table ofcontents - malaysiastock.biz...2012/05/29 · table ofcontents tms today company structure...

Table of

ContentsTMS Today

Company Structure

Corporate Information

Profile of Board of Directors

Chairman’s Statement

Notice of Annual General Meeting

Appendix 1

Annexure ANotice of Nomination of Change Auditors

Statement Accompanying Notice of Annual General Meeting

2

3

4

6

10

13

15

16

17

Audit Committee Report

Statement on Corporate Governance

Statement on Internal Control

Additional Compliance Information

Financial Statements

Property of the Group

Analysis of Shareholdings

Analysis of Warrantholdings

Proxy Form (Enclosed)

18

22

29

30

33

91

92

94

The Media Shoppe Berhad (383028-D)2

100%TMS SOFTWARE

SDN BHD

100%KINETIC FORWARD

SDN BHD

TMSTODAY

THE MEDIA SHOPPE BERHAD (“TMS” or “the Company”), a company listed on the ACE Market of Bursa Malaysia Securities Berhad in 2004, is one of Malaysia’s leading companies in Internet-based applications and solutions. The origin of TMS dates back to 1996, when three (3) Malaysian graduates from the United States were encouraged by the emergence of the Internet phenomenon and the knowledge economy (K-economy) to set up the Company as a developer of web-based solutions for small and medium-sized enterprises.

TMS has global clients spreading across a broad range of industries ranging from banking and finance, publication, education, government, telecommunications to energy sectors, amongst others.

TMS has received numerous awards and accolades for its contributions to the industry. In 1999, it was awarded the Multimedia Super Corridor (MSC) status for its contributions to the development of flagship applications and support for Malaysia’s K-economy initiatives. This Pioneer Status was extended in 2004 in recognition of the company’s contributions towards producing world-class homegrown solutions and systems.

Ever since its inception in 1996, TMS’ products have won many awards and accolades including the coveted APICTA Awards for Best Application, COMDEX/ASIA for the Best Software Product Award and IBM Most Promising Linux Application.

Annual Report 2011 3

100%TMS SOFTWARE

SDN BHD

100%KINETIC FORWARD

SDN BHD

COMPANYSTRUCTURE


CORPORATEINFORMATION

BOARD OF DIRECTORS

Tan Ooi JinChairman/Independent Non-Executive Director

Christopher Chan Hooi GuanChief Executive Officer

Lee Li ChainFinance Director

Dato’ Chairil Nazri Bin AhmadIndependent Non-Executive Director

Lim Boon HongIndependent Non-Executive Director

Lai Soon YipIndependent Non-Executive Director

AUDIT COMMITTEE

Lai Soon Yip Chairman

Dato’ Chairil Nazri Bin Ahmad

Lim Boon Hong

Tan Ooi Jin

REMUNERATION COMMITTEE

Lai Soon Yip Chairman

Christopher Chan Hooi Guan

Tan Ooi Jin

NOMINATION COMMITTEE

Tan Ooi Jin Chairman

Lai Soon Yip

COMPANY SECRETARIES

Lai Chee Wah(MAICSA No: 7031124)

Pang Chia Tyng(MAICSA No. 7034545)

REGISTERED OFFICE

10th Floor, Menara Hap SengNo. 1 & 3, Jalan P. Ramlee50250 Kuala LumpurTel No. : 603-2382 4288Fax No. : 603-2382 4170

WEB SITE

www.tmsasia.com

AUDITORS

Baker Tilly Monteiro HengMonteiro & Heng Chambers 22 Jalan Tun Sambanthan 350470 Kuala Lumpur Tel No. : 603-2274 8988Fax No. : 603-2260 1708

LEGAL ADVISER

Yeap, Yong & AmyNo. 25A & B Jalan Pandan Indah 4/6APandan Indah55100 Kuala LumpurTel No. : 603-4291 7033Fax No. : 603-4292 6033

REGISTRAR

Tricor Investor Services Sdn BhdLevel 17, The Gardens North TowerMid Valley City Lingkaran Syed Putra59200 Kuala LumpurWilayah PersekutuanTel No. : 603-2264 3883Fax No. : 603-2282 1886

PRINCIPAL BANKER

Malayan Banking Berhad30-32, Jalan PJS 11/28ABandar Sunway46150 Petaling JayaSelangor Darul EhsanTel No. : 603-5637 0867Fax No. : 603-5637 0869

OFFICE

Head/Management OfficeC-01-3, Block C, Plaza GlomacNo.6, Jalan SS7/19 Kelana Jaya47301 Petaling Jaya Selangor Darul EhsanTel No. : 603-7885 8030Fax No. : 603-7885 8035

MSC Office9.01, 9th Floor, Persoft Tower6B, Persiaran TropicanaTropicana Golf & Country Resort 47410 Petaling JayaSelangor Darul EhsanTel No. : 603-7805 2188Fax No. : 603-7805 5688

LISTING

ACE Market of Bursa Malaysia Securities BerhadStock Name : TMSStock Code : 0060


Continuingour voyage

for next cycleof growth



PROFILE OF BOARD OF DIRECTORS

CHRISTOPHER CHAN HOOI GUANChief Executive Officer

CHRISTOPHER CHAN HOOI GUAN, a Malaysian, aged 45, is the Chief Executive Officer of the Group and is a Director of the Company since 9 April 1996. He is also a member of Remuneration Committee of the Company. He graduated from the University of Central Arkansas, USA, with a Bachelor of Music degree in 1993. He is the co-founder of TMS. He has more than 18 years experience in the IT industry. He is involved in the overall management of the TMS Group and developing the strategic direction of the Group.

He started his career as a Graduate Assistant at the School of Business, University of Central Arkansas in Arkansas, USA in 1993. In 1995, he took up the post of a Consultant at Acxiom Corporation a data mining company, in USA, where he was involved in exploring business opportunities in Asia and in the Pacific realm upon coming to Malaysia in 1996, he founded TMS.

In 2001 he won the PIKOM-Computimes ICT Award for ICT Entrepreneur of the Year. He was also the finalist at the 2004 Ernst and Young ICT Entrepreneur of the Year Award. Between March 2003 to February 2005, Chris was also the President of the Technopreneurs’ Association of Malaysia. He is also a council member of PIKOM.

Christopher Chan does not hold any directorship in other public companies.

DATO’ CHAIRIL NAZRI BIN AHMADIndependent Non-Executive Director

DATO’ CHAIRIL NAZRI BIN AHMAD, a Malaysian, aged 41, is an Independent Non-Executive Director of the Company since 8 December 2010. He is a graduate of the University of Newcastle, United Kingdom, obtaining the degree of Bachelor of Arts in Accounting and Financial Analysis with Honors, as a beneficiary of the Shell Scholarship Program.

He started his career as an auditor with Coopers & Lybrand to provide audit advisory and auditing related services to various clients which include MNCs, GLCs and large private companies. Among the notable companies that he has had the opportunity to serve were POS Malaysia Berhad, Telekom Malaysia Berhad and IJM Corporation Berhad. The invaluable corporate experience that he had gained in these various industries had provided him with a strong foundation in the understanding and the application of best practices in various industries.

Subsequently, Dato’ Chairil moved on to management and technology consulting. He joined Accenture, the leading global management consulting and technology services company. During his 8 years tenure in Accenture, Dato’ Chairil has served many large organisations and multinationals, amongst which include Siemens AG (Germany), PETRONAS Group of Companies (Malaysia), Universiti Teknologi Petronas (Malaysia), Carrefour (France), Natsteel (Singapore) and MISC Berhad (Malaysia). His consulting expertise was primarily in the areas of Business Process Engineering, Change Management, Enterprise Resource Planning (ERP) implementation, Shared Services and Corporate Strategy planning and implementation. His primary focus was in the Oil and Gas industry having served the PETRONAS group for 4 years. Nevertheless, he was then exposed to several other industries which include telecommunication, IT, maritime, logistics, steel, construction, education and retailing.

Dato’ Chairil does not hold any directorship in other public companies.


LAI SOON YIPIndependent Non-Executive Director

LAI SOON YIP, a Malaysian, aged 44, is an Independent Non-Executive Director of the Company since 7 September 2011. He is also a Chairman of Audit and Remuneration Committee and a member of Nomination Committee of the Company. He is a Fellow Member of the Association of Chartered Certified Accountants, United Kingdom, a Member of the Malaysian Institute of Accountants and Institute of Public Accountants, Australia, respectively.

He was professionally trained under Messrs Hew & Tan, a firm of public accountants from 1992 to 1996. Thereafter, he embarked on his career with Permata Merchant Bank Bhd in the corporate finance division. He had extensive exposure and experience in all functions of corporate finance and advisory services, which include, amongst others, IPOs, equity and debt fund raising, corporate restructuring and corporate acquisitions. During his tenure with the bank, he was also exposed to corporate banking and privatisation works during the 1997 financial crisis.

He left the bank in late 2000 and embarked on his general consultancy and business venture. He was involved in the corporate restructuring exercises for distressed public listed companies, IPO exercise, project procurements and travel agency.

Mr Lai does not hold any directorship in other public companies.

PROFILE OF BOARD OF DIRECTORS

cont’d

LEE LI CHAIN Finance Director

LEE LI CHAIN, a Malaysian, aged 37, is a Finance Director of the Company. She was appointed as Board of Director of the Company on 23 March 2012. She is a Chartered Accountant with the Malaysian Institute of Accountants and a member of the Association of Chartered Certified Accountants.

Ms. Li Chain started her career in 2000 as tax assistant in Crowe Horwath Tax Sdn Bhd. During her tenure in tax, she was in charge of ensuring tax compliance by individuals, medium to large private companies and public listed companies.

She then joined Messrs Crowe Horwath in 2001 and left in 2010 as a Senior Manager. She was responsible to plan and review the audits of public listed companies, private limited companies and foreign owned entities involved in a wide range of industries. She also led special assignments.

She then joined Felda IFFCO Sdn Bhd in 2011 as a Group Finance Manager, and subsequently a public listed company as Senior Group Finance Manager.

She currently holds the position of Chief Financial Officer in the Company.

Ms. Li Chain does not hold any directorships in other public companies.


PROFILE OF BOARD OF DIRECTORScont’d

LIM BOON HONGIndependent Non-Executive Director

LIM BOON HONG, a Malaysian, aged 42, is an Independent Non-Executive Director of the Company since 3 August 2011. He is also a member of Audit Committee of the Company. He graduated with a degree in Business Administration majoring in Actuarial Science from University of Nebraska-Lincoln.

He started as a management trainee with Arab Malaysian Merchant Bank (Now known as AMInvestment Bank) in 1992 and subsequently joined Zalik Securities Sdn Bhd (Now known as Hong Leong Investment Bank) as research analyst. In 1998, he ventured into own business, which mainly involved in trading of Technology and LCD products. He joined Green Packet Berhad as Special Assistant to Group Managing Director/CEO in 2006, till present.

Mr. Lim does not hold any directorship in other public companies.

TAN OOI JINIndependent Non-Executive Director

TAN OOI JIN, a Malaysian, aged 37, is an Independent Non-Executive Director of the Company. He was appointed as Board of Director of the Company on 22 September 2011 and subsequently re-designated as Chairman on 23 September 2011. He was appointed as a member of the Company’s Audit Committee on 23 September 2011. He is also the Chairman of the Nomination Committee and a member of Remuneration Committee.

He is a lawyer by qualification and holds a Second Class Honours LL.B. Bachelor of Laws degree from the University of Newcastle-upon-Tyne, UK and during his years of practice, he was focussing on the areas of Corporate & Securities and ICT. A former ASEAN scholar, he started his legal career in a medium-sized firm with an international affiliation focussing on Corporate and ICT. Previously, he was probably the most junior legal practitioner globally, noted and recognised by the independent international publication “Asia Pacific Legal 500” in 3 practice areas including in IT and Telecommunications.

He also advises the Technopreneurs Association of Malaysia, its members including its council members on legal issues and strategy. He currently sits on the Board of Trustees of the 1Utopia Foundation which aims to generate donations whether in cash or in forms of ICT equipment and gadgets to orphanages, schools and underprivileged children. He is also a founding member/adviser on corporate and legal matters to the World Chinese Association (Malaysia) Asia Division.

He has advised the listing of various companies in Malaysia as well as overseas including London and Hong Kong and is constantly consulted to assist public-listed companies to recover and generate more shareholders value. He currently sits on the board of a private company involved in circuit manufacturing and whose ultimate holding company is listed on the NASDAQ.

Mr Tan holds directorship in Takaso Resources Berhad and 1 Utopia Berhad (formerly known as Tejari Technologies Berhad).

Notes to Directors’ profile:

1. Family Relationships None of the Directors have any family relationship with any Directors and/or major shareholders of the

Company.2. Conflict of Interest None of the Directors have any business arrangement with the Company in which he has a personal interest

or have any conflict of interest with the Company.3. Conviction of Offences None of the Directors have any conviction for offences within the past 10 years other than traffic offences.4. Attendance of Board Meetings The details of the Directors’ attendance at Board Meetings are set out on page 23 of this Annual Report.5. Shareholdings The details of the Directors’ interest in the securities of the Company are set out on page 92 of this Annual

Report.

Annual Report 2011 9Annual Report 20119

Respondingto borderlesscustomers

needs



CHAIRMAN’SSTATEMENT

Dear Valued Shareholders,

On behalf of the Board of Directors, it gives me great pleasure to present to you the Annual Report and Audited Financial Statements of the Company for the financial year ended 31 December 2011.

FINANCIAL REVIEW

Our Group‘s business is subject to risks inherent in the ICT industry. The market for integrated web-based applications and solutions is characterised by rapid technological changes. Our Group’s revenue and operating results could be adversely affected by many factors which include amongst others, changes in demand and market acceptance, changes in operating expenses, technological evolvement, consumer preferences and lower profit margins due to pricing competition, etc.

For the financial year ended 31 December 2011, the Group remained resilient and generated revenue of RM11.8 million; representing an increase of 16% as compared to the corresponding period ended 31 December 2010. The increase in revenue is mainly attributed to the trading business carried by our newly acquired subsidiary, Kinetic Forward Sdn Bhd. Amidst the flattish growth in its revenue, the Group recorded a loss before taxation of RM2.3 million in 2011 as compared to RM2.1 million in 2010 mainly due to a lower profit margin from trading business.

GROWTH VIA STRATEGIC ExPANSION

Ours is a highly competitive business environment, where the players are aggressive and the need for software change increases due to pace of change in society and business. This is the squeeze that we are in and that software evolution research seeks to alleviate. As the playing field continues to get a little too crowded and new challengers emerge, we need to outrun, out-jump and out-throw the rest and the Board of Directors are mindful of this and has laid out plans for the future.

We acquired Kinetic Forward Sdn Bhd on 30 September 2011 to expand our business line into hardware distribution. The acquired company is principally engaged in the business of trading in Information Technology (IT) and Information Communication Technology (ICT) products, apart from its business as an electronic commerce provider and facilitator.

PRODUCTS ENHANCEMENT AND DEVELOPMENT

During the year under review, we continued to enhance our internet-based applications and solution offerings in web-based systems including our TMS School Management System. As we understand the need to be proactive in responding to today’s borderless customers needs, TMS has always stayed focused to position itself as a responsive ICT company through its continuous efforts on products enhancement, expansion in terms of new offerings or added feature and enhancement of existing solutions.

For year 2012, we will continue to place greater emphasis on R&D in developing and enhancing products and services such as an Enterprise Resource Planning (“ERP”) system that is localised with integration points to Point-of-Sales (POS), mobile devices, comprehensive e-commerce platforms, Software as a Service (“Saas”), etc. Developing the ERP solution on a highly customisable platform will enable us to significantly expand and keep our client base through the use of business centric solutions. These modules will be developed not only for bigger businesses, but also for smaller businesses to easily adapt and expand when their business grows bigger.


INDUSTRY OUTLOOK

It is expected that the GDP growth in Malaysia will be largely domestic driven and is expected to be sustained at 5%-6% in 2012, due to heightened uncertainties in global economy. Meanwhile, the ICT sector will continue to be a key focus for Malaysia and is likely to gain greater momentum driven by the convergence of industries due to digitalisation. The contribution of the ICT industry to GDP is targeted to increase to 10.2% by 2015. Greater use of ICT will not only support the growth of the sector but also boost productivity and raise the nation’s overall competitiveness.

One of the four key technological priorities that will propel the ICT industry includes development of niche areas in software and e-solutions, shared services and outsourcing as well as e-business. Other key areas include adoption of cloud computing, expansion on creative multimedia, education and training notably in the human resource aspect. The national broadband tax incentive measure implemented by the Government will also continue to accelerate Malaysia’s development into an advanced economy and knowledge-based nation.

PROSPECTS AND FUTURE PLANS

It is always our view that ICT is a key driver to promote growth, productivity and competiveness, which is set to contribute 10.2% to gross domestic product (GDP) by 2015. There will be increasingly attractive opportunities in the IT services area as the government implements measures to make Malaysia a regional IT hub.

Malaysia’s software industry is expected to grow, and the addition of 700 Government agencies under the Government Transformation Programme will be exploring ways to improve efficiency through the use of technology. This positive outlook will in turn create opportunities for TMS, placing the Group in a better position to secure more projects based on this prospect.

Having ridden the turbulent waves in the past years, the question now posed is “what’s next for TMS?” TMS is now ready to embark on another chapter of our continuing voyage, and we have mapped out our course and milestones to chart progress for the next cycle of growth. In essence, the ‘big picture’ is for the TMS Group to emerge stronger as a credible company and inimitable brand, gaining recognition amongst peers and competitors while further strengthening our market position, regionally.

Amidst the opportunities ahead of us, this comes with a set of challenges as competition in the ICT industry is high. The market for integrated web-based applications and solutions in Malaysia is characterised by rapid technological changes, evolving industry standards, swift changes in customer requirements and frequent new product introductions and enhancement.

Our competitive advantage is our ability to provide a wider range of products under one roof as compared to some of our competitors, plus our efficient and proven delivery mode to customers based on our 15 years of operational experience. Our Group will strive to offer products and services that incorporate leading technologies and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. Our immediate plan is to venture further into more niche markets through the introduction of forward looking business centric solutions such as ERP with POS, CRM and e-Commerce. As part of our expansion plan, we will continue to explore strategic alliances and acquire good companies to complement our growing business to serve our customers better. With more products and services coming from within our Group, we will be more competitive in terms of delivery, response and pricing.

APPRECIATION

On behalf of the board, let me extend my most heartfelt appreciation to all our fellow directors, clients, loyal shareholders, investors, business associates and members of the press for their continuous support and belief in the Group. And not forgetting our staff for the many ways in which they have demonstrated their professionalism, dedication and commitment over the years. Our team spirit is second to none. And that will continue to drive us towards innovative ideas and harnessing key values for greater growth and profitability in the years to come.

TAN OOI JINChairman

CHAIRMAN’SSTATEMENT

cont’d


Innovatingsolutions for

higherperformanceas technology

advances



NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Sixteenth Annual General Meeting of THE MEDIA SHOPPE BERHAD (383028-D) (“Company” or “TMS”) will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 22 June 2012 at 3.00 p.m. for the following purposes:

1. To receive the Audited Financial Statements for the financial year ended 31 December 2011 together with the Reports of the Directors and Auditors thereon.

2. To re-elect Mr Christopher Chan Hooi Guan, Director who is retiring in accordance with

Article 83 of the Company’s Articles of Association.

3. To elect the following Directors who are retiring in accordance with Article 90 of the Company’s Articles of Association:

a. Mr Lim Boon Hong

b. Mr Lai Soon Yip

c. Mr Tan Ooi Jin

d. Ms Lee Li Chain

4. To approve the payment of Directors’ fees of RM200,000 for the financial year ending 31 December 2012 which is payable quarterly in arrears.

5. To appoint the Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

Notice of Nomination from a shareholder pursuant to Section 172(11) of the Companies Act, 1965, a copy of which is annexed hereto and marked “Annexure A” has been received by the Company for the nomination of Messrs Crowe Horwath, who have given their consent to act, for appointment as Auditors and of the intention to propose the following Ordinary Resolution:

“THAT Messrs Crowe Horwath be and hereby appointed as Auditors of the Company in place of the retiring Auditors, Messrs Baker Tilly Monteiro Heng and to hold office until the conclusion of the next Annual General Meeting and that authority be and is hereby given to the Directors to determine their remuneration.”

As Special Business To consider and, if thought fit, with or without any modification, to pass the following

Resolutions:

6. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 “THAT subject to Section 132D of the Companies Act, 1965 and approvals of the relevant

governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company, at any time to such persons 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 does not exceed ten per centum (10%) of the issued and paid-up share capital (excluding treasury shares) of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

(Please refer to Note A)

(Ordinary Resolution 1)







(Ordinary Resolution 8)Innovating

solutions forhigher

performanceas technology

advances


NOTICE OF ANNUAL GENERAL MEETINGcont’d

7. Proposed Amendments to the Articles of Association of the Company “THAT the amendments to the Articles of Association of the Company as set out in Appendix

1 contained in the Annual Report 2011 be and are hereby approved.

AND THAT, the Board of Directors of the Company be and is hereby empowered and authorised to do or procure to be done all acts, deeds and things and execute, sign and deliver on behalf of the Company, all such documents as it may deem necessary, expedient and/or appropriate to implement, give full effect to and complete the Proposed Amendements with full power to assent to any conditions, modifications, variations and/or amendments as the Board of Directors of the Company may deem fit and/or as may be required by any relevant authorities in connection with the Proposed Amendments.”

By Order of the Board

LAI CHEE WAH (MAICSA 7031124)PANG CHIA TNYG (MAICSA 7034545)

Company Secretaries

Kuala Lumpur29 May 2012

Explanatory notes to Special Business:

Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965Ordinary Resolution 8 is proposed for the purpose of granting a renewed general mandate (“General Mandate”) and empowering the Directors of the Company, pursuant to Section 132D of the Companies Act, 1965, to issue new shares in the Company from time to time provided that the aggregate number of shares issue pursuant to the General Mandate does not exceed 10% of the issued and paid-up share capital (excluding treasury shares) of the Company for the time being. The General Mandate, unless revoked or varied by the Company in General Meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

The renewal of the General Mandate is to provide flexibility to the Company to issue new shares without the need to convene a separate general meeting to obtain shareholders’ approval so as to avoid incurring additional cost and time. The proceeds raised from the General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purposes of funding future investment project(s), working capital and/or acquisition(s).

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 last Annual General Meeting held on 29 June 2011 which will lapse at the conclusion of the Sixteenth Annual General Meeting.

Proposed Amendments to the Articles of Association of the CompanyThe Special Resolution 1, if passed, will render the Articles of Association of the Company to be in line with the recent amendments to the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad and to enhance administrative efficiency.

Notes:A. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal

approval of the shareholders and hence, is not put forward for voting.(1) A member may appoint up to two (2) proxies to attend and vote instead. A proxy may but need not be a member of the Company. If

the proxy is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Companies Commission of Malaysia.

(2) Where a Member appoints more than one (1) proxy, he shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid.

(3) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, such member may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(4) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

(5) If the appointor is a corporation, this form must be executed under its common seal or under the hand of an attorney duly authorised.(6) To be valid, this form which is duly completed must be deposited at the registered office of the Company at 10th Floor, Menara Hap

Seng, No. 1 & 3 Jalan P. Ramlee, 50250 Kuala Lumpur not less than forty eights (48) hours before the time for holding the meeting PROVIDED THAT in the event the member(s) duly executes the form of proxy but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, PROVIDED ALWAYS that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the member(s).

(7) For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting the Bursa Malaysia Depository Sdn Bhd to make available to the Company pursuant to Article 58 of the Articles of Association of the Company and Rule 7.16(2) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, a Record of Depositors as at 15 June 2012 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting.

(Special Resolution 1)


The Company proposes to implement the amendments to the Articles of Association of the Company (for which differences are underlined and highlighted in bold below under the columns “Existing Articles” and “Amended Articles” respectively) in the following manner:

THAT the existing articles in the Articles of Association be amended by substituting with the amended articles as set out below:-

1. THAT the following additional definitions be inserted into the Article 2 of the Company’s Articles of Association in alphabetical order of the ‘Words’ as follows:-

WORDS MEANINGS

Bursa Securities or the Exchange means Bursa Malaysia Securities Berhad (Company No.30632-P) DefinitionsDividend Reinvestment Scheme means a scheme which enables members to reinvest cash

dividend into new shares.

2. THAT the existing articles in the Articles of Association be amended by substituting with the amended articles as set out belows:-

61 (a) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account. Where a member of the company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act.

Appointment of proxy/multiple

proxies and qualification and rights of proxy to

speak

(b) Save for the exempt authorised nominees defined in Article 61(a), a member may appoint up to two (2) proxies to attend on the same occasion. A proxy may but need not be a member of the Company. If the proxy is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Companies Commission of Malaysia. The provisions of Section 149(1)(b) of the Act shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. If a Member appoints up to two (2) more than one (1) proxy, the appointments shall be invalid unless he specifies the proportions of his holding to be represented by each proxy.

(c) A proxy appointed to attend and vote at a meeting of a company shall have the same rights as the member to speak at the meeting.

62 In every notice calling a meeting of the Company there shall appear with reasonable prominence, a statement that save for the exempt authorised nominees defined in Article 61(a), a Member entitled to attend and vote is entitled to appoint up to two (2) proxies to attend and vote in his stead, and that a proxy need not also be a Member. Where a Member appoints more than one (1) proxy, he shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid.

Notice that proxy is allowed

76 The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised. Save for the authorised nominee defined in Article 61(a), A proxy may but need not be a Member of the Company and need not be an Advocate or an approved company auditor, or a person approved by Companies Commission of Malaysia. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. A proxy shall be entitled to vote on a show of hands on any question at any general meeting.

Instrument appointing proxy

to be in writing

3. THAT the following Article be inserted immediately after Article 148 of the Company’s Articles of Association as follows:-

148A Subject to the approval being obtained from the members of the Company and the Listing Requirements of Bursa Securities, the Company may issue shares pursuant to a Dividend Reinvestment Scheme to all its members who are entitled to dividend in accordance with the provisions of the Act and any rules, regulations and guidelines there under or issued by Bursa Securities and any other relevant authorities in respect thereof.

Dividend Reinvestment

Scheme

APPENDIx 1


ANNExURE ANOTICE OF NOMINATION OF CHANGE AUDITORSChristopher Chan Hooi GuanC-01-3, Block C, Plaza GlomacNo. 6 Jalan SS7/19Kelana Jaya47301 Petaling JayaSelangor Darul Ehsan

Date : 18 May 2012

The Board of DirectorsTHE MEDIA SHOPPE BERHAD10th Floor, Menara Hap Seng No. 1 & 3 Jalan P. Ramlee50250 Kuala Lumpur

Dear Sirs,

THE MEDIA SHOPPE BERHAD - NOTICE OF NOMINATION OF CHANGE AUDITORS

Pursuant to Section 172(11) of the Companies Act, 1965, I, Christopher Chan Hooi Guan being a shareholder of the Company, hereby give notice of our intention to nominate Messrs. Crowe Horwath as Auditors of the Company in place of the retiring Auditors, Messrs Baker Tilly Monteiro Heng, and to propose the following resolution to be tabled at the Sixteenth Annual General Meeting of the Company:

“THAT Messrs Crowe Horwath be and are hereby appointed as Auditors of the Company in place of the retiring Auditors, Messrs Baker Tilly Monteiro Heng and to hold office until the conclusion of the next Annual General Meeting and that authority be and is hereby given to the Directors to determine their remuneration.”

Yours faithfully

CHRISTOPHER CHAN HOOI GUAN Shareholder


STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

Pursuant to Rule 8.29(2) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, the Directors who are seeking for election at this Sixteenth Annual General Meeting are as follows:-

Pursuant to Article 90 of the Company’s Articles of Association:-

a. Mr Lim Boon Hong

b. Mr Lai Soon Yip

c. Mr Tan Ooi Jin

d. Ms Lee Li Chain

The details of the above Directors who are standing for election are set out in the Profile of Board of Directors from pages 6 to 8 of this Annual Report. Their securities holdings in the Company are set out on page 92 of this Annual Report.


AUDIT COMMITTEE REPORT

The Audit Committee (“the Committee”) was established on 23 September 2004 to act as committee of the Board of Directors.

The Committee members comprised of the following:

Chairman : Lai Soon Yip – Independent Non-Executive Director (Appointed on 7 September 2011)

Members : Dato’ Chairil Nazri Bin Ahmad – Independent Non-Executive Director

Lim Boon Hong – Independent Non-Executive Director (Appointed on 3 August 2011)

Tan Ooi Jin – Independent Non-Executive Director (Appointed on 22 September 2011) Ong Boon Kee – Independent Non-Executive Director (Resigned on 7 September 2011)

Dr Tay Chuan Hui – Independent Non-Executive Director (Resigned on 23 September 2011)

AUDIT COMMITTEE MEETING

The Committee held five (5) meetings during the financial year ended 31 December 2011. The record of attendance of these meetings by the members is as follows:-

Director Meeting attendance *

Lai Soon Yip (Appointed on 7 September 2011) 1/1

Dato’ Chairil Nazri Bin Ahmad 5/5

Lim Boon Hong (Appointed on 3 August 2011) 0/1

Tan Ooi Jin (Appointed on 22 September 2011) 1/1

Ong Boon Kee (Resigned on 7 September 2011) 4/4

Dr Tay Chuan Hui (Resigned on 23 September 2011) 4/4

* Meeting held during the financial year under review were 23 February 2011, 18 April 2011, 13 May 2011, 10 August 2011 and 23 November 2011.

SUMMARY OF ACTIVITIES OF THE COMMITTEE

During the financial year ended 31 December 2011, the activities carried by the Committee include:

a. Reviewed the unaudited quarterly reports of the Group before recommending to the Board of Directors for their approval and release of the Group’s results to Bursa Securities;

b. Reviewed with external auditors on the audit planning memorandum of the Group for the financial year ended 31 December 2011;

c. Reviewed with external auditors on the results and issues arising from the audit and their resolutions;

d. Reviewed with internal auditors on the internal audit findings and recommendations;



cont’d

SUMMARY OF ACTIVITIES OF THE COMMITTEE cont’d

e. Reviewed with external auditors on the impact of new accounting standards on the Group’s performance and its state of readiness;

f. Reviewed the quarterly provision for doubtful debts;

g. Reviewed the software development expenditure;

h. Reviewed the audit committee report, statement of corporate governance and statement of internal control before recommending to the Board of Directors for their approval, for inclusion in the 2011 Annual Report;

i. Reviewed the progress of the legal actions taken by the Company against trade debtors; and

j. Reviewed with secretaries on the revised terms of reference of the audit committee which was amended to be in line with the Code.

INTERNAL AUDIT FUNCTION

The Group has outsourced its Internal Audit Function to an independent internal audit service provider for the financial year ended 31 December 2011.

The functions of internal audit are:

a. Perform audit work in accordance with the pre-approved internal audit plan.b. Carry out review on the system of internal controls of the Group.c. Review and comment on the effectiveness and adequacy of the existing control policies and procedures.d. Provide recommendations, if any, for the improvement of the control policies and procedures.

TERMS OF REFERENCE

1. Composition

The Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members, a majority of whom shall be independent directors and all members should be non-executive directors. At least one (1) member must be a member of the Malaysian Institute of Accountants or possess such other qualifications and/or experience as approved by the Bursa Malaysia Securities Berhad.

In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy shall be filled within two (2) months but in any case not later than three (3) months. Therefore, a member of the Audit Committee who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be appointed before he leaves.

The Board of Directors of the Company must review the term of office and performance of an audit committee and each of its members at least once every three (3) years to determine whether such audit committee and members have carried out their duties in accordance with their terms of reference.

2. Chairman The Chairman, who shall be elected by the Audit Committee, shall be an independent director. In event of the chairman’s

absence, the meeting shall be chaired by an independent director.

The Chairman should engage on a continuous basis with senior management, such as the chairman, the chief executive officer, the finance director, the head of internal audit and the external auditors in order to be kept informed of matters affecting the company.


AUDIT COMMITTEE REPORTcont’d

TERMS OF REFERENCE cont’d

3. Secretary

The Company Secretary shall be the Secretary for the Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee Members. The Committee Members may inspect the minutes of the Audit Committee at the Registered Office or such other place as may be determined by the Audit Committee.

4. Meetings

The Committee shall meet at least four (4) times in each financial year and may regulate its own procedure in lieu of convening a formal meeting by means of video or teleconference. The quorum for a meeting shall be two (2) members, of which the majority of members present must be independent directors.

The Committee may call for a meeting as and when required with reasonable notice as the Committee Members deem fit.

All decisions at such meeting shall be decided on a show of hands on a majority of votes.

The external auditors and internal auditors have the right to appear at any meeting of the Audit Committee and shall appear before the Committee when required to do so by the Committee. The external auditors may also request a meeting if they consider it necessary.

5. Rights The Audit Committee shall:

a. have authority to investigate any matter within its terms of reference; b. have the resources which are required to perform its duties;

c. have full and unrestricted access to any information pertaining to the Group;

d. have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;

e. have the right to obtain legal or independent professional or other advice at the Company’s expense;

f. have the right to convene meetings with the external auditors, internal auditors, or both, excluding the presence of the executive board members, whenever deemed necessary;

g. promptly report to the Bursa Malaysia Securities Berhad (“Bursa Securities”), or such other name(s) as may be adopted by Bursa Securities, matters which have not been satisfactorily resolved by the Board of Directors resulting in a breach of the listing requirements;

h. have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall have the casting vote should a tie arise;

i. meet as and when required on a reasonable notice;

j. the Chairman shall call for a meeting upon the request of the External Auditors.


TERMS OF REFERENCE cont’d

6. Duties

The duties of the Committee shall include:

a. To review with the external auditors on:

• the audit plan, its scope and nature;• the audit report;• the results of their evaluation of the accounting policies and systems of internal accounting controls within

the Group; and• the assistance given by the officers of the Company to external auditors, including any difficulties or disputes

with Management encountered during the audit.

b. To review the adequacy of the scope, functions and resources and set the standards of the internal audit function.

c. To ensure that the external auditors review a statement made by the Board of Directors, with regard to the state of internal control of the listed company and report the results thereof to the Board of Directors.

d. To recommend such measures as to be taken by the Board of Directors on the effectiveness of the system of internal control, management information and risk management practices of the Group.

e. 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.

f. To review any appraisal or assessment of the performance of the internal audit function.

g. To approve any appointment or termination of the internal auditors.

h. To take cognizance of resignation of internal auditors and provide the resignation internal auditors an opportunity to submit its reasons for resignation.

i. To review with management:

• audit reports and management letter issued by the external auditors and the implementation of audit recommendations;

• interim financial information; and• the assistance given by the officers of the Company to external auditors.

j. To monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public, and to ensure that the Directors report such transactions annually to shareholders via the annual report, and to review conflicts of interest that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

k. To review the quarterly reports on consolidated results and annual financial statements prior to submission to the Board of Directors, focusing particularly on:

• changes in or implementation of major accounting policy and practices;• significant and/or unusual matters arising from the audit;• the going concern assumption; and• compliance with accounting standards and other legal requirements.

l. To consider the appointment and / or re-appointment of auditors, the audit fee and any questions of resignation or dismissal including recommending the nomination of person or persons as auditors to the board.

m. To verify the allocation of options pursuant to a share scheme for employees as being in compliance with the criteria for allocation of options under the share scheme, at the end of each financial year.


cont’d


STATEMENT ON CORPORATE GOVERNANCE

INTRODUCTION

The Board of Directors (“the Board”) is committed towards ensuring that the highest standards of Corporate Governance are observed throughout the Group. Upholding integrity and professionalism in its management of the affairs of the Group, the Board aims to enhance business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholders’ value and interests of other stakeholders.

The Board of Directors continues to implement the recommendations of the Malaysian Code on Corporate Governance (Revised 2007) (“the Code”), which set out the principles and best practices on structures and processes that may be applied in the Group. The following statement ascribes how the Group has applied and complied with the principles and best practices of the Code.

BOARD OF DIRECTORS

Composition and Balance

An experienced Board consisting of members with wide range of business, technical, financial and public service background leads and controls the Group. This brings insightful depth and diversity to the acute leadership and management of an eminent and evolutionary business.

There is a clear division of responsibilities between the Chairman of the Board and the Chief Executive Officer. The Chairman leads strategic planning at the Board level, while the Executive Directors are responsible for the implementation of the policies laid down and executive decision-making. The Board makes key decisions, such as approval of interim and annual reports, acquisitions and disposals, new ventures and investments, material agreements, major capital expenditures, and budgets.

The Board of Directors currently comprises six (6) members, of whom four (4) are Independent Non-Executive Directors (including the Chairman), and two (2) Executive Directors. The four (4) Independent Non-executive Directors fulfilled the criteria of independence as defined in the ACE Market Listing Requirements (“AMLR”). The Independent Non-Executive Directors do not participate in the day-to-day management of the Company and do not involve themselves in business transactions or relationships with the Company, in order not to compromise their objectivity. In staying clear of any potential conflict of interest, the Independent Non-Executive Directors remain in a position to fulfill their responsibility to provide check and balance to the Board.

The Board composition has met the AMLR and the Code for a balance board is fulfilled with Independent Directors constituting more than one-third of the Board.

The Independent Non-Executive Directors are of the caliber necessary to provide an independent judgment on the issues of strategy, performance and resource allocation. They carry sufficient weight in Board decisions to ensure long-term interest of the shareholders, employees, customers and other stakeholders.

The Board is assisted by three (3) board committees, namely the Audit Committee, the Remuneration Committee and the Nomination Committee, each entrusted with specific tasks.

The Board is currently satisfied with the existing Board composition for the time, as it fairly reflects the investment of minority shareholders of the Company and represents the needed mix of skills and experience required to discharge the Board’s duties responsibility. In addition, no individual Director or group of Directors can dominate the Board’s decision making process.

The profiles of the Directors are presented on pages 6 to 8 of this Annual Report.

Board Meetings and Supply of Information

Board Meetings for the ensuing financial year are scheduled in advance before the end of each financial year so as to enable Directors to plan ahead and fit the year’s Board meetings into their respective schedules. Board meetings are conducted in accordance with a structured agenda. The agenda for each Board meeting and relevant papers providing details on operational, financial and corporate developments are forwarded to all Directors before the Board meeting. This is to facilitate the Board to peruse the board papers and review the issues to be deliberated at the Board meeting well ahead of the meeting date to enable Directors to make informed decisions.


STATEMENT ONCORPORATE GOVERNANCE

cont’d

BOARD OF DIRECTORS cont’d

Board Meetings and Supply of Information cont’d

The Board ordinarily meets five (5) times a year with additional meetings being convened when urgent and important decisions need to be taken between the scheduled meetings.

A total of five (5) Board Meetings were held during the financial year under review and the Board attendance record is as follows:-

Directors Meeting attendance *

Christopher Chan Hooi Guan 5/5

Dato’ Chairil Nazri Bin Ahmad 5/5

Lim Boon Hong (appointed on 3 August 2011) 1/2

Lai Soon Yip (appointed on 7 September 2011) 1/1

Tan Ooi Jin (appointed on 22 September 2011) 1/1

Lee Li Chain (appointed on 23 March 2012) -

Suhaimi bin Badrul Jamil (appointed on 13 May 2011/retired on 29 June 2011) -

Mohd Reza Bin Shafiee (retired on 29 June 2011) 3/3

Ong Boon Kee (resigned on 7 September 2011) 4/4

Dr Tay Chuan Hui (resigned on 23 September 2011) 4/4

Chong Kien Eng @ Teo Kien Eng (resigned on 10 October 2011) 4/4

Tan Ching Ling (appointed on 13 October 2011/resigned on 23 February 2012) 1/1

Chan Chooi Teng (appointed on 10 August 2011/resigned on 23 March 2012) 0/1

* Meetings held during the financial year under review were 23 February 2011, 18 April 2011, 13 May 2011, 10 August 2011 and 23 November 2011.

All Directors have ready and unrestricted access to the advice and services of the Company Secretaries who are responsible for ensuring that Board procedures are followed. In addition, the Directors are also empowered to seek external independent professional advice at the Company’s expense, to enable them to make well-informed decisions.

The Directors are also regularly updated and advised by the Company Secretary on relevant new statutory and regulatory requirements concerning their duties and responsibilities as and when necessary. In addition, the Directors may at any time request from Management further explanations, information or updates on any aspects of the Company’s operations or business.

Nomination Committee

The Nomination Committee (“NC”) which was established on 28 April 2005 comprises wholly of Non-Executive Directors as follows:

Directors Position

Tan Ooi Jin - Independent Non-Executive Director Chairman

Lai Soon Yip - Independent Non-Executive Director Member


STATEMENT ON CORPORATE GOVERNANCEcont’d


Nomination Committee cont’d

In furtherance of their duties, the NC is guided by specific terms of reference. The NC’s duties are:

1. To recommend to the Board, candidates for directorships.2. To recommend the Directors to sit on respective Board committees.3. To administer the annual assessment of Directors, including a review of the skill, qualification and competencies of the

Board as a whole.4. To identify suitable orientation, educational and training programmes for continuos development of Directors.

For the year under review, the NC held two (2) meetings and the attendance of members at the Nomination Committee meetings is reflected as follows:




Dr Tay Chuan Hui (resigned on 23 September 2011) 1/1

Ong Boon Kee (resigned on 7 September 2011) 1/1

* Meetings held during the financial year under review were 13 May 2011 and 23 November 2011.

The NC reviews the criteria for evaluating the Board’s performance. Based on the recommendations of the NC, the Board has established processes for evaluating the effectiveness of the Board as a whole.

The performance criteria for the Board evaluation includes an evaluation of the size and composition of the Board, the Board’s access to information, accountability, Board processes, Board performance in relation to discharging its principal responsibilities, communication with management and standards of conduct of Directors.

The NC has upon its recent annual review carried out, concluded that all the Directors have undergone required trainings for the financial year ended 31 December 2011 that are relevant to them and would expect to enhance their effectiveness in serving the Board.

Remuneration Committee

The Remuneration Committee (“RC”) which was established on 28 April 2005 comprises the following directors:

Directors Position

Lai Soon Yip - Independent Non-Executive Director Chairman

Christopher Chan Hooi Guan - Chief Executive Officer Member

Tan Ooi Jin - Independent Non-Executive Director Member

The objectives of the RC are to establish a remuneration framework for Directors and make recommendations to the Board on all elements of remuneration, terms of employment, reward structure and fringe benefits for Directors.

The RC reviews annually all aspects of remuneration including but not limited to directors’ fees, salaries, allowances, bonuses, options and benefit-in-kind.



Remuneration Committee cont’d

The RC held one (1) meeting during the financial year and the attendance of members at the RC meetings is reflected as follows:



Christopher Chan Hooi Guan 1/1


* Meetings held during the financial year under review was 23 November 2011.

Directors’ Remuneration

The details of the remuneration of the Director’s of the Company for the financial year under review are as follows:

Executive Directors (RM)

Non-Executive Directors (RM)

Salaries and other emoluments 661,841 -

Fees - 90,000

The number of Directors whose remuneration falls into each band of RM50,000 for the financial year ended 31 December 2011 are set as below:

RemunerationExecutive Directors

(RM)Non-Executive Directors

(RM)Total (RM)

Below RM50,000 2 8 186,827

RM50,001 – RM100,000 1 - 87,210

RM100,001 – RM150,000 1 - 110,560

RM150,001 – RM200,000 - - -

RM200,001 – RM250,000 - - -

RM250,001 – RM300,000 - - -

RM300,001 – RM350,000 - - -

RM350,001 – RM400,000 1 - 367,244

Appointments and Re-election

In accordance with the Company’s Articles of Association, one third (1/3) of the Directors (including the Chairman and Managing Director) shall retire from office and be eligible for re-election at each Annual General Meeting and all Directors shall retire from office once at least in each three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders at the Annual General Meeting.

STATEMENT ON CORPORATE GOVERNANCE

cont’d



Directors’ Training

The Board acknowledges that continuous education is vital in keeping abreast with changes in laws and regulations, business environment and corporate governance developments, besides enhancing professionalism and knowledge in enabling them to discharge their duties more effectively. Accordingly, the Group is committed to continuously provide pertinent educational program to the Board of Directors through internal and external means. All Directors receive updates from time to time, on relevant new laws and regulations to enhance their business acumen and skills to meet changing commercial risks and challenges.

All Directors newly appointed have completed their Mandatory Accredited Programme prescribed by the Bursa Malaysia Securities Berhad. For the year under review, the Directors had attended relevant seminars and courses in enhancing themselves for the purpose of disposing their duties better. The Directors will continue to undergo relevant training programmes to further enhance their skills and knowledge.

Further details of the training programmes attended by the existing Directors as at the year end of 2011 are set out below:

Directors Courses attended Date attended

Christopher Chan Hooi Guan Communicasia Singapore - trade delegation

Mygoscon (Malaysian Open Source Government Conference)

Telkom Polytechnic Bandung, Indonesia - Seminar Workshop on Business Process Management

OSBC (Open Source Business Conference) - San Francisco

ATSI (Association of Thai Software Industry) Workflow presentation to members

June 2011

November 2011

October 2011

May 2011

August 2011

Dato’ Chairil Nazri Bin Ahmad Corporate Governance, Risk & Compliance - training program

Malaysia Innovation Economy: Concepts & Leadership Challenges - Seminar

Action Centered Internal Audit Reporting - training program

Cradle’s “Coach & Grow” training programs

13 - 14 April 2011

21 July 2011

23-24 April 2011

20 October 2011

Lim Boon Hong (appointed on 3 August 2011)

Mandatory Accreditation Programme (MAP)

Global TD-LTE Initiative Summit - Hong Kong

Mobile Asia Congress 2011 - Hong Kong

J.P. Morgan Asia Pacific Technology, Media & Telecommunications Conference 2011 - Hong Kong

September 2011

15 November 2011

16 November 2011

17-18 November 2011

Lai Soon Yip(appointed on 7 September 2011)

Updates on company law and practices organized by MIA.

Islamic Finance Workshop- Executive Certificate in Fundamentals of Islamic Finance (endorsed by MIA & INCEIF)

- Module 1: Shariah aspect in Business & Finance

- Module 2: Islamic Banking Practices

- Module 3: Islamic Capital Markets

7 March 2011

22-23 March 2011

12-13 April 2011

14-15 April 2011

Tan Ooi Jin(appointed on 22 September 2011)

Mr Tan did not attend any training courses during the financial year ended 31 December 2011. As a legal practitioner, he keeps abreast of requirements set by the relevant authorities.

Lee Li Chain (appointed on 23 March 2012)

N/A



SHAREHOLDERS

Dialogue with Investors

The Group has always recognized the importance of accountability to shareholders. Timely releases of the financial results on a quarterly basis, press releases and announcements provide an overview of the Group’s performance and operations to its shareholders. The Chairman has held discussions with analysts and shareholders on the Group’s strategy, performance, major developments and future plans. However, any information that may be regarded as undisclosed material information about the Group will not be given to any single shareholder.

The Annual Report of the Company is a key channel of communication with shareholders and investors, which highlights the corporate information and financial highlights of the Group, to facilitate shareholders’ easy access to such key information.

Apart from the mandatory announcements of the Group’s financial results and corporate developments to the Bursa Securities, the Group also sets up a website (www.tmsasia.com) for public access of Group information, business activities and recent developments to all stakeholders, and for feedback.

Annual General Meeting

The Annual General Meeting remains the principal forum for dialogue with shareholders. At the Annual General Meeting, the Board presents the progress and performance of the business and encourages shareholders to participate in the question and answer session. The Chairman and Directors are in attendance to respond to shareholders’ queries during the meeting.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for presenting a balanced and meaningful assessment of the Group’s financial performance and prospects primarily through the annual report/financial statements and quarterly announcements of the Group’s results and other price-sensitive public report. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting processes and the accuracy, consistency and the appropriateness of the use and application of accounting policies and standards, as well as the reasonable and prudence of making estimates, statements and explanatory.

Statement of Directors’ Responsibility In Respect of the Preparation of the Financial Statements

The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordance with the applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2011 and of the results and cashflows of the Group and the Company for the financial year ended of that date.

In preparing the financial statements, the Directors have:

a. adopted suitable accounting policies and applied them consistently;b. made judgements and estimates that are prudent and reasonable;c. ensured the adoption of applicable approved Financial Reporting Standards; andd. used the going concern basis for the preparation of the financial statements.

The Directors are responsible for ensuing proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Group and the Company and are kept in accordance with the Companies Act, 1965.

The Directors are also responsible for ensuing that a proper system of internal control is in place to safeguard the Group’s assets and to prevent and detect fraud and other irregularities.

Internal Control

The Board acknowledges their responsibility for the Group’s system of internal controls and reviewing its effectiveness regularly.

STATEMENT ONCORPORATE GOVERNANCE

cont’d


ACCOUNTABILITY AND AUDIT cont’d

Internal Control cont’d

The Board also recognizes that risks cannot be eliminated completely. As such, the internal controls are aimed at minimizing and managing such risks. The Board views that the system of internal controls instituted throughout the Group is sound and sufficient to safeguard shareholders’ investment and the Company’s assets. The Group is continuously looking into the adequacy and integrity of its system of internal controls to ensure the effectiveness of the system.

The Board has always been concerned with key commercial and financial risks facing the Group, including general risks relating to compliance with laws and regulations. In its effort to optimize shareholders’ value, the Board is continuously reviewing the “business risk inventory” and working towards addressing such evolving risks within structural and objective frameworks.

An overview of the state of internal controls of the Company is set out on page 29 of this Annual Report.

Relationship with the Auditors

The Board established an independent internal audit function within the Group which operates within the Audit Charter conferred by the Audit Committee. On behalf of the Board, the Audit Committee has established transparent and professional relationship with the Company’s auditors, both internal and external.

Discussions are carried out between the Audit Committee with management on actions taken on issues identified by Board members or the external and internal auditors. The Committee has full access to the auditors, both external and internal who in turn have access at all times to the Chairman and members of the Committee.

This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directors dated 24 April 2012.



STATEMENT ONINTERNAL CONTROL

INTRODUCTION

The Malaysian Code on Corporate Governance requires the Board of Directors (“Board”) of listed companies to maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets. The Board of the Company is pleased to present this Statement on Internal Control, with respect to the state, nature and scope of the internal control of the Group for the financial year ended 31 December 2011.

RESPONSIBILITY

The Board is ultimately responsible for the Group’s system of internal controls which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity. Because of the limitations that are inherent in any system of internal control, this system is designed to manage, rather than eliminate, the risk of failure to achieve corporate objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or loss. The system of internal control covers, inter alia, risk management and financial, organisational, operational and compliance controls.

RISKS MANAGEMENT FRAMEWORK

In the process of applying a risks assessment approach, the management from each division identifies the risks relating to their area; the likelihood of the occurrence of the risks; the consequences; and the action plan to manage those risks. The risks that derived from this process are then communicated at management level and reported to the Audit Committee. The Board confirms that this process will continue throughout the year with the aim of identifying, evaluating and managing the significant risks associated with all the business entities within the Group. This process is regularly reviewed by the Board to ensure the adequacy and integrity of the Group’s internal control system and accords with the guidance given in the Statement on Internal Control – Guidance for Directors of Public Listed Companies, issued by the Task Force on internal control.

INTERNAL CONTROL

The Group currently relies on existing internal control mechanisms and its in-house knowledge management software to provide management with the required level of assurance that the business is being operated in an orderly manner. This is further enhanced by meetings between the Group’s Audit Committee members and its independent external auditors to better understand the Group’s state of affairs and internal control.

The Group has engaged an independent professional firm for RM20,000 per year to provide outsourced Internal Audit services that supports the Audit Committee in discharging its duties with respect to the adequacy and integrity of the systems of internal controls within the Group.

The Audit Committee reviews the risks of monitoring and compliance procedures, ensuring that an appropriate mix of techniques is used to obtain the level of assurance required by the Board. The Audit Committee presents its findings to the Board on a quarterly basis or earlier, as appropriate. The minutes of the audit committee meetings are tabled to the Board.

Board regularly receives and reviews management reports which highlight financial performance and the key operational performance indicators. The Board deliberates on these matters and where necessary, ensures that actions are taken to resolve issues promptly and satisfactorily. There is a structured budgeting and forecasting system in place where a detailed budgeting process is established according to Business Plan for the next financial year which is to be approved by the Board.

Other key elements of the Group’s internal control system are having clear internal policies and procedures in respect of Operations and Human Resources in place and regularly updated to reflect the changes in the business environment, legal requirements or changes in the business processes; and clear defined delegation of responsibilities to the Board, Management Executive and business operating units.


ADDITIONAL COMPLIANCE INFORMATION

During the financial year ended 31 December 2011, the additional compliance information is as follows:-

1. Utilisation of Proceeds raised from Right Issue There were no proceeds raised from any Corporate Proposal.

2. Share Buy-Back

The Company does not have any scheme to buy back its own shares.

3. Options, Warrants or Convertible Securities

The Company did not issue any options, warrants or convertible securities.

4. Depository Receipts

The Company did not sponsor any depository receipts programme.

5. Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and/or its subsidiaries.

6. Variation in Results

There was no variance of 10% or more between the audited results for the financial year ended 31 December 2011 and the unaudited results previously announced by the Company.

7. Profit Guarantee

There was no profit guarantee given by the Company.

8. Material Contracts

There were no material contracts entered into by the Company nor any of its subsidiaries involving directors’ interest either still subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year.

9. Non-audit Fees

The non-audit fees paid by the Group to external auditors or company affiliated to the external auditors’ firm for the financial year ended 31 December 2011 amounted to RM4,240.00.

10. Recurrent Related Party Transactions of Revenue Nature

The details of the transaction with related parties undertaken by the Company and its subsidiaries during the financial year ended 31 December 2011 are disclosed in Note 30 to the Financial Statements on page 77 of this Annual Report.

11. Employees’ Share Option Scheme

The Company has not implemented the Employees’ Share Option Scheme which was approved by the shareholders on 5 December 2011.

12. Corporate Social Responsibility

The Workplace

TMS encourages a work-life balance concept and harmony environment in work place. We offer career advancement, multicultural workplace, award employees for their outstanding performance during the financial year. In addition, TMS also encourages employees for continuous learning and development programs to enhance individual competencies in work that closes the gap between current and desired employee capability. Throughout the year, TMS also pratises to organise indoor gathering, birthday celebration and outdoor activities in every alternate month to enhance the rapports amongst the staff in TMS.


ADDITIONAL COMPLIANCE INFORMATION

cont’d

12. Corporate Social Responsibility cont’d

The Community

Our vision is to “make a difference” and reach out the hand to the needy. During the financial year, TMS contributes, both in monetary and non-monetary form, to a disabled children’s home and encourages TMS employees to participate in the voluntary manner to provide the helping hands on the monthly basis.

Health And Safety At Work

Health and safety at work are essential at workplace. The Company objective is to have an accident and illness free environment. We strive to ensure the workplace is safe and without risk to the health and welfare of all those in the premises. No reportable accidents or incidents occurred during the financial year ended 2011.

FinancialStatements

34

38

38

39

41

43

44

45

47

90

Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Financial Position

Statements of Comprehensive Income

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information


DIRECTORS’REPORT

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of research and development and marketing of computer software, and the provision of system networking support whilst the principal activities of the subsidiary are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

THE GROUP THE COMPANY

RM RM

Loss after taxation, representing total comprehensive loss for the financial year attributable to the owners of the Company (2,389,830) (3,358,487)

DIVIDENDS

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) there were no changes in the authorised share capital of the Company;

(b) the Company increased its issued and paid-up share capital from RM14,480,790 to RM15,928,869 by the allotment of 14,480,790 new ordinary shares of RM0.10 each at par by a Private Placement for working capital purposes. The shares were issued for cash consideration. The new shares issued rank pari passu in all respects with the existing shares of the Company; and

(c) there were no issues of debentures by the Company.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

BAD AND DOUBTFUL DEBTS

Before the financial statements 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 impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.


DIRECTORS’REPORT

cont’d

BAD AND DOUBTFUL DEBTS cont’d

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

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

(a) 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

(b) any contingent liabilities of the Group and of the Company which 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 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 which 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 during 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.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.


DIRECTORS

The directors who served since the date of the last report are as follows:-

CHRISTOPHER CHAN HOOI GUANDATO’ CHAIRIL NAZRI BIN AHMAD SUHAIMI BIN BADRUL JAMIL (APPOINTED ON 13.05.2011 AND RETIRED ON 29.6.2011)LIM BOON HONG (APPOINTED ON 03.08.2011)CHAN CHOOI TENG (APPOINTED ON 10.08.2011 AND RESIGNED ON 23.3.2012)LAI SOON YIP (APPOINTED ON 07.09.2011)TAN OOI JIN (APPOINTED ON 22.09.2011)TAN CHING LING (APPOINTED ON 13.10.2011 AND RESIGNED ON 23.2.2012)ONG BOON KEE (RESIGNED ON 07.09.2011)DR TAY CHUAN HUI (RESIGNED ON 23.09.2011)CHONG KIEN ENG @ TEO KIEN ENG (RESIGNED ON 10.10.2011)MOHD REZA BIN SHAFIEE (RETIRED ON 29.06.2011)LEE LI CHAIN (APPOINTED ON 23.03.2012)

DIRECTORS’ INTERESTS

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

NUMBER OF ORDINARY SHARES OF RM0.10 EACH

AT 1.1.2011 BOUGHT SOLD AT 31.12.2011

THE COMPANY

DIRECT INTERESTS

CHRISTOPHER CHAN HOOI GUAN 11,279,680 - (11,279,680) -

TAN CHING LING 15,929,500 - - 15,929,500

INDIRECT INTEREST

CHRISTOPHER CHAN HOOI GUAN 7,088,880 22,000,000 (7,088,880) 22,000,000

By virtue of their shareholdings in the Company, Christopher Chan Hooi Guan and Tan Ching Ling are deemed to have interests in shares in the Company and its related corporations during the financial year to the extent of the Company’s interest in accordance with Section 6A of the Companies Act, 1965.

The other directors holding office at the end of the financial year had no interests in shares in the Company and its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year, was the Group and the Company a party to any arrangements whose object is 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.

DIRECTORS’REPORTcont’d


SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 33 to the financial statements.

SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

The significant events occurring after the reporting period are disclosed in Note 34 to the financial statements.

AUDITORS

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 24 APRIL 2012

CHRISTOPHER CHAN HOOI GUAN LEE LI CHAIN

DIRECTORS’REPORT

cont’d


STATEMENTBY DIRECTORS

STATUTORYDECLARATION

We, Christopher Chan Hooi Guan and Lee Li Chain, being two of the directors of The Media Shoppe Berhad, state that, in the opinion of the directors, the financial statements set out on pages 41 to 89 are properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as at 31 December 2011 and of their results and cash flows for the financial year ended on that date.

The supplementary information set out on page 90, which is not part of the financial statements, is prepared in accordance with 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 and the directive of Bursa Malaysia Securities Berhad.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 24 APRIL 2012

CHRISTOPHER CHAN HOOI GUAN LEE LI CHAIN

I, Christopher Chan Hooi Guan, I/C No. 670607-07-5037, being the director primarily responsible for the financial management of The Media Shoppe Berhad, do solemnly and sincerely declare that the financial statements set out on pages 41 to 89 and supplementary information set out on page 90 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared byChristopher Chan Hooi Guan, I/C No. 670607-07-5037,at Kuala Lumpur in the Federal Territory on this

Before me CHRISTOPHER CHAN HOOI GUAN

COMMISSIONER FOR OATHS( ZULKIFLA MOHD DAHLIM (W 541) )


INDEPENDENTAUDITORS’ REPORT

TO THE MEMBERS OF THE MEDIA SHOPPE BERHAD

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of The Media Shoppe Berhad, which comprise the statements of financial position as at 31 December 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 41 to 89.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’s preparation of financial statements that give a 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.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with the Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended.

REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Companies Act, 1965 in Malaysia.

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

(c) Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Companies Act,1965 in Malaysia.


OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 90 to the financial statements 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.

OTHER MATTERS

The financial statements of the Group and of the Company for the financial year ended 31 December 2010 were audited by another firm of chartered accountants whose report dated 18 April 2011, expressed an unmodified opinion on those financial statements.

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

BAKER TILLY MONTEIRO HENG M.J.MONTEIRONo. AF 0117 No. 828/05/12 (J/PH)Chartered Accountants Chartered Accountant

Kuala Lumpur

Date: 24 April 2012

INDEPENDENTAUDITORS’ REPORTTO THE MEMBERS OF THE MEDIA SHOPPE BERHADcont’d


STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011


2011 2010 2011 2010

NOTE RM RM RM RM

ASSETS

NON-CURRENT ASSETS

Investments in subsidiaries 5 - - 2 1,600,000

Property, plant and equipment 6 3,077,447 3,051,386 2,654,665 2,879,729

Other investments 7 250,000 250,000 250,000 250,000

Software development costs 8 518,907 603,029 387,242 603,029

Goodwill on consolidation 9 - - - -

3,846,354 3,904,415 3,291,909 5,332,758

CURRENT ASSETS

Trade receivables 10 6,608,657 2,642,632 2,563,408 1,150,199

Other receivables, deposits and prepayments 544,463 130,227 448,879 84,504

Amounts owing by subsidiaries 11 - - 2,679,048 -

Tax refundable 2,743 3,075 2,743 3,075

Short-term investments 12 906,299 1,103,421 904,649 1,101,817

Deposits with licensed banks 13 24,141 24,141 24,141 24,141

Cash and bank balances 569,894 5,359,589 533,795 4,730,550

8,656,197 9,263,085 7,156,663 7,094,286

TOTAL ASSETS 12,502,551 13,167,500 10,448,572 12,427,044

EqUITY AND LIABILITIES

EqUITY

Share capital 14 15,928,869 14,480,790 15,928,869 14,480,790

Share premium 15 9,475,641 9,551,390 9,475,641 9,551,390

Accumulated losses (15,654,270) (13,264,440) (16,646,152) (13,287,665)

TOTAL EqUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 9,750,240 10,767,740 8,758,358 10,744,515

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


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2011cont’d


2011 2010 2011 2010

NOTE RM RM RM RM

NON-CURRENT LIABILITIES

Hire purchase payable 16 254,760 69,540 - 69,540

Term loan 17 968,310 1,019,280 968,310 1,019,280

1,223,070 1,088,820 968,310 1,088,820

CURRENT LIABILITIES

Trade payables 18 145,440 200,868 - 21,175

Other payables and accruals 19 1,086,685 928,108 527,316 326,646

Amount owing to a subsidiary 11 - - - 92,241

Hire purchase payable 16 42,026 52,140 - 52,140

Term loan 17 52,892 52,619 52,892 52,619

Bank overdraft 1,250 - 1,250 -

Provision for sales commission 20 200,948 77,205 140,446 48,888

1,529,241 1,310,940 721,904 593,709

TOTAL LIABILITIES 2,752,311 2,399,760 1,690,214 1,682,529

TOTAL EqUITY AND LIABILITIES 12,502,551 13,167,500 10,448,572 12,427,044

NET ASSETS PER SHARE (RM) 21 0.06 0.07



STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011


2011 2010 2011 2010

NOTE RM RM RM RM

REVENUE 22 11,790,263 10,200,487 3,917,134 4,508,245

DIRECT COSTS (8,365,809) (5,213,038) (570,915) (2,261,821)

GROSS PROFIT 3,424,454 4,987,449 3,346,219 2,246,424

OTHER INCOME 292,341 1,164,008 264,880 361,554

3,716,795 6,151,457 3,611,099 2,607,978

ADMINISTRATIVE EXPENSES (4,348,730) (4,173,314) (1,288,629) (1,427,664)

DISTRIBUTION COSTS (325,951) (215,906) (147,038) (36,678)

OTHER EXPENSES (1,323,501) (3,828,634) (5,438,542) (2,804,541)

FINANCE COSTS (108,443) (93,449) (95,377) (93,310)

LOSS BEFORE TAXATION 23 (2,389,830) (2,159,846) (3,358,487) (1,754,215)

INCOME TAX EXPENSE 24 - 5,154 - 4,065

LOSS AFTER TAXATION, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR (2,389,830) (2,154,692) (3,358,487) (1,750,150)

LOSS AFTER TAXATION, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR ATTRIBUTABLE TO:-

Owners of the Company (2,389,830) (2,154,692) (3,358,487) (1,750,150)

LOSS PER SHARE (RM)

- Basic 25 (0.02) (0.02)

- Diluted 25 Not applicable Not applicable



STATEMENTS OF CHANGES IN EqUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

SHARECAPITAL

SHARE PREMIUM

ACCUMULATED LOSSES TOTAL

THE GROUP RM RM RM RM

At 1.1.2010 13,164,360 9,551,390 (11,109,748) 11,606,002

Issuance of shares pursuant to private placement 1,316,430 - - 1,316,430

Total comprehensive loss for the financial year - - (2,154,692) (2,154,692)

At 31.12.2010/1.1.2011 14,480,790 9,551,390 (13,264,440) 10,767,740


Expenses incurred in relation to the Private Placement - (75,749) - (75,749)


At 31.12.2011 15,928,869 9,475,641 (15,654,270) 9,750,240

THE COMPANY

At 1.1.2010 13,164,360 9,551,390 (11,537,515) 11,178,235



At 31.12.2010/1.1.2011 14,480,790 9,551,390 (13,287,665) 10,744,515


Expenses incurred in relation to the Private Placement - (75,749) - (75,749)


At 31.12.2011 15,928,869 9,475,641 (16,646,152) 8,758,358




2011 2010 2011 2010

NOTE RM RM RM RM

CASH FLOWS (FOR)/FROM OPERATING ACTIVITIES

Loss before taxation (2,389,830) (2,159,846) (3,358,487) (1,754,215)

Adjustments for:-

Amortisation of software development costs 396,423 973,735 396,423 915,770

Bad debts written off - 156,389 - 154,986

Depreciation of property, plant and equipment 357,526 466,253 224,828 418,122

Interest expense 108,443 93,449 95,377 93,310

Impairment loss on investment in subsidiary - - 1,600,000 2,192,500

Impairment loss on goodwill on consolidation - 3,139,194 - -

Impairment loss on amount owing by a subsidiary - - 3,604,764 -

Impairment loss on trade receivables 965,278 65,619 8,950 38,204

Plant and equipment written off - 41 - 41

Provision for sales commission 169,360 - 116,176 -

Gain on deconsolidation of a subsidiary 26 - (707,934) - -

Gain on disposal of plant and equipment (118,197) (3,383) (118,197) (3,383)

Gain on disposal of software development cost - (4,038,089) - (816,764)

Interest income (103,527) (29,318) (103,481) (29,276)

Reversal of impairment losses on trade receivables (65,619) (113,386) (38,204) (113,386)

Overprovision of sales commission - (294,986) - (200,509)

Operating (loss)/profit before working capital changes (680,143) (2,452,262) 2,428,149 895,400

Receivables (5,279,920) 27,299 (1,748,330) 735,419

Payables 103,149 2,244,829 179,495 (206,216)

Provision for sales commission (45,617) (79,523) (24,618) (14,462)

CASH FLOWS (FOR)/FROM OPERATIONS (5,902,531) (259,657) 834,696 1,410,141

Income tax paid (1,200) (3,237) (1,200) (3,237)

Income tax refund 1,532 4,684 1,532 4,255

Interest paid (108,443) (93,449) (95,377) (93,310)

NET CASH (FOR)/FROM OPERATING ACTIVITIES/BALANCE CARRIED FORWARD (6,010,642) (351,659) 739,651 1,317,849

STATEMENTS OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011




2011 2010 2011 2010

NOTE RM RM RM RM

NET CASH (FOR)/FROM OPERATING ACTIVITIES/BALANCE BROUGHT FORWARD (6,010,642) (351,659) 739,651 1,317,849

CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES

Interest received 103,527 29,318 103,481 29,276

Software development costs paid (312,301) (83,180) (180,636) -

Proceeds from disposal of plant and equipment 125,000 3,387 125,000 3,387

Proceeds from disposal of software development costs - 5,000,000 - 1,680,000

Incorporation of new subsidiary - - (2) -

Purchase of equipment 27 (60,390) (231,964) (6,567) (40,307)

Additional investment in subsidiary - - - (192,500)

Acquisition of unquoted shares - (198,998) - (198,998)

Advances to subsidiaries - - (6,376,053) -

Net cash outflow on deconsolidation of a subsidiary 26 - (1,851,934) - -

NET CASH (FOR)/FROM INVESTING ACTIVITIES (144,164) 2,666,629 (6,334,777) 1,280,858

CASH FLOW FROM FINANCING ACTIVITIES

Repayment by subsidiary - - - 219,386

Repayment of hire purchase payable (154,894) (52,140) (121,680) (52,140)

Repayment of term loan (50,697) (51,914) (50,697) (51,914)

Proceeds from issuance of shares pursuant to private placement, net of expenses 1,372,330 1,316,430 1,372,330 1,316,430

NET CASH FROM FINANCING ACTIVITIES 1,166,739 1,212,376 1,199,953 1,431,762

NET (DECREASE)/INCREASE IN CASH AND CASH EqUIVALENTS (4,988,067) 3,527,346 (4,395,173) 4,030,469

CASH AND CASH EqUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 6,487,151 2,959,805 5,856,508 1,826,039

CASH AND CASH EqUIVALENTS AT END OF THE FINANCIAL YEAR 28 1,499,084 6,487,151 1,461,335 5,856,508

STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011 cont’d



NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

1. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Companies Act, 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:-

Registered office : 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, 50250 Kuala Lumpur.

Principal place of business : C-01-3, Block C, Plaza Glomac, No. 6, Jalan SS7/19 Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 24 April 2012.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of research and development and marketing of computer software and the provision of system networking support whilst the principal activities of the subsidiary are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial Reporting Standards (“FRS”) and the Companies Act, 1965 in Malaysia.

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

IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”)

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

The Group and the Company had adopted the following revised FRSs, amendments/improvements to FRSs, new IC Int and amendments to IC Int that are mandatory for the current financial year:

Revised FRSsFRS 1 First-time Adoption of Financial Reporting StandardsFRS 3 Business CombinationsFRS 127 Consolidated and Separate Financial Statements Amendments/Improvements to FRSsFRS 1 First-time Adoption of Financial Reporting StandardsFRS 2 Share-based PaymentFRS 3 Business CombinationsFRS 5 Non-current Assets Held for Sale and Discontinued OperationsFRS 7 Financial Instruments : DisclosuresFRS 101 Presentation of Financial StatementsFRS 121 The Effects of Changes in Foreign Exchange RatesFRS 128 Investments in AssociatesFRS 131 Interests in Joint VenturesFRS 132 Financial Instruments : PresentationFRS 134 Interim Financial ReportingFRS 138 Intangible AssetsFRS 139 Financial Instruments: Recognition and Measurement


3. BASIS OF PREPARATION cont’d

(a) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) cont’d


cont’d

New IC IntIC Int 4 Determining Whether an Arrangement contains a LeaseIC Int 16 Hedges of a Net Investment in a Foreign OperationIC Int 17 Distribution of Non-cash Assets to OwnersIC Int 18 Transfers of Assets from Customers Amendments to IC IntIC Int 9 Reassessment of Embedded DerivativesIC Int 13 Customer Loyalty Programmes

The main effects of the adoption of the above revised FRSs, amendments/improvements to FRSs, new IC Int and amendments to IC Int are summarised below:-

FRS 3 Business Combinations (Revised)

The adoption of the FRS 3 affects the way in which the Group accounts for business combinations. The main changes made in this revised standard were:

• Alltheacquisition-relatedcostsincurredbytheacquirerinconnectionwiththebusinesscombinationshall be recognised as expense in the profit or loss in the period in which the costs are incurred (rather than included in goodwill);

• All considerations transferred by the acquirer, including contingent considerations, in a businesscombination shall be measured at fair value as at the acquisition date. Subsequent changes in the fair value of contingent consideration classified as liabilities are recognised in accordance with FRS139, FRS137 or other FRSs, as appropriate (rather than by adjusting goodwill);

• Anacquirerisnolongerpermittedtorecognisecontingenciesacquiredinabusinesscombinationthatdo not meet the definition of a liability;

• For each business combination, the acquirer must measure any non-controlling interest in theacquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. Previously, only the latter was permitted;

• Forabusinesscombinationachievedinstages,theequityinterestsheldbytheacquirerintheacquireeimmediately before achieving control are re-measured at its acquisition-date fair value with any corresponding gain or loss recognised in profit or loss.

• Goodwillarisingfromthebusinesscombinationismeasuredasthedifferencebetweentheaggregate

fair value of consideration transferred, any non-controlling interest in the acquiree, and the fair value at acquisition date of any previously-held equity interest in the acquiree, and the fair value of identifiable assets acquired and liabilities assumed (including contingent liabilities) at acquisition date.

This revised FRS3 shall be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2010. There is no material financial impact on the financial statements of the Group for the current financial year as there were no major business combinations during the financial year.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011 cont’d



(a) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) cont’d


cont’d

FRS 127 Consolidated and Separate Financial Statements (Revised)

The revised FRS 127 requires that any changes in a parent’s ownership interest in a subsidiary company that do not result in the loss of control are accounted for within equity. When the Group loses control of a subsidiary company, any remaining interest retained in the former subsidiary company will be measured at fair value and any resulting gain or loss is recognised in profit or loss. Total comprehensive income will be proportionately allocated to the owners of the parent and to the non-controlling interests even if it results in the non-controlling interests having a deficit balance.

The revised FRS 127 shall be applied prospectively to business combinations for which the acquisition date is on or after 1 July 2010. There is no financial impact on the financial statements of the Group for the current financial year as there were no business combinations during the financial year.

Amendments to FRS 7 Financial Instruments: Disclosures

Disclosures on fair value and liquidity have been enhanced upon the adoption of this amendment. In particular, financial instruments measured at fair value are disclosed by class in a three-level fair value measurement hierarchy, with specific disclosures related to transfers between levels in the hierarchy and detailed disclosures on level three of the fair value hierarchy. Certain disclosures on liquidity are also modified. The adoption of this amendment resulted in additional disclosures in the financial statements but did not have any financial impact on the Group and the Company.

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

The Group and Company have not adopted the following new and 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

New FRSs

FRS 9FRS 10FRS 11FRS 12FRS 13

Financial InstrumentsConsolidated Financial StatementsJoint ArrangementsDisclosures of Interests in Other EntitiesFair Value Measurement

1 January 20151 January 20131 January 20131 January 20131 January 2013

Revised FRSs

FRS 119FRS 124FRS 127FRS 128

Employee Benefits Related Party DisclosuresSeparate Financial StatementsInvestments in Associates and Joint Ventures

1 January 20131 January 20121 January 20131 January 2013


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011 cont’d



(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early cont’d

Effective for financial periods beginning on or

after

Amendments/Improvements to FRSs

FRS 1FRS 7

FRS 101FRS 112FRS 132

First-time Adoption of Financial Reporting StandardsFinancial Instruments: Disclosures

Presentation of Financial StatementsIncome TaxesFinancial Instruments: Presentation

1 January 20121 January 2012

and 1 January 20131 July 2012

1 January 20121 January 2014

New IC Int

IC Int 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011

Amendments to IC Int

IC Int 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

1 July 2011

A brief discussion on the above significant new and revised FRSs, amendments/improvements to FRSs, new IC Int and amendments to IC Int are summarised below. Due to the complexity of these new standards, the financial effects of their adoption are currently still being assessed by the Group and the Company.

FRS 9 Financial Instruments

FRS 9 specifies how an entity should classify and measure financial assets and financial liabilities.

This standard requires all financial assets to be classified based on how an entity manages its financial assets (its business model) and the contractual cash flow characteristics of the financial asset. Financial assets are to be initially measured at fair value. Subsequent to initial recognition, depending on the business model under which these assets are acquired, they will be measured at either fair value or at amortised cost.

In respect of the financial liabilities, the requirements are generally similar to of the former FRS 139. However, this standard requires that for financial liabilities designated as at fair value through profit or loss, changes in fair value attributable to the credit risk of that liability are to be presented in other comprehensive income, whereas the remaining amount of the change in fair value will be presented in the profit or loss.

FRS 10 Consolidated Financial Statements and FRS 127 Separate Financial Statements (Revised)

FRS 10 replaces the consolidation part of the former FRS 127 Consolidated and Separate Financial Statements. The revised FRS127 will deal only with accounting for investment in subsidiaries, joint ventures and associates in the separate financial statements of an investor and require the entity to account for such investments either at cost, or in accordance with FRS 9.

FRS 10 brings about convergence between FRS 127 and SIC-12, which interprets the requirements of FRS 10 in relation to special purpose entities. FRS 10 introduces a new single control model to identify a parent-subsidiary relationship by specifying that “an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. It provides guidance on situations when control is difficult to assess such as those involving potential voting rights, or in circumstances involving agency relationships, or where the investor has control over specific assets of the entity, or where the investee entity is designed in such a manner where voting rights are not the dominant factor in determining control.




(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early cont’d

FRS 11 Joint Arrangements

FRS 11 supersedes the former FRS 131 Interests in Joint Ventures. Under FRS 11, an entity accounts for its interest in a jointly controlled entity based on the type of joint arrangement, as determined based on an assessment of its rights and obligations arising from the arrangement. There are two types of joint arrangement namely joint venture or joint operation as specified in this new standard. A joint venture recognises its interest in the joint venture as an investment and account for its using the equity method. The proportionate consolidation method is disallowed in such joint arrangement. A joint operator accounts for the assets, liabilities, revenue and expenses related to its interest directly.

FRS 12 Disclosures of Interests in Other Entities

FRS 12 is a single disclosure standard for interests in subsidiary companies, joint ventures, associated companies and unconsolidated structured entities. The disclosure requirements in this FRS are aimed at providing standardised and comparable information that enable users of financial statements to evaluate the nature of, and risks associated with, the entity’s interests in other entities, and the effects of those interests on its financial position, financial performance and cash flows.

FRS 13 Fair Value Measurement

FRS 13 defines fair value and sets out a framework for measuring fair value, and the disclosure requirements about fair value. This standard is intended to address the inconsistencies in the requirements for measuring fair value across different accounting standards. As defined in this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Amendments to FRS 112 Income Taxes

This amendment to FRS 112 addresses the measurement approach for deferred tax assets and liabilities in respect of investment properties which are measured at fair value. The amendment introduces a rebuttable presumption that the investment property is recovered entirely through sale. In such cases, deferred tax assets or liabilities are provided at tax rates applicable when recovering the property entirely through sale. If this presumption is rebutted, deferred tax assets or liabilities are provided based on tax rates applicable when consuming substantially the economic benefits embodied in the property over a period of time (for example via rental income).

FRS 128 Investments in Associates and Joint Ventures (Revised)

This revised FRS 128 incorporates the requirements for accounting for joint ventures into the same accounting standard as that for accounting for investments in associated companies, as the equity method was applicable for both investments in joint ventures and associated companies. However, the revised FRS 128 exempts the investor from applying equity accounting where the investment in the associated company or joint venture is held indirectly via venture capital organisations or mutual funds and similar entities. In such cases, the entity shall measure the investment at fair value through profit or loss, in accordance with FRS 9.

(c) MASB Approved Accounting Standards, MFRSs

In conjunction with the planned convergence of FRSs with International Financial Reporting Standards as issued by the International Accounting Standards Board on 1 January 2012, the MASB had on 19 November 2011 issue a new MASB approved accounting standards, MFRSs (“MFRSs Framework”) for application in the annual periods beginning on or after 1 January 2012.





(c) MASB Approved Accounting Standards, MFRSs cont’d

The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities subject to the application of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (“Transitioning Entities”). The Transitioning Entities are given an option to defer adoption of the MFRSs framework for an additional one year. Transitioning Entities also includes those entities that consolidate or equity account or proportionately consolidate another entity that has chosen to continue to apply the FRSs framework for annual periods beginning on or after 1 January 2012.

Accordingly, the Group and the Company which are not Transitioning Entities are required to adopt the MFRSs framework for the next financial year, being the first set of financial statements prepared in accordance with the MFRSs framework.

As at 31 December 2011, all FRSs issued under the existing FRSs framework are equivalent to the MFRSs issued under MFRSs framework except for differences in relation to the transitional provisions as well as differences in effective dates contained in certain of the existing FRSs. As such, except those as discussed below, the main effects arising from the transition to the MFRSs Framework has been discussed in Note 3(b). The effect is based on the Group’s and the Company’s best estimates at reporting date. The financial effect may change or additional effects may be identified, prior to the completion of the Group’s and the Company’s first MFRSs based financial statements.

Application of MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”)

MFRS 1 requires comparative information to be restated as if the requirements of MFRSs effective for annual periods beginning on or after 1 January 2012 have always been applied, except when MFRS 1 allows certain elective exemptions from such full retrospective application or prohibits retrospective application of some aspects of MFRSs. The Group and the Company are currently assessing the impact of adoption of MFRS 1, including identification of the differences in existing accounting policies as compared to the new MFRSs and the use of optional exemptions as provided for in MFRS1. As at the date of authorisation of issue of the financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adoption of MFRS1 cannot be determined and estimated reliably until the process is completed.

4. SIGNIFICANT ACCOUNTING POLICIES

(a) Critical Accounting Estimates And Judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial and usage factors which could change significantly.

The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and commercial factors could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.



4. SIGNIFICANT ACCOUNTING POLICIES cont’d

(a) Critical Accounting Estimates And Judgements cont’d

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

(iii) Impairment of Non-financial Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(iv) Amortisation of Development Costs

Changes in the expected level of usage and technological development could impact the economic useful lives, therefore future amortisation charges could be revised.

(v) Impairment of Available-for-sale Financial Assets

The Group reviews its available-for-sale financial assets at the end of each reporting period to assess whether they are impaired. The Group also records impairment loss on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is “significant’ or “prolonged” requires judgement. In making this judgement, the Company evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost.

(vi) Impairment of Goodwill

Goodwill is tested for impairment annually and at other times when such indicators exists. This requires management to estimate the expected future cash flows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill.

(vii) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loan and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the adequacy of the allowance for impairment loss. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(viii) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and equity.





(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 December 2011.

A subsidiary is defined as a company in which the parent company has the power, directly or indirectly, to exercise control over its financial and operating policies so as to obtain benefits from its activities.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the Company’s shareholders’ equity, and are separately disclosed in the consolidated statement of comprehensive income. Transactions with non-controlling interests are accounted for as transactions with owners and are recognised directly in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity and attributed to owners of the parent.

Upon loss of control of a subsidiary, the profit or loss on disposal is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained profits) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 127.

All subsidiaries are consolidated using the purchase method. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination.

Non-controlling interests are initially measured at their share of the fair values of the identifiable assets and liabilities of the acquiree as at the date of acquisition.




(c) Goodwill

i. Acquisition before 1 January 2011

Goodwill arising on acquisition represents the excess of cost of business combination over the Group’s share of the net fair values of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is stated at cost less impairment losses, if any.

Goodwill is not amortised but is reviewed for impairment, annually or more frequently for impairment in value and is written down where it is considered necessary. Gain or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the business combination in which the goodwill arise.

Negative goodwill represents the excess of the fair value of the Group’s share of net assets acquired over the cost of acquisition. Negative goodwill is recognised directly in profit or loss.

ii. Acquisition on or after 1 January 2011

For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition date as:

• thefairvalueoftheconsiderationtransferred;plus• therecognisedamountofanynon-controllinginterestsintheacquire;plus• ifthebusinesscombinationisachievedinstages,thefairvalueoftheexistingequityinterestinthe

acquire; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities

assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the

Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

(d) Functional and Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.





(e) Financial Instruments

Financial instruments are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

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.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(i) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

• FinancialAssetsatFairValueThroughProfitorLoss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Company’s right to receive payment is established.

• Held-to-maturityInvestments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with revenue recognised on an effective yield basis.

• LoansandReceivablesFinancialAssets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.




(e) Financial Instruments cont’d

(i) Financial Assets cont’d

• Available-for-saleFinancialAssets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

(ii) Financial Liabilities

All financial liabilities are measured initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

(iii) Equity Instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(f) Investments

(i) Investments in Subsidiaries

Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that their carrying values may not be recoverable.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

(ii) Other Investments Other investments held on a long-term basis are stated at cost less allowance for permanent diminution in

value.

On the disposal of these investments, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.





(g) Research and Development Expenditure

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that expenditure incurred on development projects are capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if, an entity can demonstrate all of the following:-

(i) its ability to measure reliably the expenditure attributable to the asset under development;

(ii) the product or process is technically and commercially feasible;

(iii) its future economic benefits are probable;

(iv) its ability to use or sell the developed asset; and (v) the availability of adequate technical, financial and other resources to complete the asset under

development.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense are not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of five years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

(h) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Building 2%Computer equipment 33 1/3%Furniture and fittings 20%Motor vehicles 20%Office equipment 20%Renovation 20%

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at the end of the reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss.




(i) Impairment

(i) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period 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. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets 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 financial asset’s original effective interest rate.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity to profit or loss upon disposal.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

(ii) Impairment of Non-financial Assets

The carrying values of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewed at each end of the reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited to the other comprehensive income.

However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the statement of comprehensive income, a reversal of that impairment loss is recognised as income in the statement of comprehensive income.

(j) Assets Under Hire Purchase

Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 4(h) above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements.





(k) Provisions Provisions are recognised when the Group has a present obligation as a result of past events, when it is probable

that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation.

(l) Income Taxes

Income taxes for the financial year comprise current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

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 future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are 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 the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.

(m) Borrowing Costs

Borrowing costs, directly attributable to the acquisition and construction of property, plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale.

Capitalisation of borrowing costs is suspended during extended periods in which active development is

interrupted.

All other borrowing costs are recognised in profit or loss as expenses in the period in which they incurred.




(n) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(o) Employee Benefits

(i) Short-term Benefits Wages, salaries, paid annual leave, bonuses, and non-monetary benefits are recognised in profit or loss and

included in the development costs in the period in which the associated services are rendered by employees of the Group.

(ii) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss and included in the development costs in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(p) Revenue Recognition

(i) Sale of Goods

Revenue is recognised upon delivery of goods and customers’ acceptance, and where applicable, net of returns and trade discounts.

(ii) Support and Maintenance Income

Support and maintenance income are recognised over the period of the service contracts based on services rendered.

Any billings in advance of which the maintenance services have not been performed will be treated as unearned income until the services have been delivered. The unearned income will be credited to the profit or loss upon the services performed.

(iii) Interest Income

Interest income is recognised on an accrual basis.

(q) 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.





(r) Related Parties

A party is related to an entity if:-

(i) directly, or indirectly through one or more intermediaries, the party:- • controls,iscontrolledby,orisundercommoncontrolwith,theentity(thisincludesparents,subsidiaries

and fellow subsidiaries);• hasaninterestintheentitythatgivesitsignificantinfluenceovertheentity;or• hasjointcontrolovertheentity;

(ii) the party is an associate of the entity;(iii) the party is a joint venture in which the entity is a venturer;(iv) the party is a member of the key management personnel of the entity or its parent;(v) the party is a close member of the family of any individual referred to in (i) or (iv); (vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant

voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is

a related party of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

5. INVESTMENTS IN SUBSIDIARIES

THE COMPANY

2011 2010

RM RM

Unquoted shares, at cost 3,792,502 3,792,500

Less: Accumulated impairment loss (3,792,500) (2,192,500)

2 1,600,000

Details of the subsidiaries are as follows:-

Name of CompanyCountry of

IncorporationEffective

Equity Interest Principal Activities

2011 2010

TMS Software Sdn. Bhd. Malaysia 100% 100% Provision of information technology system and integration services.

Kinetic Forward Sdn. Bhd. (“KFSB”)*

Malaysia 100% - Business of trading in Information Technology (IT) and Information Communication Technology (ICT) products and electronic commerce provider and facilitator.

* Duringthecurrentfinancialyear,theCompanyhadacquiredKFSB.ThedetailsareexplainedinNote33(c).



6. PROPERTY, PLANT AND EqUIPMENT

AT 1.1.2011 ADDITIONS DISPOSAL

DEPRECIATION CHARGE

AT 31.12.2011

RM RM RM RM RM

THE GROUP

NET BOOK VALUE

Building 2,461,152 - - (51,274) 2,409,878

Computer equipment 149,995 32,664 - (89,716) 92,943

Furniture and fittings 42,698 - - (16,961) 25,737

Motor vehicle 27,215 350,000 (6,803) (78,745) 291,667

Office equipment 61,706 7,726 - (19,270) 50,162

Renovation 308,620 - - (101,560) 207,060

3,051,386 390,390 (6,803) (357,526) 3,077,447


WRITTEN OFF

DEPRECIATION CHARGE

AT 31.12.2010

RM RM RM RM RM RM

THE GROUP

NET BOOK VALUE

Building 2,512,426 - - - (51,274) 2,461,152

Computer equipment 174,469 172,943 (4) (19) (197,394) 149,995

Furniture and fittings 49,869 11,307 - (11) (18,467) 42,698

Motor vehicle 108,864 - - - (81,649) 27,215

Office equipment 32,283 45,414 - (6) (15,985) 61,706

Renovation 407,809 2,300 - (5) (101,484) 308,620

3,285,720 231,964 (4) (41) (466,253) 3,051,386

COSTACCUMULATED DEPRECIATION

NET BOOK VALUE

RM RM RM

AT 31.12.2011

Building 2,563,700 (153,822) 2,409,878

Computer equipment 2,104,629 (2,011,686) 92,943

Furniture and fittings 208,867 (183,130) 25,737

Motor vehicle 350,000 (58,333) 291,667

Office equipment 230,330 (180,168) 50,162

Renovation 507,811 (300,751) 207,060

5,965,337 (2,887,890) 3,077,447




6. PROPERTY, PLANT AND EqUIPMENT cont’d


NET BOOK VALUE

RM RM RM

AT 31.12.2010

Building 2,563,700 (102,548) 2,461,152



Motor vehicle 408,244 (381,029) 27,215


Renovation 507,811 (199,191) 308,620

5,983,191 (2,931,805) 3,051,386


DEPRECIATION CHARGE

AT 31.12.2011

RM RM RM RM RM

THE COMPANY

NET BOOK VALUE

Building 2,461,152 - - (51,274) 2,409,878

Computer equipment 36,881 4,807 - (30,205) 11,483

Furniture and fittings 26,801 - - (12,762) 14,039

Motor vehicle 27,215 - (6,803) (20,412) -

Office equipment 20,976 1,760 - (9,075) 13,661

Renovation 306,704 - - (101,100) 205,604

2,879,729 6,567 (6,803) (224,828) 2,654,665


WRITTEN OFF

DEPRECIATION CHARGE

AT 31.12.2010

RM RM RM RM RM RM

THE COMPANY

NET BOOK VALUE

Building 2,512,426 - - - (51,274) 2,461,152

Computer equipment 160,594 35,192 (4) (19) (158,882) 36,881

Furniture and fittings 40,975 655 - (11) (14,818) 26,801

Motor vehicle 108,864 - - - (81,649) 27,215

Office equipment 26,921 4,460 - (6) (10,399) 20,976

Renovation 407,809 - - (5) (101,100) 306,704

3,257,589 40,307 (4) (41) (418,122) 2,879,729



6. PROPERTY, PLANT AND EqUIPMENT cont’d


NET BOOK VALUE

RM RM RM

AT 31.12.2011

Building 2,563,700 (153,822) 2,409,878



Motor vehicle - - -


Renovation 505,511 (299,907) 205,604

5,359,648 (2,704,983) 2,654,665

AT 31.12.2010

Building 2,563,700 (102,548) 2,461,152



Motor vehicle 408,244 (381,029) 27,215


Renovation 505,511 (198,807) 306,704

5,761,325 (2,881,596) 2,879,729

Included in the property, plant and equipment of the Group at the end of the reporting period is a motor vehicle with a

net book value of RM291,667 (2010 - RM27,215) which was acquired under hire purchase terms.

The building has been pledged for bank borrowings and bank overdraft granted to the Group and the Company as disclosed in Note 17 and Note 28 to the financial statements.

7. OTHER INVESTMENTS

THE GROUP/THE COMPANY

2011 2010

RM RM

Unquoted shares in Malaysia 199,000 199,000

Club membership, at cost 51,000 51,000

250,000 250,000

Club membership, at market value 60,000 60,000 Investments in unquoted shares of the Group and the Company, designated as available-for-sale financial assets, are

stated at cost as their fair values cannot be reliably measured using valuation techniques due to the lack of marketability of the shares.

Investments in club membership of the Group and the Company, designated as available-for-sale financial assets, are stated at cost.




8. SOFTWARE DEVELOPMENT COSTS


2011 2010 2011 2010

RM RM RM RM

Software development, at cost

At 1 January 3,185,008 6,451,149 3,185,008 5,911,370

Addition during the financial year 312,301 83,180 180,636 -

Derecognition due to full amortisation - (1,326,520) - (1,326,520)

Disposal - (1,555,644) - (1,399,842)

Disposal on deconsolidation - (467,157) - -

At 31 December 3,497,309 3,185,008 3,365,644 3,185,008

Less: Accumulated amortisation

At 1 January (2,581,979) (3,560,495) (2,581,979) (3,529,335)

Amortisation for the financial year (396,423) (973,735) (396,423) (915,770)

Derecognition due to full amortisation - 1,326,520 - 1,326,520

Disposal - 593,733 - 536,606

Disposal on deconsolidation - 31,998 - -

At 31 December (2,978,402) (2,581,979) (2,978,402) (2,581,979)

518,907 603,029 387,242 603,029 The software development costs of the Group and of the Company at the end of the reporting period relate to expenditure

incurred for the development of software, namely “tmsEKP”.

9. GOODWILL ON CONSOLIDATION

THE GROUP

2011 2010

RM RM

At cost 3,139,194 3,139,194

Less: Accumulated impairment loss (3,139,194) (3,139,194)

- -



10. TRADE RECEIVABLES


2011 2010 2011 2010

RM RM RM RM

Trade receivables 7,573,935 2,708,251 2,572,358 1,188,403

Allowance for impairment losses (965,278) (65,619) (8,950) (38,204)

6,608,657 2,642,632 2,563,408 1,150,199

Allowance for impairment losses :-

At 1 January (65,619) (113,386) (38,204) (113,386)

Reversal during the financial year 65,619 113,386 38,204 113,386

Addition during the financial year (965,278) (65,619) (8,950) (38,204)

At 31 December (965,278) (65,619) (8,950) (38,204)

The Group’s normal trade credit terms range from 7 days to 45 days (2010 - 7 days to 45 days). Other credit terms are assessed and approved on a case-by-case basis.

Included in the Group’s net trade receivables is an amount of RM224,085 (2010 - RM754,859), due from a customer which has been long outstanding. The directors are of the opinion that the debt will be recoverable as evidenced by the partial settlement subsequent to the reporting period and post dated cheques received on the balance of the amount outstanding. As such, no allowance for impairment loss is deemed necessary.

11. AMOUNTS OWING BY/(TO) SUBSIDIARIES

THE COMPANY

2011 2010

RM RM

Amount owing by subsidiaries:

Non-trade balances 6,283,812 -

Allowance for impairment losses (3,604,764) -

2,679,048 -

Amount owing to a subsidiary:

Non-trade balance - 92,241

Allowance for impairment losses:-

At 1 January - -

Addition during the financial year (3,604,764) -

At 31 December (3,604,764) -

The amounts owing are non-trade in nature, unsecured, interest-free and are repayable on demand.




12. SHORT-TERM INVESTMENTS


2011 2010 2011 2010

RM RM RM RM

Unquoted unit trusts, at cost: 906,299 1,103,421 904,649 1,101,817

13. DEPOSITS WITH LICENSED BANKS

The deposits with licensed banks have been pledged as security for banking facilities granted to the Group and the Company.

The deposits with licensed banks of the Group and of the Company at the end of the reporting period bore an effective interest rate of 2.94% (2010 - 2.61%) per annum. The deposits have maturity periods ranging from 90 days to 365 days (2010 - 90 days to 365 days).

14. SHARE CAPITAL

THE COMPANY

2011 2010 2011 2010

NUMBER OF SHARES RM RM

ORDINARY SHARES OF RM0.10 EACH:-

AUTHORISED 500,000,000 500,000,000 50,000,000 50,000,000

ISSUED AND FULLY PAID-UP:

At 1 January 144,807,900 131,643,600 14,480,790 13,164,360

Issuance of shares pursuant to private placement 14,480,790 13,164,300 1,448,079 1,316,430

At 31 December 159,288,690 144,807,900 15,928,869 14,480,790 During the financial year, the Company increased its issued and paid-up share capital from RM14,480,790 to

RM15,928,869 by the allotment of 14,480,790 new ordinary shares of RM0.10 each at par by a Private Placement. The shares were issued for cash consideration.

The new shares issued rank pari passu in all respects with the existing shares of the Company.

15. SHARE PREMIUM


2011 2010

RM RM

At 1 January 9,551,390 9,551,390

Expense incurred in relation to Private Placement (75,749) -

At 31 December 9,475,641 9,551,390 The share premium is not distributable by way of cash dividends and may be utilised in the manner as set out in Section

60(3) of the Companies Act, 1965 in Malaysia.



16. HIRE PURCHASE PAYABLE


2011 2010 2011 2010

RM RM RM RM

Minimum hire purchase payments:

- not later than one year 55,536 61,608 - 61,608

- later than one year and not later than five years 222,144 82,063 - 82,063

- later than five years 64,714 - - -

342,394 143,671 - 143,671

Less: Future finance charges (45,608) (21,991) - (21,991)

Present value of hire purchase payable 296,786 121,680 - 121,680

The net hire purchase payable is repayable as follows:

Current:

- not later than one year 42,026 52,140 - 52,140

Non-current:

- later than one year and not later than five years 191,772 69,540 - 69,540

- later than five years 62,988 - - -

254,760 69,540 - 69,540

296,786 121,680 - 121,680

The hire purchase payable of the Group bore an effective interest rate of 4.77% (2010 - 4.85%) per annum at the end of the reporting period.

The hire purchase payable of the Company bore an effective interest rate of 4.85% per annum at the end of the previous financial year.




17. TERM LOAN


2011 2010

RM RM

Current portion:

- repayable within one year 52,892 52,619

Non-current portion:

- repayable between one and two years 56,983 56,310

- repayable between two and five years 197,277 193,764

- repayable after five years 714,050 769,206

968,310 1,019,280

1,021,202 1,071,899

The term loan is repayable in 180 monthly instalments of RM11,137 each commencing from 1 February 2008. The monthly instalments have been revised to RM10,324 commencing from 1 June 2010, due to the change in the Base Lending Rate (“BLR”).

The term loan of the Group and of the Company bore an effective interest rate (BLR + 0.50%) of 7.10% (2010 - 6.80%) per annum at the end of the reporting period and is secured by a legal charge over the property of the Group and of the Company as disclosed in Note 6 to the financial statements.

18. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 days to 120 days (2010 - 30 days to 120 days).

19. OTHER PAYABLES AND ACCRUALS


2011 2010 2011 2010

RM RM RM RM

Accruals 323,880 553,852 150,754 111,673

Other payables 436,993 221,688 286,672 72,747

Unearned income 325,812 152,568 89,890 142,226

1,086,685 928,108 527,316 326,646



20. PROVISION FOR SALES COMMISSION


2011 2010 2011 2010

RM RM RM RM

At 1 January 77,205 451,714 48,888 263,859

Addition during the financial year 169,360 - 116,176 -

Paid during the financial year (45,617) (79,523) (24,618) (14,462)

Overprovision in the previous financial year - (294,986) (200,509)

At 31 December 200,948 77,205 140,446 48,888 Provision for sales commission is recognised on the revenue generated and is payable upon collections received.

21. NET ASSETS PER SHARE

The net assets per share is calculated based on the net assets value at the end of the reporting period of RM9,750,240 (2010 - RM10,767,740) divided by the number of ordinary shares in issue at the end of the reporting period of 159,288,690 (2010 - 144,807,900).

22. REVENUE

Revenue represents billings for sales of software, hardware and professional services less discounts as further disclosed in Note 31 to the financial statements.

23. LOSS BEFORE TAXATION


2011 2010 2011 2010

RM RM RM RM

Loss before taxation is arrived at after charging/(crediting):-

Amortisation of software development costs 396,423 973,735 396,423 915,770

Audit fee 35,000 32,000 20,000 18,500

Bad debts written off - 156,389 - 154,986

Depreciation of property, plant and equipment 357,526 466,253 224,828 418,122

Directors’ fee 90,000 61,000 90,000 61,000

Directors’ non-fee emoluments:

- salaries and allowances 586,400 634,700 586,400 634,700

- defined contribution plans 74,718 77,168 74,718 77,168

- others 723 1,240 723 1,240




23. LOSS BEFORE TAXATION cont’d


2011 2010 2011 2010

RM RM RM RM

Loss before taxation is arrived at after charging/(crediting):- cont’d

Impairment loss on goodwill on consolidation - 3,139,194 - -

Impairment loss on investment in a subsidiary - - 1,600,000 2,192,500

Impairment losses on trade receivables 965,278 65,619 8,950 38,204

Impairment losses on amounts owing by subsidiaries - - 3,604,764 -

Interest expense:

- bank overdraft 8,598 11,867 8,598 11,867

- hire purchase 26,654 9,468 13,588 9,468

- term loan 73,191 71,975 73,191 71,975

- others - 139 - -

Plant and equipment written off - 41 - 41

Preliminary expenses 2,703 - - -

Provision for sales commission 169,360 - 116,176 -

Realised foreign exchange loss 697 1,138 - 688

Rental of premises and equipment 48,877 70,790 - 10,877

Staff costs:

- salaries, wages, bonuses and allowances 3,787,773 3,743,113 122,510 245,297

- defined contribution plans 444,756 418,384 17,974 -

- other benefits 375,379 322,659 80,330 84,696

Gain on deconsolidation of a subsidiary - (707,934) - -

Gain on disposal of plant and equipment (118,197) (3,383) (118,197) (3,383)

Gain on disposal of software development costs - (4,038,089) - (816,764)

Interest income (103,527) (29,318) (103,481) (29,276)

Rental income (5,000) (15,000) (5,000) (15,000)

Overprovision of sales commission - (294,986) - (200,509)

Reversal of impairment losses on trade receivables (65,619) (113,386) (38,204) (113,386)



24. INCOME TAX EXPENSE


2011 2010 2011 2010

RM RM RM RM

Current tax expense:

- overprovision in the previous financial year - (5,154) - (4,065)

The Company and TMS Software Sdn. Bhd. (“TMSS”), a wholly-owned subsidiary were granted the MSC Malaysia

status which confers the Company and TMSS the pioneer status incentive whereby the income from pioneer activities is exempted from tax during the pioneer period from 1 September 2004 to 31 August 2010, and from 30 May 2003 to 29 May 2008, respectively. After the expiry of the pioneer status the Company has surrendered its MSC status. TMSS is currently applying for a renewal of its pioneer status incentive.

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


2011 2010 2011 2010

RM RM RM RM

Loss before taxation (2,389,830) (2,159,846) (3,358,487) (1,754,215)

Tax at the statutory tax

rate of 25% (597,458) (539,962) (839,622) (438,554)

Tax effects of:-

Non-deductible expenses 418,751 1,002,962 1,458,256 887,554

Reversal/(origination) of deferred tax asset not recognised in the financial statements 204,539 (463,000) (592,802) (449,000)

Non-taxable income (25,832) - (25,832) -

Overprovision of current tax in the previous financial year - (5,154) - (4,065)

- (5,154) - (4,065) Subject to agreement with the tax authorities, at the end of the reporting period, the unutilised tax losses available to be

carried forward for offset against future taxable business income are as follows:-


2011 2010 2011 2010

RM RM RM RM

Unutilised tax losses (8,328,359) (7,619,070) (4,107,833) (6,505,212)

Temporary difference 29,650 138,518 (21,068) 5,102

(8,298,709) (7,480,552) (4,128,901) (6,500,110)




24. INCOME TAX EXPENSE cont’d The deferred tax asset has not been recognised for the following:-


2011 2010 2011 2010

RM RM RM RM

Potential deferred tax assets not recognised at 25% (2,074,677) (1,870,138) (1,032,225) (1,625,027)

25. LOSS PER SHARE

THE GROUP

2011 2010

Loss attributable to owners of the Company (RM) (2,389,830) (2,154,692)

Weighted average number of ordinary shares:-

Issued ordinary shares at 1 January 144,807,900 131,643,600

Effect of new ordinary shares issued pursuant to the Private Placement 3,808,646 8,728,111

Weighted average number of ordinary shares at 31 December 148,616,546 140,371,711

Basic loss per share (RM) (0.02) (0.02) The diluted loss per share is not presented as there was no potential dilutive ordinary share outstanding at the end of the

reporting period.

26. SUMMARY OF EFFECT ON DECONSOLIDATION OF A SUBSIDIARY

In the previous financial year, Open Dynamics Sdn Bhd (“ODSB”) ceased to be a subsidiary of the Company and therefore was deconsolidated.



26. SUMMARY OF EFFECT ON DECONSOLIDATION OF A SUBSIDIARY cont’d

The effects of the deconsolidation of ODSB on the financial position of the Group at the end of the previous reporting period are as follows:-

THE GROUP

2010

RM

Software development costs 999,847

Current assets 2,007,198

Current liabilities (3,150,291)

Fair value of net liabilities deconsolidated (143,246)

Realisation of the gain on disposal of intangible asset to subsidiary (564,688)

(707,934)

Gain on deconsolidation of a subsidiary 707,934

-

Cash and cash equivalents of the subsidiary deconsolidated (1,851,934)

Net cash outflow on deconsolidation of a subsidiary (1,851,934)

The effects of the deconsolidation of the subsidiary on the financial results of the Group in the previous financial year are as follows:

THE GROUP

2010

RM

Revenue 68,462

Cost of sales (84,200)

Gross loss (15,738)

Administrative expenses (48,067)

Distribution costs (59,025)

Loss for the financial year (122,830)

27. PURCHASE OF EqUIPMENT


2011 2010 2011 2010

RM RM RM RM

Cost of equipment purchased 390,390 231,964 6,567 40,307

Amount financed through hire purchase (330,000) - - -

Cash disbursed for purchase of equipment 60,390 231,964 6,567 40,307




28. CASH AND CASH EqUIVALENTS

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-


2011 2010 2011 2010

RM RM RM RM

Short-term investments 906,299 1,103,421 904,649 1,101,817

Deposits with licensed banks 24,141 24,141 24,141 24,141


Bank overdraft (1,250) - (1,250) -

1,499,084 6,487,151 1,461,335 5,856,508

Bank overdraft bear interest at BLR + 0.6% per annum and are secured by a legal charge over the property of the Group and of the Company as disclosed in Note 6 to the financial statements.

29. DIRECTORS’ REMUNERATION

(a) The aggregate amounts of emoluments received and receivable by the directors of the Group and of the Company during the financial year are as follows:-


2011 2010

RM RM

Executive directors:

- salaries and allowances 570,700 619,200

- defined contribution plans 74,718 77,168

- others 723 1,240

Non-executive directors:

- allowances 15,700 15,500

- fee 90,000 61,000

Total 751,841 774,108



29. DIRECTORS’ REMUNERATION cont’d

(b) Details of directors’ emoluments for the directors of the Group and of the Company received/receivable for the financial year in bands of RM50,000 are as follows:-


2011 2010

RM RM

Executive directors:

- Below RM50,000 2 -

- RM50,001 - RM100,000 1 2

- RM100,001 - RM150,000 1 -

- RM150,001 - RM200,000 - -

- RM200,001 - RM250,000 - 1

- RM250,001 - RM300,000 - -

- RM300,001 - RM350,000 - -

- RM350,001 - RM400,000 1 1

Non-executive directors:

- Below RM50,000 8 5 30. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Identities of Related Parties

The Group has a controlling related party relationship with its subsidiary as disclosed in Note 5 to the financial statements.

(b) In addition to the information detailed elsewhere in the financial statements, the Company carried out the following significant transactions with the related parties during the financial year:-


2011 2010 2011 2010

RM RM RM RM

Sales of intellectual property to subsidiary - - - 1,680,000

Key management personnel:

- salaries and allowances 570,700 619,200 570,700 619,200

- defined contribution plans 74,718 77,168 74,718 77,168

- others 723 1,240 723 1,240




31. OPERATING SEGMENTS Operating segments are prepared in a manner consistent with the internal reporting provided to the Group Executive

Committee as its chief operating decision maker in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The Group is organised into 2 main business segments as follows:-

(i) Provision of integrated web-based and workflow system segment - involved in the research and development and marketing of computer software, provision of system networking support, provision of information technology system and integration services.

(ii) Trading of hardware segment - involved in the trading in Information Technology and Information Communication Technology products.

Business Segments

PROVISION OF INTEGRATEDWEB-BASED

AND WORKFLOW

SYSTEMTRADING OF

HARDWARE THE GROUP

RM RM RM

2011

Revenue

External revenue 6,417,988 5,372,275 11,790,263

Consolidated revenue 11,790,263

Results

Segment results (688,712) 23,025 (665,687)

Interest income 103,527 - 103,527

Depreciation of property, plant and equipment (357,526) - (357,526)

Amortisation of software development costs (396,423) - (396,423)

Interest expense (108,443) - (108,443)

Impairment losses on trade receivables (965,278) - (965,278)

Consolidated loss after taxation (2,412,855) 23,025 (2,389,830)

Assets

Segment assets 9,797,710 2,702,098 12,499,808

Tax refundable 2,743

Consolidated total assets 12,502,551

Liabilities

Segment liabilities 2,752,288 23 2,752,311

Consolidated total liabilities 2,752,311



31. OPERATING SEGMENTS cont’d

Business Segments cont’d

PROVISION OF INTEGRATEDWEB-BASED

AND WORKFLOW

SYSTEMTRADING OF

HARDWARE THE GROUP

RM RM RM

2011

Other Segment Items

Additions to non-current assets other than financial instruments:-

- Property, plant and equipment 390,390 - 390,390

- Software development costs 312,301 - 312,301

702,691 - 702,691

The Group principally operates in Malaysia.

Total revenue from three major customers, with revenue from each customer equal to or more than 10% of Group revenue amounted to RM6,380,825 (2010 - one major customer with revenue of RM5,613,520 from provision of integrated web-based and work-flow system), of which RM2,344,070 is from provision of integrated web-based and RM4,036,755 is from trading of hardware.

There is no segmental information disclosed for the previous financial year as the Group’s revenue and profit after

taxation was principally contributed from the provision of integrated web-based and workflow system.

32. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

(a) Financial Risk Management Policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(i) Market Risk

(a) ForeignCurrencyRisk

The Group does not have material foreign currency transactions, assets and liabilities and hence is not exposed to any significant or material currency risk.

There is no exposure to foreign currency in the current financial year.

(b) InterestRateRisk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed financial institutions to generate income.




32. FINANCIAL INSTRUMENTS cont’d

(a) Financial Risk Management Policies cont’d

(i) Market Risk cont’d

(b) InterestRateRiskcont’d

Interestraterisksensitivityanalysis

The following table details the sensitivity analysis on loss after taxation and equity to a reasonably possible change in the interest rates as at the end of the reporting period, with all other variables held constant:-


2011 2010

Increase/ (Decrease)

Increase/ (Decrease)

RM RM

Effects on loss after taxation

Increase of 100 basis points 10,225 10,719

Decrease of 100 basis points (10,225) (10,719)

Effects on equity

Increase of 100 basis points (10,225) (10,719)

Decrease of 100 basis points 10,225 10,719

(c) EquityPriceRisk

The Group does not have any quoted investment and hence is not exposed to equity price risk.

(ii) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including quoted investments, cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is estimated by management based on prior experience and the current economic environment.

Creditriskconcentrationprofile

The Group’s major concentration of credit risk relates to the amounts owing by three (3) customers which constituted approximately 76% of its trade receivables as at the end of the reporting period.

Exposuretocreditrisk

As the Group does not hold any collateral, the maximum exposure to credit risks is represented by the carrying amount of the financial assets as at the end of the reporting period.

The Company does not have exposure to international credit risk as most of its trade receivables are concentrated in Malaysia.





(ii) Credit Risk cont’d

Ageinganalysis

The ageing analysis of the Group and Company’s trade receivables at the end of the reporting period is as follows:-

GROSS AMOUNT

INDIVIDUAL IMPAIRMENT

COLLECTIVE IMPAIRMENT

CARRYING VALUE


2011

Not past due 5,122,917 - (17,550) 5,105,367

Past due:

- less than 4 months 1,145,314 (196,200) (750) 948,364

- 4 to 10 months 497,516 (146,100) (10,075) 341,341

- over 10 months 808,188 (553,330) (41,273) 213,585

7,573,935 (895,630) (69,648) 6,608,657

GROSS AMOUNT



CARRYING VALUE


2010

Not past due 1,747,440 - - 1,747,440

Past due:

- less than 4 months 338,941 - - 338,941

- 4 to 10 months 131,878 - (63,689) 68,189

- over 10 months 489,992 - (1,930) 488,062

2,708,251 - (65,619) 2,642,632






(ii) Credit Risk cont’d

Ageinganalysiscont’d

GROSS AMOUNT



CARRYING VALUE

THE COMPANY RM RM RM RM

2011

Not past due 2,344,070 - - 2,344,070

Past due:-

- less than 4 months - - - -

- 4 to 10 months 24,400 - (8,950) 15,450

- over 10 months 203,888 - - 203,888

2,572,358 - (8,950) 2,563,408

GROSS AMOUNT



CARRYING VALUE

THE COMPANY RM RM RM RM

Not past due 524,150 - - 524,150

Past due:-

- less than 4 months 107,650 - - 107,650

- 4 to 10 months 80,908 - (38,204) 42,704

- over 10 months 475,695 - - 475,695

1,188,403 - (38,204) 1,150,199

At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

The collective impairment allowance is determined based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.

Tradereceivablesthatarepastduebutnotimpaired

The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with no recent history of default.

Tradereceivablesthatareneitherpastduenotimpaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 180 days, which are deemed to have higher credit risk, are monitored individually.





(iii) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

<CONTRACTUAL UNDISCOUNTED CASH FLOWS>

WEIGHTED AVERAGE

EFFECTIVE RATE

CARRYING AMOUNT TOTAL

WITHIN 1 YEAR

1 – 5 YEARS

OVER 5 YEARS

THE GROUP % RM RM RM RM RM

2011

Hire purchase payable 4.77% 296,786 342,394 55,536 222,144 64,714

Term loan 7.10% 1,021,202 1,538,276 123,888 495,552 918,836

Bank overdraft 1,250 1,250 1,250 - -

Trade payables - 145,440 145,440 145,440 - -

Other payables and accruals - 1,086,685 1,086,685 1,086,685 - -

2,551,363 3,114,045 1,412,799 717,696 983,550


WEIGHTED AVERAGE

EFFECTIVE RATE


WITHIN 1 YEAR

1 – 5 YEARS

OVER 5 YEARS

THE GROUP % RM RM RM RM RM

2010

Hire purchase payable 4.85 121,680 143,671 61,608 82,063 -

Term loan 6.80 1,071,899 1,621,635 123,888 495,552 1,002,195

Trade payables - 200,868 200,868 200,868 - -

Other payables and accruals - 928,108 928,108 928,108 - -

2,322,555 2,894,282 1,314,472 577,615 1,002,195






(iii) Liquidity Risk cont’d


WEIGHTED AVERAGE

EFFECTIVE RATE


WITHIN 1 YEAR

1 – 5 YEARS

OVER 5 YEARS

THE COMPANY % RM RM RM RM RM

2011

Term loan 7.10 1,021,202 1,538,276 123,888 495,552 918,836

Bank overdraft 1,250 1,250 1,250 - -


1,549,768 2,066,842 652,454 495,552 918,836


WEIGHTED AVERAGE

EFFECTIVE RATE


WITHIN 1 YEAR

1 – 5 YEARS

OVER 5 YEARS

THE COMPANY % RM RM RM RM RM

2010

Hire purchase payable 4.85 121,680 143,671 61,608 82,063 -

Term loan 6.80 1,071,899 1,621,635 123,888 495,552 1,002,195

Trade payables - 21,175 21,175 21,175 - -


Amount owing to a subsidiary - 92,241 92,241 92,241 - -

1,633,641 2,205,368 625,558 577,615 1,002,195

(b) Capital Risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjust the amount of dividend payment, return of capital to shareholders or issue new shares.

The Group manages its capital based on debt-to-equity ratio. The Group’s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.




(b) Capital Risk Management cont’d

The debt-to-equity ratio of the Group as at the end of the reporting year was as follows:-

THE GROUP

2011 2010

RM RM

Hire purchase payable 296,786 121,680

Term loan 1,021,202 1,071,899

Bank overdraft 1,250 -

Trade payables 145,440 200,868

Other payables and accruals 1,086,685 928,108

Provision for sales commission 200,948 77,205

2,752,311 2,399,760

Less: Short-term investments (906,299) (1,103,421)

Less: Deposits with licensed banks (24,141) (24,141)

Less: Cash and bank balances (569,894) (5,359,589)

Net debt 1,251,977 (4,087,391)

Total equity 9,750,240 10,767,740

Net debt-to-equity ratio 0.13 Not applicable

Under the requirement of Bursa Malaysia Guidance Note No. 3/2006, the Company is required to maintain its shareholders’ equity equal to or not lesser than the 25% of the issued and paid-up share capital (excluding treasury shares) of the Company. The Company has complied with this requirement.





(c) Classification Of Financial Instruments


2011 2010 2011 2010

RM RM RM RM

Financial assets

Available-for-sale financial asset

Other investments, at cost 250,000 250,000 250,000 250,000

Loans and receivables financial assets

Trade receivables 6,608,657 2,642,632 2,563,408 1,150,199

Other receivables and deposits 101,689 80,033 27,280 37,565

Amount owing by subsidiaries - - 2,679,048 -

Deposits with licensed banks 24,141 24,141 24,141 24,141


7,304,381 8,106,395 5,827,672 5,942,455

Fair value through profit and loss

Short-term investments 906,299 1,103,421 904,649 1,101,817

Financial liabilities

Other financial liabilities

Hire purchase payable 296,786 121,680 - 121,680

Term loan 1,021,202 1,071,899 1,021,202 1,071,899

Bank overdraft 1,250 - 1,250 -

Trade payables 145,440 200,868 - 21,175

Other payables and accruals 1,086,685 928,108 527,316 326,646

Amount owing to a subsidiary - - - 92,241

2,551,363 2,322,555 1,549,768 1,633,641




(d) Fair Values of Financial Instruments

The carrying amounts of the financial assets reported in the financial statements approximated their fair values except for the following:-

2011 2010

CARRYING AMOUNT

FAIR VALUE

CARRYING AMOUNT

FAIR VALUE

RM RM RM RM

THE GROUP

Other investments - unquoted shares 199,000 * 199,000 *

Hire purchase payables (non-current) 254,760 259,018 69,540 75,141

453,760 259,018 268,540 75,141

THE COMPANY

Other investments - unquoted shares 199,000 * 199,000 *

Hire purchase payables (non-current) - - 69,540 75,141

199,000 - 268,540 75,141

* Thefairvaluecannotbereliablymeasuredusingvaluationtechniquesduetothelackofmarketabilityoftheshares.

The following summarised the methods used to determine the fair values of the financial instruments:-

(i) The financial assets and financial liabilities maturing within the next 12 months approximated their fair values due to the relatively short-term maturity of the financial instruments.

(ii) The fair value of hire purchase payable is determined by discounting the relevant cash flows using current interest rates for similar instruments as at the end of the reporting period.

(iii) The carrying amounts of the term loan approximated their fair values as this instrument bears interest at

variable rates.

The interest rate used to discount estimated cash flows of hire purchase payables of the Group and of the Company is 6.44% (2010 - 5.22%).

(e) Fair Value Hierarchy

As at 31 December 2011, there were no financial instruments carried at fair values.




33. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) Material Litigation

(i) On 8 September 2011, a letter of demand has been issued to Xybase Sdn Bhd (“Xybase”) for a sum of RM366,358 due and owing by Xybase to the Group pursuant to Agreement for the Supply, Delivery, Installation, Testing Integration, Commissioning and Maintenance of tmsEKP Full Suite and the Developed Software dated 29 January 2008 and the Agreement for the Supply, Delivery, Installation, Testing Integration, Commissioning and Maintenance of tmsEKP Full Suite and the Developed Software dated 1 April 2008.

Subsequent to the letter of demand, Xybase has contacted the Group and has settled a portion of the outstanding sum. On 21 March 2012, another letter of demand has been issued to Xybase for a balance of RM166,358 due and owing by Xybase to the Group. The Group will continue to pursue for the collection of balance due.

(ii) On 19 September 2011, a letter of demand has been issued to Rebound Asia (M) Sdn Bhd (“RASB”) for a sum of RM797,530 due and owing by RASB to a subsidiary pursuant to Sub-Contract Agreement dated 11 August 2010 between RASB and a subsidiary for ‘Tender, Membekal, Membangun, Memasang, Mengkonfigurasi, Mengintegrasi, Menguji, Mentauliah dan Menyelenggara Perisian Sistem Pengurusan Sekolah (SPS) dan Sistem Pengurusan KPM (SPK), Kementerian Pelajaran Malaysia.

On 14 February 2012, a notice of termination has been issued to RASB to terminate the Sub-Contract Agreement with immediate effect and demand RASB to settle the outstanding sum.

The Company will continue to pursue with the legal proceedings against RASB. Based on the advice from the Company’s legal advisers, at this juncture, the Directors are of the view that the subsidiary has a good chance of recovering the debts owing by RASB.

(b) Private Placement

On 26 September 2011, the Company increased its issued and paid-up capital from RM14,480,790 to RM15,928,869 by the issuance of 14,480,790 new ordinary shares of RM0.10 each at par by a private placement. The shares were issued for cash consideration. The new shares issued rank pari passu in all respects with the existing shares of the Company.

(c) Changes in the Composition in the Group

The Company had on 30 September 2011 acquired 2 ordinary shares of RM1.00 each, representing 100% of the issued and paid-up capital of Kinetic Forward Sdn Bhd (“KFSB”) for a cash consideration of RM2 (“the Acquisition”). As a result of the Acquisition, KFSB becomes a wholly-owned subsidiary of the Company.

KFSB was incorporated as a private limited company in Malaysia pursuant to the Companies Act, 1965 on 7 July 2011. The authorised share capital of KFSB is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The principal activity of KFSB is trading in Information Technology (IT) and Information Communication Technology (ICT) products and an electronic commerce provider and facilitator.

(d) Corporate Proposals

On 19 October 2011, Hong Leong Investment Bank Berhad (“HLIB”) on behalf of the Board of Directors of The Media Shoppe Berhad (“TMS”) announced that the Company proposed to undertake the following:-

(i) proposed renounceable rights issue of up to 318,577,380 new ordinary shares of RM0.10 each in TMS (“Rights Shares”) on the basis of 2 Rights Shares for every 1 existing ordinary share of RM0.10 each held in TMS (“TMS Shares” or “Shares”) together with up to 238,933,035 free detachable warrants (“Warrants”) on the basis of 3 Warrants for every 4 Rights Shares subscribed on an entitlement date to be determined later (“Proposed Rights Issue with Warrants”);

(ii) proposed establishment of an employees’ share option scheme (“ESOS”) for the eligible employees and directors of the Group (“Proposed ESOS”);

(iii) proposed increase in the authorised share capital of TMS from RM50,000,000 comprising 500,000,000 TMS Shares to RM100,000,000 comprising 1,000,000,000 TMS Shares (“Proposed Increase In Authorised Share Capital”); and

(iv) proposed amendment to the Memorandum of Association of TMS (“Proposed Amendment”)



33. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR cont’d

(d) Corporate Proposals cont’d

(collectively referred to as the “Proposals”).

Bursa Malaysia Securities Berhad had, via its letter dated 3 November 2011 approved the Proposals and Bank Negara Malaysia had, via its letter dated 4 November 2011, approved the application for the issuance of Warrants to the non-resident shareholders of TMS pursuant to the Proposed Rights Issue with Warrants.

The shareholders had, in an Extraordinary General Meeting held on 5 December 2011, approved the Proposals.

34. SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

(a) On 18 January 2012, a wholly-owned subsidiary of the Company, TMS Software Sdn Bhd (“TMSS”), entered into a Teaming Agreement (“Agreement”) with Konsortium Jaya Sdn Bhd (“KJSB”), as both parties wish to work together, with KJSB as the intended main contractor, while TMSS as the intended subcontractor to KJSB for the submission of a proposal to the Government of Malaysia, represented by the Ministry of Education (“Customer”) in relation to the “Perluasan Sistem Pengurusan Sekolah” to all 10,000 schools nationwide (“Project”) for their respective scope of work, with TMSS’s portion. If such Project is awarded by the Customer to KJSB, the both parties agree for:-

(i) KJSB to enter into an agreement with the Customer (“Prime Contract”); and

(ii) TMSS to enter into a subcontract agreement with KJSB (“Subcontract”), for the implementation of the Project, with both parties’ respective responsibilities as described in the Agreement.

(b) On 19 January 2012, the Proposed Rights Issue with Warrants has been completed following the listing of and quotation for 312,631,700 Rights Shares together with 234,473,775 Warrants on the ACE Market of Bursa Malaysia Securities Berhad on an even date.

(c) On 19 January 2012, the Company entered into a Heads of Agreement with Viewnet Computer System Sdn Bhd (“Viewnet”) and Open Adventure Sdn Bhd (“OASB”), respectively, with a view to acquire them. Viewnet is engaged in the business of trading in software, hardware, multimedia, internet and electronic commerce providers and facilitators and OASB is an Information Technology Solutions and related services provider. The Heads of Agreement with Viewnet and OASB is valid for 9 months and 6 months, respectively, and the validity term may be extended with mutual consent from both parties. The Company is willing to acquire Viewnet and OASB after a due diligence is carried out to verify the representations including the accounts furnished by the respective companies.

(d) On 3 February 2012, the Company entered into a Collaboration Agreement with Hopetech Sdn Bhd (“Hopetech”). Under the Collaboration Agreement, Hopetech shall identify project that requires TMS’ input and participation and the Parties shall mutually decide on how to tap each Party’s Intellectual Property in order to carry out the project in the optimum and most effective manner including the funding of any project awarded. In the event the parties decide to proceed, the Parties may opt for a joint venture structure whereby the parties should in good faith, negotiate and agree on setting up a Joint Venture Company and signing a Joint Venture Agreement.

Pursuant to the Collaboration Agreement, the Company had on 8 February 2012 received a Letter of Award from Hopetech to participate in certain portions of a project to design, manufacture, supply, install, testing and commissioning of Automatic Fare Collection (“AFC”) System for Keretapi Tanah Melayu Berhad (“KTMB”)’s Commuter Stations (“the Project”). Pursuant to the discussions between TMS and Hopetech arising from the Letter of Award, it is not feasible for the Company to undertake the Project, principally due to funding is not available within the required time frame of delivery. Hence, TMS has decided not to accept the Letter of Award from Hopetech in relation to the Project.

For the avoidance of doubt, the Collaboration Agreement is still valid.

35. COMPARATIVE FIGURE The comparative figures as for the financial year ended 31 December 2010 were audited by another firm of Chartered

Accountants other than Messrs. Baker Tilly Monteiro Heng.




The breakdown of the accumulated losses of the Group and of the Company as at the end of the reporting period into realised and unrealised losses are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:-


2011 2011

RM RM

Total accumulated losses:

- realised (19,907,534) (16,646,152)

- unrealised - -

(19,907,534) (16,646,152)

Less: Consolidation Adjustments 4,253,264 -

At 31 December (15,654,270) (16,646,152)

SUPPLEMENTARYINFORMATION DISCLOSURE OF REALISED AND UNREALISED LOSSES


PROPERTYOF THE GROUP

AS AT 31 DECEMBER 2011

Location DescriptionDate Of

Acquisition

Approximate Age of

Buildings (Years) Tenure

Built-up Area

(sq. ft.) Existing Use

Net Book Value

(RM’000)

Plaza GlomacKelana Jaya47301 Petaling Jaya

H.S. (M) 10263PT 113 Seksyen 40,Bandar Petaling Jaya,Mukim Damansara

11 October 2006

5 Leasehold period of 99 years

11,572 Office premises

2,410


ANALYSIS OFSHAREHOLDINGS AS AT 30 APRIL 2012

Authorised Share Capital : RM100,000,000 comprising of 1,000,000,000 ordinary shares of RM0.10 eachIssued and Paid-Up Share Capital : RM50,627,589 comprising of 506,275,890 ordinary shares of RM0.10 eachClass of Shares : Ordinary shares of RM0.10 eachVoting Rights : One (1) vote per ordinary shareNumber of shareholders : 4,248

ANALYSIS OF SHAREHOLDINGS

HoldingsNo. of

shareholders% of

shareholdersNo. of

shares held% of

shareholdings

1 – 99 15 0.35 834 0.00

100 – 1,000 326 7.68 113,496 0.02

1,001 – 10,000 605 14.24 4,597,900 0.91

10,001 – 100,000 2,473 58.22 125,752,160 24.84

100,001 – 25,313,793 * 828 19.49 309,811,500 61.19

25,313,794 and above ** 1 0.02 66,000,000 13.04

TOTAL 4,248 100.00 506,275,890 100.00

Note:* lessthan5%ofissuedshares** 5%andaboveofissuedshares

LIST OF SUBSTANTIAL SHAREHOLDERS (BASED ON REGISTER OF SUBSTANTIAL SHAREHOLDERS)

Direct Indirect

Shareholders No. of shares % No. of shares %

Master Knowledge Sdn Bhd 66,000,000 13.04 - -

Christopher Chan Hooi Guan - - 66,000,000 13.04

Lee Chi Yeng - - 66,000,000 13.04

LIST OF DIRECTORS’ SHAREHOLDINGS

Direct Deemed

No. of Shares % No. of Shares %

Tan Ooi Jin - - - -

Christopher Chan Hooi Guan - - 66,000,000 (1) 13.04

Dato’ Chairil Nazri Ahmad - - - -

Lim Boon Hong - - - -

Lai Soon Yip - - - -

Lee Li Chain - - - -

Note:1 DeemedinterestedunderSection6AoftheCompaniesAct,1965byvirtueofhisandhisspouse’sdirectinterestinMasterKnowledge

SdnBhd


ANALYSIS OFSHAREHOLDINGS

AS AT 30 APRIL 2012cont’d

LIST OF THIRTY (30) LARGEST SHAREHOLDERS

NameNo. of

shares heldPercentage

(%)

1 JF Apex Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforMasterKnowledgeSdnBhd(Margin)

66,000,000 13.04

2 Nor Ashikin Binti Khamis 4,830,000 0.95

3 Ong Swee Lian 3,780,000 0.75

4 Wong Kang Ling 3,700,000 0.73

5 Tan Kak Seng 3,600,000 0.71

6 Foo Fook Min 3,500,000 0.69

7 Goh Ching Mun 3,500,000 0.69

8 Ng Yoke Ngah @ Cheah Gaik Ngoh 3,300,000 0.65

9 HLG Nominee (Tempatan) Sdn BhdPledgedSecuritiesAccountforIbrahimBinHamzah

3,100,000 0.61

10 Public Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforNgLaiCheng(E-TSA)

3,100,000 0.61

11 Tan Chong Jun 3,000,000 0.59

12 Wong Ngie Tien 3,000,000 0.59

13 Yew Kok Hee 3,000,000 0.59

14 Oh Teik Chye 2,989,900 0.59

15 Ng Poh Hwa 2,900,000 0.57

16 Tan Kak Seng 2,660,000 0.53

17 Ang Ah Tee 2,600,000 0.51

18 Yeoh Chin Seng 2,200,000 0.43

19 Zamila Aleiya Binti Zahari 2,126,400 0.42

20 Ibrahim Bin Hamzah 2,000,000 0.40

21 Public Invest Nominees (Asing) Sdn BhdExemptAnforPhilipSecuritiesPteLtd(Clients)

1,853,000 0.37

22 Low Chee Eng 1,700,000 0.34

23 Mohd Bilal Bin Abdullah 1,574,000 0.31

24 Saw Song Kee 1,528,700 0.30

25 Cheah Yit Woon 1,517,400 0.30

26 Public Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforSVijianA/LSubramaniam(E-SJA/SAM)

1,510,000 0.30

27 Cimsec Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforNgTeeKok(JlnKapar-CL)

1,500,000 0.30

28 Hong Kah Seng 1,500,000 0.30

29 Khoo Siew Huay @ Koo Siu Hoy 1,500,000 0.30

30 Lum Yin Mui 1,500,000 0.30

TOTAL 140,569,400 27.77


ANALYSIS OFWARRANTHOLDINGS AS AT 30 APRIL 2012

Types of Securities : Warrants 2012/2017Date of Expiry : 16 January 2017Exercise Period : 17 January 2012 to 16 January 2017Exercise Price : RM0.10 per WarrantExercise Rights : Each Warrant shall entitles the registered holder, at any time during the Exercise Period, to subscribe for one (1) new Ordinary Shares at the Exercise Price, subject to adjustments in accordance with the provisions of the Deed Poll

ANALYSIS OF WARRANTHOLDINGS

HoldingsNo. of

warrantholders% of

warrantholdersNo. of

warrant held% of

warrantholdings

1 – 99 8 0.53 425 0.00

100 – 1,000 3 0.20 1,500 0.00

1,001 – 10,000 144 9.56 1,192,500 0.60

10,001 – 100,000 973 64.61 53,927,350 26.95

100,001 – 10,005,912 * 378 25.10 144,996,500 72.45

10,005,913 and above ** 0 0.00 0 0.00

TOTAL 1,506 100.00 200,118,275 100.00

Note:* lessthan5%ofoutstandingwarrants** 5%andaboveofoutstandingwarrants

LIST OF DIRECTORS’ WARRANTHOLDINGS

Direct Deemed

No. of Warrants %

No. of Warrants %

Tan Ooi Jin - - - -

Christopher Chan Hooi Guan - - - -

Dato’ Chairil Nazri Ahmad - - - -

Lim Boon Hong - - - -

Lai Soon Yip - - - -

Lee Li Chain - - - -


LIST OF THIRTY (30) LARGEST WARRANTHOLDERS

NameNo. of

warrants heldPercentage

(%)

1 Soon Chiew Khoon 3,930,000 1.96

2 Abdul Haniff Bin Sulaiman 3,836,800 1.92

3 Abdul Rahman Bin Khalid 3,500,000 1.75

4 Wong Ah Yong 2,900,000 1.45

5 Cimsec Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforMuthusamyA/LRamasamy(BTinggi-CL)

2,500,000 1.25

6 Cheng Siew Fong 2,438,600 1.22

7 M & A Nominee (Tempatan) Sdn BhdPledgedSecuritiesAccountforCherngChinGuan(M&A)

2,400,000 1.20

8 Foo Fook Min 2,000,000 1.00

9 HLG Nominee (Tempatan) Sdn BhdPledgedSecuritiesAccountforNgPohHwa

1,800,000 0.90

10 Lim Chiong Seng 1,500,000 0.75

11 Wan Mansor Bin Wan Ahmad 1,500,000 0.75

12 Ahmad Sabri Bin Abdul Aziz 1,257,000 0.63

13 Maybank Securities Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforMohdBilalBinAbdullah(Margin)

1,206,900 0.60

14 Wong Kok Keong 1,100,000 0.55

15 Gan Chu Gee 1,059,300 0.53

16 Ong Chin Hong 1,030,000 0.51

17 Alliancegroup Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforWongKiemYoong(8061855)

1,000,000 0.50

18 Chong Lai Fun 1,000,000 0.50

19 HLG Nominee (Tempatan) Sdn BhdPledgedSecuritiesAccountforSiewBoonYeong

1,000,000 0.50

20 Lim Kwai Thin 1,000,000 0.50

21 Lim Tian @ Tan Tee Soon 1,000,000 0.50

22 Maybank Securities Nominees (Tempatan) Sdn BhdPledgedSecuritiesAccountforAmerzuanBinJaseh(REM111)

1,000,000 0.50

23 Mohd Jamel Bin Abdul Munin 1,000,000 0.50

24 Tan Teik Long 1,000,000 0.50

25 Wong King Ming 1,000,000 0.50

26 Yeo Peng Huat 1,000,000 0.50

27 Yow Hsien Loong 1,000,000 0.50

28 Lim Chee Cheng 900,000 0.45

29 Ong Seng Kee 900,000 0.45

30 Sapari Bin Ali 850,000 0.42

TOTAL 47,608,600 23.79

ANALYSIS OFWARRANTHOLDINGS

AS AT 30 APRIL 2012cont’d


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THE MEDIA SHOPPE BERHAD (383028-D)(Incorporated in Malaysia)

PROXY FORM

* I/We NRIC/Co. No (full name in block letters)

of (full address)

Tel No. being a Member(s) of THE MEDIA SHOPPE BERHAD (383028-D), hereby appoint

NRIC/Co. No. (full name in block letters)

of (full address)

or failing him/her NRIC/Co. No. (full name in block letters)

of (full address)

as *my/our proxy to vote for *me/us on *my/our behalf at the Sixteenth Annual General Meeting of the Company to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 22 June 2012 at 3.00 p.m. or at any adjournment thereof and to vote as indicated below:

Ordinary Resolutions For Against

1 To re-elect Mr Christopher Chan Hooi Guan as Director

2 To re-elect Mr Lim Boon Hong as Director

3 To re-elect Mr Lai Soon Yip as Director

4 To re-elect Mr Tan Ooi Jin as Director

5 To re-elect Ms Lee Li Chain as Director

6 To approve the Directors’ fees

7 To appoint the Auditors of the Company and to authorise the Directors to fix their remuneration

8 To authorise Directors to issue shares in the Company pursuant to Section 132D of the Companies Act, 1965

Special Resolutions

1 To propose amendments to the Articles of Association of the Company

Mark either box if you wish to direct the proxy how to vote. If no mark is made the proxy may vote on the resolution or abstain from voting as the proxy thinks fit. If you appoint two proxies and wish them to vote differently this should be specified.

# Ifyouwishtoappointotherperson(s)tobeyourproxy/proxies,kindlydeletethewords“TheChairmanoftheMeetingorfailinghim”andinsertthename(s)oftheperson(s)desired.

* Deleteifnotapplicable.

Signed this day of 2012 Signature/Common Seal of Shareholder

Notes:

(1) Amembermayappointuptotwo(2)proxiestoattendandvoteinstead.AproxymaybutneednotbeamemberoftheCompany.Iftheproxyisnotamember,theproxyneednotbeanadvocate,anapprovedcompanyauditororapersonapprovedbytheCompaniesCommissionofMalaysia.

(2) WhereaMemberappointsmorethanone(1)proxy,heshallspecifytheproportionofhisholdingstoberepresentedbyeachproxy,failingwhichtheappointmentshallbeinvalid.

(3) WhereamemberisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act,1991,suchmembermayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

(4) WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.

(5) Iftheappointorisacorporation,thisformmustbeexecutedunderitscommonsealorunderthehandofanattorneydulyauthorised.(6) Tobevalid,thisformwhichisdulycompletedmustbedepositedattheregisteredofficeoftheCompanyat10thFloor,MenaraHapSeng,No.1&3Jalan

P.Ramlee,50250KualaLumpurnotlessthanfortyeights(48)hoursbeforethetimeforholdingthemeetingPROVIDEDTHATintheeventthemember(s)dulyexecutestheformofproxybutdoesnotnameanyproxy,suchmember(s)shallbedeemedtohaveappointedtheChairmanofthemeetingashis/theirproxy,PROVIDEDALWAYSthattherestoftheproxyform,otherthantheparticularsoftheproxyhavebeendulycompletedbythemember(s).

(7) Forthepurposeofdeterminingwhoshallbeentitledtoattendthismeeting,theCompanyshallberequestingtheBursaMalaysiaDepositorySdnBhdtomakeavailabletotheCompanypursuanttoArticle58oftheArticlesofAssociationoftheCompanyandRule7.16(2)oftheACEMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,aRecordofDepositorsasat15June2012andonlyaDepositorwhosenameappearsonsuchRecordofDepositorsshallbeentitledtoattend,speakandvoteatthismeeting.

Number Of Shares Held CDS ACCOUNT NO.

- -


Affix Stamp

The Company Secretary

THE MEDIA SHOPPE BERHAD (383028-D)

10th Floor, Menara Hap SengNo. 1&3, Jalan P. Ramlee50250 Kuala Lumpur

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