ANNUAL REPORT2006 - aim-net.com.my€¦ · AmBank (M) Berhad STOCK EXCHANGE ... globalization, advancement of Information Technology and capable human capital that is scarce these

ANNUAL REPORT 2006

(644769-D)

Advance Information Marketing Berhad (644769-D)

Suite 2A-16-2, Block 2, Level 16, Plaza SentralJalan Stesen Sentral 5, Kuala Lumpur Sentral50470 Kuala LumpurTel : +603-2773 0773 Fax : +603-2780 6898Email : [email protected] : www.aim-net.com.my

Contents02 Corporate Information 03 Company Profile 06 Board of Directors07 CEO Message 10 Statement of Corporate Governance14 Statement on Internal Control 15 Audit Committee Report 18 Additional Compliance Information 21 Financial Highlights 67 Statements by Directors and Statutory Declaration 68 Report of the Auditors 69 Summary of Landed Properties70 Analysis of Shareholdings 72 Notice of Annual General Meeting76 Statement Accompanying Notice of Annual General MeetingEnclosed Form of Proxy

Advance Information Marketing Berhad • Annual Report 2006�

Corporate Information

BOARD OF DIRECTORS

Dato’ Shamsuddin Bin Hayroni(Non-Executive Chairman)

Nyang Koon Seng(Chief Executive Officer and Executive Director)

Palani Selvam Muruganandam(Executive Director)

Tay Woon Teck(Non-Executive Director)

Yeoh Aik Chuan(Independent Non-Executive Director)

Za’ba Bin Hasrin(Independent Non-Executive Director)

Datin Rahmah Binti Kassim(Alternate Director to Dato’ Shamsuddin Bin Hayroni)

AUDIT COMMITTEE

Yeoh Aik Chuan (Chairman)Tay Woon TeckZa’ba Bin Hasrin

COMPANY SECRETARY

Goee Meow Neoh (LS 006011)

REGISTERED OFFICE

5�, 1st FloorJalan SS �1/58Damansara Utama47400 Petaling JayaSelangorTel : 03-77�9 769�Fax : 03-77�7 �866

HEAD OFFICE

Suite �A-16-�, Block �, Level 16Plaza SentralJalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala LumpurTel : 03-�773 0773Fax : 03-�780 6898

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel �6, Menara Multi-PurposeCapital SquareNo.8, Jalan Munshi Abdullah50100 Kuala LumpurTel : 03-�7�1 ��Fax : 03-�7�1 �530

AUDITORS

Azman, Wong, Salleh & Co (AF: 001�)1�th Floor, Wisma Tun SambanthanNo. �, Jalan Sultan SulaimanP.O.Box 1�01950764 Kuala LumpurTel : 03-��73 �688Fax : 03-��74 �688

SPONSOR

OSK Investment Bank Berhad(formerly known as OSK Securities Berhad)�0th Floor, Plaza OSKJalan Ampang50450 Kuala LumpurTel : 03-�16� 4388Fax : 03-�175 3�17

PRINCIPAL BANKERS

Alliance Bank Malaysia BerhadHong Leong Bank BerhadAmBank (M) Berhad

STOCK EXCHANGE LISTING

The MESDAQ Market of Bursa Malaysia Securities BerhadStock Name : AIMStock Code : 01��

Advance Information Marketing Berhad • Annual Report 2006 3

AIM Group is a regional BPO (Business Process Outsourcing) solution provider offering a broad spectrum of loyalty management services from consultation, technology infrastructure and technical support to procurement and logistics for companies aiming to build and nurture a life long relationship with their customer.

As the total BPO solution provider in loyalty management services, our all-round expertise is applied in diverse industries. In today’s competitive business climate, this experience has transformed into important business know-how and powerful marketing tools to our clients. Our holistic approach enabled us to provide strategic direction and consultancy to our clients on how best to tailor, implement and manage their loyalty programs effectively and to meet the desired objectives. In addition, through outsourcing, our clients can rely on our expertise and stay focused on their core business competency.

On the technology front, AIM is a software research and development specialist, focusing primarily on the development of enterprise marketing management solutions in the loyalty management scene. Through years of R & D efforts, AIM has designed and developed the sophisticated enterprise marketing management solution called AIMS™ (Advance Information Marketing System). This R & D initiative will continue to enhance the robustness and versatility of the system.

AIMS™ is integrated to our 5 service components namely Business Intelligence, Integrated Marketing Services, Contact Centre Management, Procurement & Fulfillment, and Technology Infrastructure to equip the companies with the right marketing tools. This integrated platform provides more complete information and better understanding of the customer behavior and response to marketing initiatives implemented. As a result, at one single touch point with AIM, our clients are able to understand their customer better, become more customer-centric and more strategic and targeted in their marketing programs.

AIM Group Corporate Structure

Company Profile

Advance Information Marketing Berhad • Annual Report 20064

Company Profile (cont’d)

CuSToMER LoYALTY SoLuTIoNS SDN. BHD. (610748-V)PT. CLS SYSTEM (INDoNESIA) (02.419.774.1-059.000)

CLS is the total integrated loyalty consulting arm for AIM Group, which provides strategic consultation to clients on how best to design, structure, implement and manage a loyalty program in the long run. It also offers integrated contact centre management which caters for both inbound and outbound services as well as integrated marketing services through ERM.

In April 07, AIM Group incorporated PT CLS System, Indonesia to extend similar services in the Indonesian market.

Today, CLS supports and manages loyalty program that cater to the “Business-to-Business” and “Business-to-Consumer” needs for many multinational companies of diverse industries ranging from financial institutions, insurance, retailing and manufacturing to food chain, oil & gas and etc.

ADVANCED SuPPLY CHAIN SoLuTIoNS SDN. BHD. (620478-X)

ASCS, an ISO 9001:�000 certified company is the integrated supply chain service provider in the area of procurement and fulfillment services. ASCS’ competitive edge is that it is able to consolidate regional procurement at competitive prices and preferred terms with selected suppliers, ASCS also offers many other merchandise such as gifts and novelties, health & beauty products, home & household appliances, personal & lifestyle items and electronic gadgets. ASCS operates from its own warehouse, which is a one-stop distribution centre for cost effective and efficient distribution logistic.

ASCS will continue to value add to the service offering to its clients by enhancing the warehouse management system, inventory management system and improving the transportation services.


BouNTY TRADING PTE. LTD. (SINGAPoRE) (200207440H)

On the international arena, Bounty is the international link for the group to source and procure merchandise from international suppliers. To better service our clients, Bounty is involved in sourcing for contract manufacturers and has created its own in-house brand such as “Azon” electrical products and appliances. It also imports from time to time selected merchandise with exclusive models and designs that are not available locally for various clients or programs.

Company Profile (cont’d)


Board of Directors

DATo’ SHAMSuDDIN BIN HAYRoNI, a Malaysian aged 51, was appointed Non-Executive Chairman on �1 February �005. A civil engineer by training and profession, Dato Shamsuddin started his illustrious career in Jabatan Kerja Raya, Selangor (Public Works Department, Selangor) from 1978 to 1988 and Project Lebuhraya Utara Selatan (PLUS) Bhd from 1989-1995. He then ventured into the construction and property development industry in 1995. Subsequently, in 1999, he ventured into the CRM business and is an ultimate shareholder and director of Electronic Commerce Technology Sdn Bhd (ECT) - the owner of the ‘RealRewards’ loyalty program and subsequently launched the ‘RealRewards’ card program in March �001. He is currently also the Executive Chairman of Majulia Group of Companies. He graduated from University Technology Malaysia with a Diploma in Civil Engineering in 1978 and a Bachelor Degree in Civil Engineering from the University of New Hampshire, USA in 1983. His spouse Datin Rahmah Binti Kassim, a Malaysian, aged 51, was appointed as alternate Director to him and is a substanstial shareholder of the Company.

NYANG KooN SENG, a Singaporean aged 46, was appointed CEO and Executive Director on 8 March �004. He started his career as a Factory Manager with Prima Ltd, a listed company in Singapore from 1984 to 1989. He joined Oculus Contact Lens Manufacturing Pte Ltd as its General Manager from 1989 to 1995. He was the Executive Director and General Manager of Rotol Singapore Ltd from 1995 to �000. He left the corporate environment to be an entrepreneur in �000, and joined a customer loyalty program known as ‘MoreRewards’ in Singapore as its working director. In �001, he co-founded the ‘RealRewards’ program in Malaysia and is currently a shareholder and director of Electronic Commerce Technology Sdn Bhd (ECT), the program owner. He graduated from the National University of Singapore with a Bachelor Degree (Honours) in Mechanical Engineering in 1984 and a Master Degree in Industrial Engineering and Statistics in 1990.

PALANI SELVAM MuRuGANANDAM, an Indian aged 38, was appointed Executive Director on 8 March �004. He started his career with Pasha Associates, VTCompany, and MinFoong Co (Pte) Ltd as its project manager, in charge of civil and mechanical project from 1990-1998. He became the functional consultant for Seagate Technology International, Singapore from January to July of 1999. He joined MThree Asia Pte Ltd (MThree) in August 1999 as its Chief Technology Officer (CTO). Subsequently, he became the CTO of Cyber Generation- the parent company of MThree in �00�. He joined AIM Group in �004. He graduated from the Bharathiyar University, India in 1990 with a Bachelor Degree in Engineering and a Master Degree in Engineering in 1997. He is a Six Sigma Black Belt, PMP and an Oracle Certified Professional.

TAY WooN TECK, a Singaporean aged 4�, was appointed Non-Executive Director on �1 February �005. He started his career with Ernst & Young from 1989 to 1996. He was the financial controller of Kuok Singapore Ltd, a diversified group of companies in Singapore from 1996-1999. In �000 and �001, he was a director and shareholder of MThree and ECT, the owners of the coalition programs - ‘MoreRewards’ and ‘RealRewards’ respectively. He graduated from the National University of Singapore, with a Bachelor Degree in Accountancy (Honours) in 1989 and is a fellow member of the Institute of Certified Public Accountants in Singapore (“FCPA”). He is also a member of the Audit Committee of the Company.

YEoH AIK CHuAN, a Malaysian aged 37, was appointed Independent Director on 15 March �005. He joined Sony Electronics (M) Sdn Bhd as its Business Planner in 1995. He was Senior Associate in Coopers & Lybrand/PriceWaterhouseCoopers from 1996 to 1998. He joined SF Wong & Associates in 1999 as its Manager. He graduated from Universiti Utara Malaysia in 1995 with a Bachelor Degree in Accountancy (Honours). Currently, he is involved in the audit, taxation and business advisory of YAC & Associates, a sole proprietorship that he set up in �00�. He is also the director of Iant Consultancy Pte Ltd, ProSem Technology Sdn Bhd, ProCross Technology Sdn Bhd, Dragon Communication & Technology Sdn Bhd. He is a certified Chartered Accountant of the Malaysian Institute of Accountants and an Associate Member of the Malaysian Institute of Taxation. He is also the Chairman of the Audit Committee of the Company.

ZA’BA BIN HASRIN, a Malaysian aged 44, was appointed Independent Non-Executive Director on �3 February �006. He started his career as Account Manager with Reuters Ltd Kuala Lumpur from 199� to 1996. Subsequently, he founded Orinet Business Systems (M) Sdn Bhd, a company specializing in Credit Risk Management solution. He is also currently the managing director and co-founder of CCR Networks Sdn Bhd. He holds a Diploma in Civil Engineering. He is also a member of the Audit Committee of the Company.


With the Malaysian economy growing at 5.8% in �006 (Gross Domestic Product “GDP”), AIM Group enjoyed a relatively good year. I believe it will continue as the economic outlook in �007 remains positive and vibrant forecasting to grow with a GDP of 6.4%, barring any unforeseen circumstances. Against this promising macro-economic indicator, however, is an increasingly competitive and challenging business environment due to globalization, advancement of Information Technology and capable human capital that is scarce these days.

On behalf of the Board, please let me take you through AIM’s performance for the financial year ended 31st December �006 and the key direction that the Group is taking to grow further.

FINANCIAL AND BuSINESS REVIEWThe year �006 has been a significant milestone for the Group as reflected in the financial performance for the year. We are delighted to announce that the Group recorded an audited net profit after tax of RM9.0 million (�005: RM7.6 million) over a revenue of RM43.� million (�005: RM36.7 million), in spite of rising costs and competition.

The total shareholder’s equity has grown from RM�1.4 million in FYE�005 to RM40.4 million in FYE�006 with the injection of listing funds raised and accumulated retained earnings. As at 31st December �006, the Group maintained a healthy cash reserve of RM�6.4 million with a borrowing of less than RM1.7 million and after paying out RM�.3million in tax-exempt interim dividend (15%). With this cash reserve, the Group is now poised to leverage on the growth opportunities, both locally and regionally.

Our effort to deepen and widen the services provided to existing clientele has paid off with the engagement of more loyalty marketing activities and the launching of various loyalty programs for different target segment and business units. We have also widened our client base and broadened our services to include those in the IT sector, oil and gas industries, health and beauty sector and fast-moving consumer group (“FMCG”) retailer market.

On the technology front, Information Technology remains the key driver and backbone of the Group’s total integrated services offering. One of the major R&D developments achievement in FY�006 is the successful launch of AIMS™ Thor Transactor™ Application in collaboration with, Transactor Technologies Limited of New Zealand. The new application is designed to perform electronic payment processing and settlement for stored value payment mechanism such as gift vouchers, gift cards and prepaid cards which does not require a direct (online) interface with a traditional banking system. The Group believes that this new application will offer additional revenue model due to the enormous benefits and convenience offered to the retailers, encourage customer frequency and spending through promotional campaigns.

Operationally we saw our processes being streamlined with increased efficiency and capability with the ISO 9001:�000 certification on our warehouse and fulfillment processes, the centralization of many business units into one office at Plaza Sentral, the expansion of the integrated contact centre from 40 to 1�0 seats and the annual audit on our data security system based on the Payment Card Industry (PCI) Data Security Standard. PCI-DSS is an industrial standard established and recognized by Visa, Master, and American Express.

CEO Message

Source : Shanghai Magazine, Malaysia


CEO Message (cont’d)

Thanks to our regional partnership with COLLOQUY, our plans to expand out network and strengthen our foothold in the flourishing Asia Pacific markets came to fruition in April �007 with the set up of another wholly-owned subsidiary in Indonesia, PT. CLS System and hosted the first ever Loyalty Marketing Summit in Indonesia that is well attended by industry practitioners. The Indonesian subsidiary focuses on strategic consultancy, IT technology and infrastructure, rewards merchandise and fulfillment to the local banks and we believe it will contribute significantly to the Group’s financial performance for many years to come.

The Board is also proud to note that we are the recipient of the SMB Achievers’ Award �006 by the SMI (Small Medium Industries) Association of Malaysia. The award is bestowed on Small Medium Businesses which were formerly family owned or small one/two man operations and have successfully made the transition from privately owned companies into the public-listed companies.

These are just some of the significant indicators that we are progressing and venturing into bigger challenges and establishing ourselves as the regional leader in the industry.

FoR A BETTER AND MoRE EXCITING TIMES AHEADIn many ways, we see the Group to be standing at the forefront of opportunity due to the solid foundation that we have today.

The management sees tremendous prospects arise from the increased popularity of stored value and gift cards in loyalty applications and emerging technology for greater convenience such as the trend of combining the payment and the loyalty card into one for convenience. Some of the innovative means include mobile phone-based barcode, debit cards, ID cards (such as MyKAD) as loyalty program identifiers.

The surge in loyalty coalitions and networks has also become increasingly popular as they offer a huge range of marketing advantages (e.g. shared marketing, lower costs, cross-partner customer acquisition). It is also because participating partners within the network are able to provide consumers with loyalty benefits or rewards at a greater variety of outlets and merchant locations. Such loyalty programs are also gaining popularity within business-to-business dealings.

Additionally, the rapidly developing economies of Asia Pacific countries particularly in China, India and Indonesia are expected to contribute to the region’s strong demand for loyalty program as loyalty program remains one of the strategic tools employed by many organizations in order to influence the spending patterns of their customers through a variety of reward schemes. The enormous populations of these markets also give unlimited opportunities for the Group to realize its regionalization plan as we leverage on the solid financial performance, human capital and track record that we have built in the past few years. Merger and acquisition will be one of the strategies to ensure we continue to grow in the years to come.

SMB Achievers’ Award ISO 9001 : �000


CEO Message (cont’d)

Not only the above trends will intensify and encourage more companies to outsource their loyalty program to the company, it is an endorsement for the overall plan to strengthen the Enterprise Application software, AIMS with the continuous research and development particularly in the area of grid computing, mobile technology development and payment technology. The company foresees that their clientele will continuously expand to a wider base namely in the telecommunications and transportation (including airlines and motor vehicles dealerships) sectors.

As we move on working towards our goals, we always believe in continuously generate new thrust, new ideas, explore new partnership and new additional business models that were not possible before. This is because by doing so, we will be ahead of competition and take the lead in the ever-changing landscape in loyalty management and yet not losing sight on our core expertise.

IN APPRECIATIoNNothing is more valuable for an organization than a committed group of employees who work diligently together as a team for common organizational goals. The Board is particularly proud to witness the spirit of teamwork in the past 1 year and see some of the career grooming initiatives starting to pay off. The Group will continue to encourage the employees to take on bigger responsibilities and portfolios especially on overseas assignments, and upgrade their skill set from time to time.

As such, in conclusion, I would like to express my sincere gratitude to our management, staff, business partners, and also our Board of Directors guidance. Most importantly, to all our customers for their continual support.

Yours Sincerely,

Nyang Koon SengChief Executive Officer


Statement of Corporate Governance

The Directors strongly endorse the importance of good corporate governance in steering the Group’s operations and business towards safeguarding and protection of shareholders’ interests and the financial performance of the Group. The Directors are fully committed to ensure the highest standard in corporate governance as articulated in the Principles and Best Practices set out in the Malaysian Code of Corporate Governance (“the Code”) is practiced throughout the Group.

A. BoARD oF DIRECToRS

Composition of the Board and Board Balance The Company is managed by a well-balanced Board which consists of members with wide range of business, technical

and financial background. This brings diversity and insightful depth to the company leadership and management for the business.

The Board is made up of six (6) members as follows:

• Two (�) Executive Directors• Four (4) Non-Executive Directors (including the Chairman)

All independent and Non-Executive Directors fulfill their role through objective participation in the deliberations of the Board and by the exercise of independent judgement with regard to the long-term interest of the stakeholders of the Company. The Chairman is responsible for the Board’s effectiveness and conduct whilst the Chief Executive Officer has overall responsibilities over the business and operation. The clear division of responsibilities between these two roles will ensure a balance of power and authority.

The profiles of the Directors are presented on page 6 of this annual report.

Board Responsibilities The board is responsible to set and develop corporate objectives goals and strategic direction of the Group. The Board’s

primary roles are:

• The protection and enhancement of long-term shareholders’ value and interest of the stakeholders.• Setting strategic direction, including establishing vision and mission for the Group.• Review and approval of corporate plan, annual budget, quarterly and annual results, acquisitions and disposal of

undertakings and properties of substantial value, major investments and financial decision.• Succession planning for top management.

The Board has established the Audit Committee to assist the Board in the execution of its responsibilities. There was no other committee established by the Board. The Board may, whenever required, as provided by the Article of Association, set up Board committees delegated with specific powers and responsibilities.

Directors’ Meetings The Board meets regularly on a quarterly basis and as and when required. There were five (5) meetings held during the

financial year and the attendance record is as follows:

Meetings Attended

Dato’ Shamsuddin Bin Hayroni 4/5Nyang Koon Seng 5/5Palani Selvam Muruganandam 5/5Tay Woon Teck 4/5Yeoh Aik Chuan 4/5Za’ba Bin Hasrin (appointed w.e.f. �3.�.�006) �/4


Statement of Corporate Governance (cont’d)

A. BoARD oF DIRECToRS (CoNT’D)

Supply of Information All Directors are provided with notices to meetings, setting out the agenda accompanied by a full set of Board Papers in

sufficient time before each meeting. The Board Papers provide sufficient detail of matters to be deliberated during the meeting. In the event that the Directors require additional information, a request is made and the additional information is provided together to resolve any clarifications sought, in sufficient detail in order for the Board members to understand fully the matter deliberated. Information provided to the Board are not limited to quantitative performance data, instead it includes qualitative information such as major operational and financial issues.

The proceedings at all Board meetings together with decisions taken by way of resolutions passed are duly minuted. These minutes are approved by the Chairman of the Meeting at the subsequent Board meeting and are kept at the registered office of the Company.

Members of the Board are given access to the services and advice of the Company Secretary. The Company Secretary is tasked with ensuring that all statutory obligations are complied with, including compliance with the Listing Requirements of Bursa Malaysia Securities Berhad for MESDAQ Market or other regulatory requirements, as they may be applicable to the Company.

The Directors are given access to information within the Company in furtherance of their duties, whether on an individual or collective basis, including direct access to senior management personnel. They may further obtain independent professional advice in fulfilling their fiduciary duties at the Company’s expense, when necessary.

Appointments of the Board and Re-election Matters relating to the appointment of Directors are dealt with by the entire Board collectively. No Nomination Committee

has been set up as the Directors are of the opinion that given the current size and composition of the board, the nomination of Directors is more effectively dealt with by the entire Board as opposed to a committee. In accordance with the Company’s Articles of Association, all Directors shall retire from the office at least once every three (3) years at the Annual General Meeting. A retiring director shall be eligible for re-election.

Directors’ Training The Board acknowledges that continuous education is vital in keeping abreast with changes 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 both internal and external means. All Directors receive updates from time to time, on relevant new laws and regulations to enhance their acumen and skills to meet changing commercial risks and challenges. The Directors have attended the Mandatory Accreditation Programme (“MAP”) as required by the authorities. The Board would evaluate and determine the training needs of its directors on a continuous basis.

B. DIRECToRS’ REMuNERATIoN The Company has adopted the objective as recommended by the Code to determine the remuneration of the Directors so as

to ensure that the Company attracts, retains and motivates the Directors of the quality needed to manage the business of the Group effectively. The remuneration scheme is reflective of the individual Director’s experience and level of responsibilities. In addition, the remuneration for Executive Directors is structured to link rewards to corporate and individual performance.

Remuneration Policy and Procedures Directors’ remuneration is dealt by the Board. Due to the size of the Group, the Directors are of the opinion that the establishment

of a Remuneration Committee is not necessary at the moment.



B. DIRECToRS’ REMuNERATIoN (CoNT’D) Directors’ Remuneration The details of the Directors remuneration for the financial year are:-

Salaries & other Emoluments Fees Total (RM) (RM) (RM)

Executive Directors 80�,60� 30,000 83�,60�Non-Executive Directors – 100,000 100,000

Number of DirectorsRange of remuneration per annum Executive Non-Executive Directors Directors

Below RM50,000 – 5RM�50,001 to RM300,000 1 –RM550,001 to RM600,000 1 –

C. SHAREHoLDERS’ CoMMuNICATIoN The Board has always recognized the importance of timely dissemination of information to its shareholders and potential

investors. The maintenance of an effective communication policy between members of the public and the Company is important.

Shareholders and potential investors are kept abreast with the major developments of the Group through the various means of communications as follows:

• The Annual General Meeting is used as the main forum of dialogue for shareholders to raise any issues relating to the Group’s operations and performance.

• Latest announcements and corporate disclosure to Bursa Securities are available on the website www.bursamalaysia.com.• The Company’s website www.aim-net.com.my provides corporate information on the Group.

D. ACCouNTABILITY AND AuDIT

Financial Reporting The Board aims to provide a balanced and understandable assessment of the Group’s financial performance, financial position

and prospects through the annual financial statements, Chief Executive Officer’s statements and announcement of quarterly results.

In the preparation of the financial statements, the directors have:

• Adopted suitable accounting policies and applied them consistently;• Made judgements and estimates to present a true and fair view of the financial performance;• Ensured applicable accounting standards have been allowed, subject to any material departures, disclosed and explained

in the financial statements; and• Prepared the financial statements on an ongoing basis.



D. ACCouNTABILITY AND AuDIT (CoNT’D) Internal Control The Board has overall responsibility for maintaining a system of internal controls, which provides reasonable assessments

of effective and efficient operations, internal controls and compliance with laws and regulations. Currently, the Group does not maintain an Internal Audit Department due to the size of the Group. The Board is of the opinion that the current control mechanism, procedures and policies are adequate for the current level of operations. The Group is continuously looking into the adequacy and integrity of its system of internal controls to ensure the effectiveness of the system.

Relationship With Auditors The Group’s independent external auditors hold an essential role for the shareholders by enhancing the reliability of the

Group’s financial statements and providing assurance of that reliability to users of these financial statements. The Company has always maintained a close and transparent relationship with its external auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia.

E. DIRECToR’S RESPoNSIBILITY STATEMENT IN RESPECT oF FINANCIAL STATEMENTS

The Directors are required to prepare the financial statements for each financial year, which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year, and of the results and cash flow of the Group and of the Company for the financial year ended.

In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied.

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


Statement on Internal Control

A. INTRoDuCTIoN The Board is committed to maintain a sound system of internal control of the Group and is pleased to provide the following

statement, which outlines the nature and scope of internal control of the Group during the year.

B. BoARD RESPoNSIBILITIES The Board recognizes the importance of sound internal control and risk management practices towards maintaining good

corporate governance. The Board acknowledges its overall responsibility for maintaining a sound system of internal control and risk management which include reviewing the effectiveness, adequacy and integrity of these systems throughout the Group. However, the Directors are aware that such systems are designed to manage rather than to eliminate the risk of failure to achieve business objectives. Accordingly, the Board is of the view that the Group’s system of internal control can only provide reasonable but not absolute assurance against material misstatement or loss.

The Group has in place an ongoing process for identifying, evaluating, monitoring and managing significant risks faced by the Group in order to attain a reasonable assurance that its business objectives are met. These controls are regularly reviewed by the Board and subject to continuous improvements.

C. RISK MANAGEMENT The process of identifying, evaluating and managing significant risks faced by the Group is practiced continuously. These

processes are managed under the leadership of the directors. Meetings are held regularly to review changes in the business environment and its’ potential significant impact on the Group’s mid to long term business objectives. Business strategies are reviewed and refined at the same time to ensure that operations are in accordance with the corporate expectation.

D. INTERNAL CoNTRoL FRAMEWoRK Presently the Group does not maintain an internal audit department. The Board believes that the same objective can be

achieved as it has established an organization with clearly defined lines of accountability and delegated authority and the current control mechanisms are sufficient for the size of the Group.

The other key elements of the Group’s internal control systems are described below:

• Regular monitoring of operational results against budgeted for the Board’s review and discussion;• Regular and comprehensive information provided to the Board, covering financial performance and key business

indicators;• Regular updates of internal policies and procedures, to reflect changing risks or resolve operational deficiencies; and• Regular meetings with management to address weaknesses and improve efficiency.

The Board is of the view that there has been no weaknesses in the system of internal control of the Group that may have a material impact on the operations of the Group for the financial year ended 31st December �006.


Audit Committee Report

The Audit Committee (“the Committee”) was established to act as a Committee of the Board of Directors (“Board”), with the primary objective of assisting the Board in the areas of corporate governance, systems of internal controls, risk management, and management and financial reporting practices of the Group.

1. CoMPoSITIoN The present members of the Audit Committee comprise of:-

ChairmanYeoh Aik Chuan Independent Non-Executive Director

MembersTay Woon Teck Non-Executive DirectorZa’ba Bin Hasrin Independent Non-Executive Director

2. TERMS oF REFERENCE

A. Composition The Audit Committee shall be appointed by the Board which shall fulfil the following requirements:-

i. the Audit Committee must be composed of no fewer than three (3) members;ii. a majority of the Audit Committee must be Independent Non-Executive Directors;iii. the Chairman of the Audit Committee shall be an Independent Non-Executive Directors appointed by the Board;

and iv. at least one member of the Audit Committee:

• must be a member of the Malaysian Institute of Accountants; or• one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967;

or• fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad.

B. Authority The Audit Committee shall have the following authority empowered by the Board:-

i. to have explicit authority to investigate any matter within its terms of reference;ii. to have full and unrestricted access to any information pertaining to the Company and its subsidiaries;iii. to have direct communication channels with both the external auditors and the internal auditors or any person(s)

carrying out the internal audit function or activity;iv. to have free access to any employee or member of the management; andv. to have free access to seek and accept independent professional advice and to secure the attendance of outsiders

with relevant experience and expertise as it considers necessary and the requisite resources to do so.


Audit Committee Report (cont’d)

2. TERMS oF REFERENCE (CoNT’D)

C. Duties and Responsibilities The duties and responsibilities of the Audit Committee are as follows:-

i. to consider the appointment of external auditors, the audit fees and any questions of resignation or dismissal;ii. to review with the external auditors:

a. their audit plan, scope and nature of the audit for the Group;b. their audit report;c. the external auditors’ management letter and the management’s response with regard to problems and

reservations arising from their audits; andd. any matters the auditors may wish to discuss (in the absence of management where necessary)

iii. determine the quality, adequacy and effectiveness of the Group’s internal control environment;iv. to review the adequacy of the scope, functions and resources of the internal audit functions;v. to review the internal audit program, processes and results of the internal audit function and whether or not

appropriate action is taken on the recommendations of the internal audit functions;vi. provide greater emphasis on the audit function by serving as the focal point for open line of communication

between the Board, internal auditors, external auditors and the management and providing a forum for discussion that is independent of the management. It is to be the Board’s principal agent in assuring the independence of the Company’s external auditors, the integrity of the management and the adequacy of disclosure to the shareholders;

vii. to review with management on a periodic basis, the Company’s general policies, procedures and controls especially in relation to management accounting, financial reporting, risk management and business ethics;

viii. to review the quarterly results and annual financial statements, prior to the approval by the Board, focusing particularly on:-

a. any change in accounting policies and practicesb. significant adjustment arising from the auditc. any other significant and unusual eventsd. compliance with accounting standards and other legal requirementse. major potential risk issues, if any

ix. to review related party transactions to ensure that they have been conducted at arm length and on normal commercial terms; and

x. to carry out such other functions as may be agreed to by the Committee and the Board of Directors.

D. Retirement and Resignation In the event of any vacancy in the Audit Committee, the Company shall fill in the vacancy within two (�) months, but

in any case not later than three (3) months.

E. Attendance at Meetings The Head of Finance and Head of Internal Audit Department shall normally be invited to attend the meetings. Other

members of the Board may attend the meetings upon invitation of the Audit Committee. At least once a year, the Audit Committee shall meet the external auditors without any executive directors present.


Audit Committee Report (cont’d)

3. MEETINGS

The Audit Committee will meet at least four (4) times a year although additional meetings may be called at any time at the discretion of the Chairman. Upon the request of the external auditors or internal auditors, the Chairman of the Audit Committee shall also convene a meeting of the Committee to consider any matter that the auditors believe should be brought to the attention of the directors or shareholders.

A minimum of two (�) members present shall form the quorum.

During the financial year ended 31st December �006, the Audit Committee held a total of three (3) meetings*. The details of attendance of the Committee members are as follows:

Meetings Attended

Yeoh Aik Chuan 3/3Tay Woon Teck �/3Za’ba Bin Hasrin �/3* Company was listed on 18th April 2006.

4. SuMMARY oF ACTIVITIES uNDERTAKEN During the financial year ended 31st December �006, the activities undertaken by the Committee included:

a) Reviewed the unaudited quarterly reports of the Group before recommending to the Board of Directors for their approval and release to Bursa Malaysia Securities Berhad;

b) Reviewed with external auditors on the audit planning memorandum of the Group for the financial year ended 31st December �006;

c) Reviewed the annual audited financial statements of the Group with the external auditors prior to submission to the Board for approval;

d) Reviewed the recurrent related party transactions to ensure compliance with laws and regulations and the renewal of shareholders mandate; and

e) Recommended to the Board of Directors on the re-appointment of the external auditors.

5. INTERNAL AuDIT FuNCTIoN The Group at present does not have an internal audit department. Due to the size of the Group, the Board is of the opinion

that the current control mechanism, procedures and policies are adequate for the current level of operations.

During the year, there were no weaknesses in the system of internal control that has resulted in any material losses, contingencies or uncertainties, which would require disclosure in the Company’s Annual Report.

6. STATEMENT PERTAINING To THE ALLoCATIoN oF SHARE oPTIoNS To EMPLoYEES To date, the Company has not granted any share options to eligible employees pursuant to the Company’s ESOS.

In the event such options are granted to eligible employees, the Audit Committee will review such allocation to ensure compliance with the criteria as set out in the by-laws of the Company’s ESOS.


Additional Compliance Information

1. uTILIZATIoN oF PRoCEEDS FRoM CoRPoRATE EXERCISES As at 31st December �006, the status of the utilization of the proceeds of RM14.7 million raised by the Company from its

Initial Public Offering is as follows:

Proposed Actual Balance utilization utilization Amount* RM’000 RM’000 RM’000

Expansion of the core and related business of the Group 3,900 – 3,900Purchase of software and hardware equipment 3,000 631 �,369R & D expenditure 4,800 803 3,997Working capital 1,300 �83 1,017Listing expenses 1,700 1,700 – 14,700 3,417 11,�83

* The utilization of proceeds is within the timeframe of 5 years as stated in the company’s prospectus dated 28th March 2006

2. SHARE BuY-BACK The Company did not undertake any share buy-backs during the financial year.

3. oPTIoNS, WARRANTS oR CoNVERTIBLES SECuRITIES The Company has not issued any options, warrants or convertible securities during the financial year.

4. AMERICAN DEPoSIToRY RECEIPT (ADR) oR GLoBAL DEPoSIToRY RECEIPT (GDR) The Company did not sponsor any ADR or GDR programme during the financial year.

5. IMPoSITIoN oF SANCTIoNS AND/oR PENALTY There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant

regulatory bodies during the financial year.

6. NoN-AuDIT FEES There were no non-audit fees paid to the external auditors by the Company during the financial year.

7. PRoFIT ESTIMATES, FoRECAST oR PRojECTIoNS The Directors have voluntarily disclosed the consolidated profit estimate for the Group for the financial year ended 31st

December �006 on the Company’s prospectus dated �8th March �006. The actual audited consolidated profit attributable to shareholders of the Company for the financial year was RM9.0 million, no material variance against the consolidated profit estimation.

8. PRoFIT GuARANTEE The Company did not issue any profit guarantee during the financial year.


Additional Compliance Information (cont’d)

9. RECuRRENT RELATED PARTY TRANSACTIoNS oF A REVENuE oR TRADING NATuRE Details of the Group’s recurrent related party transactions made during the financial year ended 31st December �006 pursuant to

the shareholders’ mandate obtained by the Company at the Annual General Meeting held on �7th June 06 are as follows:

Related party RRPTManner of relationship Name of Recurrent Description of transaction Aggregatewith RRPT Companies Transactions Value (RM’000) (Payable) or Receivables

Mr Tay Woon Teck Electronic Commerce a) The granting of a software licence and 5,660Mr Nyang Koon Seng, Technology Sdn Bhd maintenance service to ECT by AIM toDatin Rahmah Binti Kassim (“ECT”) use and operate the AIMS system.and Dato’ Shamsuddin Bin Hayroni are Major Shareholders of ECT. b) Provision of procurement, purchasing 8,486 of goods, logistic, warehouse storage and distribution services for the electronic loyalty card program by ASCS

c) Provision of the running and operating 1,050 of contact centre management, Mid-Valley member services center, agent and program manager for negotiation on terms and conditions in relation to co-brand credit card programs by CLS

Mr Tay Woon Teck RealRewards Sdn Bhd , Trading of consumer goods by BT 3Mr Nyang Koon Seng, and Negara BruneiDatin Rahmah Binti Kassim Darulssalam (“RRewards”)are Major Shareholders andDirectors of RRewards. Major Shareholders of MoreRewards Trading of consumer goods by BT �9MRewards (Singapore) Pte Ltd (“MRewards”)

Landlord of the office Mr. Nyang Koon Seng Rental of office for expansion of contact (88) centre services by CLS at Unit �B-1�-�, 1�th Floor, Block �, Plaza Sentral, Kuala Lumpur.

The Company will be seeking renewal of the mandate from the shareholders to enter into proposed recurrent related party transactions of a revenue or trading nature at the forthcoming Annual General Meeting of the Company.

Advance Information Marketing Berhad • Annual Report 2006�0

Additional Compliance Information (cont’d)

10. CoNTRACT RELATING To LoAN BY THE CoMPANY There were no contracts relating to loan by the Company.

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

12. MATERIAL CoNTRACTS There were no other material contracts entered into by the Company and/or its subsidiary companies involve Directors

interests except for the disclosed below:

a) On �1st February �006, AIM and Everfine Arch Sdn Bhd (“Everfine”) entered into a Tenancy Agreement wherein we agree to take a tenancy from Everfine for a term of 3 years commencing thirty (30) days from the date of vacant possession of the premises is duly delivered to Everfine, at the monthly rental of RM17,518.50, where the parties also mutually agree that this agreement is conditional upon the issuance of the Temporary Certificate of Fitness for Occupation in respect of the Premises is to be obtained no later than 30th June �006, subject to further terms and conditions contained therein;

b) On 16th March �006, AIM entered into an Underwriting Agreement with OSK for the underwriting of 1,000,000 Issue Shares made available for application under the public offer and any of the unsubscribed 1,000,000 Issue Shares made available for application by our eligible Directors, employees and persons who have contributed to our success for an underwriting commission of �.0% of the underwritten value; and

c) Advanced Supply Chain Solutions Sdn Bhd, a wholly-owned subsidiary of the company, had on 8th February �007 entered into a Sale and Purchase Agreement with Loyal Shoes (Malaysia) Sdn Bhd (Company No. 105005-A), in respect of the acquisition for a cash consideration of RM4,630,000.00 (Ringgit Malaysia Four Million Six Hundred and Thirty Thousand) only.

Financial Highlights22 Directors’ Report 27 Balance Sheets 29 Income Statements30 Statements of Changes in Equity 31 Cash Flow Statements33 Notes to the Financial Statements

Advance Information Marketing Berhad • Annual Report 2006��

Directors’ Report

The directors hereby submit their report together with the audited financial statements of the Group and the Company for the year ended 31st December �006.

1. PRINCIPAL ACTIVITY The Group is principally engaged in the provision of end-to-end customer loyalty management solutions and business process

outsourcing services.

The Company is principally engaged in the development and provision of loyalty and database management software applications and information technology infrastructure. The Company is currently involved in the promotion of its Enterprise Marketing Management application, namely Advance Information Marketing System (“AIMS”).

The details of the subsidiary companies are disclosed in Note 9 of the financial statements.

2. RESuLTS GRouP CoMPANY RM RM

Profit for the year 9,0�7,674 1�,�99,767

3. ISSuE oF SHARES During the financial year, the authorized share capital of the Company of RM49,000,000 comprising 49,000,000 ordinary shares

of RM1.00 each was subdivided into 490,000,000 ordinary shares of RM0.10 each. Subsequent to the subdivision of ordinary shares, the Company had transferred the balance of the authorized share capital of RM1,000,000 comprising 50,000,000 Redeemable Convertible Preference Shares (“RCPS”) Class A of RM0.01 each and 50,000,000 RCPS Class B of RM0.01 each into RM1,000,000 comprising 10,000,000 ordinary shares of RM0.10 each.

In addition, the issued and paid-up share capital of the Company was increased from RM5,580,6�3 comprising 4,860,6�3 ordinary shares of RM1.00 each, ��,000,000 RCPS Class A of RM0.01 each and 50,000,000 RCPS Class B of RM0.01 each to RM15,500,000 comprising 155,000,000 ordinary shares of RM0.10 each by way of:-

(i) the issue of 1,007,478 new ordinary shares of RM1.00 each of the Company at par pursuant to the conversions of ��,000,000 of RCPS Class A and 50,000,000 of RCPS Class B on �0th February �006;

(ii) the issue of 6,131,899 new ordinary shares of RM1.00 each of the Company pursuant to the completion of a bonus issue of approximately 1.05 shares for every 1 existing ordinary share by capitalizing RM5,504,5�� from the share premium account and RM6�7,377 from retained profits;

(iii) the subdivision of the enlarged issued and paid-up share capital of 1�,000,000 ordinary shares of RM1.00 each into 1�0,000,000 ordinary shares of RM0.10 each on the basis of 10 ordinary shares of RM0.10 each for every 1 existing ordinary share of RM1.00 each; and

(iv) the issue of 35,000,000 ordinary shares of RM0.10 each by way of public issue at an issue price of RM0.4� per share in conjuction with its listing and quotation on the MESDAQ market of Bursa Malaysia Securities Berhad via the issue of a prospectus dated �8th March �006.

Upon completion of the public issue, the Company was listed on the MESDAQ Market of Bursa Malaysia Securities Berhad on 18th April �006.

All shares issued during the year rank pari passu in all respects with the existing shares of the Company.

Advance Information Marketing Berhad • Annual Report 2006 �3

Directors’ Report (cont’d)

4. DIVIDENDS In September �006, the Company paid a tax exempt interim dividend of 15% amounting to RM�,3�5,000 in respect of the

year ended 31st December �006.

In January �007, the directors approved the payment of special dividend of �0% per ordinary share of RM0.10 each less income tax of �7% in respect of the financial year ended 31st December �006. The special dividend was paid on 14th February �007.

The directors now recommend the payment of a tax exempt final dividend of 15% in respect of the year ended 31st December �006. This proposed final dividend is subject to the approval of shareholders at the forthcoming Annual General Meeting and will be reflected in the financial statements for the year ending 31st December �007 upon approval by the shareholders.

5. RESERVES AND PRoVISIoNS There were no material transfers to or from reserves or provisions during the year ended 31st December �006 other than

those disclosed in the financial statements or in the notes thereto.

6. DIRECToRS oF THE CoMPANY The directors in office since the last Directors’ Report are:-

Dato’ Shamsuddin Bin Hayroni Nyang Koon Seng Palani Selvam Muruganandam Tay Woon Teck Yeoh Aik Chuan Za’ba Bin Hasrin (appointed on �3rd February �006) Datin Rahmah Binti Kassim (Alternate Director to Dato’ Shamsuddin Bin Hayroni)

According to Article 83 of the Company’s Article of Association, Dato’ Shamsuddin Bin Hayroni and Palani Selvam Muruganandam retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

The directors’ interests in the ordinary shares of the Company during the year covered by the income statement were as follows:-

Number of ordinary shares of RM1 each in the Company Balance As at Bonus prior to 1.1.2006 Bought Sold issue share split

DirectDatin Rahmah Binti Kassim 1,458,187 – – 1,5�3,739 �,981,9�6



6. DIRECToRS oF THE CoMPANY (CoNT’D)

Number of ordinary shares of RM0.10 each in the Company Balance after As at share split Allotted Sold 31.12.2006

Datin Rahmah Binti Kassim �9,819,�60 – – �9,819,�60Palani Selvam Muruganandam – 600,000 (600,000) –Yeoh Aik Chuan – 100,000 – 100,000Za’ba Bin Hasrin – 50,000 – 50,000

Number of ordinary shares of RM1 each in Company Balance As at Bonus prior to 1.1.2006 Bought Sold issue share split

IndirectDato’ Shamsuddin Bin Hayroni * 1,458,187 – – 1,5�3,739 �,981,9�6

Indirect (held through CG Assets Pte. Ltd.)Nyang Koon Seng 3,40�,436 – – 3,555,391 6,957,8�7Tay Woon Teck 3,40�,436 – – 3,555,391 6,957,8�7

Number of ordinary shares of RM0.10 each in the Company Balance after As at share split Bought Transferred 31.12.2006

IndirectDato’ Shamsuddin Bin Hayroni * �9,819,�60 – – �9,819,�60

Indirect (held through CG Assets Pte. Ltd.)Nyang Koon Seng 69,578,�70 – (1,800,000) 67,778,�70Tay Woon Teck 69,578,�70 – (1,800,000) 67,778,�70

* Deemed interested by virtue of the shareholding held by his spouse, Datin Rahmah Binti Kassim.

Apart from the above, the directors have no other direct/indirect interests in the Group and the Company as at the balance sheet date.

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

Neither during nor at the end of the year was the Group and the Company a party to any arrangements 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 other than the Employees’ Share Option Scheme (“ESOS”) of the Company. The ESOS is governed by the By-Laws which were approved by the shareholders of the Company on ��nd February �006. To date, the ESOS has not been implemented.



7. oTHER STATuToRY INFoRMATIoN(a) Before the income statements and balance sheets of the Group and the Company were made up, the directors took

reasonable steps:-

(i) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowances for doubtful debts, and have satisfied themselves that all known bad debts have been written off and no allowance for doubtful debts is necessary; and

(ii) to ensure that any current assets, which were unlikely to realize in the ordinary course of business, their values as stated in the accounting records of the Group and the Company have been written down to an amount which they might be expected so to realize.

(b) At the date of this report:-

(i) the directors are not aware of any circumstances which would require the writing off of bad debts and the making of allowances for doubtful debts in the financial statements of the Group and the Company;

(ii) the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and the Company misleading;

(iii) the directors are not aware of any circumstances which have arisen that would render adherence to the existing method of valuation of assets or liabilities of the Group and the Company misleading or inappropriate;

(iv) the directors are not aware of any circumstances which would render any amount stated in the financial statements misleading;

(v) there does not exist any charge on the assets of the Group and the Company that has arisen since 31st December �006 which secures the liabilities of any other person; and

(vi) there does not exist any contingent liability that has arisen since 31st December �006.

(c) No contingent liability or other liability of the Group and the Company has become enforceable, or is likely to become enforceable within the period of twelve months from 31st December �006 which, in the opinion of the directors, will or may affect the ability of the Group and the Company to meet their obligations as and when they fall due.

(d) In the opinion of the directors:-

(i) the results of the operations of the Group and the Company for the year ended 31st December �006 were not substantially affected by any item, transaction or event of a material and unusual nature; and

(ii) there has not arisen in the interval between 31st December �006 and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and the Company for the period in which this report is made.

8. HoLDING CoMPANY Previously, the holding company was CG Assets Pte Ltd. (“CGAS”). Pursuant to a dilution of CGAS interest in the Company,

CGAS ceased to be the holding company.



9. SIGNIFICANT EVENTS DuRING THE YEAR(a) On 30th January �006, Customer Loyalty Solutions Sdn. Bhd. (“CLS”), a subsidiary of the Company, acquired the remaining

45% equity interest in Elite Relationship Marketing Sdn. Bhd. (“ERM”) from Shaik Akmal bin Shaik Allaudin at a purchase consideration of RM45,000. Subsequently on 31st January �006, CLS disposed 49% equity interest in ERM to Intisatria Sdn. Bhd. for RM49,000.

(b) On 18th February �006, the Company entered into a Supplemental Agreement with Desiran Mawar Sdn. Bhd. (“DMSB”) whereby DMSB is entitled to a refund of the consideration paid in excess of the fair value of ��,000,000 Redeemable Convertible Preference Shares (“RCPS”) class A of RM0.01 each in the Company as at the date. On �0th February �006, DMSB converted the RCPS into �34,7�4 ordinary shares of RM1.00 each in the Company in accordance with the terms of the Subscription Agreement dated 10th March �005. On 10th March �006, the Company refunded the excess consideration paid estimated at RM688,000 to DMSB in accordance with the terms of the Supplemental Agreement.

(c) On �0th February �006, OSK Technology Ventures Sdn. Bhd. converted 50,000,000 RCPS class B of RM0.01 each in the Company into 77�,754 ordinary shares of RM1.00 each in the Company in accordance with the terms of the Subscription Agreement dated 3rd February �005.

(d) On �1st February �006, the Company implemented a bonus issue of 6,131,899 new ordinary shares of RM1.00 each to existing shareholders of the Company after the conversion of the RCPS on the basis of approximately 1.05 new ordinary share of RM1.00 each for every 1 existing ordinary share of RM1.00 held in the Company via the capitalisation of RM5,504,5�� from the share premium account of the Company arising from the conversion of the RCPS and the remaining RM6�7,377 from retained profits of the Company.

(e) On ��nd February �006, the authorized share capital of the Company of RM49,000,000 comprising 49,000,000 ordinary shares of RM1.00 each was subdivided into 490,000,000 ordinary shares of RM0.10 each. Subsequent to the subdivision of ordinary shares, the Company had transfered the balance of the authorized share capital of RM1,000,000 comprising 50,000,000 Redeemable Convertible Preference Shares (“RCPS”) Class A of RM0.01 each and 50,000,000 RCPS Class B of RM0.01 each into RM1,000,000 comprising 10,000,000 ordinary shares of RM0.10 each.

(f ) On �8th March �006, the Company issued its prospectus for an initial public offering of 35,000,000 ordinary shares of RM0.10 each at RM0.4� per share in conjunction with its listing on the MESDAQ Market of the Bursa Malaysia Securities Berhad on 18th April �006.

10. AuDIToRS Azman, Wong, Salleh & Co. have expressed their willingness to accept reappointment.

Signed in accordance with a resolution of the Board of Directors,

DATO’ SHAMSUDDIN BIN HAYRONI

NYANG KOON SENG

Kuala Lumpur,Date: �3rd April �007


Balance Sheets as at 31st December �006

GRouP CoMPANY 2006 2005 2006 2005 Note RM RM RM RM

ASSETSNon-Current AssetsProperty, plant and equipment 8 6,541,158 5,156,319 �,375,57� 1,545,91�Investment in subsidiaries 9 – – 5,745,465 5,745,465Intangible assets - development expenditure 10 1,313,519 1,�10,513 1,313,519 1,�10,513Deferred tax asset 11 31,000 – – –

7,885,677 6,366,83� 9,434,556 8,501,890

Current AssetsInventories 1� �,67�,971 1,95�,638 – –Trade receivables 13 6,784,138 6,890,536 – 48,399Other receivables, deposits and prepayments 14 1,171,145 1,�07,198 �61,015 551,9�1Amount due from related parties 15 3,�3�,31� 3,537,143 1,0�7,503 616,900Amount due from subsidiaries 16 – – 9,378,806 �,��3,�16Tax recoverable 4�6,61� 78,55� 98� –Short term deposits 17 �3,565,509 9,95�,468 �0,168,584 7,450,000Cash and bank balances 18 �,83�,686 �,88�,4�0 753,091 1,041,639

40,685,373 �6,500,955 31,589,981 11,93�,075

ToTAL ASSETS 48,571,050 3�,867,787 41,0�4,537 �0,433,965

EQuITYShare capital 19 15,500,000 5,580,6�3 15,500,000 5,580,6�3Share premium �0 9,500,000 6,480,000 9,500,000 6,480,000Retained profits �1 15,310,438 9,�71,080 15,360,1�6 6,01�,736Exchange fluctuation reserve 77,805 39,109 – –

Equity attributable to the shareholders of the Company 40,388,�43 �1,370,81� 40,360,1�6 18,073,359Minority interest 5�,680 15,148 – –

ToTAL EQuITY 40,440,9�3 �1,385,960 40,360,1�6 18,073,359

LIABILITIESNon-Current LiabilitiesAmount due to a related party 15 – 1,000,000 – 1,000,000Hire purchase payable �� 3�,1�0 59,750 �0�,913 15,71�Term loan �3 1,�13,636 1,�78,984 – –Deferred tax liability 11 93,��4 74,�49 – –

1,538,980 �,41�,983 �0�,913 1,015,71�



Current LiabilitiesTrade payables �5 4,136,�41 5,75�,664 17,383 –Other payables and accruals �6 1,610,444 1,�9�,7�3 319,474 �70,487Hire purchase payable �� 138,878 �9,180 1�4,046 15,71�Term loan �3 53,6�3 67,911 – –Amount due to related parties 15 �73,�14 1,880,945 595 1,000,000Amount due to a subsidiary 16 – – – �3,395Tax payable 378,747 45,4�1 – 35,300

6,591,147 9,068,844 461,498 1,344,894

ToTAL LIABILITIES 8,130,1�7 11,481,8�7 664,411 �,360,606

TOTAL EQUITY AND LIABILITIES 48,571,050 3�,867,787 41,0�4,537 �0,433,965

The notes on pages 33 to 66 form part of these financial statements.

Balance Sheets as at 31st December 2006 (cont’d)


Income Statements for the year ended 31st December �006


REVENuE �7 43,161,�87 36,667,5�5 7,631,�45 6,�4�,000CoST oF SALES AND SERVICES �8 (�4,501,968) (�1,583,8�7) (1,148,014) (768,94�)

GRoSS PRoFIT 18,659,319 15,083,698 6,483,�31 5,473,058oTHER INCoME �9 808,675 576,35� 8,101,389 137,388ADMINISTRATIVE EXPENSES (8,75�,179) (6,175,988) (1,�45,867) (1,103,834)oTHER EXPENSES (401,�09) (616,�95) (35,514) (�,755)

PRoFIT FRoM oPERATIoNS 10,314,606 8,867,767 13,303,�39 4,503,857FINANCE CoSTS (1�1,3�7) (94,34�) (�5,599) (�,744)

PRoFIT BEFoRE TAXATIoN 30 10,193,�79 8,773,4�5 13,�77,640 4,501,113TAXATIoN 33 (1,165,605) (1,16�,893) (977,873) (35,300)

PRoFIT FoR THE YEAR 9,0�7,674 7,610,53� 1�,�99,767 4,465,813

Attributable to:-Shareholders of the Company 8,991,735 7,6�7,03� 1�,�99,767 4,465,813Minority interest 35,939 (16,500) – –

9,0�7,674 7,610,53� 1�,�99,767 4,465,813

EARNINGS PER SHARE 34 Basic 6.�� sen 7.84 sen 8.5� sen 4.59 sen Fully diluted 6.�� sen 7.84 sen 8.5� sen 4.59 sen



Statements of Changes in Equity for the year ended 31st December �006

Attributable to the shareholders of the Company Note Share Capital Non-distributable Distributable Exchange ordinary Share Fluctuation Retained Minority Shares RCPS Premium Reserve Profits Interest Total RM RM RM RM RM RM RM

GRouPBalance at 1st January �005 581,051 – – – 1,644,048 31,648 �,�56,747Allotment during the year 19 4,�79,57� – – – – – 4,�79,57�Issue of redeemable convertible preference shares (“RCPS”) 19 – 7�0,000 6,480,000 – – – 7,�00,000Currency translation difference – – – 39,109 – – 39,109Net profit for the year – – – – 7,6�7,03� (16,500) 7,610,53�

Balance at 31st December �005 4,860,6�3 7�0,000 6,480,000 39,109 9,�71,080 15,148 �1,385,960 Conversion of RCPS 19 1,007,478 (7�0,000) (975,478) – – – (688,000)Capitalization on bonus issue 19 6,131,899 – (5,504,5��) – (6�7,377) – –Allotment during the year 19 3,500,000 – 11,�00,000 – – 14,700,000Share issue expenses – – (1,700,000) – – – (1,700,000)Currency translation difference – – – 38,696 – – 38,696Adjustment on share of goodwill – – – – – 1,593 1,593Net profit for the year – – – – 8,991,735 35,939 9,0�7,674Interim tax exempt dividend of 15% paid in respect of the year ended 31st December �006 35 – – – – (�,3�5,000) – (�,3�5,000)

Balance at 31st December �006 15,500,000 – 9,500,000 77,805 15,310,438 5�,680 40,440,9�3

Attributable to the shareholders of the Company Non- Note Share Capital distributable Distributable ordinary Share Retained Shares RCPS Premium Profits Total RM RM RM RM RM

CoMPANYBalance at 1st January �005 581,051 – – 1,546,9�3 �,1�7,974Allotment during the year 19 4,�79,57� – – – 4,�79,57�Issue of RCPS 19 – 7�0,000 6,480,000 – 7,�00,000Net profit for the year – – – 4,465,813 4,465,813

Balance at 31st December �005 4,860,6�3 7�0,000 6,480,000 6,01�,736 18,073,359Conversion of RCPS 19 1,007,478 (7�0,000) (975,478) – (688,000)Capitalization on bonus issue 19 6,131,899 – (5,504,5��) (6�7,377) –Allotment during the year 19 3,500,000 – 11,�00,000 – 14,700,000Share issue expenses – – (1,700,000) – (1,700,000)Net profit for the year – – – 1�,�99,767 1�,�99,767Interim tax exempt dividend of 15% paid in respect of the year ended 31st December �006 35 – – – (�,3�5,000) (�,3�5,000)

Balance at 31st December �006 15,500,000 – 9,500,000 15,360,1�6 40,360,1�6



Cash Flow Statements for the year ended 31st December �006

GRouP CoMPANY 2006 2005 2006 2005 RM RM RM RM

CASH FLoWS FRoM oPERATING ACTIVITIESProfit before taxation 10,193,�79 8,773,4�5 13,�77,640 4,501,113

Adjustment for:Depreciation of property, plant and equipment 906,0�3 613,489 544,491 338,�30Property, plant and equipment written off – 7,667 – –Amortization intangible assets - development expenditure 368,��9 �48,6�0 368,��9 �48,6�0Negative goodwill – (189,�81) – –Loss/(gain) on foreign exchange (net) 19,091 (93,980) – (11,5�3)Allowance for obsolete and slow-moving inventories ��,693 �4,463 – –Damaged inventories written off – 8,719 –Deposits written off 1,800 – – –Bad debts written off 834 – – –Interest expense on term loan 85,30� 79,�94 – –Interest expense on overdraft 3,687 5,0�9 – –Interest expense on hire purchase 30,�03 8,713 �5,559 �,744Interest on short term deposits (646,314) (134,113) (565,�17) (1�5,865)Dividend income from subsidiary companies – – (7,536,17�) –Gain on disposal of shares in a subsidiary company (�,407) – – –

operating profit before working capital changes 10,98�,4�0 9,35�,045 6,114,530 4,953,319Increase in inventories (741,678) (1,0�6,530) – –Decrease/(increase) in trade receivables 87,948 (1,673,963) 48,399 (48,399)(Increase)/decrease in other receivables, deposits and prepayments (484,54�) 391,056 (��8,379) (��,758)Decrease in amount due from/to subsidiary companies – – (7,178,985) (81�,917)Decrease in amount due from/to related parties (�,30�,900) (�,407,701) (�,410,008) (543,9�1)(Decrease)/increase in trade payables (1,600,440) �,789,48� 17,383 –Increase in other payables and accruals 31�,686 574,873 48,987 77,738

Cash generated from/(used in) operations 6,�53,494 7,999,�6� (3,588,073) 3,603,06�Income tax paid (1,011,996) (1,�1�,353) (1,014,155) –Witholding tax paid (179,7�1) (��5,357) – –Interest paid on overdraft (3,687) (5,0�9) – –

Net cash generated from/(used in) operating activities 5,058,090 6,556,5�3 (4,60�,��8) 3,603,06�

CASH FLoWS FRoM INVESTING ACTIVITIESPurchase of property, plant and equipment (�,008,631) (1,�94,�49) (1,078,616) (944,766)Increase in intangible assets - development expenditure (471,�35) (5�3,085) (471,�35) (5�3,085)Acquisition of a subsidiary company (Note 36) – �01,974 – –Dividend income from subsidiary companies – – 7,536,17� –Interest received from short term deposits 646,314 134,113 565,�17 1�5,865Proceeds from disposal of shares in subsidiary companies (net) 4,000 – – (600,000)

Net cash (used in)/generated from investing activities (1,8�9,55�) (1,481,�47) 6,551,538 (1,941,986)


Cash Flow Statements for the year ended 31st December 2006 (cont’d)


CASH FLoWS FRoM FINANCING ACTIVITIESProceeds from public issue of ordinary shares 14,700,000 – 14,700,000 –Proceeds from issuance of RCPS at premium – 7,�00,000 – 7,�00,000Refund of RCPS proceeds on conversion (688,000) – (688,000) –Payment/prepayment of listing expenses (1,180,715) (365,306) (1,180,715) (365,306)Repayment of advances from a director – (50�,�54) – (�,�70)Drawdown of term loan – 1,400,000 – –Principal repayment of term loan (79,636) (69,374) – –Interest paid on term loan (85,30�) (79,�94) – –Interest paid on hire purchase (30,�03) (8,713) (�5,559) (�,744)Dividend paid (�,3�5,000) – (�,3�5,000) –

Net cash generated from financing activities 10,311,144 7,575,059 10,480,7�6 6,8�9,680

NET INCREASE IN CASH AND CASH EQuIVALENTS DuRING THE YEAR 13,539,68� 1�,650,335 1�,430,036 8,490,756CASH AND CASH EQuIVALENTS AT BEGINNING oF THE YEAR 1�,834,888 184,553 8,491,639 883EXCHANGE DIFFERENCE oN CASH AND CASH EQuIVALENTS AT BEGINNING �3,6�5 – – –

CASH AND CASH EQuIVALENTS AT END oF THE YEAR �6,398,195 1�,834,888 �0,9�1,675 8,491,639

Cash and cash equivalents comprise:Short term deposits (Note 17) �3,565,509 9,95�,468 �0,168,584 7,450,000Cash and bank balances �,83�,686 �,88�,4�0 753,091 1,041,639

�6,398,195 1�,834,888 �0,9�1,675 8,491,639



Notes to the Financial Statements - 31st December �006

1. BASIS oF PREPARATIoN

(a) The financial statements of the Group and the Company are prepared under the historical cost convention modified to include other bases of valuation as disclosed under significant accounting policies, and comply with MASB Approved Accounting Standards for Entities Other than Private Entities and the provisions of the Companies Act, 1965.

(b) During the financial year, the Company adopted the following applicable revised Financial Reporting Standards (“FRS”) issued by MASB which are effective for the Group and the Company’s financial year beginning on or after 1st January �006:-

FRS 101 Presentation of Financial StatementsFRS 10� InventoriesFRS 108 Accounting Policies, Changes in Accounting Estimates and ErrorsFRS 110 Events After the Balance Sheet DateFRS 116 Property, Plant and EquipmentFRS 1�1 The Effects of Changes in Foreign Exchange RatesFRS 1�7 Consolidated and Separate Financial StatementsFRS 13� Financial Instruments: Disclosure and PresentationFRS 133 Earnings Per ShareFRS 136 Impairment of AssetsFRS 138 Intangible Assets

The adoption of the above revised FRSs have been made in accordance with their respective transitional provisions, if any, and did not result in any substantial financial impact on the results of the Group and the Company.

(c) The new FRSs that are mandatory for the Group’s financial period on or after 1st January �007 or later periods, but which the Group has not early adopted, are as follow:-

Effective for annual periodFRS Title commencing on or after

FRS 117 Lease 1.10.�006FRS 1�1 The Effect of Changes in Foreign Exchange(Amendment) Rates - Net Investment in Foreign Operation 15.�.�007FRS 1�4 Related Party Disclosures 1.10.�006FRS 139 Financial Instruments: Recognition and Yet to be Measurement determined by MASB

The Company will apply FRS 117 and FRS 1�4 from the financial year beginning on 1st January �007, amendment to FRS 1�1 from the financial year beginning on 1st January �008 and FRS 139 when the standard becomes effective.

2. PRINCIPAL ACTIVITIES The Group is principally engaged in the provision of end-to-end customer loyalty management solutions and business process

outsourcing services.

The Company is principally engaged in the development and provision of loyalty and database management software applications and information technology infrastructure. The Company is currently promoting its Enterprise Marketing Management application, namely Advance Information Marketing System (“AIMS”).

The principal activities of the subsidiary companies are disclosed in Note 9 to the financial statements.


Notes to the Financial Statements - 31st December 2006 (cont’d)

3. GENERAL INFoRMATIoN The financial statements of the Group and the Company were authorized for issue on �3rd April, �007 by the Board of

Directors.

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

The address of the Company’s registered office is 5�, 1st Floor, Jalan SS �1/58, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan.

The principal place of business of the Company is located at Suite �A-16-�, Block �, Level 16, Plaza Sentral, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur.

4. FuNCTIoNAL AND PRESENTATIoN CuRRENCY Transactions and balances included in the financial statements of the Company and each of its subsidiary companies are

measured using the currency of the primary economic environment in which each entity operates (the “functional currency”). The financial statements of the Group and the Company are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

5. CRITICAL ACCouNTING ESTIMATES AND juDGEMENTS The preparation of financial statements requires management to make judgements, estimates and assumptions that affect

the application of accounting policies and reported amounts of assets, liablities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. The critical assumptions concerning the future that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below:-

Deferred tax liabilities No deferred tax liabilities are recognized for all the temporary differences arising between the tax bases of assets and liabilities

and their carrying amounts in the financial statements because the Company was granted MSC status under the Promotion of Investments Act, 1986 whereby 100% of its statutory income is exempted from tax until �9th September, �009.

The Company estimated that any tax charge arising from temporary differences between the tax bases and the carrying amount of its assets and liabilities would be recognized upon expiry of the Pioneer Status tax exemption.

6. FINANCIAL RISK MANAGEMENT PoLICIES The Group’s financial risk management policies seek to ensure that adequate financial resources are available for the

development of the Group’s business whilst managing its foreign currency, interest rate, credit, liquidity and cash flow risks.

(a) Foreign Currency Risk The Group is exposed to currency risks as a result of the foreign currency transactions entered into in currencies other

than its functional currencies. Currently, the Group does not enter into foreign exchange contracts to hedge its foreign exchange risk as the amount of foreign currency transactions is not significant. However, the Group reviews its foreign currency exposure periodically to ensure that its net exposure is managed at an acceptable level.

(b) Interest Rate Risk Interest rate exposure arises from the Group’s borrowings and deposits, and is managed through the use of fixed and

floating rate debts.



6. FINANCIAL RISK MANAGEMENT PoLICIES (CoNT’D)

(c) Credit Risk The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from its receivables. The

maximum exposure to credit risk is represented by the total carrying amounts of these financial assets in the balance sheet reduced by the effects of any netting arrangements with counterparties.

The Group’s major concentration of credit risk is in respect of trade balances due from a third party and a related party totalling RM4,807,960 (�005: RM5,873,�9�). The third party is a major customer who contributed approximately 1�.3% (�004: 13.4%) of a subsidiary’s operating revenue for the year. The exposure arising from the amount owing by a related party of RM3,�3�,31� (�005: RM3,537,143) is reduced by an amount of RM�73,�14 (�005: RM1,853,0�3) due to the same related party and trade deposits of RM Nil (�005: RM1,000,000) received from the same related party as at the balance sheet date. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis.

(d) Liquidity and Cashflow Risks The Group’s exposure to liquidity and cashflow risks arises mainly from general funding and business activities. It

practices prudent liquidity risk management by maintaining sufficient cash balances to support its daily operations.

7. SIGNIFICANT ACCouNTING PoLICIES

(a) Basis of Consolidation The income statement and balance sheet of the Group include the audited financial statements of the Company and

its subsidiary companies, as listed in Note 9 to the financial statements, made up to 31st December �006.

The results of subsidiaries acquired or disposed are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ identifiable net assets are determined and these values are reflected in the Group’s financial statements. Minority interest is measured at the minorities’ share of fair value of the identifiable assets and liabilities of the acquiree. All intragroup transactions and balances are eliminated on consolidation.

(b) Goodwill and Negative Goodwill The excess of the cost of acquisition over the Group’s share of the fair values of the subsidiaries’ identifiable net assets

at the date of acquisition is reflected as goodwill arising on consolidation in the consolidated balance sheet. Goodwill is stated net of negative goodwill. The carrying value of goodwill is reviewed at each balance sheet date and is written down for impairment, where necessary.

Negative goodwill represents the excess of the Group’s share of the fair values of the subsidiaries’ identifiable net assets at the date of acquisition over the cost of acquisition and is taken to the consolidated income statement immediately on consolidation after set-off against goodwill in the consolidated balance sheet.

(c) Investment in Subsidiary Companies A subsidiary company is an enterprise in which the Company has power to exercise control over the financial and

operating policies so as to obtain benefits from its activities.

Investment in subsidiary companies are stated at cost in the Company’s financial statements and are subject to review for impairment at each balance sheet date.



7. SIGNIFICANT ACCouNTING PoLICIES (CoNT’D)

(d) Financial Instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability

or equity instrument of another enterprise.

A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an equity instrument of another enterprise.

A financial instrument issued by the Group is classified as a liability or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as liability are reported as expenses or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group and the Company have a legally enforceable right to set off and intend to settle either on a net basis or to realise the asset and settle the liability simultaneously.

The accounting policy statement associated with each significant financial asset and liability are disclosed in the respective accounting policy notes.

(e) Property, Plant and Equipment Property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciation and

impairment losses, if any. Freehold land is stated at cost less any impairment losses and is not depreciated.

Property, plant and equipment is depreciated on a straight line basis to write off the depreciable amount of the assets over their estimated useful lives. Depreciable amount is the cost of an asset less its residual value.

The principal annual rates used for this purpose are:-

Warehouse 3%Furnitures and fittings 10%Renovation 10% - �0%Plant and machinery �0%Computer hardware and software �0% - 33 1/3%Office equipment �0% - 33 1/3%

The residual value and the useful life of property, plant and equipment are reviewed at least at each financial year end. If the residual value and/or the useful life of the asset differ from the previous estimates, the revised depreciation charge will be adjusted immediately in the income statement in the year of the change.

(f) Impairment of Assets The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewed

at each balance sheet date 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 is the higher of net realizable value and value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets or the relevant cash generating units.

An impairment loss is charged to the income statement immediately.

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 recognized to the extent of the carrying amount of the asset that would have been determined (net of amortization and depreciation) had no impairment loss been recognised. The reversal is recognized in the income statement immediately.




(g) Assets acquired under hire purchase financing Assets acquired under hire purchase financing are included in property, plant and equipment and are depreciated over

their useful lives. Outstanding obligations, after deducting attributable finance expenses, are included as liabilities in the financial statements. Finance expenses are charged to the income statement on a reducing balance basis over the period of financing.

(h) Inventories Inventories are valued at the lower of cost and net realizable value after making adequate allowance for deteriorated,

damaged, obsolete or slow-moving items. Cost includes the actual cost of purchase and incidental expenses incurred in bringing the inventories to their present location and condition. Cost is determined on the folowing bases:-

Customers Loyalty Solutions Sdn. Bhd. - “first-in, first-out” basisAdvanced Supply Chain Solutions Sdn. Bhd. - “first-in, first-out” basisBounty Trading Pte. Ltd. - weighted average basis

(i) Receivables Receivables are carried at invoiced amount less an estimate made for doubtful debts based on a review of all outstanding

amounts at the balance sheet date. Bad debts are written off in the period in which they are identified.

(j) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services

received.

(k) Provisions Provisions are recognized when the Group has a present legal or constructive obligation as a result of past event, when

it is probable that an outflow of resources will be required to settle the obligation,and when a reliable estimate of the amount can be made.

(l) Equity Instruments Ordinary shares and preference shares are classified as equity. Dividends on share capital are recognized as liabilities

when declared before the balance sheet date. A dividend proposed or declared after the balance sheet date, but before the financial statements are authorized for issue, is not recognized as a liability at the balance sheet date. Upon the approval of the proposed dividend, it will be accounted for as a liability.

(m) Preliminary Expenses Preliminary expenses are written off in the income statement when incurred.

(n) Research and Development Costs Research expenditure is recognized as an expense when incurred. Costs incurred on development project (relating to

the design and testing of new or improved products) are recognized as intangible assets when the following criteria are fulfilled:

(a) it is technically feasible to complete the intangible asset so that it will be available for use or sale;(b) management intends to complete the intangible asset and use or sell it;(c) there is an ability to use or sell the intangible asset;(d) it can be demonstrated how the intangible asset will generate probable future economic benefits;(e) adequate technical, financial and other resources to complete the development and to use or sell the intangible

asset are avaliable; and(f ) the expenditure attributable to the intangible asset during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognized as an expense when incurred. Development costs previously recognised as an expense are not recognized as an asset in a subsequent period. Capitalized development cost are recorded as intangible assets and amortized from the point at which the asset is ready for used on a straight-line basis over its useful life of five years.

Development assets are tested for impairment annually, in accordance with FRS 136.




(o) Taxation Taxation for the financial period comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the period and is measured using the tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred tax is provided for 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 negative goodwill 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 recognized for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred tax is recognized in the income statement, except when it arises from a transaction which is recognized directly in equity, in which case the deferred tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax assets to be utilized.

(p) Cash and Cash Equivalents Cash represents cash in hand and bank balances. Cash equivalents comprise demand deposits, bank overdrafts, short

term deposits, and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(q) Foreign Currencies Transactions in foreign currencies are translated into Ringgit Malaysia at the approximate rates of exchange ruling at

the transaction dates. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated at the rates ruling as of that date. All exchange gains and losses are taken to the income statement.

For the purpose of consolidation, the financial statements of the subsidiary incorporated in Singapore are translated into Ringgit Malaysia as follows:-

Share capital - at historical rates (ruling at transaction dates)Reserves - at historical rates (average rates)Assets and liabilities - at closing rateIncome statement - at average rate prevailing during the financial period

All translation gains or losses are taken up and reflected in the exchange fluctuation reserve account under shareholders’ equity in the consolidated balance sheet.




(r) Employee Benefits

Short-term Benefits Salaries, wages, commission, allowances, paid annual leave, bonuses and non-monetary benefits are accrued for in the

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

Defined Contribution Plan The Group makes contributions to the Employees Provident Fund (“EPF”), the national contribution plan in Malaysia

and the Central Provident Fund (“CPF”), a defined contribution plan managed by the Government of Singapore. The contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Group has no further liabilities in respect of the defined contribution plans.

(s) Revenue Recognition Revenue of the Group is recognized upon rendering of services and customers’ acceptance, and when the outcome

of the transaction can be estimated reliably.

Sales and Services Upon delivery of goods or rendering of services and when applicable, upon customers’ acceptance. In the event the

outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable.

Royalty Fee When the fee is effectively chargeable.

Interest Income - Short Term Deposits On accrual basis.

Commission Income When the terms and conditions attaching to the claim are satisfied.

8. PRoPERTY, PLANT AND EQuIPMENTGRouP At Depreciation Exchange At 1.1.2006 Additions charge Disposal differences 31.12.2006Net Book Value RM RM RM RM RM RM

Freehold land 1,950,000 – – – – 1,950,000Warehouse 478,750 – (15,000) – – 463,750Furnitures and fittings 191,9�8 39�,861 (44,�19) – – 540,570Computer hardware and software 1,941,074 1,�37,390 (657,3�1) – 161 �,5�1,304Office equipment 79,531 84,908 (�9,1�6) – � 135,315Plant and machinery 134,1�4 180,083 (55,�96) – – �58,911Renovation 380,91� 395,457 (105,061) – – 671,308

5,156,319 �,�90,699 (906,0�3) – 163 6,541,158



8. PRoPERTY, PLANT AND EQuIPMENT (CoNT’D)

GRouP Accumulated Exchange Net book At cost depreciation differences valueAt 31.12.2006 RM RM RM RM

Freehold land 1,950,000 – – 1,950,000Warehouse 500,000 (36,�50) – 463,750Furnitures and fittings 613,518 (7�,948) – 540,570Computer hardware and software 3,737,915 (1,�16,891) �80 �,5�1,304Office equipment 188,190 (5�,88�) 7 135,315Plant and machinery 363,394 (104,483) – �58,911Renovation 888,0�8 (�16,7�0) – 671,308

8,�41,045 (1,700,174) �87 6,541,158

At Acquisition Depreciation Exchange At 1.1.2005 of a subsidiary Additions charge Write off differences 31.12.2005Net Book Value RM RM RM RM RM RM RM

Freehold land 1,950,000 – – – – – 1,950,000 Warehouse 493,750 – – (15,000) – – 478,750 Furnitures and fittings 159,7�� – 5�,711 (�0,505) – – 191,9�8 Computer hardware and software 1,�61,175 8,661 1,1�0,6�8 (441,84�) (7,667) 119 1,941,074 Office equipment 46,187 71� 50,448 (17,8�1) – 5 79,531 Plant and machinery 170,136 – 650 (36,66�) – – 134,1�4 Renovation 4��,081 – 40,490 (81,659) – – 380,91�

4,503,051 9,373 1,�64,9�7 (613,489) (7,667) 1�4 5,156,319

Accumulated Exchange Net book At cost depreciation differences valueAt 31.12.2005 RM RM RM RM

Freehold land 1,950,000 – – 1,950,000Warehouse 500,000 (�1,�50) – 478,750Furnitures and fittings ��0,657 (�8,7�9) – 191,9�8Computer hardware and software �,500,5�5 (559,570) 119 1,941,074Office equipment 103,�8� (�3,756) 5 79,531Plant and machinery 183,311 (49,187) – 134,1�4Renovation 49�,571 (111,659) – 380,91�

5,950,346 (794,151) 1�4 5,156,319

(i) The freehold land and warehouse of a subsidiary company were pledged as security for a term loan facility of RM1.4 million and an overdraft facility of RM300,000 obtained by the subsidiary company, details of which are disclosed in Notes �3 and �4.




(ii) Net book values of property, plant and equipment of the Group acquired under hire purchase are as follows:-

GRouP 2006 2005 RM RM

Computer hardware and software �07,443 43,�08 Plant and machinery 189,�91 67,6�1

CoMPANY At Depreciation At 1.1.2006 Additions charge 31.12.2006Net Book Value RM RM RM RM

Computer hardware and software 1,503,777 1,01�,9�0 (51�,�47) �,004,450Furniture and fittings �1,065 95,�89 (7,566) 108,788Renovation �0,31� 103,595 (8,177) 115,730Plant and machinery – 155,��5 (15,5��) 139,703Office equipment 758 7,1�� (979) 6,901

1,545,91� 1,374,151 (544,491) �,375,57�

Accumulated Net book At cost depreciation valueAt 31.12.2006 RM RM RM

Computer hardware and software �,935,574 (931,1�4) �,004,450Furniture and fittings 117,807 (9,019) 108,788Renovation 1�5,1�5 (9,395) 115,730 Plant and machinery 155,��5 (15,5��) 139,703Office Equipment 7,964 (1,063) 6,901

3,341,695 (966,1�3) �,375,57�

At Depreciation At 1.1.2005 Additions charge 31.12.2005Net Book Value RM RM RM RM

Computer hardware and software 955,088 884,164 (335,475) 1,503,777Furniture – ��,518 (1,453) �1,065Renovation – �1,530 (1,�18) �0,31�Office equipment – 84� (84) 758

955,088 9�9,054 (338,�30) 1,545,91�




CoMPANY Accumulated Net book At cost depreciation valueAt 31.12.2005 RM RM RM

Computer hardware and software 1,9��,654 (418,877) 1,503,777Furniture ��,518 (1,453) �1,065 Renovation �1,530 (1,�18) �0,31� Office Equipment 84� (84) 758

1,967,544 (4�1,63�) 1,545,91�

(i) Net book values of property, plant and equipment of the Company acquired under hire purchase are as follows:-

CoMPANY 2006 2005 RM RM

Computer hardware and software �07,443 43,�08Plant and machinery 139,70� –

9. INVESTMENT IN SuBSIDIARIES CoMPANY

2006 2005 RM RM

Unquoted shares, at cost 5,745,465 5,745,465

Details of the subsidiary companies are as follows:

Place of Effective Equity InterestName of Company Incorporation 2006 2005 Principal Activity % %

DirectCustomer Loyalty Solutions Malaysia 100 100 Providing integrated solutions in the Sdn. Bhd. (“CLS”) management of customer loyalty servicesAdvanced Supply Chain Malaysia 100 100 Providing procurement services Solutions Sdn. Bhd. (“ASCS”) through local suppliers and mail order programs* Bounty Trading Pte. Ltd. Singapore 100 100 Providing international outsourced (“BT”) procurement services

IndirectElite Relationship Marketing Malaysia 51 55 Providing integrated solutions in Sdn. Bhd. (“ERM”) the management of customer loyalty services

* Not audited by Azman, Wong, Salleh & Co.

On 30th January �006, Customer Loyalty Solutions Sdn. Bhd. acquired the remaining 45% equity interest in ERM from Shaik Akmal bin Shaik Allaudin at a purchase consideration of RM45,000. Subsequently, CLS disposed 49% equity interest in ERM to Intisatria Sdn. Bhd., a company in which a director of CLS has substantial direct interest for RM49,000 on 31st January �006.



10. INTANGIBLE ASSETS - DEVELoPMENT EXPENDITuRE At Amortisation At 1.1.2006 Additions Charge 31.12.2006 RM RM RM RM

GRouP/CoMPANYNet Book ValueInternally generated development expenditure 1,�10,513 471,�35 (368,��9) 1,313,519

Accumulated Net Book Cost amortised Value RM RM RM

At 31.12.2006Internally generated development expenditure 1,981,979 (668,460) 1,313,519

At Amortisation At 1.1.2005 Additions Charge 31.12.2005 RM RM RM RM

Net Book ValueInternally generated development expenditure 936,048 5�3,085 (�48,6�0) 1,�10,513

Accumulated Net Book Cost amortised Value RM RM RM

At 31.12.2005Internally generated development expenditure 1,510,744 (300,�31) 1,�10,513

GRouP / CoMPANY 2006 2005 RM RM

Analysed as:Staff costs of personnel engaged in development activities 695,087 378,909Software development work-in-progress acquired 469,787 640,618Management/maintenace fees for services rendered by a related party 148,645 190,986

1,313,519 1,�10,513

The internally generated development cost is in respect of software application known as Advance Information Marketing System (“AIMS”).

The amortization charge is included in the income statement as cost of sales and services (Note �8).



11. DEFERRED TAX GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Deferred tax assets 31,000 – – –Deferred tax liabilities (93,��4) (74,�49) – –

(6�,��4) (74,�49) – –

At 1st January (74,�49) (4�,306) – –Acquisition of subsidiaries – (1,874) –Exchange differences (�8) (��)Credited/(charged) to income statement (Note 33) 1�,053 (30,047) – –

At 31st December (6�,��4) (74,�49) – –

The component of deferred tax assets:Provision for bonus 70,470 – – –Offsetting (39,470) – – –

31,000 – – –

The component of deferred tax liabilities:Property, plant and equipment (13�,694) (74,�49) – –Offsetting 39,470 – – –

(93,��4) (74,�49) – –

The temporary differences for which deferred tax asset/(liabilities) have not been recognized are as follows:Provision for bonus 168,418 – 168,418 –Property, plant and equipment (1,450,074) (1,1�0,814) (1,450,074) (1,177,�43)Research and development expenditure capitalized (1,313,519) (1,�10,513) (1,313,519) (1,�10,513)

(�,595,175) (�,331,3�7) (�,595,175) (�,387,756)

Deferred tax liabilities have not been recognized as the Company was granted MSC Status under the Promotion of Investment Act, 1986 whereby 100% of its statutory income is exempted from tax for the period from 30th September �004 to �9th September �009.



12. INVENToRIES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

At costMerchandise goods �,866,190 �,1��,��8 – –

Allowance for obsolete and slow-moving inventoriesBalance at 1st January 169,590 36,509 – –Arising from acquisition of subsidiaries – 108,618 – –Exchange differences 936 –Allowance for the year ��,693 �4,463 – –

Balance at 31st December 193,�19 169,590 – –

Carrying value at 31st December �,67�,971 1,95�,638 – –

Analyzed as:Cost �,005,�17 1,379,374 – –Net realisable value 667,754 573,�64 – –

�,67�,971 1,95�,638 – –

13. TRADE RECEIVABLES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Trade receivables 6,784,138 6,890,536 – 48,399

Analysis of foreign currency exposure:Euro �9,075 16,077 – –US Dollar 13,�39 918,181 – –Singapore Dollar 3�,155 486,54� – –

The Group/Company’s normal credit term is 30 days. Other credit terms are assessed and approved on a case-by-case basis.



14. oTHER RECEIVABLES, DEPoSITS AND PREPAYMENTS GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Prepayment of listing expenses – 519,�85 – 519,�85Trade deposits 353,�96 87,�48 – –Receivables, sundry deposits and other prepayments 817,849 58�,478 �61,015 3�,636Performance bond – 18,187 – –

1,171,145 1,�07,198 �61,015 551,9�1

Analysis of foreign currency exposure:Singapore Dollar 44,137 134,�1� – –

The performance bond is pledged by BT to secure a bank guarantee.

Payment/prepayment of listing expenses of RM50,000 (�005: RM70,000) to the auditors as fees for Reporting Accountants’ work, had been set off against the share premium arising from the Company’s issue of shares to the investing public in connection with its listing of and quotation for the entire enlarged issued and paid-up share capital on the MESDAQ Market of the Bursa Malaysia Securities Berhad.

15. AMouNT DuE FRoM/(To) RELATED PARTIES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Amount due from:CurrentTrade 3,��5,31� 3,537,143 1,0�7,503 616,900Non-trade 7,000 – – –

3,�3�,31� 3,537,143 1,0�7,503 616,900

Analysis of trade balances:Electronic Commerce Technology Sdn. Bhd. (“ECT”) 3,100,878 3,537,143 954,703 616,900PT. Customers Loyalty Solutions (“PT CLS”) 7�,800 – 7�,800 –Other related party 51,634 – – –

3,��5,31� 3,537,143 1,0�7,503 616,900

Analysis of non-trade balances:ECT 7,000 – – –

Analysis of foreign currency exposure:Singapore Dollar 51,634 – – –

Included in the trade balances due from ECT of RM3.10 million (�005: RM3.54 million) are fees and related charges receivable in respect of end-to-end customer loyalty management solutions services rendered by CLS and ASCS.

The credit terms granted to the related parties range from 60 to 90 days.



15. AMouNT DuE FRoM/(To) RELATED PARTIES (CoNT’D) GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Amount due to:CurrentTrade �7�,619 1,880,945 – 1,000,000Non-trade 595 – 595 –

�73,�14 1,880,945 595 1,000,000

Non-CurrentTrade – 1,000,000 – 1,000,000

Analysis of trade balances:ECT �7�,619 �,853,0�3 – �,000,000Other related party – �7,9�� – –

�7�,619 �,880,945 – �,000,000

Analysis of foreign currency exposure:Singapore Dollar – �7,9�� – –

The credit terms granted to the Group/Company range from 30 to 90 days.

The trade balances of RM1 million in the previous year represents non-refundable deposits received from ECT in respect of services to be rendered by the Company to ECT over a �-year period subsequent to the balance sheet date.

The non-trade balance of the Group represents payments made on behalf by another related party which are are unsecured, interest-free and not subject to fixed terms of repayment.

The nature of the related party relationships and details of the transactions involved are disclosed in Note 37 to the financial statements.

16. AMouNT DuE FRoM/(To) SuBSIDIARIES CoMPANY

2006 2005 RM RM

Amount due from:CurrentTrade 1,898,644 1,300,77�Non-trade 7,480,16� 9��,444

9,378,806 �,��3,�16

Analysis of foreign currency exposure:Singapore Dollar �36,194 –



16. AMouNT DuE FRoM/(To) SuBSIDIARIES (CoNT’D)

The trade balance of RM1,898,644 (�005: RM1,300,77�) comprises system maintenance fees receivable from CLS, ASCS and ERM amounting to RM1,�68,416, RM6�9,000 and RM1,��8 (�005: RM690,77�, RM610,000 and RM Nil) respectively. The credit terms granted to CLS, ASCS and ERM range from 60 to 90 days.

The non-trade amount of RM7,480,16� (�005: RM9��,444) represents payments made on behalf of CLS, ASCS and BT amounting to RM�,7�5,563, RM4,518,405 and RM�36,194 (�005: RM�91,95�, RM630,49� and RM Nil) respectively which are unsecured, interest-free and have no fixed terms of repayment.

CoMPANY 2006 2005 RM RM

Amount due to:CurrentNon-trade – �3,395

Analysis of foreign currency exposure:Singapore Dollar – �3,395

The non-trade amount of RM�3,395 represents payments made on behalf by BT which are unsecured, interest-free and have no fixed terms of repayment.

17. SHoRT TERM DEPoSITS GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Short term deposits placed with licensed financial institutions �3,506,793 9,9�9,895 �0,168,584 7,450,000Cash Management Trust Account 58,716 ��,573 – –

�3,565,509 9,95�,468 �0,168,584 7,450,000

Analysis of foreign currency exposure:Singapore Dollar �30,�40 1,136,700 – –

The effective weighted average interest rates of short term deposits are: 3.�0% �.34% 3.�0% �.30%

Short term deposits of the Group and the Company have an average maturity of less than 30 days.



18. CASH AND BANK BALANCES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Cash and bank balances �,83�,686 �,88�,4�0 753,091 1,041,639

Analysis of foreign currency exposure:Singapore Dollar 48�,567 715,357 – –US Dollar 1�7,880 – – –

19. SHARE CAPITAL GRouP / CoMPANY

No of Shares Par value Value RM RM RM

Authorised:Ordinary SharesBalance at 1st January �005 10,000,000 1.00 10,000,000Created during the year 39,000,000 1.00 39,000,000

Balance at 31st December �005 49,000,000 1.00 49,000,000

Subdivision of shares 490,000,000 0.10 49,000,000Transferred from Redeemable Convertible Preference Shares 10,000,000 0.10 1,000,000


Redeemable Convertible Preference Shares Class A (“RCPS Class A”)Balance at 1st January �005 – –Created during the year 50,000,000 0.01 500,000

Balance at 31st December �005 50,000,000 0.01 500,000Cancelled and transferred to ordinary shares (50,000,000) 0.01 (500,000)

Balance at 31st December �006 – –

Redeemable Convertible Preference Shares Class B (“RCPS Class B”)Balance at 1st January �005 – –Created during the year 50,000,000 0.01 500,000

Balance at 31st December �005 50,000,000 0.01 500,000Cancelled and transferred to ordinary shares (50,000,000) 0.01 (500,000)


Total authorised share capital at 31st December �006 500,000,000 0.10 50,000,000



19. SHARE CAPITAL (CoNT’D) GRouP / CoMPANY

No of Shares Par value Value RM RM RM

Issued and fully paid-up:Ordinary SharesBalance at 1st January �005 581,051 1.00 581,051Allotment during the year 4,�79,57� 1.00 4,�79,57�

Balance at 31st December �005 4,860,6�3 1.00 4,860,6�3

Conversion of RCPS A �34,7�4 1.00 �34,7�4Conversion of RCPS B 77�,754 1.00 77�,754

1,007,478 1,007,478Bonus issue of approximately 1.05 ordinary shares of every 1 existing ordinary share 6,131,899 1.00 6,131,899

Balance before subdivision of shares 1�,000,000 1.00 1�,000,000

Subdivision of shares 1�0,000,000 0.10 1�,000,000Public issue 35,000,000 0.10 3,500,000


RCPS Class ABalance at 1st January �005 – –Allotment during the year ��,000,000 0.01 ��0,000

Balance at 31st December �005 ��,000,000 0.01 ��0,000Converted during the year (��,000,000) 0.01 (��0,000)


RCPS Class BBalance at 1st January �005 – –Allotment during the year 50,000,000 0.01 500,000

Balance at 31st December �005 50,000,000 0.01 500,000Converted during the year (50,000,000) 0.01 (500,000)


Total issued and fully paid-up share capital at 31st December �006 155,000,000 0.10 15,500,000



19. SHARE CAPITAL (CoNT’D)

On 18th February �006, the Company entered into a Supplemental Agreement with Desiran Mawar Sdn. Bhd. (“DMSB”) whereby DMSB is entitled to a refund of the consideration paid in excess of the fair value of ��,000,000 RCPS Class A of RM0.01 each in the Company as at that date. On �0th February �006, DMSB converted the RCPS into �34,7�4 ordinary shares of RM1.00 each in the Company in accordance with the terms of the Subscription Agreement dated 10th March �005. On 10th March �006, the Company refunded the excess consideration paid estimated at RM688,000 to DMSB in accordance with the terms of the Supplemental Agreement.

On �0th February �006, OSK Technology Ventures Sdn. Bhd. converted 50,000,000 RCPS Class B of RM0.01 each in the Company into 77�,754 ordinary shares of RM1.00 each in the Company in accordance with the terms of the Subscription Agreement dated 3rd February �005.

On �1st February �006, the Company implemented a bonus issue of 6,131,899 new ordinary shares of RM1.00 each to existing shareholders of the Company after the conversion of the RCPS on the basis of approximately 1.05 new ordinary share of RM1.00 each for every 1 existing ordinary share of RM1.00 held in the Company via the capitalization of RM5,504,5�� from the share premium account of the Company arising from the conversion of the RCPS and the remaining RM6�7,377 from the retained profits of the Company.

On ��nd February �006, the authorized preference share capital comprising 100,000,000 RCPS of RM0.01 each had been cancelled and the authorized ordinary share capital had been increased by the creation of 1,000,000 of RM1.00 each. On the same day, every 1 ordinary share of RM1.00 each had been subdivided into 10 new ordinary shares of RM0.10 each.

On 17th April �006, the Company increased its issued and paid-up ordinary share capital from RM1�,000,000 to RM15,500,000 by way of public issue of 35,000,000 new ordinary shares of RM0.10 each at an issue price of RM0.4� per share. Upon completion of the public issue, the Company was listed in the MESDAQ Market of Bursa Malaysia Securities Berhad on 18th April �006.

20. SHARE PREMIuM GRouP / CoMPANY

2006 2005 RM RM

Balance at 1st January 6,480,000 –Issue of RCPS Class A – 1,980,000Issue of RCPS Class B – 4,500,000Capitalization on conversion of RCPS A and RCPS B (�87,478) –Refund of excess consideration (688,000) –Capitalization on bonus issue (5,504,5��) –Public issue 11,�00,000 –Listing expenses (1,700,000) –

Balance at 31st December 9,500,000 6,480,000

This amount is not distributable by way of cash dividends and may be utilized only in the manner set out in Section 60(3) of the Companies Act, 1965.



21. RETAINED PRoFITS Subject to agreement with the tax authorities, the Company has estimated tax exempt income of RM6,093,000 (�005:

RM3,665,000) at the balance sheet date available for distribution as tax exempt dividends.

Subject to agreement with the tax authorities, the subsidiaries of the Company have adequate Section 108 tax credits to frank the payment of net dividends out of the entire retained profits as at the balance sheet date.

22. HIRE PuRCHASE PAYABLE GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Hire purchase payable:Due within 1 year 165,084 36,5�8 147,01� 18,456Due between 1 to � years �00,35� 54,600 168,749 18,456Due between � to 5 years 50,893 13,531 50,893 –

416,3�9 104,659 366,654 36,91�Less: Future finance charges (45,331) (15,7�9) (39,695) (5,488)

Principal outstanding 370,998 88,930 3�6,959 31,4�4

Analysed as:CurrentRepayable within 1 year 138,878 �9,180 1�4,046 15,71�

Non-CurrentRepayable between 1 to � years 183,577 44,011 154,370 15,71�Repayable between � to 5 years 48,543 15,739 48,543 –

�3�,1�0 59,750 �0�,913 15,71�

The interest rates applicable to the hire purchase payable at the balance sheet date range from 3.05% to 4.75% (�005: 5% to 7%) per annum.

23. TERM LoAN (SECuRED) GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

CurrentRepayable within 1 year 53,6�3 67,911 – –

Non-currentRepayable between 1 to � years 119,614 145,846 – –Repayable between � to 5 years �15,�1� �56,�06 – –Repayable after 5 years 878,810 876,93� – –

1,�13,636 1,�78,984 – –

Principal outstanding 1,�67,�59 1,346,895 – –



23. TERM LoAN (SECuRED) (CoNT’D)

On 11th January �005, CLS drew a term loan facility of RM1.4 million which is secured against the following:

(i) the freehold land and warehouse of the subsidiary company (Note 8); and

(ii) joint and several guarantee of Nyang Koon Seng, a director of the Company and Mohd Razali Bin Mohd Zain, a director of the subsidiary company at the time of drawdown.

The term loan is repayable by 180 monthly instalments of RM1�,389 commencing 1st February �005. Interest is charged at the Base Lending Rate (BLR) for the first � years and, thereafter, at a rate of 0.75% above BLR, subject to variation as stipulated in the loan offer letter dated 17th October �004. In March �006, the BLR has increased from 6.�5% to 6.75%.

24. oVERDRAFT FACILITY A subsidiary company, CLS has been granted an overdraft facility of RM300,000 which is secured against the following:

(i) the freehold land and warehouse of the subsidiary company (Note 8); and

(ii) joint and several guarantee of Nyang Koon Seng, a director of the Company and Mohd Razali Bin Mohd Zain, a director of the subsidiary company at the time of drawdown.

The overdraft is repayable on demand and is renewable subject to annual review. Interest is charged at 1.00% above BLR subject to variation as stipulated in the overdraft facility offer letter dated 17th October �004. In March �006, the BLR has increased from 6.�5% to 6.75%.

As at 31st December �006, the overdraft facility was fully settled.

25. TRADE PAYABLES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Trade payables 4,136,�41 5,75�,664 17,383 –

Analysis of foreign currency exposure:Singapore Dollar �1,88� 46,564 – –

The normal credit terms granted to the Group/Company range from 30 to 60 days.

Included in trade payables are accrued cost attributable to the managed customer loyalty services amounting to RM1,6�0,�9� (�005: RM�,941,605) in relation to the end-to-end customer loyalty management solutions services rendered by CLS.

26. oTHER PAYABLES AND ACCRuALS GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Other payables and accruals 1,610,444 1,�9�,7�3 319,474 �70,487

Analysis of foreign currency exposure:Singapore Dollar 178,017 �44,875 – –



27. REVENuE GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Information technology licensing and data management 5,73�,60� 4,�5�,000 7,631,�45 6,�4�,000Managed customer loyalty services 36,646,998 31,647,365 – –Mail order 781,687 768,160 – –

43,161,�87 36,667,5�5 7,631,�45 6,�4�,000

Revenue of the subsidiaries represents the invoiced value of goods sold and services rendered in relation to providing end-to-end customer loyalty management solutions services to the operators of the loyalty programs and servicing the members of respective loyalty programs. The services rendered include marketing, procurement, warehousing, distribution and other support services.

Revenue of the subsidiaries includes royalty fee on licensing of product distribution amounting to RM1,69�,1�0 (�005: RM1,699,987).

28. CoST oF SALES AND SERVCES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Cost of inventories sold 16,01�,465 13,�88,89� – –Amortization of intangible assets (Note 10) 368,��9 �48,6�0 368,��9 �48,6�0Others 8,1�1,�74 8,046,315 779,785 5�0,3��

�4,501,968 �1,583,8�7 1,148,014 768,94�

29. oTHER INCoME GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Negative goodwill on consolidation § BT (Note 36) – 189,�81 – –Interest income on short term deposits 646,314 134,113 565,�17 1�5,865Commission income 13�,309 155,895 – –Gain on foreign exchange �7,618 93,980 – 11,5�3Dividend income from subsidiaries § CLS – – �,110,080 – § ASCS – – 1,197,000 – § BT – – 4,��9,09� –Gain on disposal of shares in subsidiary § ERM �,407 – – –Others �7 3,083 – –

808,675 576,35� 8,101,389 137,388



30. PRoFIT BEFoRE TAXATIoN GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

This is arrived at after charging/(crediting):-Allowance for obsolete and slow-moving inventories ��,693 �4,463 – –Amortization of intangible assets - development expenditure 368,��9 �48,6�0 368,��9 �48,6�0Audit fees § Statutory �9,604 �7,188 7,500 5,000 § Non-statutory - current year – 1�,�00 – 3,800 - (over)/underprovision in prior year (�,315) 1,0�5 – –Damaged inventories written off – 8,719 – –Bad debts written off 834 – – –Deposits written off 1,800 – – –Depreciation of property, plant and equipment 906,0�3 613,489 544,491 338,�30Loss on foreign exchange 46,709 – 3,�7� –Interest expense on hire purchase 30,�03 8,713 �5,599 �,744Interest expense on term loan 85,30� 79,�94 – –Interest expense and commitment fee on overdraft facility 3,687 5,0�9 – –Property, plant and equipment written off – 7,667 – –Rental of warehouse and office premises 67�,815 501,311 65,8�9 16,450Research and development expenses 17�,078 184,847 17�,078 184,847

31. DIRECToRS’ REMuNERATIoN GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Directors of the CompanyExecutiveSalaries and allowances 589,�63 �76,�90 �10,000 45,000Bonus 176,7�1 56,�50 75,000 56,�50Contributions to CPF 36,618 1�,436 – –Fees 30,000 30,000 30,000 30,000

83�,60� 374,976 315,000 131,�50Non-ExecutiveFees 100,000 70,000 80,000 50,000

93�,60� 444,976 395,000 181,�50

Directors of subsidiary companiesExecutiveSalaries and allowances 348,000 �75,�00 13�,000 60,000Bonus 1�9,000 67,000 11,000 �8,750Contributions to EPF 45,�40 41,485 17,160 9,504Fees �0,000 �0,000 – –SOCSO and other benefits 1,�40 84� 6�0 310

543,480 404,5�7 160,780 98,564

Total 1,476,08� 849,503 555,780 �79,814



31. DIRECToRS’ REMuNERATIoN (CoNT’D) GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Directors’ remuneration are included in the income statement as follows:-Cost of sales 30,000 – 30,000 –Administrative expenses 1,446,08� 849,503 5�5,780 �79,814

1,476,08� 849,503 555,780 �79,814

Analyzed as:Fees - directors of the Company 130,000 100,000 110,000 80,000 - other directors �0,000 �0,000 – –

150,000 1�0,000 110,000 80,000Other emoluments - directors of the Company 80�,60� 344,976 �85,000 101,�50 - other directors 5�3,480 384,5�7 160,780 98,564

1,3�6,08� 7�9,503 445,780 199,814

1,476,08� 849,503 555,780 �79,814

32. EMPLoYEE BENEFITS EXPENSES GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Salaries, allowances and bonus 4,856,966 3,731,579 906,�78 7�1,879Commission 119,6�7 1�3,444 – –SOCSO and other short term benefits 181,3�5 13�,164 �9,385 17,389

5,157,918 3,987,187 935,663 739,�68Defined contribution plans - Employees Provident Fund 44�,351 333,835 70,566 63,731 - Central Provident Fund 8�,175 5�,1�5 – –

5,68�,444 4,373,147 1,006,��9 80�,999

Staff costs are taken up as follows:Intangible assets - development expenditure capitalised �45,04� �81,008 �45,04� �81,008Cost of sales and services 15�,1�7 134,171 15�,1�7 134,171Administrative expenses * 5,�85,�75 3,957,968 609,060 387,8�0

5,68�,444 4,373,147 1,006,��9 80�,999



32. EMPLoYEE BENEFITS EXPENSES (CoNT’D)

* This includes emoluments paid/payable to certain directors of AIM, CLS and ASCS as follows:


Salaries, allowances and bonus 801,647 34�,�00 358,000 88,750SOCSO and other short term benefits 1,�40 84� 6�0 310

80�,887 343,04� 358,6�0 89,060Defined contribution plans - Employees Provident Fund 45,�40 41,485 17,160 9,504 - Central Provident Fund 17,849 – – –

865,976 384,5�7 375,780 98,564

33. TAXATIoN GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Current taxCurrent year - Malaysia 996,018 83�,900 988,000 35,300 - Foreign 40,33� �9,415 – –(Over)/underprovision in prior year - Malaysia (�8,306) 40,61� (10,1�7) – - Foreign – (35,631) – –Withholding tax - Foreign 169,614 �65,550 – –

1,177,658 1,13�,846 977,873 35,300Deferred tax (Note 11) - Malaysia (11,678) �9,931 – – - Foreign (375) 116 – –

(1�,053) 30,047 – –

Total tax expense 1,165,605 1,16�,893 977,873 35,300

The Company was granted MSC status under the Promotion of Investments Act, 1986 (PIA 1986) whereby 100% of its statutory income is exempted from tax for the period from 30th September �004 to �9th September �009. However, the Company has provided for tax on the interest income on short term deposits and dividend income.

The corporate tax rate for the subsidiaries in Malaysia whose share capital is less than RM�.5 million on the first RM500,000 of chargeable income was �0% while the balance of the chargeable income was taxable at �8%. The statutory tax rate of income tax in Singapore was �0%.



33. TAXATIoN (CoNT’D)

A reconciliation of tax applicable to the profit before taxation at the statutory tax rates to current year’s tax expense of the Group/Company is as follows:-


Profit before taxation 10,193,�79 8,773,4�5 13,�77,640 4,501,113

Tax applicable at �8% �,854,118 �,456,559 3,717,739 1,�60,31�

Tax effect of:Income exempted from tax - pioneer status in Malaysia (1,331,640) (993,71�) (1,331,640) (993,71�) - stepped income exemption in Singapore (�4,31�) (�7,753) – –Expenses not deductible for tax purposes 85,3�8 103,354 13,554 6,�50Income not subject to tax (98,18�) (4,879) (1,�79,9�1) (3,��6)Net research and development expenditure claimed in arriving at exempt income (�8,84�) (6�,399) (�8,84�) (6�,399)Net capital allowances claimed in arriving at exempt income – (171,9�5) – (171,9�5)Tax savings on lower tax rate (167,71�) (��1,��5) – –Double tax relief in Singapore (169,�13) (169,998) – –Withholding tax applicable in Singapore 169,615 �65,550 – –(Over)/underprovision in prior year (�8,306) 4,981 (10,1�7) –Deferred tax liabilities not recognized (95,�49) (15,660) (10�,890) –

Tax expense 1,165,605 1,16�,893 977,873 35,300

34. EARNINGS PER oRDINARY SHARE GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Earnings per ordinary share of RM0.10 each attributable to ordinary shareholders of the Company is calculated as follows:-

Basic:-Net profit for the year attributable to shareholders of the Company 8,991,735 7,6�7,03� 1�,�99,767 4,465,813

Weighted number of ordinary shares in issue 144,363,457 97,�39,176 144,363,457 97,�39,176

Basic earning per share 6.�� sen 7.84 sen 8.5� sen 4.59 sen



34. EARNINGS PER oRDINARY SHARE (CoNT’D) GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Fully diluted:-Net profit for the year after taxation and minority interest 8,991,735 7,6�7,03� 1�,�99,767 4,465,813

Weighted numer of ordinary shares in Issue 144,363,457 97,�39,176 144,363,457 97,�39,176

Dilutive effects of ESOS ** – – – –

Weighted average number of ordinary shares used to compute diluted earnings per share 144,363,457 97,�39,176 144,363,457 97,�39,176

Fully diluted earnings per share 6.�� sen 7.84 sen 8.5� sen 4.59 sen

** There are no dilutive effects of ESOS as there are no ESOS granted during the year.

The comparative basic and fully diluted earnings per share have been restated to take into account the effect of the bonus issue and share split referred to in Note 19.

35. DIVIDENDS IN RESPECT oF oRDINARY SHARES GRouP/CoMPANY 2006 2005 Gross Gross dividend Amount of dividend Amount of per share dividend per share dividend Sen RM Sen RM

Interim tax exempt dividend paid 1.50 �,3�5,000 – –Special dividend less income tax of �7% �.00 3,100,000 – –Proposed tax exempt final dividend 1.50 �,3�5,000 – –

Proposed in respect of the year 5.00 7,750,000 – –

Dividend per share recognized as distribution to ordinary shareholders of the Company 1.50 �,3�5,000 – –

In January �007, the directors approved the payment of special dividend of �0% per ordinary shares of RM0.10 each less income tax of �7% amounting to RM3,100,000 in respect of the financial year ended 31st December �006. The dividend was paid on 14th February �007.

At the forthcoming Annual General Meeting, final tax exempt dividends in respect of the year ended 31st December �006 of 1.5 sen per share (�005: Nil) amounting to RM�,3�5,000 (�005: Nil) will be proposed for shareholders’ approval.



36. SuMMARY oF EFFECTS oF ACQuISITIoN oF SuBSIDIARY CoMPANIES Acquisition in the year ended 31.12.2005

(i) Details of net assets acquired, goodwill and cashflow arising from the acquisition of BT are as follows:-

9.1.2005 RM

Property, plant and equipment 9,373Inventories 190,334Trade receivables �,441,119Other receivables, deposits and prepayments 810,351Amount due from related parties �48,973Cash and bank balances �01,974Trade payables (�41,033)Other payables and accruals (51,064)Tax payable (357,35�)Deferred tax (1,785)

Fair value of net assets acquired 3,�50,890Exchange fluctuation reserve 3,805Negative goodwill on consolidation (189,�81)

Total purchase consideration 3,065,414Less: Consideration discharged by issuance of ordinary shares (3,065,414)

Consideration discharged by cash –Less: Cash and bank balances of subsidiary company acquired (�01,974)

Cash inflow on acquisition (�01,974)

(ii) The effect of the acquisition on the financial results of the Group is as follows:-

10.1.2005 to 31.12.2005 RM

Revenue �,7�3,976Cost of sales (1,313,519)

Gross profit 1,410,457Other operating income 95,904Administrative expenses (1�3,079)Other operating expenses (148,8�4)

Profit from operations 1,�34,458Taxation (�06,911)

Profit after taxation 1,0�7,547



37. RELATED PARTY RELATIoNSHIPS AND TRANSACTIoNS Related party relationships exist between the Group/Company and the following entities:-

(a) CG Assets Pte. Ltd. (“CGAS”) being the substantial shareholder with direct interest of 43.7% in the Company;

(b) Subsidary companies as disclosed in Note 9;

(c) Electronic Commerce Technology Sdn. Bhd. (“ECT”) being a company in which certain directors and shareholders of the Company have substantial indirect interest. A director of CLS and ASCS is also a director of ECT;

(d) MoreRewards Pte. Ltd. (“MRewards”) being a company in which certain directors and shareholders of AIM have substantial indirect interest;

(e) MThree Asia Pte. Ltd. (“MThree”) being a company in which certain directors and shareholders of AIM have substantial indirect interest;

(f ) PT. Customers Loyalty Solutions (“PT CLS”) being a company in which certain directors and shareholders of AIM have substantial direct interest;

(g) Intisatria Sdn. Bhd. being a company in which a director of CLS has substantial direct interest; and

(h) RealRewards Sdn. Bhd. (“RRewards”) being a company in which certain directors of AIM have substantial direct interest.

Significant transactions between the related parties and the Group/Company during the period are as follows:-


RevenueInfrastructure set-up, software licensing and system maintenance feesCLS – – 1,�68,415 1,�00,000ECT 5,659,80� 4,147,000 5,659,80� 4,147,000ASCS – – 6�9,000 790,000ERM – – 1,��8 –PT CLS 7�,800 – 7�,800 –

Sales of merchandiseECT 5,859,891 6,393,856 – –MRewards �8,940 5�,0�0 – –RRewards 3,355 – – –

Procurement and fulfilment services fees including handling and related chargesECT 4,33�,�40 3,5�1,790 – –

15,957,0�8 14,114,666 7,631,�45 6,137,000



37. RELATED PARTY RELATIoNSHIPS AND TRANSACTIoNS (CoNT’D)


Cost of Sales and ServicesCost of inventories soldPT CLS 105,069 – – –IT servicesMThree – ��,800 – –Research and development expensesMThree – 70,567 – –

105,069 93,367 – –

Administrative ExpensesManagement feesMThree – 37�,3�6 – �96,7�6MRewards – 16,800 – –Rental of office premiseMThree 89,307 98,1�1 – –Mr Nyang Koon Seng 87,576 – – –Management and maintenance feesMThree – �11,70� – –

176,883 698,949 – �96,7�6

38. SEGMENT ANALYSIS Segment revenue and expenses are those directly attributable to the segments and include any joint revenue and expenses

where a reasonable basis of allocation exists. Segment revenue does not include dividend and interest income unless the segment’s operations are primarily of a financial nature.

Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories and property, plant and equipment (net of allowances, accumulated depreciation and amortization). Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include income tax assets and liabilities respectively.

(a) Primary reporting format - Business segments The Group operates in three main business segments:

(i) Information technology - provision of information technology licensing - provision of data management

(ii) Managed customer loyalty - sales and marketing services - client relationship management - outsourced contact centre management

(iii) Mail order - outsourced procurement and fulfilment services through mail order programs



38. SEGMENT ANALYSIS (CoNT’D)

Primary reporting format - Business segments Managed Customer Information Loyalty Technology Services Mail order Elimination Consolidated RM RM RM RM RM

31.12.2006Segment RevenueTotal revenue 7,631,�45 36,965,55� 781,687 – 45,378,484Inter-segment revenue (1,898,643) (318,554) – – (�,�17,197)

External revenue 5,73�,60� 36,646,998 781,687 – 43,161,�87

Segment Results 5,1�4,360 4,584,643 (43,118) 9,665,885Gain on disposal of shares in a subsidiary company – �,407 – �,407Interest income 565,�17 81,097 – 646,314Finance costs (�5,599) (95,7�8) – (1�1,3�7)Taxation (51,891) (1,111,438) (�,�76) (1,165,605)

Profit after taxation 9,0�7,674

Segment Assets 35,�78,090 ��,�11,8�3 31,808 (9,377,�83) 48,144,438Tax recoverable 98� 4�5,630 – 4�6,61�

Total assets 48,571,050

Segment Liabilities 664,411 16,351,508 19,5�0 (9,377,�83) 7,658,156Tax payable – 378,747 – – 378,747Deferred tax liability – 93,��4 – – 93,��4

Total liabilities 8,130,1�7

other Information:Capital expenditure 1,374,151 896,548 �0,000 – �,�90,699Depreciation 544,491 356,49� 5,040 – 906,0�3Amortisation 368,��9 – – – 368,��9




Primary reporting format - Business segments Managed Customer Information Loyalty Technology Services Mail order Elimination Consolidated RM RM RM RM RM

31.12.2005Segment RevenueTotal revenue 6,�4�,000 31,676,464 768,160 – 38,686,6�4Inter-segment revenue (1,990,000) (�9,099) – – (�,019,099)

External revenue 4,�5�,000 31,647,365 768,160 – 36,667,5�5

Segment Results 4,477,99� 4,008,�18 58,163 8,544,373Recognition of negative goodwill 189,�81Interest income 1�5,865 8,188 60 134,113Finance costs (�,744) (91,598) – (94,34�)Taxation (35,300) (1,108,153) (19,440) (1,16�,893)

Profit after taxation 7,610,53�

Segment Assets 14,705,�63 �0,139,789 �56,3�1 (�,31�,138) 3�,789,�35Tax recoverable – 77,�5� 1,300 78,55�

Total assets 3�,867,787

Segment Liabilities �,34�,069 11,133,73� 198,494 (�,31�,138) 11,36�,157Tax payable 35,300 10,1�1 – 45,4�1Deferred tax liability – 7�,804 1,445 74,�49

Total liabilities 11,481,8�7

other Information:Capital expenditure 9�9,054 330,67� 5,�01 1,�64,9�7Depreciation 338,�30 �70,396 4,863 613,489Amortization �48,6�0 – – �48,6�0

(b) Secondary reporting format - Geographical segments The Group operates in three main geographical areas where Malaysia being the Company’s home country:-

(i) Malaysia - provision of information technology licensing and data management - managed customer loyalty services - mail order programs

(ii) Singapore - managed customer loyalty services - outsourced procurement and fulfilment services - mail order programs

(iii) Brunei - mail order programs




Secondary reporting format - Geographical segments Malaysia Singapore Brunei Elimination Consolidated RM RM RM RM RM

31.12.2006Total revenue 4�,177,571 983,716 – – 43,161,�87Segment assets 47,559,794 1,011,�56 – – 48,571,050Capital expenditure �,�86,3�4 4,375 – – �,�90,699

31.12.2005Total revenue 36,300,015 �91,450 76,060 – 36,667,5�5Segment assets 3�,518,397 337,445 88,063 (154,670) 3�,789,�35Capital expenditure 1,�64,�71 5�0 136 – 1,�64,9�7

39. EVENT SuBSEQuENT To BALANCE SHEET DATE(a) On 8th February �007, ASCS entered into Sale and Purchase Agreement to acquire a piece of land together with a two

storey office annex and a single storey guard house located at Lot 30, Jalan Sepadu �5/1�3, Axis Premier Industrial Park, Section �5, 40400 Shah Alam, Selangor Darul Ehsan for a cash consideration of RM4,630,000.

(b) On 16th April �007, the Company incorporated a wholly owned subsidiary, PT CLS System in Indonesia. PT CLS System was incorporated under the laws of Republic of Indonesia with an authorized share capital of USD500,000 and issued and paid-up share capital of USD150,000. PT CLS System intends to commence its business activities in general trading, import and export and business management consultation.

40. NoN-CANCELLABLE oPERATING LEASE CoMMITMENTS GRouP / CoMPANY

2006 2005 RM RM

Not later than 1 year �10,�� –Later than 1 year and not later than 5 years �80,�96 –

490,518 –

During the year, the Company entered into tenancy agreement with Everfine Arch Sdn. Bhd. for the rental of office premises at a monthly rental of RM17,518.50 for 3 years. The first rental payment shall be due after rental-free renovation period of 30 days commencing not later than 30th June �006. This agreement may be extended for further � years at a monthly rental equivalent to 15% higher than RM17,518.50.

41. CAPITAL CoMMITMENTS GRouP CoMPANY

2006 2005 2006 2005 RM RM RM RM

Acquisition of property, plant and equipmentApproved but not contracted for 5,9�4,000 1,87�,000 30,000 1,300,000



42. FINANCIAL INSTRuMENTS Current The carrying amounts of financial assets and financial liabilities of the Group and the Company at the balance sheet date

approximate their fair values due to the short term maturity of these instruments.

Non-Current GRouP CoMPANY

Carrying Fair Carrying Fair Amount Value Amount Value RM RM RM RM

At 31.12.2006Hire purchase payable �3�,1�0 �36,833 �0�,913 �07,�49

Term Loan 1,�13,636 1,�60,3�8 – –

At 31.12.2005Amount due to a related party 1,000,000 1,000,000 1,000,000 1,000,000

Hire purchase payable 59,637 60,54� 15,71� 16,479

Term loan 1,�78,984 1,�81,�36 – –

The fair value of hire purchase and term loan payable is estimated by discounting the future contractual cash flows at the effective interest rates available to the Group/Company.

It is not practical to estimate the fair value of the amount due to a related party of RM Nil (�005: RM1 million) in the absence of fixed terms of settlement. However, the directors of the Company do not anticipate the carrying amount recorded at the balance sheet date to be significantly different from the value that would eventually be settled by way of rendering of services (Note 4).


Statements by Directors

We, DATo’ SHAMSuDDIN BIN HAYRoNI and NYANG KooN SENG, being two of the directors of ADVANCE INFORMATION MARKETING BERHAD, state that in the opinion of the directors, the financial statements set out on pages �7 to 66 are drawn up in accordance with the MASB Approved Standards for Entities Other than Private Entities 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 of the Company as at 31st December �006 and of their results and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Board of Directors,

DATo’ SHAMSuDDIN BIN HAYRoNI

NYANG KooN SENG


Statutory Declaration

I, NYANG KooN SENG, the director primarily responsible for the financial management of ADVANCE INFoRMATIoN MARKETING BERHAD, do solemnly and sincerely declare that the financial statements set out on pages �7 to 66 are in my opinion correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed NYANG KOON SENG at )Kuala Lumpur in Wilayah Persekutuan on )�3rd April �007 ) NYANG KooN SENG


Report of the Auditors to the members of Advance Information Marketing Berhad

We have audited the financial statements set out on pages �7 to 66. These financial statements are the responsibility of the directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act,1965 and for no other purpose. We do not assume responsibility towards any other person for the contents of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. Our audit includes an examination, on a test basis, of evidence supporting the amounts and disclosures in the financial statements. Our audit also includes an assessment of the accounting principles used and significant estimates made by the directors, as well as an evaluation of the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements are properly drawn up in accordance with the MASB Approved Accounting Standards for Entities Other than Private Entities and the provisions of the Companies Act, 1965 so as to give a true and fair view of:-

(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and

(ii) the state of affairs of the Group and of the Company as at 31st December �006 and of their results and cash flows for the year then ended;

and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiary companies for which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and the auditor’s report of the subsidiary company for which we have not acted as auditors as indicated in Note 9 to the financial statements.

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

The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did not include any comments made under subsection (3) of section 174 of the Act.

AZMAN, WoNG, SALLEH & Co.AF: 001�Chartered Accountants

SIVADASAN A/L NARAYANAN NAIR14�0/1�/07(J)Partner of the Firm



Summary of Landed Properties

The summary of the information on landed properties owned by our Group is as follows:-

Approximate Land Audited Approximate Area/ Net Book age of Approximate Description of Status/ Value as at Building Tenure/ Total Property/ Registered 31st December (Years)/CF Expiry Built-upPostal Address Existing use owner 2005 Status Date of Lease Area (RM) (Sq metre) Lot �8, Land and Owned/ CLS �,4�8,750 7 Freehold Land AreaJalan Pemberita semi-detached 89� sq metreU1/49, Temasya light industrial Issued with CFIndustrial Park, factory as logistic on �8th Built-upSeksyen U1, depot. ASCS’s February �000 760 sq metreGlenmarie, operation centre40150 Shah Alam, Selangor Darul Ehsan


Analysis of Shareholdings as at 30th April �007

Class of Equity Securities : Ordinary Shares of RM0.10 eachVoting Rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

Distribution Schedule of Shareholders No of TotalHoldings Holders Shareholdings %#

1 to 199 6 470 *�00 to 999 4 �,400 *1,000 to 4,999 163 374,800 0.�45,000 to 10,000 314 �,359,100 1.5�10,001 to 100,000 318 1�,160,600 7.85100,001 to 1,000,000 81 ��,747,400 14.68Above 1,000,000 14 117,355,�30 75.71

# Based on the issued and paid-up capital of the Company of RM15,500,000 comprising of 155,000,000 ordinary shares of RM0.10 each.

* Insignificant.

Substantial Shareholders No of ordinary Shares of RM0.10 Each Beneficially Held by the Shareholders Direct IndirectName of Shareholders Interest %# Interest %#

CG Assets Pte Ltd 67,778,�70 43.73 – –Datin Rahmah Binti Kassim �9,819,�60 19.�4 – –Nyang Koon Seng* – – 67,778,�70 43.73Tay Woon Teck* – – 67,778,�70 43.73Dato’ Shamsuddin Bin Hayroni – – �9,819,�60 19.�4

# Based on the issued and paid-up capital of the Company of RM15,500,000 comprising of 155,000,000 ordinary shares of RM0.10 each.

* Deemed interested by virtue of shareholding in CG Assets Pte Ltd.

Directors’ Shareholdings No of ordinary Shares of RM0.10 Each Beneficially Held by the Shareholders Direct IndirectName of Shareholders Interest %# Interest %#

Dato’ Shamsuddin Bin Hayroni (Note 1) – – �9,819,�60 19.�4Nyang Koon Seng (Note �) – – 67,778,�70 43.73Tay Woon Teck (Note �) – – 67,778,�70 43.73Palani Muruganandam – – – –Yeoh Aik Chuan 100,000 0.06 – –Za’ba Bin Hasrin 50,000 0.03 – –

Note:-1 Deemed interested by virtue of his spouse’s (Datin Rahmah Binti Kassim) shareholding in the shares of the Company.� Deemed interested by virtue of their shareholdings in CG Assets Pte Ltd.

# Based on the issued and paid-up capital of the Company of RM15,500,000 comprising 155,000,000 ordinary shares of RM0.10 each.


Analysis of Shareholdings as at 30th April 2007 (cont’d)

30 Largest Securities Account Holders(Without aggregating securities from different securities accounts belonging to the same person)

No Name No of Shares Held %#

1 CG Assets Pte Ltd 67,778,�70 43.73� Datin Rahmah Binti Kassim �9,819,�60 19.�43 Malaysia Nominees (Tempatan) Sendirian Berhad 3,546,900 �.�9 (Great Eastern Life Assurance (Malaysia) Berhad (LPF)4 Malaysia Nominees (Tempatan) Sendirian Berhad �,113,400 1.36 (Great Eastern Life Assurance (Malaysia) Berhad (LGF)5 Cimsec Nominees(Tempatan) Sdn Bhd �,000,000 1.�9 CIMB Bank for Loo Poh Keng (MM1282)6 HSBC Nominees (Tempatan) Sdn Bhd 1,930,000 1.�5 (HSBC (M) Trustee Bhd for OSK-UOB Small Cap Opportunity Unit Trust (3548)7 Chung Shan Hui 1,500,000 0.978 Uswanijaya Sdn Bhd 1,500,000 0.979 AMMB Nominees (Tempatan) Sdn Bhd 1,465,400 0.95 Amtrustee Berhad For HLG Penny Stock Fund (5/4-3)10 RHB Capital Nominees(Tempatan) Sdn Bhd 1,�40,000 0.80 (Pledged Securities Account for Liew Lee Chin (CEB)11 Amsec Nominees (Tempatan) Sdn Bhd 1,�09,400 0.78 (P.T. Arab-Malaysian Capital Indonesia for Hon Pansy)1� Kenanga Nominees(Tempatan) Sdn Bhd 1,�00,000 0.77 (Pledged Securities Account For Tiong Thai King)13 Pacific & Orient Insurance Co Berhad 1,04�,600 0.6714 Woon Lee Chong 1,010,000 0.6515 HSBC Nominees (Asing) Sdn Bhd 1,000,000 0.65 (Exempt an for HSBC Private Bank (Suisse) S.A. (Nassau ACCL)16 HSBC Nominees (Asing) Sdn Bhd 950,000 0.61 (Exempt an For HSBC Private Bank (Suisse) S.A. (Spore TST ACCL)17 Onn Kien Hoe 870,000 0.5618 Wong Keet Loy 858,000 0.5519 Mayban Nominees(Tempatan) Sdn Bhd 850,�00 0.55 (Hwang-DBS Investment Management Bhd for Benta Wawasan Sdn Bhd)(230129)�0 Malaysia Nominees (Tempatan) Sendirian Berhad 800,000 0.5� (Great Eastern Life Assurance(Malaysia) Berhad)(LBF)�1 Lee See Kwan 749,000 0.48�� Public Nominees (Tempatan) Sdn Bhd 551,500 0.36 (Pledged securities account for Loo Ken Fong @ Loh Ken Fong (E-BMM)�3 HLB Nominees (Tempatan) Sdn Bhd 548,000 0.35 (Pledged Securities Account For Chong Dai Thai)�4 Lim Aik Soon 5�0,000 0.34�5 Mayban Nominees(Tempatan) Sdn Bhd 508,100 0.33 (Hwang-DBS Investment Management Bhd for YMC Technologies Sdn Bhd)(230166)�6 Affin Nominees (Tempatan) Sdn Bhd 475,000 0.31 (Pledged Securities Account For Yeow See Yuen (YE00876C)�7 Tasec Nominees(Tempatan) Sdn Bhd 473,300 0.31 (Pledged Securities Account For Ooi Hooi Cheng)�8 HSBC Nominees (Asing) Sdn Bhd 4��,900 0.�7 (HPBS Sg for Global Summit Finance Limited)�9 Amsec Nominees (Tempatan) Sdn Bhd 406,800 0.�6 (Pledged Securities Account For Koh Pee Leong)30 PM Nominees (Tempatan) Sdn Bhd 400,000 0.�6 (Pledged Securities Account for Yong Tuan Peow (G)

# Based on the issued and paid-up capital of the Company of RM15,500,000 comprising 155,000,000 ordinary shares of RM0.10 each.


Notice of Annual General Meeting

NoTICE IS HEREBY GIVEN that the Third Annual General Meeting of ADVANCE INFoRMATIoN MARKETING BERHAD will be held at Subang 1, Mezzanine Floor, Sheraton Subang Hotel & Towers, Jalan SS1�/1, 47500 Subang Jaya, Selangor Darul Ehsan, on Friday, 15th June �007 at 10.30 a.m. for the following purposes:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31st December, �006 together with the Reports of the Directors and Auditors thereon.

� To approve the payment of a tax exempt final dividend of 15% per ordinary share in respect of the financial year ended 31st December �006.

3. To approve the payment of Directors’ Fees for the financial year ended 31st December �006.

4. To re-elect the following Directors who shall retire in accordance with Article 83 of the Company’s Articles of Association and who being eligible, offer themselves for re-election:-

a) Dato’ Shamsuddin Bin Hayroni

b) Mr Palani Selvam Muruganandam

5. To re-appoint Messrs Azman, Wong, Salleh & Co., Chartered Accountants as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorize the Directors to fix their remuneration.

AS SPECIAL BuSINESSTo consider and, if thought fit, to pass the following resolutions:- 6. Authority to Allot Shares Pursuant to Section 132D of the Companies Act, 1965 “THAT pursuant to Section 13�D of the Companies Act, 1965, the Directors be and are hereby

empowered to issue and allot shares in the Company, at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad (“Bursa Securities”) AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company, subject always to the Companies Act, 1965, the Articles of Association of the Company and approval from Bursa Securities and other relevant regulatory bodies where such approval is necessary .”

Ordinary Resolution 1

Ordinary Resolution �








Special Resolution

Notice of Annual General Meeting (cont’d)

7. Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’ Mandate”)

“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Company and the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiary companies to enter into all arrangements and/or transactions involving the interests of the Directors, major shareholders or persons connected with Directors and/or major shareholders of the Company and/or its subsidiary companies (“Related Parties”) as specified in Section �.3 of the Circular to Shareholders dated �3rd May �007 provided that such arrangements and/or transactions are:

(i) recurrent transactions of a revenue or trading nature; (ii) necessary for the day-to-day operations; (iii) carried out on an arm’s length basis, in the ordinary course of business and on normal

commercial terms which are not more favourable to the Related Parties than those generally available to the public; and

(iv) are not to the detriment of the minority shareholders.

AND THAT the Proposed Shareholders’ Mandate, unless revoked or varied by the Company in a

general meeting, shall take effect from the date of the passing of this Ordinary Resolution and will continue in force until:

(a) the conclusion of the next Annual General Meeting of the Company at which time it will lapse

unless authority is renewed by a resolution passed at the next Annual General Meeting; (b) the expiration of the period within which the next Annual General Meeting is to be held

pursuant to Section 143(1) of the Act, (but shall not extend to such extension as may be allowed pursuant to Section 143(�) of the Act); or

(c) revoked or varied by a resolution passed by the shareholders in a general meeting before

the next Annual General Meeting, whichever is the earlier, AND FURTHER THAT the Directors of the Company be authorized to complete and do all such acts

and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Shareholders’ Mandate.”

8. Proposed Amendments to the Articles of Association of the Company “THAT the proposed amendments to the Articles of Association of the Company as contained in

the Appendix II attached in the Circular to Shareholders dated �3rd May �007 be approved.

AND THAT the Directors be and are hereby authorized to assent to any modifications, variations and/or amendments as may be required by the relevant authorities and to do all acts and things and take all steps as may be considered necessary to give full effect to the proposed amendments to the Articles of Association of the Company.”



9. To transact any other business for which due notice shall have been given.

Notice of Dividend Entitlement and Payment Notice is hereby given that a tax exempt final dividend of 15% per ordinary share for the financial year ended 31st December

�006, if approved by the shareholders at the Third Annual General Meeting, will be payable on �nd July �007 to shareholders whose names appear in the Record of Depositors at the close of business on 18th June �007.

A Depositor shall qualify for entitlement to the dividend only in respect of:

(a) Shares transferred into the Depositor’s securities account before 4.00 p.m. on 18th June �007 in respect of the transfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia

Securities Berhad.

By Order of the Board GoEE MEoW NEoH (F) (LS 006011)Company Secretary

Selangor Darul Ehsan�3rd May �007



Notes Relating To Proxy

1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provision of Section 149(1)(b) of the Companies Act, 1965, shall not apply to the Company.

�. Where a member of the Company is an authorized nominee as defined under the Central Depositories Act, such member may appoint at least one (1) proxy in respect of each Securities Account it holds with Securities of the Company standing to the credit of the said Securities Account.

3. The instrument appointing a proxy shall be in writing and signed under the hand of the appointor or of his/her attorney duly authorized 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 authorized.

4. The instrument appointing a proxy shall be deposited at the Registered Office of the Company at No. 5�, 1st Floor, Jalan SS�1/58, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not less than forty eight (48) hours before the time for holding the meeting.

Explanatory Notes on Special Business

1. Ordinary Resolution 7 - Authority to Allot and Issue Shares

The Ordinary Resolution 7, if passed, will empower the Directors to issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company at the time of issue for such purposes as the Directors consider would be in the interests of the Company. This would avoid any delay and costs in convening a general meeting to specifically approve such an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

�. Ordinary Resolution 8 - Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.

Please refer to the Circular to Shareholders dated �3rd May �007 for further information.

3. Special Resolution - Proposed Amendment to the Company’s Articles of Association.

The Special Resolution is to amend the Company’s Articles of Association in line with the revamped Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market.

The details of the Proposed Amendments to the Articles of Association are set out in the Circular to Shareholder dated �3rd May �007, which is despatch together with this Annual Report.


Statement Accompanying Notice of Annual General Meeting

1. The Directors who are standing for re-election at the Third Annual General Meeting of the Company are as follows:-

Name of Director Retiring Pursuant To

Dato’ Shamsuddin Bin Hayroni Article 83 (Ordinary Resolution 4)Mr Palani Selvam Muruganandam Article 83 (Ordinary Resolution 5)

�. The details of the Directors who are standing for re-election are set out in Profile of Directors on page 6 of the Annual Report and information on their shareholdings are listed on page 70 of the Annual Report.

3. During the financial year ended 31st December �006, five (5) Board Meetings were held. Details of attendance of each Directors are set out on page 10 of this Annual Report.

4. The Third Annual General Meeting of the Company will be held at Subang 1, Mezzanine Floor, Sheraton Subang Hotel & Towers, Jalan SS1�/1, 47500 Subang Jaya, Selangor Darul Ehsan on Friday, 15th June �007 at 10.30 a.m.

Form of Proxy No. of shares held

*I/We, ................................................................................................................................................................................................................................................................................... (Full Name In Capital Letters) of ............................................................................................................................................................................................................................................................................................ (Address)

.....................................................................................................................................................................................................being a member of ADVANCE INFoRMATIoN

MARKETING BERHAD [644769-D] hereby appoint .........................................................................................................................................................................................

.................................................................................................................................................................................................................................................................................................(Full Name In Capital Letters)

of ............................................................................................................................................................................................................................................................................................

.......................................................................................................................................................................................................................or * THE CHAIRMAN OF THE MEETING(Address)

or failing him/her, ........................................................................................................................................................................................................................................................... , (Full Name In Capital Letters)

of ............................................................................................................................................................................................................................................................................................ (Address)

as my/our proxy, to vote for me/us on my/our behalf at the Third Annual General Meeting of the Company to be held at Subang 1, Mezzanine Floor, Sheraton Subang Hotel & Towers, Jalan SS1�/1, 47500 Subang Jaya, Selangor Darul Ehsan on Friday, 15th June �007 at 10.30 a.m. and at any adjournment thereof.

* If you wish to appoint other person to be your proxy, kindly delete the words “ The Chairman of the Meeting or failing him/her” and insert the name of the person desired.

My/our proxy is to vote as indicated below :

No Resolution For Against

Ordinary To receive the Audited Financial Statements for the financial year ended 31st December, �006Resolution 1 with the Reports of the Directors and Auditors thereon.

Ordinary To approve the payment of a tax exempt final dividend of 15 % per ordinary share in respectResolution � of the financial year ended 31st December �006.

Ordinary To approve the payment of Directors’ fees for the financial year ended 31st December, �006.Resolution 3

Ordinary To re-elect Dato’ Shamsuddin Bin Hayroni as Director pursuant to Article 83 of the Company’s Resolution 4 Articles of Association and being eligible, offers himself for re-election.

Ordinary To re-elect Palani Selvam Muruganandam as Director pursuant to Article 83 of theResolution 5 Company’s Articles of Association and being eligible, offers himself for re-election.

Ordinary To re-appoint Messrs Azman, Wong, Salleh & Co., Chartered Accountants as Auditors of the Resolution 6 Company until the conclusion of the next Annual General Meeting and to authorize the

Directors to fix their remuneration.Special Business

Ordinary Authority to allot shares pursuant to Section 13�D of the Companies Act, 1965.Resolution 7

Ordinary Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions Resolution 8 of a Revenue or Trading Nature.

Special Resolution Proposed Amendments to the Articles of Association of the Company.

Please mark with “ X “ in 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.

Signed this ...........................................day of .........................................................., �007.

.................................................................................................... Signature/Common Seal of ShareholderNotes:

1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provision of Section 149(1)(b) of the Companies Act, 1965, shall not apply to the Company.

�. Where a member of the Company is an authorized nominee as defined under the Central Depositories Act, such member may appoint at least one (1) proxy in respect of each Securities Account it holds with Securities of the Company standing to the credit of the said Securities Account.

3. The instrument appointing a proxy shall be in writing and signed under the hand of the appointor or of his/her attorney duly authorized 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 authorized.

4. The instrument appointing a proxy shall be deposited at the Registered Office of the Company at No. 5�, 1st Floor, Jalan SS�1/58, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not less than forty eight (48) hours before the time for holding the meeting.

✄

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AffixSTAMP

THE COMPANY SECRETARYADVANCE INFoRMATIoN MARKETING BERHAD (644769-D)52, 1st Floor, Jalan SS21/58Damansara Utama47400 Petaling Jaya

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