directors’ ang chin joo profile age 59, malaysian

Ang Chin JooIndependent Non-Executive DirectorAge 59, Malaysian

Ang Chin Joo is an Independent Non-Executive Director of the Company. As the former Executive Director and CEO, Ang was responsible for setting up the business directions and formulating the strategy for the Company in its earlier years. Ang has been on the Board since 29 May 1998.

He began his career in the IT industry with Computer Systems Advisers Berhad (CSA) in 1976. Ang joined IBM Malaysia in 1981 where he spent 13 years in various sales marketing, services, management and consulting positions covering various industries such as banking, telecommunications, airlines, utilities, as well as small and medium enterprises. His consulting stint in IBM in 1992 and 1993 included being the Principal of the IBM Consulting Group for the ASEAN region.

Ang left IBM in 1994 to become the first Country Manager for Compaq Computer Malaysia. After spending three years in Compaq, he moved on to become the CEO of IT Partners Sdn Bhd in 1996 and the Managing Director of Transight Systems in 1997. Ang is currently a Director of Milux Corporation Berhad and the President of PIKOM, the Association of the Computer and Multimedia Industry of Malaysia.

Ang graduated with a Bachelor of Applied Science (Honours) from the University of Science Malaysia in 1976.

Directors’Profile

2010 ANNUAL REPORT27 / 27

Tai Keat ChaiIndependent Non-Executive DirectorAge 57, Malaysian

Tai Keat Chai was appointed to the Board on 28 May 2004.

Tai brings with him many years of valuable experience and insight through his work in KPMG, London between 1977 and 1978, after which he returned to Malaysia and commenced working with PricewaterhouseCoopers in Kuala Lumpur. In 1981, he joined Alliance Investment Bank Berhad where he worked in corporate finance for seven years before he ventured into stock broking, during which he worked in SJ Securities Sdn Bhd, A A Anthony Securities Sdn Bhd and ECM Libra Investment Bank Berhad.

Tai is a Fellow of the Institute of Chartered Accountants in England & Wales and a member of the Malaysian Institute of Accountants. He is also a Director of Chuan Huat Resources Berhad, Disccomp Berhad, Imaspro Corporation Berhad, Opensys (M) Berhad, SILK Holdings Berhad and a few other unlisted companies.

One of the main requirements of being part of the Call Centre is the ability to relate to clients. The new talent development programme gives us the opportunity to harness our people skills.

Key Highlights

NEW OFFICESCuscapi confirmed new office setup and location in Shanghai.

EXTENSION OF SERVICE SCOPE WITH EXISTING CLIENTSCuscapi signed a two-year supply agreement with KFC Malaysia.

Cuscapi replaced 500 units of old Posiflex terminals with new Cuscapi brand POS terminals.

With the rapid growth of the Xiabu Hotpot business in Beijing and Shanghai, Xiabu signed a bulk order with Cuscapi to implement another new batch of 50 stores for Beijing and 36 stores for Shanghai.

Cuscapi signed on to provide consulting/outsourcing services to McDonalds China, providing consultants and analysts to help with McDonalds internal system integration and data centre maintenance

Cuscapi signed software replacement deal with The Chicken Rice Shop.

Cuscapi signed software replacement deal with Nandos.

Pizza Hut Singapore completed roll-out of Transight including the remaining 40 KFC stores in 2011.

Crystal Jade continued using Transight solution for Mybread outlets expanding to eight stores.

NEW PARTNERSXinYatu Fuzhou China for Transight F&B solution.

Thailand Pisit POS signed up as a new distributor.

EVENTSCuscapi participated in the China E-Commerce and IT event in Chongqing, one of the biggest IT events in China every year.

Cuscapi participated in the POS IT & Information event in Stadium Olympic Beijing.

Cuscapi participated in the F&B IT and Information Training workshop in Suzhou, China organised by CCA (China Cuisine Association).

Cuscapi participated in the China Chain Store & Franchise Association (CCFA) workshop in Beijing.

NEW OFFERINGSCuscapi introduced its own Cuscapi brand of POS hardware range.

Launched Transight Ember and Xpress in China market.

Cuscapi implemented new 2nd display of video advertising feature to 100 KFC outlets.

Cuscapi signed 1st anjua? Software license contract with Revenue Valley.

AWARDS & ACCOLADESCuscapi’s Transight application received the Award of Excellence from the China E-Commerce Committee.

Cuscapi Innovation Lab Sdn Bhd ranked 6th against 74 top MSC Malaysia status companies with “Global Potential” under MDeC’s extension of its SCORE+ programme in collaboration with IDC Market Research.


CHINA

F&B INDUSTRY

JCO Donut & Coffee – The first store (Donut and Coffee from Indonesia) introduced in Shanghai, uses Transight POS and HQ.

Nathan Famous (a new hotdog F&B chain store in Beijing) utilised Transight POS, KDS, Inventory and HQ system at their first store in China. It subsequently added on a module of Web Reporting in China, the first Web Reporting implementation in China as a good reference site.

Signed contract with Wei Wo Coffee chain stores, using Transight POS, HQ, Inventory and Membership.

Yonghe King Shanghai started pilot project with Cuscapi, implementing Transight HQ and POS in two new stores in Shanghai, China.

Cuscapi signed a sales contract with Beijing F&B chain store, You Dao Group for three stores consisting of Chinese Fine Dining and Bread store.

Cuscapi signed a sales contract with Yonghe King for their 180 existing stores in China.

NEW CLIENTSMALAYSIA

OTHER INDUSTRY

Cuscapi was awarded the contract to provide, implement and support the IT Logs Management Solution for CIMB in Malaysia.

Cuscapi was contracted to supply, implement and maintain the virtual internet security gateway for CIMB.

Bermaz went live with GENPACX.

Public Bank awarded Cuscapi the project to deploy its data loss prevention solution.

Cuscapi was appointed as the vendor to launch the Portal for Institution of Engineers Malaysia.

AM Bank appointed Cuscapi to supply and implement its Network Address Management Solutions.

A&W Indonesia deployed Cuscapi’s solutions at 150 stores.

Cuscapi won the contract to start the new business with KFC in India.

Food Republic continued to roll-out Transight at Ion Mall, 313, Wisma Atrium and Vivo City shopping mall.

Ministry of Food (MOF) Singapore chose the Transight application.

OTHER INDUSTRYDing Tai Fong resort world used Transight application.

Tunglok chose EPS for e-procurement and inventory management.

Expanded market coverage to Australia and secured the Chocolate Lounge contract to change 16 stores via partner Tosiba Tec Australia.

F&B INDUSTRY

SOUTH EAST ASIA

To achieve our KPI’s, it is important that we constantly challenge ourselves. At Cuscapi, we work as a team to achieve our targets.

Corporate Governance Statement

The Board of Directors (“Board”) of Cuscapi Berhad appreciates the importance of embedding the highest standards of corporate governance best practices in the business and affairs of the Company and the Group and views corporate governance as synonymous with transparency, accountability, integrity and corporate performance as the prerequisites of a responsible corporate citizen.

The Board is also fully committed to sustaining its high standards of corporate governance with the goal of ensuring that the Group is in the forefront of good governance and is recognised as an exemplary organisation in this respect by further supporting and implementing the prescriptions of the Principles and Best Practices set out in the Malaysian Code on Corporate Governance (“Code”). The code has served as a fundamental guide to the Board in discharging its principal duty to act in the best interest of the Company as well as managing the business and affairs of the Group efficiently.

In the attainment of this purpose, the Board is pleased to share the manner in which the Principles of the Code have been applied in the Group in respect of the financial year ended 31 December 2010 and the extent to which the Company has complied with the Best Practices of the Code. The Board believes that the Principles and the Best Practices set out in the Code have, in all material respects, been adhered to and complied with.

The following sets out the manner in which the Principles in Part 1 of the Code have been applied by the Company and are under the headings of Board of Directors, Directors’ Remuneration, Shareholders and Investors, and Accountability and Audit.

A. BOARD OF DIRECTORS

Board Responsibilities The Company is led and controlled by an effective Board comprising members drawn from various professional backgrounds, bringing depth and diversity in experience, expertise and perspectives to the Group’s business operations. The group recognises the pivotal role played by the Board of Directors in the stewardship of its strategic business direction and ultimately in the enhancement of its long-term shareholder value. The Board remains resolute and upholds its responsibility in governing, guiding and monitoring the direction of the Company with the eventual objective of enhancing long-term sustainable value creation aligned with shareholders’ interests whilst taking into account the long-term interests of all stakeholders, including shareholders, employees, customers, business associates and the communities in which the Group conducts its business.

The Board reserves to itself responsibility for the following matters:• Reviewing and adopting corporate strategies and direction for the Group.• The approval of all investment and divestment proposals.• The review and approval of all corporate plans, budgets and other significant matters of a financial nature.• Human resource policies and processes involving the planning, appointing, training including succession planning for top management.

STATEMENT OF PRINCIPLES


Director Status

Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow (Chairman)

Danny Leong Kah Chern (Resigned 31 March 2010)

Her Chor Siong

Dato’ Rosman bin Abdullah

Ang Chin Joo

Tai Keat Chai

Teoh Hoay Ming (Appointed 1 July 2010)

Non-Executive Independent

Executive Non-Independent


Non-Executive Non-Independent




Cuscapi Berhad complies with the Bursa Malaysia Securities Berhad Listing Requirements with regards to Board composition and the required ratio of Independent Directors. The profiles of the Directors are set out on pages 22 to 27 of this Annual Report.

The roles of the Chairman and the Chief Executive Officer are segregated and clearly defined by their individual position descriptions. The Chairman is responsible for running the Board and ensures that all Directors receive sufficient and relevant information on financial and non-financial matters to enable them to participate actively in Board decisions. The Chief Executive Officer is responsible for the day-to-day management of the business as well as the implementation of Board policies and decisions.

The Board will, from time to time, review its composition and size to ensure it fairly reflects the investments of the shareholders of the Company.

• Developing and implementing an effective public communications programme for the Group.• Reviewing the adequacy and integrity of the Group’s internal control systems and management information systems, including system for compliance with applicable laws, regulations, rules, directives and guidelines.• Developing an effective framework for identifying and monitoring significant business risks.

Board Committees The Board of Directors delegates certain responsibilities to the Board Committees, namely the Audit Committee, Nomination Committee, and Remuneration Committee in order to enhance business and operational efficiencies as well as efficacies.

All Board Committees have written terms of reference and charters and the Board receives all minutes and reports of their proceedings and deliberations, where relevant. The Chairmen of the various Committees report to the Board on the outcome of Committee meetings. Such reports are usually incorporated in the minutes of the full Board meetings.

Board Composition and Balance The Board consists of a total of six (6) Directors and the status of their directorship is as follows:

Supply of InformationAll members of the Board are supplied with information in a timely manner. Board reports and papers are circulated prior to Board meetings to enable Directors to obtain further information and explanations, where required, before the meetings.

Each Director has unhindered access to information pertaining to the Group’s business and affairs to enable them to discharge their duties. In addition, certain matters are reserved specifically for the Board’s decision. These include approval of material acquisitions and disposals of assets, major corporate plans, financial results, and Board appointments.

The Directors also have direct access to the advice of the Company Secretary, independent professional advisors and internal and external auditors, as and when appropriate, at the Company’s expense.

Re-election of Directors An election of Directors will take place at each Annual General Meeting (AGM) whereby one-third of the Directors shall retire and be eligible to offer themselves for re-election. This provides an opportunity for shareholders to renew their mandate. New Directors appointed by the Board are subject to election by the shareholders at the next AGM following their appointments.

MeetingsDuring the financial year ended 31 December 2010, the Board met on six (6) occasions, deliberating upon and considering a variety of matters including the Group’s financial results, major investments, strategic decisions and the overall direction of the Group.

Agenda and matters for discussion are prepared and circulated in advance of each meeting. All proceedings from Board meetings are recorded and the minutes maintained by the Company Secretary. During the financial year under review, the Board meetings were held as follows:

• 10 February, 12 May, 13 August and 10 November• Three Special Board Meetings were held on 12 January, 9 April and 8 December

Details of Directors attendance at meetings of the Board during the financial year under review are as follows:

Director Attendance

Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow 7/7(Chairman)

Her Chor Siong 7/7

Dato’ Rosman bin Abdullah 7/7

Ang Chin Joo 7/7

Tai Keat Chai 7/7

Teoh Hoay Ming (Appointed on 1 July 2010) 3/3

Leong Kah Chern (Resigned on 31 March 2010) 2/2


Appointments to the Board

Nomination CommitteeThe Nomination Committee is responsible for identifying and recommending to the Board suitable nominees for Board appointments. The Committee also assists the Board in determining Directors’ remuneration. Ultimate responsibility and final decisions on all matters, however, lies with the Board.

The Nomination Committee comprised the following members in the financial year under review. There were no meetings in the year.

Directors’ TrainingThe Board, through the Nomination Committee, ensures that it recruits to the Board only individuals of sufficient calibre, knowledge, and experience to appropriately perform the duties of Director. As at the end of the financial year under review, all Directors have successfully completed the Mandatory Accreditation Programme. In addition, Directors undergo continuous training to equip themselves with the necessary knowledge and to keep abreast with developments to effectively discharge their duties as a Director.

B. DIRECTORS’ REMUNERATION

Remuneration Committee The Remuneration Committee comprised the following members in the financial year under review and their attendance at meetings is as follows:

The Committee is responsible for recommending the remuneration framework for Executive Directors and Senior Management staff. In formulating the recommended framework and levels of remuneration, the Committee has considered information prepared by the Management and independent consultants and survey data on the remuneration practices of comparable companies.

Members



Her Chor Siong

Director Attendance



Tai Keat Chai

1/1

1/1

1/1

The number of Directors whose remuneration fell within the respective bands is as follows:

Remuneration (RM) Non-Executive DirectorsExecutive Directors

Salaries

Fees

Allowances

1,106,784

-

-

-

229,665

51,700

Range of Remuneration (RM) Non-Executive DirectorsExecutive Directors

50,001 to 100,000

150,001 to 200,000

650,001 to 700,000

-

1

1

4

-

-

C. SHAREHOLDERS AND INVESTORS

Communication The Company recognises the importance of communicating with its shareholders and other stakeholders and does this through the annual reports, AGMs and the various disclosures and announcements made to Bursa Malaysia Securities Berhad. At the AGM, the shareholders are encouraged to ask questions both about the resolutions being proposed or about the Group’s operations in general.

In addition, the Company makes various announcements through Bursa Malaysia Securities Berhad, in particular, the timely release of the quarterly results within two (2) months from the close of a particular quarter. Summaries of the quarterly and full year results and copies of the full announcements are supplied to shareholders and members of the public upon request. Members of the public can also obtain the full financial results and Company announcements from the Bursa Malaysia Securities Berhad website.

The Board, as a whole, determines the remuneration of Non-Executive Directors, with each Director concerned abstaining from any decision with regards to his remuneration. Taking into account the performance of the Group and the responsibilities and performance of the Directors, Directors’ fees are set in accordance with a remuneration framework comprising responsibility fees and attendance fees. The Company pays its Directors an annual fee which is approved annually by shareholders. Details of the nature and amount of each major element of the remuneration of Directors of the Company, during the financial year, are as follows:


Investor Relations Along with good corporate governance practices, the Company has embarked on appropriate corporate policies to provide greater disclosure and transparency through all its communications with its shareholders, investors and the general public.

The Company strives to promote and encourage bilateral communications with its shareholders through participation at its general meetings and also ensures timely dissemination of any information to investors, analysts and the general public.

The Group maintains the following website that allows all shareholders and investors access to information about the Group: www.cuscapi.com.

Any further information regarding the Cuscapi Group may also be obtained from the following persons:

D. ACCOUNTABILITY AND AUDIT

Financial ReportingThe Board aims to provide a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly announcements of results to shareholders and the Chairman’s Statement in the Annual Report. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting processes and the quality of its financial reporting.

Internal ControlThe Board has overall responsibility for maintaining a system of internal control and risk management that provides a reasonable assurance of effective and efficient operations and compliance with laws and regulations, as well as with internal procedures and guidelines.

The Statement on Internal Control furnished on pages 40 to 43 of this Annual Report provides an overview of the internal control framework within the Group during the financial year under review.

Relationship with the AuditorsThe Company has established a transparent arrangement with the Auditors to meet their professional requirement. Key features underlying the relationship of the Audit Committee with the Internal and External Auditors are included in the Audit Committee Report on pages 44 to 47 of this Annual Report.

Tham Yue FoonMarketing ManagerCuscapi BerhadTelephone : 603-7623 7791Facsimile : 603-7622 1999Email : [email protected]

Datuk Francis Tan & Chan Yoke PengCompany Secretaries Ad-Consult Sdn BhdTelephone : 603-2164 0206Facsimile : 603-2164 0207Email : [email protected]

A summary of the activities of the Audit Committee during the financial year under review, including an evaluation of the independent audit process is also set out in the Audit Committee Report.

Internal AuditIn the pursuit of greater independence in the internal audit function, the Internal Audit activity continued to be outsourced during the financial year under review to M/S Stanco & Ruche Consulting, a company specialising in the provision of internal audit services.

A summary of the activities of the Audit Committee and the Internal Auditors during the financial year under review is set out in the Audit Committee Report on pages 48 to 49 of this Annual Report.

Options, Warrants or Convertible SecuritiesThe Company did not issue any options, warrants or convertible securities during the financial year ended 31 December 2010. Non-Audit FeesThe amount of non-audit fees paid to the external auditors by the Company for the financial year was RM3,500 (2009 : RM3,a)

Recurrent Related Party Transactions (“RRPT”)The details of RRPT for the financial year under review are disclosed in Note 25 of the financial statements. The above related party transactions are of revenue or trading in nature and are entered into in the ordinary course of business.

Revaluation of Landed PropertyThe Group has no property that falls within the definition of investment property.

Share Buy-BacksDuring the financial year under review, the Company did not enter into any share buy-back transactions.

Sanctions and/or PenaltiesIn the financial year ended 31 December 2010, the Company was not subject to any sanctions or penalties.

Profit Estimates, Forecasts or ProjectionsThere were no significant variances noted between the reported results and the unaudited results announced. The Company did not make any release on the profit estimates, forecasts or projections for the financial year.

Profit GuaranteesThere were no profit guarantees given by the Company during the financial year.

ADDITIONAL COMPLIANCE INFORMATION


The Companies Act 1965 (the Act) requires the Directors to present financial statements of Cuscapi Berhad (the Company) and its subsidiaries (the Group) which give a true and fair view of the Group and the Company at the end of the financial year. As required by the Act and the Listing requirements of Bursa Malaysia Securities Berhad, the financial statements have been prepared in accordance with the Companies Act 1965 and the MASB Approved Accounting Standards in Malaysia. The financial statements include the consolidated balance sheet, cash flows and income statements and are made out in accordance with relevant provisions of the Act and applicable accounting standards.

The Directors have placed reliance on the system of internal control within the Company and the Group to form a basis of reasonable grounds that accounting systems and records maintained by the Company and the Group provide a true and fair view of the current state of affairs of the Company and the Group, a true and fair view of the financial year results and that it sufficiently explains the transactions and financial position of the Company and the Group. The Directors also have a general responsibility in taking steps to preserve the interests of stakeholders and to safeguard the assets of the Company and the Group.

The Directors have the further responsibility of ensuring that reasonably proper, accurate, timely and reliable accounting records are kept. The annual audited financial statements have been prepared based on relevant and appropriate accounting policies and with usage of reasonable and prudent judgment and estimates.

The Directors have also a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

In compliance with the several responsibilities of the Directors, the Directors present the financial statements of the Company and the Group for the financial year ended 31 December 2010 as set out on pages 50 to 104 of this annual report.

STATEMENT ON DIRECTORS’ RESPONSIBILITY

Material Contract Involving Directors and Substantial ShareholdersThe Company and its subsidiary companies have not entered into any material contracts outside the ordinary course of business, involving directors and substantial shareholders since the end of the previous financial year (31 December 2009).

STATEMENT OF COMPLIANCE

The Group has complied throughout the financial year ended 31 December 2010 with all the Best Practices of Corporate Governance set out in Part 2 of the Code.

Statement on Internal Control

1. INTRODUCTION

The Malaysian Code of Corporate Governance requires listed companies to maintain a sound system of internal controls to safeguard shareholders’ investments and Group assets.

The Group in discharging its stewardship responsibilities has recognised and established procedures of internal control that are in accordance with the guidance provided in the “Statement on Internal Control: Guidance for Directors of Public Listed Companies”. These procedures, which are subject to continuous review by the Board, provide a systematic and ongoing process for identifying, evaluating and managing significant business risks faced by the Group that may affect the achievement of its business objectives. The Board of Directors of Cuscapi Berhad, in recognition of this responsibility, hereby issues the following statement which is prepared in accordance with these requirements.

2. BOARD RESPONSIBILITY

The Board of Directors acknowledges that it is their overall responsibility to maintain a sound system of internal controls to cover all aspects of the Group’s business and to safeguard the interests of its shareholders. This responsibility requires Directors to establish procedures, controls and policies and to seek continuous assurance that the system is operating satisfactorily in respect of the strategic direction, financial, operational, compliance and risk management policies and procedures.

The Directors are also aware that a sound internal control system provides reasonable and not absolute assurance that the Company will not be hindered in achieving its business objectives in the ordinary course of business. It should also be appreciated that the whole system of internal control is designed to manage and control risks appropriately rather than a definitive system designed for the total avoidance of risks or for eliminating the risk of failure.

The Board maintains full control over strategic, financial, organisational and compliance issues and has put in place an organisation with formal lines of responsibility, clear segregation of duties and appropriate delegation of authority. The Board has delegated to the executive management the implementation of the system of internal controls within an established framework throughout the Group.

The Board also acknowledges the need to establish an ongoing process for identifying, evaluating and managing significant risks faced by the Group and to regularly review this process in conjunction with the Statement on Internal Control: Guidance for Directors of Public Listed Companies.


3. CONTROL STRUCTURE & RISK MANAGEMENT FRAMEWORK

Day to day operations is monitored by the Chief Executive Officer. This control is exercised through Executive Directors and Senior Management in respect of commercial, financial and operational aspects of the Company. The Chief Executive Officer, Executive Directors and Senior Management meet regularly in respect of such matters.

The Board fully supports the contents of the Statement on Internal Control: Guidance for Directors of Public Companies and through the Audit Committee continually reviews the adequacy and effectiveness of the risk management processes in place within the various operating units with the aim of strengthening the risk management functions across the Group.

The Management also acknowledges its responsibility for the management of risks, for developing, operating and monitoring the system of internal control and for providing assurance to the Board that it has done so in accordance with the policies adopted by the Board. Further assurance is provided by the Internal Audit function which operates across the Group with emphasis on key operating units within the Group. Acknowledging the need for an effective and independent Internal Audit function as an integral part of the control structure and risk management framework of the Group, the decision was taken to outsource the Internal Audit activity to a third party service provider.

The Board of Directors and the Management also recognise and acknowledge that the development of an effective internal control system is an ongoing process and to this end maintains a continuous commitment to strengthen the existing internal control environment of the Group.

4. INTERNAL AUDIT FUNCTION

In a desire to maintain total independence in the management of the internal control environment and remain in compliance with the Bursa Malaysia Securities Berhad Listing requirements, the Company has appointed Messrs Stanco & Ruche Consulting to manage the Company’s internal audit function on an outsourced basis.

Stanco & Ruche Consulting reports independently and directly to the Audit Committee in respect of the internal audit function. The Audit Committee together with Stanco & Ruche Consulting agrees on the scope and planned internal audit activity annually and all audit findings arising there from are reported to the Audit Committee on a quarterly basis.

Stanco & Ruche Consulting is allowed complete and unrestricted access to all documents and records of the Group deemed necessary in the performance of its function and independently reviews the risk identification procedures and control processes implemented by the Management. It also reviews the internal controls in the key activities of the Group’s business based on the risk profiles of the business units in the Group. In addition, Stanco & Ruche Consulting carry out periodic assignments to ensure the policies and procedures established by the Board are complied with by the Management. All reports and findings arising from these reviews are discussed primarily with the respective process custodians prior to a formal report being presented to the Audit Committee.

As an additional function to the Group, Stanco & Ruche also provide business improvement recommendations for the consideration of the Management and the Board to assist in the continuous development of a more efficient and comprehensive internal control environment.

Stanco & Ruche Consulting continued the review, mapping and implementation of the Group Standard Operating Procedures to document and record operational processes and control check points for management compliance. The two (2) Standard Operating Procedures documented in the financial year under review were as follows:

• Procurement Management• Creditors & Accounts Payable Management

The internal auditors undertook two (2) audit routines in the year as follows:

• Sales Order Processing Management• Credit Management

It is the audit committee’s decision to undertake the implementation of Standard Operating Procedures for two (2) further processes and an internal audit review of the Procurement Management & Creditors & Accounts Payable Management for the next financial year.

5. OTHER KEY INTERNAL CONTROL ELEMENTS

• Clearly defined terms of reference, authorities and responsibilities of the various committees which include the Audit Committee, Nomination Committee and Remuneration Committee. • Well defined organisational structure with clear lines for the segregation of duties, accountability and the delegation of responsibilities to Senior Management and the respective division heads including appropriate authority limits to ensure accountability and approval responsibility.

• Budgets are prepared annually for the Business/Operating units and approved by the Board. The budgets include operational, financial and capital expenditure requirements and performance monitored on a monthly basis and the business objectives and plans are reviewed in the monthly management meetings attended by division and business unit heads. The Chief Executive Officer and Executive Directors meet regularly with Senior Management to consider the Group’s financial performance, business initiatives and other management and corporate issues.

• There are regular Board meetings and Board papers are distributed in advance to all Board members who are entitled to receive and access all necessary and relevant information. Decisions of the Board are only made after the required information is made available and deliberated on by the Board. The Board maintains complete and effective control over the strategies and direction of the Group.


• The Audit Committee reviews the effectiveness of the Group’s system of internal control on behalf of the Board. The Audit Committee comprises of Non-Executive members of the Board, the majority of who are Independent Directors. The Audit Committee is not restricted in any way in the conduct of its duties and has unrestricted access to the internal and external auditors of the company and to all employees of the Group. The Audit Committee is also entitled to seek such other third party independent professional advice deemed necessary in the performance of its responsibility.

• Review by the Audit Committee of internal control issues identified by the external and internal auditors and action taken by the Management in respect of the findings arising there from. The internal audit function reports directly to the Audit Committee. Findings are communicated to the Management and the Audit Committee with recommendations for improvements and follow up to confirm all agreed recommendations are implemented. The internal audit plan is structured on a risk based approach and is reviewed and approved by the Audit Committee.

• Review of all proposals for material capital and investment opportunities by the Management committee and approval for the same by the Board prior to expenditure being committed.

• There are sufficient reports generated in respect of the business and operating units to enable proper review of the operational, financial and regulatory environment. Management Accounts are prepared timely and on a monthly basis and is reviewed by the Chief Executive Officer, Executive Directors and Senior Management.

• The professionalism and competency of staff are enhanced through a structured training and development programme and potential candidates/entrants are subject to a stringent recruitment process. A performance management system is in place with established key performance indicators to measure and review staff performance on an annual basis.

• The decision of the Board of Directors to the appointment of Messrs Stanco & Ruche Consulting, a firm specialising in the provision of internal audit services, to manage the internal audit function of the company on an outsourced basis for greater independence and accountability in the internal audit function.

6. WEAKNESSES IN INTERNAL CONTROL RESULTING IN MATERIAL LOSS

The Board of Directors is of the opinion that there is no significant weakness in the system of internal control, contingencies or uncertainties that could result in material loss and adversely affect the Group. The Group continues to take necessary measures to strengthen its internal control structure and the management of risks.

Audit Committee Report

The Board of Directors of Cuscapi Berhad is pleased to present the report on the Audit Committee of the Board for the year ended 31 December 2010.

OBJECTIVE

The Audit Committee was established to act as a Committee of the Board of Directors to fulfill its fiduciary responsibilities in accordance to the Audit Committee Charter of Cuscapi Berhad and to assist the Board review the adequacy and integrity of the Group’s financial administration and reporting, internal control and risk management systems including the management information systems for compliance with applicable laws, regulations, rules, directives and guidelines.

TERMS OF REFERENCE

1.0 COMPOSITION

1.1 The Committee shall fulfill the following requirements: a. The Committee must be composed of no fewer than three (3) members. If a member of the Committee ceases to be a member resulting in the number of members reducing to below three (3), the Board of Directors shall within three (3) months thereof appoint such number of new members required to make up the minimum required number.

b. All members of the Committee shall be Non-Executive Directors with a majority of them being Independent Directors. An Independent Director has the meaning as ascribed to it under paragraph 1.01 of the Listing Requirements of Bursa Malaysia Securities Berhad for the ACE Market (“Listing Requirement”), including any amendment thereto that may be made from time to time; and

c. At least one (1) member of the Committee: i. Must be a member of the Malaysian Institute of Accountants; or ii. If he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and: a. He must have passed the examination specified in Part 1 of the First Schedule of the Accountants Act, 1967; or b. He must be a member of one of the Association of Accountants specified in Part II of the First Schedule of the Accountants Act, 1967; or c. Fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad. iii. Be a holder of a degree/masters/doctorate in accounting or finance and has at least three (3) years post qualification experience in accounting or finance; or iv Have at least seven (7) years experience being a Chief Financial Officer of a corporation or having the function of being primarily responsible for the management of the financial affairs of a corporation.


1.2 Members of the Committee shall elect from among them a Chairman who shall be an Independent Non-Executive Director.

1.3 No alternate Director should be appointed as a member of the Committee.

1.4 In the event of any vacancy in the Committee resulting in the non-compliance of the Listing Requirements pertaining to composition of audit committee, the Board of Directors shall within three (3) months of that event fill the vacancy.

1.5 The Committee is authorised by the Board to investigate any activity of the Company and its subsidiaries. It is authorised to seek any information it requires from any employee and all employees are directed to cooperate as requested by members of the Committee.

Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Bursa Malaysia Securities Berhad Listing Requirements, the Committee shall promptly report such matter to Bursa Malaysia Securities Berhad.

2.0 MEMBERSHIP

2.1 The present members of the Committee comprise of the following Directors: Tai Keat Chai - Chairman Dato’ Rosman bin Abdullah Ang Chin Joo

3.0 MEETINGS 3.1 Frequency a. Meeting shall be held at least four (4) times annually, or more frequently if circumstances so require the Committee to do so. b. Upon the request of the external auditor, the Chairman of the Committee shall convene a meeting of the Committee to consider any matter the external auditor believes should be brought to the attention of the Directors or shareholders.

3.2 Quorum a. A quorum shall consist of a majority of Independent Directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.

3.3 Secretary a. The Company Secretary shall be the Secretary of the Committee or in his absence, another person authorised by the Chairman of the Committee. The Secretary in conjunction with the Chairman shall draw up an agenda which shall be circulated at least one (1) week before each meeting to members of the Committee.

3.4 Attendance a. The Committee may require the members of the Management, the internal auditors and representatives of the external auditors to attend any of its meetings as it determines.

b. Other Directors, employees and a representative of the external and internal auditors may attend any particular meeting only at the Committee’s invitation, specific to the relevant meeting.

3.5 Reporting Procedure a. The Minutes of each meeting shall be circulated to all members of the Board.

3.6 Meeting Procedure The Committee shall regulate its own procedure, in particular: a. The calling of meetings; b. The notice to be given of such meetings; c. The voting and proceedings of such meetings; d. The keeping of minutes; and e. The custody, production and inspection of such minutes.

4.0 AUTHORITY The Committee shall: a. Have explicit authority to investigate any matter within its terms of reference; b. Have the resources which it needs to perform its duties; c. Have full access to any information pertaining to the Company and Group which it requires in the course of performing its duties; d. Have unrestricted access to the Senior Management of the Company and Group; e. Have direct communication channels with the external auditor and person(s) carrying out the internal audit function or activity; f. Be able to obtain independent professional or other advice in the performance of its duties; g. Be able to convene meetings with external auditors, excluding the attendance of the executive members of the committee, whenever deemed necessary; and h. Be able to invite outsiders with relevant experience to attend its meeting, whenever deemed necessary.

5.0 DUTIES AND RESPONSIBILITIES The Committee shall, amongst other, discharge the following functions: 5.1 To review: a. The quarterly result and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on: i. The going concern assumption; ii. Changes in or implementation of major accounting policy changes; iii. Significant and unusual events; and iv. Compliance with accounting standards and other legal requirements.


b. Any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of the Management integrity. c. With the external auditor: i. The audit plan; ii. His evaluation of the system of internal controls; iii. His audit report; iv. His Management letter and Management’s response; and v. The assistance given by the Company’s employees to the external auditor.

5.2 To review the effectiveness of the internal control, management information system and management’s risk management practices and procedures.

5.3 In respect of the appointment of external auditors:

a. To review whether there is reason (supported by grounds) to believe that the external auditor is not suitable for reappointment; b. To consider the nomination of a person or persons as external auditors and the audit fee; and c. To consider any questions of resignation or dismissal of external auditors.

5.4 In respect of the internal audit function: a. To review 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; b. To review 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 of the internal audit function; c. To review any appraisal or assessment of the performance of members of the internal audit function; d. To approve any appointment or termination of the internal audit function staff members; and e. To provide a resigning internal audit function staff member the opportunity to submit his reasons for resigning.

5.5 To promptly report such matters to Bursa Malaysia Securities Berhad if the Committee is of the view that any matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements.

5.6 To carry out such other function as may be agreed to by the Committee and the Board of Directors.

Audit Committee Report in Respect of the Year Under Review

1. MEMBERSHIP

The Directors who served as members of the Audit Committee during the financial year under review and as at the date of this report are:

Independent Non-Executive DirectorsTai Keat Chai - ChairmanAng Chin Joo

Non-Independent Non-Executive DirectorDato’ Rosman bin Abdullah

2. MEETINGS

The Audit Committee convened a total of four (4) meetings and recorded an attendance of its members during the financial year as follows:

The Audit Committee met on the following dates in the financial year under review:10 February, 12 May, 13 August and 10 November.

The Company Secretary was present at all meetings.

Also attended by invitation were the Chief Executive Officer, Executive Director, Senior Management and the internal auditors. Where appropriate, the external auditors were invited to attend and brief the Audit Committee and to provide responses to queries raised by the Audit Committee in respect of the Company’s Financial Statements and reporting requirements.

3. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR UNDER REVIEW

3.1 Reviewed the unaudited quarterly financial results of the Group before recommending to the Board of Directors for their approval and release of the Group’s financial results to Bursa Malaysia.

3.2 Reviewed the Audit Planning Memorandum of the Group for the financial period ended 31 December 2010 with the external auditors.

3.3 Reviewed the audited financial statements of the Group, the issues arising from the audit, their resolution and the audit report prior to recommending to the Board of Directors for approval.

3.4 Reviewed the role and management of the internal audit function and the continued option to outsource the internal audit function in the financial period ended 31 December 2010.

Attendance

Tai Keat Chai - Chairman Dato’ Rosman bin Abdullah Ang Chin Joo

4/4

4/4

4/4


3.5 Reviewed with the internal auditors the internal audit findings and recommendations presented and the manner in which the issues raised by the internal auditor was subsequently resolved by management.

3.6 Reviewed other pertinent issues of the Group, which has significant impact on the results of the Group and the statutory audits.

4. INTERNAL AUDIT FUNCTION

It is the responsibility of the internal auditors to provide the Audit Committee with independent and objective reports on the state of internal control of the various operating units within the Group and the extent of compliance of the units with the Group’s established policies and procedures.

To this end, the functions of the internal auditors are to:

1. Perform audit work in accordance with the pre-approved internal audit plan2. Carry out reviews on the systems of internal control of the Group3. Review and comment on the effectiveness and adequacy of the existing control policies and procedures4. Provide recommendations, if any, for the improvement of the control policies and procedures

The Audit Committee and Board of Directors are satisfied with the performance of the internal auditors and have in the interest of continuity and greater independence in the Internal Audit function, taken the decision to continue with the outsource of the Internal Audit function to M/S Stanco & Ruche Consulting, a firm specialising in the provision of outsourced internal audit services.

In compliance with the decision of the Audit Committee in the financial year under review, Stanco & Ruche Consulting commenced the review, mapping and implementation of the Group Standard Operating Procedures to document and record operational processes and control check points for management compliance. The two (2) Standard Operating Procedures implemented in the financial year were as follows:

• Procurement Management• Creditors & Accounts Payable Management

It is the audit committee’s decision to undertake the implementation of Standard Operating Procedures for two (2) further processes and an internal audit review of the Procurement Management and Creditors & Accounts Payable Management for the next financial year.

The internal auditors undertook two (2) audit routines in the year under review as follows:

• Sales Order Processing Management• Credit Management

5. STATEMENT ON EMPLOYEE SHARE OPTION SCHEME BY THE COMMITTEE

The Board of Directors had resolved on 8 December 2010 that the Company implement an Employee Share Option Scheme (ESOS) in accordance with recommendations of management and the establishment of an ESOS Committee comprising three (3) Directors of the Board.

51 Directors’ Reports55 Statement by Directors56 Statutory Declaration57 Independent Auditors’ Report to the Members of Cuscapi Berhad59 Statement of Financial Position60 Statement of Comprehensive Income61 Statements of Changes in Equity62 Statements of Cash Flows64 Notes to the Financial Statements

Other Information

105 Shareholding Statistics106 Statement of Shareholding107 Notice of Annual General Meeting110 Statement Accompanying Notice of Annual General Meeting111 Proxy Form

Inside2010 Financial Report


Directors’Report

The Directors hereby submit their report together with the audited financial statements of Cuscapi Berhad (“the Company”) and its subsidiaries (“the Group”) for the financial year ended 31 December 2010.

PRINCIPAL ACTIVITIES

The principal activities of the Company during the financial year were investment holding and the provision of management services to its subsidiaries. The principal activities of the subsidiaries and a jointly controlled entity are set out in Note 6 and Note 7 to the financial statements.

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

RESULTS

DIVIDENDS

In respect of the financial year ended 31 December 2010:

First interim dividend of 1.3 cents per share less tax at 25% totalling RM2,168,715/- was declared and paid on 13 May 2010 and 30 June 2010 respectively.

Second interim dividend of 1.3 cents per share less tax at 25% totalling RM2,168,715/- was declared and paid on 8 December 2010 and 11 January 2011 respectively.

The Directors do not recommend the payment of any final dividend in respect of the financial year ended 31 December 2010.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year other than as disclosed in the financial statements.

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.

Group Company RM RM

Net profit for the financial year 9,122,662 4,812,985

Attributable to:Owners of the Company 9,122,662 4,812,985Non-controlling interests - -

9,122,662 4,812,985

2010 Financial Report

CURRENT ASSETS

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 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 would render adherence to the existing method 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 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.

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

The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the Directors, substantially affected by any item, transaction or event of a material and unusual nature.

No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.


ISSUE OF SHARES AND DEBENTURES

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

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:

Dato’ Larry Gan Nyap Liou @ Gan Nyap LiowHer Chor SiongDato’ Rosman bin AbdullahTai Keat Chai Ang Chin Joo Teoh Hoay Ming (appointed on 1 July 2010)

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 in the Company and its related corporations during the financial year ended 31 December 2010 are as follows:

The Company:Cuscapi Berhad

Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow 11,769,300 35,000 - 11,804,300Her Chor Siong 23,166,667 - - 23,166,667Tai Keat Chai 30,000 - - 30,000Ang Chin Joo 11,400,000 - - 11,400,000Teoh Hoay Ming 6,857,167 - - 6,857,167

Indirect interest by virtue of shares held by a company in which a Director has interestTransight Systems Sdn BhdDato’ Rosman bin Abdullah 48,120,000 - - 48,120,000

Deemed interest by virtue of the shareholding of his family membersHer Chor Siong - 180,000 - 180,000

Deemed interest by virtue of the shareholding of his spouse and parentTeoh Hoay Ming 182,000 - - 182,000

Number of ordinary shares of RM0.10 each At At 1.1.2010 Bought Sold 31.12.2010

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 Note 21 to 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 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.

SUBSEQUENT EVENT

Subsequent event that occurred during the financial year are disclosed in Note 26 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,

DATO’ LARRY GAN NYAP LIOU@ GAN NYAP LIOWDirector

TAI KEAT CHAIDirector

Kuala LumpurDate: 13 April 2011


We, DATO’ LARRY GAN NYAP LIOU @ GAN NYAP LIOW and TAI KEAT CHAI, being two of the Directors of Cuscapi Berhad, do hereby state that in the opinion of the directors, the financial statements set out on pages 59 to 101 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and of the results and cash flows of the Group and of the Company for the financial year ended on that date in accordance with the Financial Reporting Standards and the Companies Act, 1965 in Malaysia.

The supplementary information set out in Note 14 have 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,

DATO’ LARRY GAN NYAP LIOU@ GAN NYAP LIOWDirector

TAI KEAT CHAIDirector


Statement by Directors

I, HER CHOR SIONG, being the Director primarily responsible for the financial management of Cuscapi Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 59 to 104 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.

HER CHOR SIONG

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 13 April 2011.

Before me,

W 541ZULKIFLA MOHD DAHLIMCommissioner for Oaths

Statutory Declaration


Report on the Financial StatementsWe have audited the financial statements of Cuscapi Berhad, which comprise the statements of financial position as at 31 December 2010 of the Group and of the Company, and the statements of comprehensive income, statement 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 information, as set out on pages 59 to 104.

Directors’ Responsibility for the Financial StatementsThe 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 (“FRS”) 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 and error.

Auditors’ ResponsibilityOur 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 financial statements that 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.

OpinionIn our opinion, the financial statements have been properly drawn up in accordance with the FRS 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 31 December 2010 and of their financial performance and cash flows for the financial year then ended.

Independent Auditors’ Report to the Members of Cuscapi Berhad(Incorporated in Malaysia)

Report on Other Legal and Regulatory RequirementsIn 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 provision of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 6 to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in the form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) Other than those subsidiaries with modified opinions in the auditors’ reports as disclosed in Note 6 to the financial statements, the auditors’ reports on the financial statements of the remaining subsidiaries were not subject to any comments required to be made under Section 174 (3) of the Act.

Other MattersThe supplementary information set out in Note 14 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. MonteiroNo. AF 0117 No. 828/05/10 (J/PH)Chartered Accountants Partner



Statements of Financial Positionas at 31 December 2010

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

Group Company 2010 2009 2010 2009 Note RM RM RM RM

ASSETSNon-current assetsProperty, plant and equipment 3 5,250,674 4,925,400 447,890 610,525 Goodwill on consolidation 4 8,596,889 8,596,889 - - Development costs 5 6,720,486 5,184,593 - - Investment in subsidiaries 6 - - 13,242,138 13,248,301 Investment in a jointly controlled entity 7 - - 55,000 55,000 Other investment 8 70,000 70,000 70,000 70,000

20,638,049 18,776,882 13,815,028 13,983,826

Current assetsInventories 9 2,057,083 1,715,879 - - Trade and other receivables 10 18,058,072 17,261,022 16,929,610 19,004,301 Prepayments 515,561 462,838 59,445 106,504 Tax recoverable 494,101 426,139 46,375 22,028 Short-term deposits with licensed banks 11 6,392,154 3,357,988 4,392,154 3,357,988 Cash and bank balances 12 4,371,692 3,365,207 208,448 232,011

31,888,663 26,589,073 21,636,032 22,722,832

TOTAL ASSETS 52,526,712 45,365,955 35,451,060 36,706,658

EQUITY AND LIABILITIESEquity attributable to owners of the CompanyShare capital 13 22,243,227 22,243,227 22,243,227 22,243,227 Reserves 14 20,849,616 16,121,074 8,679,791 8,204,236

Shareholders’ funds 43,092,843 38,364,301 30,923,018 30,447,463

Non-controlling interests - - - -

Total equity 43,092,843 38,364,301 30,923,018 30,447,463

Non-current liabilityDeferred tax liabilities 15 576,385 316,945 - -

Current liabilityTrade and other payables 16 8,857,484 6,684,709 4,528,042 6,259,195

Total liabilities 9,433,869 7,001,654 4,528,042 6,259,195

TOTAL EQUITY AND LIABILITIES 52,526,712 45,365,955 35,451,060 36,706,658


Statements of Comprehensive Incomefor the financial year ended 31 December 2010

Group Company 2010 2009 2010 2009 Note RM RM RM RM

Revenue 17 48,903,369 38,925,173 9,027,000 3,750,000 Cost of sales 18 (20,076,520) (17,690,612) - -

Gross profit 28,826,849 21,234,561 9,027,000 3,750,000

Other items of income- Other income 65,186 221,075 462 158,614 - Interest income 19 101,660 70,965 78,816 55,887 Other items of expense- Administrative expenses (18,982,514) (21,019,909) (4,018,190) (3,893,263)

Profit before taxation 20 10,011,181 506,692 5,088,088 71,238

Taxation 22 (888,519) (244,325) (275,103) (15,148)

Net profit for the financial year 9,122,662 262,367 4,812,985 56,090

Other comprehensive income - Foreign currency transition 56,690 (107,961) - -

Total comprehensive income for the financial year 9,065,972 154,406 4,812,985 56,090

Profit attributable to:Owners of the Company 9,122,662 262,367 4,812,985 56,090 Non-controlling interest - - - -

9,122,662 262,367 4,812,985 56,090

Total comprehensive income attributable to:Owners of the Company 9,065,972 154,406 4,812,985 56,090 Non-controlling interest - - - -

9,065,972 154,406 4,812,985 56,090

Earnings per share attributable to owners of the Company 23- Basic (sen) 4.10 0.12



Statements of Changes in Equity for the financial year ended 31 December 2010

GroupAt 1 January 2009 22,243,227 327,556 7,275,823 8,363,289 38,209,895 - 38,209,895Total comprehensive income for the financial year - (107,961) - 262,367 154,406 - 154,406

At 31 December 2009 22,243,227 219,595 7,275,823 8,625,656 38,364,301 - 38,364,301

Dividends (Note 24) - - - (4,337,430) (4,337,430) - (4,337,430) Total comprehensive income for the financial year - (56,690) - 9,122,662 9,065,972 - 9,065,972

At 31 December 2010 22,243,227 162,905 7,275,823 13,410,888 43,092,843 - 43,092,843

CompanyAt 1 January 2009 22,243,227 7,275,823 872,323 30,391,373 Total comprehensive income for the financial year - - 56,090 56,090

At 31 December 2009 22,243,227 7,275,823 928,413 30,447,463

Dividend (Note 24) - - (4,337,430) (4,337,430) Total comprehensive income for the financial year - - 4,812,985 4,812,985

At 31 December 2010 22,243,227 7,275,823 1,403,968 30,923,018

<--------------------------------- Attributable to owners of the Company ---------------------------------> Non-distributable Distributable

Foreign Currency Non- Share Translation Share Retained Controlling Total Capital Reserve Premium Earnings Total Interests Equity RM RM RM RM RM RM RM

Statements of Comprehensive Incomefor the financial year ended 31 December 2010

Statements of Cash Flowsfor the financial year ended 31 December 2009


Group Company 2010 2009 2010 2009 RM RM RM RM

OPERATING ACTIVITIES Profit before taxation 10,011,181 506,692 5,088,088 71,238

Adjustments for: Amortisation of development costs 1,193,889 1,587,582 - - Impairment loss on trade receivables 26,041 113,836 - 32,854 Bad debts written off - 30,640 - - Inventories written off 3,020 35,925 - - Inventories written back - (2) - - Impairment loss on investment in subsidiaries - - 6,163 - Impairment loss on investment in a jointly controlled entity no longer required - - - (55,000) Impairment on receivables no longer required (22,531) (115,119) - (97,614) Currency realignment (22,376) (99,635) - - Depreciation 1,589,749 720,499 223,956 229,069 Loss on disposal of property, plant and equipment - 140 - - Gain on disposal of property, plant and equipment (11,503) (500) (137) - Interest revenue (101,660) (70,965) (78,816) (55,887) Property, plant and equipment written off 20,723 10,787 - 6,570 Unrealised loss on foreign exchange 84,669 - 139,457 -

Operating cash flows before changes in working capital 12,771,202 2,719,880 5,378,711 131,230

Changes in working capital: Inventories (222,325) (33,253) - - Trade and other receivables (395,969) (363,446) 2,481,437 1,314,603 Prepayments - - 47,059 - Trade and other payables 8,280 2,861,092 (3,899,868) (600,332) Balances with subsidiaries - - - (3,551,281) Balances with jointly controlled entity (50,000) 20,000 (50,000) 20,000

Net cash flows from operations 12,111,188 5,204,273 3,957,339 (2,685,780)

Taxes refunded - 256,670 - - Net taxes paid (697,041) (328,924) (299,450) (42,049)

Net cash flows from/(used in) operating activities 11,414,147 5,132,019 3,657,889 (2,727,829)


Statements of Cash Flowsfor the financial year ended 31 December 2009 (Continued)



INVESTING ACTIVITIES Dividends paid (2,168,715) - (2,168,715) - Development costs paid (2,729,782) (2,900,514) - - Purchase of property, plant and equipment (2,203,764) (2,441,699) (186,157) (138,093) Proceeds from disposal of property, plant and equipment 123,946 1,000 5,584 - Net cash outflow from the acquisition of shares of a subsidiary - - - (240,495) Interest received 101,660 70,965 78,816 55,887

Net cash flows used in investing activities (6,876,655) (5,270,248) (2,270,472) (322,701)

FINANCING ACTIVITIES Net advances from subsidiaries - - 119,389 3,793,418 Net advances to a jointly controlled entity (496,203) (569,457) (496,203) (569,457)

Net cash flows (used in)/generated from financing activities (496,203) (569,457) (376,814) 3,223,961

NET CHANGE IN CASH AND CASH EQUIVALENTS 4,041,289 (707,686) 1,010,603 173,431

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 6,723,195 7,428,642 3,589,999 3,416,568 Effect of the exchange rate changes (638) 2,239 - -

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR (a) 10,763,846 6,723,195 4,600,602 3,589,999

(a) Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts: Short-term deposits with licensed banks 6,392,154 3,357,988 4,392,154 3,357,988 Cash and bank balances 4,371,692 3,365,207 208,448 232,011

10,763,846 6,723,195 4,600,602 3,589,999

Notes to the Financial Statements

1 CORPORATE INFORMATION

The principal activities of the Company during the financial year were investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries and a jointly controlled entity are set out in Note 6 and Note 7. 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 the Bursa Malaysia Securities Berhad.

The registered office and principal place of business of the Company are both located at Level 1, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 13 April 2011.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation The financial statements of the Group and of the Company have been prepared in accordance with the Financial Reporting Standards (“FRS”) and the Companies Act, 1965 in Malaysia.

At the beginning of current financial year, the Group and the Company adopted new and revised FRSs which are mandatory for financial periods beginning on or after 1 January 2010 as describe fully in Note 2.2(a) to the financial statements.

The financial statements of the Group and of the Company have been prepared under the historical cost basis and are expressed in Ringgit Malaysia (“RM”).

The preparation of financial statements in conformity with FRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period. It also requires the 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 2.4 in the financial statements.

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 and 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 mandatory for the current financial year:

New FRSsFRS 4 Insurance ContractsFRS 7 Financial Instruments: DisclosuresFRS 8 Operating SegmentsFRS 139 Financial Instruments: Recognition and Measurement


2 SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.2 New and Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC Int”) and Amendments to IC Int (Continued) (a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs and IC Int and Amendments to IC Int (Continued)

Revised FRSsFRS 101 Presentation of Financial StatementsFRS 123 Borrowing Costs

Amendments/Improvements to FRSsFRS 1 First-time Adoption of Financial Reporting StandardsFRS 2 Share-based Payment – Vesting Conditions and CancellationsFRS 5 Non-current Assets Held for Sale and Discontinued OperationsFRS 7 Financial Instruments: DisclosuresFRS 8 Operating SegmentsFRS 107 Statement of Cash FlowsFRS 108 Accounting Policies, Changes in Accounting Estimates and ErrorsFRS 110 Events After the Reporting PeriodFRS 116 Property, Plant and EquipmentFRS 117 LeasesFRS 118 RevenueFRS 119 Employee BenefitsFRS 120 Accounting for Government Grants and Disclosures of Government AssistanceFRS 123 Borrowing CostsFRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or AssociateFRS 128 Investments in AssociatesFRS 129 Financial Reporting in Hyperinflationary EconomiesFRS 131 Interests in Joint VenturesFRS 132 Financial Instruments: PresentationFRS 134 Interim Financial ReportingFRS 136 Impairment of AssetsFRS 138 Intangible AssetsFRS 140 Investment Property

IC IntIC Int 9 Reassessment of Embedded DerivativesIC Int 10 Interim Financial Reporting and ImpairmentIC Int 11 FRS 2 – Group and Treasury Share TransactionsIC Int 13 Customer Loyalty ProgrammesIC Int 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

Amendments to IC IntIC Int 9 Reassessment of Embedded Derivatives



2.2 New and Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC Int”) and Amendments to IC Int (Continued) (a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs and IC Int and Amendments to IC Int (Continued) 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 discussed below:

FRS 7 Financial Instruments: Disclosures FRS 7 requires enhanced disclosures about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risk arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. 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 year ended 31 December 2010.

FRS 8 Operating Segments FRS 8, which replaces FRS 114 Segment Reporting, specifies how an entity should report information about its operating segments, based on internal reports that are regularly reviewed by the entity’s chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers.

The Group concluded that the reportable operating segments determined in accordance with FRS 8 which is also the basis of presenting its quarterly internal management reports are the same as the business segments previously identified under FRS 114. The Group has adopted FRS 8 retrospectively and the revised disclosures including the related revised comparative information are shown in Note 30 to the financial statements.

FRS 101 Presentation of Financial Statements (revised) The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised FRS 101 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 equity presented as a single line. This standard also introduce the statement of comprehensive income, together with all items of 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.




2.2 New and Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC Int”) and Amendments to IC Int (Continued) (a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs and IC Int and Amendments to IC Int (Continued) Amendments to FRS 116 Property, Plant and Equipment On 1 January 2010, the Group adopted the amendments to FRS 116 Property, Plant and Equipment.

The Group has computers held for rental for periods ranging from one to three years, after which these computers are routinely sold in the ordinary course of business. These computers were previously included as part of the Group’s property, plant and equipment. The amendments required such computers to be transferred to inventory at their carrying amounts when rental ceases and such machines become held for sale. With the consequential amendments to FRS 7, the cash payments to manufacture or acquire such computers, and the receipts from rental and subsequent sales of the computers are classified as cash flow from operating activities. The amendments have been applied retrospectively.

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 1 January 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard has accounted for by adjusting the opening balance of retained earnings as at 1 January 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:

• Impairment of trade and other receivables Prior to 1 January 2010, allowance for doubtful debts was recognised when it was considered uncollectible. Upon the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 January 2010, the Group and the Company have re-measured the allowance for impairment losses at that date in accordance with FRS 139.

• Financial guarantee contracts During the current and prior financial years, the Company provided financial guarantees to banks in connection with bank loans and other banking facilities granted to its subsidiary company. Prior to 1 January 2010, the Company did not provide for such guarantees unless it was more likely than not that the guarantees would be called upon. The guarantees were disclosed as contingent liabilities. Upon the adoption of FRS 139, all unexpired financial guarantees issued by the Company are recognised as financial liabilities and are measured at their initial fair value less accumulated amortisation as at 1 January 2010.

(b) Revised FRSs, Amendments/Improvements to FRSs, IC Int and Amendments to IC Int that are issued, but not yet effective and have not been early adopted The Group and the Company have not adopted the following revised FRSs, amendments/improvements to FRSs, IC Int and amendments to 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 FRSsFRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010FRS 3 Business Combinations 1 July 2010FRS 124 Related Party Disclosures 1 January 2012FRS 127 Consolidated and Separate Financial Statements 1 July 2010



2.2 New and Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC Int”) and Amendments to IC Int (Continued) (b) Revised FRSs, Amendments/Improvements to FRSs, IC Int and Amendments to IC Int that are issued, but not yet effective and have not been early adopted (Continued)

Effective for financial periods beginning on or after

Amendments/Improvements to FRSsFRS 1 First-time Adoption of Financial Reporting Standards 1 January 2011FRS 2 Share-based Payment 1 July 2010 and 1 January 2011FRS 3 Business Combinations 1 January 2011FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 July 2010FRS 7 Financial Instruments: Disclosures 1 January 2011FRS 101 Presentation of Financial Statements 1 January 2011FRS 121 The Effects of Changes in Foreign Exchange Rates 1 January 2011FRS 128 Investments in Associates 1 January 2011FRS 131 Interests in Joint Ventures 1 January 2011FRS 132 Financial Instruments: Presentation 1 March 2010 and 1 January 2011FRS 134 Interim Financial Reporting 1 January 2011FRS 138 Intangible Assets 1 July 2010FRS 139 Financial Instruments: Recognition and Measurement 1 January 2011

IC IntIC Int 4 Determining Whether an Arrangement contains a Lease 1 January 2011IC Int 12 Service Concession Arrangements 1 July 2010IC Int 15 Agreements for the Construction of Real Estate 1 January 2012IC Int 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Int 17 Distributions of Non-cash Assets to Owners 1 July 2010IC Int 18 Transfers of Assets from Customers 1 January 2011IC Int 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011

Amendments to IC IntIC Int 9 Reassessment of Embedded Derivatives 1 July 2010IC Int 13 Customer Loyalty Programmes 1 January 2011IC Int 14 Prepayments of a Minimum Funding Requirement 1 July 2011




2.2 New and Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC Int”) and Amendments to IC Int (Continued) (b) Revised FRSs, Amendments/Improvements to FRSs, IC Int and Amendments to IC Int that are issued, but not yet effective and have not been early adopted (Continued)

The Directors do not anticipate that the application of the above revised FRSs, amendments/improvements to FRSs, 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 company (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 amendments to FRS 127 require all losses attributable to minority interest to be absorbed by minority interest. Any excess and any further losses exceeding the minority interest in the equity of a subsidiary company are no longer charged against the Group’s interest. Currently, such losses are accounted for in accordance with the accounting policies as described in Note 2.3(a) to the financial statements. The Group does not intend to early adopt the above revised FRS and amendments to FRS.

2.3 Summary of Significant Accounting Policies (a) Subsidiaries and Basis of Consolidation The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the financial year. The financial statements of the parent and its subsidiaries are all drawn up at the same reporting date.

Subsidiaries are entities over which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of accounting, subsidiaries are fully consolidated from the date on which control is transferred to the Group and are de-consolidated from the date that control ceases. The cost of an acquisition is measured as the aggregate of the fair value of the assets acquired, equity instruments issued and liabilities and contingent liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.

The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired at the date of acquisition is reflected as goodwill. The accounting policy on goodwill is set out in Note 2.3(d)(i) to the financial statements. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised immediately in the profit or loss.

Intragroup transactions and balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated 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.



2.3 Summary of Significant Accounting Policies (Continued) (a) Subsidiaries and Basis of Consolidation (Continued) Minority interests represent the portion of the profit or loss and net assets of subsidiaries attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the parent. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since that date.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the excess and any further losses applicable to the minority are charged against the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is allocated all such profit until the minority’s share of losses previously absorbed by the Group has been recovered.

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(k) to the financial statements. On disposal of such investments, the difference between the net disposal proceeds and their carrying amount is included in the profit or loss.

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 balance of goodwill is reflected as a gain or loss on disposal in the profit or loss.

(b) Jointly Controlled Entities Jointly controlled entities are corporations, partnerships or other entities in which the Group has contractually agreed to share its control with one or more parties, where strategic financial and operating decisions relating to the jointly controlled entity required unanimous consent of the parties.

In the Company’s separate financial statements, investment in a jointly controlled entity is stated at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(k) to the financial statements.

The Group’s interest in jointly controlled entities are accounted for in the consolidated financial statements using the equity method of accounting and are recognised at cost less impairment losses, if any. Under the equity method, the investment in jointly controlled entity is carried in the consolidated statements of financial position at cost adjusted for post acquisition changes in the Group’s share of net assets of the jointly controlled entity. The Group’s share of the net profit or loss of the jointly controlled entity is recognised in the profit or loss.

In applying the equity method, unrealised gains and losses on transactions between the Group and the jointly controlled entity are eliminated to the extent of Group’s interest in the jointly controlled entity, and the unrealised losses are eliminated to the extent of the costs that can be recovered. Where necessary, in applying the equity method, adjustments are made to the financial statements of the jointly controlled entity to ensure consistency of accounting policies with those of the Group.

After the application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in the jointly controlled entity. The jointly controlled entity is equity accounted for from the date the Group ceases to have significant influence over the jointly controlled entity.

The results of the jointly controlled entity, Cuscapi Outsourcing Sdn Bhd, is accounted for in the consolidated financial statements based on the audited financial statements of Cuscapi Outsourcing Sdn Bhd made up as at 31 December 2010 and are prepared using accounting policies that conform to those used by the Group for like transactions and events in similar circumstances.

On disposal of such investment, the difference between net disposal proceeds and the carrying amount of the investment in a jointly controlled entity is reflected as a gain or loss on disposal in the profit or loss.




2.3 Summary of Significant Accounting Policies (Continued) (c) Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. Cost includes expenditure that is directly attributable to the acquisition of the asset. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit or loss as incurred.

Depreciation of property, plant and equipment is provided on the straight line basis to write off the cost of each asset to its residual value over their estimated useful lives, at the following annual rates:

Plant and equipment 10% - 20% Furniture and fittings 15% - 20% Motor vehicles 20% Computers 20% - 40% Renovation 2% - 10%

The residual values, useful lives and depreciation method are reviewed, and adjusted if appropriate, at each balance sheet date. The effects of any revisions of the residual values, useful lives and depreciation method 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.

At each reporting date, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(k) to the financial statements.

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 year the asset is derecognised.

(d) Intangible Assets (i) Goodwill on Consolidation Goodwill represents the excess of the cost of business combination over the fair value of the Group’s share of the identifiable net assets at the date of acquisition.

Following the initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses on goodwill are not reversed. Gain and loss on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash- generating units or groups of cash-generating units that are expected to benefit from the synergies of the business combination in which the goodwill arose. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(k) to the financial statements.



2.3 Summary of Significant Accounting Policies (Continued) (d) Intangible Assets (Continued) (ii) Research and Development Costs All research costs are recognised in the profit or loss as incurred. Expenditure incurred on projects to develop, design and test new products is capitalised as intangible assets 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. Other development expenditure which do not meet these criteria are expensed when incurred.

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 five years. Impairment is assessed whenever there is an indication of impairment. 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. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(k) to the financial statements. The amortisation period and method are also reviewed at least at each reporting date.

(e) Investments Investments in shares, bonds and debentures held as long-term investment are stated at cost less impairment losses. Where an indication of impairment exists, the carrying amount of the investment is reviewed, and if found to be in excess of recoverable amount, is written down immediately to its recoverable amount. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(k) to the financial statements.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the profit or loss.

(f) Inventories Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the weighted average method. The cost of inventories comprises cost of purchase and incidental costs in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

(g) 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 instruments.

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.




2.3 Summary of Significant Accounting Policies (Continued) (g) Financial Instruments (Continued) 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.

A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the near future or part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit taking.

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 profit or loss.

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 and the Group have the positive intention and ability to hold the investment to maturity is classified as held-to-maturity investments.

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 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.



2.3 Summary of Significant Accounting Policies (Continued) (g) Financial Instruments (Continued) (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.

Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(iv) 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.

(h) Taxation 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, affect neither accounting profit nor taxable profit.




2.3 Summary of Significant Accounting Policies (Continued) (h) Taxation (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 equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill 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.

(i) 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, which is the Group’s functional currency and presentation currency.

(ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Non-monetary items are measured in terms of historical cost in a foreign currency or translated using the exchange rates as at the date of the initial transaction. Non-monetary items measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.

(iii) Foreign Operations The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each account balances are translated at the closing rate at the reporting date; • Income and expenses for each profit or loss are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates); • All resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders’ equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the profit or loss as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.



2.3 Summary of Significant Accounting Policies (Continued) (j) 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) Rental Revenue Rental revenue comprises Point of Sale (“POS”) equipment and is recognised on accrual basis.

(iii) Interest Revenue Interest revenue is recognised on a time proportion basis, taking into account the principal outstanding and the effective rate over the period to maturity, when it is determined that such revenue will accrue to the Group.

(iv) Dividend Revenue Dividend revenue is recognised when the right to receive payment is established.

(v) Management fees Management fees is recognised on an accrual basis.

(k) Impairment of Assets (i) Impairment of Financial Assets All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiaries and associate company) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.




2.3 Summary of Significant Accounting Policies (Continued) (k) Impairment of Assets (Continued) (i) Impairment of Financial Assets (Continued) An impairment loss in respect of available-for-sale financial assets is recognised in the profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument is not reversed through the profit or loss. If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the profit or loss.

(ii) Impairment of Non-financial Assets The Group and the Company assess 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 and the Company make an estimate of the asset’s recoverable amount.

For goodwill that has an indefinite useful life and are not available for use, the recoverable amount is estimated at each reporting date or more frequently when indicators of impairment are identified.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less cost to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. Where the carrying amounts of an asset exceed its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An impairment loss is recognised in the 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.



2.3 Summary of Significant Accounting Policies (Continued) (l) Borrowing Costs Borrowing costs are charged to the profit or loss as an expense in the period in which they are incurred.

(m) Employee Benefits (i) Short-term employee benefits Wages, salaries, social security contribution, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by the employees. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences sick leave, maternity and paternity leave are recognised when absences occur.

(ii) Post-employment benefits The Group contributes to the Employees’ Provident Fund, the national defined contribution plan. The contributions are charged to the profit or loss in the period to which they are related. Once the contributions have been paid, the Group has no further payment obligations.

(n) Segmental Reporting In the previous financial 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, 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 the statements of cash flows, 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. Cash and cash equivalents are stated net of bank overdrafts which are repayable on demand.





2.4 Critical Accounting Estimates and Judgments The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Group’s results and financial position are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions 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:

(a) Key Sources of Estimation (i) Impairment of Goodwill The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash-generating units (“CGU”) to which goodwill are allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 December 2010 was RM8,596,889/- (2009 : RM8,596,889/-).

(ii) Depreciation of Property, Plant and Equipment Property, plant and equipment are depreciated on the straight line basis over their estimated useful lives. Management estimates the useful lives of the property, plant and equipment to be 2.5 to 50 years. The carrying amount of property, plant and equipment of the Group and of the Company as at 31 December 2010 was RM5,250,674/- (2009 : RM4,925,400/-) and RM447,890/- (2009 : RM610,525/-) respectively. Changes in expected level of usage and technological developments could impact the economic useful lives and residual values of the property, plant and equipment, therefore the future depreciation charges could be revised.

(iii) Taxation 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.

(iv) Deferred Tax Assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the tax losses and capital allowances can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying amount of deferred tax assets not recognised are disclosed in Note 15 to the financial statements.



2.4 Critical Accounting Estimates and Judgments (Continued) (a) Key Sources of Estimation (Continued) (v) Impairment of Development Costs The Group determines whether development costs, not yet available for use, are impaired, at least on an annual basis. Development costs have finite useful lives and are assessed for impairment whenever there is an indication of impairment.

This requires an estimation of the value-in-use of the assets. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the assets and also to choose a suitable discount rate in order to calculate the present value of the cash flows. The carrying amount of development costs as at 31 December 2010 was RM6,720,486/- (2009 : RM5,184,593/-).

(vi) Allowance for Obsolescence in Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgements and estimates. Possible changes in these estimates could result in revisions to the valuations of inventories.

(vii) Impairment of Loans and Receivables The Group makes allowances for impairment based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analysed historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables. (viii) Impairment of Investment in Subsidiaries The Group carried out the impairment test based on a variety of estimation including the value-in-use of the cash generating unit. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Changes in assumptions could significantly affect the results of the Group’s tests for impairment of investment in subsidiaries.

(b) Critical judgements made in applying accounting policies There are no critical judgements made by management in the process of applying the Group’s accounting policies that have significant effect on the amounts recognised in the financial statements.


Plant Furniture and and Motor Equipment Fittings Vehicles Computers Renovation Total RM RM RM RM RM RM

3 PROPERTY, PLANT AND EQUIPMENT


Group 2010 CostAt 1 January 2010 890,566 555,106 224,744 6,229,448 1,173,823 9,073,687 Currency alignment (6,541) (6,886) - (26,638) (2,634) (42,699) Additions 272,167 32,784 - 1,819,496 79,317 2,203,764 Transfers to inventories - - - (149,752) - (149,752) Disposals / Write offs (200) - - (1,020,429) (1,100) (1,021,729) Reclassification 42,438 - - (42,438) - -

At 31 December 2010 1,198,430 581,004 224,744 6,809,687 1,249,406 10,063,271

Accumulated DepreciationAt 1 January 2010 239,735 345,749 117,492 3,246,154 199,153 4,148,283 Currency alignment (1,224) (1,503) - (6,065) (227) (9,019) Transfers to inventories - - - (27,853) - (27,853) Depreciation for the financial year 154,843 98,244 33,000 1,263,307 40,355 1,589,749 Disposals / Write offs (43) - - (888,401) (119) (888,563) Reclassification 18,964 - - (18,964) - -

At 31 December 2010 412,275 442,490 150,492 3,568,178 239,162 4,812,597

Net Book Value at 31 December 2010 786,155 138,514 74,252 3,241,509 1,010,244 5,250,674

Group 2009CostAt 1 January 2009 814,293 433,055 224,744 4,967,237 968,023 7,407,352 Currency alignment (846) (2,534) - (6,736) (4,805) (14,921) Additions 144,947 131,636 - 1,954,511 210,605 2,441,699 Disposals / Write offs (67,828) (7,051) - (685,564) - (760,443)

At 31 December 2009 890,566 555,106 224,744 6,229,448 1,173,823 9,073,687

Accumulated DepreciationAt 1 January 2009 246,676 342,581 84,492 3,397,843 109,568 4,181,160 Currency alignment (170) (401) - (1,382) (2,403) (4,356) Depreciation for the financial year 54,720 8,680 33,000 532,107 91,988 720,495 Disposals / Write offs (61,491) (5,111) - (682,414) - (749,016)

At 31 December 2009 239,735 345,749 117,492 3,246,154 199,153 4,148,283

Net Book Value at 31 December 2009 650,831 209,357 107,252 2,983,294 974,670 4,925,400

Plant Furniture and and Motor Equipment Fittings Vehicles Computers Renovation Total RM RM RM RM RM RM

3 PROPERTY, PLANT AND EQUIPMENT (Continued)


Company 2010 CostAt 1 January 2010 211,752 321,480 224,744 696,265 84,350 1,538,591 Additions 106,910 600 - 66,647 12,000 186,157 Transfers to subsidiaries (104,899) - - (17,738) - (122,637) Disposals - - - (12,013) - (12,013)

At 31 December 2010 213,763 322,080 224,744 733,161 96,350 1,590,098

Accumulated DepreciationAt 1st January 2010 120,386 240,882 117,492 442,697 6,609 928,066 Depreciation for the financial year 19,262 52,492 33,000 117,375 1,827 223,956 Transfers to subsidiaries (1,522) - - (1,726) - (3,248) Disposals - - - (6,566) - (6,566)

At 31 December 2010 138,126 293,374 150,492 551,780 8,436 1,142,208

Net Book Value at 31 December 2010 75,637 28,706 74,252 181,381 87,914 447,890

Company 2009CostAt 1 January 2009 261,932 320,730 224,744 1,185,243 84,350 2,076,999 Additions 17,949 750 - 119,394 - 138,093 Transfers to subsidiaries (2,499) - - - - (2,499) Disposals (65,630) - - (608,372) - (674,002)

At 31 December 2009 211,752 321,480 224,744 696,265 84,350 1,538,591

Accumulated DepreciationAt 1 January 2009 157,937 188,337 84,492 931,010 4,923 1,366,699 Depreciation for the financial year 22,012 52,545 33,000 119,826 1,686 229,069 Transfers to subsidiaries (270) - - - - (270) Disposals (59,293) - - (608,139) - (667,432)

At 31 December 2009 120,386 240,882 117,492 442,697 6,609 928,066

Net Book Value at 31 December 2009 91,366 80,598 107,252 253,568 77,741 610,525


5 DEVELOPMENT COSTS

Group 2010 2009 RM RM


At 1 January/31 December 8,596,889 8,596,889

CostAt 1 January 10,156,648 7,256,134 Additions - internally developed 2,729,782 2,900,514

At 31 December 12,886,430 10,156,648

AmortisationAt 1 January 4,972,055 3,384,473 Amortisation for the financial year 1,193,889 1,587,582

At 31 December 6,165,944 4,972,055

Net book value At 31 December 6,720,486 5,184,593

Group

Development costs principally comprise internally generated expenditure on development on major projects where it is reasonably anticipated that the costs will be recovered through future commercial activities. The remaining amortisation period at year end range from 1 to 5 years (2009 : 1 to 5 years).

Development costs during the financial year consists of staff costs.

The goodwill on consolidation arose from the investment in Cuscapi Solutions Sdn Bhd, a wholly owned subsidiary of the Company which is mainly involved in the development of software.

The recoverable amount of the investment is determined based on value-in-use calculation using cash flow projections based on financial budget approved by the management covering a five-year period, which shows positive net cash inflow throughout the period.

(i) Budgeted gross margin The budgeted gross profit margin is assumed to be consistent.

(ii) Discount rate The discount rate used for the IT sector is 9%. This rate is pre-tax and reflect specific risks relating to the industry.

Sensitivity to changes in assumptions There are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation to exceed its recoverable amount.

4 GOODWILL ON CONSOLIDATION


Group’s Country of EffectiveName of Companies Incorporation Equity Interest Principal Activities 2010 2009 % %

Direct subsidiariesCuscapi Innovation Lab Sdn Bhd Malaysia 100 100 Software development

Cuscapi Consulting Services Sdn Bhd Malaysia 100 100 Provision of project management, business and IT related consultancy services

Cuscapi Network Solutions Sdn Bhd ^ Malaysia 100 100 Provision of network infrastructure and security solutions and services

Cuscapi International Sdn Bhd Malaysia 100 100 Provision of POS and business management solutions and system integration services

Cuscapi Malaysia Sdn Bhd Malaysia 100 100 Provision of POS and business management solutions, remedial services for POS hardware and related software implementation and support services

Cuscapi Hospitality Solutions Sdn Bhd Malaysia 100 100 Inactive

Transight (S) Pte Ltd +# Singapore 95 95 Inactive

BRG Asia Sdn Bhd ^ Malaysia 51 51 Dormant

Cuscapi Solutions Sdn Bhd Malaysia 100 100 Software development

Cuscapi International Pte Ltd +^ Singapore 100 100 Investment holding

Indirect subsidiaries北京客凯易科技有限公司 China 100 100 Provision of POS and business management (Cuscapi Beijing Co Ltd) +*^ solutions, remedial services for POS hardware and related software implementation and support services, project management, business and IT related consultancy services

苏州客凯易科技有限公司 China 100 100 Software development(Cuscapi Suzhou Co Ltd) +*^

Details of the subsidiaries are as follows:


Company 2010 2009 RM RM

Unquoted shares, at cost 13,384,597 13,384,597 Less: Impairment loss (142,459) (136,296) 13,242,138 13,248,301

6 INVESTMENT IN SUBSIDIARIES


6 INVESTMENT IN SUBSIDIARIES (Continued)



Cuscapi Singapore Pte Ltd +* Singapore 100 100 Provision of POS and business management solutions, remedial services for POS hardware and related software implementation and support services, project management, business and IT related consultancy services

+ These companies are not audited by Baker Tilly Monteiro Heng.* Held indirectly through Cuscapi International Pte Ltd.^ The audited report of these subsidiaries contain an emphasis of matter relating to the appropriateness of the going concern basis of accountingusedinthepreparationoftheirfinancialstatementswhichpresumescontinuedfinancialsupporttobegivenbytheholdingand ultimate holding company, Cuscapi Berhad. # Struck-off from the Registrar of Companies on 23 February 2011.

The Group’s aggregate share of assets, liabilities and revenue and expenses of the jointly controlled entity are as follows:

7 INVESTMENT IN A JOINTLY CONTROLLED ENTITY


Unquoted shares, at cost 55,000 55,000 55,000 55,000Less: Share of losses (55,000) (55,000) - -

- - 55,000 55,000

Company 2010 2009 RM RM

Assets and liabilitiesCurrent assets 465,277 235,784Non-current assets 41,300 75,665

Total assets 506,577 311,449

Current liabilities 1,749,440 1,215,246

ResultsRevenue 629,965 158,357Expenses including finance costs and tax expense (934,981) (983,264)

Loss for the financial year (305,016) (824,907)


7 INVESTMENT IN A JOINTLY CONTROLLED ENTITY (Continued)

The Group has discontinued the recognition of its share of losses of Cuscapi Outsourcing Sdn Bhd because the share of losses of the joint venture company has exceeded the Group’s interest in the joint venture Company. The Group’s unrecognised share of losses of the joint venture company for the current year and cumulatively are RM305,016/- (2009 : RM824,907/-) and RM1,242,863/- (2009 : RM937,847/-) respectively.

The details of the jointly controlled entity which was incorporated in Malaysia are as follows:

The Company entered into a joint venture agreement with Protéas Innovation Sdn Bhd (“Protéas”) to incorporate a jointly controlled entity, Cuscapi Outsourcing Sdn Bhd (“Cuscapi Outsourcing”) in Malaysia to provide contact centre outsourcing services with a total paid up share capital of RM100,000/- consisting of 100,000 ordinary shares of RM1/- each. The Company subscribed for 55% of the shares in Cuscapi Outsourcing whilst Protéas subscribed for the remaining 45% of the shares in Cuscapi Outsourcing. In the initial start up, certain strategic financial and operating decisions of Cuscapi Outsourcing require the unanimous consent of both the Company and Protéas, and accordingly this investment has been accounted for as an investment in a jointly controlled entity instead of investment in a subsidiary.

8 OTHER INVESTMENTS

9 INVENTORIES


At costPOS related equipment, components and parts 2,057,085 1,715,879

Cuscapi Outsourcing Sdn Bhd Malaysia 55 55 Provision of contact centre outsourcing services


Group and Company 2010 2009 RM RM

Transferable club membership, at cost 80,000 80,000 Less: Impairment loss (10,000) (10,000) 70,000 70,000


10 TRADE AND OTHER RECEIVABLES



CurrentTrade receivables Third parties 15,211,751 15,243,826 49,594 143,438 Amount owing by susbidiaries - - 2,217,606 9,160,219 Amount owing by a jointly controlled entity 60,000 10,000 60,000 10,000

15,271,751 15,253,826 2,327,200 9,313,657

Less: Allowance for impairment - Third parties (266,665) (263,155) (40,794) (40,794) - Amount owing by subsidiaries - - (48,848) (48,848)

(266,665) (263,155) (89,642) (89,642)

Trade receivables, net 15,005,086 14,990,671 2,237,558 9,224,015

Other receivables Other receivables 7,183 257,100 - - Amount owing by susbidiaries - - 12,670,659 8,492,776 Amount owing by a jointly controlled entity 1,700,647 1,204,444 1,700,647 1,204,444 Sundry advances 499,394 - 182,853 - Deposits 845,762 808,807 541,723 486,896

3,052,986 2,270,351 15,095,882 10,184,116

Less: Allowance for impairment - Amount owing by subsidiaries - - (403,830) (403,830)

- - (403,830) (403,830)

Other receivables, net 3,052,986 2,270,351 14,692,052 9,780,286

Total receivables 18,058,072 17,261,022 16,929,610 19,004,301

Analysis of trade receivables by currencyRinggit Malaysia 9,648,313 11,225,146 2,237,558 9,224,015 US Dollar 3,561,068 3,577,435 - - Singapore Dollar 795,098 95,985 - - Renminbi 1,000,607 92,105 - -

15,005,086 14,990,671 2,237,558 9,224,015

10 TRADE AND OTHER RECEIVABLES (Continued)



Neither past due nor impaired 9,153,910 3,437,815 2,237,558 9,121,371

Past due 1 - 30 days 1,056,744 2,552,018 - 102,644 Past due 31 - 120 days 2,054,770 5,494,133 - - Past due more than 120 days 2,739,662 3,506,705 - -

5,851,176 11,552,856 - 102,644 Impaired 266,665 263,155 89,642 89,642

15,271,751 15,253,826 2,327,200 9,313,657

(i) Trade receivables Trade receivables are non-interest bearing and are generally on 30 to 90 (2009 : 30 to 60) days terms. They are recognised at their original amounts which represent their fair values. Analysis on trade receivables The ageing analysis of the Group’s trade receivables is as follows:

Receivables that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. More than 59% (2009 : 59%) of the Group’s trade receivables arise from customers with more than two years of experience with the Group and losses have incurred infrequently. Trade receivables that are past due whose terms have been renegotiated during the year amounting to RM554,454 (2009 : Nil). The trade receivables would have been past due or impaired as at the reporting date if the terms had not been renegotiated during the financial year.

(ii) Third parties Receivables that are past due but not impaired The management has a credit policy in place to monitor and minimise the exposure of default. The Group trades only with recognised and credit worthy third parties. Trade receivables are monitored on an ongoing basis. As at the balance sheet date, there were no significant concentrations of credit risk in the Group and receivables that are past due but not impaired and are unsecured in nature.


Individually impaired Group Company 2010 2009 2010 2009 RM RM RM RM

Trade receivables - nominal amounts 266,665 263,155 89,642 89,642 Less: Allowance for impairment (266,665) (263,155) (89,642) (89,642)

- - - -




At 1 January 263,155 206,498 89,642 96,462 Charge for the financial year 26,041 124,004 - 32,854 Reversal of impairment losses (22,531) (67,347) - (39,674)

At 31 December 266,665 263,155 89,642 89,642

(ii) Third parties (Continued) Receivables that are impaired The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Movements in allowance accounts:

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.


(iii) Amount owing by subsidiaries

Amount owing by subsidiaries is unsecured, non-interest bearing and repayable upon demand.

(iv) Amount owing by a jointly controlled entity Amount owing by a jointly controlled entity is unsecured, non-interest bearing and repayable on demand.

Individually impaired 2010 2009 RM RM

CompanyAmount owing by subsidiaries 2,217,606 9,160,219 Less: Allowance for impairment (48,848) (48,848)

2,168,758 9,111,371


11 SHORT-TERM DEPOSITS WITH LICENSED BANKS

Group and CompanyThe short-term deposits bear interest at rates ranging from 1.96% to 2.75% (2009 : 1.96% to 3.70%) per annum.


US Dollar 1,281,261 227,544 15,794 19,376 SG Dollar 433,975 550,603 - - Renminbi 887,073 193,432 - - Ringgit Malaysia 1,769,383 2,393,628 192,654 212,635

4,371,692 3,365,207 208,448 232,011

12 CASH AND BANK BALANCES

Analysis of cash and bank balances by currency:




Non-distributableShare premium 7,275,823 7,275,823 7,275,823 7,275,823 Foreign currency translation reserve 162,905 219,595 - -

DistributableRetained earnings 13,410,888 8,625,656 1,403,968 928,413

20,849,616 16,121,074 8,679,791 8,204,236

13 SHARE CAPITAL

14 RESERVES

Group and Company Group and Company 2010 2009 2010 2009 Number of shares Unit Unit RM RM

Ordinary shares of RM0.10 each Authorised: At 1 January / 31 December 600,000,000 600,000,000 60,000,000 60,000,000

Issued and fully paid: At 1 January / At 31 December 222,432,267 222,432,267 22,243,227 22,243,227

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 28 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 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the tax credits under Section 108 of the Income Tax Act, 1967 (“Section 108 balance”) and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the Section 108 balance to be reside as at 31 December 2007.

The Company did not elect for the irrevocable option to disregard the Section 108 balance. Accordingly, during the transitional period, the Company may utilise the Section 108 balance as at 31 December 2010 to distribute cash dividend payments to ordinary shareholders as defined under Finance Act 2007.

Subject to agreement with the Inland Revenue Board, the Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and tax exempt account under Section 12 of the Income Tax (Amendment) Act, 1999 to frank the distribution of its entire retained earnings as at 31 December 2010 by way of dividends.

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers and requires to disclose the breakdown of the retained earnings or accumulated losses as at the end of the reporting period, into realised and unrealised profits and losses. On 20 December 2010, Bursa Malaysia Securities further issued guidance on the disclosure and the format required.

14 RESERVES (Continued)


The retained earnings as at reporting date may be analysed as follows:

The determination of realised and unrealised profits or loss is complied 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 20 December 2010.

The disclosure of realised and unrealised profits and losses is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other purposes.

Deferred tax assets have not been recognised for the following items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits:



Realised 14,108,102 9,040,845 1,403,643 935,790 Unrealised (697,214) (415,189) 325 (7,377)

13,410,888 8,625,656 1,403,968 928,413

Unutilised tax losses 1,298,185 1,286,236 64,750 64,750 Deductable temporary differences 369,185 290,170 403,771 281,670

1,667,370 1,576,406 468,521 346,420

Potential deferred tax assets not recognised at 25% 416,843 394,102 117,130 86,605

15 DEFERRED TAX LIABILITIES


At 1 January 316,945 207,610 Charged to income statement (Note 22) 259,440 109,335

At 31 December 576,385 316,945

Timing differences between net book values and the corresponding tax written down values 576,385 316,945


The trade and other payables are non-interest bearing and are normally settled on 30 to 120 (2009 : 30 to 120) days terms.

The amount owing to subsidiaries is unsecured, non-interest bearing and repayable on demand.

Analysis of trade payables by currency:


16 TRADE AND OTHER PAYABLES


CurrentTrade Payables Third parties 1,734,842 3,696,079 6,090 6,090 Amount owing to subsidiaries - - - 168,885

1,734,842 3,696,079 6,090 174,975 Other Payables Accrued operating expenses 3,047,641 1,557,396 571,712 234,974 Other payables 2,530,116 233,410 2,215,446 32,347 Refundable deposits 355,350 563,216 - - Advance receipts from customer for maintenance contract 1,189,535 634,608 - - Amount owing to subsidiaries - - 1,734,794 5,816,899

7,122,642 2,988,630 4,521,952 6,084,220

Total financial liabilities carried at amortised cost 8,857,484 6,684,709 4,528,042 6,259,195


US Dollar 477,932 322,025 - - SG Dollar 104,959 613,510 - - Renminbi 262,627 200,085 - - Thai Baht 2,587 - - - Ringgit Malaysia 886,737 2,560,459 6,090 174,975

1,734,842 3,696,079 6,090 174,975





Sale of goods 30,702,554 22,506,007 - - Services 18,080,815 16,299,166 - - Dividend income - - 5,456,000 - Management fees 120,000 120,000 3,571,000 3,750,000

48,903,369 38,925,173 9,027,000 3,750,000

Cost of goods sold 18,648,349 15,636,554 - - Amortisation of development costs 1,210,427 1,587,583 - - Other direct costs 217,744 466,475 - -

20,076,520 17,690,612 - -

17 REVENUE

18 COST OF SALES



Interest income- licensed banks 101,660 70,965 78,816 55,887

19 INTEREST INCOME



20 PROFIT BEFORE TAXATION


Profit before taxation is arrived at after charging:Impairment loss on trade receivables 26,041 113,836 - 32,854 Amortisation of development costs 1,193,889 1,587,582 - - Audit fee- Statutory - Current year 72,486 60,595 10,000 12,000 - Under/(over)accrual in prior year 3,415 (1,500) 3,500 1,500 - Non statutory 67,690 40,000 46,000 40,000 Bad debts written off - 30,640 - - Depreciation 1,589,749 720,499 223,956 229,069 Directors’ remuneration- Fees 229,665 149,502 193,665 149,502 - Salaries and other emoluments 1,060,204 749,600 812,204 749,600 - Employees’ Provident Fund 98,280 86,808 69,480 86,808 Inventories written off 3,020 35,925 - - Impairment loss on investment in subsidiaries - - 6,163 - Loss on disposal of property, plant and equipment - 140 - - Realised loss on foreign exchange - 98,242 - 7,377 Property, plant and equipment written off 20,723 10,787 - 6,570 Rental of premises 1,242,293 1,405,070 318,347 195,708 Staff costs- Salaries, allowances and bonuses 6,541,687 9,448,056 800,595 1,062,385 - Employees’ Provident Fund 1,056,459 1,286,729 117,147 128,156 - Other staff related costs 511,328 471,965 93,415 96,350 - Incentive 1,962,160 - 260,568 - Unrealised loss on foreign exchange 84,669 - 139,457 -

And crediting:Impairment on receivables no longer required 22,531 115,119 - 97,614 Gain on disposal of property, plant and equipment 11,503 500 137 - Inventories written back - 2 - - Impairment on investment in a jointly controlled entity no longer required - - - 55,000 Realised gain on foreign exchange (net) 196,712 - - -

21 DIRECTORS’ REMUNERATION



Executive: Salaries and other emoluments 819,000 720,000 579,000 720,000 Bonus 189,504 - 189,504 - Defined contribution plan 98,280 86,808 69,480 86,808

Total Executive Directors’ remuneration 1,106,784 806,808 837,984 806,808

Non-Executive: Fees 229,665 149,502 193,665 149,502 Other emoluments 51,700 29,600 43,700 29,600

Total Non-Executive Directors’ remuneration 281,365 179,102 237,365 179,102

Total Directors’ remuneration 1,388,149 985,910 1,075,349 985,910

The details of remuneration receivable by Directors of the Group & Company during the year are as follows:

The number of Directors of the Company whose remuneration during the financial year within the following bands are:

Number of Directors 2010 2009 RM RM

Executive Directors:RM150,001 - RM200,000 1 -RM400,001 - RM450,000 - 2RM650,001 - RM700,000 1 -

Non-Executive Directors:Below RM50,000 - 4RM50,001 - RM100,000 4 1



22 TAXATION



Malaysian income tax expense- Current year (627,342) (118,731) (276,500) (13,972) - Prior years 103,192 13,882 1,397 (1,176)

(524,150) (104,849) (275,103) (15,148) Foreign income tax expense- Current year (97,258) (30,141) - - - Prior years (7,671) - - -

(104,929) (30,141) - - Deferred taxation (Note 15)- Current year (77,542) (82,755) - - - Prior years (181,898) (26,580) - -

(259,440) (109,335) - -

(888,519) (244,325) (275,103) (15,148)

Profit before taxation 10,011,181 506,692 5,088,088 71,238

Tax at applicable tax rate of 25% (2,502,795) (126,673) (1,272,022) (17,810) Tax effects arising from:- Non-deductible expenses (49,592) (802,048) (61,453) (47,224) - Non-taxable income 150,975 5,010 1,087,500 28,236 - Tax incentives-pioneer status 1,612,772 842,117 - - - (Reversal)/origination of deferred tax assets not recognised in the financial statements (22,741) (150,033) (30,525) 22,826 - Effect of different tax rates in other countries 9,239 - - - - (Under)/overprovision in prior years (86,377) (12,698) 1,397 (1,176)

Tax expense for the financial year (888,519) (244,325) (275,103) (15,148)

The income tax is calculated at the statutory tax rate of 25% (2009 : 25%) of the estimated taxable profit for the fiscal year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the current financial year, the income tax rate applicable to subsidiaries in China and Singapore were 25% and 17% (2009 : 25% and 17%) respectively.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:

23 EARNINGS PER SHARE

24 DIVIDENDS


Profit attributable to owners of the Company (RM) 9,122,662 262,367

Weighted average number of ordinary shares in issue 222,432,267 222,432,267

Basic earnings per share (sen) 4.10 0.12


Basic Earnings Per ShareBasic earnings per share is calculated by dividing the net profit for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year:

During the financial year ended 31 December 2010, the Company paid the following dividends:

i. First interim dividend in respect of financial year ended 31 December 2010, of 1.3 sen per share, less income tax of 25% amounting to RM2,168,715 was paid on 30 June 2010; and

ii. Second interim dividend in respect of financial year ended 31 December 2010, of 1.3 sen per share, less income tax of 25% amounting to RM2,168,715 was paid on 11 January 2011.

Diluted Earnings Per ShareNo calculation is made on the diluted earnings per share in respect of the current and previous financial year as there are no dilutive potential ordinary shares.


25 SIGNIFICANT RELATED PARTY TRANSACTIONS


(a) The Group and the Company had the following transactions with related parties during the financial year are as follows:

(b) The remuneration of Directors and other members of Key Management of the Group and the Company during the financial year were as follows:



Income:

Management fees receivable from subsidiaries- Cuscapi Solutions Sdn Bhd - - - 155,000 - Cuscapi Malaysia Sdn Bhd - - 2,070,600 3,091,000 - Cuscapi Innovation Lab Sdn Bhd - - - 205,000 - Cuscapi Network Solutions Sdn Bhd - - 1,035,300 - - Cuscapi Consulting Services Sdn Bhd - - 345,100 - - Cuscapi International Sdn Bhd - - - 179,000 Rental income, sales of POS equipment, remedial and maintenance income from A & W (Malaysia) Sdn Bhd* 1,010,375 1,046,142 - - Sale transactions with Ambank (M) Berhad + 34,636 263,627 - - Management fee receivable from a jointly controlled entity- Cuscapi Outsourcing Sdn Bhd 120,000 120,000 120,000 120,000

ExpensesOther expenses paid to- Cuscapi Consulting Services Sdn Bhd - - - 3,240

ExpensesDirectors’ remuneration- Fees 229,665 149,502 193,665 149,502 - Salaries and other emoluments 1,060,204 749,600 812,204 749,600 Post-employment benefits:- Defined contribution plan 98,280 86,808 69,480 86,808

1,388,149 985,910 1,075,349 985,910

*TransactionswithA&W(Malaysia)SdnBhd,awholly-ownedsubsidiaryofKUBMalaysiaBerhad,wherebyDato’RosmanbinAbdullahisa boardmemberofKUBMalaysiaBerhad.+TransactionswithAmbank(M)Berhad,wherebyDato’LarryGanNyapLiou@GanNyapLiowisaboardmemberofAmbank(M)Berhad.

26 SUBSEQUENT EVENTS

27 FAIR VALUE OF FINANCIAL INSTRUMENTS

28 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES


The Company has on 28 February 2011 acquired the remaining 45,000 ordinary shares of RM1/- each in the capital of Cuscapi Outsourcing Sdn Bhd (Company No. 819696-V) from Protéas Innovation Sdn Bhd (Company No. 759976-T) for a total consideration of RM350,000/-, resulting in Cuscapi Outsourcing Sdn Bhd (“Cuscapi Outsourcing”) becoming a wholly-owned subsidiary of the Company.

On even date, the Company further subscribed for an additional 990,000 ordinary shares of RM1/- each at par in the capital of Cuscapi Outsourcing in satisfaction of part of the indebtedness due by Cuscapi Outsourcing to the Company to the extent of RM990,000/-. The issued and paid-up capital of Cuscapi Outsourcing has been increased to RM1,090,000/- comprising of 1,090,000 ordinary shares of RM1/- each after the subscription.

The acquisition and further subscription in the capital of Cuscapi Outsourcing is not expected to have any material effect on the earnings per share, net assets or share capital of the Company.

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

Trade and other receivables (current) 10Trade and other payables (current) 16

The carrying amounts of these financial assets and liabilities are reasonable approximation of their fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of their fair values due to the insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

The operations of the Group and of the Company are subject to a variety of financial risks, including credit risk, liquidity risk, interest rate risk and foreign currency risk. The Group and the Company have formulated a financial risk management framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group and of the Company.

(i) Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities, cash and bank balances and derivatives), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company does not hold any collateral as security and other credit enhancements for the above financial assets.



28 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

(i) Credit risk (Continued) The management has a credit policy in place to monitor and minimise the exposure of default. The Group trades only with recognised and credit worthy third parties. Trade receivables are monitored on an ongoing basis.

As at balance sheet date, there were no significant concentrations of credit risk in the Group. The maximum exposure to credit risk for the Group is represented by the carrying amount of each financial instrument.

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 10 to the financial statements. Deposits with banks that are neither past due nor impaired are placed with reputable financial institutions with no history of default.

Financial assets that are either past due or impaired Information regarding financial assets that are past due or impaired is disclosed in Note 10 to the financial statements.

(ii) Liquidity risk Liquidity risk is the risk that the Group or the Company will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

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.

2010 On demand RM or within One to Over five one year five years years Total

GroupFinancial liabilitiesTrade and other payables 8,708,735 140,962 7,787 8,857,484

Total undiscounted financial liabilities 8,708,735 140,962 7,787 8,857,484

CompanyFinancial liabilitiesTrade and other payables 4,520,868 1,084 6,090 4,528,042

Total undiscounted financial liabilities 4,520,868 1,084 6,090 4,528,042



(iii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group and the Company does not have any exposure to interest rate risk as the Group and Company does not have any loans and borrowings.

The information on maturity dates and effective interest rate of financial assets and liabilities are disclosed in their respective notes.

(iv) 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.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currency of Group entities, primarily Ringgit Malaysia (“RM”). The foreign currency in which these transactions are denominated are primarily US Dollar (“USD”), Singapore Dollar (“SGD”) and Renminbi (“RMB”).

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 Group’s exposure to foreign currency risks are on USD, SGD, RMB and Thai Baht which are as follows:

United States Singapore Thai Total Dollar Renminbi Dollar Baht RM

Functional currency of Group companiesAt 31 December 2010Cash and deposits 1,281,261 887,073 433,975 - 2,602,309 Trade and other receivables 3,561,068 1,000,607 795,098 - 5,356,773 Trade and other payables (477,932) (262,627) (104,959) (2,587) (848,105)

Gross statement of financial position exposure 4,364,397 1,625,053 1,124,114 (2,587) 7,110,977

Functional currency of Group companiesAt 31 December 2009Cash and deposits 227,544 193,432 550,603 - 971,579 Trade and other receivables 3,577,435 92,105 95,985 - 3,765,525 Trade and other payables (322,025) (200,085) (613,510) - (1,135,620)

Gross statement of financial position exposure 3,482,954 85,452 33,078 - 3,601,484


29 CAPITAL MANAGEMENT



The primary objective of the Group’s capital management is to ensure that it maintains a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

The debt-to-equity ratios at 31 December 2010 and 31 December 2009 were as follows:

There were no changes in the Group’s approach to capital management during the financial year.

The Group and the subsidiaries are not subject to any externally imposed capital requirements.

(iv) Foreign currency risk (Continued) Sensitivity analysis for foreign currency risk A 3% strengthening of the USD & SGD against the RM at the end of the financial year would have increased/(decreased) profit and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

Profit or loss and equity RM’000

Group 2010

USD- strengthen 3% +404- weakened 3% -404

SGD- strengthen 3% +81- weakened 3% -81


Total liabilities 9,433,869 7,001,654 Equity attributable to owners of the Company 43,092,843 38,364,301 Debt-to-equity ratio 22% 18%

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Analysis by Size of Holdings as at 12 April 2011

NO. OF HOLDERS % NO. OF HOLDINGS %

1 - 99 3 0.27 150 0.00100 - 1,000 421 37.93 399,200 0.181,001 - 10,000 273 24.59 1,656,650 0.7410,001 - 100,000 298 26.85 12,575,600 5.65100,001 - 11,121,612 (*) 111 10.00 111,733,400 50.2311,121,613 AND ABOVE (**) 4 0.36 96,067,267 43.19

T O T A L 1,110 100.00 222,432,267 100.00

Holders With Holdings of 5.00% and Above as at 12 April 2011

Nationality/No. Holder Name Country of Incorporation Shareholdings % 1 Transight Systems Sdn Bhd Malaysia 48,120,000 21.632 Her Chor Siong Malaysia 23,166,667 10.423 CIMSEC Nominees (Tempatan) Sdn Bhd Malaysia 11,469,300 5.16 CIMB Bank for Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow4 Ang Chin Joo Malaysia 11,400,000 5.13

REMARK: * - LESS THAN 5% OF ISSUED HOLDINGS** - 5% AND ABOVE: OF ISSUED HOLDINGS

Shareholdings Statisticsas at 12 April 2011

List of Directors’ Holdings as at 12 April 2011

No. Name of Directors

% %

1. Ang Chin Joo 11,400,000 5.13 0 0.00

2. Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow 0 0.00 0 0.00

CIMSEC Nominees (Tempatan) Sdn Bhd 0 0.00 13,380,600 6.02 CIMB Bank for Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow (MY0747)

CIMSEC Nominees (Tempatan) Sdn Bhd 0 0.00 850,500 0.38 CIMB for Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow (PB)

3. Her Chor Siong 23,166,667 10.42 0 0.00

4. Dato’ Rosman bin Abdullah 0 0.00 0 0.00

5. Tai Keat Chai 30,000 0.01 0 0.00

6. Teoh Hoay Ming 6,857,167 3.09 0 0.00

Total 41,453,834 18.64 14,231,100 6.40

No. of SharesDirect

No. of SharesNominess

Statement of Shareholdingas at 12 April 2011

The 30 largest securities holders as at 12 April 2011

No. Holders Name No. of Holdings Percentage

1 Transight Systems Sdn Bhd 48,120,000 21.632 Her Chor Siong 23,166,667 10.423 CIMSEC Nominees (Tempatan) Sdn Bhd 13,380,600 6.02 CIMB Bank for Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow (MY0747)4 Ang Chin Joo 11,400,000 5.135 Koay Teng Heng 10,202,000 4.596 Pui Cheng Wui 8,352,800 3.767 Leong Kah Chern 7,146,333 3.218 Cimsec Nominees (Tempatan) Sdn Bhd 7,000,000 3.15 CIMB for Chan Hiok Khiang (PB)9 Teoh Hoay Ming 6,857,167 3.0910 Jonah Lau Kung Hui 5,364,000 2.4111 Wong Yoke Yung 4,550,000 2.0512 Ong Pig Suang @ Ong Phaik Suan 4,537,000 2.0413 Hassan bin Che Abas 3,500,000 1.5714 Mohd Razali bin Abdul Rahman 3,500,000 1.5715 Chua Sim Neo @ Diana Chua 2,875,300 1.2916 EB Nominees (Tempatan) Sendirian Berhad 2,702,000 1.21 Pledged Securities Account for Wong Yoke Yung (Epic - Bur)17 ECML Nominees (Tempatan) Sdn Bhd 2,700,000 1.21 Pledged Securities Account for Ewe Suan Chin (10E00088M)18 Ling Yoke Tek 2,050,000 0.9219 Sreekumar A/L P Narayana Pillai 1,895,000 0.8520 Citigroup Nominees (Tempatan) Sdn Bhd 1,596,400 0.72 Pledged Securities Account for Syed Hishamuddin bin Syed Kamaruddin (472615)21 Ng Kam Man 1,500,000 0.6722 Lee Teck Seng Patrick 1,400,000 0.6323 Public Nominees (Tempatan) Sdn Bhd 1,400,000 0.63 Pledged Securities Account for Tan Leh Kiah (E-BWK)24 Mohd Razali bin Abdul Rahman 1,350,000 0.6125 Tan Poh Keat 1,320,000 0.5926 Ooi Yen Hwa 1,200,000 0.5427 Chua Chee Koon 1,110,000 0.5028 Krishnan A/L C K Menon 1,100,000 0.4929 Tsai Chang, Hsiu-Hsiang 1,100,000 0.4930 Mayban Nominees (Tempatan) Sdn Bhd 1,094,500 0.49 Pledged Securities Account for Tang Sing Ling


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Thirty-Second Annual General Meeting (AGM) of Cuscapi Berhad will be held at Mutiara Room, The Saujana Hotel Kuala Lumpur, 2km, Off Sultan Abdul Aziz Shah Airport Highway, Saujana, 47200 Subang, Selangor Darul Ehsan on Monday, 23 May 2011 at 3.00 p.m. for the following purposes:

AGENDA

1. To receive and adopt the audited financial statements for the financial year ended 31 December 2010 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fees for the financial year ended 31 December 2010.

3. To re-elect the following Directors retiring in accordance with Article 91 of the Company’s Articles of Association and who being eligible, have offered themselves for re-election: i Ang Chin Joo

ii Tai Keat Chai

4. To re-elect Teoh Hoay Ming who retires by rotation and being eligible, offers himself for re-election in accordance with Article 96 of the Company’s Articles of Association.

5. To re-appoint Auditors and to authorise the Directors to fix their remuneration.

6. Special Business

To consider and if thought fit, to pass the following resolutions:

6.1 Ordinary Resolution Authority to Allot and Issue Shares in General Pursuant to Section 132D of the Companies Act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approval of all relevant authorities being obtained, the Directors be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the issued capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next AGM of the Company.”

6.2 Ordinary Resolution Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

“THAT approval be and is hereby given to the Cuscapi Group to enter into and to give effect to recurrent related party transactions of a revenue or trading nature with the Transacting Related Party as stated in Section 2.2 of the Circular to Shareholders dated 29 April 2011 which are necessary for the day-to-day operations of the Cuscapi Group, subject to the following: i. The transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and is not detrimental to the minority shareholders and that such transactions are made on an arm’s length basis and on normal commercial terms;

ii. Disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to this shareholders’ mandate during the financial year; and

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

iii. The authority hereby given shall continue to be in force until: a. The conclusion of the next AGM of the Company, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or

b. The expiration of the period within which the AGM of the Company is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or

c. Revoked or varied by resolution passed by the shareholders in general meeting whichever is the earlier.

AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the transactions contemplated or authorised by this resolution.” 6.3 Ordinary Resolution Proposed Renewal of Authority for the Company to Purchase up to 10% of its Own Shares in the Issued and Paid-Up Share Capital (“Proposed Renewal of Share Buy-Back Authority)

“THAT, subject to the approval of the relevant authorities, approval be and is hereby given for the Company to acquire its own ordinary shares of RM0.10 each of up to 10% of its issued and paid up share capital (“Cuscapi Shares”) from the market of Bursa Malaysia Securities Berhad (“Bursa Securities”), as may be determined by the Directors of the Company from time to time, in the manner set out in Section 2 of Part B of the Circular to Shareholders dated 29 April 2011 (“the Circular”).

THAT such authority shall commence upon the passing of this resolution and shall continue to be in force until:

i The conclusion of the next AGM at which time the authority will lapse, unless by an ordinary resolution passed at the next AGM, the authority is renewed; or

ii The expiration of the period within which the next AGM after that date is required by law to be held; or

iii Revoked or varied by an ordinary resolution of the Company’s shareholders in a general meeting, whichever occurs first, but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date.

THAT the Directors of the Company be and are hereby authorised to take all such steps and do all acts and deeds and to execute, sign and deliver on behalf of the Company, all necessary documents to give full effect to and for the purpose of completing or implementing the Proposed Renewal of Share Buy-Back Authority in the manner set out in Section 2 of Part B of the Circular, which would include the maximum funds to be allocated by the Company for this purpose.

AND THAT following completion of the purchase(s) of the Cuscapi Shares by the Company, the Directors be and are empowered to cancel or retain as treasury shares, any or all of the Cuscapi Shares so purchased, resell on Bursa Securities or distribute as dividends to the Company’s shareholders or subsequently cancel, any or all of the treasury shares, with full power to assent to any condition, revaluation, modification, variation and/or amendment in any manner as may be required by any relevant authority or otherwise as they deem fit in the best interests of the Company.” 6. To transact any other ordinary business for which due notice shall have been given.

By Order of the Board

DATUK TAN LEH KIAHCHAN YOKE PENGSUZANA BINTI AHMADSecretariesKuala Lumpur29 April 2011

Resolution 9


Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any other person to be his proxy and the provisions of Section 149(1) of the Companies Act, 1965 shall not apply to the Company.

2. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.

4. The instrument of proxy must be deposited with the Company’s Registered Office at Level 1, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

5. Explanatory note under Special Business: Ordinary Resolution 7 – Authority to Issue Shares

The proposed Ordinary Resolution 7 is a renewal of the general mandate pursuant to Section 132D of the Companies Act, 1965 (“General Mandate”) obtained from the shareholders of the Company at the previous AGM and, if passed, will empower the Directors of the Company to issue new ordinary shares from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued share capital of the Company for the time being.

The General Mandate, unless revoked or varied by the Company at a general meeting, will expire at the conclusion of the next AGM of the Company.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the Thirty-First AGM held on 16 June 2010 and which will lapse at the conclusion of the Thirty-Second AGM.

The General Mandate sought will provide flexibility to the Company for any possible fund raising activities, including but not limited for further placing of shares, for purpose of funding investment(s), working capital and/or acquisition(s). Ordinary Resolution 8 – Proposed Shareholders’ Mandate

The proposed Ordinary Resolution 8, if passed, will enable the Company and each of its subsidiaries to enter into a recurrent related party transactions with the parties as set out in the Circular to Shareholders of the Company dated 29 April 2011 despatched together with the Annual Report. This authority, subject to renewal thereof, will expire at the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM of the Company is required to be held under the Companies Act 1965 (excluding any extension of such period as may be allowed under the Companies Act 1965) whichever is earlier, unless earlier revoked or varied by a resolution in a general meeting.

Ordinary Resolution 9 – Proposed Renewal of Share-Buy Back Authority

The proposed Resolution 9, if passed, will empower the Director to buy-back and/or hold up to a maximum of 10% of the Company’s issue and paid-up share capital at any point of time, by utilising the funds allocated which shall not exceed the total retained profits and/ or share premium of the Company as set out in the Circular to Shareholders of the Company dated 29 April 2011 despatched together with the Annual Report. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company, or the expiration of period within which the next AGM is required by law to be held, whichever is earlier.

Resolution 9

NAME OF DIRECTORS STANDING FOR RE-ELECTION

The following are Directors standing for re-election at the forthcoming AGM:i. Ang Chin Jooii. Tai Keat Chaiiii. Teoh Hoay Ming

The profile of the Directors are set out on page 22 to 27 of this Annual Report. DETAILS OF BOARD MEETINGS

Seven (7) Board Meetings were held during financial year ended 31 December 2010. Details of the meetings are as follows:

Date of Meeting Venue12 January 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

10 February 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

9 April 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

12 May 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

13 August 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

10 November 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

8 December 2010 Cuscapi Meeting Room 1, 2nd Floor, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan

DETAILS OF ATTENDANCE OF DIRECTORS

Details of attendance of Directors at the Board Meetings held in the financial year ended 31 December 2010 are as follows:

Name of Directors No. of Meetings AttendedDato’ Larry Gan Nyap Liou @ Gan Nyap Liow 7/7Her Chor Siong 7/7Dato’ Rosman bin Abdullah 7/7Ang Chin Joo 7/7Tai Keat Chai 7/7Teoh Hoay Ming (Appointed on 1 July 2010) 3/3Leong Kah Chern (Resigned on 31 March 2010) 2/2

Statement AccompanyingNotice of Annual General Meeting


CUSCAPI BERHAD (43190-H)

Form of ProxyI/We, of being a Member/Members of CUSCAPI BERHAD, hereby appoint of or failing him/her, of or failing him/her, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Thirty-Second Annual General Meeting of the Company to be held at Mutiara Room, The Saujana Hotel Kuala Lumpur, 2km, Off Sultan Abdul Aziz Shah Airport Highway, Saujana, 47200 Subang, Selangor Darul Ehsan on Monday, 23 May 2011 at 3.00 p.m. and at any adjournment thereof.

My/Our proxy is to vote as indicated below:(Please indicate an “X” how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his direction)

No. of shares held

Dated this day of , 2011

_______________________________________Signature(If shareholder is a corporation, this part should be executed under seal)

Notes :1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any other person to be his proxy and the provisions of Section 149(1) of the Companies Act, 1965 shall not apply to the Company.2. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.4. The instrument of proxy must be deposited with the Company’s Registered Office at Level 1, Block B, Peremba Square, Saujana Resort, Seksyen U2, 40150 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

Resolutions For Against1. To receive and adopt the audited financial statements for the financial year ended 31 December 2010 together with the Reports of the Directors and Auditors thereon.2. To approve the payment of Directors’ fees for the financial year ended 31 December 2010.3. To re-elect Ang Chin Joo as Director.4. To re-elect Tai Keat Chai as Director.5. To re-elect Teoh Hoay Ming as Director.6. To re-appoint Auditors and to authorise Directors to fix their remuneration.7. To authorise Directors to issue and allot shares pursuant to Section 132D of the Companies Act, 1965.8. To approve the Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.9. To approve the Proposed Renewal of Share Buy-Back Authority.

The Company Secretary

Cuscapi Berhad (43190-H)Level 1, Block B, Peremba SquareSaujana Resort, Seksyen U240150 Shah AlamSelangor Darul Ehsan, Malaysia.

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directors’ ang chin joo profile age 59, malaysian

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