Contentscms.m3online.com.my/m3tech_admin/img/financial/Annual... · 2013-02-04 · contents corporate information 2 - 3 corporate structure 4 financial highlights 5 directors’ profile

ContentsCORPORATE INFORMATION 2 - 3

CORPORATE STRUCTURE 4

FINANCIAL HIGHLIGHTS 5

DIRECTORS’ PROFILE 6 - 9

CHAIRMAN’S STATEMENT 10 - 13

STATEMENT ON CORPORATE GOVERNANCE 14 - 19

STATEMENT ON INTERNAL CONTROL 20 - 21

AUDIT COMMITTEE REPORT 22 - 24

STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATIONTO THE AUDITED FINANCIAL STATEMENT 25

ADDITIONAL COMPLIANCE INFORMATION 26

FINANCIAL STATEMENTS 28 - 71

LIST OF PROPERTY 72

ANALYSIS OF SHAREHOLDINGS 73 - 74

NOTICE OF ANNUAL GENERAL MEETING 75 - 76

APPENDIX 1 77 - 79

STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERAL MEETING 80

PROXY FORM 81

Cover Rationale:

There's no business like technology business

The visual imagery depicting a ‘pen’ to write into a palm top in close-up,epitomizes the cutting-edge technology which forms the competitive edge ofthe organization’s business. Cutting across borders and boundaries, AKN’sbusiness is conducted with hi-tech efficiency and breakneck speed, and thisexemplifies the success of the organization in every conceivable way.

Corporate Information

2 A K N M E S S A G I N G T E C H N O L O G I E S B E R H A D

Board of Directors

Dato’ Ahmad Kabeer bin Mohamed Nagoor Chairman, Non-Independent Non-Executive Director

Dato’ Haji Hasan bin Malek Senior Independent Non-Executive Director

Lim Seng Boon Managing Director

Lim Eng ThongExecutive Director

Krishnan Menon Non-Independent Non-Executive Director

Mohamad Najeb bin AliIndependent Non-Executive Director

Chew Sing ChouNon-Independent Non-Executive Director

YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail PetraIndependent Non-Executive Director

Audit Committee

Dato’ Haji Hasan bin Malek Senior Independent Non-Executive Director, Chairman

Mohamad Najeb bin AliIndependent Non-Executive Director, Member

Lim Eng ThongExecutive Director, Member

YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail PetraIndependent Non-Executive Director, Member

Company SecretariesTea Sor Hua (MACS 01324)Chan Bee Fang (MAICSA 7032385)

Principal BankersCommerce International Merchant Bankers Berhad

Corporate Information

3A N N U A L R E P O R T 2 0 0 7

Auditors

ERNST & YOUNGChartered Accountants

Corporate OfficeUnit 801, Block A, Pusat Dagangan Phileo II, 15 Jalan SS 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan, Malaysia.

Tel : 603 - 7665 2282Fax : 603 - 7665 2283

Head OfficeLevel 32, Tower 2, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia.

Tel : 603 - 2161 1101Fax : 603 - 2168 8836

Website: www.aknmtech.com

Registered Office

Third Floor, No.79 (Room A)Jalan SS 21/60, Damansara Utama,47400 Petaling Jaya, Selangor Darul Ehsan, Malaysia.

Tel : 603 - 7728 4778Fax : 603 - 7722 3668

Share RegistrarSecurities Services (Holdings) Sdn. Bhd.Suite 18.05 MWE Plaza, No. 8 Lebuh Farquhar,10200 Penang, Malaysia.

Tel : 604 - 263 1966Fax : 604 - 262 8544

Stock Exchange ListingBursa Malaysia Securities Berhad (Mesdaq Market)Stock Name : AKNMTECStock Code : 0017

Corporate Structure


* Unless otherwise stated, 100% owned

5A N N U A L R E P O R T 2 0 0 7

Financial Highlights

30/6/2004 30/6/2005 30/6/2006 30/6/2007RM’000 RM’000 RM’000 RM’000

Turnover 31,870 42,340 30,750 28,260Profit / Loss Before Tax 14,447 16,816 2,453 (3,106)Paid-up Share Capital 16,148 16,278 16,352 16,352Net Tangible Asset (NTA) 31,845 33,550 32,512 25,775

Directors’ Profile


DATO’ AHMAD KABEER BIN MOHAMED NAGOOR

Dato’ Ahmad Kabeer bin Mohamed Nagoor, a Malaysian aged 50, wasappointed to the Board on 18 January 2000 and is the Non-IndependentNon-Executive Chairman of the Company. He graduated with a MasterDegree in Finance from the University of St. Louis, Missouri, USA in1986. He started his career with the Bank of Nova Scotia in 1986 in theforeign exchange division before becoming a lecturer at the School ofManagement, University Sains Malaysia from 1988 to 1994.

Dato’ Ahmad Kabeer bin Mohamed Nagoor, is a substantial shareholderof the Company. He is also the Executive Chairman of AKN TechnologyBhd., Non-Executive Chairman of Mems Technology Berhad and Scicom(MSC) Berhad. He is also a Non-Executive Deputy Chairman of AWCFacility Solutions Berhad and a director Yayasan AKN.

LIM SENG BOON

Lim Seng Boon, a Malaysian aged 50, is the Managing Director andfounder of the Company. He was appointed to the Board on 11 June 1999.He is also a substantial shareholder of the Company. He possesses over20 years of experience in the computer/information technology industry,both locally and abroad. His experience ranges from computers to systemintegration, network implementation and the development of businessapplications. In 1984, he established World Value Sdn. Bhd., a companydealing with computer hardware and systems integration.

He was also the key person responsible for the establishment of MultisoftBusiness Systems Sdn. Bhd., a company which has developed numerousbusiness applications software focusing on the concept of messagingthrough the internet. He has established numerous ties with local andforeign corporations, namely Advox of Sweden, Infinite Technology ofthe USA, Microsoft Malaysia, EasyCall Malaysia and Celcom Berhad.He was solely responsible for the successful alliance between Advox’stechnology in messaging and EasyCall pagers in January 1999.

DATO’ AHMAD KABEER BINMOHAMED NAGOOR

Non-Independent Non-Executice Chairman

LIM SENG BOONManaging Director

7A N N U A L R E P O R T 2 0 0 7

DATO’ HAJI HASAN BIN MALEK

Dato’ Haji Hasan bin Malek, a Malaysian aged 61, was appointed as theIndependent Non-Executive Director of the Company on 3 December 2002 and subsequently promoted to Senior IndependentNon-Executive Director of the Company. He is also the Chairman of theAudit Committee of the Company. He graduated with a Bachelor of Arts(Hons.) degree in Sociology from University of Malaya in 1973 andobtained a Diploma in Development Administration from University ofManchester, United Kingdom in 1978. He started his career in 1964 in theMinistry of Education, Kuala Lumpur and later became a teacher andlecturer between 1967 to 1973 in Jelebu and Mantin. He joinedPerbadanan Kemajuan Negeri, Negeri Sembilan in 1973 where he lastserved as a Deputy General Manager. Since 1995, he has been the electedState Assemblyman for the Juasseh District. Presently he is the electedmember of Parlimen of Kuala Pilah constituency and a director ofDigistar Corporation Berhad.

LIM ENG THONG

Lim Eng Thong, a Malaysian aged 46, is an Executive Director and amember of the Audit Committee of the Company. He was appointed as anExecutive Director of the Company on 18 January 2000. He is a memberof the Malaysian Institute of Accountants and the Malaysian Institute ofCertified Public Accountants.

He spent 11 years in the audit profession with a Public Accounting firmand left the firm as Senior Audit Manager in 1992. He is also a directorof AKN Technology Bhd and an Alternate Director of Mems TechnologyBerhad.

DATO’ HAJI HASAN BIN MALEKSenior Independent

Non-Executive Director

LIM ENG THONGExecutive Director



MOHAMAD NAJEB BIN ALI

Mohamad Najeb bin Ali, a Malaysian aged 43, was appointed as anIndependent Non-Executive Director of the Company on 2 April 2003.He is also a member of the Audit Committee of the Company.He graduated with a Diploma in Quantity Surveyor from Federal Instituteof Technology Kuala Lumpur.

He posses 12 years experience in business management as ManagingDirector. Currently, he is also a director of AKN Technology Bhd.

KRISHNAN MENON

Mr. Krishnan Menon, 58, a Malaysian was appointed to the Board on10 March 2004.

He is a Fellow of the Institute of Chartered Accountants in England &Wales, and also a member of both the Malaysian Institute of CertifiedPublic Accountants and Malaysian Institute of Accountants.

He spent 13 years in public practice at Hanafiah Raslan and Mohamad,seven of those years as a Partner. He then joined Public Bank Berhad asa General Manager, and was subsequently promoted to ExecutiveVice-President. After working with two public-listed companies, hejoined Putrajaya Holdings Sdn. Bhd. between 1997 and 2000 as a ChiefOperating Officer.

His other directorship include MISC Berhad, SPK Sentosa CorporationBerhad, Scicom (MSC) Berhad, Putrajaya Perdana Berhad (of which heis currently the Chairman of the Board) and Putrajaya Holdings Sdn. Bhd.

KRISHNAN MENONNon-Independent


MOHAMAD NAJEB BIN ALIIndependent Non-Executive Director



9A N N U A L R E P O R T 2 0 0 7

CHEW SING CHOU

Chew Sing Chou, a Malaysian aged 50, was appointed as a Non-Independent Non-Executive Director of the Company on30 July 2004. He is a Fellow of the Association of Chartered CertifiedAccountants. Currently, Mr. Chew is a Dealer’s Representative in AvenueSecurities Sdn. Bhd. He was the Chief Executive Officer for FercoPte Ltd, a subsidiary of L&M Group Investment Ltd, Singapore.

YAM TENGKU MUHAMMAD FAKHRY PETRAIBNI SULTAN ISMAIL PETRA

YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail Petra,a Malaysian aged 29, was appointed as an Independent Non-ExecutiveDirector of the Company on 16 February 2005. He is also a member ofAudit Committee of the company. He graduated with a B.A. BusinessServices from the University of Westminster, England. He has vastworking experience and has worked in Merril Lynch (Singapore), ArbarDiscount House, Unilever (Malaysia) and Resort World GentingHighlands. He is currently a Second Class Magistrate attached to theKelantan Land Office and he is also a Major in the Army Reserves,attached to the Intelligence Regiment. He is the Chairman for theKelantan Tourism Association and the Kelantan Arts, Culture and CraftsAssociation.

None of the above Directors have family relationship with any other Directors ormajor shareholders except for Dato’ Ahmad Kabeer bin Mohamed Nagoor who isshareholder and director of AKN Capital Sdn. Bhd. Mr. Chew Sing Yong Mark, thebrother of Mr. Chew Sing Chou, is the Managing Director of MessagingTechnologies (H.K.) Limited which is a wholly-owned subsidiary of the Company.

None of the Directors have any convictions for offences other than traffic offencesin the past 10 years.

CHEW SING CHOUNon-Independent


YAM TENGKU MUHAMMADFAKHRY PETRA

IBNI SULTAN ISMAIL PETRAIndependent Non-Executive Director

Chairman’s Statement


On behalf ofthe Board, I am pleased topresent to you theAnnual Report of the Groupand Company for the financial year ended 30th June, 2007.

DATO’ AHMAD KABEER BINMOHAMED NAGOORNon-Executive Chairman

““


11A N N U A L R E P O R T 2 0 0 7

REVIEW OF OPERATIONS AND FINANCIAL HIGHLIGHTS

For the year ended 30th June, 2007, the Group recorded a revenue of RM28.26 million and a net loss after tax of RM4.37 million ascompared to a revenue of RM30.75 million and a profit after tax of RM2.03 million in the financial year ended 30th June, 2006.

The drop in the Group’s revenue is due to the Malaysian operations where its revenue dropped from RM15.1 miilion in financial year2006 to RM11.8 million in financial year 2007. The reduction in revenue is mainly due to the Company’s full compliance with thenew operating guidelines issued by the Malaysian Communication and Multimedia Commission. Overseas operations continue toexperience revenue growth, particularly in Thailand and Pakistan.

The loss suffered by the Group in financial year 2007 includes two exceptional charges which is the provision for doubtful debts ofRM5.25 million and impairment on the company’s investment in Indonesia amounting to RM1.64 million. The provision for doubtfuldebts arose from the Malaysian operations and is mainly due to a dispute with a particular Telco. The impairment in value ininvestment in Indonesia and its related goodwill was arrived at by discounting the future cash flow of the Indonesian operations inaccordance with the requirements of the relevant accounting standards.

The Group would have generated a profit after tax of RM2.52 million without the above-mentioned exceptional charges.

CORPORATE DEVELOPMENTS

During the financial year, the Company increased its equity interest in AKN MTech Thailand (MTech Thailand) from 70% to 95%through the acquisition of the entire issued and paid up capital of Virtue Partners International Limited (VPI). VPI is principally aninvestment holding company and its only investment is a 25% equity interest in MTech Thailand.

During the financial year,the Company increased its equityinterest in AKN MTech Thailand(MTech Thailand) from 70% to 95% through the acquisition ofthe entire issued and paid upcapital of Virtue PartnersInternational Limited (VPI).

“

“

DIVIDEND

No dividend has been paid or declared by the Company since the end of the previous financial year. The Directors did not recommendthe payment of dividend for the year ended 30th June , 2007.

INDUSTRY TREND AND DEVELOPMENT

The trend of mobility solutions in Malaysia has not changed much in the past year, even though there has been a significant increasein revenue reported by the 3 major mobile operators. The average user continues to indulge mostly in SMS, MMS and WAP basedproducts. The third generation mobile network (3G) still falls behind in terms perceived importance and functionality. Based onavailable statistics, the total number of 3G subscribers is still less than 10% of the market’s total penetration. The recent launch of “UMobile” by one of the 3G operators and its projected active roll-out of its 018 range of 3G subscription early next year, marks anencouraging start to boost the 3G usage in the country.

FUTURE OUTLOOK

We expect the mobile telecommunication industry, particularly the usage of SMS products and more enriched services like MMS,WAP and 3G applications will continue to grow at a steady pace. Affordable handsets are no longer an inhibiting factor, with leadingmanufacturers introducing a wider range of 3G enabled handsets for every type of user segment. This augurs well for the contentindustry as more innovative and richer contents can be provided to the customers. The growth potential in other regions such asPakistan, Indonesia and Thailand where the subscribers are growing at a rapid pace is very encouraging.

However, we believe the industry will still be subject to changes in rules and regulations from mobile operators and/or regulators.Nevertheless the Group believes its Asia-Pacific wide presence will enable the Group to mitigate the operational risks brought aboutby changes to rules and regulations either by the mobile operators and/or country regulators of the countries the Group operate in.



Official mobile solutionprovider for the Asia

IT Congress, Queen Sirikit Convention

Centre, Bangkok.


13A N N U A L R E P O R T 2 0 0 7

CORPORATE SOCIAL RESPONSIBILITY

The Group views Corporate Social Responsibility (CSR) as a continuing commitment by business to behave ethically and contributeto economic and social development while improving the quality of workforce, stakeholders value and the local community at large.

The Group has participated in various corporate events in support of various charities throughout the year and will continue to do soin the future.

BOARD CHANGES

During the year, Mr Ooi Boon Leong resigned from the Board and I wish to record our sincere thanks and appreciation for hiscontribution and services rendered.

APPRECIATION

On behalf of the Board of Directors, I wish to extend my sincere gratitude and appreciation to members of our management team andstaff for their hard work, commitment and loyalty.

I also wish to record our gratitude and thanks to our customers, suppliers, business associates, bankers, government authorities andmost importantly, our shareholders for their support and confidence in the Company.

DATO’ AHMAD KABEER BIN MOHAMED NAGOORChairman

I wish to extend my sinceregratitude and appreciation tomembers of our management teamand staff for their hard work,commitment and loyalty.

“ “

Statement on Corporate Governance


The Board of Directors (“Board”) is committed to the principals of the Malaysian Code on Corporate Governance(“the Code”) and strives to adopt the prescriptions of the Code.

The Board has continued its commitment in maintaining high standards of corporate governance and the effective applicationof the principles and best practices, as set out in the Code, throughout the Group.

The Board recognises that the practice of good corporate governance is fundamental in this era of globalisation wherecorporate climate calls for enhancement of shareholders’ value, alongside safeguarding the interest of shareholders andstakeholders of the Company.

The Board is pleased to state and affirm the means and manner which the Group has applied the principles, and state the extentto which the Group has complied with the Best Practices of the Code during the financial year under the review.

A. THE BOARD

The Board is entrusted with the proper stewardship of the Company’s resources for the best interest of its shareholdersand also to steer the Group towards achieving the maximum economic value capable of achieving. The members of theBoard have extensive experience and expertise in a wide range of related and unrelated industries and have been selectedbased on their skills, knowledge and their ability to add strength to the leadership.

The Directors are equally accountable for the Company’s activities, strategy and financial performance. Particularattention is given to ensure that the strategies proposed by the Management of the Company are fully discussed andcritically examined by the Board.

Composition and Balance of the Board

The strength of the Board lies in the composition of its members, who has a wide range of expertise, extensiveexperience and diverse background in business, finance and technical knowledge.

The current Board has eight (8) members comprising two (2) Executive Directors, three (3) Non-Independent Non-Executive Directors and three (3) Independent Non-Executive Directors. This composition complies with Rule 15.02 ofthe Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for the Mesdaq Market wherein itstates that the Board must comprise of at least two (2) or 1/3rd of the Board of Directors of a listed company, whicheveris higher, are Independent Directors. The profile of each Director is presented separately in the annual report.

Dato’ Ahmad Kabeer bin Mohamed Nagoor is the Group’s Non-Independent Non-Executive Chairman while Mr. LimSeng Boon is the Group’s Managing Director. The Chairman is responsible for the Board’s effectiveness and conduct,whilst the Managing Director has overall responsibilities over the business and operation of the Group. The cleardivision of functions and responsibilities between these two roles will ensure a balance of power and authority.

In accordance with the recommendation of the Code, Dato’ Haji Hasan bin Malek, the Senior Independent Non-Executive Director of the Company is available to deal with concerns of the Group whereby it will be inappropriate tobe dealt with by the Chairman or the Managing Director.

Non-Executive Directors play a crucial supervisory function. The presence of Independent Non-Executive Directors areessential in providing unbiased and independent views, advice and judgement, ensuring a balanced and impartial Boarddecision making process, as well as safeguarding the interests of other parties, such as minority shareholders. All Non-Executive Directors do not participate in the day-to-day management of the Group.


15A N N U A L R E P O R T 2 0 0 7

A. THE BOARD (continued)

Board Responsibilities

The Board provides overall strategic direction and effective control of the Company. The Board has reserved appropriatestrategic, financial and organisational matters for its collective decision. Key matters, such as approval of annual andinterim results, acquisitions and disposals of material investment, material agreements, major capital expenditures,budgets, long term plans and succession planning for top management are reserved for the Board.

The Board Meetings

Board meetings are held quarterly with additional meetings held when necessary. The Board met four (4) times duringthe year under review. All Directors attended more than 50% of the total Board meetings held during the financial year2007.

The meeting attendance record of the Directors is as follows:

Directors Meeting Attendance

Dato’ Ahmad Kabeer bin Mohamed Nagoor 4 / 4Dato’ Haji Hasan bin Malek 4 / 4Lim Seng Boon 4 / 4Lim Eng Thong 4 / 4Ooi Boon Leong (resigned on 28th May 2007) 4 / 4Krishnan Menon 4 / 4Mohamad Najeb bin Ali 4 / 4Chew Sing Chou 3 / 4YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail Petra 4 / 4

Board Committees

As appropriate or whenever required as provided by the Article of Association, the Board has delegated certainresponsibilities to the Board Committees, which operates within clearly defined terms of reference. The BoardCommittees are:-

a. Audit Committee; and b. Employee Share Option Scheme Committee.

Supply of Information to the Board

Prior to each Board meeting, notice of meetings, setting out the agenda and accompanied by the relevant Board reportsand documents are provided to the Directors on a timely manner to allow the Directors to peruse, obtain additioninformation and where applicable, seek further clarification on the matters to be tabled at the meeting.

Where applicable, there will be a schedule of matters reserved specifically for the Board’s decision, including theapproval of corporate plans and budgets, acquisitions and disposals of major investments, change of management andcontrol structure of the Group, including key policies, procedures and authority limits.

The proceedings and resolutions passes at each Board Meeting are minuted and kept in the statutory minutes book at theregistered office of the Company.



A. THE BOARD (continued)

Supply of Information to the Board (continued)

Directors have access to all information within the Company whether as full board or in their individual capacity, infurtherance of their duties. In addition, whenever independent professional advice is required by the Directors, outsideexperts may be engaged at the Company’s expense. Before incurring such professional fees, the Director concerned mustconsult with the Chairman, or with two (2) other Directors (one whom a Non-Executive Director). Such advice was notsought by any of the Directors for the financial year under review.

Directors also have direct access to the advice and the services of the Group’s Company Secretary. The Board is advisedand updated on statutory and regulatory requirements pertaining to their duties and responsibilities as well asappropriate procedures for management of meetings.

Appointments of the Board and Re-election

Currently, the appointments of Directors are dealt with by the entire Board. The Board has decided not to set up aNomination Committee, as the Board is of the opinion that given its current size and composition, appointments of newdirectors can be dealt with effectively and objectively by the entire Board.

In accordance with the Articles of Association of the Company, at least one third of the Board shall retire from officeand all Directors shall retire from office at least once in every three (3) years, but shall be eligible for re-election. Aretiring director shall retain office until the close of the meeting at which he/she retires.

Directors’ Training

All Directors have attended the Mandatory Accreditation Programme (“MAP”) as required by Bursa Securities on alldirectors of listed companies.

The Directors also attended Continuing Education Programmes (“CEP”) to accumulate the requisite points and also keepabreast with relevant developments in the business environment as well relevant regulatory requirements.

In conjunction with the repeal of CEP requirements with effective from 1 January 2005, The Board of Directors hasassessed the training needs of their Directors during the financial year 2007. A one-day training session was conductedon 12 January 2007 with assistance from several professional bodies and the training provided the Directors with currentupdates on various businesses, management and legal issues appropriate to further enhance their knowledge and skills.The topics were mainly relating to the provisions of the Listing Requirements of Bursa Securities, Financial ReportingStandards frameworks and Corporate Social Responsibilities. All Directors have attended the said in-house training.

B. DIRECTORS’ REMUNERATION

Remuneration Policy and Procedures

The Directors’ remuneration is dealt by the entire Board. The Board decided not to establish a Remuneration Committeeafter taking into account that there is only one (1) salaried Executive Director and also the quantum of remunerationpaid to him.

In determining the Directors’ remuneration, the Board took into account the responsibilities, contribution andperformance by each individual director. The salaried Executive Director did not participate in any way in determininghis own remuneration.


17A N N U A L R E P O R T 2 0 0 7

B. DIRECTORS’ REMUNERATION (continued)

Remuneration Policy and Procedures (continued)

The salaried Executive Director does not receive other benefits apart from his monthly salary, non-contractual annualbonuses and the share options granted under the Company’s Employee’ Share Option Scheme (“ESOS”). The otherExecutive Director does not receive other benefits apart from the share options granted under the Company’s ESOS. Theallocation of share options under ESOS is administered by the ESOS Committee in accordance with the ESOS by-laws.

Directors’ fees which are subject to shareholders’ approval are payable only to Non-Executive Directors. For the yearended 30 June 2007, the Board proposed a fee of RM18,000 for each Non-Executive Director. In addition, the Boardalso proposed to pay additional fees of RM6,000 each to the Chairman of the Board and the Chairman of the AuditCommittee.

The Executive Directors played no part in determining their own remuneration, whilst the Non-Executive Directorsabstain from discussion of their own directors’ fees.

Directors’ Remuneration

The details of the Directors’ remuneration for the financial year are:

Salary Bonus Fee TotalRM’000 RM’000 RM’000 RM’000

Executive Directors 232 - - 232Non-Executive Directors - - 138 138Total 232 - 138 370

The Directors, whose remuneration falls within the following bands are as follows:

Range Executive Non-Executive

Below RM50,000 - 7RM50,001 - RM100,000 - -RM100,001 - RM150,000 - -RM150,001 - RM200,000 - -RM200,001 - RM250,000 1 -

The detailed remuneration of each Director is not disclosed as the information is sensitive and confidential.

C. SHAREHOLDERS

Shareholders and Investors Relations

The Board acknowledges its role in representing and promoting the interests of shareholders, and its accountability toshareholders for the performance and activities of the Group. Regular briefings and discussions sessions with analystand investors were held by the Managing Director. The Group has also conducted analysts briefing with fund managersand potential investors.



C. SHAREHOLDERS (continued)

Shareholders and Investors Relations (continued)

The Group recognises the importance of timely and thorough dissemination of information to shareholders. In thisregard, the information that is disseminated to the investment community conforms strictly with the Bursa Securitiesdisclosure rules and regulations. Care is taken to ensure that no market sensitive information such as corporateproposals, financial results and other material information is disseminated to any party without first making an officialannouncement through Bursa Securities.

The annual report has comprehensive information pertaining to the Group, while various disclosures on quarterly andannual results provide investors with financial information.

Annual General Meeting

The Annual General Meeting (“AGM”) is a crucial mechanism and it is the principal forum in shareholdercommunication. Shareholders are notified of the meeting and provided with a copy of the Company’s annual reporttwenty one (21) days before the meeting. At each AGM, the Board presents the progress and performance of theCompany and provides shareholders with an opportunity to ask for more information pertaining to the financialstatements, without limiting the time and questions asked.

During the meeting, the Chairman and Board will respond to queries and undertake to provide sufficient explanation andclarification on issues and concerns raised by the shareholders.

The Board has ensured that each item of special business included in the notice of the AGM is accompanied by a fullexplanation of the effects of the proposed resolution to facilitate full understanding and evaluation of the issuesinvolved.

Where Extraordinary General Meeting are held to obtain shareholders’ approval on business or corporate proposals,comprehensive circulars are sent to shareholders within prescribed deadlines in accordance with regulatory and statutoryprovisions.

D. ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is aware of its responsibilities to the shareholders and the requirements to present a balanced andcomprehensive assessment of the Group’s financial position, by means of the annual and quarterly report and otherpublished information. In this regard, the Board is primarily responsible to present a fair and balanced report of thefinancial affairs of the Group, which is prepared in accordance with the Companies Act, 1965 and the approvedaccounting standards set by Malaysian Accounting Standard Board.

With assistance from the Audit Committee, the Board scrutinised the financial aspect of the Audited FinancialStatements and reviewed the statutory compliance aspects of the Audited Financial Statements.


19A N N U A L R E P O R T 2 0 0 7

D. ACCOUNTABILITY AND AUDIT (continued)

Internal Control

The Board acknowledged its overall responsibility for maintaining a sound system of internal controls to safeguardshareholders’ investment and Group’s assets. The Statement on Internal Controls is set out on pages 20 to 21 of theannual report providing an overview of the state of internal controls within the Group.

Relationship with Auditors

Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group’sauditors, in seeking professional advice and ensuring compliance with the applicable accounting standards and statutoryrequirements in Malaysia. The Audit Committee has been explicitly accorded the power to communicate directly withboth the External Auditors and Internal Auditors.

During the financial year, the Audit Committee also met up once with the External Auditors without the presence of anyexecutive Board member.

The role of the Audit Committee in relation to the Auditors is set out in the Audit Committee Report on pages 22 to 24.

E. STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE

The Company is committed to achieving high standards of corporate governance throughout the Group and to thehighest level of integrity and ethical standards in all its business dealings. Apart from the above disclosure, the Boardconsiders that it has complied throughout the financial year with the Best Practices as set out in the Code.

This statement is made in accordance with the resolution passed in the Board of Directors’ meeting held on 28 August 2007.

Statement on Internal Control


This statement of internal control has been prepared in compliance to paragraph 15.26(b) of the Listing Requirements of BursaMalaysia Securities Berhad for the Mesdaq Market.

RESPONSIBILITY OF THE BOARD

The Board acknowledges its overall responsibility in maintaining a sound system of internal controls (including systems forcompliance with applicable laws, regulations, rules, directives and guidelines) to safeguard shareholders’ investments and theGroup’s assets and for reviewing the effectiveness, adequacy and integrity of these systems. The Board also recognises that asound system of internal controls is a concerted and continuing process, designed to reduce rather than eliminate the risk offailure in achieving the business objectives. It therefore provides reasonable assurance but not absolute assurance that theGroup will not be hindered in achieving its business objectives.

Following the publication of the Statement on Internal Control: Guidance for Directors of Public Listed Companies (“theInternal Control Guidance”), the Board confirms that there is an ongoing process for identifying, evaluating and managingsignificant risks faced by the Group, that has been in place for the financial year and up to the date of approval of the annualreport and financial statements, and that this process is regularly reviewed by the Board and accords with the Internal ControlGuidance.

RISK MANAGEMENT FRAMEWORK

The Executive Directors with the assistance of the senior management and internal auditors undertook to identify, evaluate,monitor and manage the principal business risks that affecting the day-to-day operations of the Group. To facilitate the riskidentification and evaluation, a checklist was developed and senior management were required to identify controls whichcould mitigate such risks and make appropriate assessment of any impact of such risks may have. The risks assessed werecategorised under market & environment, financial, reporting and planning, process, information technology security,customer and integrity of employees. Regular review by the Board will be conducted on a yearly basis with additional reviewsto be carried out as and when required.

CONTROL STRUCTURE AND ENVIRONMENT

The Board is fully committed to ensure that a proper and conducive control environment is maintained within the Group togovern the manner in which the Group and its employees conducting themselves. The key elements of internal controls are:

Independence of the Audit CommitteeThe Audit Committee comprises majority of Non-Executive Directors and they have varied experience and qualification.The Audit Committee has full access to both the internal as well as external auditors.

The Audit Committee, on behalf of the Board, considers the effectiveness of the operation of internal control procedures inthe Group during the financial year. The Audit Committee reviews internal control issues identified by the internal auditors,external auditors and management, and evaluate the adequacy and effectiveness of the Group’s risk management and internalcontrol system. It also conducts a review of the internal audit functions with emphasis on the scope of audits, quality andindependence of the internal auditors.

Organisation structure with defined roles and responsibilitiesTerm of reference for the Chairman, Managing Director and the Board Committees are clearly defined while job functions forthe management and employees in the Group have also been streamlined to provide well-defined roles and responsibilities.The above will ensure proper division and segregation of duties and responsibilities.

Documented policies and proceduresPolicies and control procedures which are developed by the senior management are also reviewed by the internal auditors forassessment of the effectiveness and adequacies of the internal control. They are updated regularly and distributed to allemployees for their compliance and reference.

Statement on Internal Control

21A N N U A L R E P O R T 2 0 0 7

CONTROL STRUCTURE AND ENVIRONMENT (continued)

Authority LimitsThe limits of authority determine the respective levels of authority which are delegated to the employees of the respectivelevels to enable control of the Group’s commitment of both capital and operational expenditure. The limits of authority wasapproved and updated regularly by the senior management together with the Executive Directors.

All major investments and projects are subject to proper due diligence review before the Executive Directors present to theBoard for its consideration and approval.

Financial and operational informationFinancial and operational information are prepared monthly for the Executive Directors’ review. This will ensure a closemonitoring of the performance of the Group and rectification measures can be taken promptly if there is any discrepancies anddeviation from the plans.

The annual budgets which contain financial and operating targets, capital expenditure proposals and performance indicators,are reviewed and approved by the Executive Directors together with the senior management before presenting to the Boardfor final review and approval.

MONITORING AND REVIEW

The Board has developed a monitoring and reporting process to continuously evaluate and monitor the significant risks in aformalised manner, which entail establishing procedures for reporting and monitoring for risks and controls. Regular reviewswill be conducted with additional reviews as and when required.

Performance monitoring and reviewMonthly performance reports are provided regularly and promptly to the Executive Directors for their review and assessmentwhile the Board receives and discuss the quarterly reports on the financial results, business development and other corporatematters during the quarterly Board meeting.

Monitoring ControlsThe Group has an internal audit function whose primary responsibility is to provide an independent evaluation, enablingcontinual improvement in the processes and controls and to independently assure the Board, through the Audit Committee,that the internal control procedures and policies are complied with and functioned as intended. Annual internal audit plan ispresented to the Audit Committee for approval.

On a quarterly basis, Internal Audit Division submits audit reports for the Audit Committee’s review and approval. Includedin the reports are recommended corrective measures on risk identified, if any, for implementation by the Management.

The system of internal controls described in this statement is considered by the Board to be adequate and the risks areconsidered by the Board to be at an acceptable level within the context on the business environment throughout the Group’sbusinesses. However, such system does not eliminate the possibility of human error, collusion, or deliberate circumvention ofcontrol procedures by employees and others. The Board is satisfied that for the financial year under review, there was nomaterial losses, deficiencies or errors have arisen from any inadequacy or failure of the Group’s system of internal control thatwould require separate disclosure in the Group’s Annual Report.


Audit Committee Report


The Audit Committee (“Committee”) was established by the Board of Directors with the primary objective to assist the Board ofDirectors in fulfilling its fiduciary responsibilities relating to corporate governance, system of internal controls, risk managementprocesses and management and financial reporting practices of the Group.

COMPOSITION

The current members of the Committee comprise:

Chairman Status of DirectorshipDato’ Haji Hasan bin Malek Senior Independent Non-Executive Director

MembersLim Eng Thong Executive DirectorMohamad Najeb bin Ali Independent Non-Executive DirectorYAM Tengku Muhammad Fakhry Petra Independent Non-Executive Director (appointed on 26th February 2007)Ibni Sultan Ismail Petra

Detailed profile of the Committee members are contained in the “Directors’ Profile” as set out on pages 6 to 9 of this Annual Report.Members of the Committee possess sound judgement, objectivity, independent attitude, management experience and knowledge ofthe industry. All members of the Committee have working knowledge of basic finance and accounting practices; particularly Mr. LimEng Thong who is a member of the Malaysian Institute of Certified Public Accountants.

TERMS OF REFERENCE

The terms of reference of the Committee are as follows:

Membership1. The Committee shall be appointed by the Board from among its members and shall comprise a minimum of three (3) members,

whereby a majority of the Committee must be Independent Directors, and at least one (1) member of the Committee:-a) must be a member of the Malaysian Institute of Accountants; or

b) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experienceand:-i. he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; orii. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the

Accountants Act 1967; or

c) fulfils such other requirements as prescribed by the Bursa Malaysia Securities Berhad.

2. The Chief Executive Officer or Alternate Director shall not be appointed as a member of the Committee.

3. The Committee shall elect a Chairman from among its members and the elected Chairman shall be an Independent Director.

4. In the event, the elected Chairman is not able to attend a meeting, the remaining members present shall elect one of themselvesas Chairman for the meeting. The elected Chairman shall be an Independent Director.

5. If a member of the Audit Committee resigns, retire, dies or for any other reason ceases to be a member which resulting in thenon-compliance with point 1 above, the Board shall fill the vacancy within three (3) months.

6. The Board shall review the term of office and performance of the Committee and each member at least once every three(3) years.


23A N N U A L R E P O R T 2 0 0 7

Frequency of meetings1. Meetings shall be held not less than four (4) times a year. However, additional meetings may be called at anytime depending

on the scope of activities of the Committee. 2. Other Board members, Senior management, Internal and External auditors may be invited to attend meetings. 3. Prior notice shall be given for all meetings.

QuorumThe minimum quorum for the meeting is two (2) members of the Committee, a majority of members present must be independent andNon-Executive Directors.

SecretaryThe Company Secretary shall be the secretary of the Committee. The Secretary shall circulate the notice and minutes of the Committeeto all members of Board.

FunctionsThe functions of the Committee are as follows:-

i) To consider the appointment of external auditors, the audit fee and any questions of resignation of dismissal.ii) To review with the external auditors:

a) the audit plan, scope and nature of the audit of the Group;b) their evaluation and findings of the system of internal controls; and the audit reports on the financial statements.

iii) To review the adequacy of the scope, function and resources of internal audit and to ensure that it has the necessary authorityto carry its work.

iv) To review any appraisal or assessment of the performance of the internal audit functions.v) To review the quality, adequacy and effectiveness of the Group’s internal control environment.vi) To review the quarterly and year end financial statements of the Group, focusing particularly on any changes in or

implementation of major accounting policies and practices, significant adjustments arising from the audit, the going concernassumption and compliance with applicable approved accounting standards and other legal and regulatory requirements.

vii) To review any related party transactions and conflicts of interest situation that may arise within the Group including anytransactions, procedures or course of conduct that raises questions of management integrity.

viii) To review the external auditors’ management letter and management’s response.ix) To review and verify the allocation of options pursuant to the Employees’ Share Option Scheme (“ESOS”) in compliance with

the criteria as stipulated in the by-law of ESOS of the Group, if any. x) Any other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to the

Company and ensure the effective discharge of the Committee’s duties and responsibilities.

AuthorityThe Committee is authorised by the Board to investigate any activity within its term of reference at the cost of the Company, to:-i) secure full and unrestricted access to any information pertaining to the Company and its subsidiaries

(“the Group”).ii) communicate directly with the external auditors, internal auditors and all employees of the Group.iii) seek and obtain independent professional advice and to secure the attendance of outsiders with relevant experience and

expertise as it considers necessary.iv) convene meetings with external auditors, excluding the attendance of the executive members of the committee, whenever

deemed necessary.



MEETINGS

During the year, the Committee held a total of four (4) meetings. Details of attendance of the Committee members are as follows:

Committee Members Meeting Attendance

Dato’ Haji Hasan bin Malek 4 / 4Lim Eng Thong 4 / 4Mohamad Najeb bin Ali 4 / 4YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail Petra 1 / 1(appointed on 26 February 2007)

The Company’s other Board members, internal auditor, external auditors, and certain senior management staff had attended all themeetings at the invitation of the Chairman of the Committee.

SUMMARY OF ACTIVITIES

The Committee had carried out the following activities during the four (4) meetings in discharging their duties and responsibilities:

• Reviewed the quarterly financial results and annual audited financial statements of the Group and the Company including theannouncements pertaining thereto, before recommending to the Board for their approval and release of the Group’s results toBursa Malaysia Securities Berhad.

• Reviewed with external auditors on their audit planning memorandum on the statutory audit of the Group for the financial yearended 30 June 2007.

• Reviewed with external auditors on the results and issues arising from their audit of the financial year end statements and theirresolutions of such issues highlighted in their report to the Committee.

• Reviewed the risk management framework report prepared by the senior management of the Group and the progress of the riskmanagement functions.

• Reviewed with the internal auditor, the internal audit plan to ensure principal risk areas are adequately covered in the audit plan.• Reviewed the results of the internal audit process to ensure that the recommendations made by the Internal Audit Function and

corrective actions taken by management are adequately addressed on a timely basis.• Reviewed related party transactions, if any, for compliance with the Listing Requirements of Bursa Securities.

REVIEW OF EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

During the financial year, the Company did not allocate or grant any share options to eligible employees pursuant to the Company’sESOS. Nevertheless, the Audit Committee has reviewed the allocation of share options granted in prior financial years and noted thatthey were made in accordance with the criteria as set out in the bye-laws of the Company's ESOS.

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

INTERNAL AUDIT FUNCTION

The Group has an independent and adequately resourced Internal Audit Function to assist the Audit Committee in maintaining a soundsystem of internal control. The internal audits were undertaken to provide independent assessments on the adequacy, efficiency andeffectiveness of the Group’s internal control systems in anticipating potential risks exposures over key business processes within theGroup. The Audit Committee has full access to internal auditor and received reports on all audits performed.

The resulting reports from the audits undertaken were forwarded to the Management for its attention and to take the necessarycorrective actions as recommended. The Management is responsible for ensuring that corrective actions on reported weaknesses aretaken within the required time frame.

During the financial year, the internal audit activities have been carried out in accordance to the internal audit plan, which have beenapproved by the Audit Committee.


25A N N U A L R E P O R T 2 0 0 7

Statement of Directors’ Responsibility InRelation To The Audited Financial Statement

This statement is prepared pursuant to the Listing Requirements of Bursa Malaysia Securities Berhad.

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

In preparing these financial statements, the Directors have considered the following:-

• the Group and the Company have used appropriate accounting policies, and are consistently applied;• that reasonable and prudent judgements and estimates were made; and• that the approved accounting standards in Malaysia have been applied.

The Directors are responsible for ensuring that the Company maintains proper accounting records which disclose withreasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financialstatements comply with the Companies Act 1965.

The Directors have general responsibility for taking such steps that are reasonably available to them to safeguard the assetsof the Group and the Company, and to prevent and detect fraud and other irregularities.


Additional Compliance Information


Share BuybackDuring the year, the Company did not enter into any share buyback transactions.

Option or WarrantsDuring the financial year, there has been no issuance of new ordinary share arising from the exercise of option pursuant to theCompany’s Employees’ Share Option Scheme.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) ProgrammeDuring the financial year, the Company did not sponsor any ADR and GDR programme.

Impositions of Sanctions and PenaltiesThere were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatorybodies during the financial year.

Non-Audit FeesThe amount of non-audit fees paid to the external auditors by the Group and Company for the financial year amounted to RM7,000.

Profit Estimates, Forecast or ProjectionThe Company did not issue any profit estimates, forecast or projection for the financial year.

Profit GuaranteeThe Company did not issue any profit guarantee during the financial year.

Material Contract Involving Directors and Major ShareholdersThere are no material contracts involving Directors and major shareholders during the financial year.

Recurrent Related Party Transactions of a Revenue or Trading NatureDetails of Recurrent Related Party Transactions of a Revenue or Trading Nature is disclosed in Note 23 to the Financial Statement onpage 67.

Revaluation Policy The Company did not revalue any of its property, plant and equipment.

Financial StatementsDIRECTORS' REPORT 28 - 32

STATEMENT BY DIRECTORS 33

STATUTORY DECLARATION 33

REPORT OF THE AUDITORS 34

INCOME STATEMENTS 35

BALANCE SHEETS 36

STATEMENTS OF CHANGES IN EQUITY 37 - 38

CASH FLOW STATEMENTS 39 - 40

NOTES TO THE FINANCIAL STATEMENTS 41 - 71

Directors’ Report


The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Companyfor the financial year ended 30 June 2007.

PRINCIPAL ACTIVITY

The principal activity of the Company is the provision of mobile-internet messaging solutions using the Short Messaging Services(“SMS”), General Packet Radio Services (“GPRS”) and Wireless Application Protocol (“WAP”) technology.

The principal activities of the subsidiaries are described in Note 14 to the financial statements.

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

RESULTS

GROUP COMPANYRM RM

Loss for the year (4,371,241) (7,143,631)

Attributable to:Equity holders of the Company (4,807,076) (7,143,631)Minority interests 435,835 -

(4,371,241) (7,143,631)

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were notsubstantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in the financialstatements.

DIVIDENDS

No dividends have been declared or paid by the Company since the end of the previous financial year. The directors do notrecommend the payment of any dividend in respect of the current financial year.

Directors’ Report

29A N N U A L R E P O R T 2 0 0 7

DIRECTORS

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

Dato' Ahmad Kabeer bin Mohamed Nagoor Dato' Haji Hasan bin Malek Krishnan MenonLim Seng Boon Lim Eng Thong Mohamad Najeb bin Ali Chew Sing Chou YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail Petra Ooi Boon Leong - resigned on 28 May 2007

DIRECTORS' BENEFITS

Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement to which the Companywas a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or anyother body corporate, other than as may arise from the share options to be granted pursuant to the Employees' Share Options Scheme(“ESOS”).

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than the benefitsincluded in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 8 to the financialstatements or the fixed salaries of directors who are full-time employees of the Company and the subsidiaries) by reason of a contractmade by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in whichhe has a substantial financial interest, except as disclosed in Note 23 to the financial statements.

DIRECTORS' INTERESTS

According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in shares andoptions during the financial year were as follows:

Number of Ordinary Shares of RM0.10 Each1 July 30 June

2006 Bought Sold 2007Direct Interest

Dato’ Haji Hasan bin Malek 320,000 - - 320,000Krishnan Menon 350,000 - - 350,000Lim Seng Boon 11,220,000 1,461,000 - 12,681,000Lim Eng Thong 2,050,000 - - 2,050,000

Indirect Interest

Dato' Ahmad Kabeer bin Mohamed Nagoor 15,852,000 - - 15,852,000

Directors’ Report


DIRECTORS' INTERESTS (continued)

Number of Options Over Ordinary Shares of RM0.10 EachOptions Options

Outstanding Outstanding SubscriptionOptions granted as at as at price Date ofon 8.1.2003 1.7.2006 Exercised Lapsed 30.6.2007 (RM) expiry

Lim Seng Boon 480,000 - - 480,000 0.29 7.1.2008Lim Eng Thong 800,000 - - 800,000 0.29 7.1.2008

Number of Options Over Ordinary Shares of RM0.10 EachOptions Options

Outstanding Outstanding SubscriptionOptions granted as at as at price Date ofon 10.11.2003 1.7.2006 Exercised Lapsed 30.6.2007 (RM) expiry

Lim Seng Boon 100,000 - - 100,000 2.52 7.1.2008Lim Eng Thong 100,000 - - 100,000 2.52 7.1.2008

None of the other directors in office at the end of the financial year had any interest in shares and options in the Company duringthe financial year.

EMPLOYEES' SHARE OPTIONS SCHEME

The Company's Employees' Share Options Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at anExtraordinary General Meeting held on 10 December 2002.

The main features of the ESOS are as follows:

(a) The ESOS shall be in force for a period of five years from 8 January 2003.

(b) Eligible persons are employees of the Company (other than Government employee(s) or representative(s) of the Government)who have been confirmed in writing as an employee on the date of the offer, including Executive Directors. In the case of anon-Malaysian citizen employee, the employee's contribution must be deemed to be vital to the Company and the employee hasserved the Company on a full time basis for at least one year from the date of offer (where the employee is of executive status)and for more than three years as at the date of offer (where the employee is of non-executive status).

(c) The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the issued share capital of theCompany at any point in time during the tenure of the ESOS. In addition, not more than 50% of the shares available under theESOS shall be allocated, in aggregate, to senior management and not more than 25% of the shares available under the ESOSshall be allocated to any individual eligible employee.

(d) Offers made in conjunction with the Company's listing on the MESDAQ would be at the exercise price of RM0.45, which isthe initial public offer price. The exercise price for each new ordinary share made subsequent to this may be fixed at a discountnot more than 10% of the weighted average market price of the shares for five market days immediately preceding the date ofoffer.

(e) The number of shares under option and the exercise price may be adjusted as a result of any alteration in the capital structureof the Company by way of capitalisation of profits or reserves, consolidation or subdivision or reduction of capital, if any, madeby the Company while an option remains unexercised.

Directors’ Report

31A N N U A L R E P O R T 2 0 0 7

EMPLOYEES' SHARE OPTIONS SCHEME (continued)

As at 30 June 2007, the details of the share options are as follows:

Number of Share OptionsExercise Balance Balance

Year of price Grant as at as at Date of option (RM) date 1.7.2006 Granted Exercised Lapsed 30.6.2007 expiry

2003 * 0.29 8.1.2003 3,354,580 - - - 3,354,580 7.1.20082003 2.52 10.11.2003 1,177,500 - - - 1,177,500 7.1.20082004 2.17 9.6.2004 1,190,000 - - - 1,190,000 7.1.2008

* The exercise price for this ESOS has been adjusted from RM0.45 per share to RM0.29 per share to take into account the effectof the three for five bonus issue made during the financial year ended 30 June 2004.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names ofemployees who have been granted options to subscribe for less than 500,000 ordinary shares of RM0.10 each. The list of employeesof the Company and its subsidiaries granted options to subscribe for 500,000 or more ordinary shares of RM0.10 each is as follows:

Number of Share OptionsBalance Balance

Grant Exercise as at as at Date of Name date price 1.7.2006 Granted Lapsed 30.6.2007 expiry

Lester Neil Francis 8.1.2003 0.29 960,000 - - 960,000 7.1.2008Ng Heng Kit 8.1.2003 0.29 740,000 - - 740,000 7.1.2008

No ESOS were exercised subsequent to the end of the financial year.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonablesteps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision fordoubtful debts and satisfied themselves that all known bad debs had been written off and that adequate provision had beenmade for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in theordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off as bad debts or the amount of the provision for doubtful debts in the financial statements of theGroup and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence tothe existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

Directors’ Report


OTHER STATUTORY INFORMATION (continued)

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financialstatements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which securesthe liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelvemonths after the end of the financial year which will or may affect the ability of the Group or of the Company to meet itsobligations when they fall due; and

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

OTHER SIGNIFICANT EVENTS

The other significant events during the financial year are as disclosed in Note 14(b) and 26 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 18 September 2007.

DATO' AHMAD KABEER BIN MOHAMED NAGOOR LIM SENG BOON

Statutory Declaration Pursuant to Section 169(16) of the Companies Act, 1965

33A N N U A L R E P O R T 2 0 0 7

Statement By Directors Pursuant to Section 169(15) of the Companies Act, 1965

We, DATO' AHMAD KABEER BIN MOHAMED NAGOOR and LIM SENG BOON, being two of the directors ofAKN MESSAGING TECHNOLOGIES BERHAD, do hereby state that, in the opinion of the directors, the accompanying financialstatements set out on pages 35 to 71 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicableFinancial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of theCompany as at 30 June 2007 and of the results and the cash flows of the Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 18 September 2007.

DATO' AHMAD KABEER BIN MOHAMED NAGOOR LIM SENG BOON

I, LIM ENG THONG, being the director primarily responsible for the financial management of AKN MESSAGINGTECHNOLOGIES BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 35 to71 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of theprovisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared bythe abovenamed LIM ENG THONGat Georgetown in the State of Penangon 18 September 2007: LIM ENG THONG

Before me,

Commissioner for Oaths

Report of the Auditors to the Members of AKNMessaging Technologies Berhad (Incorporated in Malaysia)


We have audited the financial statements set out on pages 35 to 71. These financial statements are the responsibility of theCompany's directors.

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

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as wellas evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for ouropinion.

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 andapplicable Financial Reporting Standards in Malaysia so as to give a true and fair view of:

(i) the financial position of the Group and of the Company as at 30 June 2007 and of the results and the cash flows of theGroup and of the Company for the year ended; and

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

(b) the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept inaccordance with the provisions of the Act.

We have considered the financial statements and the auditors' reports thereon of the subsidiaries of which we have not acted asauditors, as indicated in Note 14 to the financial statements, being financial statements that have been included in the consolidatedfinancial statements.

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

The auditors' reports on the financial statements of the subsidiaries were not subject to any qualification to the consolidated financialstatements and did not include any comment required to be made under Section 174(3) of the Act.

ERNST & YOUNG TEOH SOO HOCKAF: 0039 No. 2477/10/07(J)Chartered Accountants Partner

Penang, MalaysiaDate: 18 September 2007

35A N N U A L R E P O R T 2 0 0 7

Income Statements for the year ended 30 June 2007

Group CompanyNote 2007 2006 2007 2006

RM RM RM RM

Revenue 3 28,260,692 30,750,302 11,811,929 15,172,655Cost of sales 4 (9,103,529) (9,041,144) (4,851,706) (3,702,114)Gross profit 19,157,163 21,709,158 6,960,223 11,470,541

Other income 5 100,003 189,603 3,226 99,548Selling and distribution expenses (5,604,259) (8,508,952) (1,100,031) (3,016,990)Administrative expenses (14,889,575) (10,850,208) (11,315,753) (7,737,219)Other expenses (1,870,014) (81,304) (1,691,148) (33,632)Operating (loss)/profit (3,106,682) 2,458,297 (7,143,483) 782,248

Finance costs 6 (263) (4,388) - -(Loss)/Profit before tax 7 (3,106,945) 2,453,909 (7,143,483) 782,248Income tax expense 9 (1,264,296) (420,130) (148) (7,690)(Loss)/Profit for the year (4,371,241) 2,033,779 (7,143,631) 774,558

Attributable to:Equity holders of the Company (4,807,076) 1,536,079 (7,143,631) 774,558Minority interests 435,835 497,700 - -

(4,371,241) 2,033,779 (7,143,631) 774,558(Loss)/Earnings per share (sen) 10Basic (2.94) 0.94Diluted (2.94) 0.94

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

Balance Sheets as at 30 June 2007



RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 12 7,409,094 8,630,431 4,904,749 6,137,996Intangible assets 13 14,667,681 11,635,059 940,722 1,226,942Investment in subsidiaries 14 - - 36,332,143 32,473,981

22,076,775 20,265,490 42,177,614 39,838,919

Current assets

Trade and other receivables 15 10,068,115 14,231,983 7,967,692 12,413,499Tax prepayment 528,660 28,419 31,158 18,982Cash and bank balances 16 14,413,862 16,469,120 4,616,176 10,063,579

25,010,637 30,729,522 12,615,026 22,496,060TOTAL ASSETS 47,087,412 50,995,012 54,792,640 62,334,979EQUITY AND LIABILITIESEquity attributable to equity holders of the Company

Share capital 19 16,351,874 16,351,874 16,351,874 16,351,874Share premium 2,351,731 2,351,731 2,351,731 2,351,731Other reserves 20 970,036 (132,857) 16,074,240 16,074,240Retained earnings 21 20,769,701 25,576,777 18,013,648 25,157,279

40,443,342 44,147,525 52,791,493 59,935,124Minority interests 1,414,161 2,075,671 - -Total equity 41,857,503 46,223,196 52,791,493 59,935,124

Non-current liabilities

Borrowings - 11,117 - -Deferred taxation 18 60,850 - - -

60,850 11,117 - -

Current liabilities

Trade and other payables 17 4,595,527 4,530,824 2,001,147 2,399,855Borrowings - 22,713 - -Tax payable 573,532 207,162 - -

5,169,059 4,760,699 2,001,147 2,399,855Total liabilities 5,229,909 4,771,816 2,001,147 2,399,855

TOTAL EQUITY AND LIABILITIES 47,087,412 50,995,012 54,792,640 62,334,979


37A N N U A L R E P O R T 2 0 0 7

Statements of Changes In Equity for the year ended 30 June 2007

Attributable to equity holdersof the Company

Non-Distributable DistributableForeign

Share Share Exchange Retained Minority TotalNote Capital Premium Reserve Earnings Total Interests Equity

(Note 19) (Note 20(a)) (Note 21)GROUP RM RM RM RM RM RM RM

At 1 July 2005 16,278,194 2,211,739 (86,794) 26,484,807 44,887,946 1,221,702 46,109,648Foreign currency translation, representing net income and expense recognised directly in equity - - (46,063) - (46,063) 13,700 (32,363)

Profit for the year - - - 1,536,079 1,536,079 497,700 2,033,779Total recognised income

and expense for the year - - (46,063) 1,536,079 1,490,016 511,400 2,001,416Dividend 11 - - - (2,444,109) (2,444,109) - (2,444,109)Contribution to share capital

of subsidiaries by monitoring interests - - - - - 342,569 342,569

Issue of ordinary shares- pursuant to ESOS 19 73,680 139,992 - - 213,672 - 213,672

At 30 June 2006 16,351,874 2,351,731 (132,857) 25,576,777 44,147,525 2,075,671 46,223,196

At 1 July 2006 16,351,874 2,351,731 (132,857) 25,576,777 44,147,525 2,075,671 46,223,196Acquisition of

subsidiary 14(a) - - - - - (1,095,190) (1,095,190)Foreign currency

translation representing net income and expense recognised directlyin equity - - 1,102,893 - 1,102,893 (2,155) 1,100,738

Total recognised incomeand expense for the year - - 1,102,893 - 1,102,893 (1,097,345) 5,548

(Loss)/profit for the year - - - (4,807,076) (4,807,076) 435,835 (4,371,241)At 30 June 2007 16,351,874 2,351,731 970,036 20,769,701 40,443,342 1,414,161 41,857,503


Statements of Changes In Equity for the year ended 30 June 2007 (continued)


Non-Distributable DistributableShare Share Special Retained Total

Capital Premium Reserve Earnings EquityNote (Note 19) (Note 20 (b)) (Note 21)

COMPANY RM RM RM RM RM

At 1 July 2005 16,278,194 2,211,739 16,074,240 26,826,830 61,391,003Issue of ordinary shares

- pursuant to ESOS 19 73,680 139,992 - - 213,672Profit for the year, representing total

recognised income and expense for the year - - - 774,558 774,558

Dividends 11 - - - (2,444,109) (2,444,109)At 30 June 2006 16,351,874 2,351,731 16,074,240 25,157,279 59,935,124

At 1 July 2006 16,351,874 2,351,731 16,074,240 25,157,279 59,935,124Loss for the year, representing total

recognised income and expense for the year - - - (7,143,631) (7,143,631)

At 30 June 2007 16,351,874 2,351,731 16,074,240 18,013,648 52,791,493


39A N N U A L R E P O R T 2 0 0 7

Cash Flow Statements for the year ended 30 June 2007


RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit before tax (3,106,945) 2,453,909 (7,143,483) 782,248Adjustments for:Interest income 5 (73,823) (161,863) (3,226) (99,548)Finance costs 6 263 4,388 - -Amortisation of product development expenditure 7 1,546,603 866,123 1,241,754 660,642Depreciation of property, plant and equipment 7 1,945,769 1,822,134 1,405,477 1,354,141Impairment of intangible assets 7 1,641,838 - - -Impairment of investment in subsidiary 7 - - 1,641,838 -Gain on disposal of property, plant and equipment 7 (1,068) (6,956) - (1,547)Net unrealised loss on foreign exchange 7 251,685 57,642 18,204 -Provision for doubtful debts/ bad debts written off

- trade receivables 7 5,255,395 727,771 5,255,395 727,771- due from subsidiaries 7 - - - 777,733

Property, plant and equipment written off 7 23,757 33,409 11,853 6,738Short-term accumulating compensated absences 8 13,330 (21,097) 5,308 (22,126)Operating profit before working capital changes 7,496,804 5,775,460 2,433,120 4,186,052(Increase)/decrease in receivables (1,091,527) 5,905,141 (796,295) 5,519,481Decrease in payables (200,311) (712,647) (422,220) (467,146)Cash generated from operations 6,204,966 10,967,954 1,214,605 9,238,387Interest received 73,823 161,863 3,226 99,548Finance costs paid (263) (4,388) - -Taxes paid (1,403,549) (845,866) (12,324) (28,500)Net cash generated from operating activities 4,874,977 10,279,563 1,205,507 9,309,435


Cash Flow Statements for the year ended 30 June 2007 (continued)



RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Additional investment in subsidiaries - - - (687,655)Acquisition of a subsidiary 14(a) (5,499,993) - (5,500,000) -Proceeds from disposal of property, plant and equipment 34,255 59,374 - 32,401Product development expenditure (1,210,043) (1,172,957) (955,534) (939,173)Purchase of property, plant and equipment (Note A) (817,242) (2,967,852) (197,376) (1,826,292)Net change in related company balances - - - (1,742,434)Net cash used in investing activities (7,493,023) (4,081,435) (6,652,910) (5,163,153)

CASH FLOWS FROM FINANCING ACTIVITIES

Contribution to share capital of subsidiary by minority interests - 342,569 - -Dividends paid - (2,444,109) - (2,444,109)Repayment of hire purchase payables (33,830) (22,971) - -Proceeds from exercise of share options - 213,672 - 213,672Net cash used in financing activities (33,830) (1,910,839) - (2,230,437)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,651,876) 4,287,289 (5,447,403) 1,915,845

EFFECT OF EXCHANGE RATE CHANGES 596,618 (11,869) - -CASH AND CASH EQUIVALENTS AS AT 1 JULY 16,469,120 12,193,700 10,063,579 8,147,734CASH AND CASH EQUIVALENTS AS AT 30 JUNE (Note B) 14,413,862 16,469,120 4,616,176 10,063,579

A. Purchase of Property, Plant and EquipmentDuring the financial year, the Group and the Company acquired property, plant and equipment with an aggregate cost ofRM817,242 (2006: RM2,967,852) and RM197,376 (2006: RM1,826,292) respectively by way of the following:

Group Company2007 2006 2007 2006RM RM RM RM

Cash payments 817,242 2,967,852 197,376 1,780,178Transfer - - - 46,114

817,242 2,967,852 197,376 1,826,292

B. Cash and cash equivalents comprise:Group Company

2007 2006 2007 2006RM RM RM RM

Cash on hand and at banks (Note 16) 13,210,839 12,405,775 4,550,153 6,000,234Deposits with a licensed bank (Note 16) 1,203,023 4,063,345 66,023 4,063,345

14,413,862 16,469,120 4,616,176 10,063,579


41A N N U A L R E P O R T 2 0 0 7

Notes To The Financial Statements30 June 20071. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the MESDAQMarket of Bursa Malaysia Securities Berhad.

The Company operates in three main locations:

(a) Part of Level 32, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur;

(b) 1007, Block A, Pusat Dagangan Phileo 2, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan; and

(c) 707 & 706, Block A, Pusat Dagangan Phileo 2, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan

The principal activity of the Company is the provision of mobile-internet messaging solutions using the Short MessagingServices (“SMS”), General Packet Radio Services (“GPRS”) and Wireless Application Protocol (“WAP”) technology. The principal activities of the subsidiaries are described in Note 14. There have been no significant changes in the nature ofthe principal activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on18 September 2007.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements comply with the provisions of the Companies Act, 1965 and applicable Financial ReportingStandards in Malaysia. At the beginning of the current financial year, the Group and the Company had adopted new andrevised FRSs which are mandatory for financial periods beginning on or after 1 January 2006 as described fully in Note2.3.

The financial statements of the Group and of the Company have also been prepared on a historical basis, unless otherwisestated in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM) except when otherwise indicated.

2.2 Summary of Significant Accounting Policies

(a) Subsidiaries and Basis of Consolidation

i. Subsidiaries

Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as toobtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisableor convertible are considered when assessing whether the Group has such power over another entity.

In the Company's separate financial statements, investments in subsidiaries are stated at cost less impairment losses.On disposal of such investments, the difference between the net disposal proceeds and their carrying amounts isincluded in profit or loss.

Notes To The Financial Statements


2. SIGNIFICANT ACCOUNTING POLICIES (continued)

2.2 Summary of Significant Accounting Policies (continued)

(a) Subsidiaries and Basis of Consolidation (continued)

ii. Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at thebalance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as theCompany.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, andcontinue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements,intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies areadopted in the consolidated financial statements for like transactions and events in similar circumstances.

Acquisitions of certain subsidiaries are accounted for using the purchase method. The purchase method of accountinginvolves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingentliabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values,at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus anycosts directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group's interest in the net fair value of the identifiable assets,liabilities and contingent liabilities represents goodwill. Any excess of the Group's interest in the net fair value of theidentifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profitor loss.

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It ismeasured at the minorities' share of the fair value of the subsidiaries' identifiable assets and liabilities at the acquisitiondate and the minorities' share of changes in the subsidiaries' equity since then.

(b) Intangible Assets

i. Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of businesscombination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill isnot amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes incircumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity includethe carrying amount of goodwill relating to the entity sold.

ii. Product development expenditure

All research costs are recognised in the profit or loss as incurred.

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group candemonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, itsintention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, theavailability of resources to complete the project and the ability to measure reliably the expenditure during thedevelopment. Product development expenditures which do not meet these criteria are expensed when incurred.

30 June 2007


43A N N U A L R E P O R T 2 0 0 7



(b) Intangible Assets (continued)

ii. Product development expenditure (continued)

Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortisedusing the straight-line basis over the commercial lives of the underlying products not exceeding 2 years. Impairment isassessed whenever there is an indication of impairment and the amortisation period and method are also reviewed atleast at each balance sheet date.

(c) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset's carryingamount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associatedwith the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replacedpart is derecognised. All other repairs and maintenance are charged to the income statement during the financial period inwhich they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and anyaccumulated impairment losses.

Building 2% Computers and software 10% - 15%Furniture, fixtures, fittings and office equipment 15%Motor vehicles 10% Renovation 10%

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount,method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of thefuture economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expectedfrom its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognisedin profit or loss and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.

(d) Impairment of Non-financial Assets

The carrying amounts of assets, other than investment properties, inventories, deferred tax assets and non-current assets (ordisposal groups) held for sale, are reviewed at each balance sheet date to determine whether there is any indication ofimpairment. If any such indication exists, the asset's recoverable amount is estimated to determine the amount of impairmentloss.

For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, therecoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unlessthe asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverableamount is determined for the cash-generating unit (CGU) to which the asset belongs to. Goodwill acquired in a businesscombination is, from the acquisition date, allocated to each of the Group's CGUs, or groups of CGUs, that are expected tobenefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned tothose units or groups of units.

30 June 2007





(d) Impairment of Non-financial Assets (continued)

An asset's recoverable amount is the higher of an asset's or CGU's fair value less costs to sell and its value in use. Inassessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amountof an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount ofany goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in theunit or groups of units on a pro-rata basis.

An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revaluedamount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment lossdoes not exceed the amount held in the asset revaluation reserve for the same asset.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill isreversed if, and only if, there has been a change in the estimates used to determine the asset's recoverable amount since thelast impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revisedrecoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (netof amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairmentloss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in whichcase, such reversal is treated as a revaluation increase.

(e) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisionsof the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement.Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense orincome. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financialinstruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis orto realise the asset and settle the liability simultaneously.

i. Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank, deposit atcall and short term highly liquid investments which have an insignificant risk of changes in value, net of outstandingbank overdrafts.

ii. Other Non-current Investments

Non-current investments other than investments in subsidiaries are stated at cost less impairment losses. On disposalof an investment, the difference between net disposal proceeds and its carrying amount is recognised in profit or loss.

iii. Short term investments

Short term investments are carried at the lower of cost and market value, determined on an aggregate basis. On disposalof short term investments, the difference between net disposal and carrying amount is recognised in profit or loss.

30 June 2007


45A N N U A L R E P O R T 2 0 0 7



(e) Financial Instruments (continued)

iv. Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is madefor doubtful debts based on a review of all outstanding amounts as at the balance sheet date.

v. Payables

Payables are stated at the fair value of the consideration to be paid in the future for goods and services received.

vi. Interest Bearing Loans and Borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributabletransaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured atamortised cost using the effective interest method.

vii. Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in whichthey are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transactioncosts comprise only those incremental external costs directly attributable to the equity transaction which wouldotherwise have been avoided.

(f) Leases

i. Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental toownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of otherassets and the land and buildings elements of a lease of land and buildings are considered separately for the purposesof lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operatingleases.

ii. Finance Leases - the Group as Lessee

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair valuesand the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation andimpairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the presentvalue of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it ispracticable to determine; otherwise, the company's incremental borrowing rate is used. Any initial direct costs are alsoadded to the carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs,which represent the difference between the total leasing commitments and the fair value of the assets acquired, arerecognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge onthe remaining balance of the obligations for each accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment asdescribed in Note 2.2(c).

30 June 2007





(f) Financial Instruments (continued)

iii. Operating Leases - the Group as Lessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. Theaggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease termon a straight-line basis.

(g) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets thatnecessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets,until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporaryinvestment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costseligible for capitalisation.

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

(h) Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of incometaxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at thebalance sheet date.

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxabletemporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses andunused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporarydifferences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporarydifference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transactionwhich is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability issettled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax isrecognised as income or an expense and included in the profit or loss for the period, except when it arises from a transactionwhich is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arisesfrom a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or theamount of any excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities andcontingent liabilities over the cost of the combination.

(i) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that anoutflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of theamount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to thepassage of time is recognised as finance cost.

30 June 2007


47A N N U A L R E P O R T 2 0 0 7



(j) Employee Benefits

i. Short Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which theassociated services are rendered by employees. Short term accumulating compensated absences such as paid annualleave are recognised when services are rendered by employees that increase their entitlement to future compensatedabsences. Short term non-accumulating compensated absences such as sick leave are recognised when the absencesoccur.

ii. Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions intoseparate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the fundsdo not hold sufficient assets to pay all employee benefits relating to employee services in the current and precedingfinancial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law,companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”). Some of the Group's foreignsubsidiaries also make contributions to their respective countries' statutory pension schemes.

iii. Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date or whenever anemployee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits asa liability and an expense when it is demonstrably committed to either terminate the employment of current employeesaccording to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offermade to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, themeasurement of termination benefits is based on the number of employees expected to accept the offer. Benefits fallingdue more than twelve months after balance sheet date are discounted to present value.

(k) Foreign Currencies

i. Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of the primaryeconomic environment in which the entity operates (“the functional currency”). The consolidated financial statementsare presented in Ringgit Malaysia (RM), which is also the Company's functional currency.

ii. Foreign Currency Transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity'sfunctional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing atthe dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies aretranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that aredenominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined.Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

30 June 2007





(k) Foreign Currencies (continued)

ii. Foreign Currency Transactions (continued)

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are includedin profit or loss for the period except for exchange differences arising on monetary items that form part of the Group'snet investment in foreign operation. Exchange differences arising on monetary items that form part of the Group's netinvestment in foreign operation, where that monetary item is denominated in either the functional currency of thereporting entity or the foreign operation, are initially taken directly to the foreign currency translation reserve withinequity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchangedifferences arising on monetary items that form part of the Group's net investment in foreign operation, where thatmonetary item is denominated in a currency other than the functional currency of either the reporting entity or theforeign operation, are recognised in profit or loss for the period. Exchange differences arising on monetary items thatform part of the Company's net investment in foreign operation, regardless of the currency of the monetary item, arerecognised in profit or loss in the Company's financial statements or the individual financial statements of the foreignoperation, as appropriate.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or lossfor the period except for the differences arising on the translation of non-monetary items in respect of which gains andlosses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recogniseddirectly in equity.

iii. Foreign Operations

The results and financial position of foreign operations that have a functional currency different from the presentationcurrency (RM) of the consolidated financial statements are translated into RM as follows:

- Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheetdate;

- Income and expenses for each income statement are translated at average exchange rates for the year, whichapproximates the exchange rates at the dates of the transactions; and

- All resulting exchange differences are taken to the foreign currency translation reserve within equity.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 July 2006 are treatedas assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operationsand translated at the closing rate at the balance sheet date. Goodwill and fair value adjustments which arose on theacquisition of foreign subsidiaries before 1 July 2006 are deemed to be assets and liabilities of the parent company andare recorded in RM at the rates prevailing at the date of acquisition.

(l) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue canbe reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

i. Revenue from Services

Revenue from services rendered is recognised net of service taxes and discounts as and when the services areperformed.

30 June 2007

49A N N U A L R E P O R T 2 0 0 7




(l) Revenue Recognition (continued)

ii. Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs

The MASB has issued a number of new and revised FRS and Interpretations that are effective for financial periods beginningon or after 1 January 2006. The Group has early adopted FRS 117: Leases for its financial period beginning 1 July 2006.

Except for the changes in accounting policies and their effects as discussed below, the new and revised FRS andInterpretations above do not have any other significant impact on the financial statements of the Group and the Company:

Changes in Accounting Estimates

(a) FRS 101: Presentation of Financial Statements

Prior to 1 July 2006, minority interests at the balance sheet date were presented in the consolidated balance sheetseparately from liabilities and equity. Upon the adoption of the revised FRS 101, minority interests are now presentedwithin total equity. In the consolidated income statement, minority interests are presented as an allocation of the totalprofit or loss for the year. A similar requirement is also applicable to the statement of changes in equity. The revisedFRS 101 also requires disclosure, on the face of the statement of changes in equity, total recognised income andexpenses for the year, showing separately the amounts attributable to equity holders of the Company and to minorityinterests.

This change in presentation has been applied retrospectively and as disclosed in Note 2.3(d), certain comparatives havebeen restated. The effects on the consolidated balance sheet as at 30 June 2007 are set out in Note 2.3(c). This changein presentation has no impact on the consolidated income statement and the Company's financial statements.

(b) FRS 121: The Effects of Changes in Foreign Exchange Rates

Goodwill and fair value adjustments

Prior to 1 July 2006, goodwill arising on the acquisition of a foreign operation and fair value adjustments to the carryingamounts of assets and liabilities arising on such an acquisition were deemed to be assets and liabilities of the parentcompany and were translated using the exchange rate at the date of acquisition. Upon the adoption of the revised FRS121, goodwill and fair value adjustments arising on the acquisition of a foreign operation are now treated as assets andliabilities of the foreign operation and are translated at the closing rate. In accordance with the transitional provisions,the Group has applied this change in accounting policy prospectively to all acquisitions occurring after 1 July 2006. Thechange in accounting policy, therefore, has had no impact on amounts reported for 2006 or prior periods. The effectson the consolidated balance sheet as at 30 June 2007 are set out in Note 2.3(c). There were no effects on the consolidatedincome statement for the year ended 30 June 2007 and the Company's financial statements.

30 June 2007




2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs (continued)

(c) Summary of effects of adopting new and revised FRSs on the current year's financial statements

The following tables provide estimates of the extent to which each of the line items in the balance sheets and incomestatements for the year ended 30 June 2007 is higher or lower than it would have been had the previous policies beenapplied in the current year.

Effects on balance sheet of the Group as at 30 June 2007

Increase/(Decrease)FRS 101 FRS121

Description of Change Note 2.3(a) Note 2.3(b) TotalGROUP RM RM RMIntangible assets - (627,949) (627,949)Other reserve - (627,949) (627,949)Total equity 1,414,161 - 1,414,161

(d) Restatement of comparatives

The following comparative amounts have been restated as a result of adopting the new and revised FRSs and to conformwith current year's presentation:

Previously Increase/(Decrease)Stated FRS 101

Description of Change Note 2.3(a) RestatedRM RM RM

At 30 June 2006

GROUP

Total equity 44,147,525 2,075,671 46,223,196

Previously Increase/(Decrease)Stated Reclassification Restated

Description of Change RM RM RM

For the year ended 30 June 2006

GROUP

Cost of sales (8,676,684) 364,460 (9,041,144)Other income 52,276 137,327 189,603Administrative expenses (11,214,668) (364,460) (10,850,208)Other expenses (91,959) (10,655) (81,304)Operating profit 2,310,315 147,982 2,458,297Finance income / (costs) 143,594 (147,982) (4,388)

30 June 2007

51A N N U A L R E P O R T 2 0 0 7

Notes To The Financial Statements 30 June 2007


2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs (continued)

(d) Restatement of comparatives (continued)Previously Increase/(Decrease)

Stated Reclassification RestatedDescription of Change RM RM RM

COMPANY

Other income 3,407 96,141 99,548Other expenses (30,961) 2,671 (33,632)Operating profit 688,778 93,470 782,248Finance income 93,470 (93,470) -

2.4 Standards and Interpretations Issued But Not Yet Effective

At the date of authorisation of these financial statements, the following FRS, amendments to FRS and Interpretations wereissued but not yet effective and have not been applied by the Group and the Company:

FRS, Amendments to FRS and Interpretations Effective for financial periods beginning on or after

FRS 124: Related Party Disclosures 1 October 2006FRS 139: Financial Instruments: Recognition and Measurement DeferredFRS 6: Exploration for and Evaluation of Mineral Resources 1 January 2007Amendment to FRS 1192004: Employee Benefits - Actuarial Gains and Losses,

Group Plans and Disclosures 1 January 2007Amendment to FRS 121: The Effects of Changes in Foreign Exchange Rates -

Net Investment in a Foreign Operation 1 July 2007FRS 107: Cash Flow Statements 1 July 2007FRS 111: Construction Contracts 1 July 2007FRS 112: Income Taxes 1 July 2007FRS 118: Revenue 1 July 2007FRS 120: Accounting for Government Grants and Disclosure of Government Assistance 1 July 2007FRS 134: Interim Financial Reporting 1 July 2007FRS 137: Provisions, Contingent Liabilities and Contingent Assets 1 July 2007IC Interpretation 1: Changes in Existing Decommissioning, Restoration and

Similar Liabilities 1 July 2007IC Interpretation 2: Members' Shares in Co-operative Entities and Similar Instruments 1 July 2007IC Interpretation 5: Rights to Interests arising from Decommissioning, Restoration

and Environmental Rehabilitation Funds 1 July 2007IC Interpretation 6: Liabilities arising from Participating in a Specific Market -

Waste Electrical and Electronic Equipment 1 July 2007IC Interpretation 7: Applying the Restatement Approach under FRS 1292004 -

Financial Reporting in Hyperinflationary Economies 1 July 2007IC Interpretation 8: Scope of FRS 2 1 July 2007

The above FRS, amendments to FRS and Interpretations are expected to have no significant impact on the financialstatements of the Group and the Company upon their initial application.




2.5 Significant Accounting Estimates and Judgements

(a) Critical Judgement Made in Applying Accounting Policies

There is a critical judgement made by management in the process of applying the Company's accounting policies that hassignificant effect on the amounts recognised in the financial statements.

Provision for doubtful debts

The policy for provision for doubtful debts of the Group and the Company is based on the evaluation of collectibility andageing analysis of the receivables and on management's judgment. A considerable amount of judgment is required inassessing the ultimate realisation of these receivables, including the current credit-worthiness and the past collection historyof each customer. If the financial conditions of customers of the Group and the Company were to deteriorate, additionalallowances may be required.

(b) Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, thathave a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the nextfinancial year are discussed below:

(i) Impairment of goodwill

The Group determines whether goodwill are impaired at least on an annual basis. This requires the estimation of thevalue-in-use of the cash-generating units (“CGU”) to which goodwill are allocated. Estimating a value-in-use amountrequires management to make an estimate of the expected cash flows from the CGU and also to choose a suitablediscount rate in order to calculate the present value of those cash flows. The carrying amount of the goodwill as at 30June 2007 is RM13,464,066 (2006: RM10,073,152). Further details are disclosed in Note 13(b).

(ii) Deferred tax assets

Deferred tax assets are recognised for unused tax losses, unabsorbed capital allowances and others deductible temporarydifferences to the extent that it is probable that taxable profit will be available against which the losses, capitalallowances and others deducible temporary differences can be utilised. Significant management judgement is requiredto determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of futuretaxable profits together with tax planning strategies. The total urecognised tax losses, capital allowances, and otherdeductible temporary differences of the Group and the Company were RM3,864,366 (2006: RM3,944,800) andRM1,564,433 (2006: RM791,783) respectively.

(iii) Exchange rates used for consolidation

The Bank of Thailand had issued notices regarding the Rules and Practices on Currency Exchange in December 2006.Consequently, this has resulted in the Thai Baht being traded using different rates in on-shore and off-shore foreignexchange market. For the subsidiary in Thailand, transactions in foreign currencies are recorded and re-measured in thefinancial statements using the Thai Baht on-shore rate. On consolidation, the Group translates the financial statementsof the subsidiary in Thailand into Ringgit Malaysia using the published rates in Malaysia.

30 June 2007

53A N N U A L R E P O R T 2 0 0 7



2.6 Changes in Accounting Estimates

With effect from the current financial year, the Company changed the amortisation period for product developmentexpenditure from 3 years to 2 years so as to better reflect their estimated useful lives. Because the revised accounting policyhas been applied prospectively, the change has had no impact on amounts reported for 2006 or prior periods. The effects onthe financial statements of this change in accounting estimate is an increase in amortisation of product developmentexpenditure and increase in the current year net loss of the Group and the Company by RM505,668 and RM422,153respectively.

3. REVENUE

Revenue consists of invoiced value of products and services, net of service taxes and discounts.

4. COST OF SALES

Cost of sales consists mainly of SMS and leased-line charges, royalty expenses, amortisation of product development expenditureand other incidental costs incurred for the provision of mobile-internet messaging solution using SMS, GPRS and WAPtechnology.

5. OTHER INCOMEGroup Company

2007 2006 2007 2006RM RM RM RM

Interest income 73,823 161,863 3,226 99,548Miscellaneous 26,180 27,740 - -

100,003 189,603 3,226 99,548

6. FINANCE COSTS


Interest expenses on:Hire purchase payables 263 4,388 - -

30 June 2007



7. (LOSS)/PROFIT BEFORE TAX

The following amounts have been included in arriving at (loss)/profit before tax:


Advertisement expenses 4,990,015 8,010,962 1,072,174 2,920,075Amortisation of product development expenditure (Note 13) 1,546,603 866,123 1,241,754 660,642Auditors' remuneration

- statutory audits 70,096 68,031 35,000 35,000- other services 37,000 37,000 25,000 25,000

Depreciation (Note 12) 1,945,769 1,822,134 1,405,477 1,354,141Directors' fees

- holding company 138,000 119,250 138,000 119,250- subsidiaries 4,517 4,625 - -

Gain on disposal of property, plant and equipment (1,068) (6,956) - (1,547)Net (gain)/loss on foreign exchange

- realised (60,556) (41,306) 3,032 (3,407)- unrealised 251,685 57,642 18,204 -

Provision for doubtful debts/bad debts written off- trade receivables 5,255,395 727,77 5,255,395 727,771- due from subsidiaries - - - 777,733

Property, plant and equipment written off 23,757 33,409 11,853 6,738Operating lease:Minimum lease payment for premises and equipment 670,873 534,278 349,476 455,601Employee benefits expense (Note 8) 5,868,051 5,759,432 3,157,331 3,273,363Impairment of intangible assets (Note 13)

- included in other expenses 1,641,838 - - -Impairment of investment in subsidiary (Note 14)

- included in other expenses - - 1,641,838 -

8. EMPLOYMENT BENEFITS EXPENSE


Wages and salaries 4,525,437 4,106,786 2,488,094 2,566,487Directors' remuneration

- holding company 232,251 229,220 232,251 229,220- subsidiaries 410,819 536,335 - -

Social security costs 83,194 60,688 33,618 33,756Short-term accumulating compensated absences 13,330 (21,097) 5,308 (22,126)Pension costs - defined contribution plan 281,525 325,429 281,525 291,718Other staff related expenses 321,495 522,071 116,535 174,308

5,868,051 5,759,432 3,157,331 3,273,363

30 June 2007

55A N N U A L R E P O R T 2 0 0 7


9. INCOME TAX EXPENSEGroup Company

2007 2006 2007 2006RM RM RM RM

Tax expense for the year:Malaysian income tax 148 11,161 148 11,161Foreign tax 1,203,299 412,440 - -

1,203,447 423,601 148 11,161Overprovided in prior year:Malaysian Income Tax - (3,471) - (3,471)Deferred tax (Note 18)Relating to origination and reversal of temporary Differences 60,850 - - -

1,264,296 420,130 148 7,690

Domestic current income tax is calculated at the statutory tax rate of 27% (2006: 28%) of the estimated assessable profit for theyear. The domestic statutory tax rate will be reduced to 26% from the current year's rate of 27% effective year of assessment2008. The computation of deferred tax as at 30 June 2007 has reflected these changes.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

A reconciliation of income tax expense applicable to (loss)/profit before tax at the statutory income tax rate to income tax expenseat the effective income tax rate of the Group and of the Company is as follows:

2007 2006GROUP RM RM

(Loss)/profit before tax (3,106,945) 2,453,909

Taxation at Malaysian statutory tax rate of 27% (2006: 28%) (838,875) 687,095Effect of different tax rates in other countries 204,443 129,621Effect of income derived during pioneer period not subject to tax - (500,074)Effect of income not subject to tax under foreign tax incentives (142,349) (39,409)Effect of expenses not deductible for tax purposes 793,218 305,378Effect of utilisation of previously unrecognised unused tax losses

and unabsorbed capital allowances (259,025) (330,218)Effect of taxable temporary difference not recognisable during pioneer period 1,428,539 (1,791)Effect of control transfer (472) -Deferred tax assets not recognised during the year 78,817 172,999Overprovision of tax expense in prior year - (3,471)Tax expense for the year 1,264,296 420,130

COMPANY

(Loss)/profit before tax (7,143,483) 782,248

Taxation at Malaysian statutory tax rate of 27% (2006: 28%) (1,928,740) 219,029Effect of income derived during pioneer period not subject to tax - (500,074)Effect of income not subject to tax (723) (16,855)Effect of expenses not deductible for tax purposes 501,544 310,852Effect of taxable temporary difference not recognisable during pioneer period 1,428,539 (1,791)Effect of control transfer (472) -Overprovision of income tax expense in prior years - (3,471)Tax expense for the year 148 7,690

30 June 2007



9. INCOME TAX EXPENSE (continued)

The Company has been accorded Multimedia Super Corridor (MSC) Status and was granted Pioneer Status effective from 24October 2000, which exempts 100% of the statutory business income from taxation for a period of 5 years, with an extendedpioneer period for a further 5 years, granted from 24 October 2005 to 23 October 2010.

The Company's tax charge for the current year is in respect of interest income.

10. (LOSS)/EARNINGS PER SHARE

(a) Basic

Basic (loss)/earnings per share amounts are calculated by dividing the (loss)/profit for the year attributable to ordinaryequity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

Group2007 2006RM RM

(Loss)/profit attributable to ordinary equity holders of the Company (RM) (4,807,076) 1,536,079Weighted average number of ordinary shares in issue 163,518,740 163,031,440Basic (loss)/earnings per share (sen) (2.94) 0.94

(b) Diluted

For the purpose of calculating diluted (loss)/earnings per share, the (loss)/profit for the year attributable to ordinary equityholders of the Company and the weighted average number of ordinary shares in issue during the financial year have beenadjusted for the dilutive effects of all potential ordinary shares.

2007 2006

(Loss)/profit attributable to ordinary equity holders of the Company (RM) (4,807,076) 1,536,079

Weighted average number of ordinary shares in issue 163,518,740 163,031,440Adjusted for:Assumed conversion of ESOS - 1,252,575Adjusted weighted average number of ordinary shares in issue and issuable 163,518,740 # 164,284,015

Diluted (loss)/earnings per share (sen) * (2.94) 0.94

* The effect on the basic loss per share for the current financial year arising from the assumed conversion of theEmployees' Share Option Scheme is anti-dilutive. Accordingly, the diluted loss per share for the current year ispresented as equal to basic loss per share.

# The adjusted weighted average number of ordinary shares in issue and issuable has been arrived at based on theassumption that the ESOS (at exercise prices of RM0.29) were exercised at the date the ESOS were granted.

30 June 2007

57A N N U A L R E P O R T 2 0 0 7


11. DIVIDENDS

Dividends in respect Dividendsof year Recognised in YearGroup Company

2006 2005 2007 2006RM RM RM RM

Recognised during the year

Final tax exempt dividend of 10%, on 16,627,819 ordinary shares (1.0 sen per ordinary share) - 1,627,819 - 1,627,819

First interim tax exempt dividend of 5%, on 16,325,800 ordinary shares (0.5 sen per ordinary share) 816,290 - - 816,290

816,290 1,627,819 - 2,444,109

The directors do not recommend the payment of final dividends for the current financial year.

12. PROPERTY, PLANT AND EQUIPMENTFurniture,

Fixtures,fittings

Computers and office MotorBuilding and software equipment vehicles Renovation Total

GROUP RM RM RM RM RM RM

At 30 June 2007

Cost

At 1 July 2006 580,000 13,675,598 973,963 77,339 409,900 15,716,800Additions - 651,651 87,176 70,229 8,186 817,242Disposals - (960) (5,576) (68,005) - (74,542)Write off - (20,660) (6,754) - (28,857) (56,271)Exchange differences - (54,147) (16,138) (4,374) (330) (74,989)At 30 June 2007 580,000 14,251,482 1,032,671 75,188 388,899 16,328,240

Accumulated Depreciation

At 1 July 2006 5,307 6,438,211 467,568 40,673 134,611 7,086,370Depreciation charge 11,600 1,729,450 152,644 9,081 42,994 1,945,769Disposals - (339) (1,743) (39,273) - (41,355)Write off - (10,317) (5,244) - (16,953) (32,514)Exchange differences - (26,947) (9,714) (2,320) (142) (39,124)At 30 June 2007 16,907 8,130,058 603,511 8,161 160,510 8,919,146

Net carrying amount

At 30 June 2007 563,093 6,121,424 429,160 67,027 228,390 7,409,094

30 June 2007


12. PROPERTY, PLANT AND EQUIPMENT (continued)Furniture,

fixtures,fittings

Computers and office MotorBuilding and software equipment vehicles Renovation Total

RM RM RM RM RM RM

At 30 June 2006

Cost

At 1 July 2005 - 11,548,607 985,638 81,011 409,848 13,025,104Additions 580,000 2,337,723 50,129 - - 2,967,852Disposals - (203,061) (43,496) - - (246,557)Exchange differences - (7,671) (18,308) (3,672) 52 (29,599)At 30 June 2006 580,000 13,675,598 973,963 77,339 409,900 15,716,800


At 1 July 2005 - 4,998,519 337,425 17,155 90,577 5,443,676Depreciation charge 5,307 1,584,387 164,093 24,326 44,021 1,822,134Disposals - (131,462) (29,268) - - (160,730)Exchange differences - (13,233) (4,682) (808) 12 (18,711)At 30 June 2006 5,307 6,438,211 467,568 40,673 134,610 7,086,369

Net carrying amount

At 30 June 2006 574,693 7,237,387 506,395 275,290 36,666 8,630,431

COMPANY

At 30 June 2007

Cost

At 1 July 2006 580,000 10,649,791 415,056 - 379,567 12,024,414Additions - 118,102 9,045 70,229 - 197,376Transfer - (30,385) - - - (30,385)Write off - (20,660) (6,754) - - (27,414)At 30 June 2007 580,000 10,716,848 417,347 70,229 379,567 12,163,991


At 1 July 2006 5,307 5,538,821 220,769 - 121,521 5,886,418Depreciation charge 11,600 1,298,068 51,137 6,715 37,957 1,405,477Transfer - (17,092) - - - (17,092)Write off - (10,317) (5,244) - - (15,561)At 30 June 2007 16,907 6,809,480 266,662 6,715 159,478 7,259,242

Net Carrying Amount

At 30 June 2007 563,093 3,907,368 150,685 63,514 220,089 4,904,749


59A N N U A L R E P O R T 2 0 0 7


12. PROPERTY, PLANT AND EQUIPMENT (continued)Furniture,

fixtures,fittings

Computers and officeBuilding and software equipment Renovation Total

RM RM RM RM RM

At 30 June 2006

Cost

At 1 July 2005 - 9,519,598 384,065 379,567 10,283,230Additions 580,000 1,168,625 31,553 - 1,780,178Transfer - 46,114 - - 46,114Disposal - (32,402) - - (32,402)Write off - (52,144) (562) - (52,700)At 30 June 2006 580,000 10,649,791 415,056 379,567 12,024,414


At 1 July 2005 - 4,335,234 160,995 83,564 4,579,793Depreciation charge 5,307 1,250,573 60,304 37,957 1,354,141Disposal - (1,548) - - (1,548)Write off - (45,438) (530) - (45,968)At 30 June 2006 5,307 5,538,821 220,769 121,521 5,886,418

Net Carrying Amount

At 30 June 2006 574,693 5,110,970 194,287 258,046 6,137,996

Net book values of property, plant and equipment held under hire purchase payables arrangements are as follows:

Group2007 2006RM RM

Motor vehicle - 32,463- 32,463

30 June 2007



13. INTANGIBLE ASSETS Product development

Goodwill expenditure TotalRM RM RM

GROUPCostAt 1 July 2005 10,073,152 2,924,499 12,997,651Additions - internal development - 1,172,957 1,172,957Exchange differences - (15,563) (15,563)At 30 June 2006 10,073,152 4,081,893 14,155,045Additions - internal development - 1,210,043 1,210,043Acquisition of subsidiaries (Note 14) 4,404,803 - 4,404,803Exchange differences 627,949 (47,420) 580,529At 30 June 2007 15,105,904 5,244,516 20,350,420Accumulated amortisation and impairment

At 1 July 2005 - 1,659,820 1,659,820Amortisation (Note 7) - 866,123 866,123Exchange differences - (5,957) (5,957)At 30 June 2006 - 2,519,986 2,519,986Amortisation (Note 7) - 1,546,603 1,546,603Impairment recognised in profit or loss (Note 7) 1,641,838 - 1,641,838Exchange differences - (25,688) (25,688)At 30 June 2007 1,641,838 4,040,901 5,682,739

Net carrying amount

At 30 June 2006 10,073,152 1,561,907 11,635,059At 30 June 2007 13,464,066 1,203,615 14,667,681

Product development expenditure Total

RM RMCOMPANYCostAt 1 July 2005 2,411,793 2,411,793Additions - internal development 939,173 939,173At 30 June 2006 3,350,966 3,350,966Additions - internal development 955,534 955,534At 30 June 2007 4,306,500 4,306,500

Accumulated amortisation and impairment

At 1 July 2005 1,463,382 1,463,382Amortisation (Note 7) 660,642 660,642At 30 June 2006 2,124,024 2,124,024Amortisation (Note 7) 1,241,754 1,241,754At 30 June 2007 3,365,778 3,305,778Net carrying amount

At 30 June 2006 1,226,942 1,226,942At 30 June 2007 940,722 940,722

30 June 2007

61A N N U A L R E P O R T 2 0 0 7


13. INTANGIBLE ASSETS (continued)

(a) Impairment loss recognised

The management of the Group carried out a review of the recoverable amounts of its subsidiaries during the currentfinancial year. The review led to the recognition of an impairment loss of RM1,641,838 (included in Other Expenses asdisclosed in Note 7). The recoverable amount was based on value-in-use and was determined at the cash-generating unit(CGU). In determining value-in-use for the CGU, the discount rate applied to cash flow projections is the Group's internalrate of return.

(b) Impairment tests for goodwill

Allocation of goodwill

Goodwill has been allocated to the Group's cash generating unit (“CGU”) identified according to the business segment asfollows:

2007 2006RM RM

Other Asian Countries 13,464,066 10,073,152

Key assumptions used in value-in-use calculations

The recoverable amount of the CGU is determined based on value-in-use calculations using cash flow projections basedon financial forecasts approved by management covering a 5-year period. The discount rate applied to cash flowprojections is the Group's internal rate of return and cash flows beyond the 5-year period are extrapolated assuming zerogrowth rate.

Key assumptions and management's approach to determine the values assigned to each key assumption are as follows:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margins is the average gross margin achieved inthe year immediately before the budgeted year increased for expected efficiency improvements.

(ii) Selling price

The selling price used to calculate the cash inflows from operations was determined after taking into considerationprice trends of the industries which the CGUs are exposed. Values assigned are consistent with the external sources ofinformation.

(iii) Exchange rate

The exchange rate used to translate foreign currencies transactions into the CGUs' functional currency is based on theexchange rates obtained immediately before the forecast year. Values assigned are consistent with external sources ofinformation.

(iv) Disposal value

The disposal value of the CGUs is determined by extrapolating cash flow projections beyond the forecast period anddiscounted at the discount rate used by the Company immediately before the disposal. Values assigned are derivedafter considering the industry valuation trend and historical information.

30 June 2007



13. INTANGIBLE ASSETS (continued)

(b) Impairment tests for goodwill (continued)

(v) Discount rate

The discount rate applied to the cash flow projections is based on the internal rate of return of the Group.

The value-in-use calculations covered periods greater than 5 years as the management believes that the CGUs are ableto maintain the production efficiency and quality of their products with adequate maintenance of the assets.

Sensitivity to changes in assumptions

With regard to the assessment of value-in-use of all CGUs, management believes that no reasonable change in any ofthe above key assumptions would cause the carrying value of the units to materially exceed their recoverable amounts.

14. INVESTMENT IN SUBSIDIARIES Company

2007 2006RM RM

Unquoted shares at cost 37,973,981 32,473,981Less: Accumulated impairment losses (1,641,838) -

36,332,143 32,473,981Details of the subsidiaries are as follows:

Equity InterestCountry of Held

Name of Subsidiaries Incorporation 2007 2006% %

AKN Messaging Technologies (S) Pte. Ltd. (“MTECH Singapore”) Singapore 100 100

Messaging Technologies (H.K.) Limited (“MTECH HK”) Hong Kong, SAR 100 100

AKN Messaging Technologies (Thailand) Ltd. (“MTECH Thailand”) Thailand 95 70

AKN Messaging Technologies (Pvt.) Limited (“MTECH Pakistan”) Pakistan 60 60

PT Surya Genta Perkasa (“MTECH Indonesia”) Indonesia 80 80

Virtue Partners International Limited (“VPI”) British Virgin Island 100 -

Held under MTECH HKAKN Messaging Technologies (Xiamen) Co., Ltd. (“MTECH Xiamen”) The People's

Republic of China 89.67 80

All the subsidiaries are audited by firms other than Ernst & Young.

30 June 2007

63A N N U A L R E P O R T 2 0 0 7


14. INVESTMENT IN SUBSIDIARIES (continued)

All the subsidiaries are involved in provision of mobile-internet messaging solutions using the Short Messaging Services(“SMS”), General Packet Radio Services (“GPRS”) and Wireless Application Protocol (“WAP”) technology except for VirtuePartners International Limited (“VPI”) which is an investment holding company.

(a) Acquisition of subsidiary

On 3 July 2006, the Company entered into a share sale agreement (“SSA”) to acquire the entire issued and paid-up sharecapital of Virtue Partners International Limited (“VPI”), comprising 240,002 ordinary shares of USD1.00 each, fora total cash consideration of RM5,500,000 or its equivalent in HKD (“Purchase Consideration”).

The acquired subsidiary has contributed the following results to the Group:

2007RM

Profit for the year 637,229

The assets and liabilities arising from the acquisitions are as follows:Fair value Acquiree's

recognised on carryingacquisition amount

RM RM2007Investment in subsidiary 1,095,190 1,095,190Cash on hand 7 7

1,095,197 1,095,197

Fair value of net assets 1,095,197Goodwill on acquisition (Note 13) 4,404,803Total cost of acquisition 5,500,000

2007RM

The cash inflow on acquisition is as follows:

Purchase consideration satisfied by cash, representing total cash outflow of the Company 5,500,000Cash and cash equivalents of subsidiary acquired (7)Net cash inflow of the Group 5,499,993

(b) Acquisition of additional shares in a subsidiary

During the current financial year, the Company wholly owned subsidiary, Messaging Technologies (H.K.) Limitedsubscribed an additional 2,483,009 shares of Reminbi (RMB) 1.00 each at cost in AKN Messaging Technologies (Xiamen)Co. Ltd. (MTech Xiamen). As a result of this, the Company's effective interest in MTech Xiamen has increased from 80.0%to 89.67%.

30 June 2007



15. TRADE AND OTHER RECEIVABLES Group Company

2007 2006 2007 2006RM RM RM RM

Current

Trade receivables 14,879,233 13,857,970 9,952,957 9,060,799Related company 83,804 130,676 - -Provision for doubtful debts (5,956,539) (701,144) (5,956,539) (701,144)

9,006,498 13,287,502 3,996,418 8,359,655

Other receivables

Advances to a director of a subsidiary 88,596 92,893 - -Amount due from subsidiaries - - 4,492,141 4,518,561Deposits 264,444 227,798 172,499 169,596Prepayments 423,949 530,010 78,228 135,787Sundry receivables 284,628 93,780 6,139 7,633

1,061,617 944,481 4,749,007 4,831,577Provision for doubtful debts - - (777,733) (777,733)

1,061,617 944,481 3,971,274 4,053,84410,068,115 14,231,983 7,967,692 12,413,499

(a) Credit risk

The Group's primary exposure to credit risk arises through its trade receivables. The Group's trading term with its customersis mainly on credit. The credit period generally ranges from 30 to 120 days. Other credit terms are assessed and approvedon a case-by-case basis. The Group and the Company have approximately 68% (2006: 75%) and 62% (2006: 98%) of theoutstanding trade receivables as at 30 June 2007 due from various telecommunication companies mainly for the provisionof SMS content and services.

(b) Advances to a director of a subsidiary

The advances to a director of a foreign subsidiary are unsecured, interest free and have no fixed terms of repayment.

(c) Amount due from subsidiaries

The amounts due from subsidiaries are unsecured, interest free and have no fixed terms of repayment.

Future details on related party transactions are disclosed in Note 23.

Other information on financial risks of trade and other receivables are disclosed in Note 24.

30 June 2007

65A N N U A L R E P O R T 2 0 0 7


16. CASH AND BANK BALANCES


Cash on hand and at banks 13,210,839 12,405,775 4,550,153 6,000,234Deposits with licensed banks 1,203,023 4,063,345 66,023 4,063,345

14,413,862 16,469,120 4,616,176 10,063,579

Other information on financial risks of cash and bank balances are disclosed in Note 24.

17. TRADE AND OTHER PAYABLES


Current

Trade payablesThird parties 2,175,173 2,535,670 1,390,037 1,726,699

Other payablesAdvance from a director 90,000 100,000 90,000 100,000Amount due to a director related company,

Malahon Credit Company Limited 661,901 707,822 - -Accrued operating expenses 1,026,910 769,360 407,496 354,755Payroll related expenses 67,472 3,729 - -Sundry payables 402,760 414,243 113,614 218,401Advance from a minority shareholder of a subsidiary 171,311 - - -

2,420,354 1,995,154 611,110 673,1564,595,527 4,530,824 2,001,147 2,399,855

(a) Trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90 days.

(b) Amount due to a director related company, Malahon Credit Company Limited

The advances from a director related company, Malahon Credit Company Limited (“MCCL”) are unsecured, interest freeand have no fixed terms of repayment. MCCL is a company in which a director of Messaging Technologies (H.K.) Limited,i.e. Chew Shin Yong, Mark has an interest.

Future details on related party transactions are disclosed in Note 23.

Other information on financial risks of trade and other payables are disclosed in Note 24.

30 June 2007



18. DEFERRED TAX Group

2007 2006RM RM

As at 1 July - -Recognised in income statement (Note 9) 60,850 -As at 30 June 60,850 -

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Property, Plantand Equipment Total

RM RM

As at 1 July 2006 - -Recognised in income statement (Note 9) 60,850 60,850As at 30 June 2007 60,850 60,850

Deferred tax assets have not been recognised in respect of the following items:


Unused tax losses- pre-pioneer 791,783 791,783 791,783 791,783- others 2,883,855 3,115,484 772,650 -Unabsorbed capital allowances 36,652 37,533 - -Others deductible temporary differences 152,076 - - -

3,864,366 3,944,800 1,564,433 791,783

The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of thesubsidiaries in the Group and the Company are subject to no substantial changes in shareholdings of the subsidiaries underSection 44(5A) and (5B) and Paragraph 75A and 75B of Schedule 3 of the Income Tax Act, 1967 respectively.

19. SHARE CAPITALGroup Company

2007 2006 2007 2006RM RM RM RM

Authorised 250,000,000 250,000,000 250,000,000 25,000,000

Issued and fully paid:At 1 July 163,518,740 162,781,940 16,351,874 16,278,194Issued during the year- pursuant to ESOS - 736,800 - 73,680At 30 June 163,518,740 163,518,740 16,351,874 16,351,874

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote pershare at meetings of the Company. All ordinary shares rank equally with regard to the Company's residual assets.

30 June 2007

67A N N U A L R E P O R T 2 0 0 7


20. OTHER RESERVES (NON-DISTRIBUTABLE)

(a) Foreign Currency Translation Reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from that of the Group's presentation currency. Itis also used to record the exchange differences arising from monetary items which form part of the Group's net investmentin foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or theforeign operation.

(b) Special Reserve

In financial year ended 30 June 2005, the Company has obtained approval from High Court of Malaysia, pursuant to Section64 of the Companies Act, 1965, to reduce the share premium account of the Commpany by RM16,074,240 and for suchamount to be transferred to a Special Reserve Account and thereon to set off the goodwill arising from the acquisition of awholly owned subsidiary, Messaging Technologies (H.K.) Limited against the Special Reserve Account.

21. RETAINED EARNINGS

As at 30 June 2007, the Company has tax exempt profits available for distribution of approximately RM24,656,000 (2006:RM24,656,000), subject to agreement of the Inland Revenue Board.

The Company has sufficient tax-exempt profit to frank the payment of dividends out of its entire retained earnings as at 30 June2007.

22. OPERATING LEASE ARRANGEMENTS

The Group also leases various properties under cancellable operating lease agreements. The Group is required to give a three-month notice for the termination of those agreements.

23. SIGNIFICANT RELATED PARTY TRANSACTIONSGroup Company

2007 2006 2007 2006RM RM RM RM

Purchase of plant and equipment from TBT (Pvt) Limited, a corporate shareholder of a foreign subsidiary 113,901 - - -

Sales to Golden Bridge Network Co. Ltd., a corporate shareholder of a foreign subsidiary 142,280 153,618 - -

Rental expenses charged by Litherland Limited, a companyin which two of the directors of MTECH HK, i.e. Chew Shin Yong, Mark and Cheung Chung Yuen, Jason have interests 155,761 181,709 - -

Directors' fees- holding company 138,000 119,250 138,000 119,250- subsidiaries 4,517 4,625 - -

Directors' remuneration- holding company 232,251 229,220 232,251 229,220- subsidiaries 410,819 536,335 - -

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and havebeen established on terms and conditions that are not materially different from those obtainable in transactions with unrelatedparties.

30 June 2007



24. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

The Group's financial risk management policy seeks to ensure that adequate financial resources are available for thedevelopment of the Group's businesses whilst managing its interest rate risk (both fair value and cash flow), credit risk,liquidity risk and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and they aresummarised below. It is, and has been throughout the year under review, the Group's policy that no trading in derivativefinancial instruments.

(b) Interest Rate Risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changesin market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due tochanges in market interest rates. As the Group has no significant interest-bearing financial assets, the Group's income andoperating cash flows are substantially independent of changes in market interest rates. The Group's interest-bearing financialassets are mainly short term in nature and have been mostly placed in fixed deposits.

The following tables set out the carrying amounts, the highest and lowest interest rates as at the balance sheet date and theremaining maturities of the Group's and the Company's financial instruments that are exposed to interest rate risk:

Within 1 1 - 2Note Highest Lowest Year Years Total

% % RM RM RM

At 30 June 2007

GROUP

Floating rateDeposits with licensed banks 16 2.52 2.50 1,203,023 - 1,203,023

COMPANY

Floating rateDeposits with licensed banks 16 2.50 2.50 66,023 - 66,023

At 30 June 2006

GROUP

Fixed rateHire purchase payables 12.5 8.0 22,713 11,117 33,830


COMPANY


30 June 2007

69A N N U A L R E P O R T 2 0 0 7


24. FINANCIAL INSTRUMENTS (continued)

(c) Foreign Currency Risk

The Group operates in Asia Pacific region and is exposed to various currencies, mainly Hong Kong Dollar, Singapore Dollar,Thai Baht, Chinese Renminbi, Pakistan Rupee and Indonesian Rupiah. Foreign currency denominated assets and liabilitiestogether with expected cash flows from highly probable purchases and sales give rise to foreign exchange exposures.

The Group did not hedge its foreign currency assets as the net unhedged position is deemed to be immaterial.

The unhedged financial assets of the Group that are not denominated in Ringgit Malaysia are as follows:

At 30 June 2007:Trade Other Cash and Bank Trade Other

Receivables Receivables Balances Payables PayablesRM RM RM RM RM

Singapore Dollar 63,101 27,965 158,156 90 10,587Hong Kong Dollar 865,731 231,663 1,230,764 447,486 744,361Chinese Renminbi 310,915 58,463 1,365,110 - 119,451Thai Baht 2,001,681 349,542 6,087,702 251,692 576,790Pakistan Rupee 902,887 22,967 583,956 32,511 228,658Indonesia Rupiah 865,764 114,151 371,992 53,356 129,397

At 30 June 2006:Trade Other Cash and Bank Trade Other Borrowings

Receivables Receivables Balances Payables Payables PayablesRM RM RM RM RM RM

Singapore Dollar 106,572 57,505 15,614 472 11,287 -Hong Kong Dollar 1,095,819 253,571 1,682,520 297,212 774,160 -Chinese Renminbi 920,823 52,080 854,010 - 148,245 -Thai Baht 1,299,964 104,466 3,146,869 228,667 252,435 -Pakistan Rupee 636,951 42,524 161,088 33,978 23,246 33,830Indonesia Rupiah 867,718 130,756 545,440 248,642 112,625 -

(d) Liquidity Risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensurethat all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Groupmaintains sufficient level of cash, cash convertible investments and committed credit lines available to meet its workingcapital requirements.

(e) Credit Risk

The Group's credit risk is primarily attributable to trade and other receivables. The Group trades only with recognised andcreditworthy third parties. It is the Group's policy that all customers who wish to trade on credit terms are subject to creditverification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group's exposure to baddebts is not significant. For transactions that are not denominated in the functional currency of the relevant operating unit,the Group does not offer credit terms without the specific approval.

30 June 2007


24. FINANCIAL INSTRUMENTS (continued)

(e) Credit Risk (continued)

The credit risk of the Group's other financial assets, which comprise cash and cash equivalents, and non-current investments,arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any majorconcentration of credit risk related to any financial instruments, other than as disclosed in Note 15.

(f) Fair Values

The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments:

Cash and Cash Equivalents, Trade and Other Receivables/Payables, Due from subsidiaries

The carrying amounts approximate fair values due to the relatively short-term maturity of these financial instruments.

25. SEGMENT INFORMATION

Only geographical segment information is presented as the Group's activities fall within one sector of operation.

The People’sRepublic of China and Other Asian

Malaysia Hong Kong Countries Eliminations Consolidated2007 RM RM RM RM RM

RevenueExternal sales representing total revenue 11,811,929 4,523,293 11,925,470 - 28,260,692

ResultSegment results (7,143,483) (269,042) 4,429,070 (123,228) (3,106,682)Finance cost (263)Income tax expense (1,264,296)Net loss for the year (4,371,241)

ASSETS AND LIABILITIESSegment assets 18,429,339 5,532,243 27,181,228 (4,584,058) 46,558,752Unallocated corporate assets 528,660Consolidated total assets 47,087,412

Segment liabilities 2,001,147 4,089,227 3,187,939 (4,888,433) 4,389,881Unallocated corporate liabilities 840,029Consolidated total liabilities 5,229,909

OTHER INFORMATIONCapital expenditure and product

development expenditure 1,152,910 283,721 590,654 - 2,027,285Amortisation of product

development expenditure 1,241,754 304,849 - - 1,546,603Depreciation 1,405,472 223,577 316,715 - 1,945,769Non-cash expenses other

depreciation and amortisation 5,267,248 13,795 1,638,879 251,685 7,171,607


71A N N U A L R E P O R T 2 0 0 7


25. SEGMENT INFORMATION (continued)

The People’sRepublic of China and Other Asian

Malaysia Hong Kong Countries Eliminations Consolidated2006 RM RM RM RM RM

RevenueExternal sales representing total revenue 15,172,655 5,401,237 10,176,410 - 30,750,302

ResultSegment results 782,248 (603,926) 1,496,084 783,891 2,458,297

Finance cost (4,388)Income tax expense (420,130)Net profit for the year 2,033,779

ASSETS AND LIABILITIESSegment assets 29,842,016 6,081,131 19,126,762 (4,083,316) 50,966,593Unallocated corporate assets 28,419Consolidated total assets 50,995,012

Segment liabilities 2,399,855 4,325,054 2,331,595 (4,491,850) 4,564,654Unallocated corporate liabilities 207,162Consolidated total liabilities 4,771,816

OTHER INFORMATIONCapital expenditure and product

development expenditure 2,719,351 244,203 1,177,255 - 4,140,809Amortisation of product

development expenditure 660,642 205,481 - - 866,123Depreciation 1,354,141 262,243 205,750 - 1,822,134Non-cash expenses other

than depreciation and amortisation 732,962 30,914 (9,652) 57,642 811,866

26. OTHER SIGNIFICANT EVENTS

On 3 July 2006, the Company entered into a share sale agreement (“SSA”) to acquire the entire issued and paid-up share capitalof Virtue Partners International Limited (“VPI”), comprising 240,002 ordinary shares of USD1.00 each, for a total cashconsideration of RM5,500,000 or its equivalent in HKD (“Purchase Consideration”).

VPI is principally an investment holding company and its only investment is 874,999 ordinary shares of Thai Baht (“THB”) 10.00each in AKN Messaging Technologies (Thailand) Ltd (“MTECH Thailand”), representing 25% of the issued and paid-up sharecapital of MTECH Thailand.

The acquisition was completed on 7 July 2006 and as a result of this acquisition, the Company's interest in MTECH Thailand hasincreased from 70% to 95%.

30 June 2007

List of Property


Location Description Land area/ Tenure Approximate Net Book Value(Built-up area) Age of Building RM

1007, Block A, Office Lot 2,506 sq.ft. Freehold 8 years 563,093Pusat Dagangan Phileo 2,Jalan16/11, 46350, Petaling Jaya, Selangor.

73A N N U A L R E P O R T 2 0 0 7

Analysis of Shareholdings as at 28 September 2007

Authorised Capital : RM25,000,000.00Issued and Fully Paid-up Capital : RM16,351,874.00 comprising 163,518,740 Ordinary Shares of RM0.10 eachClass of Equity Securities : Ordinary Shares of RM0.10 each (“Shares”)Voting Rights : One vote per Share

Distribution Schedule of Shareholders

No. of Holders Size of holdings No. of Shares %

26 Less than 100 Shares 1,266 *544 100 - 1,000 Shares 474,244 0.29

2,231 1,001 - 10,000 Shares 12,419,054 7.591,431 10,001 - 100,000 Shares 48,215,020 29.49

191 100,001 - less than 5% of issued Shares 78,319,156 47.902 5% and above issued Shares 24,090,000 14.73

4,425 Total 163,518,740 100.00

* Negligible

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

No. Name No. of Shares held %

1 AIBB Nominees (Tempatan) Sdn Bhd 14,300,000 8.75Pledged Securities Account for AKN Capital Sdn Bhd

2 Lim Seng Boon 9,790,000 5.993 Lembaga Tabung Haji 8,063,300 4.934 TCL Nominees (Tempatan) Sdn. Bhd. 3,350,000 2.05

OCBC Securities Private Limited for Wong Yoke Fong @ Wong Nyok Fing5 Goh Lee Lang 3,000,000 1.836 Malahon Credit Company Limited 2,836,800 1.737 Chew Shin Yong, Mark 2,130,600 1.308 Choong Yean Yaw 1,794,800 1.109 Goh Lee Lang 1,655,040 1.01

10 Lim Seng Boon 1,641,000 1.0011 AIBB Nominees (Tempatan) Sdn Bhd 1,630,000 1.00

Pledged Securities Account for Koek Tiang Kung12 CIMB Group Nominees (Tempatan) Sdn Bhd 1,512,000 0.92

Pledged Securities Account for AKN Capital Sdn Bhd13 Ong Peh Hoon 1,350,000 0.8314 Loh Lai Kim 1,334,000 0.8215 Lim Seng Boon 1,250,000 0.7616 Malahon Securities Limited 1,163,200 0.7117 HDM Nominees (Tempatan) Sdn Bhd 1,143,000 0.70

Pledged Securities Account for Wong Yoke Fong @ Wong Nyok Fing18 HDM Nominees (Tempatan) Sdn Bhd 1,050,000 0.64

Pledged Securities Account for Lim Eng Thong19 HSBC Nominees (Tempatan) Sdn Bhd 1,000,000 0.61

HSBC (Malaysia) Trustee Berhad for Amanah Saham Sarawak20 Lim Eng Thong 1,000,000 0.61

Analysis of Shareholdings as at 28 September 2007 (continued)


30 Largest Securities Account Holders (continued)

No. Name No. of Shares held %

21 MAYBAN Nominees (Tempatan) Sdn Bhd 1,000,000 0.61Pledged Securities Account for Haslin Nazim Bin Masdor

22 AIBB Nominees (Tempatan) Sdn Bhd 966,300 0.59Pledged Securities Account for Kek Lian Lye

23 ECM Libra Avenue Nominees (Tempatan) Sdn. Bhd. 847,100 0.52Pledged Securities Account for Ong Liang Ching

24 Lester RatnaKumar Neil Francis 808,016 0.4925 Ang Leong Chai 757,300 0.4626 Lee Che Weng 642,700 0.3927 Ng Heng Kit 560,000 0.3428 MAYBAN Nominees (Tempatan) Sdn Bhd 553,900 0.34

Pledged Securities Account for Ng Teck Wee29 Tor Seo Eng @ Toh Siew Yang 515,000 0.3130 ECM Libra Avenue Nominees (Tempatan) Sdn. Bhd. 500,000 0.31

Pledged Securities Account for Leong Kam Chee

Substantial Shareholders’ Shareholdings (excluding those who are bare trustees pursuant to Section 69 of the Companies Act, 1965)

Name of Substantial Shareholders Direct Interest % Indirect Interest %

AKN Capital Sdn Bhd 15,852,000 9.69 - -Dato’ Ahmad Kabeer bin Mohamed Nagoor - - 15,852,000 * 9.69Ooi Boon Leong 80 # 15,852,000 * 9.69Lim Seng Boon 12,681,000 7.76 - -

Note:* By virtue of their interest in AKN Capital Sdn Bhd (AKNC), Dato’ Ahmad Kabeer bin Mohamed Nagoor and Mr. Ooi Boon Leong are deemed

to have an interest in shares of the Company to the extent that AKNC has an interest. # Negligible

Directors' Shareholdings

Name Of Directors Direct Interest % Indirect Interest %

Dato’ Ahmad Kabeer bin Mohamed Nagoor - - 15,852,000 * 9.69Yam Tengku Muhammad Fakhry

Petra Ibni Sultan Ismail Petra - - - -Lim Seng Boon 12,681,000 7.76 - -Dato’ Haji Hasan bin Malek 320,000 0.20 - -Lim Eng Thong 2,050,000 1.25 - -Krishnan Menon 350,000 0.21 - -Mohamad Najeb bin Ali - - - -Chew Sing Chou - - - -

* By virtue of his interest in AKN Capital Sdn Bhd (AKNC), Dato’ Ahmad Kabeer bin Mohamed Nagoor is deemed interested in the shares of theCompany to the extent that AKNC has an interest.

75A N N U A L R E P O R T 2 0 0 7

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Eighth Annual General Meeting of AKN MESSAGING TECHNOLOGIESBERHAD (“the Company”) will be held at Ballroom 2, LG Level, Eastin Hotel, No. 13, Jalan 16/11, Pusat Dagangan Seksyen16, 46350 Petaling Jaya, Selangor on Tuesday, 27 November 2007 at 10.30 a.m. to transact the following business:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 30 June 2007 together with thereports of the directors and auditors thereon.

2. To approve the payment of directors’ fees for the financial year ended 30 June 2007.

3. To re-elect the following Directors who retire in accordance with Article 104 of the Company’s Articles ofAssociation:

i. Lim Seng Boonii Lim Eng Thongiii. Chew Sing Chou

4. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next AnnualGeneral Meeting and to authorise the Directors to fix their remuneration.

As Special Business:To consider and if thought fit, pass with or without any modifications, the following resolutions:-

5. ORDINARY RESOLUTIONGENERAL AUTHORITY FOR THE DIRECTORS TO ISSUE SHARES PURSUANT TO SECTION132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevantgovernmental and/or regulatory authorities, the Directors be and are hereby empowered to allot and issueshares in the Company from time to time at such price, upon such terms and conditions, for such purposesand to such person or persons whomsoever as the Directors may deem fit provided that the aggregate numberof shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Companyfor the time being AND THAT the Directors be and are also empowered to obtain approval from the BursaMalaysia Securities Berhad for the listing of and quotation for the additional shares so issued AND THATsuch authority shall continue in force until the conclusion of the next annual general meeting of theCompany.”

6. SPECIAL RESOLUTION 1PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

“THAT the proposed amendments to the existing Articles of Association of the Company as set out in theAppendix I attached to the Annual Report 2007 be and are hereby approved and adopted.”

7. SPECIAL RESOLUTION 2PROPOSED CHANGE OF NAME OF COMPANY

“THAT the name of the Company be changed from AKN Messaging Technologies Berhad to“M3 Technologies (Asia) Berhad” to be effective from the date of issuance of the Certificate of Incorporationon the Change of Name of the Company by the Companies Commission of Malaysia (“CCM”) AND THATall reference in the Company’s Memorandum and Articles of Association to the name AKN MessagingTechnologies Berhad, wherever the same may appear, shall be deleted and substituted with the name“M3 Technologies (Asia) Berhad” AND THAT the Directors and Secretaries of the Company be and arehereby authorised to carry out all necessary formalities in giving effect to the Proposed Change of Name.”

Resolution 1

Resolution 2

Resolution 3Resolution 4Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Notice of Annual General Meeting (continued)


8. To transact any other business of which due notice shall have been given in accordance with the CompaniesAct, 1965.

By order of the Board

TEA SOR HUA (MACS 01324)CHAN BEE FANG (MAICSA 7032385)Company Secretaries

Petaling Jaya, Selangor1 November 2007

EXPLANATORY NOTES TO SPECIAL BUSINESS

Ordinary Resolution

The Ordinary Resolution proposed under Agenda 5 is primarily to give flexibility to the Board of Directors of the Company to allotand issue shares at any time in their absolute discretion without convening a general meeting. This authority unless revoked or variedby the Company at a general meeting, will expire at the conclusion of the next annual general meeting of the Company.

Special Resolution 1

The Special Resolution 1 proposed under Agenda 6 is to amend the existing Articles of Association of the Company to ensurecontinued compliance with the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market. Please refer tothe documents marked Appendix I attached to the Annual Report for details of the Proposed Amendments.

Special Resolution 2

The Special Resolution 2 proposed under Agenda 7 is to seek shareholders’ approval for the proposed change of the Company’s namefrom AKN Messaging Technologies Berhad to “M3 Technologies (Asia) Berhad”. The rationale for the proposed change of name isto reflect the new direction and corporate identity for the Company to undertake its existing business and to provide the flexibility toleverage on its new business focus going forward. Approval for the use of name had been obtained from CCM. The change of nameof the Company, if approved by shareholders, will be effective from the date of issuance of the Certificate of Incorporation on theChange of Name of the Company by CCM.

Notes:

i. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. Aproxy may but need not be a member of the Company and the provision of Section 149 (1) (a) and (b) of the Companies Act, 1965shall not apply to the Company.

ii. In the case of Corporate member, the instrument appointing a proxy shall be under its Common Seal.

iii. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his holding tobe represented by each proxy.

iv. The instrument appointing a proxy must be deposited at the Registered office of the Company at Third Floor, No. 79 (Room A), JalanSS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor not less than 48 hours before the time for holding the Meeting or atany adjournment thereof.

77A N N U A L R E P O R T 2 0 0 7

Appendix 1

Details of the Proposed Amendments to the Articles of Association of AKN MESSAGING TECHNOLOGIES BERHAD (482772-D)

ARTICLENO.

5(5) The total nominal value of issued preferenceshares shall not exceed the total nominal value ofissued ordinary shares at any time;

5(6) The Company shall have power to issue preferencecapital ranking equally with, or in priority to,preference shares already issued.

8 Preference shareholders shall have the same rightsas ordinary shareholders as regards receivingnotices, reports and audited accounts, and attendinggeneral meetings of the Company and shall beentitled to a return of capital in preference toordinary shareholders when the Company iswound up. Preference shareholders shall alsohave the right to vote at any meeting in each of thefollowing circumstances:-

(a) when the dividend or part of the dividend onthe preference shares is in arrears for more thansix (6) months;

(b) on a proposal to reduce the Company’s sharecapital;

(c) on a proposal for the disposal of the whole ofthe Company’s property, business andundertaking;

(d) on a proposal that affects the rights attached tothe preference shares;

(e) on a proposal to wind up the Company; and

(f) during the winding up of the Company.

Deleted

Renumbered as Article 5(5)

Preference shareholders shall have the same rightsas ordinary shareholders as regards receivingnotices, reports and audited accounts, andattending general meetings of the Company andshall also have the right to vote at any meeting ineach of the following circumstances:-

(a) No change

(b) No change

(c) No change

(d) No change

(e) No change

(f) No change

EXISTING PROVISIONS AMENDED PROVISIONS

49 A statutory declaration in writing that the declarantis a Director of the Company, and that a share hasbeen duly forfeited or surrendered or sold to satisfya lien on a date stated in the declaration pursuant tothese Articles, and stating the date upon which itwas forfeited, shall, as against all persons claimingto be entitled to the share adversely to the forfeiturethereof, be conclusive evidence of the facts thereinstated against all persons claiming to be entitled tothe shares, and such declaration, together with thereceipt of the Company for the consideration (ifany) given for the share on the sale or dispositionthereof, and a certificate of proprietorship of theshare under the seal delivered to the person towhom the same is sold or disposed of, shallconstitute a good title to the share, and such personshall be registered as the holder of the share andshall be discharged from all calls made prior to suchsale or disposition, and shall not be bound to see tothe application of the purchase money (if any), norshall his title to the share be affected by any act,omission, irregularity or invalidity relating to orconnected with the proceedings in reference to theforfeiture, sale, re-allotment or disposal of the sale.

88(1) A shareholder may appoint more than two (2)proxies to attend the same meeting. Where ashareholder appoints two (2) or more proxies, heshall specify the proportion of his shareholdingsto be represented by each proxy.

Appendix 1



ARTICLENO.

A statutory declaration in writing that the declarantis a Director of the Company, and that a share hasbeen duly forfeited or surrendered or sold to satisfya lien on a date stated in the declaration pursuant tothese Articles, and stating the date upon which itwas forfeited, shall, as against all persons claimingto be entitled to the share adversely to theforfeiture thereof, be conclusive evidence of thefacts therein stated against all persons claiming tobe entitled to the shares, and such declaration,together with the receipt of the Company for theconsideration (if any) given for the share on thesale or disposition thereof, and a certificate ofproprietorship of the share under the seal deliveredto the person to whom the same is sold or disposedof, shall constitute a good title to the share, andsuch person shall be registered as the holder of theshare and shall be discharged from all calls madeprior to such sale or disposition, and shall not bebound to see to the application of the purchasemoney (if any), nor shall his title to the share beaffected by any act, omission, irregularity orinvalidity relating to or connected with theproceedings in reference to the forfeiture, sale, re-allotment or disposal of the share. Any residue ofthe proceeds of sale of shares which are forfeitedand sold, after the satisfaction of the unpaid callsand accrued interest and expenses shall be paid tothe person whose shares have been forfeited orhis executors, administrators, or assignees or ashe directs.

A shareholder shall be entitled to appoint up totwo (2) proxies to attend and vote at the samemeeting. Where a shareholder appoints two (2)proxies, he shall specify the proportion of hisshareholdings to be represented by each proxy.


Appendix 1

79A N N U A L R E P O R T 2 0 0 7

115 The office of a Director shall, ipso facto, be vacatedif the Director:-

(1) attains the age of seventy (70) years unlessSection 129(6) of the Act is complied with;

(2) ceases to be a Director by virtue of the Act;

(3) becomes bankrupt or makes any arrangementor composition with his creditors generally;

(4) becomes prohibited from being a Director byreason of any order made under the Act orcontravenes Section 130 of the Act;

(5) becomes of unsound mind or a person whoseperson or estate is liable to be dealt with in anyway under the law relating to mental disorder;

(6) resigns his Office by notice in writing to theCompany;

(7) is absent from more than 50% of the total boardof Directors’ meetings held during a financialyear save and except in a case where theExchange has granted a waiver to the Directorfrom compliance with this requirement; or

(8) is removed from his Office of Director by aresolution of the Company in general meetingof which special notice has been given.

(9) No provision

ARTICLENO.

The office of a Director shall become vacant if theDirector:-

(1) No change

(2) No change

(3) becomes bankrupt or makes any arrangementor composition with his creditors generallyduring his term of office;

(4) No change

(5) becomes of unsound mind or a person whoseperson or estate is liable to be dealt with in anyway under the law relating to mental disorderduring his term of office;

(6) No change

(7) No change

(8) is removed from his Office of Director by aresolution of the Company in general meetingof which special notice has been given; or

(9) is convicted of any offence (whether inMalaysia or elsewhere) in relation to theoffences under the Act or the securities lawsas defined in the Listing Requirements.




Statement AccompanyingNotice of Annual General Meeting

1. Directors standing for re-election

In accordance with Article 104 of the Company’s Articles of Association, at least one-third of the Directors for the timebeing shall retire from Office provided that all Directors shall retire from office once at least in every three years but shallbe eligible for re-election.

The Directors standing for re-election at the Eighth Annual General Meeting of the Company are as follows:-

i. Lim Seng Boonii. Lim Eng Thongiii. Chew Sing Chou

2. Details of attendance of Directors at Board Meetings

A total of four (4) Board Meetings were held during the financial year ended 30 June 2007. Details of attendance ofDirectors holding office at the end of the financial year are as follows:

Directors AttendanceDato’ Ahmad Kabeer Bin Mohamed Nagoor 4 of 4YAM Tengku Muhammad Fakhry Petra Ibni Sultan Ismail Petra 4 of 4Lim Seng Boon 4 of 4Lim Eng Thong 4 of 4Ooi Boon Leong (resigned on 28 May 2007) 4 of 4Krishnan Menon 4 of 4Dato’ Haji Hasan Bin Malek 4 of 4Mohamad Najeb Bin Ali 4 of 4Chew Sing Chou 3 of 4

3. The place, date and time of the meeting

The Eighth Annual General Meeting of AKN MESSAGING TECHNOLOGIES BERHAD will be held at Ballroom 2, LG Level,Eastin Hotel, No. 13, Jalan 16/11, Pusat Dagangan Seksyen 16, 46350 Petaling Jaya, Selangor on Tuesday, 27 November 2007at 10.30 a.m.

4. Further details of Directors who are standing for re-election

Further details of the Directors who are standing for re-election are set out in the Directors’ Profile Section (pages 6 to 9 of theAnnual Report); while their securities holdings (where applicable) are set out in the Analysis of Shareholdings - Directors’Interest in the Company and Related Corporations (pages 73 to 74 of the Annual Report).

I/We NRIC/Company No.of

being (a) member(s) of AKN MESSAGING TECHNOLOGIES BERHAD hereby appointNRIC No.

of

or failing him/her, NRIC No. of

or failing him/her, the Chairman ofthe Meeting as my/our proxy to vote for me/us on my/our behalf at the Eighth Annual General Meeting of the Company tobe held at Ballroom 2, LG Level, Eastin Hotel, No. 13, Jalan 16/11, Pusat Dagangan Seksyen 16, 46350 Petaling Jaya,Selangor on Tuesday, 27 November 2007 at 10.30 a.m. and at any adjournment thereof.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. If no specific direction as to voteis given, the Proxy will vote or abstain from voting at his/her discretion.

No. Resolutions For Against

1. To receive the Audited Financial Statements for the financial year ended 30 June 2007 together with the reports of the directors and auditors thereon.

2. To approve the payment of directors’ fees for the financial year ended 30 June 2007.3. To re-elect Mr. Lim Seng Boon as director who retires pursuant to Article No. 104

of the Company’s Articles of Association.4. To re-elect Mr. Lim Eng Thong as director who retires pursuant to Article No. 104

of the Company’s Articles of Association.5. To re-elect Mr. Chew Sing Chou as director who retires pursuant to Article No. 104

of the Company’s Articles of Association.6. To re-appoint Messrs Ernst & Young as Auditors of the Company.7. To approve the authority for Directors to issue shares pursuant to Section 132D

of the Companies Act, 1965.8. To approve the proposed amendments to the Articles of Association.9. To approve the proposed change of name of Company.

Dated this_______________ day of ____________ 2007

NO. OF SHARES HELD

Signature of Member(s)/Common Seal

AKN MESSAGING TECHNOLOGIES BERHAD (482772-D) (Incorporated in Malaysia)

PROXY FORM

(full name in capital letters)

(full name in capital letters)

(full address)

NOTES:i. A member of the Company entitled to attend and vote at the 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 the provision of Section 149 (1) (a) and (b) of the CompaniesAct, 1965 shall not apply to the Company.

ii. In the case of Corporate member, the instrument appointing a proxy shall be under its Common Seal.iii. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his

holding to be represented by each proxy.iv. The instrument appointing a proxy must be deposited at the Registered office of the Company at Third Floor, No. 79

(Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor not less than 48 hours before the time for holdingthe Meeting or at any adjournment thereof.

(full address)

(full address)

#

Stamp

Please fold across the lines and close

AKN MESSAGING TECHNOLOGIES BERHAD (482772-D)(Incorporated in Malaysia)

The Company SecretaryThird Floor, No. 79 (Room A),Jalan SS21/60,Damansara Utama,47400 Petaling Jaya,Selangor.

Please fold across the lines and close

Contentscms.m3online.com.my/m3tech_admin/img/financial/Annual... · 2013-02-04 · contents corporate information 2 - 3 corporate structure 4 financial highlights 5 directors’ profile

Documents