Contents. Page. Chairman s Statement 02. Corporate Information 04. Our Chairman and Managing Director 05. Profile of Directors 06

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2 ASIAEP BHD (Company No W) Contents Page Chairman s Statement 02 Corporate Information 04 Our Chairman and Managing Director 05 Profile of Directors 06 Statement of Corporate Governance 08 Additional Compliance Information 12 Audit Committee Report 14 Statement on Internal Control 16 Financial Statements 17 Analysis of Shareholdings 74 List of Properties 78 Share Buy Back Statement 79 Notice of Annual General Meeting 83 Statement Accompanying Notice of AGM 86 Proxy Form 87 asiaep Annual Report

3 ASIAEP BHD (Company No W) Chairman s Statement A New Experience in searching Business Information Tan Sri Dato (DR) Abdul Aziz Bin Abdul Rahman Chairman Dear Shareholders, On behalf of the Board of Directors, I have the pleasure of presenting the Annual Report and Financial Statements of asiaep Berhad and its Group of Companies for the financial year ended 29 February Tan Sri Dato (DR) Abdul Aziz Bin Abdul Rahman Chairman asiaep Annual Report

4 ASIAEP BHD (Company No W) Chairman s Statement (continued) The past year has been a year of growth for us with continuous expansion of the group s business. For financial year ended 29 February 2008, the Group posted a net profit of RM7.059 million representing an increase of 38.44% from last financial year. Research & Development During the financial year ended 29 February 2008, the Group invested RM6.493 million in Research and Development. Looking forward, the Proposed Acquisition of General Perfect Sdn Bhd will contribute positively to the earnings of asiaep in future after the acquisition is completed. The Group will continue to develop its online business model and improve the quality of its product offerings through product developments and updated versions of existing products with enhanced features to meet various business requirements of its customers. Industry Outlook The goverment has provided in the 2008 Budget for an increase in the broadband penetration rate from 12% currently to 50% of households by 2010, in line with efforts to establish a knowledge-based economy and narrow the digital divide. For this, an effective public-private partnership will be required to accelerate the rollout of broadband. As part of this effort, developers will be encouraged to provide telecommunication infrastructure in new housing areas. These developments will provide greater opportunity for the Group to expand its business and enhance its profitability. Current Year Prospects With all these positive developments, the Board is confident that next year will be another successful year. Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman Chairman asiaep Annual Report

5 ASIAEP BHD (Company No W) Corporate Information Corporate Information Registered Office No. 18 & 20 Jalan TK 2/1C Taman Kinrara Seksyen Puchong Selangor Malaysia Tel : (hunting line) Fax: Company Secretaries Mary Margret A/P V. Pelly Sin May Peng Share Registrar Sectrars Services Sdn Bhd 28-1 Jalan Tun Sambathan 3 Brickfields Kuala Lumpur Tel : Fax : Auditors Baker Tilly Monteiro Heng Chartered Accountants 22-1, Monteiro & Heng Chambers, Jalan Tun Sambanthan 3, Kuala Lumpur Malaysia Principal Bankers Malayan Banking Berhad Hong Leong Bank Berhad CIMB Bank Berhad (formerly know as Bumiputra - Commerce Bank Berhad) Affin Bank Berhad Adviser RHB Investment Bank Berhad Level 10, Tower One RHB Centre Jalan Tun Razak Kuala Lumpur Malaysia Stock Exchange Listing MESDAQ Market Bursa Malaysia Securities Berhad Website asiaep Annual Report

6 ASIAEP BHD (Company No W) Our Chairman and Managing Director Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman Chairman Dr Tan Boon Nunt Managing Director asiaep Annual Report

7 ASIAEP BHD (Company No W) Profile of Directors Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman Chairman/ Independent Non-Executive Director Malaysian, Aged 75 Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman was appointed to the Board of the Company as the Non- Executive Chairman and an Independent Non-Executive Director on 8 July A lawyer by profession with multiple doctorates obtained from University Utara Malaysia, Tan Sri who has more than 38 years of experience in managing public and private corporations both locally and abroad is a well respected individual among the business and professional fraternity. Some of the organisations which Tan Sri has been involved in previously include Malaysian Airlines System Berhad (Managing Director & CEO), Sessions Court (Magistrate & President), ABACUS (Chairman), International Council of the Chartered Institute of Transport (President). He also sits on the Board of Maju Perak Holdings Bhd & BTM Resources Bhd. Tan Sri Dato (Dr) Abdul Aziz does not have any family relationship with any other Directors and / or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offences in the last ten (10) years, other than traffic offences (if any). Dr Tan Boon Nunt Managing Director/ Chief Executive Officer Malaysian, Aged 50 Dr Tan Boon Nunt was appointed to the Board of the Company in He was subsequently appointed as the Managing Director and Chief Executive Officer in He is the co-founder of the Company as well as Topclass Access Sdn Bhd (TASB). Dr Tan achieved his doctorate in Management from Greenwich University of Australia in He started his career as a media planner in the publication industry for more than eleven (11) years. Before founding the Company, he was the Managing Director of Better Living Sdn Bhd, a trading house, for five years prior to Dr Tan was awarded the 2002 Ernst & Young Entrepreneur of the Year Award for Information & Communication Technology. Dr Tan does not have any family relationship with any Director and / or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offences in the last ten (10) years, other than traffic offences (if any). Madam Lee Suet Hong Executive Director/ Chief Operating Officer Malaysian, Aged 52 Madam Lee Suet Hong was appointed to the Board of the Company in She was subsequently appointed as the Executive Director and Chief Operating Officer in She is also the co-founder of the Company as well as TASB. She graduated with a Diploma in Business Studies and Management from The London College of Business Studies in She obtained her MBA, majoring in E-Marketing from the Greenwich University of Australia in Madam Lee started her career as a Personal Assistant to the Managing Director of Atkinson Pte Ltd in London from 1978 to She held senior management and administrative positions in several public listed companies before joining the company. Madam Lee does not have any family relationship with any Director and / or substantial shareholders of the Company or any conflict of interest with the Company. She has not been convicted of any offences in the last ten (10) years, other than traffic offences (if any). asiaep Annual Report

8 ASIAEP BHD (Company No W) Profile Directors (continued) Mr. Khor Chai Tian Independent Non-Executive Director Malaysian, Aged 46 Mr. Khor Chai Tian was appointed to the Board of the Company as an Independent Non-Executive Director on 13 December He obtained a Bachelor of Economics Degree(Honours) from University of Malaya and M.B.A from Asia International Open University, Macau. He was Executive Director of Hunza Consolidation Berhad from 1995 to Currently, he is an Executive Director of Master Advisory Services Sdn Bhd and Oceanpac Sdn Bhd. Mr. Khor does not have any family relationship with any Director and / or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offences in the last ten (10) years, other than traffic offences (if any). Mr. Lim Ghim Chai Independent Non-Executive Director Malaysian, Aged 33 Mr. Lim Ghim Chai was appointed to the Board of the Company as an Independent Non-Executive Director on 11 April He graduated with a Bachelor of Commerce (Accounting) Degree from La Trobe University at Melbourne, Australia and is a member of Malaysian Institute of Accountants and Malaysian Insurance Institute. He obtained membership of Certified Practising Accountant of CPA Australia in year Mr. Lim worked as a Financial Accountant in Acer Technologies (M) Sdn. Bhd. from year 2000 to 2001 and was a Financial Analyst in Agilent Technologies (M) Sdn Bhd in year Thereafter, he worked as an Accountant in Lorry Commercial Logistic Sdn Bhd in year He was a Partner and also a Director in a professional firm providing services of taxation, business planning consultancy, company accounting and company secretarial from years 2003 until Currently, Mr. Lim is a Partner, Managing Director and Executive Director and also Shareholder of a few companies in the business of Interior Design, Property Development and Recycling. Mr. Lim does not have any family relationship with any Director and / or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offences in the last ten (10) years, other than traffic offences (if any). asiaep Annual Report

9 ASIAEP BHD (Company No W) Statement of Corporate Governance The Board of Directors acknowledges the importance of adopting high standards of corporate governance within the Company. Good corporate governance is a fundamental part of the Company s responsibility to protect, realize and enhance long-term shareholders value and the financial performance of the Company, whilst taking into account the interests of other stakeholders. The Statement below sets out how the Company has applied the Key Principles of the Malaysian Code on Corporate Governance for the financial year ended 29 February a) BOARD OF DIRECTORS The Board of Directors consists of five (5) dedicated members, comprising of one Chairman / Independent Non- Executive Director, one CEO/Managing Director, one Executive Director, two Independent Non-Executive Directors. The Company complied with the Listing Requirements of Bursa Malaysia Securities Bhd (Bursa Malaysia) for the Mesdaq Market (Listing Requirements) which states that a listed company must have at least two directors or one third of the Board of Directors, whichever is the higher, whom are independent. There is a clear division of responsibilities between the Chairman / Independent Non-Executive Director and the Managing Director to ensure clear and definitive segregation of duties, balance of power and authority. The Independent Non-Executive Directors are independent of management and free from any business or other relationship that could materially interfere with the exercise of their independent judgement. i) Board Meetings Since the Company s previous financial year end, the Board has met ten (10) times for the financial year ended 29 February The Board meetings have always gathered full attendance of its members. The records of attendance of each Director at Board Meetings held during the financial year ended 29 February 2008 are disclosed below: Director (s) Number of Meeting(s) attended Percentage Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman 10 out of % Dr Tan Boon Nunt 10 out of % Madam Lee Suet Hong 10 out of % Mr. Low To Fong (resigned on 11/4/2008) 9 out of 9 100% Mr. Khor Chai Tian (appointed on 13/12/2007) 1 out of 1 100% Mr. Lim Ghim Chai (appointed on 11/4/2008) Nil Nil ii) Supply Of Information The Directors have full and timely access to information concerning the Company. Agenda of meetings and discussion papers are circulated prior to Board meetings to allow the Directors time to study and evaluate the matters to be discussed. The Directors have unrestricted access to the advice and services of the Company Secretaries and senior management in the Company and may obtain independent professional advice at the Company s expense in order to discharge their duties effectively. iii) The Board and Board Committees To assist the Board in the discharge of its duties effectively, the Board has delegated specific functions to certain Committees, namely the Nomination Committee, Remuneration Committee and Audit Committee, each operating within its clearly defined terms of reference. The Chairman of the various Committees will report to the Board on the outcome of the Committee meetings. asiaep Annual Report

10 ASIAEP BHD (Company No W) iv) Nomination Committee The Committee was formed on 16 February, 2004 its members are: - Chairman: Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman (Chairman/Independent Non-Executive Director) Members : Mr Khor Chai Tian (Independent Non-Executive Director) (appointed on 11/4/2008), Mr. Low To Fong (Independent Non-Executive Director) (resigned on 11/4/2008) and Madam Lee Suet Hong (Executive Director) (resigned on 13/12/2007). The primary function of the Nomination Committee is to identify and recommend to the Board, technically. competent persons of integrity with a strong sense of professionalism to be appointed to the Board. The Nomination Committee will assess the suitability of an individual to be appointed to the Board by taking into account the individual s other commitments, resources and time available for input to the Board before recommendation is made for the Board s approval. The Committee shall review annually the required mix of skills and experience and other qualities and competencies of its Directors and shall review the composition, structure and size of the Board. v) Remuneration Committee The Remuneration Committee was established on 16 February, 2004 and its members are : Chairman : Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman (Independent Non- Executive Director) Members : Madam Lee Suet Hong (Executive Director), Mr. Khor Chai Tian (Independent Non-Executive Director) (appointed on 11/4/2008) and Mr. Low To Fong (Independent Non-Executive Director)(resigned on 11/4/2008). The Committee is responsible for recommending to the Board from time to time, the remuneration framework and package of the Executive Directors of the Company in all forms to commensurate with the respective contributions of the Executive Directors. Executive Directors are to abstain from deliberations and voting on the decision in respect of their own remuneration packages. The Board as a whole decides on the remuneration of Non-Executive Directors, including the Non- Executive Chairman. The individuals concerned should abstain from discussion on their own remuneration packages. The shareholders at the Annual General Meeting (AGM) approve the Directors fees. b) DIRECTORS REMUNERATION The Directors are satisfied that the current levels of remuneration are in line with the responsibilities as undertaken by directors. A summary of the remuneration of the Directors for the financial year under review, distinguishing between Executive and Non-Executive Directors in aggregate with categorization into appropriate components is set out below: Directors Remuneration Executive Non-executive Directors Total Directors Fee (RM 000) Salaries and Other Emoluments (RM 000) The number of Directors whose remuneration falls into the following brands are:- Remuneration Range Executive Director Non Executive Director Below RM50,000-3 RM50,0001-RM100, RM100,001-RM150, RM150,001-RM200, RM200,001-RM250, RM250,001-RM300, The Board is of the view that the above disclosure, without divulging respective Directors individual remuneration, is sufficient. asiaep Annual Report

11 ASIAEP BHD (Company No W) vi) Training for Directors All the Directors have attended the Mandatory Accreditation Programme (MAP) conducted by the Research Institute of Investment Analysts Malaysia, an affiliate of Bursa Malaysia. The Board has assessed the training needs of the Directors and encourages the Directors to attend any relevant programme to further enhance their knowledge to enable them to discharge their responsibility more effectively. vii) Appointment and Re-election In accordance with the Company s Articles of Association, all new Directors are subject to election at the AGM following their first appointment. In every year, one-third of the Directors or if their number is not three or a multiple of three, then the number nearest to one-third, shall retire by rotation from office and seek re-election at each AGM and that each Director shall retire from office at least once in every three years and shall be eligible for re-election. c) SHAREHOLDERS i) Relations with Shareholders and Investors The Company acknowledges the significance of being accountable to its shareholders and investors and as such, has maintained active communication and feedback policy from institutional investors, shareholders and the public generally. All shareholders, including private investors, have an opportunity to participate in discussion with the Board on matters relating to the Company s operation and performance at the Company s AGM. Alternatively, they may obtain the Company s latest announcements such as quarterly financial results from the Bursa Malaysia s website ( ii) Annual General Meeting (AGM) The AGM is the principal forum for dialogue with public shareholders. The shareholders are encouraged to participate in the open question and answer sessions in the AGM in which they may raise questions on the resolutions being proposed at the meeting and the financial performance and business operation in general. d) ACCOUNTABILITY AND AUDIT i) Financial Reporting The Directors have taken reasonable steps to provide a balanced and understandable assessment of the Company s financial performance and prospects. In this respect, the Audit Committee assists the Board with the overseeing of the Company s financial reporting process and the quality of the financial reporting. ii) Statement of Directors in Relation to the Financial Statements The Directors are responsible for the preparation of the Annual Audited Financial Statements which give a true and fair view of the state of affairs of the Company and will ensure that they are presented in accordance with the provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia. In the preparation of the financial statements for the year ended 29 February 2008, the Directors are satisfied that the Company had used appropriate accounting policies that are consistently applied and supported by reasonable and prudent judgement and estimates. asiaep Annual Report

12 ASIAEP BHD (Company No W) iii) Internal Control The Board recognizes the importance of internal control systems whereby shareholders investment and the Company s assets can be safeguarded. As at to date, the Board is comfortable with the current internal controls which are in place. The Board will improve the internal controls of the Company should the Board become aware of any weaknesses. iv) External Auditors The Board has established a transparent relationship with the external auditors through the Audit Committee, which has been accorded with the power to communicate directly with the external auditors towards ensuring compliance with the accounting standards and other related regulatory requirements. v) Statement Of Compliance with the Best Practices of the Case The Company is committed to achieve high standards of corporate governance throughout the Group and the highest level of integrity and ethical standards in all of its business dealings. The Board will continue to strive for full compliance with the Malaysian Code of Corporate Governance in the coming financial year. asiaep Annual Report

13 ASIAEP BHD (Company No W) Additional Compliance Information 1. CONFLICT OF INTEREST None of the Directors have any family relationship with other Directors or major shareholders of the Company. 2. CONVICTIONS FOR OFFENCES None of the Directors have been convicted for offences within the past ten (10) years other than traffic offences, if any. 3. UTILISATION OF PROCEEDS As at 29 Feb 2008, the Company has fully utilised the proceeds raised from its Initial Public Offer of January SHARE BUY BACKS The Company purchased 1,339,900 of its ordinary shares from the open market at an average RM0.240 per share. The total consideration paid for the repurchase including transaction costs was RM324, and this was financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES During the financial year, the Company increased its ordinary shares from RM21,187, to RM24,531, by the creation of 14,302,314 ordinary shares of RM0.10 each pursuant to the ESOS and conversion of 19,142,000 warrant. 6. AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY (GDR) PROGRAMME During the financial year under review, the Company did not sponsor any ADR or GDR programmes. 7. IMPOSITION OF SANCTIONS / PENALTIES There were no sanctions and/or penalties imposed on the Company, directors or management by the relevant regulatory bodies during the financial year under review. 8. NON-AUDIT FEES No non-audit fees were paid to the External Auditors, Messrs Baker Tilly Monteiro Heng. 9. PROFIT ESTIMATE, FORECAST OR PROJECTION The Company did not make any release on the profit estimate, forecast or projection for the financial year. asiaep Annual Report

14 ASIAEP BHD (Company No W) 10. MATERIAL CONTRACTS There were no material contracts entered into by the Company/or its subsidiaries involving Director s or major shareholders interest, during the financial year under review. 11. PROFIT GUARANTEE During the year, there was no profit guarantee given by the Company. 12. CONTRACTS RELATING TO LOAN During the financial year under review, there were no contracts relating to loan by the Company involving Directors and major shareholders. 13. REVALUATION OF LANDED PROPERTIES The Company does not have a revaluation policy on landed properties. 14. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES OR PRACTICES The Group was actively involved in corporate social responsibilty activities or practices during the financial year ended 29 February During the financial year, the management encouraged the staff to recycle paper and reduce the storage of paper and documents. The Group interacts responsibly with our shareholders, suppliers, customers, government departments, regulators and industry associations in a number of ways, such as supporting the market with good products, engaging in ethical procurement practices, maintaining quality of its service and business offerings and compliance with the relevant regulations and obligations. We are also committed to career development of our management and support staff, by sponsoring key personnel for training and seminars. 15. RECURRENT RELATED PARTY TRANSACTIONS STATEMENT During the financial year, the Company did not enter into any recurrent related party transactions of revenue or trading nature. asiaep Annual Report

15 ASIAEP BHD (Company No W) Audit Committee Report Audit Committee Report COMPOSITION Members of the Committee shall be determined by the Board of Directors and shall be composed of no fewer than 3 members, wholly non-executive directors with majority of whom are independent. The Chairman of the Committee shall be an independent director. The members of the Committee shall also possess the requisite qualification and experience that meet the prescribed requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market from time to time in force. No Alternate Director or Chief Executive Officer shall be appointed as a member of the audit Committee. The Audit committee comprise the following:- Members Mr. Low To Fong (resigned as Chairman & Member on 11/4/2008) Mr. Khor Chai Tian (appointed as Member on 13/12/2007 & Chairman on 29/4/2008) Tan Sri Dato (DR) Abdul Aziz Bin Abdul Rahman Madam Lee Suet Hong (resigned on 13/12/2007) Mr. Lim Ghim Chai (appointed on 11/4/2008) Independent and Non-Executive Director Independent and Non-Executive Director Independent Non-Executive Director/Chairman Executive Director Independent and Non-Executive Director TERMS OF REFERENCE OF AUDIT COMMITTEE Chairman The Chairman of the Committee must be an independent Director. In the absence of the Chairman, the members shall elect any one of the members present at the meeting to be Chairman of the meeting. MEETINGS The committee shall meet at least 4 times a year with 2 members in attendance to form a quorum. SECRETARY The Company Secretary shall be the Secretary of the Committee. QUORUM In order to form a quorum in respect of a meeting of an audit committee, the majority of members present must be independent directors. MEETINGS The Executive Directors, Accountant, Representative of the internal auditors may be present in any meeting upon the invitation of the Committee. AUTHORITY The Committee is authorised by the Board to investigate any matter within its terms of reference. The Committee shall have the resources and shall be allowed to obtain independent professional or other advice as deemed necessary to assist the Committee in fulfilling its responsibilities at the cost of the Company. The Committee shall have full and unrestricted access to the Chief Executive Officer and any information pertaining to the Company. The Committee shall also have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity. Whenever necessary, the Committee may also convene meetings with the external auditors, the internal auditors or both, without the attendance of the other directors and employees of the Company asiaep Annual Report

16 ASIAEP BHD (Company No W) Audit Committee Report (continued) DUTIES The duties of the Audit Committee are :- to report to the Board of Directors after review the following :- the audit plan with the external auditors; the evaluation of the internal control system with the external auditors; the external auditors audit report and any management letter from the external auditors to the Company and the management s response to such letter; the assistance given by the employees of the Company to the external auditor; the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work; the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function, the quarterly results and year end consolidated financial statements, prior to the approval by the board of directors, focusing particularly on:- (i) changes in or implementation of major accounting policy changes; (ii) significant and unusual events; and (iii) compliance with accounting standards and other legal requirements; any related party transaction and potential conflict of interest situation that may arise within the listed company or group including any transaction, procedure or course of conduct that raises questions of management integrity; to recommend to the board the nomination, appointment or reappointment of the external auditors and any question of their resignation and termination; and to perform any other duties as may be agreed by the Committee and the Board of Directors MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS There were no material contracts entered into by the Company or its subsidiaries, which involved the interests of the Directors and substantial shareholders during the financial year. VARIATION IN RESULTS There were no significant variations between the audited results for the financial year and the unaudited results previously announced. RECURRENT RELATED PARTY TRANSACTION Details of Recurrent Related Party Transactions of revenue or trading nature are disclosed in the Notes to the Financial Statements. SUMMARY OF ACTIVITIES OF THE COMMITTEE DURING THE FINANCIAL YEAR ENDED 29 FEBRUARY 2008 During the financial year under review, the Committee convened five (5) meetings. Details of attendance are as follows:- Committee Members No. of meetings attended Mr. Low To Fong 5/5 Tan Sri Dato (DR) Abdul Aziz B. Abdul Rahman 5/5 Madam Lee Suet Hong 4/4 Mr. Khor Chai Tian 1/1 Mr. Lim Ghim Chai (appointed on 11/4/2008) Nil STATEMENT VERIFYING ALLOCATION OF OPTIONS The Committee has reviewed and verified that the allocation of share options pursuant to the Employees Share Option Scheme (ESOS) for the financial year ended 29 February 2008 was made in accordance with the criteria as set out in the By-Laws of the Company s ESOS. There were no options granted to any of the non-executive directors of the company. asiaep Annual Report

17 ASIAEP BHD (Company No W) Statement on Internal Control INTRODUCTION The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal controls to safeguard shareholders investments and the Group s assets. The Bursa Malaysia Securities Berhad s ( Bursa Securities ) Revamped Listing Requirements require directors of public listed companies to include a statement in their annual reports on the state of their internal controls. The Bursa Securities Statement on Internal Control: Guidance for Directors of Public Listed Companies ( Guidance ) provides guidance for compliance with these requirements. The Board of Directors is pleased to present the Statement on Internal Control of the Group which outlines the key elements of internal control for the year ended 29 February This statment has been prepared in accordance with the Guidance and the Listing Requirements of Bursa Securities. RESPONSIBILITY OF THE BOARD The Board is ultimately responsible for the Group s system of internal control which includes financial, compliance and operational controls of the Group. The Board also recognises its responsibility for reviewing the adequacy and integrity of the system of internal control to safeguard shareholders investments and the Group s assets. RISK MANAGEMENT FRAMEWORK The Executive Directors with assistance of the management are continuously identifying, evaluating and managing significant business risks that affect the day-to-day operations of the Group. The Audit Committee, on behalf of the Board, considers the effectiveness of the operation of the internal control procedures in the Group during the financial year. The Audit Committee reviews internal control issues identified by management and evaluates the adequacy and effectiveness of the Group s risk management and internal control system. In accordance with the Malaysia Code on Corporate Governance, the Group has appointed an external professional firm as internal auditor in March The Internal Audit function reports directly to the Audit Committee, carries out regular review of business process to assess the effectiveness of internal controls and highlights any significant risk that may adversely affect the Group. Whenever necessary, the Audit Committee reviews and discusses with key management on the issues brought up by the Internal Audit function. KEY ELEMENTS The key elements of the Group s internal control system include the following: - There is a clearly defined delegation of responsibility to the Management and operating units to ensure proper identification of accountability and segregation of duties. - Policy guidelines, procedures and authority limits are established for Executive Directors and management within the Group in respect of the day-to-day operations, acquisitions and disposal of assets. - There are standard operating policies and procedures which are set out and communicated to all levels of the organisation. - Regular Board and Management Meetings are held where information is provided to the Board and Management covering financial performance and operation. CONCLUSION The Board is of the opinion that based on the current level of activities, the Group s system of internal control is adequate, and the Management will continue to take measures to strengthen the control environment. This statment was made in accordance with a resolution of the Board of Directors. asiaep Annual Report

18 ASIAEP BHD (Company No W) Financial Statements ASIAEP BHD. (Incorporated in Malaysia) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 29TH FEBRUARY 2008 Contents Page Directors Report 1-7 Financial statements Balance Sheet 8-9 Income Statement 10 Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Statement by Directors 52 Statutory Declaration 53 Report of the Auditors asiaep Annual Report

19 ASIAEP BHD. (Incorporated in Malaysia) DIRECTORS' REPORT The directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 29th February PRINCIPAL ACTIVITIES The Company is principally engaged in providing e-commerce solutions and developing an e- market place for both local and international enterprises. The principal activities of its subsidiaries are disclosed in Note 5 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year. RESULTS Group RM'000 Company RM'000 Net profit for the financial year 7,059 7,626 DIVIDEND No dividend was paid or declared by the Company since the end of the previous financial year. The directors do not recommend the payment of any dividend in respect of the financial year ended 29th February RESERVES AND PROVISIONS All material transfers to and from reserves and provisions during the financial year have been disclosed in the financial statements. BAD AND DOUBTFUL DEBTS Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts. 1

20 At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent. CURRENT ASSETS Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company had been written down to an amount that they might be expected to be realised. At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES At the date of this report, there does not exist:- (i) (ii) 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 any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year. No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company that would render any amount stated in the financial statements misleading. 2

21 ITEMS OF AN UNUSUAL NATURE The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. ISSUE OF SHARES AND DEBENTURES During the financial year, the issued and paid-up share capital of the Company was increased from 217,073,971 ordinary shares of RM0.10 each to 245,318,285 ordinary shares of RM0.10 each by way of :- (a) (b) the issuance of 9,102,314 new ordinary shares of RM0.10 each at RM0.135 per share for cash by virtue of the share option exercised pursuant to the Company s Employees Share Option Scheme. the issuance of 19,142,000 new ordinary shares of RM0.10 each arising from the exercise of 19,142,000 warrants of the Company at an exercise price of RM0.30 per share. The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company. There was no change in the authorised share capital of the Company during the financial year. The Company did not issue any debentures during the financial year. TREASURY SHARES The shareholders of the Company, by an ordinary resolution passed at the Extraordinary General Meeting held on 28th May 2007, approved the plan of the Company to buy-back from the open market of up to 10% of the Company s issued and paid-up ordinary share capital at any point in time through Bursa Malaysia Securities Berhad ( Proposed Share Buy-Back ). During the financial year, the Company repurchased 1,339,900 of its issued share capital from the open market at an average price of RM0.24 per share. The total consideration paid for the repurchase including transaction costs was RM324,083/-. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, Further relevant details are disclosed in Note 14 to the financial statements. 3

22 ISSUE OF WARRANTS On 16th February 2006, the shareholders at the Extraordinary General Meeting, approved the proposed renounceable Rights Issue up to 82,777,778 new warrants on the basis of one new warrant for every three existing ordinary shares of RM0.10 each held in the Company at an issue price of RM0.01 per warrant ( Rights Issue ). On 19th June 2006, the Company completed the listing of 66,681,390 warrants issued pursuant to the Rights Issue which was implemented in accordance with the Deed Poll dated 3rd April Details of the warrants are set out in Note 13 to the financial statements. EMPLOYEES SHARE OPTION SCHEME ( ESOS ) No options were granted to any person to take up unissued shares or debentures of the Company during the financial year apart from the options exercised pursuant to the ESOS. At an extraordinary general meeting held on 23rd August 2004, the Company s shareholders approved the establishment of an ESOS of up to 15% of the issued share capital of the Company, to eligible Executives Directors and employees of the Group ( the Scheme ). The Scheme was set to expire on 27th August 2007 ( Date of expiry ). However, prior to the date of expiry, on 20th August 2007 the Company approved the proposal to extend the existing scheme for a further period of up to 3 years from the date of expiry ( Extended Scheme ). The Extended Scheme shall be implemented in accordance with the terms of the Company s By-Law of ESOS Scheme. There were no options granted to any person to take up unissued shares or debentures of the financial year under this Extended Scheme. The options offered to take up unissued ordinary shares of RM0.10 each and the option prices are as follows:- Number of offer over ordinary shares of RM0.10 each Exericse Balance at Balance at Grant Expiry price Granted Lapsed Exercised Date Date RM/Share ,994,750 - (892,436) (9,102,314) - The Company was granted an exemption by the Companies Commission of Malaysia from having to disclose the names of options holders who have been granted options in aggregate under 1,500,000 ordinary shares of RM0.10 each. 4

23 Details of the ESOS are set out in Note 11 to the financial statements. The persons to whom the options have been granted have no right to participate by virtue of the options in any share issue of any other companies. DIRECTORS The names of the directors of the Company in office since the date of the last report and at the date of this report are:- YB Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman Dr. Tan Boon Nunt Lee Suet Hong Khor Chai Tian (appointed on ) Lim Ghim Chai (appointed on ) Low To Fong (resigned on ) DIRECTORS INTERESTS According to the register of directors shareholdings kept by the Company under Section 134 of the Companies Act, 1965, the interests of those directors who held office at the end of the financial year in shares, options over ordinary shares and warrants in the Company during the financial year ended 29th February 2008 are as follows:- Number of ordinary shares of RM0.10 each At At Bought Sold Shareholdings in which directors have interests in the Company YB Tan Sri Dato (Dr) Abdul Aziz Bin Abdul Rahman 100, ,000 Dr. Tan Boon Nunt 14,737,260 9,825,000 (15,188,000) 9,374,260 Lee Suet Hong 15,398,760 6,575,000 ( 8,250,000) 13,723,760 Shareholdings in which directors have deemed interests through Topclass Access Sdn. Bhd. Dr. Tan Boon Nunt 18,562, ,562,509 Lee Suet Hong 18,562, ,562,509 5

24 Options over ordinary shares of RM0.10 each At Exercised Lapsed At Dr. Tan Boon Nunt 575,000 (575,000) - - Lee Suet Hong 575,000 (575,000) - - Warrants 2006/2011 At Bought Exercised Dr. Tan Boon Nunt 3,640,116 - (1,473,400) 2,166,716 Lee Suet Hong 2,944,983 - (1,611,600) 1,333,383 Other than as disclosed above, none of the directors in office at the end of the financial year had any interest in shares, options over ordinary shares and warrants in the Company and its related corporations during the financial year. DIRECTORS' BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest. Neither during nor at the end of the financial year was the Company or any of its related corporations a party to any arrangement, whose object was to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate apart from the director s entitlements to subscribe for new ordinary shares in the Company under the ESOS of the Company. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR Significant events during and after the financial year are disclosed in Note 27 to the financial statements. 6

25 AUDITORS The auditors, Messrs Baker Tilly Monteiro Heng, formerly known as Monteiro & Heng, have expressed their willingness to continue in office. On behalf of the Board,.. DR. TAN BOON NUNT Director.. LEE SUET HONG Director Kuala Lumpur Date: 23rd May

26 ASIAEP BHD. (Incorporated in Malaysia) BALANCE SHEETS AS AT 29TH FEBRUARY 2008 Group Company Note RM'000 RM'000 RM'000 RM'000 ASSETS Non-current assets Property, plant and equipment 3 32,118 19,692 2,242 2,772 Prepaid land lease payments Investment in subsidiaries ,466 1,999 Intangible assets 6 30,721 26,094 13,739 14,895 63,319 46,271 17,927 20,151 Current assets Trade receivables 7 3,940 4,973 3,940 4,973 Other receivables, deposits and prepayments Amount owing by subsidiaries ,099 27,270 Short term investments 10 1,049-1,049 - Cash and bank balances 2,314 5,318 1,871 4,798 7,604 10,438 54,156 37,103 TOTAL ASSETS 70,923 56,709 72,083 57,254 EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital 11 24,532 21,707 24,532 21,707 Reserves 12 45,668 34,623 46,887 35,178 Shareholders' funds 70,200 56,330 71,419 56,885 Minority interest Total equity 70,200 56,330 71,419 56,885 8

27 BALANCE SHEETS AS AT 29TH FEBRUARY 2008 (Continued) Group Company Note RM'000 RM'000 RM'000 RM'000 Non-current liabilities Hire purchase liabilities Deferred tax liabilities Current liabilities Trade payables Other payables and accruals Hire purchase liabilities Tax payable Total liabilities TOTAL EQUITY AND LIABILITIES 70,923 56,709 72,083 57,254 The accompanying notes form an integral part of these financial statements. 9

28 ASIAEP BHD. (Incorporated in Malaysia) INCOME STATEMENTS FOR THE YEAR ENDED 29TH FEBRUARY 2008 Group Company Note RM'000 RM'000 RM'000 RM'000 REVENUE 19 15,049 11,069 15,016 11,069 Cost of services (2,378) (1,546) (1,898) (1,546) GROSS PROFIT 12,671 9,523 13,118 9,523 Other operating revenue Administrative expenses (5,472) (4,336) (4,704) (4,167) Other operating expenses - (130) (691) (130) Finance expense - hire purchase interest (5) (8) (5) (8) PROFIT BEFORE INCOME TAX EXPENSE 20 7,249 5,085 7,767 5,247 Income tax expense 21 (190) 14 (141) 14 NET PROFIT FOR THE FINANCIAL YEAR 7,059 5,099 7,626 5,261 Attributable to: Equity holders of the Company 7,059 5,099 7,626 5,261 Minority interest Net profit for the financial year 7,059 5,099 7,626 5,261 Earnings per share attributable to ordinary equity holders of the Company: 22 Basic (sen) Diluted (sen) The accompanying notes form an integral part of these financial statements. 10

29 ASIAEP BHD. (Incorporated in Malaysia) STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 29TH FEBRUARY 2008 Attributable to equity holders of the Company Non-distributable Distributable Share Share ESOS Translation Warrant Premium Retained Treasury Minority Total Capital Reserve Reserve Reserve Reserve Profits Shares Total Interest Equity Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 1st March , (20) - 14,462 12,950-47,497-47,497 Issue of shares - private placements 1, , ,100-2,100 - exercise of options ,355-1,355 - options lapsed - (113) share issue expense (75) - - (75) - (75) Issue of warrants - renounceable rights issue warrants issue costs (222) (222) - (222) Exchange differences - - (92) (92) - (92) Net profit for the financial year ,099-5,099-5,099 At 28th February , (112) ,917 18,162-56,330-56,330 11

30 STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 29TH FEBRUARY 2008 (Continued) Attributable to equity holders of the Company Non-distributable Distributable Share Share ESOS Translation Warrant Premium Retained Treasury Minority Total Capital Reserve Reserve Reserve Reserve Profits Shares Total Interest Equity Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 28th February , (112) ,917 18,162-56,330-56,330 Issue of shares - exercise of options 911 (470) ,229-1,229 - options expense charge during the financial year warrants exercised 1, (127) 3, ,743-5,743 Purchase of company's own shares (324) (324) - (324) Exchange differences - - (97) (97) - (97) Net profit for the financial year ,059-7,059-7,059 At 29th February ,532 - (209) ,661 25,221 (324) 70,200-70,200 12

31 STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 29TH FEBRUARY 2008 (Continued) Non-distributable Distributable Share Share ESOS Translation Warrant Premium Retained Treasury Capital Reserve Reserve Reserve Reserve Profits Shares Total Company RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 1st March , ,462 13,231-47,798 Issue of shares - private placements 1, , ,100 - exercise of options ,355 - options lapsed - (113) share issue expense (75) - - (75) Issue of warrants - renounceable rights issue warrants issue costs (222) (222) Net profit for the financial year ,261-5,261 At 28th February , ,917 18,605-56,885 Issue of shares - exercise of options 911 (470) ,229 - options expense charge during the financial year warrants exercised 1, (127) 3, ,743 Purchase of company's own shares (324) (324) Net profit for the financial year ,626-7,626 At 29th February , ,661 26,231 (324) 71,419 13