acquisition to the Group’s business in accordance with the Group’s intention to diversify into property development and investment segment. The net assets acquired in the transaction, goodwill and cash flow arising therefrom, are as follows:

At date of acquisition

RM

5.40(d) Property, plant and equipment 500,233 5.40(d) Investment property 1,217,852 Land held for development 1,495,060 Property development costs 987,342 5.40(d) Trade and other receivables 112,368 5.40(c) Cash and bank balances 771 5.40(d) Trade and other payables (227,684) Progress billings (300,000) 5.40(d) Current tax liabilities (23,469) 5.40(c) Bank overdrafts (800,519) Other bank borrowings (2,790,306) 5.40(d) Deferred tax liabilities (68,900)

102,748

Goodwill on consolidation 1,397,252

5.40(a)

Purchase consideration

1,500,000

Less: Purchase consideration satisfied by issuance of shares (1,000,000)

Purchase consideration satisfied by cash

500,000

5.40(b) Cash and cash equivalents acquired 799,748

Acquisition of subsidiary, net of cash acquired

1,299,748



1.8(e) 1.46(b),(c)


58

The effects of the acquisition on the financial position as at the balance sheet date are as follows:

At 31.12.2009

RM

Property, plant and equipment 543,234 Land held for property development 455,719 Property development costs 691,144 Investment property 543,607 Trade and other receivables 345,678 Cash and bank balances 4,324 Trade and other payables (265,890) Progress billings (97,597) Current tax liabilities (45,678) Bank overdrafts (657,890) Other bank borrowings (904,784)

Deferred tax liabilities (68,901)

Increase in Group’s net assets

542,966

The effects of the acquisition of AXP Property Sdn. Bhd. on the financial results of the Group during

the financial year are as follows:

RM

Revenue 1,147,392 Expenses (860,844)

Increase in Group’s net profit

286,548



1.8(e) 1.46(b),(c)


59

36. DISPOSAL OF SUBSIDIARY On 1 December 2009, the Company disposed off its entire interest in a subsidiary, AE Packaging

Sdn. Bhd.

The net assets of AE Packaging Sdn. Bhd. at the date of disposal were as follows:

1.12.2009

RM

5.40(d) Property, plant and equipment 839,808 Inventories 543,788 5.40(d) Trade and other receivables 212,566 5.40(c) Cash and bank balances 1,986 5.40(d) Trade and other payables (880,600) 5.40(d) Current tax liabilities (17,166) 5.40(c) Bank overdrafts (201,716) Other bank borrowings (416,238) 5.40(d) Deferred tax liabilities (37,543) 5.40(d) Attributable goodwill 176,930

Net assets of AE Packaging Sdn. Bhd.

221,815

Gain on disposal 1,459

5.40(a)

Total consideration

223,274

5.40(b) Cash and cash equivalents disposed off 199,730

Proceeds from disposal of subsidiary, net of cash disposed

423,004

37. PURCHASES OF PROPERTY, PLANT AND EQUIPMENT THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

Purchases of property, plant and

equipment

4,264,626

748,665

677

1,088 Less interest expense capitalised (325) (642) - - 5.43 Less purchases made directly by: Long-term borrowings * (142,219) (35,799) - - Hire purchases (413,758) (117,688) - -

Purchases of property, plant and equipment made by cash payments

3,708,324

594,536

677

1,088

5.44(b)

* Note: If the assets are acquired by directly assuming the related borrowings, the transaction is deemed to be a non-cash transaction.



1.8(e) 1.46(b),(c)


60

5.45 38. CASH AND CASH EQUIVALENTS THE GROUP THE COMPANY

2009 2008 2009 2008

RM RM RM RM

Fixed deposits with licensed banks 206,625 271,791 - - Cash and bank balances 97,305 215,132 128 214 Bank overdrafts (280,316) (324,225) (36,068) (44,396)

23,614 162,698 (35,940) (44,182) 5.48 Less: Fixed deposits pledged (3,540) (3,540) - - 5.48 Less: Cash at bank held under Housing

Development Account

(56,965)

(176,870)

-

-

Cash and cash equivalents as previously reported

(36,891)

(17,712)

(35,940)

(44,182)

5.28 Effect of foreign exchange rate changes 432 389 - -

(36,459)

(17,323)

(35,940)

(44,182)

15.79(d)

39. COMMITMENTS As the balance sheet date, the Group and the Company have the following commitments for the acquisition of the property, plant and equipment:


2009 2008 2009 2008

RM RM RM RM

Contracted but not provided for 66,504 48,040 8,593 6,594 Authorised but not contracted for 124,000 324,000 - -

190,504

372,040

8,593

6,594

16.59 The Group’s share of the capital commitments for the acquisition of the property, plant and

equipment of the jointly-controlled entities are as follows: THE GROUP

2009 2008

RM RM

Contracted but not provided for 459,000 982,000 Authorised but not contracted for 212,000 36,000

671,000

1,018,000



1.8(e) 1.46(b),(c)


61

5.34 (a) & (d)

The total minimum lease payments under non-cancellable operating leases of the Group for the leasing of certain of the office premises, with an average lease term of 8 years, is as follows:


2009 2008 2009 2008

RM RM RM RM

Within one year 5,430 4,390 - - Later than one year and not later than

five years

34,500

28,610

-

- Later than five years 12,390 20,010 - -

52,320

53,010

-

-

40. CONTINGENT LIABILITIES

16.58 Contingent liabilities arising from the interest in jointly-controlled entities

THE GROUP

2009 2008

RM RM

Unsecured - Guarantee given to banks in respect of bank facilities utilised by

AXP-China Co., Ltd.

31,040

45,210 - Guarantee given to suppliers of AXP-Singapore Pte. Ltd. in

respect of facilities utilised

7,620

4,320

38,660

49,530

12.36 Contingent liabilities arising from the interest in associates

THE GROUP

2009 2008

RM RM

Unsecured - Guarantee given to an offshore bank for bank facilities utilised by

SERP Sdn. Bhd.

605,040

543,790 - Guarantee given to the creditors of AE (HK) Limited jointly with

other investors

4,360

3,520

609,400

547,310

Contingent liabilities of the Company

THE COMPANY

2009 2008

RM RM

Unsecured - Guarantee given to subsidiaries for bank facilities granted 354,789 458,791



1.8(e) 1.46(b),(c)


62

20.87 During the financial year, a customer of a subsidiary took legal action against the said subsidiary for default in payment of the warranty claims to the said customer amounting to RM40,000. However, based on legal opinion and the warranty agreement, the said subsidiary has a merit to win the legal suit. Thus, no provision has been made in the financial statements of the Group. However, associated legal costs have been accrued in the balance sheet.

19.19

41. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE Subsequent to the balance sheet date, a) the Company has obtained the court approval to appeal against a legal suit won by a creditor at

the balance sheet date. Total amount claimed by the creditor is RM200,000. No provision has been made in the financial statements as the advocator of the Company estimates that the Company has a good chance to win the litigation.

19.21 b) the Company has entered into an agreement with third parties to acquire the entire interest in Be

Good Limited, a company incorporated in Bermuda, for a total cash consideration of RM5 million. This company is principally an investment holding company with investment in several companies in North America involving in software development and consultancy services. The proposed acquisition is expected to strengthen the Group’s present in the software industry in this region. The acquisition of the interest will be funded by internally generated fund and issue of shares as disclosed in note (c) below and is expected to be completed in the second quarter of the financial year ending 31 December 2010 if the proposed acquisition is approved by the relevant authorities and the shareholders of the Company.

c) the directors of the Company proposed to issue additional 660,100 new ordinary shares of

RM1.00 each at RM5.00 per ordinary share via 2-for-1 Right Issue and 200,000 new ordinary shares of RM1.00 each at RM5.00 per ordinary shares to selected institutional investors to partly finance the acquisition of Be Good Limited. The new shares to be issued rank pari passu in respect of the distribution of dividends and repayment of capital with the existing shares.

d) one of the Group’s debtors has gone into liquidation. The total outstanding amount due from

this debtor amounts to RM50,000. Of the total outstanding amount, the Group expects to recover approximately RM20,000. An allowance for doubtful debt has been made for the estimated unrecoverable amount.

19.16

42. AUTHORISATION FOR ISSUE OF THE FINANCIAL STATEMENTS The financial statements of the Company were authorised for issue by the Board of Directors on 31 January 2010.

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