asiaep bhd asiaep bhd (company no. 253387-w) asiaep annual report 2011 chairman’s statement...

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ASIAEP BHD (Company No. 253387-W)

asiaEP Annual Report 2011

Contents

Page

Chairman’s Statement 02

Corporate Information 04

Our Executive Chairman and Managing Director 05

Profile of Directors 06

Statement of Corporate Governance 09

Additional Compliance Information 13

Audit Committee Report 16

Statement on Internal Control 18

Financial Statements 19

Analysis of Shareholdings 91

List of Properties 97

Notice of Annual General Meeting 98

Statement Accompanying Notice of AGM 101

Proxy Form 102

asiaEP Annual Report 2011 2


Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul Razak Executive Chairman

Dear Shareholders,On behalf of the Board of Directorsof as iaEP Berhad, I have thepleasure of presenting to you theAnnual Repor t and F inancia lStatements of asiaEP Berhad and itsGroup of Companies for the financialyear ended 28 February 2011.

As shown in our previous quarterly reports, due to thespillover effect into the local economy from the currentvolat i l i ty of the global economies and the caut iousworldwide market sentiments, the financial year ended28 February 2011 has been a challenging year for theGroup.

At the same time, we are looking positively on the EconomicTransformation Program initiated by the Government toassist in promot ing the overal l growth of the localeconomy.

Financial Highlight

In view of the market uncertainties, the Board of Directors, reflecting its prudent stance, took a major decision duringthe financial year ended 28 February 2011, by making a huge impairment on to the intangible asset. In this respect,upon the additional impairment amount of RM28.3 million being taken in, the Group registered a total loss of RM33.1million.

The decline in the Group turnover from RM9.86 million as for the financial year ended 28 February 2010 to RM8.27million, as registered during the financial year ended 28 February 2011 and the necessity of maintaining a high levelof administration expenses for ensuring smooth operations of the Group, also contributed towards the Group loss ofRM4.8 million before taking into account the above-mentioned impairment.

Chairman’s Statement

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Chairman’s Statement (continued)

Industry Outlook and the Group’s Future Strategies

Besides maintaining our on-line business, the Board of Directors is in consensus that there is an urgent needto diversify the business risks of the Group with the purpose of enhancing future shareholders’ values. Inpursuit of such objective, the Group is currently looking for other avenues of growth such as investing insectors with potential for generating profits.

At this juncture, the Group has identified one potentially lucrative venture in the sector of iron ore-mining. Ourfirst announcement about the subject was made on 1st April 2011 which indicated our proposal to take over41% of shareholding in Global Mineral Technologies Sdn Bhd. However, this proposed acquisition is subjectto the satisfaction of all conditions precedent mentioned therein.

Current Year Prospects

The Board anticipates that the growth prospect of the Group continues to be challenging for the financial yearending 28 February 2012, subject also to the timing for the realisation of the prospective new ventures.

Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul RazakExecutive Chairman



Registered OfficeNo. 18 & 20 Jalan TK 2/1CTaman Kinrara Seksyen 247180 Puchong, SelangorMalaysiaTel : 603 - 8075 6213 (hunting line)Fax: 603 - 8070 5668

Company SecretariesWong Youn KimSin May Peng

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

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

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

Affin Bank Berhad

SolicitorsKadir, Andri & PartnersAdvocates & Solicitors8th Floor, Menara Safuan80 Jalan Ampang50450 Kuala LumpurMalaysia

Stock Exchange ListingACE MarketBursa Malaysia Securities Berhad

Websitewww.asiaEP.com

Corporate InformationCorporate Information

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Dr Tan Boon NuntManaging Director

Our Executive Chairman and Managing Director

Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul RazakExecutive Chairman



Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul RazakExecutive ChairmanMalaysian, Aged 62

Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul Razak was previously the Secretary General of the Ministry ofForeign Affairs Malaysia. He joined the Ministry of Foreign Affairs, mainly in the Political Division, and at theMalaysian Missions abroad in Moscow, the Hague, Canberra, Washington and Dhaka.

Tan Sri Ahmad Fuzi has previously also served as Director General, Institute of Diplomacy and ForeignRelations Malayisa; Ambassador-at-Large; Malaysia’s Representative to the ASEAN High Level Task Force(HLTF) on the Drafting of the ASEAN Charter and Malaysia’s Representative to the High Level Panel (HLP)on the Drafting of the Terms of Reference of the ASEAN Human Rights Body.

He was formerly Member, the Board of BERNAMA; PROTON; the Malaysian-Thailand Joint Authority (MTJA);the Maritime Institute of Malaysia (MIMA); the Board of Advisors, Institute of Diplomacy and Foreign Relations(IDFR); the Board of Trustee, World Islamic Economic Forum (WIEF); International Advisory Panel (IAP) ofthe WIEF; Chairman, AmanahRaya Capital Group Sdn Bhd; Chairman, Al-Nibras Limited and IndependentNon-Executive Director, LCL Corporation Berhad.

Tan Sri Ahmad Fuzi is currently the Secretary General of the World Islamic Economic Forum Foundation(WIEF); Chairman, Amanahraya-Reit; Chairman, Seremban Engineering Berhand; Executive Chairman,AsiaEP Bhd; Chairman, PKT Logistics (M) Sdn Bhd; Non-Executive Chairman, Sofgen Sdn Bhd; Chairman,Leisure Guide Publishing Sdn Bhd; Independent Non-Executive Director, Puncak Niaga Holdings Berhad;Non-Executive Director, Management Development Institute of Singapore; Member, Board of Trustees, F3Strategies Berhad; and Member, Advisory Board, Asia Pacific Entrepreneurship Award (APEA).

Tan Sri Ahmad Fuzi is also a Distinguished Fellow, Institute of Strategic and International Studies (ISIS);Distinguished Fellow, Institute of Diplomacy and Foreign Relations; Deputy Chairman, Malaysian MemberCommittee of the Council for Security Cooperation in the Asia Pacific (CSCAP Malaysia); Member, Board ofTrustees MERCY, Malaysia; President, Association of Former Malaysian Ambassadors (AFMA) and AdvisorHigh School Bukit Mertajam Alumni Malaysia.

He holds a Bachelor of Arts Degree (Honours) from the University of Malaya (1972) and a Certificate inDiplomacy (Foreign Service Course) from the University of Oxford (1974).

In recognition of his service to the nation, he was awarded the AMN (1979), the JSM (1999), the DSPN(1999), the DMPN (2002) and the PSM (2003).

Born on 8 January 1949, Tan Sri Ahmad Fuzi is married to Puan Sri Khadijah bt. Mohd. Nor and has twochildren.

Tan Sri Ahmad Fuzi does not have any family relationship with any Director and / or substantial shareholderof the Company or any conflict of interest with the Company. He has not been convicted of any offences in thelast ten (10) years, other than traffic offences (if any).

Profile of Directors

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Profile Directors (continued)

Mr. Khor Chai TianIndependent Non-Executive DirectorMalaysian, Aged 49

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

He was Executive Director of Master-Pack Group Bhd from 1995 to 2004. Currently, he is an ExecutiveDirector of Master Advisory Services Sdn Bhd and Oceanpac Sdn Bhd.

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

Dr Tan Boon NuntManaging Director/ Chief Executive OfficerMalaysian, Aged 53

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

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

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

Madam Lee Suet HongExecutive Director/ Chief Operating OfficerMalaysian, Aged 55

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

Madam Lee started her career as a Personal Assistant to the Managing Director of Atkinson Pte Ltd in Londonfrom 1978 to 1979. She held senior management and administrative positions in several public listed companiesbefore joining the company.

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



Mr. Lim Ghim ChaiIndependent Non-Executive DirectorMalaysian, Aged 36

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

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

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

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

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

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

Mr Chu Kheh WeeIndependent Non-Executive DirectorMalaysian, Aged 41

Mr. Chu Kheh Wee was appointed to the Board of the Company as an Independent Non-Executive Director on 22 July 2009.

He is a Associate member of the Chartered Institute of Management Accountants (CIMA) and the Chartered Accountant ofMalaysian Institute of Accountants (MIA).

Mr Chu has vast experience working with industries of property development/construction, hotel development and managementand oil/gas throughout his career.

He worked as the Senior Finance Manager of Worthy Builders since October 2000.Subsequently he joined Oilcorp BerhadGroup in May 2002 as Senior Manager - Corporate Finance and he was designated as Chief Financial Officer of D’Tiara CorpLimited in Year 2007 before he left the group in end of year 2008.

At present, he is director of Tracklink Resources Sdn Bhd, a trading cum business consultant service provider. He is alsoappointed as the Independent Director of Sumatec Resources Bhd.

Mr. Chu does not have any family relationship with any Director and / or substantial shareholders of the Company or anyconflict of interest with the Company. He has not been convicted of any offences in the last ten (10) years, other than trafficoffences (if any).

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

The Statement below sets out how the Company has applied the Key Principles of the Malaysian Code on CorporateGovernance (“the Code”) and how the Board has complied with the Best Practices set in the Code for the financial yearended 28 February 2011.

a) BOARD OF DIRECTORS

The Board of Directors consists of six (6) dedicated members, comprising of Executive Chairman, CEO/ManagingDirector, Executive Director and three Independent Non-Executive Directors.

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

The role and responsibilities of the Executive Chairman is assumed by Tan Sri Dato’ Ahmad Fuzi bin Haji AbdulRazak whilst as for the Managing Director is by Dr. Tan Boon Nunt.

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

i) Board Meetings

Since the Company’s previous financial year end, the Board has met six (6) times for the financial yearended 28 February 2011.

The records of attendance of each Director at Board Meetings held during the financial year ended 28February 2011 are disclosed below:

Director (s) Number of Meeting(s) attended PercentageTan Sri Dato’ Ahmad Fuzi bin Haji Abdul Razak 6 out of 6 100%Dr Tan Boon Nunt 6 out of 6 100%Madam Lee Suet Hong 6 out of 6 100%Mr. Khor Chai Tian 6 out of 6 100%Mr. Lim Ghim Chai 5 out of 6 83%Mr. Chu Kheh Wee 6 out of 6 100%

ii) Supply of Information

The Directors have full and timely access to information concerning the Company. Agenda of meetingsand discussion papers are circulated prior to Board meetings to provide adequate time for the Directors tostudy and evaluate the matters to be discussed.

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

iii) Identification of the Senior Independent Non-Executive Director

In order to provide an avenue to the shareholders to convey their concerns, the Board has identified Mr KhorChai Tian who is currently the Chairman of the Audit Committee, to act as the Senior Independent Non-Executive Director, serving as an alternative for shareholders to convey their concerns and seek clarificationsfrom the Board.

Statement of Corporate Governance



vi) Remuneration Committee

The Remuneration Committee was established on 16 February, 2004. The members are MrKhor Chai Tian (Independent Non-Executive Director), Mr Lim Ghim Chai (Independent Non-Executive) and Madam Lee Suet Hong (Executive Director / Chief Operating Officer).

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

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

The Remuneration Committee conducted a meeting on 30 April 2010 during the financial year.

vii) Training for Directors

All the Directors have attended the Mandatory Accreditation Programme (MAP) as prescribed under theListing Requirements of the Bursa Malaysia Securities Berhad.

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

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

On 28th October 2010, all board members attended a workshop called “Business Protocol : Weatheringthe Ever Challenging Corporate Environment” at the Malaysian Petroleum Club in Kuala Lumpur.

iv) The Board and Board Committees

In order to assist the Board in the discharge of its duties effectively, the Board has formal anddelegated specific functions to the Board Committees, namely the Nomination Committee,Remuneration Committee and Audit Committee. Each committee operates within its clearlydefined terms of reference conferred by the Board. The Chairman of the various Committeesreports to the Board on the outcome of the Committee meetings.

v) Nomination Committee

The Nomination Committee was formed on 16 February 2004. The members are Mr Khor Chai Tian(Independent Non-Executive Director) and Mr Lim Ghim Chai (Independent Non-Executive Director).

The Nomination Committee shall be appointed by the Board from amongst the Directors of the Companyand shall consists exclusively of a minimum of two (2) non-executive directors, majority of whom areindependent. The members of the Nomination Committee shall elect the Chairman from among their numberwho shall be an independent director. The majority of members present in the Commitee must be independentdirectors in order to form a quorum.

The functions of the Nomination Committee is to recommend the suitability of an individual to be appointedto the Board and to assess not only the performance of each Director on an on-going basis but the effectivenessof the whole Board and other Board Committees as a whole. The Board of Directors have full responsibilityin considering the approval on each nomination taking into account the individual’s skills, knowledge,expertise, experience, professionalism, integrity and suitability in filling the particular position.

The Nomination Committee conducted a meeting on 30 April 2010 during the financial year.

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c) SHAREHOLDERS

i) Relations with Shareholders and Investors

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

ii) Annual General Meeting (AGM)

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

d) ACCOUNTABILITY AND AUDIT

i) Financial Reporting

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

viii) Appointment and Re-election

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

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

b) DIRECTORS’ REMUNERATION

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

A summary of the remuneration of the Directors for the financial year under review, distinguishing betweenExecutive and Non-Executive Directors in aggregate with categorization into appropriate components is setout below:

Directors’ Remuneration Executive Director Non-Executive Director Total

Directors’ Fee (RM’000) - 72 72 Salaries and Other Emoluments (RM’000) 916 - 916

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

Remuneration Range Executive Director Non-Executive Director

Below RM50,000 - 3RM50,001-RM100,000 1 -RM350,001-RM400,000 1 -RM400,001-RM450,000 1 -

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



iii) Internal Control

The Board recognises the importance of internal control systems to safeguard the shareholders’ investment and theCompany’s assets. As at to date, the Board is comfortable with the current systems of internalcontrol in the Group. Nonetheless, The Board will improve the internal controls of the Group continuously.

iv) External Auditors

The Board has established a transparent relationship with the external auditors through the Audit Committee.The Audit Committee has the right to communicate directly with the external auditors for ensuring compliance withthe accounting standards and other related regulatory requirements are addressed objectively.

v) Statement of Compliance with the Best Practices of the Code

Except for the non-disclosure of individual director’s remunerations which the explanation thereto has beenprovided in the foregoing, the Board believes that all material aspects of the best practices set out in Part 2 ofthe Revised Code have been complied with during the financial year.

ii) Statement of Directors’ Responsibility in the Financial Statements

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

In the preparation of the financial statements for the year ended 28 February 2011, the Directors are satisfiedthat the Company had used appropriate accounting policies that are consistently applied and supported byreasonable and prudent judgement and estimates.

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1. CONFLICT OF INTEREST

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

2. CONVICTIONS FOR OFFENCES

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

3. SHARE BUY BACKS

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

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

4. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

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

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

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

6. IMPOSITION oF SANCTIONS / PENALTIES

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

7. NON-AUDIT FEES

There was no non-audit fees paid to the External Auditors, Messrs Baker Tilly Monteiro Heng during the financialyear ended 28 February 2011.

8. PROFIT ESTIMATE, FORECAST OR PROJECTION

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

9. MATERIAL CONTRACTS

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

Additional Compliance InformationAdditional Compliance Information



10. PROFIT GUARANTEE

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

11. CONTRACTS RELATING TO LOAN

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

12. REVALUATION OF LANDED PROPERTIES

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

13. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES OR PRACTICES

The Group was actively involved in corporate social responsibilty activities or practices during the financialyear ended 28 February 2011.

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

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

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

14. RECURRENT RELATED PARTY TRANSACTIONS STATEMENT

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

15. MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

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

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16. UTILISATION OF PRIVATE PLACEMENT PROCEEDS

On 27 January 2011, the Company annouced that it proposed to undertake a private placement exercise of up to 72,568,496ordinary shares at par value RM0.10 each in asiaEP (“asiaEP Shares”) representing up to 10% of the issued and paid-upshare capital (excluding treasury shares) of asiaEP. On 10 February 2011, the Company announced that Bursa Malaysiahad, vide its letter dated 9 February 2011, given its approval-in-principle for the listing and quotation.

On 10 February 2011, the Company announced that the issue price for the first tranche placement of 5,000,000 new ordinaryshares of RM0.10 each (“Placement Shares”) at RM0.10 per Placement Share.

on 3 March 2011, the Company announced that the issue price for the second tranche placement of 3,000,000 new ordinaryshares of RM0.10 each (“Placement Shares”) at RM0.10 per Placement Share.

on 22 April 2011, the Company announced that the issue price for the third tranche placement of 3,000,000 new ordinaryshares of RM0.10 each (“Placement Shares”) at RM0.10 per Placement Share.

As at the date of this report, the Company had placed out 11,000,000 placement shares out of 72,568,496 proposed numberas mentioned above.

The following are the allotment details of the shares concerned :

Allotment Date Quotation Date1st tranche - 5,000,000 shares 11/02/2011 16/02/20112nd tranche - 3,000,000 shares 04/03/2011 09/03/20113rd tranche - 3,000,000 shares 25/042011 28/04/2011

As at date of Notice of Meeting the Company has utilised approximately 87.2% of the proceeds from the private placement.

Amount Allocated Amount Utilised BalancePurpose RM’000 RM’000 RM’000

i. Working Capital 1,030.0 902.0 128.0 ii. Defray Private Placement Expenses 70.0 57.4 12.6

1,100.0 959.4 140.6



Audit Committee Report

The Audit Committee comprises the following:-

Members

Mr Khor Chai Tian (Chairman) (Independent Non-Executive Director)Mr Lim Ghim Chai (Independent Non-Executive Director)Mr Chu Kheh Wee (Independent Non-Executive Director)

AUDIT COMMITTEE TERMS OF REFERENCE

COMPOSITION

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

The members of the Committee shall also possess the requisite qualification and experience that meet theprescribed requirements of Bursa Malaysia Securities Berhad for the ACE Market from time to time in force.

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

CHAIRMAN

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

MEETINGS

The Committee shall meet at least 4 times a year. The Executive Directors, Accountant, Representative of theinternal auditors may be present in any meeting upon the invitation of the Committee.

SECRETARY

The Company Secretary shall be the Secretary of the Committee.

QUORUM

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

AUTHORITY

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

The Committee shall have the resources and shall be allowed to obtain independent professional or otheradvice as deemed necessary to assist the Committee in fulfilling its responsibilities at the cost of the Company.

The Committee shall also have full and unrestricted access to the Chief Executive Officer and any informationpertaining to the Company. The Committee shall also have direct communication channels with the externalauditors and person(s) carrying out the internal audit function or activity. Whenever necessary, the Committeemay also convene meetings with the external auditors, the internal auditors or both, without the attendanceof the other directors and employees of the Company.

DUTIES

The duties of the Audit Committee are :-1) Report to the Board of Directors after review the following :-• the audit plan with the external auditors;• the evaluation of the internal control system with the external auditors;• the External Auditors’ audit report and any management letter from the external auditors to the Company

and the management’s response to such letter;

Audit Committee Report

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VARIATION IN RESULTS

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

RECURRENT RELATED PARTY TRANSACTION

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

SUMMARY OF ACTIVITIES OF THE COMMITTEE DURING THE FINANCIAL YEAR ENDED 28 FEBRUARY 2011

During the financial year under review, the Committee convened six (6) meetings. Details of attendance are as follows:-

Committee Members No. of meetings attended

Mr. Khor Chai Tian 6/6Mr. Lim Ghim Chai 5/6Mr. Chu Kheh Wee 6/6

STATEMENT VERIFYING ALLOCATION OF OPTIONS

The Committee has reviewed and verified that the allocation of share options pursuant to the Employees Share OptionScheme (ESOS) for the financial year ended 28 February 2011 was made in accordance with the criteria as set out inthe By-Laws of the Company’s ESOS.

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

Internal Audit Function

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

During the financial year, the report on 28 February 2011 was presented to the Audit Committee.

• the assistance given by the employees of the Company to the external auditor;• the adequacy of the scope, functions, competency and resources of the internal audit function and that

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

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

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

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

2) Recommend to the Board the nomination, appointment or reappointment of the External Auditors and any question of their resignation and termination; and

3) Perform any other duties as may be agreed by the Committee and the Board of Directors

REVIEW OF THE AUDIT COMMITTEE

The term of office and performance and each of its members of the Audit Committee shall be reviewed by the Board at least oncein every 3 years to determine whether the Committee and members have carried out their duties in accordance with their termsof reference.



INTRODUCTION

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

The Board of Directors is pleased to present the Statement on Internal Control of the Group which outlines the keyelements of internal control for the year ended 28 February 2011. This statement has been prepared in accordance withthe Guidance and the Listing Requirements of Bursa Securities.

RESPONSIBILITY OF THE BOARD

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

RISK MANAGEMENT FRAMEWORK

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

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

INTERNAL AUDIT FUNCTION

The Group has appointed HMC Governance Sdn Bhd, an external professional firm as internal auditor. The InternalAudit function reports directly to the Audit Committee, carries out regular review of business process to assess theeffectiveness of internal controls and highlights any significant risk that may adversely affect the Group. Whenevernecessary, the Audit Committee reviews and discusses with key management on the issues brought up by the InternalAudit function.

For the financial year ended 28 February 2011, the amount of fees incurred in respect of the internal control reviewperformed by the professional firm was RM18,000.

KEY ELEMENTS

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

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

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

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

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

CONCLUSION

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

Statement on Internal Control

19



Contents Page

Directors’ Report 1 - 7

Financial Statements

Statements of Financial Position 8

Statements of Comprehensive Income 9 - 10

Statements of Changes in Equity 11 - 12

Statements of Cash Flow 13 - 15

Notes to the Financial Statements 16 - 66

Supplementary Information on the Disclosure

of Realised and Unrealised Profits or Losses 67

Statement by Directors 68

Statutory Declaration 69

Independent Auditor’s Report 70 - 71

Financial Statements

REPORTS AND FINANCIAL STATEMENTSFOR THE YEAR ENDED 28TH FEBRUARY 2011

ASIAEP BHD.(Incorporated in Malaysia)

1

Company No. 253387 - W

asiaEP BERHAD

(Incorporated in Malaysia)

DIRECTORS' REPORT

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

Group and of the Company for the financial year ended 28th February 2011.

PRINCIPAL ACTIVITIES

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

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

are disclosed in Note 6 to the financial statements.

There have been no significant changes in the nature of these principal activities during the

financial year.

RESULTS

Group Company

RM'000 RM'000

Net loss for the financial year (33,078) (56,690)

Other comprehensive income (21) -

Total comprehensive loss (33,099) (56,690)

Attributable to:

Owners of the parent (33,099) (56,690)

Minority interests - -

(33,099) (56,690)

DIVIDEND

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

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

ended 28th February 2011.

RESERVES AND PROVISIONS

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

disclosed in the financial statements.

2


BAD AND DOUBTFUL DEBTS

Before the statements of comprehensive income and statements of financial position of the Group

and of the Company were made out, the directors took reasonable steps to ascertain that action had

been taken in relation to the writing off of bad debts and the making of allowance for doubtful

debts, and had satisfied themselves that all known bad debts had been written off and adequate

allowance had been made for doubtful debts.

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

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

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

CURRENT ASSETS

Before statements of comprehensive income and statements of financial position of the Group and

of the Company were made out, the directors took reasonable steps to ensure that any current

assets, other than debts, which were unlikely to be realised in the ordinary course of business, their

values as shown in the accounting records of the Group and of the Company had been written

down to an amount that they might be expected to be realised.

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

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

misleading.

VALUATION METHODS

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

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

and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

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

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

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

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

the end of the financial year.

No contingent liabilities or other liabilities of the Group and of the Company has become

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

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

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

3


CHANGE OF CIRCUMSTANCES

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

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

any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

In the opinion of the directors, other than impairment loss on investment in subsidiary companies

amounting to RM204,000/- and impairment loss on amount owing by subsidiary companies

amounting to RM52,253,000/- charged to the profit or loss, the results of the operations of the

Company for the financial year were not substantially affected by any item, transaction or event of

a material and unusual nature.

In the opinion of the directors, other than the impairment loss on intangible assets amounting to

RM28,265,000/- charged to the profit or loss, the results of the operations of the Group for the

financial year were not substantially affected by any item, transaction or event of a material and

unusual nature.

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

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

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

report is made.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the issued and paid-up ordinary share capital of the Company was

increased from RM72,911,000/- to RM73,411,000/- by way of the issuance of 5,000,000 ordinary

shares of RM0.10 each additional working capital purposes.

The new ordinary shares issued during the financial year rank pari passu in all respects with the

existing ordinary shares of the Company.

The Company has not issued any debentures during the financial year.

WARRANTS

The Company has not issued any warrant during the financial year.

Details of the warrants are disclosed in Note 11 to the financial statements.

TREASURY SHARES

The Company has not repurchased any issued share capital during the financial year.

4


EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

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

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

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

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

Prior to the Date of Expiry, on 20th August 2007, the Company approved the proposal to extend

the existing scheme for a further period of up to 3 years from the date of expiry (“Extended

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

Company’s By-Laws of the ESOS Scheme.

Prior to the expiration of the Extended Scheme, on 26th August 2010, the Company proposed to

extend the Extended Scheme for a further period of up to 4 years from the date of expiry

(“Extension”). The Extension shall be implemented in accordance with the terms of the

Company’s By-Laws of the ESOS Scheme.

The salient terms of the scheme are as follows:-

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

must have been confirmed on the date of offer.

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

Group and is non-assignable.

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

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

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

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

shares of the Company, whichever is higher.

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

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

upon giving notice in writing. In the event that the duration of the option shall be renewed,

the Date of Expiry of the option shall be that Date of Expiry as so extended or renewed.

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

that the number shall be in multiples of 100 shares.

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

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

options in any share issue of any other companies.

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

during the financial year.

5


DIRECTORS

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

of this report are:-

YB Tan Sri Dato’ Ahmad Fuzi Bin Haji Abdul Razak

Dr. Tan Boon Nunt

Lee Suet Hong

Khor Chai Tian

Lim Ghim Chai

Chu Kheh Wee

DIRECTORS’ INTERESTS

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

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

year in shares and warrants in the Company during the financial year ended 28th February 2011

are as follows:-

Number of ordinary shares of RM0.10 each

At At

1.3.2010 Bought Sold 28.2.2011

Shareholdings in the Company

Dr. Tan Boon Nunt 14,624,074 - (12,699,900) 1,924,174

Lee Suet Hong 13,802,074 - (13,802,000) 74

Shareholdings in which directors

have deemed interests through

Topclass Access Sdn. Bhd.

Dr. Tan Boon Nunt 45,787,527 5,087,508 (5,100,000) 45,775,030

Lee Suet Hong 45,787,527 5,087,508 (5,100,000) 45,775,030

Number of warrants 2006/2011

At

1.3.2010

Bought

Sold

At

28.2.2011

Dr. Tan Boon Nunt 4,295,471 - 4,295,471 -

Lee Suet Hong 2,643,405 - 2,643,405 -

6


DIRECTORS’ INTERESTS (Continued)


At

1.3.2010

Bought

Sold

At

28.2.2011

Dr. Tan Boon Nunt 4,874,907 - - 4,874,907

Lee Suet Hong 4,600,907 - - 4,600,907

Warrant holdings in which

directors have deemed interests

through Topclass Access Sdn. Bhd.

Dr. Tan Boon Nunt 2,812,509 312,501 (2,500,000) 625,010

Lee Suet Hong 2,812,509 312,501 (2,500,000) 625,010

By virtue of their interests in the shares of the Company, Dr. Tan Boon Nunt and Lee Suet Hong

are also deemed interested in the shares of all the subsidiaries to the extent the Company has an

interest.

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

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

year.

DIRECTORS' BENEFITS

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

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

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

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

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

interest.

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

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

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

corporate.

REMUNERATION COMMITTEE

The Remuneration Committee reviews and recommends to the Board of Directors, the Company’s

remuneration policy for Executive Directors to ensure that they are appropriately rewarded for

their contribution to the Group.

The members of the Remuneration Committee during the financial year ended 28th February 2011

are as follows:-

Lee Suet Hong Executive Director/Chief Operating Officer

Khor Chai Tian Independent Non-Executive Director

Lim Ghim Chai Independent Non-Executive Director

7


SUBSEQUENT EVENTS

Details of subsequent events are disclosed in Note 25 to the financial statements.

AUDITORS

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

office.

On behalf of the Board,

…………………………….. ……………………………..

DR. TAN BOON NUNT LEE SUET HONG

Director Director

Kuala Lumpur

Date: 10th May 2011

8


asiaEP BERHAD


STATEMENT OF FINANCIAL POSITION AS AT 28TH FEBRUARY 2011

2011 2010 2011 2010

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

ASSETS

Non-Current Assets

Property, plant and equipment 4 28,432 32,397 3,532 2,226

Prepaid land lease payments 5 488 470 488 470

Investment in subsidiaries 6 - - 825 929

Intangible assets 7 10,468 34,977 7,359 11,017

Total Non-Current Assets 39,388 67,844 12,204 14,642

Current Assets

Trade and other receivables 8 468 748 11,234 61,495

Tax recoverable 13 9 13 9

Deposit placed with a licensed bank - 3,696 - 3,696

Cash and bank balances 549 547 525 184

Total Current Assets 1,030 5,000 11,772 65,384

TOTAL ASSETS 40,418 72,844 23,976 80,026

EQUITY AND LIABILITIES

Equity attributable to Owners

of the Parent

Share capital 9 73,411 72,911 73,411 72,911

Reserves 10 (33,483) (384) (49,873) 6,817

Total Equity 39,928 72,527 23,538 79,728

Current Liability

Trade and other payables 14 490 317 438 298

Total Liability 490 317 438 298

TOTAL EQUITY AND

LIABILITIES 40,418 72,844 23,976 80,026

Group Company

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

9


asiaEP BERHAD


STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 28TH FEBRUARY 2011

2011 2010 2011 2010

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

Revenue 15 8,274 9,860 2,642 3,663

Cost of sales (4,311) (4,661) (1,103) (1,529)

Gross Profit 3,963 5,199 1,539 2,134

Other operating income 94 289 94 289

Administrative expenses (8,870) (8,532) (5,236) (5,142)

Other operating expenses (28,265) - (53,087) (537)

Operating Loss 16 (33,078) (3,044) (56,690) (3,256)

Finance costs

- hire purchase interest - (26) - (26)

- overdraft interest - (57) - (57)

Loss Before Taxation (33,078) (3,127) (56,690) (3,339)

Taxation 17 - 237 - 237

Loss for the Financial Year (33,078) (2,890) (56,690) (3,102)

Other Comprehensive Income,

Net of Tax:

Foreign currency translation reserve (21) (13) - -

Total Comprehensive Loss

for the Financial Year (33,099) (2,903) (56,690) (3,102)

Group Company

10


asiaEP BERHAD


STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 28TH FEBRUARY 2011 (Continued)

2011 2010 2011 2010

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

Loss attributable to:

Owners of the parent (33,078) (2,890) (56,690) (3,102)

Minority interest - - - -

(33,078) (2,890) (56,690) (3,102)

Total Comprehensive Loss

attributable to:

Owners of the parent (33,099) (2,903) (56,690) (3,102)

Minority interest - - - -

(33,099) (2,903) (56,690) (3,102)

Loss per share attributable to

owners of the parent 18

Basic (sen) (4.56) (0.61)

Diluted (sen) (4.56) (0.61)

Group Company


11


asiaEP BERHAD


STATEMENTS OF CHANGES IN EQUITY


Share Translation Warrant Share Treasury Total

Capital Reserve Reserve Premium Shares Equity

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

Balance at 1st March 2009 24,532 (704) 319 20,661 (669) 17,537 61,676

Total Comprehensive Loss for the Financial Year - (13) - - (2,890) (2,903)

Transaction with Owners:

Issuance of ordinary shares 9, 11 48,379 - 13,275 (20,661) - (27,239) 13,754

Total Transaction with Owners 48,379 - 13,275 (20,661) - (27,239) 13,754

Balance at 28th February 2010 72,911 (717) 13,594 - (669) (12,592) 72,527

Total Comprehensive Loss for the Financial Year - (21) - - - (33,078) (33,099)


Issuance of ordinary shares 9 500 - - - - - 500

Total Transaction with Owners 500 - - - - - 500

Balance at 28th February 2011 73,411 (738) 13,594 - (669) (45,670) 39,928

Attributable to Owners of the Parent

Losses)

RM'000

Retained

Profits/

(Accumulated

12


asiaEP BERHAD


STATEMENTS OF CHANGES IN EQUITY


Retained

Profits/

Share Warrant Share Treasury

Capital Reserve Premium Shares Total

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

At 1st March 2009 24,532 319 20,661 (669) 24,233 69,076

Total Comprehensive Loss for the Financial Year - - - - (3,102) (3,102)


Issuance of ordinary shares 9 48,379 13,275 (20,661) - (27,239) 13,754

Total Transaction with Owners 48,379 13,275 (20,661) - (27,239) 13,754

Balance at 28th February 2010 72,911 13,594 - (669) (6,108) 79,728

Total Comprehensive Loss for the Financial Year - - - - (56,690) (56,690)


Issuance of ordinary shares 9 500 - - - - 500

Total Transaction with Owners 500 - - - - 500

Balance at 28th February 2011 73,411 13,594 - (669) (62,798) 23,538

(Accumulated

Losses)/

RM'000


13


asiaEP BERHAD


STATEMENTS OF CASH FLOWS


2011 2010 2011 2010

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

CASH FLOWS FROM

OPERATING ACTIVITIES:

Loss before taxation (33,078) (3,127) (56,690) (3,339)

Adjustments for:

Amortisation

- development costs 2,943 2,998 - 219

- intellectual property 1,806 1,399 1,806 1,399

- prepaid land lease payments 5 5 5 5

Currency realignment - (5) - -

Depreciation 3,858 3,581 277 281

Gain on disposal of property, plant and equipment - (27) - (27)

Impairment loss

- intangible assets 28,265 - 630 -

- investment in subsidiaries - - 204 537

- loan to subsidiaries - - 52,253 -

Interest expense - 83 - 83

Interest income (18) (46) (18) (46)

Reversal of amortisation of prepaid land land

lease payment overcharged in prior year (23) - (23) -

Reversal of impairment loss on trade receivables (76) (214) (76) (214)

3,682 4,647 (1,632) (1,102)

Changes In Working Capital:

Receivables 356 1,227 222 1,114

Payables 173 (380) 140 (357)

Development costs paid (663) (640) (399) (74)

3,548 4,854 (1,669) (419)

Interest paid - (83) - (83)

Tax paid (4) (6) (4) (6)

Net Operating Cash Flows 3,544 4,765 (1,673) (508)

Group Company

14


asiaEP BERHAD




2011 2010 2011 2010

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

CASH FLOWS FROM

INVESTING ACTIVITIES:

Acquisition of shares in subsidiary - - (100) -

Purchase of property, plant and equipment (7,740) (13,021) (1,884) (4,895)

Interest received 18 46 18 46

Proceeds from disposal of property, plant

and equipment - 30 - 30

Net Investing Cash Flows (7,722) (12,945) (1,966) (4,819)

CASH FLOWS FROM

FINANCING ACTIVITIES:

Net changes on amount owing by subsidiaries - - (216) (3,173)

Proceeds from issuance of shares 500 - 500 -

Proceeds from Rights Issue - 14,514 - 14,514

(Repayment)/drawdown of short term borrowing - (1,504) - (1,504)

Repayment of hire purchase liabilities - (355) - (355)

Rights Issue expenses - (760) - (760)

Net Financing Cash Flows 500 11,895 284 8,722

NET CHANGE IN CASH AND

CASH EQUIVALENTS (3,678) 3,715 (3,355) 3,395

EFFECTS OF FOREIGN EXCHANGE

TRANSLATION (16) (3) - -

CASH AND CASH EQUIVALENTS AT THE

BEGINNING OF THE FINANCIAL YEAR 4,243 531 3,880 485

CASH AND CASH EQUIVALENTS AT

THE END OF THE FINANCIAL YEAR 549 4,243 525 3,880

Group Company

15


asiaEP BERHAD




2011 2010 2011 2010

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

ANALYSIS OF CASH AND CASH

EQUIVALENTS:

Deposit placed with a licensed bank - 3,696 - 3,696


549 4,243 525 3,880

Group Company


16


asiaEP BERHAD


NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

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

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

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

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

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

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

The registered office of the Company is located at No. 28-1, Jalan Tun Sambanthan 3,

50470 Kuala Lumpur.

The principal place of business of the Company is located at No. 18 & 20, Jalan TK 2/1C,

Taman Kinrara Seksyen 2, 47100 Puchong, Selangor Darul Ehsan.

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

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

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

with a resolution of the directors on 10th May 2011.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

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

accordance with the Financial Reporting Standards (“FRSs”) and the provisions of the

Companies Act, 1965 in Malaysia.

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

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

the financial statements.

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

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

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

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

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

therefore actual results may differ.

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

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

to the financial statements.

17


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.2 New and Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC

Int”) and Amendments to IC Int

(a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs, IC Int

and Amendments to IC Int

The Group and the Company had adopted the following new and revised FRSs,

amendments/improvements to FRSs, IC Int and amendments to IC Int that are relevant

to their operations and are mandatory effective for the financial periods beginning on

or after 1st January 2010:-

New FRSs

FRS 4 Insurance Contracts

FRS 7 Financial Instruments : Disclosures

FRS 8 Operating Segments

FRS 101 Presentation of Financial Statements

FRS 123 Borrowing Costs

FRS 139 Financial Instruments : Recognition and Measurement

Revised FRSs

FRS 1 First-time Adoption of Financial Reporting Standards

FRS 3 Business Combinations

Amendments/Improvements to FRSs

FRS 5 Non-current Assets Held for Sale and Discontinued Operations

FRS 7 Financial Instruments : Disclosures


FRS 107 Statement of Cash Flows

FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors

FRS 110 Events After the Reporting Period

FRS 116 Property, Plant and Equipment

FRS 117 Leases

FRS 118 Revenue

FRS 119 Employee Benefits

FRS 120 Accounting for Government Grants and Disclosure of Government

Assistance

FRS 123 Borrowing Costs

FRS 127 Consolidated and Separate Financial Statements: Cost of an

Investment in a Subsidiary, Jointly Controlled Entity or Associate

FRS 128 Investments in Associates

FRS 129 Financial Reporting in Hyperinflationary Economies

FRS 131 Interests in Joint Ventures

FRS 132 Financial Instruments : Presentation

FRS 134 Interim Financial Reporting

FRS 138 Intangible Assets

FRS 140 Investment Property

18






and Amendments to IC Int (Continued)

IC Int

IC Int 9 Reassessment of Embedded Derivatives

IC Int 10 Interim Financial Reporting and Impairment

IC Int 11 FRS 2 – Group and Treasury Share Transactions

IC Int 13 Customer Loyalty Programmes

Amendments to IC Int

IC Int 9 Reassessment of Embedded Derivatives

IC Int 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum

Funding Requirements and their Interaction

Adoption of the above standards and interpretations did not have any effect on the

financial performance or position of the Group and the Company except for those as

discussed below:-

FRS 7 Financial Instruments: Disclosures

Prior to 1st January 2010, information about financial instruments was disclosed in

accordance with the requirements of FRS 132 Financial Instruments: Disclosure and

Presentation. FRS 7 introduces new disclosure to improve the information about

financial instruments. It requires the disclosure of qualitative and quantitative

information about exposure to risks arising from financial instruments, including

specified minimum disclosures about credit risk, liquidity risk and market price risk.

As the change in accounting policy only results in additional disclosures, there is no

impact on earnings per share.

The Group and the Company have applied FRS 7 prospectively in accordance with the

transitional provisions. Hence, the new disclosures have not been applied to the

comparatives. The new disclosures are included throughout the Group’s and the

Company’s financial statements for the financial year ended 28th February 2011.


As of 1st January 2010, the Group determines and presents operating segments based

on the information that is internally provided to the Chief Executive Officer, who is

the Group’s chief operation decision maker and concluded that the reportable

operating segments determined in accordance with FRS 8 are the same as the business

segments previously identified under FRS 114.

The Group has adopted FRS 8 retrospectively and comparative segment information

has been re-presented. Since the change in accounting policy only impact presentation

and disclosure aspects, there is no impact on earnings per share. These revised

disclosures, including the related revised comparative information, are shown in Note

23 to the financial statements.

19

Company No. 253387 – W






FRS 101 Presentation of Financial Statements (revised)

The revised FRS 101 introduces changes in the presentation and disclosures of

financial statements. The revised Standard separates owner and non-owner changes in

equity. The statement of changes in equity includes only details of transactions with

owners, with all non-owner changes in equity presented as a single line. The Standard

also introduces the statement of comprehensive income, with all items of income and

expenses recognised in profit and loss, together with all other items of recognised

income and expense recognised directly in equity, either in one single statement, or in

two linked statements. The Group and the Company have elected to present this

statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliest

comparative period following a change in accounting policy, the correction of an error

or the classification of items in the financial statements.

The revised FRS 101 also requires the Group to make new disclosures to enable users

of the financial statements to evaluate the Group’s objectives, policies and processes

for managing capital.

The revised FRS 101 was adopted retrospectively by the Group and the Company.

Since the change only affects presentation aspects, there is no impact on earnings per

share.

Amendments to FRS 117 Leases

Prior to 1st January 2010, for all leases of land and buildings, if title is not expected to

pass to the lessee by the end of the lease term, the lessee normally does not receive

substantially all of the risks and rewards incidental to ownership. Hence, all leasehold

land held for own use was classified by the Group as operating lease and where

necessary, the minimum lease payments or the up-front payments made were allocated

between the land and the building elements in proportion to the relative fair values for

leasehold interests in the land element and building element of the lease at the

inception of the lease. The up-front payment represented prepaid lease payments and

were amortised on a straight-line basis over the lease term.

The amendments to FRS 117 Leases require assessment of classification based on the

risks and rewards of the lease assets.

20




Int”) and Amendments to IC Int (Continued)



FRS 139 Financial Instruments: Recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets,

financial liabilities and some contracts to buy and sell non-financial items. The Group

and the Company have adopted FRS 139 prospectively on 1st January 2010 in

accordance with the transitional provisions.

The adoptions of this Standard do not have a significant effect on the financial

statements of the Group and the Company.

(b) New and Revised FRSs, Amendments/Improvements to FRSs, IC Int and

Amendments to IC Int that are issued, but not yet effective and have not been

adopted early

The Group and the Company has not adopted the following new and revised FRSs,

amendments/improvements to FRSs and IC Int that have been issued as at the date of

authorisation of these financial statements but are not yet effective for the Group and

the Company:-

Effective for

financial

periods

beginning on

or after

Revised FRSs

FRS 1 First-time Adoption of Financial Reporting

Standards

1 July 2010

FRS 3 Business Combinations 1 July 2010

FRS 124 Related Party Disclosures 1 January 2012

FRS 127 Consolidated and Separate Financial Statements 1 July 2010

Amendments/Improvements to FRSs

FRS 1 First-time Adoption of Financial Reporting

Standards

1 January 2011

FRS 2 Share-based Payment 1 July 2010 and

1 January 2011

FRS 3 Business Combinations 1 January 2011

FRS 5 Non-current Assets Held for Sale and

Discontinued Operations

1 July 2010

FRS 7 Financial Instruments: Disclosure 1 January 2011

FRS 101 Presentation of Financial Statements 1 January 2011

FRS 121 The Effects of Changes in Foreign Exchange

Rates

1 January 2011

21







adopted early (Continued)

Effective for

financial

periods

beginning on

or after

Amendments/Improvements to FRSs (Continued)

FRS 128 Related Party Disclosures 1 January 2011

FRS 131 Interests in Joint Ventures 1 January 2011

FRS 132 Financial Instruments: Presentation 1 March 2010 and

1January 2011

FRS 134 Interim Financial Reporting 1 January 2011

FRS 138 Intangible Assets 1 July 2010

FRS 139 Financial Instruments: Recognition and

Measurement

1 January 2011

IC Int

IC Int 4 Determining Whether an Arrangement contains a

Lease

1 January 2011

IC Int 12 Service Concession Arrangements 1 July 2010

IC Int 15 Agreements for the Construction of Real Estate 1 January 2012

IC Int 16 Hedges of a Net Investment in a Foreign

Operation

1 July 2010

IC Int 17 Distributions of Non-cash Assets to Owners 1 July 2010

IC Int 18 Transfers of Assets from Customers 1 January 2011

IC Int 19 Extinguishing Financial Liabilities with Equity

Instruments

1 July 2011

FRS 134 Interim Financial Reporting 1 January 2011

FRS 138 Intangible Assets 1 July 2010

FRS 139 Financial Instruments: Recognition and

Measurement

1 January 2011

IC Int

IC Int 4 Determining Whether an Arrangement contains a

Lease

1 January 2011

IC Int 12 Service Concession Arrangements 1 July 2010

IC Int 15 Agreements for the Construction of Real Estate 1 January 2012

IC Int 16 Hedges of a Net Investment in a Foreign

Operation

1 July 2010

IC Int 17 Distributions of Non-cash Assets to Owners 1 July 2010

IC Int 18 Transfers of Assets from Customers 1 Jan 2011

IC Int 19 Extinguishing Financial Liabilities with Equity

Instruments

1 July 2011

22







adopted early (Continued)

Effective for

financial

periods

beginning on

or after

Amendments to IC Int

IC Int 9 Reassessment of Embedded Derivatives 1 July 2010

IC Int 13 Customer Royalty Programmes 1 January 2011

IC Int 14 FRS 119 – The Limit on a Defined Benefit Asset,

Minimum Funding Requirements and their

Interaction

1 July 2011

IC Int 15 Agreements for the Construction of Real Estate 30 August 2010

The Directors do not anticipate that the application of the above new and revised FRS,

amendments/improvements to FRS, IC Int and amendments to IC Int, when they are

effective, will have a material impact on the results and the financial position of the

Group and of the Company, except for those discussed below:-

FRS 3 Business Combinations (revised) and Amendments to FRS 127 Consolidated

and Separate Financial Statements (revised)

The revised standards are effective for annual periods beginning on or after 1st July

2010. The revised FRS 3 introduces a number of changes which will impact the

amount of goodwill recognised, the reported results in the period that an acquisition

occurs, and future reported results. The Amendments to FRS 127 require that a change

in the ownership interest of a subsidiary (without loss of control) is accounted for as

an equity transaction. Therefore, such transactions will no longer give rise to

goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard

changes the accounting for losses incurred by the subsidiary as well as the loss of

control of a subsidiary. These changes will affect future acquisitions or loss of control

and transactions with minority interests. The Group does not intend to early adopt.

23



2.3 Significant Accounting Policies

(a) Basis of Consolidation

The consolidated financial statements include the financial statements of the

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

statements of the parent and its subsidiaries are all drawn up to the same financial

year end.

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

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

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

control ceases.

The cost of an acquisition is measured as the fair value of the assets given, equity

instruments issued and liabilities incurred or assumed at the date of exchange, plus

costs directly attributable to the acquisition. Identifiable assets acquired and liabilities

and contingent liabilities assumed in a business combination are measured initially at

their fair values at the date of acquisition, irrespective of the extent of any minority

interest.

The excess of the cost of the acquisition over the net fair value of the Group’s share of

the identifiable net assets, liabilities and contingent liabilities represents goodwill.

Any excess of the net fair value of the Group’s share of the identifiable assets,

liabilities and contingent liabilities over the cost of acquisition is recognised

immediately in the profit or loss.

Intra-group transactions and balances, and resulting unrealised gains are eliminated on

consolidation. Unrealised losses resulting from intra-group transactions are also

eliminated on consolidation to the extent of the cost of the asset that can be recovered.

The extent of the costs that cannot be recovered is treated as write downs or

impairment losses as appropriate. Where necessary, adjustments are made to the

financial statements of the subsidiaries to ensure consistency with the accounting

policies adopted by the Group.

(b) Subsidiaries

Subsidiaries are those corporations in which the Group has the power to exercise

control over the financial and operating policies so as to obtain benefits from their

activities, generally accompanying a shareholding of more than one half of the voting

rights. The existence and effect of potential voting rights that are currently exercisable

or convertible are considered when assessing whether the Group has such power over

another entity.

In the Company’s separate financial statements, investments in subsidiaries are stated

at costs less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(f). On disposal of such investments, the difference between the net disposal proceeds and their carrying amount is included in the profit or loss.

24



2.3 Significant Accounting Policies (Continued)

(b) Subsidiaries (Continued)

In the Group’s consolidated financial statements, the difference between the net

disposal proceeds and the Group’s share of the subsidiary’s net assets together with

any unamortised goodwill is reflected as a gain or loss on disposal in the consolidated

profit or loss.

(c) Property, Plant and Equipment and Depreciation

All property, plant and equipment were initially stated at cost. Land and buildings

were subsequently shown at market value, based on valuations of external independent valuers, less subsequent accumulated depreciation and impairment losses, if any. All other property, plant and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(f).

Cost includes expenditure that is directly attributable to the acquisition of the asset. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

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

the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.

Freehold lands are not depreciated as it has an infinite life. All other property, plant

and equipment are depreciated on a straight line basis to write off the cost of each asset

to its residual value over the estimated useful lives of the assets concerned. The annual

rates used for this purpose are as follows:-

Leasehold lands 99 years

Buildings 2%

Motor Vehicles 20%

Computer equipment 20%

Office equipment 10%

Furniture and fittings 10%

Renovation 20%

The residual values and useful lives of property, plant and equipment are reviewed, and

adjusted if appropriate, at each reporting date. The effects of any revisions of the

residual values and useful lives are included in the profit or loss for the financial year

in which the changes arise.

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

use.

25




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

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

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

arising on derecognition of the asset is included in the profit or loss in the financial

year the asset is derecognised.

(d) Intangible Assets

(i) Research and development costs

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

technical knowledge and understanding are recognised in the profit or loss as

incurred.

Expenditure on development activities, whereby research findings are applied to

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

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

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

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

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

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

expenditure during the development. Product development expenditure which

do not meet these criteria are expensed when incurred.

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

appropriate proportion of overheads. Other development expenditure is

recognised in the profit or loss as an expense as incurred.

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

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

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

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

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

reporting date.

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

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

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

26




(d) Intangible Assets (Continued)

(ii) Intellectual property

Intellectual property consists of the exclusive rights of an online platform

system, including the intellectual property trademarks, copyright, source

programmes and associated documentation. This expenditure is capitalised as it

is able to generate future economic benefits to the Group.

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

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

economics benefits are consumed by the Group over fifteen years.

(e) Financial Instruments

Financial instruments are recognised in the statements of financial position when, and

only when, the Group and the Company become a party to the contract provisions of

the financial instrument.

A financial instrument is recognised initially, at its fair value, plus, in the case of a

financial instrument not at fair value through profit or loss, transaction costs that are

directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted

for as a derivative if, and only if, it is not closely related to the economic

characteristics and risks of the host contract and the host contract is not categorised at

fair value through profit or loss. The host contract, the event an embedded derivative

is recognised separately, is accounted for in accordance with policy applicable to the

nature of the host contract.

The Group and the Company categorise the financial instruments as follows:-

(i) Financial Assets

Financial assets at fair value through profit or loss

Financial assets are classified as fair value through profit or loss if they are held

for trading, including derivatives, or are designated as such upon initial

recognition.

Subsequent to initial recognition, financial assets at fair value through profit or

loss are measured at fair value with the gain or loss recognised in profit or loss.

Exchange differences, interest and dividend income on financial assets at fair

value through profit or loss are recognised as other gains or losses in the profit

or loss.

27




(e) Financial Instruments (Continued)

The Group and the Company categorise the financial instruments as follows:-

(i) Financial Assets (Continued)

Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an

active market, trade and other receivables and cash and cash equivalents are

classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at

amortised cost using the effective interest method. Gains and losses are

recognised in profit or loss when the loans and receivables are derecognised or

impaired, and through the amortisation process.

Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity that are

quoted in an active market and the Group have the positive intention and ability

to hold the investment to maturity is classified as held-to-maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at

amortised cost using the effective interest method. Gains and losses are

recognised in profit or loss when the held-to-maturity investments are

derecognised or impaired, and through the amortisation process.

Available-for-sale financial assets

Available-for-sale financial are financial assets that are designated as available

for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair

value with the gain or loss recognised in other comprehensive income, except

for impairment losses, foreign exchange gains and losses on monetary

instruments and interest calculated using the effective interest method are

recognised in profit or loss. The cumulative gain or loss previously recognised

in other comprehensive income is reclassified from equity to profit or loss as a

reclassification adjustment when the financial asset is derecognised.

Investments in equity instruments whose fair value cannot be reliably measured

are measured at cost less impairment loss.

28





(ii) Financial Liabilities

All financial liabilities are subsequently measured at amortised cost other than

those categorised as fair value through profit or loss.

Fair value through profit or loss comprises financial liabilities that are held for

trading, derivatives (except for a derivative that is a financial guarantee contract

or a designated and effective hedging instrument) or financial liabilities that are

specifically designated as fair value through profit or loss upon initial

recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity

instruments whose fair values cannot be reliably measured are measured at cost.

Other financial liabilities categorised as fair value through profit or loss are

subsequently measured at their fair values with the gain or loss recognised in

profit or loss.

(iii) Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make

specified payments to reimburse the holder for a loss it incurs because a

specified debtor fails to make payment when due in accordance with the original

or modified terms of a debt instrument.

Financial guarantee contracts are classified as deferred income and are

amortised to profit or loss over the contractual period or, upon discharge of the

guarantee. When settlement of a financial guarantee contract becomes probable,

an estimate of the obligation is made. If the carrying value of the financial

guarantee contract is lower than the obligation, the carrying value is adjusted to

the obligation amount and accounted for as a provision.

(iv) Regular Way Purchase or Sale of Financial Assets

A regular way purchase or sale is a purchase or sale of a financial asset under a

contract whose terms require delivery of the asset within the time frame

established generally by regulation or convention the marketplace concerned.

A regular way purchase or sale of financial asset is recognised and

derecognised, as applicable, using trade date accounting. Trade date accounting

refers to:

• the recognition of an asset to be received and the liability to pay for it on the

trade date, and

• derecognition of an asset that is sold, recognition of any gain or loss on

disposal and the recognition of a receivable from the buyer for payment on

the trade date.

29





(v) Derecognition

A financial asset is derecognised when the contractual right to receive cash

flows from the asset has expired or is transferred to another party without

retaining control or substantially all risks and rewards of the asset. On

derecognition of a financial asset, the difference between the carrying amount

and the sum of the consideration received and any cumulative gain or loss that

had been recognised in other comprehensive income is recognised in profit or

loss.

A financial liability is derecognised when the obligation specified in the

contract is discharged or cancelled or expires. On derecognition of a financial

liability, the difference between the carrying amount and the consideration paid

is recognised in profit or loss.

(f) Impairment

The Group and the Company assess at each reporting date whether there is any

objective evidence that a financial asset is impaired.

(i) Impairment of Financial Assets

Trade and other receivables

To determine whether there is objective evidence that an impairment loss on

financial assets has been occurred, the Group and the Company consider factors

such as the probability of insolvency or significant delay in payments. For

certain categories of financial assets, such as trade receivables, assets that are

assessed not to be impaired individually are subsequently assessed for

impairment on a collective basis based on similar characteristics. Objective

evidence of impairment for a portfolio of receivables could include the Group’s

and the Company’s past experience of collecting payments, an increased in the

number of delayed payments in the portfolio past the average credit period and

the observable changes in national or local economic conditions that correlate

with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the

difference between the asset’s carrying amount and the present value of

estimated future cash flows discounted at the financial asset’s original effective

interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss

directly for all financial assets with the exception of trade receivables, where the

carrying amount is reduced through the use of an allowance account. When a

trade receivable becomes uncollectible, it is written off against the allowance

account.

30




(f) Impairment (Continued)

(i) Impairment of Financial Assets (Continued)

Trade and other receivables (Continued)

If in a subsequent period, the amount of the impairment loss decreases and the

decrease can be related objectively to an event occurring after the impairment

loss was recognised, the previously recognised impairment loss is reversed to

the extent that the carrying amount of the asset does not exceed its amortised

cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Impairment of Non-financial Assets

The Group assesses at each reporting date whether there is an indication that an

asset may be impaired. If any such indication exists, or when an annual

impairment assessment for an asset is required, the Group makes an estimate of

the asset’s recoverable amount.

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

sell and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their

present value using a pre-tax discount rate that reflects current market

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

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

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

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

reduce the carrying amount of any goodwill allocated to those units or groups of

units and then, to reduce the carrying amount of the other assets in the unit or

groups of units on a pro-rata basis.

An impairment loss is recognised in the profit or loss in the period in which it

arises.

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

impairment loss for an asset other than goodwill is reversed if, and only if, there

has been a change in the estimates used to determine the asset’s recoverable

amount since the last impairment was recognised. The carrying amount of an

asset other than goodwill is increased to its revised recoverable amount,

provided that this amount does not exceed its carrying amount that would have

been determined (net of amortisation or depreciation) had no impairment loss

been recognised for the asset in prior years. A reversal of impairment loss for an

asset other than goodwill is recognised in the profit or loss.

31




(g) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised

as liabilities when proposed or declared before the reporting date. A dividend

proposed or declared after the reporting date, but before the financial statements are

authorised for issue, is not recognised as a liability at the reporting date.

Cost incurred directly attributable to the issuance of the shares is charged to the profit

or loss. Equity transaction costs comprise only those incremental external costs

directly attributable to the equity transaction which would otherwise have been

avoided.

(h) Warrants Reserve

Warrants issued for free to the subscribers of renounceable rights issue are accounted

for as a deduction from distributable reserve and classified as warrants reserve in

equity according to its fair value. The fair value of the free warrants is measured using

the Trinomial Model by the directors of the Company.

(i) Leases

(i) Finance Leases

Leases of property, plant and equipment where the Group assumes substantially

all the benefits and risks of ownership are classified as finance leases.

Assets acquired by way of finance lease are stated at an amount equal to the

lower of their fair values and the present value of minimum lease payments at

the inception of the leases, less accumulated depreciation and impairment

losses. The corresponding liability is included in the statement of financial

position as borrowings. In calculating the present value of minimum lease

payments, the discount factor used is the interest rate implicit in the lease, when

it is practicable to determine; otherwise, the Group’s incremental borrowing rate

is used. Property, plant and equipment acquired under finance leases are

depreciated over the shorter of the estimated useful life of the asset and the

lease term.

Lease payments are apportioned between the finance costs and the reduction of

the outstanding liability. Finance cost, which represent the difference between

the total leasing commitments and the fair value of the assets acquired, are

recognised as an expense in the profit or loss over the term of the relevant lease

so as to produce a constant periodic rate of charge on the remaining balance of

the obligations for each accounting period.

32




(i) Leases (Continued)

(ii) Operating Lease (Continued)

Leases of assets where a significant portion of the risks and rewards of

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

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

term of the relevant lease. The aggregate benefit of incentives provided by the

lessor is recognised as a reduction of rental expense over the lease term on a

straight line basis.

In the previous years, a leasehold land that normally had an indefinite economic

life and title was not expected to pass to the lessee by the end of the lease term

was treated as an operating lease. The payment made on entering into or

acquiring a leasehold land that was accounted for as an operating lease

represents prepaid lease payments, except for leasehold land classified as

investment property.

The Group has not adopted the amendment made to FRS 117 Lease on 1st

January 2010 in relation to the classification of lease of land.

(j) Foreign Currencies

(i) Functional and Presentation Currency

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

using the currency of the primary economic environment in which the entity

operates (“the functional currency”). The financial statements are presented in

Ringgit Malaysia (“RM”), which is the Company’s functional currency and

presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies are measured in the respective functional

currencies of the Company and its subsidiaries and are recorded on initial

recognition in the functional currencies at exchange rates approximating those

ruling at the transaction dates. Monetary assets and liabilities denominated in

foreign currencies are translated at the rate ruling at the reporting date. Non-

monetary items denominated in foreign currencies measured at fair value are

translated using the exchange rates at the date when the fair value was

determined.

Exchange differences arising on the settlement of monetary items or on

translating monetary items at the reporting date are recognised in profit or loss.

33




(j) Foreign Currencies (Continued)

(ii) Transactions and Balances (Continued)

Exchange differences arising on the translation of non-monetary items carried at

fair value are included in profit or loss for the period except for the differences

arising on the translation of non-monetary items in respect of which gains and

losses are recognised directly in other comprehensive income. Exchange

differences arising from such non-monetary items are also recognised directly in

other comprehensive income.

(k) Revenue Recognition

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

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

recognition criteria must also be met before revenue is recognised.

(i) Sales of Goods and Services Rendered

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

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

activities and is recognised in the profit or loss when the significant risks and

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

the services are rendered.

(ii) Interest Income

Interest income is recognised on the accrual basis.

(l) Income Tax

The tax expense in the profit or loss represents the aggregate amount of current tax

and deferred tax. Current tax is the expected amount of income taxes payable in

respect of the taxable profit for the year and is measured using the tax rates that have

been enacted at the reporting date.

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

the reporting date between the tax bases of assets and liabilities and their carrying

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

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

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

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

deductible temporary differences, unused tax losses and unused tax credits can be

utilised. Deferred tax is not recognised if the temporary difference arises from

goodwill or negative goodwill or from the initial recognition of an asset or liability in

a transaction which is not a business combination and at time of the transaction,

affects neither accounting profit nor taxable profit.

34




(l) Income Tax (Continued)

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

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

or substantively enacted at the reporting date. Deferred tax is recognised in the profit

or loss, except when it arises from a transaction which is recognised directly in equity,

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

comprehensive income, or when it arises from a business combination that is an

acquisition, in which case the deferred tax is included in the resulting goodwill or the

amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s

identifiable assets, liabilities and contingent liabilities over the cost of the

combination.

(m) Employee Benefits

(i) Short term employee benefits

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

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

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

compensated absences such as paid annual leave are recognised when services

are rendered by employees that increase their entitlement to future compensated

absences. Short term non-accumulating compensated absences like sick leave,

maternity and paternity leave are recognised when absences occur.

(ii) Post-employment benefits

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

contribution plan. The contributions are charged to the profit or loss in the

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

Group has no further payment obligations.

(iii) Share-based compensation

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

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

which allows the Group’s employees to acquire ordinary shares of the

Company. The total fair value of share options granted to employees is

recognised as an employee cost with a corresponding increase in the share

option reserve within equity over the vesting period and taking into account the

probability that the options will vest. The fair value of share options is measured

at grant date, taking into account, if any, the market vesting conditions upon

which the options were granted but excluding the impact of any non-market

vesting conditions. Non-market vesting conditions are included in the

assumptions about the number of options that are expected to become

exercisable on the vesting date.

35




(m) Employee Benefits (Continued)

(iii) Share-based compensation (Continued)

At each reporting date, the Company revises its estimates of the number of

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

recognises the impact of the revision of original estimates, if any, in the profit or

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

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

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

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

retained earnings.

The proceeds received net of any directly attributable transaction costs are

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

are exercised.

(n) Segment Reporting

In the previous years, a segment was distinguishable component of the Group that was

engaged either in providing products or services (business segment), or in providing

products or services within a particular economic environment (geographical segment)

which was subject to risks and rewards that were different from those of other

segments.

Following the adoption of FRS 8 Operating Segments, an operating segment is a

component of the Group that engages in business activities from which it may earn

revenues and incur expenses, including revenues and expenses that relate to

transactions with any of the Group’s other components. An operating segment’s

operating results are reviewed regularly by the chief operating decision maker, which

in this case is the Chief Executive Officer of the Group, to make decisions about

resources to be allocated to the segment and assess its performance, and for which

discrete financial information is available.

(o) Cash and Cash Equivalents

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

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

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

insignificant risk of changes in value.

36


3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

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

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

believed to be reasonable under the circumstances.

(a) Critical Judgements Made in Applying Accounting Policies

In the process of applying the Group’s and the Company’s accounting policies,

management has made the following judgements, apart from those involving

estimations, which have a significant effect on the amounts recognised in the

financial statements.

Operating lease commitment – as lessee

The Group entered into a lease arrangement for the leasehold land for the financial

year ended 28th February 2011. The Group evaluated based on terms and conditions

of the arrangement, whether the leasehold were clearly operating leases or finance

leases.

Management judged that it does not retain all significant risks and rewards of the

ownership of the leasehold land, thus accounted for the contract as operating lease.

(b) Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation

uncertainty at the reporting date, that have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next financial

year are as stated below:-

(i) Useful lives of property, plant and equipment

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

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

estimated useful lives of property, plant and equipment are reviewed

periodically and are updated if expectations differ from previous estimates due

to physical wear and tear, technical or commercial obsolescence and legal or

other limits on the use of the relevant assets.

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

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

is possible, however, that future results of operations could be materially

affected by changes in the estimates brought about by changes in factors

mentioned above. The amounts and timing of recorded expenses for any period

would be affected by changes in these factors and circumstances. A reduction

in the estimated useful lives of the property, plant and equipment would

increase the recorded expenses and decrease the non-current assets.

37


3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

(b) Key Sources of Estimation Uncertainty (Continued)

(ii) Impairment of property, plant and equipment

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

circumstances indicate that the carrying amount of an asset may not be

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

amount.

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

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

the projected future cash flow derived from that asset discounted at an

appropriate discount rate. Projected future cash flows are based on the Group’s

estimates calculated based on historical, sector and industry trends, general

market and economic conditions, changes in technology and other available

information.

As at reporting date, the directors of the Company are of the opinion that there

is no impact resulting from the impairment review by the management.

(iii) Impairment of investment in subsidiaries

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

including the value-in-use of the cash generating unit. Significant judgement is

required in the estimation of the present value of future cash flows generated

by the subsidiaries, which involve uncertainties and are significantly affected

by assumptions used and judgement made regarding estimates of future cash

flows and discount rates. Changes in assumptions could significantly affect the

results of the Group’s tests for impairment of investment in subsidiaries.

The carrying amounts of the investment in subsidiaries of the Company as at

28th February 2011 was RM825,000/- (2010: RM929,000/-). During the

financial year, the impairment on investment in subsidiaries charged to the

profit or loss for the Company was RM204,000/- (2010: RM537,000/-).

(iv) Impairment of intangible assets

Significant judgement is required in the estimation of the present value of

future cash flows from the intangible assets, which involve uncertainties and

are significantly affected by assumptions used and judgement made regarding

estimates of future cash flows and discount rates.

As the market for internet technology is highly competitive and unpredictable,

the actual recoverability of the development costs may differ from

management’s forecasts since anticipated events may not occur as expected.

Should such a scenario occur, adjustments would have to be made to reduce the

carrying amount of the development costs to its recoverable amount.

During the financial year, the impairment on intangible assets charged to the

profit or loss for the Group and the Company were RM28,265,000/- and

RM630,000/- respectively.

38


3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

(a) Key Sources of Estimation Uncertainty (Continued)

(v) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective

evidence that a financial asset is impaired. To determine whether there is

objective evidence of impairment, the Group considers factors such as the

probability of insolvency or significant financial difficulties of the debtor and

default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of

future cash flows are estimated based on historical loss experience for assets

with similar credit risk characteristics. The carrying amount of the Group’s

loans and receivable at the reporting date is disclosed in Note 8 to the financial

statements.

During the financial year, the impairment on loans and receivables charged to

the profit or loss for the Company was RM52,253,688/-.

(vi) Income taxes

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

judgement is required in determining the capital allowances and deductibility

of certain expenses during the estimation of the provision for income taxes.

There are many transactions and calculations for which the ultimate tax

determination is uncertain during the ordinary course of business. Where the

final tax outcome of these matters is different from the amounts that were

initially recorded, such differences will impact the income tax and deferred

income tax provisions in the period in which such determination is made.

(vii) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required,

or the amount cannot be estimated reliably, the obligation is disclosed as a

contingent liability, unless the probability of outflow of economic benefits is

remote. Possible obligations, whose existence will only be confirmed by the

occurrence or non-occurrence of one or more future events, are also disclosed

as contingent liabilities unless the probability of outflow of economic benefits

is remote.

The determination of treatment of contingent liabilities is based on

management’s view of the expected outcome of the contingencies for matters

in the ordinary course of the business.

39


4. PROPERTY, PLANT AND EQUIPMENT

Furniture

Leasehold Freehold Motor Computer Office and

Group Buildings Buildings Vehicles Equipment Equipment Fittings Renovation Total

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

2011

Cost

At 1st March 2010 580 294 579 60,064 1,247 748 497 64,009

Additions - - - 7,478 3 - 259 7,740

Disposals - - - - - - - -

Currency realignment - - - - - (4) (11) (15)

At 28th February 2011 580 294 579 67,542 1,250 744 745 71,734

Accumulated Depreciation

At 1st March 2010 52 1 569 29,440 626 447 477 31,612

Depreciation for the financial year 11 6 10 11,403 120 70 61 11,681

Depreciation under/(over)charged 19 1 - - - - - 20

Disposals - - - - - - - -


At 28th February 2011 82 8 579 40,843 746 514 530 43,302

Net Book Value at

28th February 2011 498 286 - 26,699 504 230 215 28,432

40


4. PROPERTY, PLANT AND EQUIPMENT (Continued)

Furniture


Group Buildings Buildings Vehicles Equipment Equipment Fittings Renovation Total


2010

Cost

At 1st March 2009 580 - 765 47,404 1,180 751 506 51,186

Additions - 294 - 12,660 67 - - 13,021

Disposals - - (186) - - - - (186)


At 28th February 2010 580 294 579 60,064 1,247 748 497 64,009


At 1st March 2009 46 - 713 20,150 510 372 419 22,210

Depreciation for the financial year 6 1 39 9,290 116 77 64 9,593

Disposals - - (183) - - - - (183)


At 28th February 2010 52 1 569 29,440 626 447 477 31,612

Net Book Value at

28th February 2010 528 293 10 30,624 621 301 20 32,397

41



Furniture


Company Buildings Buildings Vehicles Equipment Equipment Fittings Renovation Total


2011

Cost

At 1st March 2010 580 294 579 736 1,244 717 401 4,551

Additions - - - 1,622 3 - 259 1,884

Disposals - - - - - - - -

Transfers - - - - - - - -

At 28th February 2011 580 294 579 2,358 1,247 717 660 6,435


At 1st March 2010 52 1 569 258 623 422 400 2,325

Depreciation for the financial year 11 6 10 301 120 65 45 558

Depreciation under/(over)charged 19 1 - - - - - 20

Disposals - - - - - - - -

At 28th February 2011 82 8 579 559 743 487 445 2,903

Net Book Value at

28th February 2011 498 286 - 1,799 504 230 215 3,532

42



Furniture


Company Buildings Buildings Vehicles Equipment Equipment Fittings Renovation Total


2010

Cost

At 1st March 2009 580 - 765 221 1,177 717 401 3,861

Additions - 294 - 4,534 67 - - 4,895

Disposals - - (186) - - - - (186)

Transfers - - - (4,019) - - - (4,019)

At 28th February 2010 580 294 579 736 1,244 717 401 4,551


At 1st March 2009 46 - 713 161 507 351 356 2,134

Depreciation for the financial year 6 1 39 97 116 71 44 374

Disposals - - (183) - - - - (183)

At 28th February 2010 52 1 569 258 623 422 400 2,325

Net Book Value at

28th February 2010 528 293 10 478 621 295 1 2,226

43



Group and Company

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

and of the Company amounting to RM7,843,000/- (2010: RM6,012,000/-) and RM301,000/-

(2010: RM93,000/-) respectively have been capitalised as development costs as disclosed in

Note 7 to the financial statements.

5. PREPAID LAND LEASE PAYMENTS

2011 2010

RM'000 RM'000

Cost

At the beginning of the financial year 527 527

Additions - -

At the end of the financial year 527 527

Accumulated Amortisation

At the beginning of the financial year 57 52

Amortisation for the financial year 5 5

Reversal of amortisation overcharged in prior financial year (23) -

At the end of the financial year 39 57

Carrying Amount 488 470

Group and Company

6. INVESTMENT IN SUBSIDIARIES

2011 2010

RM'000 RM'000

Unquoted shares

Cost

At 1st March 2010 1,466 1,466

Additions∆

100 -

At 28th February 2011 1,566 1,466

Accumulated Impairment Loss

At 1st March 2010 537 -

Impairment loss for the financial year 204 537

At 28th February 2011 741 537

Net Cost of Investment 825 929

Company

44


6. INVESTMENT IN SUBSIDIARIES (Continued)

∆ During the financial year, the Company acquired additional issued and paid-up capital of

99,998 ordinary shares in Defined Search Sdn. Bhd. which represents 100% of its

additional issued and paid-up share capital. Thus, the Company’s effective equity interest

remains at 100%.

Key assumptions used in impairment calculations

Management determined the recoverable amount of the investment in subsidiaries based on

the individual assets’ value in use and the probability of the realisation of the assets. The

present value of the future cash flows to be generated by the asset is the asset’s value in use,

and it is assumed to be the same as the net worth of the asset as at reporting date. An

impairment loss is recognised immediately in the profit or loss if the recoverable amount is

less than the carrying amount.

As a result of the above, the Company recognised an impairment loss of RM204,000/- (2010:

RM537,000/-) during the financial year.

Details of the subsidiaries are as follows:-

Name of Subsidiaries

Country of

Incorporation

Effective

Equity

Interest

Principal Activities

2011 2010

% %

asiaEP Hong Kong

Ltd.*

Hong Kong 100 100 Development and provision of

e-business solutions services.

asiaEP eMarketplace

Sdn. Bhd. #

Malaysia 100 100 Dormant – Intended activity is

to provide e-commerce

solutions and e-market

platform.

Defined Search Sdn.

Bhd. #

Malaysia 100 100 To provide internet search

engine services.

Smart Infra Sdn. Bhd. # Malaysia 100 100 Dormant – Intended activity is

to provide online marketing

solutions.

* Audited by another firm of chartered accountants other than Baker Tilly Monteiro Heng.

# In view of the capital deficiencies reported by these subsidiaries, the Auditors’ Report of

these subsidiaries contained an emphasis of matter paragraph relating to the

appropriateness of the going concern basis of accounting used in the preparation of their

financial statements. In aggregate these subsidiaries recorded net current assets of

RM235,000/-.

45


7. INTANGIBLE ASSETS

Intellectual

Property Total

Group RM'000 RM'000 RM'000

2011

Cost

At 1st March 2010 32,859 16,500 49,359

Additions 8,506 - 8,506

Currency realignment (1) - (1)

At 28th February 2011 41,364 16,500 57,864


At 1st March 2010 7,677 6,705 14,382

Amortisation for the financial year 2,943 1,806 4,749

Impairment loss for the financial year 27,635 630 28,265

At 28th February 2011 38,255 9,141 47,396

Carrying amount at 28th February 2011 3,109 7,359 10,468

2010

Cost

At 1st March 2009 26,208 16,500 42,708

Additions 6,652 - 6,652

Currency realignment (1) - (1)

At 28th February 2010 32,859 16,500 49,359


At 1st March 2009 4,679 5,306 9,985

Amortisation for the financial year 2,998 1,399 4,397

At 28th February 2010 7,677 6,705 14,382


Development

Costs

46


7. INTANGIBLE ASSETS (Continued)

Development Intellectual

Costs Property Total

Company RM'000 RM'000 RM'000

2011

Cost

At 1st March 2010 2,972 16,500 19,472

Additions 700 - 700

Transfer (3,672) - (3,672)

At 28th February 2011 - 16,500 16,500


At 1st March 2010 1,750 6,705 8,455

Amortisation for the financial year - 1,806 1,806

Impairment loss for the financial year - 630 630

Transfer (1,750) - (1,750)

At 28th February 2011 - 9,141 9,141

Carrying amount at 28th February 2011 - 7,359 7,359

2010

Cost

At 1st March 2009 2,805 16,500 19,305

Additions 167 - 167

At 28th February 2010 2,972 16,500 19,472


At 1st March 2009 1,531 5,306 6,837

Amortisation for the financial year 219 1,399 1,618

At 28th February 2010 1,750 6,705 8,455


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

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

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

documentation.

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

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

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

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

depreciation charged for certain computer equipment of RM7,843,000/- (2010:

RM6,012,000/-) and RM301,000/- (2010: RM93,000/-) respectively.

47


7. INTANGIBLE ASSETS (Continued)

Impairment Testing of the Intangible Assets

The Group assesses the intangible assets for impairment on an annual basis. This requires an

estimation of the value-in-use of the intangible assets. This estimated value-in-use amount is

based on the present value of future expected cash flows from the intangible assets using the

pre-tax discount rate of the 8% per annum.

With regards to projects linked to the IP as well as the Deferred Development Expenditure,

in line with the stance of prudence of the Management, it is expected that the growth rate

would be consistent during and beyond the five-year period based on the pre-tax discount

rate of 8% per annum being used to extrapolate the cash flows.

The calculations of the value-in-use or recoverable amount in respect of the intangible assets

are based on the following assumptions:-

a) Budgeted gross margin – Gross margins are based on the average contributions

achievable based on the result of the previous financial year.

b) Growth rates – The forecasted growth rates are based on expected revenue generation

capabilities of the projects concerned over the periods under projection.

c) Pre-tax discount rate 8% per annum – This rate is based on the Weighted Average Cost

of Capital of Group as a whole.

d) Sales forecast – Compared with the previous financial years, the Management expects

that there will be minimum sales growth during the forecasted period.

Impairment Loss Recognised

During the financial year, since the value-in-use is less than the carrying amount of the

intangible assets, this resulted in an impairment which was charged to the profit or loss for

the Group and the Company amounting to RM28,265,000/- and RM630,000/- respectively.

48


8. TRADE AND OTHER RECEIVABLES

2011 2010 2011 2010

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

Current

Trade receivables 535 891 259 481

Less: Allowance for impairment (95) (171) (95) (171)

Trade receivables, net 440 720 164 310

Other receivables

Amount owing by subsidiaries - - 63,295 61,157

Less: Allowance for impairment - - (52,253) -

- - 11,042 61,157

Deposits 28 28 28 28

Other receivables, net 28 28 11,070 61,185

468 748 11,234 61,495

Total trade and other receivables 468 748 11,234 61,495

Add: Deposit placed with

a licensed bank - 3,696 - 3,696


Total loans and receivables 1,017 4,991 11,759 65,375

Group Company

(a) Trade receivables

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

are assessed and approved on a case by case basis.

Ageing analysis of the Group’s and the Company’s trade receivables is as follows:-

2011 2010 2011 2010

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

Neither past due nor impaired 24 374 11 45

1 to 30 days past due not impaired 52 59 33 40



More than 90 days past due not impaired 96 216 96 168

416 346 153 265

Impaired 95 171 95 171

535 891 259 481

CompanyGroup

49


8. TRADE AND OTHER RECEIVABLES (Continued)

(a) Trade receivables (Continued)

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with

good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have

been renegotiated during the financial year.

Receivables that are past due but not impaired

Trade receivables that are past due but not impaired are unsecured in nature.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date is as follows:-

2011 2010 2011 2010

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

Collectively impaired

Trade receivables 95 171 95 171

Less: Allowance for impairment (95) (171) (95) (171)

- - - -

CompanyGroup

Movement in the allowance for impairment account is as follows:-

2011 2010 2011 2010

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

At 1st March 171 385 171 385

Charge for the year 101 177 101 177

Reversal of impairment losses (177) (391) (177) (391)

At 28th February 95 171 95 171

CompanyGroup

50


8. TRADE AND OTHER RECEIVABLES (Continued)

(b) Related party balances

The amount owing by subsidiaries is unsecured, interest free and repayable on

demand.

The foreign currency exposure profile of amount owing by subsidiaries is as follows:-

2011 2010

RM'000 RM'000

Hong Kong Dollar 825 17,470

Ringgit Malaysia 10,217 43,687

11,042 61,157

Company

9. SHARE CAPITAL

Number

of Shares

Number

of Shares

Unit Unit

'000 RM'000 '000 RM'000

Ordinary shares of RM0.10 each

Authorised:

At the beginning of the financial year 1,500,000 150,000 500,000 50,000

Created during the financial year - - 1,000,000 100,000 -

At the end of the financial year 1,500,000 150,000 1,500,000 150,000

Issued and fully paid:

At the beginning the financial year 729,108 72,911 245,318 24,532

Issued during the financial year 5,000 500 483,790 48,379

At the end of the financial year 734,108 73,411 729,108 72,911

Group and Company

2011 2010

Issued and fully paid share capital

During the financial year, the issued and paid-up ordinary share capital of the Company was

increased from RM72,911,000/- to RM73,411,000/- by way of the issuance of 5,000,000

ordinary shares of RM0.10 each for cash via a private placement as additional working

capital purposes.

The new ordinary shares issued during the financial year rank pari passu in all respects with

the existing ordinary shares of the Company.

51


10. RESERVES

2011 2010 2011 2010

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

Translation reserve (738) (717) - -

Warrant reserve (Note 11) 13,594 13,594 13,594 13,594

Treasury shares (Note 12) (669) (669) (669) (669)

Accumulated losses (45,670) (12,592) (62,798) (6,108)

(33,483) (384) (49,873) 6,817

Group Company

(a) Translation Reserve

The foreign currency translation reserve represents exchange differences arising from

the translation of the financial statements of foreign operations whose functional

currency is different from the Group’s presentation currency.

(b) Accumulated Losses

Prior to the year of assessment 2008, Malaysian companies adopted the full

imputation system. In accordance with the Finance Act 2007 which was gazetted on

28th December 2007, companies shall not be entitled to deduct tax on dividends paid,

credited or distributed to its shareholders, and such dividends will be exempted from

tax in the hands of the shareholders (“single tier system”). However, there is a

transitional period of six years, expiring on 31st December 2013, to allow companies

to pay franked dividends to their shareholders under limited circumstances.

Companies also have an irrevocable option to disregard the balance under Section

108 of the Income Tax Act (“Section 108”) and opt to pay dividends under the single

tier system. The change in the tax legislation also provides for the balance under

Section 108 to be locked-in as at 31st December 2007 in accordance with Section 39

of the Finance Act 2007.

Subject to the agreement of the Inland Revenue Board, the Company has tax exempt

account amounting to approximately RM26,602,894/- (2010: RM26,602,894/-)

available for future distribution of tax exempt dividends.

52


11. WARRANT RESERVE

2011 2010

RM'000 RM'000

At the beginning of the financial year 13,594 319

Issued during financial year - 13,275

At the end of the financial year 13,594 13,594

Group and Company

WARRANTS 2009/2014

On 9th September 2009, the Warrants 2009/2014 were issued for free pursuant to the

renounceable Rights Issue on 14th September 2009 by issuance of 483,789,970 new

ordinary shares of RM0.10 each (“Rights Issues”) on the basis of one Rights Share for each

existing ordinary share of RM0.10 each in the Company, together with:-

(a) bonus issue of 241,894,985 new ordinary shares of RM0.10 each (“Bonus Issues”) on

the basis of one Bonus Shares for each rights share subscribed; and

(b) issuance of 241,894,985 new free detachable warrants (“Warrants”) on the basis of

one Warrant for each rights share subscribed

at an issue price of RM0.10 per Rights Share of which the first call of RM0.06 is payable in

cash on application and the second call of RM0.04 is to be capitalised from the Company’s

Share Premium Account.

Warrants 2009/2014 are listed on Bursa Malaysia Securities Berhad. Each new warrant

entitles its registered holder, at any time from the date of its issue up to and including 8th

September 2014, to subscribe for one new ordinary share of RM0.10 each in the Company at

an exercise price of RM0.10 per share which is subject to adjustments under the terms set

out in the Deed Poll dated 29th July 2009 constituting the Warrants 2009/2014.


Issue

Date

Expiry

Date

Exercise

Price

RM per

Warrant

At the

beginning

of Financial

Year

Issued

Exercised

At the

end of

Financial

Year

9.9.2009 8.9.2014 0.10 241,894,985 - - 241,894,985

The fair value of the free warrants at the issuance date is valued by the directors based on

trinomial valuation model with the following inputs:-

Fair value of the free warrants at the issuance date (RM) 0.05488

Weighted average share price (RM) 0.073

Exercise price (RM) 0.10

Warrants life (Years) 5

Delta (%) 87.61

53


11. WARRANT RESERVE (Continued)

WARRANTS 2006/2011

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

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

constituted by a Deed Poll dated 3rd April 2006.

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

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

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

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

in the Deed Poll.

However, as a result of the Rights Issue as mentioned in Warrants 2009/2014, the existing

warrants 2006/2011 holders are entitled to the adjustments of the exercise price and number

of outstanding warrants. Accordingly, the number of additional Warrants 2006/2011 to be

listed and quoted as a result of the Rights Issue is 46,883,154 and the exercise price has been

adjusted from RM0.30 to RM0.10 per warrant.


Issue

Date

Expiry

Date

Exercise

Price

RM per

Warrant

At the

beginning

of

Financial

Year

Adjusted

Exercised

At the

end of

Financial

Year

19.6.2006 18.6.2011 0.10 94,602,544 - - 94,602,544

12. TREASURY SHARES

Treasury shares relate to ordinary shares of the Company that are held by the Company.

The Company has not repurchased any issued share capital during the financial year.

13. DEFERRED TAX LIABILITIES

2011 2010

RM'000 RM'000

At the beginning of the financial year - (239)

Recognised in the profit or loss - 239

At the end of the financial year - -

Group and Company

54


14. TRADE AND OTHER PAYABLES

2011 2010 2011 2010

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

Current

Trade payables 60 40 60 40

Other payables

Accruals 251 207 224 192

Other payables 179 70 154 66

430 277 378 258

Total trade and other payables 490 317 438 298

Total financial liabilities carried at

at amortised cost 490 317 438 298

Group Company

The normal credit term granted to the Group is 30 days.

15. REVENUE

Revenue represents the invoiced value of products and services rendered, net of discounts.

16. OPERATING LOSS

Operating loss has been arrived at:-

2011 2010 2011 2010

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

After charging:-

Amortisation

- development costs 2,943 2,998 - 219

- intellectual property 1,806 1,399 1,806 1,399

- prepaid land lease payments 5 5 5 5

Audit fee

- current year 59 47 30 30

- prior year 32 6 29 6

Depreciation 3,858 3,581 277 281

Directors' remuneration

- fees 172 75 172 75

- salaries and allowances 816 816 816 816

- Employees' Provident Fund 86 86 86 86

Group Company

55


16. OPERATING LOSS (Continued)

Operating loss has been arrived at:-

2011 2010 2011 2010

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

After charging:-

Impairment loss

- intangible assets 28,265 - 630 -

- investment in subsidiaries - - 204 537

- loan to subsidiaries - - 52,253 -

Staff costs

- salaries and wages 381 418 381 418

- Employees' Provident Fund 94 70 94 70

- other staff related costs 115 184 115 184

And crediting:-

Gain on disposal of property, plant and

equipment - 27 - 27

Interest income 18 46 18 46

Reversal of impairment losses on

trade receivables 76 214 76 214

Group Company

Staff costs of the Group and of the Company amounting to RM399,000/- (2010:

RM329,000/-) and RM399,000/- (2010: RM74,000/-) respectively have been capitalised as

development costs.

17. TAXATION

2011 2010 2011 2010

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

Income tax

- prior years - (2) - (2)

Deferred taxation

- current year - 83 - 83

- prior years - 156 - 156

- 239 - 239

- 237 - 237

Group Company

The income tax rate is calculated at the Malaysian statutory rate of 25% of the estimated

taxable profit for the fiscal year.

56


17. TAXATION (Continued)

A reconciliation of income tax expense applicable to loss before taxation at the statutory

income tax rate to income tax expense at the effective income tax rate of the Group and the

Company are as follows:-

2011 2010 2011 2010

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

Loss before taxation (33,078) (3,127) (56,690) (3,339)

Taxation at applicable tax rate of 25% 8,270 782 14,173 835

Tax effects arising from:

- depreciation charges capitalised as

development costs 1,960 1,503 75 23

- non-deductible expenses (8,270) (1,202) (13,737) (617)

- non-taxable income - 72 - 72

- underaccrual in prior years - 154 - 154

- origination of deferred tax assets

not recognised in the financial statements (1,960) (1,072) (511) (230)

Tax expense for the financial year - 237 - 237

Group Company

The deferred tax assets have not been recognised for the following items:-

2011 2010 2011 2010

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

Impairment loss on financial assets 95 171 95 171

Property, plant and equipment (15,039) (20,766) (2,208) (810)

Unutilised capital allowances 32,897 32,389 2,675 838

Unutilised tax losses 2,454 774 2,454 774

20,407 12,568 3,016 973

Potential deferred tax assets 5,102 3,142 754 243

CompanyGroup

57


18. LOSS PER SHARE

(a) Basic

Basic loss per share is calculated by dividing the net loss for the financial year by the

weighted average number of ordinary shares on issue during the financial year.

2011 2010

Net loss for the financial year (RM'000) (33,078) (2,890)

Weighted average number of ordinary shares in issue ('000) 725,931 471,199

Basic loss per share for the financial year (sen) (4.56) (0.61)

Group

(b) Diluted

The diluted loss per share is not shown as the exercise price of the options under

warrant is higher than the Company’s share price at the reporting date.

19. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Identification of related parties

Parties are considered to be related to the Group if the Group has the ability, directly

or indirectly, to control the party or exercise significant influence over the party in

making financial and operating decisions, or vice versa, or where the Group and the

party are subject to common control or common significant influence. Related parties

may be individuals or other entities.

Related parties of the Group include:-

(i) Direct subsidiaries; and

(ii) Key management personnel which comprise persons (including the directors of

the Company) having the authority and responsibility for planning, directing and

controlling the activities of the Company directly or indirectly.

(b) Significant related party transactions

2011 2010

RM'000 RM'000

Transfer of property, plant and equipment

to a subsidiary - 4,019

Development costs charged to a subsidiary 1,922 255

Company

58


19. SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)

(b) Identification of related parties (Continued)

The directors of the Company are of the opinion that the above transactions have been

entered into in the normal course of business and the terms are no less favourable than

those arranged with third parties.

(c) Key management personnel remuneration

The remuneration of the key management personnel during the financial year is as

follows:-

2011 2010

RM'000 RM'000

Directors

Fees 172 75

Salaries and allowances 816 816

Employees' Provident Fund 86 86

1,074 977

Other key management personnel

Salaries, bonuses and allowances 82 93

Employees' Provident Fund 10 10

92 103

Group and Company

Other members of key management personnel comprise persons other than directors

of the Group entities, having authority and responsibility for planning, directing and

controlling the activities of the Group entities either directly or indirectly.

The details of remuneration received and receivable by directors of the Company

during the financial year are as follows:-

2011 2010

RM'000 RM'000

Executive:

- salaries 720 720

- allowances 96 96

- other emoluments 86 86

902 902

Non-Executive:

- fees 172 75

Total directors' remuneration 1,074 977

Group and Company

59


19. SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)

(c) Key management personnel remuneration (Continued)

The number of directors of the Company whose total remuneration during the

financial year fell within the following bands is analysed below:-

Number of Directors

2011 2010

Executive directors:

RM50,001 – RM100,000 1 -

RM100,001 – RM500,000 2 2

Non-executive directors:

RM50,000 and below 3 4

20. FAIR VALUE OF FINANCIAL INSTRUMENTS

Determination of fair value

The following are classes of financial instruments that are not carried at fair value and

whose carrying amounts are reasonable approximation of fair value:-

Note

Financial assets (current)

Trade and other receivables 8

Fixed deposits placed with licensed banks 8

Cash and bank balances 8

Financial liabilities (current)

Trade and other payables 14

The carrying amounts of these financial assets and liabilities are reasonable approximation

of fair values, either due to their short term nature or that they are floating rate instruments

that are re-priced to market interest rates or near the reporting date.

60


21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group seeks to manage effectively various risks namely credit, liquidity, foreign

currency, and interest rate risks to which the Group is exposed to in its daily operations.

(a) Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a

financial instrument fails to meet its contractual obligations. The Group’s objective is

to seek continual revenue growth while minimising losses incurred due to increased

credit risk exposure. The Group’s exposure to credit risk arises primarily from trade

and other receivables. For other financial assets (including fixed deposits placed with

licensed banks and cash and bank balances), the Group and the Company minimise

credit risk by dealing exclusively with high credit rating counterparties. The

management has a credit policy in place to monitor and minimise the exposure of

default. Credit evaluations are performed on all customers requiring credit over certain

amount.

(i) Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to

credit risk is represented by the carrying amount of each class of financial assets

recognised in the statements of financial position.

(ii) Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country

profile of its trade receivables on an ongoing basis.

(iii) Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor

impaired is disclosed in Note 8 to the financial statements.

(iv) Financial assets that are either past due or impaired

Information regarding financial assets that are past due or impaired is disclosed in

Note 8 to the financial statements.

(v) Amount owing by subsidiaries

The amount owing by subsidiaries is unsecured, interest free and repayable on

demand. The Company monitors the results of the subsidiaries regularly.

As at the end of the financial year, the maximum exposure to credit risk is

represented by their carrying amounts in the statement of financial position.

61


21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

(b) Liquidity risk

The Group actively manages its debt maturity profile, operating cash flows and the

availability of funding so as to ensure that all financing, repayment and funding needs

are met. As part of its overall prudent liquidity management, the Group maintains

sufficient levels of cash or cash convertible investments to meet its working capital

requirements.

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s

liabilities at the reporting date based on contractual undiscounted repayment

obligations.

On

Demand More

or within 1 - 5 than

Financial Liabilities 1 Year Years 5 Years Total

2011 RM'000 RM'000 RM'000 RM'000

Group

Trade payables 60 - - 60

Other payables and accruals 430 - - 430

Total undiscounted financial liabilities 490 - - 490 -

Company



Total undiscounted financial liabilities 438 - - 438

2010

Group



Total undiscounted financial liabilities 317 - - 317 -

Company



Total undiscounted financial liabilities 298 - - 298

62


21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial

instrument will fluctuate because of changes in foreign exchange rates.

During the financial year, the Group is exposed to foreign currency risk on transactions

that are denominated in currencies other than Ringgit Malaysia. The foreign currencies

in which these transactions are denominated are mainly Hong Kong Dollar (“HKD”).

The Group and the Company ensure that the net exposure to this risk is kept to an

acceptable level by buying or selling foreign currencies at spot rates where necessary to

address short-term imbalances. Management does not enter into currency hedging

transactions since it considers that the cost of such instruments outweigh the potential

risk of exchange rate fluctuations.

The financial assets and financial liabilities of the Group that are not denominated in

their functional currencies are disclosed in respective note to the financial statements.

Sensitivity analysis for foreign currency

The following table demonstrate the sensitivity of the Group’s profit net of tax to a

reasonably possible change in the exchange rates of HKD against the functional

currency of the Group, with all the other variables held constant.

2011 2010

RM'000 RM'000

Profit/(loss) Profit/(loss)

for the year for the year

HKD/RM - strengthened 3% (2009 : 3%) 532 524

- weakened 3% (2009 : 3%) (532) (524)

Company

22. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a

strong credit rating and healthy capitals ratio in order to support its business and maximise

shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in

economic conditions. To maintain or adjust the capital structure, the Group may adjust the

dividend payment to shareholders, return capital to shareholders or issue new shares. No

changes were made in the objectives, policies or processes during the years ended 28th

February 2011 and 28th February 2010.

The Group monitors capital using a gearing ratio, which is total debt divided by total capital

plus total debt. The Group’s policy is to keep the gearing ratio between 0.1% and 2%. The

Group includes within total debt, trade and other payables.

63


22. CAPITAL MANAGEMENT (Continued)

The gearing ratio of the Group and the Company is as follows:-

2011 2010 2011 2010

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

Trade and other payables 14 490 317 438 298

Total debt 490 317 438 298

Equity attributable to owners

of the parent 39,928 72,527 23,538 79,728

Capital and total debt 40,418 72,844 23,976 80,026

Gearing ratio 1.2% 0.4% 1.8% 0.4%

Group Company

The Group is also required to comply with the disclosure and necessary capital requirements

as prescribed in the ACE Market Listing Requirements of Bursa Malaysia Securities

Berhad.

23. OPERATING SEGMENTS

During the financial year, the Group adopted FRS 8 Operating Segments. FRS 8 requires the

identification of operating segments on the basis of internal reports that are regularly

reviewed by the Group’s chief operating decision maker in order to allocate resources to the

segments and assess their performance.

General Information

The information reported to the Group’s chief operating decision maker to make decisions

about resources to be allocated and for assessing their performance is based on the

geographical location of revenue is derived, and has two reportable operating segments as

follows:-

(a) Malaysia

(b) Hong Kong

Except as above, no other operating segment has been aggregated to form the above

reportable operating segments. There are no inter-segment revenues.

Measurement of Reportable Segments

Segment information is prepared in conformity with the accounting policies adopted for

preparing and presenting the consolidated financial statements.

Transactions between reportable segments are measured on the basis that is similar to those

external customers.

64


23. OPERATING SEGMENTS (Continued)

Measurement of Reportable Segments

Segment profit or loss is profit earned or loss incurred by each segment without allocation of

central administrative costs, non-operating investment revenue, finance costs and income tax

expense. There are no significant changes from prior financial year in the measurement

methods used to determine reported segment profit or loss.

All the Group’s assets are allocated to reportable segments other than assets used centrally

for the Group, current and deferred tax assets. Jointly used assets are allocated on the basis

of the revenues earned by individual segments.

All the Group’s liabilities are allocated to reportable segments other than liabilities incurred

centrally for the Group, current and deferred tax liabilities. Jointly incurred liabilities are

allocated in proportion to the segment assets.

Per

Consolidated

Hong Financial

Malaysia Kong Elimination Statements

2011 RM'000 RM'000 RM'000 RM'000

Revenue

External customer 8,238 37 - 8,274

Results

Interest income 18 - - 18


trade receivables 76 - - 76

Amortisation 4,731 - - 4,731

Depreciation 3,836 22 - 3,858

Impairment loss on non-financial

assets 80,722 - (52,457) 28,265

Segment profit or loss (85,531) (4) 52,457 (33,078)

Assets

Additions to property, plant and

equipment 7,740 - - 7,740

Inter segment assets 63,295 16,437 (79,732) -

Liabilities

Inter segment liabilities 63,591 15,636 (79,227) -

65


23. OPERATING SEGMENTS (Continued)

Per

Consolidated

Hong Financial

Malaysia Kong Elimination Statements

2010 RM RM RM RM

Revenue

External customer 9,806 54 - 9,860

Results

Interest income 46 - - 46


trade receivables 214 - - 214

Amortisation 4,402 - - 4,402

Depreciation 3,555 26 - 3,581

Impairment loss on non-financial

assets 537 - (537) -

Segment profit or loss (3,572) (92) 537 (3,127)

Assets

Additions to property, plant and

equipment 13,021 - - 13,021

Inter segment assets 61,157 18,118 (79,275) -

Liabilities

Inter segment liabilities 61,444 17,247 (78,691) -

24. COMPARATIVE FIGURES

FRS 101 (revised), Presentation of Financial Statements

Arising from the adoption of FRS 101 (revised), profit or loss for the financial year ended

28th February 2010 have been re-presented as statement of comprehensive income. All non-

owner changes in equity that were presented in the statements of changes in equity are now

included in the statement of comprehensive income as other comprehensive income.

Consequently, components of comprehensive income are not presented in the statements of

changes in equity.

66


25. SUBSEQUENT EVENTS

(a) Private Placement

Subsequent to the financial year ended, the issued and paid-up ordinary share capital

of the Company has increased from RM73,411,000/- to RM74,011,000/- by way of

the issuance of 6,000,000 ordinary shares of RM0.10 each for cash via private

placements as additional working capital purposes.

(b) Acquisition of an Associate Company

On 1st April 2011, the Company acquired 246,000 ordinary shares representing 41%

equity interest in Global Mineral Technology Sdn. Bhd. for a purchase consideration

of RM3 million. The purchase consideration is to be satisfied by way of RM1 million

cash and issuance of 20 million new ordinary shares of RM0.10 each. The proposed

acquisition is to be completed upon the satisfaction of the conditions precedent

mentioned therein.

67


SUPPLEMENTARY INFORMATION ON THE DISCLOSURE OF REALISED AND

UNREALISED PROFITS OR LOSSES

On 25th March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to

all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing

Requirements. The directive requires all listed issuers to disclose the breakdown of the retained

profits or accumulated losses as at the end of the reporting period, into realised and unrealised

profits and losses.

On 20th December 2010, Bursa Malaysia further issued guidance on the disclosure and the format

required.

Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the

accumulated losses of the Group and the Company as at 28th February 2011 are as follows:-

Group Company

2011 2011

RM'000 RM'000

Total accumulated losses of the Company and its subsidiaries

- realised (98,659) (62,798)

- unrealised - -

(98,659) (62,798)

Less: Consolidation adjustments 52,989 -

Total accumulated losses (45,670) (62,798)

The determination of realised and unrealised losses is based on Guidance of Special Matter No. 1,

Determination of Realised and Unrealised Profits and Losses in the Context of Disclosure

Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian

Institute of Accountants on 20th December 2010.

The disclosure of realised and unrealised losses above is solely for complying with the disclosure

requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other

purposes.

68


asiaEP BERHAD


STATEMENT BY DIRECTORS

We, DR. TAN BOON NUNT and LEE SUET HONG, being two of the directors of asiaEP

Berhad, do hereby state that in the opinion of the directors, the financial statements set out on

pages 8 to 66 are properly drawn up in accordance with the Financial Reporting Standards and the

provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the

financial position of the Group and of the Company as at 28th February 2011 and of the results

and cash flows of the Group and of the Company for the financial year ended on that date.

The supplementary information set out on page 67 has been compiled in accordance with the

Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in

the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,

issued by the Malaysian Institute of Accountants.

On behalf of the Board,

...............................................

DR. TAN BOON NUNT

Director

..............................................

LEE SUET HONG

Director

Kuala Lumpur

Date: 10th May 2011

69


asiaEP BERHAD


STATUTORY DECLARATION

I, CHAN CHEE HOE, being the officer primarily responsible for the financial management of

asiaEP Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the

financial statements set out on pages 8 to 66, and the supplementary information set out on page

67 are correct, and I make this solemn declaration conscientiously believing the same to be true,

and by virtue of the provisions of the Statutory Declarations Act, 1960.

...............................................

CHAN CHEE HOE

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory

on 10th May 2011.

Before me,

...................................................

Tengku Fariddudin

No. W533

Commissioner for Oaths

70


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

asiaEP BERHAD


Report on the Financial Statements

We have audited the financial statements of asiaEP Berhad, which comprise the statements of

financial positions as at 28th February 2011 of the Group and of the Company, and the statements

of comprehensive income, statements of changes in equity and statements of cash flows of the

Group and of the Company for the financial year then ended, and a summary of significant

accounting policies and other explanatory notes, as set out on pages 8 to 66.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give

a true and fair view in accordance with the Financial Reporting Standards (“FRSs”) and the

Companies Act, 1965 (“the Act”) in Malaysia, and for such internal controls as the directors

determine are necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

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 about whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on our judgement,

including the assessment of risks of material misstatement of the financial statements, whether due

to fraud or error. In making those risk assessments, we consider internal controls relevant to the

Company’s preparation of the financial statements that give true and fair view in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the Company’s internal controls. 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.

71


Opinion

In our opinion, the financial statements have been properly drawn up in accordance with the FRSs

and the Act so as to give a true and fair view of the financial position of the Group and of the

Company as of 28th February 2011 and of their financial performance and cash flows for the

financial year then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Act, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Act to be

kept by the Company and its subsidiaries of which we have acted as auditors have been

properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ report of the subsidiary of

which we have not acted as auditors, which are indicated in Note 6 to the financial

statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated

with the Company’s financial statements are in form and content appropriate and proper for

the purposes of the preparation of the financial statements of the Group and we have

received satisfactory information and explanations required by us for those purposes.

(d) The audit reports on the financial statements of the subsidiaries did not contain any material

qualifications or any adverse comments made under Section 174(3) of the Act.

Other Matters

The supplementary information set out on page 67 is disclosed to meet the requirement of Bursa

Malaysia Securities Berhad and is not part of the financial statements. The directors are

responsible for the preparation of the supplementary information in accordance with the Guidance

on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the

Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as

issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa

Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all

material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia

Securities Berhad.

This report is made solely to the members of the Company, as a body, in accordance with Section

174 of the Act and for no other purpose. We do not assume responsibility to any other person for

the content of this report.

Baker Tilly Monteiro Heng M.J. Monteiro

No. AF 0117 No. 828/05/12 (J/PH)

Chartered Accountants Partner

Kuala Lumpur

Date: 10th May 2011

91



Type of shares : Ordinary shares of RM 0.10 each

Voting rights : One vote per shareholder on a show of handsOne vote per ordinary share on a poll

Number of shareholders : 5,673

Analysis of Shareholdings

Size of Holdings No of Holders % of Holders No of Shares %

Less than 100101 - 1,0001,001 - 10,00010,001 - 100,000100,001 - Less than 5% ofissued shares5% and above of issued share

Total

1,048209,672

8,663,800132,966,833544,716,842

50,550,060

737,108,255

0.000.031.17

18.0473.90

6.86

100

Analysis of Shareholdings as at 26 April 2011

24259

1,4292,794

1,166

1

5,673

List of Substantial Shareholders as Per Register of Substantial Shareholders

Name Direct % Indirect %

Topclass Access Sdn. Bhd (TASB)

Dr. Tan Boon Nunt

Lee Suet Hong

91,550,060

1,924,174

74

-

12.42

12.42

12.42

0.26

0.00

-

91,550,060 *

91,550,060 *

Direct & deemed interest of Director

Name Direct % Indirect % Esos % Warrant %

* Deemed interested by virtue of their shareholding in TASB pursuant to Section 6A of the Companies Act, 1965.

Dr. Tan Boon Nunt

Lee Suet Hong

Tan Sri Dato’ Ahmad Fuzi binHaji Abdul Razak

Mr Khor Chai Tian Mr Lim Ghim Chai

Mr Chu Kheh Wee

0.26

-

-

---

91,550,060 *

91,550,060 *

-

---

12.42

12.42

-

---

-

-

-

---

-

-

-

---

-

-

-

---

-

-

-

---

1,924,174

74

-

---

0.424.57

25.1949.25

20.55

0.02

100.00



List of Top 30 shareholders

Name No. of Shares Held %

EB NOMINEES (TEMPATAN) SENDIRIAN BERHADPLEDGED SECURITIES ACCOUNT FOR TOPCLASS ACCESSSDN BHD (SFC)

LEE SUAT YEAN

M & A NOMINEE (TEMPATAN SDN BHDTOPCLASS ACCESS SDN BHD (M&A)

CIMB GROUP NOMINEES (TEMPATAN) SDN BHDLEE SUET HONG FOR TOPCLASS ACCESS SDN BHD

(17876 PETA)

CIMB GROUP NOMINEES (TEMPATAN) SDN BHDTAN BOON NUNT FOR TOPCLASS ACCESS SDN BHD(3977 PETA)

HUANG, CHIANG-MEI

WAN SARA BINTI MOHD SAID

TEH PIAK HUAT

TAN BOON SHEN

NG LEONG HWA

ESTHER KEONG PEI PEI

MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHIN TEK MING(REM 156-MARGIN)

GOH CHYE HONG

TAN KEE @ TAN ZERN KEE

TAN ENG HUAT

NG BOK WAH

YAP KON HIN

A.A. ANTHONY NOMINEES (ASING) SDN BHDAMFRASER SECURITIES PTE LTD FOR TAN EANG MIN (125768)

ASIAEP BERHAD SHARE BUY BACK ACCOUNT

SIM MUI KHEE

TAN KIM LENG ENTERPRISE SDN BHD

TOH BEE HIANG

SURAJ SINGH A/L JASWANT SINGH

AMBANK (M) BERHADPLEDGED SECURITIES ACCOUNT FOR WONG AH YONG (SMART)

MOHD NOOR ZAIMI BIN ZAINOL

RUBEN KELVIN RAJADURAI

HLG NOMINEE (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR WONG AI GIN (CCTS)

HO CHEE SHEONG

WONG AH YONG

CHAN YOOK KEONG

Total

50, 550, 060

15, 202, 000

15, 000, 000

13, 000, 000

13, 000, 000

11, 490, 300

7, 313, 000

6, 300, 000

6, 000, 000

5, 000, 000

4, 600, 000

4, 254, 700

3, 934, 600

3, 800, 000

3, 755, 200

3, 700, 000

3, 600, 600

3, 500, 000

3, 423, 300

3, 300, 000

3, 250, 000

3, 000, 000

3, 000, 000

2, 962, 000

2, 879, 000

2, 853, 900

2, 700, 000

2, 300, 000

2, 300, 000

2, 250, 000

208, 218, 060

6.86

2.06

2.03

1.76

1.76

1.56

0.99

0.85

0.81

0.68

0.62

0.58

0.53

0.51

0.51

0.50

0.49

0.47

0.46

0.45

0.44

0.41

0.41

0.40

0.39

0.39

0.37

0.31

0.31

0.31

28.22

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Analysis of Shareholdings as at 26 April 2011

93



Analysis of warrant holdings

Size of holdings No of Holders % No of warrants %

Less than 100100 - 1,0001,001 - 10, 00010,001 - 100,000100,001 - Less than 5% ofissued warrants5% and above ofissued warrants

Total

23,94725,443

1,913,27016,981,84067,044,044

8, 614, 000

94, 602, 544

0.030.032.02

17.9570.87

9.10

100

Analysis of warrant 2006/2011 holdings as at 26 April 2011

47493

300409153

1

1, 430

33.156.50

20.9828.6010.70

0.07

100.00



List of Top 30 warrant 2006/2011 holders

Name No. of warrant held %

1 CIMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR BONG SOO MAY

(PENANG-CL)

2 LIM HONG HOCK

3 TA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LAW GIM PHUAH

4 OON TEIK HOCK

5 SIM MUI KHEE

6 MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHIN TEK MING(REM 156-MARGIN)

7 AZIZAH BINTI ABDUL RAHMAN 8 TA NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR LEONG SIEW LAN

9 HARBENDAR KAUR A/P NASHTER SINGH

1 0 LIM HING FUN @ LIM KHENG HO

1 1 VEERA PANDIYAN A/L KALIANI SUNDRAM

1 2 CHU CHOA YEW

1 3 JF APEX NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR JEEVAMALAR A/P

KUMARASUBRAMANIAM (STA 2)

1 4 HII HIENG HUI 1 5 LIM VEI TAT

1 6 WONG YOON SIONG 1 7 LAU CHEE OON

1 8 TAN LIAM KWEE

1 9 TAN EE PENG

2 0 CHER DONG THENG 2 1 SJ SEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR ANG SIEW IM (SMT)

2 2 HARJINDER SINGH A/L KULDIP SINGH

2 3 CHANDRA A/P K KANAGASABAI

2 4 LEE AH BENG

2 5 TAN KHAY LONG

2 6 MUHAMMAD NIZAM BIN ALIAS

2 7 MATHESWARAN RAJAGOPAL

2 8 WONG AH YONG

2 9 NGOI SAI

3 0 HII YU GUAN

Total

8,614,000

2,999,600

2,950,000

2,874,596

2,695,340

2,336,700

2,149,900

2,100,000

1,789,143

1,350,000

1,000,100

1,000,044

1,000,000

991,240

860,300

800,000

800,000

800,000

770,200

762,300

679,990

664,130

650,022

600,000

600,000

600,000

594,744

594,744

584,900

549,146

44,761,139

9.11

3.17

3.12

3.04

2.85

2.47

2.27

2.22

1.89

1.43

1.06

1.06

1.06

1.05

0.91

0.84

0.84

0.84

0.81

0.81

0.72

0.70

0.69

0.63

0.63

0.63

0.63

0.63

0.62

0.58

47.31


95



Analysis of warrant holdings

Size of holdings No of Holders % No of warrants %

Less than 100100 - 1,0001,001 - 10, 00010,001 - 100,000100,001 - Less than 5% ofissued warrants5% and above ofissued warrants

Total

19474,400

5,802,85746,675,800

189,341,734

0

241,894,985

0.000.032.40

19.3078.27

0.00

100


482

9451,082

386

0

2,499

0.163.28

37.8143.3015.45

0.00

100



List of Top 30 warrant 2009/2014 holders

Name No. of warrant held %

1 LEE SUAT YEAN 2 TAN BOON NUNT 3 NG LEONG HWA

4 LEE SUET HONG 5 CIMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR BONG SOO MAY

(PENANG-CL)

6 MOHD NOOR ZAIMI BIN ZAINOL 7 AMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR CHIN CHIN SEONG

8 CHOO POH TIT

9 LOH GEE TONG 1 0 SURAJ SINGH A/L JASWANT SINGH 1 1 SIM MUI KHEE

1 2 TOH GIOK LAN

1 3 TA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR NG GEOK CHOO

1 4 TAN EE WAH

1 5 FOO FOOK MIN 1 6 SON KAT PEE @ SOIN KAT PEE 1 7 LIM YEE HOE

1 8 NOR AZIZY BINTI ABDUL AZIZ 1 9 AMSEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR CHUA KIM BOON

2 0 PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR HII PUO ANN(E-BTL)

2 1 CIMSEC NOMINEES (TEMPATAN) SDN BHD CIMB BANK FOR LEN BOOK LEARN (M66002)

2 2 NG KWEE FAH

2 3 LEE YON HIN

2 4 LIM KEAN BENG 2 5 GOH CHYE HONG 2 6 TAN KHAY LONG 2 7 TOPCLASS ACCESS SDN BHD 2 8 YAP KON HIN

2 9 ZAILEEZA BINTI MOHD ZAIN 3 0 LIM LEONG HENG

Total

5,111,000

4,874,907

4,681,800

4,600,907

4,389,000

4,089,900

4,000,000

3,280,000

3,255,700

3,000,000

2,957,200

2,900,000

2,784,800

2,570,000

2,100,000

1,900,000

1,700,000

1,527,200

1,500,000

1,500,000

1,437,100

1,430,000

1,430,000

1,378,000

1,355,200

1,300,000

1,250,000

1,200,000

1,200,000

1,168,000

75,870,734

2.11

2.02

1.94

1.90

1.81

1.69

1.65

1.36

1.35

1.24

1.22

1.20

1.15

1.06

0.87

0.79

0.70

0.63

0.62

0.62

0.59

0.59

0.59

0.57

0.56

0.54

0.52

0.50

0.50

0.48

31.37


97



Description/existing use

3rd Floor,Corner-Shop lot/Commercial

Single-storeysemi-detached

house/residential

Double-storeyshop-office

Double-storeyshop-office

1st Floor,Strata shop-office

Date ofAcquisition/Price

24 Nov 2001RM 67,400

12 April 2002RM 180,000

6 July 2004RM 430,000

6 July 2004RM 430,000

20 Oct 2009RM 293,733

Age ofBuildings/Land Area

7 years/ 784 sq ft

50 years/2942 sq ft

14 years/1540 sq ft

14 years/1540 sq ft

2 years/1710 sq ft

Tenure

Leaseholdfor99 years,expiringon14 June2092

Leaseholdfor99 years,expiringon12 July2056



Freehold

List of Properties

Auditednet bookvalueas at28 February2011 (RM’000)

59

157

385

385

285

Landed property

Registered owner/title/ Address

Unit 553-3A,3rd FloorMetro Ipoh Baru,Perak(Master Title Nos:HS(D)KA 27098,27099, 27100,27101, 27105 andPT No. 123928 inthe Mukin of HuluKinta, District ofKinta, State ofPerak)

35, Jalan 8/18,Petaling Jaya46050 Selangor(H.S. (D) 124476,Lot No. PT 35,Road 8/18, BandarPetaling Jaya,District of PetalingJaya)

18, Jalan TK2/1C, TamanKinrara Seksyen 2,47100 Puchong, SelangorDarul Ehsan, Malaysia

20, Jalan TK2/1C, TamanKinrara Seksyen 2,47100 Puchong, SelangorDarul Ehsan, Malaysia

Lot 77-1, Block K,Business Avenue ll,Neocyber, LingkaranCyber Point Barat, 63000Cyberjaya, Selangor



NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of the Company will be held at Putra 4, PalmGarden Hotel, IOI Resort, 62502 Putrajaya, Malaysia on Friday, 17 June 2011 at 9.00 a.m. to transact the following businesses:-

Notice of Annual General Meeting

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 28February 2011 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ Fees for the financial year ended 28 February 2011.

3. To consider and if thought fit, to pass the following resolutions:-

3.1. “That Dr Tan Boon Nunt who retires pursuant to Article 90 of the Company’s Articles ofAssociation, be and is hereby re-elected a Director of the Company.”

3.2. “That Mr Lim Ghim Chai who retires pursuant to Article 90 of the Company’s Articlesof Association, be and is hereby re-elected a Director of the Company.”

4. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorisethe Directors to fix their remuneration.

5. SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions:-

5.1. As Ordinary ResolutionAuthority to Issue Shares

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6“That, subject always to the Companies Act, 1965 and the approvals of therelevant governmental and/or regulatory authorities, the Directors be and arehereby empowered, pursuant to Section 132D of the Companies Act, 1965, toissue shares in the Company from time to time at such price, upon such termsand conditions, for such purposes and to such person or persons whomsoeveras the Directors may deem fit provided that the aggregate number of sharesissued in any one financial year of the Company pursuant to this resolutiondoes not exceed 10% of the issued share capital of the Company for the timebeing and that the Directors be also empowered to obtain the approval for thelisting and the quotation of the additional shares so issued on Bursa MalaysiaSecurities Berhad (“BMSB”) and that such authority shall continue in forceunti l the conclusion of the next Annual General Meeting (“AGM”) of theCompany.”

99



5.2. As Special ResolutionProposed Change of Name

6. To transact any other business for which due notice shall have been given.

BY ORDER OF THE BOARD

Wong Youn Kim (MAICSA 7018778)Sin May Peng (MAICSA 7018354)Company Secretaries

Selangor Darul Ehsan

Dated : 26 May 2011

Resolution 7“THAT the name of the Company be changed from AsiaEP Berhad to AsiaEPResources Berhad with effect from the date of Certificate of Incorporation on Changeof Name of the Company to be issued by the Companies Commission of Malaysia,and that the Memorandum and Articles of Association of the Company be amendedaccordingly, wherever the name of the Company appears (Proposed Change ofName”); AND THAT the Directors of the Company be and are hereby authorised togive effect to the Proposed Change of Name with full power to assent to anyconditions, modifications, variations and/or amendments as may be required by anyrelevant authorities or which the Directors may consider necessary or expedient togive effect to the said Proposed Change of Name.”



RM1,100,000.00

901,951.23 57,400.00

140,648.77

NOTES:-

A proxy may but does not need to be a Member of the Company and the provisions of Section 149(1)(b) of the CompaniesAct, 1965 need not be complied with.

To be valid this form duly completed must be deposited at the office of the Company or such place as is specified for thatpurpose in the notice convening the meeting not less than 48 hours before the time for holding the meeting.

A Member shall be entitled to appoint more than one proxy to attend and vote at the same meeting.

Where a Member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of hisholding to be represented by each proxy.

If the appointor is a corporation, this form must be executed under its common seal or under the hand of its attorney.

Explanatory notes on special business

1. Authority to issue shares

The Ordinary Resolution proposed under item 5.1, if passed, will authorise the Directors of the Company to issue shares upto a maximum ten per cent (10%) of the issued share capital of the Company for the time being for such purposes as theDirectors consider would be in the interest of the Company. This authority, unless revoked or varied by the shareholders ofthe Company in general meeting will expire at the conclusion of the next Annual General Meeting.

As at the date of Notice of Meeting, 11,000,000 ordinary shares of RM0.10 each were issued (via private placement)pursuant to the general mandate granted to the Directors at the last Annual General Meeting held on 16 June 2010 andwhich will lapse at the conclusion of the Eighteenth Annual General Meeting. Out of the total proceeds of RM1,100,000.00raised, RM959,351.23 had been utilized in the following manner:-

Proceeds from private placements

Utilisations : -

1. Working Capital2. Defray Private Placement Expenses

Balance c/f

The renewal of the mandate is to provide flexibility to the Company to issue new shares without the need toconvene a separate general meeting to obtain shareholders’ approval so as to avoid incurring additionalcost and time. The purpose of this mandate is for possible fund raising execises including but not limited tofurther placement of shares for purpose of funding current and/or future investment projects, working capitaland/or acquisitions.

2. Proposed Change of Name

The Special Resolution proposed under item 5.2, if passed, will enable the Company to change its name to betterreflect the Company’s intention to diversify its businesses and scope of activities. The details of the Proposed Changeof Name are set out in Appendix 1 attached with the Annual Report for the financial year ended 28 February 2011.

101



The Directors who are standing for re-election at the Eighteentn Annual General Meeting of the Company pursuant to Article90 of the Articles of Association of the Company are :-

1. Dr Tan Boon Nunt2. Mr Lim Ghim Chai

The details of the above Directors seeking re-election are set out in the Directors’ Profile as disclosed on pages 7 and 8 of thisAnnual Report.

Dr Tan Boon Nunt’s interests in the securities of the Company or its subsidiaries is as disclosed on page 5 and 6 of the AuditedFinancial Statements for the financial year ended 28 February 2011, whilst Mr Lim Ghim Chai does not have any interests inthe securities of the Company or its subsidiaries.

Statement Accompanying Notice of Annual General Meeting



Proxy FormProxy FormASIAEP BERHAD

(Company No. : 253387-W)(Incorporated In Malaysia)

I/We, ………… ….……..………………………………NRIC No. :…………………………...............................….

of……………………….………………………………………………………………………..............................…..

……………………..…………………………………………………………………………...........................………

being a member/members of the abovenamed Company, hereby appoint……………………................………………………………………..……of………………………………………………..………….…or failing him, theChairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the EighteenthAnnual General Meeting of the Company to be held at Putra 4, Palm Garden Hotel, IOI Resort, 62502 Putrajaya,Malaysia on Friday, 17 June 2011 at 9.00 a.m. and at any adjournment thereof in the manner indicated below :-

Resolutions Number For Against

Receive and Consider Accounts and Reports 1

Directors’ Fees 2

Re-appointment/ Re-election of Directors of the Company:-

- Dr Tan Boon Nunt 3

- Mr Lim Ghim Chai 4

Re-Appointment of Auditors - Baker Tilly Monteiro Heng 5

Authority to issue shares pursuant to Section 132D 6

Proposed Change of Name 7

Please indicate with an “X” in the appropriate box against the resolution how you wish your proxy to vote. Ifno instruction is given, this form will be taken to authorise the proxy to vote at his/her discretion.

Number of Shares ………………………

CDS No. ……………............................…

……………………….……..….……..…........ …………………………..……..….……..….Date : Signature

Notes:-A proxy may but does not need to be a Member of the Company and the provisions of Section 149(1)(b) of theCompanies Act, 1965 need not be complied with.

To be valid this form duly completed must be deposited at the office of the Company or such place as is specified for thatpurpose in the notice convening the meeting not less than 48 hours before the time for holding the meeting.

A Member shall be entitled to appoint more than one proxy to attend and vote at the same meeting.

Where a Member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportionof his holding to be represented by each proxy.

If the appointor is a corporation, this form must be executed under its common seal or under the hand of its attorney.

103



fold this line for sending

Second fold here

Third fold here

asiaEP BERHAD (Co No: 253387-W)

18 & 20, Jalan TK2/ 1C, Taman Kinrara

Seksyen 2, 47180 Puchong

Selangor Darul Ehsan, Malaysia

Af f i x

Stamp

APPENDIX 1Registered Office :18 & 20, Jalan TK2/1CTaman Kinrara Seksyen 247180 Puchong, Selangor

Board of Directors

Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul Razak (Executive Chairman)Dr Tan Boon Nunt (Managing Director)Lee Suet Hong (Ms) (Executive Director)Khor Chai Tian (Independent Non-Executive Director)Lim Ghim Chai (Independent Non-Executive Director)Chu Kheh Wee (Independent Non-Executive Director)

To : The Shareholders of AsiaEP Berhad

Dear Sir / Madam

ASIAEP BERHAD (“ASIAEP” OR “THE COMPANY”)PROPOSED CHANGE OF NAME FROM ASIAEP BERHAD TO ASIAEP RESOURCES BERHAD

1. INTRODUCTION

On 10 May 2011, the Company announced that it proposes to change its name from AsiaEP Berhad to AsiaEP Resources Berhad.

THE PURPOSE OF THE LETTER IS TO PROVIDE YOU WITH DETAILS OF THE PROPOSED CHANGE OF NAME AND TO SEEK YOUR APPROVAL FOR THE RESOLUTION TO BE TABLED AT THE FORTHCOMING ANNUAL GENERAL MEETING (“AGM”). THE NOTICE OF WHICH IS SET OUT HEREIN.

2. RATIONALE FOR THE PROPOSED CHANGE OF NAME

The proposed new name of AsiaEP Resources Berhad would be more appropriate and better reflection of AsiaEP’s intention to diversify its businesses and scope of activities.

3. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

None of the Directors, major shareholders and/or persons connected with the Directors or major shareholders of AsiaEP has any interest, direct or indirect, in the Proposed Change of Name.

4. CONDITIONS AND APPROVALS REQUIRED

The Proposed Change of Name is conditional upon the following approvals being obtained :

i) the approval of Companies Commission of Malaysia (“CCM”). The CCM had on 4 May 2011 given the approval for the reservation of name for three (3) months from the date thereof; andii) the approval of the shareholders of AsiaEP

The Proposed Change of Name will be effective from the date of issuance of the Certificate of Incorporation on Change of Name by the CCM .

5. DIRECTORS’ RECOMMENDATION

The Board of Directors is of the opinion that the Proposed Change of Name is in the best interest of the Company and therefore recommends that you vote in favour of the resolution pertaining to the Proposed Change of Name to be tabled at the forthcoming AGM of AsiaEP.

6. AGM

The AGM, the notice of which is enclosed in the 2011 Annual Report, will be held at Putra 4, Palm Garden Hotel, IOI Resort, 62502 Putrajaya on Friday, 17 June 2011, at 9.00 a.m, for the purpose of considering and, if thought fit, passing the resolution to authorise the Board of AsiaEP to give effect to the Proposed Change of Name.

If you are unable to attend and vote in person at the abovesaid meeting, please complete, sign and return the attached relevant Proxy Form in accordance with the instructions printed thereon as soon as possible and in any event, so as to arrive at the Registered Office of the Company at 18 & 20, Jalan TK2/1C, Taman Kinrara Seksyen 2, 47180 Puchong, Selangor, not later than forty-eight (48) hours before the time set for holding the meeting. The lodging of the Proxy Form will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so.

Yours faithfullyFor and on behalf of the Board of Directors ofASIAEP BERHAD

TAN SRI DATO’ AHMAD FUZI BIN HAJI ABDUL RAZAKEXECUTIVE CHAIRMAN

asiaep bhd asiaep bhd (company no. 253387-w) asiaep annual report 2011 chairman’s statement...

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