Untitled - PUC Founder

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					                                         Contents
Corporate Information                             2
Notice of Annual General Meeting                  3
Statement Accompanying Notice of
Annual General Meeting                            4
Mission Statement                                 5
Profile of Directors                              6
Management’s Discussion                           9
Products & Services                              10
Audit Committee                                  15
Statement of Corporate Governance                16
Statement of Internal Control                    20
Other Disclosures                                21
Financial Statements
Directors’ Report                                22
Statement By Directors / Statutory Declaration   26
Report of the Auditors                           27
Income Statements                                28
Balance Sheets                                   29
Statements of Changes in Equity                  30
Cash Flow Statements                             31
Notes to the Financial Statements                33
Analysis of Shareholdings                        53
Form of Proxy                                    55
    PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
    CORPORATE INFORMATION


    BOARD OF DIRECTORS             •   Executive Chairman | Cheung Shuen Lung
                                   •   Executive Directors | Teh Hon Seng (Managing Director), See Chiu Yeung
                                   •   Non-Independent Non-Executive Director | Professor Wei Xin
                                   •   Independent Non-Executive Directors
                                       Professor Ewe Hong Tat
                                       Sabrina Tang Siew Wan (Appointed w.e.f. 19/06/2008)
                                       Dr Lim Chong Keang @ Lim Chong Khiang (Appointed w.e.f. 19/06/2008)
                                       Lok Choon Hong (resigned w.e.f. 19/06/2008)
                                       Hua Chia Yee (resigned w.e.f. 26/08/2008


    COMPANY SECRETARY              • Lim Seck Wah (MAICSA 0799845)
                                   • Tang Chi Hoe (Kevin) (MAICSA 7045754)


    REGISTERED OFFICE              • Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur
                                     Tel: 6-03-2692 4271 Fax : 6-03-2732 5388


    MANAGEMENT OFFICE              • No. 6, 8 & 10, Jalan BK 3/2, Bandar Kinrara, 47100 Puchong, Selangor Darul Ehsan
                                     Tel: 6-03-8070 9933 Fax : 6-03-8070 9988


    SHARE REGISTRAR                • Mega Corporate Services Sdn Bhd (Co. No. 187984-H)
                                     Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur
                                     Tel: 6-03-2692 4271 Fax : 6-03-2732 5388


    PRINCIPAL BANKERS              • Malayan Banking Berhad
                                   • Public Bank Berhad


    AUDITORS                       • Tan Chin Huat & Co
                                     No 232, 2nd Floor, Block A, Damansara Intan 1, Jalan SS 20/27,
                                     47400 Petaling Jaya, Selangor Darul Ehsan
                                     Tel: 6-03-7726 8992 Fax: 6-03-7728 4992


    ADVISOR                        • Kenanga Investment Bank Berhad (Co. No. 15678-H)
                                     801, 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur
                                     Tel: 6-03-2164 6689 Fax: 6-03-2161 6690


    STOCK EXCHANGE                 • MESDAQ market of the Bursa Malaysia Securities Berhad


    LISTING                        • Ordinary Shares (Stock Code: 0007)




                                               WEBSITE/ COMPANY EMAIL ADDRESS
                                            • http://www.founder.com.my • info@founder.com.my




2
                                                      PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                         NOTICE OF ANNUAL GENERAL MEETING


NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting (“AGM”) of the Company will be
held at Perdana 1, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday,
18 June 2009 at 10.30 a.m. for the following purposes:


AGENDA
1)    To receive the audited Financial Statements of the Company for the financial year ended 31 December
      2008 together with the Reports of the Directors and Auditors thereon.
                                                                                    (Please refer to Note A)
2)    To approve the payment of Directors’ Fees for the financial year ended 31 December 2008.
                                                                                               (Resolution 1)
3)    To re-elect the following Directors retiring pursuant to the Company’s Articles of Association and being
      eligible, offer themselves for re-election:-
      a)    Mr Cheung Shuen Lung (Article 85)                                                  (Resolution 2)
      b)    Dr. Lim Chong Keang @ Lim Chong Khiang (Article 92)                                (Resolution 3)
      c)    Ms Sabrina Tang Siew Wan (Article 92)                                              (Resolution 4)

4)    To re-appoint Messrs Tan Chin Huat & Co. as the Auditors of the Company to hold office until the
      conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuner-
      ation.                                                                             (Resolution 5)



AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolution:-


5)    ORDINARY RESOLUTION
      AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF COMPANIES ACT, 1965
      “THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the rel-
      evant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares
      in the capital of the Company from time to time and upon such terms and conditions and for such pur-
      poses as the Directors may in their discretion deem fit, provided that the aggregate number of shares to
      be issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company
      for the time being (excluding the number of ordinary shares arising from the exercise of the Employees’
      Share Option Scheme) and that the Directors be and are hereby also empowered to obtain the approval
      from the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares so issued
      and that such authority shall continue to be in force until the conclusion of the next Annual General
      meeting of the Company.”
                                                                                               (Resolution 6)

6)    To transact any other business which may properly be transacted at an Annual General Meeting for
      which due notice shall have been given.


      By Order of the Board




      LIM SECK WAH (MAICSA NO. 0799845)
      TANG CHI HOE (KEVIN) (MAICSA No. 7045754)
      Secretaries
      Dated: 27 May 2009


      Kuala Lumpur


                                                                                                                   3
    PUC FOUNDER (MSC) BERHAD        | 2008 ANNUAL REPORT
    NOTICE OF ANNUAL GENERAL MEETING


    Notes :-
    A.      This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act 1965 and
            the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not
            put forward for voting.

    1.      A member entitled to attend and vote at the meeting is entitled to appoint a proxy/proxies to attend and vote
            in his/her stead. A proxy need not be a member of the Company.

    2.      A member may appoint up to two (2) proxies to attend at the same meeting. Where a member appoints more
            than one (1) proxy, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings
            to be represented by each proxy.

    3.      If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its
            attorney duly authorised.

    4.      The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Faber Imperial
            Court, Jalan Sultan Ismail, 50250 Kuala Lumpur, not less than 48 hours before the time appointed for holding
            the meeting or any adjournment thereof.

            Explanatory Notes on Special Business :


            Ordinary Resolution 6
            The effect of the resolution under item 5 of the agenda, if passed, will give the flexibility and authority to the
            Directors of the Company, from the date of the above AGM, to issue and allot shares in the Company up to and
            not exceeding in total 10% of the issued and paid-up share capital of the Company for the time being, for such
            purposes as they consider would be in the interest of the Company. This authority, unless revoked or varied at
            a general meeting, will expire at the conclusion of the next AGM of the Company.




    STATEMENT ACCOMPANYING NOTICE OF
    ANNUAL GENERAL MEETING


    DIRECTORS STANDING FOR RE-ELECTION
    The Directors standing for re-election at the Eleventh AGM of the Company are as follows:-
    (i)       Mr Cheung Shuen Lung
    (ii)      Dr. Lim Chong Keang @ Lim Chong Khiang
    (iii)     Ms Sabrina Tang Siew Wan


    Professor Ewe Hong Tat who is due for retirement in accordance with Article 85 of the Company’s Articles of
    Association and being eligible for re-election, does not wish to seek for re-election.
    Further details of the above Directors are set out in the Profile of Directors on page 6 to 8 of this Annual
    Report.




4
                PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                           MISSION STATEMENT




We are committed to providing quality products and
best services to meet customer satisfaction.




                                                                  5
    PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
    PROFILE OF DIRECTORS


                  EXECUTIVE CHAIRMAN                                         MANAGING DIRECTOR




            Mr Cheung Shuen Lung                                            Mr Teh Hon Seng
                          American                                                  Malaysian


    Mr Cheung Shuen Lung, aged 53, was appointed to           Mr Teh Hon Seng, aged 46, was appointed to the
    the Board of PUC Founder (MSC) Berhad (“PUC”) and         Board on 3 November 1997 and is a member of the
    Chairman on 24 October 2000. He is the Chairman           Remuneration Committee. He graduated with a de-
    of Founder Holdings Limited and one of the pio-           gree in Applied Science from Universiti Sains Malaysia
    neers of Founder Group of China. With his extensive       and the key person who initiated the set up of Found-
    experience in the information technology industry,        er Holding Group’s overseas channel in Malaysia. He
    he holds the positions as an executive director of        has vast experience in the ICT industry and has suc-
    Peking University Founder Group. Mr Cheung also           cessfully led the Company in penetrating and con-
    is one of the research fellows of Enterprise Research     quering the Chinese EPS & MIS solutions market in
    Institute at Peking University of China. He holds no      this region. He forefronts the change of FingerTec®
    other Directorships in public companies in Malay-         brand from merely a local brand to a well-known fin-
    sia.                                                      gerprint brand within two years. He holds no other
                                                              Directorships in public companies in Malaysia.
    He has no family relationship with any Director and/
    or major shareholder of PUC , no conflict of interest     He has no family relationship with any Director and/
    with PUC and has never been charged for any of-           or major shareholder of PUC, no conflict of interest
    fence except traffic, if any, within the past 10 years.   with PUC and has never been charged for any offence
    He does not hold any shares in PUC and its subsidi-       except traffic, if any, within the past 10 years. He di-
    ary companies. He attended two (2) out of four (4)        rectly holds 8,475,000 ordinary shares in PUC and
    Board meetings held during the financial year end-        1,000 ordinary shares via his spouse. He attended all
    ed 31 December 2008.                                      Board meetings held during the financial year ended
                                                              31 December 2008.




6
                                                        PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                                             PROFILE OF DIRECTORS


              EXECUTIVE DIRECTOR                                        NON-INDEPENDENT
                                                                      NON-EXECUTIVE DIRECTOR




            Mr See Chiu Yeung                                           Professor Wei Xin
                      Chinese                                                    Chinese

Mr See Chiu Yeung, aged 43, was appointed to the          Professor Wei Xin, aged 54, was appointed to the
Board on 3 June 2002. He graduated from the Faculty       Board on 24 October 2000 and is a member of the
of Electronic Engineering at Morrison Hill Technical      Remuneration Committee. He obtained his doctor
Institute Hong Kong and obtained a master degree          degree from the College of Economics at Peking
in Business Administration from Murdoch Univer-           University and currently is the Executive Dean of Col-
sity, Australia. He is currently the General Manager      lege of Education of the same university. He is also
of Founder GlobalTech Limited. He has extensive           the executive director of Founder Holdings Limited
experience in electronic publishing industry and cur-     and EC-Founder (Holdings) Company Limited, and
rently responsible for daily operation and business       the Chairman of Peking University Founder Group
development at Hong Kong and Taiwan’s businesses          Co.,Ltd. He holds no other Directorships in public
of Founder GlobalTech Limited. He holds no other Di-      companies in Malaysia.
rectorships in public companies in Malaysia.
                                                          He has no family relationship with any Director and/
He has no family relationship with any Director and/      or major shareholder of PUC, no conflict of interest
or major shareholder of PUC, no conflict of interest      with PUC and has never been charged for any of-
with PUC and has never been charged for any offence       fence except traffic, if any, within the past 10 years.
except traffic, if any, within the past 10 years. He      He does not hold any shares in PUC and its subsidi-
holds 257,500 ordinary shares in PUC. He attended all     ary companies. He attended two (2) out of four (4)
Board meetings held during the financial year ended       Board meetings held during the financial year ended
31 December 2008.                                         31 December 2008.




                                                                                                                    7
    PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
    PROFILE OF DIRECTORS


       INDEPENDENT NON-EXECUTIVE                       INDEPENDENT NON-EXECUTIVE                     INDEPENDENT NON-EXECUTIVE
               DIRECTOR                                        DIRECTOR                                      DIRECTOR




       Professor Ewe Hong Tat                       Ms Sabrina Tang Siew Wan                          Dr. Lim Chong Keang
                    Malaysian                                      Malaysian                                      Malaysian

    Professor Ewe Hong Tat, 42, was appointed       Ms. Sabrina Tang Siew Wan, 29, was           Dr. Lim Chong Keang, 65, was appointed
    to the Board on 6 February 2002 and is the      appointed to the Board on 19 June            to the Board on 26 August 2008 and is the
    Chairman of the Nomination Committee            2008 and is the Chairman of the Audit        Chairman of the Remuneration Commit-
    and member of the Audit Committee. He           Committee and member of Nomina-              tee and member of Audit and Nomina-
    received his First Class Honours Bachelor of    tion Committee. She is a Member of           tion Committees.. Dr Lim holds Bachelor
    Engineering degree in Electrical Engineer-      the Association of Chartered Certified       of Science in Mathematics from Nanyang
    ing from University of Malaya, Malaysia, S.M.   Accountants (ACCA) and Malaysian In-         University of Singapore, Master of Science
    (Master of Science) degree in EECS (Electri-    stitute of Accountants (MIA). Currently      from University of Saskatchewan, Canada
    cal Engineering and Computer Science)           she is a Senior Accountant for Entellium     and Ph.D. in Mathematics from McGill
    from Massachusetts Institute of Technology,     Technologies Sdn Bhd specializing in         University, Canada. He has held positions
    U.S.A. and obtained his PhD degree from         financial and management accounting,         as General Manager of Nanyang Press Ber-
    Faculty of Engineering, Multimedia Uni-         taxation, auditing and entrepreneurial       had and Chief Executive Officer of Sepang
    versity, Malaysia. Currently, he is a profes-   ventures.                                    Institute of Technology.
    sor and the Dean of Faculty of Information      She has no family relationship with any      He has no family relationship with any
    and Communication Technology (FICT),            Director and/or major sharehoder of          Director and/or major sharehoder of PUC,
    Petaling Jaya Campus, Universiti Tunku Ab-      PUC, no conflict of interest with PUC        no conflict of interest with PUC and has
    dul Rahman, Malaysia. In publication, he has    and has never been charged for any           never been charged for any offence ex-
    published in newspaper columns, books, in-      offence except traffic, if any, within the   cept traffic, if any, within the past 10 years.
    ternational journals and conferences. He is     past 10 years. She does not hold any         He does not hold any shares in PUC and
    also a senior member of IEEE. He is active in   shares in PUC and its subsidiary compa-      its subsidiary companies. He attended all
    technopreneur development work and has          nies. She attended all Board meetings        Board meetings during the financial year
    been a consultant/advisor for several listed    during the financial year ended 31 De-       ended 31 December 2008.
    and startup companies in Malaysia.              cember 2008.
    He has no family relationship with any Di-
    rector and/or major shareholder of PUC, no
    conflict of interest with PUC and has never
    been charged for any offence except traffic,
    if any, within the past 10 years. He does not
    hold any shares in PUC and its subsidiary
    companies. He attended all Board meetings
    held during the financial year ended 31 De-
    cember 2008.




8
                                                              PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                                       MANAGEMENT’S DISCUSSION


GROUP PERFORMANCE
For financial year ended 31 December 2008, the Group recorded RM20,259,880 total revenue and a profit after tax of
RM843,130. The Group achieved a significant growth of 33% and 231% in total revenue and profit compared to preced-
ing year. Its Biometrics Division in Malaysia mainly contributed the huge improvements.


DIVIDEND
For the financial year ended 31 December 2008, the Board of Directors does not recommend any dividend to be
declared.


INDUSTRY TREND AND DEVELOPMENT
Biometrics Division and Electronic Publishing & Management Information System Division remain as two core divisions
that contribute substantially to the Group’s total revenue.

Biometrics Division
The total worldwide revenue for Non-AFIS Fingerprint Biometrics industry, which is in line with FingerTec product for
physical access control and time attendance application is USD 400 million in 2008, with an earlier forecast of 27%
growth in 2009 for the global market. In view of the recent global economic downturn, the growth might be slightly
affected but in the long run, we anticipate a more bullish growth.

Electronic Publishing and Management
Information System Division
Electronic Publishing Division
The global trend in electronic publishing industry is skewed towards Internet publishing and e-book technology. The
rise in number of Internet publishing surfers and increase of e-books sales has posed greater challenge to the conven-
tional electronic publishing industry, which have suffered gradual shrink in market size every year. The core revenue for
the industry in Hong Kong and Taiwan regions is generally derived from electronic publishing software maintenance
contract and new/upgrading software projects.
Management Information System Division
After securing the licensing rights in distributing Anti-Virus Software in Hong Kong and Taiwan in late 2007, the Group
continues to recognize the prominent increase in demand for anti-virus software by the Internet users from the said to
safeguard their information system from harmful spyware and Trojans as well as to prevent identity thefts and Autofix
downloads.


RESEARCH & DEVELOPMENT
In 2009, the Group’s Research and Development expenses is estimated at RM650,000. The Group puts its Research and
Development focus on Biometrics Division to develop new products and applications for market expansion. New fea-
tures and functions are continuously added to existing products to accommodate the requirements of different mar-
kets. Migration of time attendance software from MS Windows platform to web platform would be one of milestones
in 2009. The investment in Research and Development for the Electronic Publishing and Management Information
Division will be reduced in 2009 due to the highly matured products and shrinking global market size.


PROSPECT FOR YEAR 2009
With a substantial sales and promotion fund allocated to fingerprint products and new products, the Group anticipates
a significant growth in the revenue for its Biometrics Division despite the economic downturn. In view of the declin-
ing market size of Electronic Publishing system in Hong Kong and Taiwan, the Group will strive to expand distribution
channels for its anti-virus software.


APPRECIATION
On behalf of the Board, we would like to extend our heartiest gratitude to our global partners and shareholders for their
continuous support. We also wish to thank the staff for their contribution rendered to the Group throughout 2008.




                                                                                                                            9
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      PRODUCTS & SERVICES




                                                                                   Selling Made Easy!
                        Color Access Control & Time Attendance Model




     FingerTec® i-Kiosk 100 Plus                       FingerTec® i-Kiosk 100                           FingerTec® Q2i Model
     Deluxe Color Fingerprint Access Control &         Premier Color Fingerprint Access Control &       Premier Color Fingerprint Access Control
     Time Attendance System                            Time Attendance System                           & Time Attendance System
     The gem of i-Kiosk series, FingerTec® i-Kiosk     Designed to impress, FingerTec® i-Kiosk          FingerTec® Q2i is an astounding hi-tech
     100 Plus is exclusively designed with a wide      100 is the multimedia fingerprint access         product with impressive design. The
     screen 8.0” high resolution TFT display for       control & time attendance system, styl-          reader has high-resolution color TFT
     vivid color presentation. It is equipped with     ishly crafted to fulfill the rising market de-   display for pleasant presentation. It also
     touch screen control panel complete with in-      mand for ultra modern clocking system.           has straightforward icons for navigation.
     tegrated camera display to suit the contem-       Stunning FingerTec® i-Kiosk 100 has TFT          Q2i has practical multimedia functions
     porary offices.                                   high-definition graphical presentation for       such as definition of work codes and
                                                       beautiful display of icons and photos.           short messages.




                                     Access Control & Time Attendance Model




     FingerTec® R2/M2                                  FingerTec® R2i                                   FingerTec® AC900
     Premier Fingerprint 2-in-1 Access Control &       Slave Fingerprint Access Control Reader          Standard Fingerprint 2-in-1 Access
     Time Attendance System                                                                             Control & Time Attendance System
     FingerTec® R2 & M2 are fingerprint systems        FingerTec® R2i is a cost effective solution      Slim and stylish design with Wiegand
     for door access & time attendance functions       for those who require fingerprint system         built-in feature, FingerTec® AC900
     that provide users comfort and convenience        as exit reader. R2i is a simple fingerprint      model is one of FingerTec bestsellers,
     with options of biometrics, password and/or       capturing station, it does not contain           delivering confidence and convenience
     card verification. M2 is made of zinc alloy for   any memory, a perfect match for finger-          by personalization of users through fin-
     solid and robust system but it does not come      print IN-models such as R2, M2, i-Kiosk          gerprints verification.
     with card reading function.                       series, etc.
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                                                                               PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                                                                       PRODUCTS & SERVICES



                                                                  Time Attendance Model




FingerTec® TA100T                                 FingerTec® TA100 Series                       FingerTec® TA100 DIY
Premier Touch Keypad Fingerprint Time             Premier Fingerprint Time Attendance           Standard Fingerprint DIY Time
Attendance System                                 System                                        Attendance System
FingerTec® TA100T is a stylish and elegant        FingerTec® TA100 Series, an award-win-        FingerTec® TA100 DIY or Do-It-Yourself
model of TA100 series, complete with fu-          ning industrial design with soft-touch        fingerprint time attendance product is
turistic touch keypad design. All features of     keypad buttons, is user-friendly in any       a user-friendly standalone system. The
TA100T are similar to the TA100 Series’, offer-   combination of password and fingerprint       management software is integrated in
ing efficient time attendance system to sim-      time attendance environment. Equipped         the fingerprint reader making installa-
plify office automation requirements.             with all functions required by a time at-     tion easy, as communication cabling is
                                                  tendance system, TA100 series provides        not at all required. Data is transferable by
                                                  not only convenience but efficiency to        USB flash disk and printable reports are
                                                  modern offices. TA100 series is equipped      available anytime.
                                                  with preset schedule siren to accommo-
                                                  date industry requirement.




                                                     RFID Card Model                            Mechanical Lock




FingerTec® TimeLine 100                           FingerTec® Kadex & i-Kadex                    FingerTec® Keylock
Standard FRID Card System for Time                Standard & Slave RFID card reader for         Fingerprint Mechanical Door Locks
Attendance System                                 Access Control System
TimeLine 100 is an RFID Card system, which        Kadex is a smooth RFID card reader com-       FingerTec® offers 6600, 6600A and 8800
can handle huge employee base. Having an          plete with important features for an access   for fingerprint mechanical doorlocks. All
LCD display, soft-touch keypad buttons and        control system. Communication options         models come with sleek designs and
USB port for data transfer, TimeLine 100 is       available include TCP/IP and USB flash        robust structures to add value to your
superior in comparison to other RFID card         disk, offering convenience to users. Com-     space.
readers in the market.                            bination with slave reader i-Kadex, Kadex
                                                  becomes a more cost effective solution.
                                                  I-Kadex is made simple and it is water-
                                                  proof/dustproof (IP65), plus it reads the
                                                  most commonly used Wiegand protocol
                                                  in the industry.

                                                                                                                                               11
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     PRODUCTS & SERVICES



                      System Development Kit (SDK) & Applications

                                                 FingerTec® OFIS TA/Registration Station
                                                 PC-based Time & Attendance System/Fingerprint Enrollment Station
                                                 Combination of OFIS sensor and TCMS V2 software has created a PC-based Time
                                                 and Attendance product known as OFIS TA, made for small sized offices. OFIS TA
                                                 makes fingerprint reader installation simplified with an easy plug to USB port of any
                                                 computer system.
                                                 For larger corporations that deploy multiple units of FingerTec® readers in their
                                                 corporations, OFIS TA can be used as fingerprint enrollment station, which the en-
                                                 rolled fingerprint templates can be transferred to other fingerprint readers from
                                                 one centralized location.


                                                 FingerTec® OFIS Server & Client
                                                 SDK for Online Fingerprint Identification System
                                                 FingerTec® Ofis SDK consists of Ofis Server and Ofis Client modules.
                                                 Ofis is a System Development Kit (SDK) in Ready-Pack for system developer to add
                                                 a layer of fingerprint protection to their software solutions.
                                                 The FingerTec® Ofis runs on Browser/Server (B/S) Environment, where user can
                                                 enroll their fingerprint through FingerTec® Ofis Sensor. For verification, the user’s
                                                 encrypted fingerprint will be transmitted and verified with the stored fingerprint
                                                 templates at the remote back-end server through Internet/Intranet/WAN/LAN.


                                                 FingerTec® BioBridge
                                                 SDK for FingerTec® Reader
                                                 System developers are full of ideas to make the most of FingerTec® readers to suit
                                                 to more applications for diversified market. Some may want to incorporate the “hu-
                                                 man touch” feature by enhancing their existing solutions to integrate with Fin-
                                                 gerTec readers to promote their niche.
                                                 FingerTec® BioBridge SDK comes with DLL and ActiveX formats and currently sup-
                                                 ports Windows 9x/2000/NT platforms. It works well on many development environ-
                                                 ments including of Visual Basic 6.0, Delphi 7.0, Visual C++, Microsoft.Net and etc.


                                                 FingerTec®TCMS V2 / DiGiTime
                                                 Time Attendance & Access Control Software for FingerTec® Reader
                                                 TCMS V2, the soul of FingerTec® fingerprint readers, is the powerful time control
                                                 management system software designed to providing efficient and effective ad-
                                                 ministration of human resources in every corporation. Thousands of enterprises
                                                 around the globe are utilizing TCMS V2 in their daily operations to ease the burden
                                                 of manual reporting, to reduce human errors and produce comprehensive and as-
                                                 sessable information.
                                                 It produces 22 printable reports; and the current languages available in its multilin-
                                                 gual platform include English, Spanish, Arabic, Portuguese, Chinese, Malay, Indone-
                                                 sian, Thai, Vietnamese, French, Russian, Farsi, German and Italian.


                                                 FOUNDER DiGiPAY
                                                 Payroll Software (for Malaysia Market only)
                                                 DiGiPAY is a simple and effective payroll system exclusively designed for Malaysian
                                                 companies. It is the all-in-one payroll solution compliant with Malaysian labor laws
                                                 to meet high expectation.
                                                 Setup of new payroll data and upgrade of existing payroll data are made simple by
                                                 DiGiPAY. DiGiPAY offers various payment settings, three salary modes and equips
                                                 with Human Resources functions to cater to the needs ranging from small compa-
                                                 nies up to medium enterprises.
                                                 Available in English, Bahasa Malaysia and Chinese language, DiGiPAY can also be
                                                 easily integrated with TCMS V2 / DiGiTimes software to adopt time and attendance
                                                 data for further payroll processing.

12
                                                                         PUC FOUNDER (MSC) BERHAD        | 2008 ANNUAL REPORT
                                                                                PRODUCTS & SERVICES


ELECTRONIC PUBLISHING SYSTEM (EPS) &
MANAGEMENT INFORMATION SYSTEM (MIS) DIVISION




                         EagleRIP- Raster Image Processor                  Founder FITs- FIT page layout software




                 Founder Fonts            Wentao Editorial Workflow MIS            Gallery graphic editing software




FOUNDER EPS
Founder EPS consists of four main modules which are Founder Raster Image Processor Software “Founder RIP”, Found-
er Advances Colour Image and Typesetting Software “Founder FIT”, and Founder Chinese language Postscripts Fonts
“Founder Fonts”. The Founder EPS software is linked to prepress hardware to integrate as a total solution EPS to perform
daily prepress operation for publishers. The Company also sources for and supplies to its customers prepress hardware
as part of its total solution for the publishing industry.


FOUNDER MIS
Founder MIS consists of four main modules which include Founder Editorial MIS, Founder Electronic Newspaper MIS,
Founder Advertisement MIS and Founder Digital Library MIS. These are the solutions which can be integrated as a whole
or adopted as a standalone module according to a newspaper publisher’s requirements.


E-LIBRARY www.go2yr.com




The e-library system concentrates on two major segments, public membership and educational institution, allowing
clients to build their own library system based on the provided platform.

                                                                                                                                13
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     PRODUCTS & SERVICES




                                       Our wholly owned subsidiary in Hong Kong, Founder GlobalTech Limited, has been ap-
                                       pointed as an exclusive distributor in Hong Kong, Macau and Taiwan region for the fol-
                                       lowing products:




                                       DUBA
                                       Kingsoft Internet Security V.90
                                       Duba, renowned anti-virus software, has 3 main engines. Anti-Spy can remove spyware and
                                       Trojans completely from EMS memory and hard disk to secure the system. Anti-Phishing blocks
                                       phishing websites and emails to prevent identity thefts and Auto-fix downloads and installs new
                                       security updates and patches automatically to fix system vulnerabilities.
                                       Duba receives the “Best Buy Award” from PC World in 2006 and is awarded “The China Top
                                       Brand” in the same year under the Antivirus Product category in China. Duba has catered a total
                                       of 23 million users and the number is increasing at a rapid rate.



                                       CIBA
                                       PowerWord 2008 Professional
                                       Ciba - PowerWord 2006 Professional software is a comprehensive, user-friendly all-in-one in-
                                       teractive English to Chinese, Chinese to English dictionary software. The new edition includes
                                       Chinese and English pronunciations, words search, translation and vocal-reading functions. The
                                       Ciba-PowerWord 2006 Professional has a large vocabulary library, and caters to vast Chinese-
                                       speaking computer users’ market with its low-price strategy.




                                       Kodak LEAF Digital Camera Back, HK only
                                       Creo Leaf is the first company that produced high-end and professional digital camera back in
                                       1992. Photographers can capture good quality images in the simplest way, equivalent to those
                                       of professionally captured. Leaf has produced great digital cameras for the past decade, which
                                       include Portable Power, digital camera back with 17 Mega Pixels and 33 Mega Pixels, Leaf Valeo
                                       22 Wi, Leaf Valeo 17 Wi, Leaf Aptus 22 and Leaf Aptus 17.




14
                                                                PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                                                               AUDIT COMMITTEE


The principle objective of the Audit Committee is to assist the Board in discharging certain of its statutory duties and
responsibilities in relation to financial, accounting and reporting practices and to ensure proper disclosure to the share-
holders of the Company.


COMPOSITION AND DESIGNATION OF AUDIT COMMITTEE
The Audit Committee comprises of the following members (“The Committee”):
1. Sabrina Tang Siew Wan (appointed w.e.f. 19/06/2008) Chairman; Independent Non-Executive Director
2. Professor Ewe HongTat Independent Non-Executive Director
3. Dr Lim Chong Keang @ Lim Chong Khiang (appointed w.e.f. 26/08/2008) Independent Non-Executive Director
4. Lok Choon Hong (resigned w.e.f. 19/06/2008) Chairman; Independent Non-Executive Director
5. Hua Chia Yee (resigned w.e.f. 26/08/2008) Independent Non-Executive Director

AUTHORITY
The Committee shall have unlimited access to financial and other relevant information and documents, to the external
and internal auditors and to senior management of the Company. The Committee shall also have the authority to inves-
tigate any matter within its term of reference.

MEETINGS
Meetings shall be held at least 4 times a year or a frequency to be decided by the Committee. The external auditors
may request a meeting if they consider one is necessary. The quorum for each meeting shall be at least 2 members. The
Committee may invite any person to be in attendance to assist in its deliberations. At least once a year, the Committee
shall meet with the external auditors.
There were five (5) meetings held during the financial year and the attendance record is as follows:-
                                                                                           Meetings attended
    Sabrina Tang Siew Wan (appointed w.e.f. 19/06/2008)                                             2/2
    Professor Ewe Hong Tat                                                                          5/5
    Dr Lim Chong Keang @ Lim Chong Khiang (appointed w.e.f. 26/08/2008)                             1/1
    Lok Choon Hong (resigned w.e.f. 19/06/2008)                                                     3/3
    Hua Chia Yee (resigned w.e.f. 26/08/2008)                                                       3/4

FUNCTIONS AND DUTIES
The duties and functions of the Committee shall be:-
• To oversee matters relating to external audit including the review of the audit plan, auditor’s management letter and
  the Auditor’s Report;
• To review the quarterly and annual financial statements before submission to the Board, with special focus on any
  changes in accounting policies and practices, significant adjustments resulting from the audit, compliance with the
  latest accounting standards and statutory and regulatory disclosure requirements;
• To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it
  has the necessary authority to carry out its work;
• To appraise and review the performance of the internal auditors.
• To approve any appointment or termination of the internal auditors and to review any resignations of internal auditors
  and provide resigning internal auditors the opportunities to submit reasons for resigning, where necessary.
• To review any related party transactions that may arise within the Company or the Group;
• To recommend to the Board the appointment, resignation and remuneration of the external auditors;
• To carry out the duties and rights as stipulated in the relevant Listing Rules; and
• To consider other issues, as authorized by the Board.

ACTIVITIES
The activities of the Committee for the financial year under review were as follow:
• Reviewed and recommended for the Board’s approval the unaudited quarterly results for public announcement;
• Reviewed the external auditor’s scope of work and audit plan for the Group;
• Reviewed with the external auditor the audited financial statements, Auditor’s Report and recommendations;
• Discussed and reviewed the updates of new developments on accounting standards; and
• Reviewed and recommended to the Board for approval the Statement on Internal Control and the Corporate Govern-
  ance Statement for inclusion in the Annual Report.

INTERNAL AUDIT
During the financial year under review, the Group’s internal audit function has been outsourced to Cheng & Co Govern-
ance Services Sdn. Bhd., an external professional firm. The Internal Auditor reports independently and directly to the
Audit Committee. The cost incurred for the Internal Audit Service for the financial year was approximately RM12,000.
The main role of the internal audit function is to review the effectiveness of the system of internal control and this is
performed with impartiality, proficiency and with due professional care.

                                                                                                                              15
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      STATEMENT OF CORPORATE GOVERNANCE


     The Board of Directors appreciates the importance of adopting high standards of corporate governance within the
     Group as means for sustaining the Group’s long term growth and increasing shareholders’ value. The Group is currently
     moving towards compliance with the Principles and adoption of most of the Best Practices as recommended by the
     Malaysian Code of Corporate Governance (“The Code”).


     A. DIRECTORS
         The Board
         The Group acknowledges the importance of having an effective Board to lead and control the Group. The Board
         is ultimately responsible for the stewardship of the Group’s strategic direction and development. The Board’s
         responsibilities include reviewing and adopting the Group’s goals, objectives and strategic plans set by the man-
         agement, monitoring the achievement of the goals and objectives, reviewing the performance and identifying
         the Group’s principal risks.

         Board Balance
         The Board, led by an Executive Chairman, has seven members, comprising one Executive Chairman, two Executive
         Directors, one Non-Executive Director and three Independent Non-Executive Directors. The current Board compo-
         sition complies with the Listing Requirements of the Bursa Malaysia Securities Berhad for MESDAQ Market.
         The Board has within it, professionals drawn from various background; bringing in-depth, and diversity in experi-
         ence, expertise and perspectives to the Group’s business operation. The profiles of the members of the Board are
         set out in this Annual Report on pages 6 to 8.

         Supply of Information
         Prior to Board meetings, an agenda together with the Board papers, comprising of financial performance and
         other relevant documents and information are distributed to all Directors. The Managing Director and/or other
         relevant Board members will provide comprehensive explanation of pertinent issues and recommendations by
         the management. The issues would then be deliberated and discussed thoroughly by the Board prior to decision-
         making.

         Apart from the above, the Board members are updated on the Company’s activities and its operations on a regular
         basis. All Directors have access to all information of the Company on a timely basis in an appropriate form and
         quality necessary to enable them to discharge their duties and responsibilities.

         All Directors have access to the advice and services of the Company Secretary and to obtain independent profes-
         sional advice, whenever necessary, at the expense of the Company.

         Board Committees
         The following Board Committees have been established to assist the Board in the execution of its duties. The terms
         of reference of these Committees have been approved by the Board.

         a. Audit Committee
            The Audit Committee comprises three Independent Non-Executive Directors. The composition, responsibili-
            ties, detailed terms of reference and the activities of the Audit Committee during the financial year are set out
            separately in the Audit Committee Report on pages 15 of the Annual Report.

         b. Nomination Committee
            The Nomination Committee was established in May 2007. The Committee meets at least once a year. The
            members of the Nomination Committee who served during the financial year are:-
            • Professor Ewe Hong Tat (re-designated as Chairman w.e.f. 26/08/2008)
              Chairman, Independent Non-Executive Director
            • Sabrina Tang Siew Wan (appointed w.e.f. 19/06/2008)
              Member, Independent Non-Executive Director
            • Dr Lim Chong Keang @ Lim Chong Khiang (appointed w.e.f. 26/08/2008)
              Member, Independent Non-Executive Director
            • Lok Choon Hong (resigned w.e.f. 19/06/2008)
              Member, Independent Non-Executive Director
            • Hua Chia Yee (resigned w.e.f. 26/08/2008)
              Chairman, Independent Non-Executive Director
16
                                                                       PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                               STATEMENT OF CORPORATE GOVERNANCE


  c. Remuneration Committee
     The Remuneration Committee was established in May 2007. The Committee meets at least once a year. The
     members of the Remuneration Committee who served during the financial year are:-
     • Dr Lim Chong Keang @ Lim Chong Khiang (appointed as member w.e.f. 26/08/2008 and re-designated as Chairman w.e.f. 6/11/2008)
       Chairman, Independent Non-Executive Director
      • Professor Wei Xin (re-designated as member w.e.f. 6/11/2008)
        Member, Independent Non-Executive Director
     • Teh Hon Seng
       Member, Managing Director
     • Hua Chia Yee (resigned w.e.f. 26/08/2008)
       Member, Independent Non-Executive Director

  Appointments to the Board
  The terms of reference of Nomination Committee include the recommendation of new candidates to the Board,
  Directors to fill the seats on the Board Committees, assess the effectiveness of the Board and Board Committees.
  The Nomination Committee will assist the Board in reviewing the required mix of skills and experience of the Non-
  Executive Directors.

  Re-election of Directors
  In accordance with the Company’s Articles of Association, one-third (1/3) of the Directors shall retire from office, at
  least once in three (3) years. Retiring Directors can offer themselves for re-election. Directors who are appointed by
  the Board during the financial year are subject to re-election by shareholders at the next Annual General Meeting
  held following their appointments. Directors over seventy (70) years of age are required to submit themselves for
  re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.
  For the forthcoming Annual General Meeting, the following Directors will retire in accordance with the Company’s
  Articles of Association and being eligible, offered themselves for re-election:-
  (i) Cheung Shuen Lung (Article 85)
  (ii) Sabrina Tang Siew Wan (Article 92)
  (iii) Dr Lim Chong Keang @ Lim Chong Khiang (Article 92)
  Professor Ewe Hong Tat who retires pursuant to Article 85 does not wish to seek for re-election.

  Meetings
  The Board meets regularly on a quarterly basis and as and when required. There were four (4) Meetings held during
  the financial year and the attendance record is as follows:-
                                                                                                     Meetings attended
  Cheung Shuen Lung                                                                                         2/4
  Teh Hon Seng                                                                                              4/4
  See Chiu Yeung                                                                                            4/4
  Professor Wei Xin                                                                                         2/4
  Professor Ewe Hong Tat                                                                                    4/4
  Sabrina Tang Siew Wan (appointed w.e.f 19/06/2008)                                                        2/2
  Dr Lim Chong Keang @ Lim Chong Khiang (appointed w.e.f. 26/08/2008)                                       1/1
  Lok Choon Hong (resigned w.e.f. 19/06/2008)                                                               2/2
  Hua Chia Yee (resigned w.e.f. 26/08/2008)                                                                 2/3

B. DIRECTORS REMUNERATION
  The Level and Make-up of Remuneration
  The aggregate Directors’ remuneration for the financial year ended 31 December 2008 are set out below:

                                              Directors’        Salaries         Bonuses      Benefits         Total
                                                 fees         & Allowance                     in-kind
  Executive Directors                               ----         690,858           ----            ----           690,858
  Non-Executive Directors                       90,000                ----         ----            ----            90,000

  Total                                         90,000           690,858           ----            ----           780,858


                                                                                                                                      17
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      STATEMENT OF CORPORATE GOVERNANCE


         The number of Directors whose remuneration fall into the following bands are as follows:-
         Range of Remuneration (RM)                           Executive             Non-Executive           Total
         50,000 and below                                              1                          3               4
         50,001 - 100,000                                            ----                       ----            ----
         100,001 – 150,000                                           ----                       ----            ----
         150,001 – 200,000                                           ----                       ----            ----
         200,001 – 250,000                                           ----                       ----            ----
         250,001 – 300,000                                           ----                       ----            ----
         300,001 – 350,000                                             1                        ----              1
         350,001 – 400,000                                             1                        ----              1

         Procedure
         The Remuneration Committee recommends to the Board the executive remuneration and its cost and the remu-
         neration package for each executive Director. It is, nevertheless, the ultimate responsibility of the entire Board to
         approve the remuneration of these Directors.
         The determination of the remuneration of the non-executive Directors is a matter for the Board as a whole with the
         Director concerned abstaining from deliberations and voting on decisions in respect of his individual remunera-
         tion.

         Disclosure
         The details of the Directors’ remuneration for the financial year ended 31 December 2008 are disclosed in the notes
         to the Audited Financial Statements for the financial year ended 31 December 2008.


     C. SHAREHOLDERS
         Dialogue between Companies and Investors
         The Company recognizes the importance of keeping the shareholders and investors informed of the Group’s
         business and corporate developments. Such information is disseminated via the Group’s annual reports, cir-
         culars to shareholders, quarterly financial results and the various announcements made from time to time. All
         shareholders, including private investors, have an opportunity to participate in discussions with the Board on
         matters relating to the Group’s operation and performance at the Company’s Annual General Meeting. Alterna-
         tively, they may obtain the Company’s latest announcements via the Bursa Malaysia Securities Berhad’s website
         at www.bursamalaysia.com.

         Annual General Meeting
         The Annual General Meetings (AGM) is the principal forum for dialogue with individual shareholders and investors.
         It is a crucial mechanism in shareholder communication for the Company. At the Company’s AGM, shareholders
         have direct access to the Board and are given the opportunity to ask questions during the question and answer
         session.


     D. ACCOUNTABILITY AND AUDIT
         Financial Reporting
         The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial perform-
         ance and prospects at the end of the financial year, primarily through the Financial Statements and the Chairman’s
         Statement in the Annual Report.
         In preparing the above Financial Statements, the Directors have:
         • adopted suitable accounting policies and then applied them consistently;
         • made judgements and estimates that are prudent and reasonable;
         • ensured applicable accounting standards have been followed, subject to any material departures disclosed and
            explained in the financial statements; and
         • prepared the financial statements on an ongoing basis.




18
                                                            PUC FOUNDER (MSC) BERHAD    | 2008 ANNUAL REPORT
                           STATEMENT OF CORPORATE GOVERNANCE


  Internal Control
  The Board of Directors has overall responsibility for maintaining a system of internal controls, which provides rea-
  sonable assessments of effective and efficient operations, internal controls and compliance with laws and regula-
  tions.

  External Audit
  The Group’s independent external auditors fill an essential role for the shareholders by enhancing the reliability of
  the Group’s financial statements and giving assurance of that reliability to users of these financial statements.
  The external auditors have an obligation to bring any significant defects in the Group’s system of control and com-
  pliance to the attention of the Management; and if necessary, to the Audit Committee and the Board.


E. DIRECTOR’S RESPONSIBILITY IN RESPECT OF FINANCIAL STATEMENTS
  The Directors are required to prepare the financial statements for each financial year which give a true and fair view
  of the state of affairs of the Group and of the Company at the end of the financial year, and of the results and cash
  flow of the Group and of the Company for the financial year then ended.
  The Directors consider that, in preparing the financial statements for the financial year ended 31 December 2008,
  the Group has used appropriate accounting policies and applied them consistently and made judgements and
  estimates that are reasonable and prudent. The Directors also consider that all applicable approved accounting
  standards have been followed and confirm that the financial statements have been prepared on a going concern
  basis.
  The Directors are responsible for ensuring that the Group and the Company keep accounting records which dis-
  close with reasonable accuracy at any time the financial position of the Group and of the Company and which
  enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965 and
  applicable approved accounting standards in Malaysia.


F DIRECTOR’S TRAINING
  All the Directors of the Company have attended the Mandatory Accreditation Programme conducted by Bursatra
  Sdn Bhd within the stipulated timeframe required in the Listing Requirements.
  The Board of Directors is aware of the importance of attending the continuous training programme from time to
  time to enhance their knowledge and awareness in discharging their duties diligently and with integrity. However,
  during the financial year, none of the Board members attended any of the appropriate courses due to their inten-
  sive traveling and working schedule.
  As for Professor Ewe Hong Tat who is a professor and the Dean of Faculty of Information and Communication Tech-
  nology, he has extensive readings, conduct research and development to equip himself for the challenging career.
  He keeps himself abreast with the ever changing rules and regulations governing the corporate environment


G CORPORATE SOCIAL RESPONSIBILITY
  Apart from giving some token donations to certain local community groups in the society, the Company has not
  carried out other major social activities during the year ended 31 December 2008.


H COMPLIANCE STATEMENT
  The Group has complied with the principles and best practices as set out in part 1 and 2 respectively of the Code.




                                                                                                                           19
     PUC FOUNDER (MSC) BERHAD     | 2008 ANNUAL REPORT
      STATEMENT OF INTERNAL CONTROL


     INTRODUCTION
     During the year under review, PUC FOUNDER (MSC) BERHAD consistently enhances its internal control system to com-
     ply with the Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirement (“Listing Requirement”) and the
     Malaysian Code on Corporate Governance (“Code”). The Board of Directors (“Board”) thereby is responsible to maintain
     a sound system of internal control to safeguard shareholders’ investments and the Group’s assets.


     BOARD RESPONSIBILITY
     The Board explicitly assumes the following specific responsibilities, which facilitate the discharge of the board’s stew-
     ardship responsibilities: -
          • Identifying principal risks and ensure the implementation of appropriate systems to manage these risks;
          • Reviewing the adequacy and the integrity of the Group’s internal control systems and management information
            systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines”.
     The internal control system is designed to provide coverage to financial control, operational control, compliance con-
     trol and risk management; to ensure reasonable assurance in achieving objectives in terms of operation efficiency and
     effectiveness, financial reporting reliability and compliance with laws and regulations. The internal control, however,
     does not provide absolute assurance against material misstatement, fraud and loss.
     On a continuing basis, the Board evaluates the performance of established operational and organizational structures
     within the Group:
     1.     The operating units, headed by qualified and experienced Directors and mangers in the respective fields of spe-
            cialization.
     2.     The provision to the Board and the management of comprehensive information on monthly and quarterly finan-
            cial performance, key business and production indicators, including customers’ feedback on the level as well as
            quality of service.
     3.     The management constantly evaluates the action taken by operating units in mitigating or overcoming the impact
            of the risks identified to the operation of the Group.
     Monitoring by management of the monthly results as against the budget and in the event of major variances, to take
     appropriate remedial action.


     INTERNAL CONTROL
     The principle characteristics of the Group’s internal control system are as follow:
          • The management of the Group is delegated to the Managing Director, whose responsibilities and authority limits
            are set by the Board.
          • Authority is delegated to different levels of Management and those requiring the Board’s approval are docu-
            mented and designed to ensure accountability and responsibility.
          • Internal policies and procedures for key processes and activities are revised and updated consistently to adapt to
            changing environment, both internally and externally.
          • Financial performance and cash flow are provided to the Group’s Directors and Audit Committee on a quarterly
            basis for close monitoring and review.
          • Ongoing review of the internal control system is performed by the Group’s internal audit function.


     INTERNAL AUDIT FUNCTION
     The Group’s internal audit activities are performed independently, with impartiality and proficiency. In addition, the
     internal audit function is responsible to conduct consistent and systematic review on the adequacy and integrity of
     internal control systems to provide reasonable assurance to ensure risks are appropriately identified and mitigated.
     An audit committee report is submitted to the Group Audit Committee on a quarterly basis. Criteria to be addressed
     in the report include risk identification and mitigation, corrective action plans and implementation of the plans by the
     Management.




20
                                                              PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                                                         OTHER DISCLOSURES


PURSUANT TO THE LISTING REQUIREMENT OF
BURSA SECURITIES
1. SHARE BUY-BACKS
   There were no share buy-back arrangements during the financial year.

2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
   There were no options, warrants or convertible securities exercised in respect of the financial year.

3. DEPOSITORY RECEIPT
   The Company did not sponsor any Depository Receipt programme during the financial year.

4. IMPOSITION OF SANCTIONS/PENALTIES
   There were no public imposition of sanctions or penalties imposed on the Company and its subsidiaries,
   directors or management by the regulatory bodies during the financial year.

5. NON-AUDIT FEES
   There was no non-audit fees paid to the external auditors by the group for the financial year ended
   31 December 2008.

6. VARIATION OF RESULTS
   The Company did not release any profit estimated, forecasts or projections for the financial year, and
   audited results did not differ by 10% or more from the unaudited results announced.

7. PROFIT GUARANTEE
   The Company did not give any form of profit guarantee to any parties during the financial year.

8. MATERIAL CONTRACTS AND CONTRACT RELATING TO LOANS
   There were no contracts relating to loan and material contracts of the Company and its subsidiaries in-
   volving the directors and substantial shareholders since the end of the previous financial year.

9. REVALUATION POLICY ON LANDED PREMISES
   The Company does not have revaluation policy on landed properties.

10. PROPERTIES AS AT 31 DECEMBER 2008
    Description of Property
    No. 6, 8 & 10, Jalan BK 3/2, Bandar Kinrara 47180 Puchong,Selangor

    Existing                   Age of      Land Area        Tenure          Date of          Net Book Value
    Use                       Building                                    Acquisition             as at
                                                                                            31 Dec 2008 (RM)

    Shop Office                 13         629 sq. m.     Freehold       29 July 2003          1,267,013




                                                                                                                21
     PUC FOUNDER (MSC) BERHAD    | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Director’s Report]


     The directors hereby submit their report together with the audited financial statements of the Group and of the Com-
     pany for the financial year ended 31st December 2008.




     PRINCIPAL ACTIVITIES
     The Company is principally engaged in the following two broad strategic business units:-
     (i)    Biometrics Division - Devices and applications incorporating fingerprint verification technology for commercial
            usage in areas such as user verification for security control, physical access control and time attendance track-
            ing.
     (ii)   Electronics Publishing System and Management Information System Division
            Information technology solutions provider of electronic publishing system and management information sys-
            tem to the Chinese language publishing industry.
     The principal activities of the subsidiaries are as disclosed in Note 12 to the Financial Statements.
     There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries
     during the financial year.




     FINANCIAL RESULTS
     The results of the operations of the Group and of the Company for the financial year are as follows:-

                                                                           GROUP                       COMPANY
                                                                            RM                           RM

     Profit/(loss) before tax                                           1,173,414                         879,022
     Income tax expense                                                 ( 330,284 )                     ( 180,926 )

     Net profit for the financial year                                    843,130                            698,096


     DIVIDENDS
     No dividend has been paid or declared by the Company since the end of the previous financial year. The directors also
     do not recommend the payment of any dividend in respect of the current financial year.


     RESERVES AND PROVISIONS
     There were no material transfers to or from reserves or provisions during the financial year other than those disclosed
     in the Financial Statements.


     ISSUE OF SHARES AND DEBENTURES
     During the financial year, the Company increased its issued and paid-up share capital from RM7,550,400 to RM7,602,900
     by the issuance of 525,000 new ordinary shares of RM0.10 each for cash pursuant to the Employees’ Share Option
     Scheme of the Company at an exercise price of RM0.10 per ordinary share. The new ordinary shares rank pari passu
     with the then existing ordinary shares of the Company.

     The Company has not issued any new shares and debentures during the financial year.


     SHARE OPTIONS
     The Employees’ Share Option Scheme (“ESOS”) was approved by the shareholders at the Extraordinary General Meet-
     ing held on 16th October 2003 which became effective on 10th November 2003 (“effective date”).
     The salient features of the ESOS are as follows:
     a)     the total number of new shares which may be made available under the scheme shall not exceed thirty per cent
            (30%) of the total issued and paid-up share capital of the Company at any point of time during the existence of
            the ESOS;
     b)     eligible persons are confirmed employees including executive directors of the Group and have been in the em-
            ployment of the Group for a period of at least twelve (12) months of continuous service on or prior to the date


22
                                                              PUC FOUNDER (MSC) BERHAD    | 2008 ANNUAL REPORT
                                        FINANCIAL STATEMENTS [Director’s Report]


      of allocation. However, where the employee/executive director is serving under an employment contract, the
      contract should be for a duration of at least two (2) years and in addition, a foreign employee of the Company,
      serving on a full-time capacity and whose contribution is vital to the Company may be considered for participa-
      tion, provided that no foreign employee who is serving under an employment contract may be considered for
      participation unless the employment contract is for a duration of at least two (2) years or such other period as may
      be required by the relevant authority;
c)    not more than fifty per cent (50%) of the shares under the ESOS will be granted to the directors and senior man-
      agement. In addition, not more than twenty five per cent (25%) of the shares under the ESOS will be granted to
      any individual staff. No option shall be granted for less than 1,000 shares;
d)    the option price may be at a discount of not more than ten per cent (10%) from the five (5) days weighted aver-
      age market price of the underlying shares preceding the date of offer or at par value of the ordinary shares of the
      Company, whichever is higher;
e)    the ESOS shall be in force for a period of five (5) years and extendable to ten (10) years from the effective date;
      and
f)    the options granted may be exercised in full immediately or in parts within the duration of the scheme.

The exercise period for the above options expired on 9th November 2008.
No options have been granted by the Company to any parties during the financial year to take up unissued shares of the
Company. As of the end of the financial year, there were no unissued shares of the Company under options.


DIRECTORS
The directors who served since the date of the last report are:
Teh Hon Seng
Cheung Shuen Lung
Wei Xin
Dr Ewe Hong Tat
See Chiu Yeung
Sabrina Tang Siew Wan (appointed on 19.06.2008)
Lim Chong Keang @ Lim Chong Khiang (appointed on 26.08.2008)
Lok Choon Hong (resigned on 19.06.2008)
Hua Chia Yee (resigned on 19.06.2008)


DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive any
benefit (other than the benefit included in the aggregate amount of emoluments received or due and receivable by
directors as disclosed in the financial statements or the fixed salary of full-time employees of the Company) by reason
of a contract made by the Company or a related corporation with the director or with a firm of which the director is a
member, or with a company in which the director has a substantial financial interest.
Neither during nor at the end of the financial year, was the Company a party to any arrangements whose object is to
enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any
other body corporate.




DIRECTORS’ INTERESTS
                                                                                                                             23
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Director’s Report]


     The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Reg-
     ister of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act 1965, are as follows:



                                                              Number of ordinary shares of RM0.10 each
                                                     Balance as of                                     Balance as of
                                                      01.01.2008       Additions       Disposals         31.12.2008
     Shares in the Company
     Registered in name of directors
     Teh Hon Seng                                       7,950,000         525,000                ----       8,475,000
     See Chiu Yeung                                       257,500              ----              ----         257,500
     Deemed interest
     Teh Hon Seng                                           1,000               ----             ----           1,000


     In addition to the above, the directors are also deemed to have an interest in the shares of the Company to the extent
     of options granted to them pursuant to the ESOS as follows:-

                                                        Number of options over ordinary shares of RM0.10 each
                                                     Balance as of                      Exercised/       Balance as of
                                                      01.01.2008        Granted          Lapsed            31.12.2008


     Teh Hon Seng                                       5,625,000               ----    (5,625,000)                 ----
     Cheung Shuen Lung                                  1,400,000               ----    (1,400,000)                 ----
     See Chiu Yeung                                     1,400,000               ----    (1,400,000)                 ----

     By virtue of the director’s interests in the shares of the Company, the directors are deemed to have an interest in the
     shares of all the subsidiaries to the extent the directors have their interests.
     None of the other directors in office at the end of the financial year had any interest in the shares of the Company or
     its related corporation during the financial year.



     STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
     a)    Before the income statements and balance sheets of the Group and of the Company were made out, the direc-
           tors took reasonable steps:
           (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
                 allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and
                 that adequate allowance had been made for doubtful debts; and
           (ii) to ensure that any current assets which were unlikely to realise in the ordinary course of business their val-
                 ues as shown in the financial statements of the Group and of the Company have been written down to an
                 amount which they might be expected to realise.
     b)    At the date of this report, the directors are not aware of any circumstances:
           (i) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts
                 in the financial statements of the Group and of the Company inadequate to any substantial extent; or
           (ii) which would render the values attributable to current assets in the financial statements of the Group and of
                 the Company misleading; or
           (iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
                 Group and of the Company misleading or inappropriate.

     c)    At the date of this report, there does not exist:
           (i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial
                year which secures the liability of any other person; or
           (ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial
                year.




24
                                                               PUC FOUNDER (MSC) BERHAD     | 2008 ANNUAL REPORT
                                         FINANCIAL STATEMENTS [Director’s Report]


d)    No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to
      become enforceable within the period of twelve months after the end of the financial year which in the opinion of
      the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations
      as and when they fall due.



OTHER STATUTORY INFORMATION
a)    At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
      or the financial statements of the Group and of the Company which would render any amount stated in the
      financial statements misleading.
b)    In the opinion of the directors,
      (i)   the results of the operations of the Group and of the Company during the financial year were not substan-
            tially affected by any item, transaction or event of a material and unusual nature; and
      (ii) there has not arisen in the interval between the end of the financial year and the date of this report any item,
           transaction or event of a material and unusual nature likely to affect substantially the results of the operations
           of the Group and of the Company for the financial year in which this report is made.



AUDITORS
The auditors, Messrs. Tan Chin Huat & Co., have indicated their willingness to continue in office.


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




TEH HON SENG                                                                     SEE CHIU YEUNG
Director                                                                         Director

Kuala Lumpur
Date : 02 March 2009




                                                                                                                                25
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Statement By Directors/Statutory Declaration]


     STATEMENT BY DIRECTORS
     We, Teh Hon Seng and See Chiu Yeung, being two of the directors of PUC Founder (MSC) Berhad, do hereby state that,
     in the opinion of the directors, the accompanying balance sheets and statements of income, cash flows and changes
     in equity, together with the notes thereto, are drawn up in accordance with the provisions of the Companies Act 1965
     and the applicable MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities so as to
     give a true and fair view of the state of affairs of the Group and of the Company as of 31st December 2008 and of the
     results and cash flows of the Group and of the Company for the year ended on that date.


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




     TEH HON SENG                                                                  SEE CHIU YEUNG
     Director                                                                      Director

     Kuala Lumpur
     Date : 02 March 2009




     STATUTORY DECLARATION
     I, Law Gin Yi, being the Officer primarily responsible for the financial management of PUC Founder (MSC) Berhad, do
     solemnly and sincerely declare that the accompanying balance sheets and statements of income, cash flows and
     changes in equity, together with the notes thereto, are to the best of my knowledge and belief, correct and I make
     this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory
     Declarations Act 1960.




                                                                                  LAW GIN YI

     Subscribed and solemnly declared by the
     abovenamed LAW GIN YI,
     at Petaling Jaya, on 02 March 2009



     Before me :




26
                                                                                 PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                                  FINANCIAL STATEMENTS [Report Of The Auditors]


TAN CHIN HUAT & CO.                                                                           No.232 2nd Floor Block A Damansara Intan
AF 1395                                                                                             1 Jalan SS20/27 47400 Petaling Jaya
Chartered Accountants (M)                                                                                              Tel: 03-7726 8992
                                                                                                                      Fax: 03-7728 4992


                      INDEPENDENT AUDITORS’ REOPRT TO THE MEMBERS OF
                                       PUC FOUNDER (MSC) BERHAD (Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of PUC Founder (MSC) Berhad, which comprise the balance sheets as of 31st December 2008
of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group
and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out
on pages 28 to 53.

Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with
the applicable MASB Approved Accounting Standards for Entities Other Than Private Entities and the Companies Act 1965 in Malaysia.
This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation
of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the ap-
propriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with the applicable MASB Approved Accounting
Standards for Entities Other Than Private Entities and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial
position of the Group and of the Company as of 31st December 2008 and of their financial performance and cash flows for the year then
ended.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:
a)    In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiar-
      ies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
b)    We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as audi-
      tors, as mentioned in Note 12 to the Financial Statements, being financial statements that have been included in the consolidated
      financial statements.
c)    We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial state-
      ments are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group
      and we have received satisfactory information and explainations required by us for these purposes.
d)    The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any
      adverse comment made under Section 174(3) of the Act.

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



                        TAN CHIN HUAT & CO.                                           TAN CHIN HUAT
                              Firm No. AF 1395                                     Approval No: 2037/06/10(J)
                          Chartered Accountants (M)                                       Proprietor
Petaling Jaya
Date: 02 March 2009
                                                                                                                                                27
     PUC FOUNDER (MSC) BERHAD    | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Income Statements]


     INCOME STATEMENTS FOR THE YEAR ENDED
     31ST DECEMBER 2008

                                                             GROUP                           COMPANY
                                                     2008             2007            2008          2007
                                           Note       RM               RM              RM            RM

     Revenue                                      20,259,880      15,248,656       1,204,748          699,197

     Other operating income                   6     1,265,375        1,021,461     2,506,794        1,691,005
     Changes in inventories of
            finished goods                          1,353,602       (169,676)         (5,957)          29,240
     Purchases and other direct costs             (12,309,460 )   (8,985,727)       (375,476)        (165,815 )
     Staff costs                                   (3,875,313 )   (2,897,389)        (99,966)        (706,465 )
     Depreciation of property,
            plant and equipment             11       (338,826 )      (270,338)      (189,936)        (178,321 )
     Directors’ remuneration                 7       (780,858 )      (725,944)      (499,248)        (437,760 )
     Amortisation of
            development costs               14       (381,124 )     (426,631)        (108,457)       (297,374 )
     Amortisation of intangible assets      15       (104,728 )      (49,646)              ----            ----
     Other operating expenses                6     (3,902,964 )   (2,412,559)      (1,553,480)       (743,136 )


     Profit/(Loss) from operations                 1,185,584          332,207        897,022         (109,429 )

     Finance costs                            8            ----        (64,204)              ----     (64,204 )
     Share of results in associate                    (12,170 )             ----             ----          ----


     Profit/(Loss) before tax                       1,173,414         268,003        897,022         (173,633 )

     Income tax expense                       9      (330,284 )        (13,585)     (180,926)         (23,113 )


     Net profit/(loss) for the financial year        843,130          254,418        698,096         (196,746 )

     Attributable to:
     Equity holders of the Company                   843,130          254,418        698,096         (196,746 )


     Earnings per share attributable to
         equity holders of the Company:
     Basic                                  10       1.12 sen         0.34 sen

     Diluted                                10           N/A          0.34 sen




     The above income statements are to be read in conjunction with the accompanying notes to the financial
     statements.

28
                                                               PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                          FINANCIAL STATEMENTS [Balance Sheets]


BALANCE SHEETS AS OF 31ST DECEMBER 2008

                                                          GROUP                           COMPANY
                                                 2008               2007           2008          2007
                                       Note       RM                 RM             RM            RM

ASSETS
Property, plant and equipment            11      2,469,174         2,228,233      2,150,422      2,017,266
Investments in subsidiaries              12             ----              ----    1,086,611        436,611
Investments in associate                 13         10,180                ----           ----           ----
Development costs                        14        642,622           862,178        107,433        215,890
Intangible assets                        15        890,185           943,275             ----           ----
Deferred tax assets                      16        146,349           373,865             ----      153,000

CURRENT ASSETS
Inventories                              17      3,478,640         2,112,946        33,141         39,098
Trade receivables                        18      2,648,075         2,569,001       384,403        730,033
Other receivables and prepaid
      expenses                           18      1,202,260           932,400         85,711         52,788
Amount owing by subsidiaries             12             ----              ----    7,012,174      6,185,671
Fixed deposits with licensed banks                 600,737           504,332        200,737        504,332
Cash and bank balances                           1,616,649         2,089,255        344,306        278,663

                                                 9,546,361         8,207,934      8,060,472      7,790,585

Less:
CURRENT LIABILITIES
Trade payables                           19      1,809,372         1,493,635       459,428        526,307
Other payables
   and accrued expenses                  19      2,144,166         2,322,637       233,058        126,231
Tax liabilities                                     99,829            48,951        28,065             ----

                                                 4,053,367         3,865,223       720,551        652,538

NET CURRENT ASSETS                               5,492,994         4,342,711      7,339,321      7,138,047

NON CURRENT LIABILITIES
Deferred tax liabilities                 16       (125,399 )        (149,344 )     (122,321 )    (149,344 )

                                                 9,526,105         8,600,918     10,532,066      9,811,470

Financed by:
Issued capital                           20      7,602,900         7,550,400      7,602,900      7,550,400
Reserves                                 21      1,923,205         1,050,518      2,959,166      2,261,070


SHAREHOLDERS’ EQUITY                             9,526,105         8,600,918     10,562,066      9,811,470



The above balance sheets are to be read in conjunction with the accompanying notes to the financial state-
ments.




                                                                                                                 29
     PUC FOUNDER (MSC) BERHAD       | 2008 ANNUAL REPORT
      FINANCIAL STATEMENTS [Statements Of Changes In Equity]


     STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED
     31ST DECEMBER 2008

                                                                             Attributable to Equity Holders of the Company

                                                                                  Exchange           Share
                                         Issued           Accumulated            fluctuation        option           Share
                                         capital              loss                 reserve          reserve         premium            Total
                                           RM                  RM                    RM               RM               RM               RM

     Group
     As of 1st January 2007              7,550,400        (5,085,122 )              35,526          276,933        5,577,081          8,354,818
     Net profit for the financial
           year                                    ----      254,418                      ----            ----               ----      254,418
     Exchange differences arising
           from consolidation of
           foreign subsidiaries                    ----               ----          (8,318 )              ----               ----        (8,318 )

     As of 31st December 2007            7,550,400        (4,830,704 )              27,208          276,933        5,577,081          8,600,918

     Issuance of shares during the
           financial year                   52,500                    ----                ----            ----               ----       52,500
     Net profit for the financial
            year                                   ----      843,130                      ----            ----               ----      843,130
     Exchange differences arising
            from consolidation
            of foreign subsidiaries                ----           ----              29,557               ----                 ----      29,557
     Share options lapsed                          ----      276,933                    -----      (276,933 )                ----

     As of 31st December 2008            7,602,900        (3,710,641 )              56,765                ----     5,577,081          9,526,105



                                                                                   Share
                                                            Issued              Accumulated         option           Share
                                                            capital                 loss            reserve         premium            Total
                                                              RM                     RM               RM               RM               RM


     Company
     As of 1st January 2007                                 7,550,400           (3,396,198 )        276,933        5,577,081         10,008,216
     Net loss for the financial
           year                                                       ---         (196,746 )              ----               ----    ( 196,746 )

     As of 31st December 2007                              7,550,400            (3,592,944 )        276,933        5,577,081          9,811,470
     Issuance of shares during
           financial year                                     52,500                      ----            ----               ----       52,500

     Net Profit for the financial
           year                                                        ---        698,096                ----                ----      698,096
     Share options lapsed                                             ----        276,933          (276,933 )                ----            ---

     As of 31st December 2008                              7,602,900            (2,617,915 )              ----     5,577,081         10,562,066




     The above statements of changes in equity are to be read in conjunction with the accompanying notes to the financial state-
     ments.

30
                                                             PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                                FINANCIAL STATEMENTS [Cash Flow Statements]


CASH FLOW STATEMENTS FOR THE YEAR ENDED 31ST
DECEMBER 2008
                                                         GROUP                           COMPANY
                                               2008               2007            2008          2007
                                                RM                 RM              RM            RM
CASH FLOWS FROM
 OPERATING ACTIVITIES
Profit/(Loss) before tax                     1,173,414            268,003        879,022         (173,633 )
Adjustments for:
  Interest income                               (8,846 )          (47,571)        (5,215 )       (27,405 )
  Allowance for doubtful debts                   9,570             25,257             ----            ----
  Amortisation of development costs            381,124            426,631        108,457         297,374
  Allowance for intangible assets              104,728             49,646             ----             ----
  Bad debts written off                        303,832             41,727             ----            ----
  Depreciation of property, plant
       and equipment                           338,826            270,338        189,936         178,321
  Exceptional item:
       Impairment loss                              ----               ----      150,000         250,000
  Finance costs                                     ----           64,204             ----        64,204
   Share of results in associate                12,170                 ----           ----            ----
  Inventories written off                      358,302            398,923          9,387              ----
  Loss on disposal of property,
       plant and equipment                      36,669                   ----     36,669                ----
  Property, plant and equipment
       written off                              20,044                187         20,044               187
  Write-down of inventories                    426,385             55,095             ----              ----

Operating profit before
 working capital changes                     3,156,218          1,552,440       1,388,300        589,048
Changes in working capital:
  Increase in inventories                    (2,150,381 )        (275,109 )       (3,430 )       (29,240)
  (Increase)/Decrease in trade receivables     (392,476 )         429,767        345,630         116,614
  (Increase)/Decrease in other receivables
      and prepaid expenses                    (204,730 )         (386,611 )       (59,807 )        38,077
  (Increase)/Decrease in amount
      owing by subsidiaries                           ----               ----   (826,503 )         25,312
  Increase in amount
      owing by associate                       (20,115 )                 ----            ----           ----
  Increase in development costs               (126,188 )                 ----            ----           ----
  Increase/(Decrease) in
      trade payables                           315,737               (403 )       (66,879 )        61,316
  Increase/(Decrease) in other
      payables and accrued expenses           (178,471 )          644,981        106,827          (28,971)

Cash Generated From Operations                 399,594           1,965,065       884,138         772,156
  Interest received                              8,846              47,571         5,215          27,405
  Interest paid                               (140,965 )           (64,204 )          ----       (64,204 )

Net Cash From
 Operating Activities                          267,475           1,948,432       889,353         735,357




                                                                                                               31
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Cash Flow Statements]




                                                              GROUP                             COMPANY
                                                    2008               2007              2008          2007
                                                     RM                 RM                RM            RM
     CASH FLOWS FROM
       INVESTING ACTIVITIES
     Purchase of property, plant
        and equipment                               (693,100 )         (264,599 )      (443,055 )        (54,721 )
     Proceeds from disposal of property,
        plant and equipment                           63,250                  ----       63,250               ----
     Purchase of additional
        investments in subsidiary                         ----               ----      (800,000 )       (199,998 )
     Purchase of investments in associate             (2,235 )               ----            ----             ----
     Purchase of intangible assets                        ----         (992,921 )            ----             ----

     Net Cash Used In
       Investing Activities                         (632,085 )    (1,257,520 )       (1,179,805)       (254,719)

     CASH FLOWS FROM
       FINANCING ACTIVITIES
     Decrease in fixed deposits pledged
        for banking facilities granted                    ----        1,024,000              ----      1,024,000
     Proceeds from issuance of shares                 52,500                 ----        52,500               ----
     Repayment of term loan                               ----         (762,483 )            ----       (762,483 )
     Repayment of hire purchase
        obligations                                        ----          (8,878 )               ----      (8,878 )

     Net Cash From Financing Activities               52,500           252,639           52,500         252,639



     NET INCREASE/(DECREASE) IN CASH
       AND CASH EQUIVALENTS                         (312,110 )         943,551         (237,952 )       733,277

     EFFECT OF EXCHANGE RATE
       CHANGES                                       (64,091 )           45,441                 ----          ----
     CASH AND CASH EQUIVALENTS
       BROUGHT FORWARD                             2,593,587          1,604,595         782,995           49,718

     CASH AND CASH EQUIVALENTS
       CARRIED FORWARD (Note 23)                   2,217,386          2,593,587         545,043         782,995




     The above cash flow statements are to read in conjunction with the accompanying notes to the financial
     statements.



32
                                                            PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
             FINANCIAL STATEMENTS [Notes To The Financial Statements]


1) GENERAL INFORMATION
   The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the
   MESDAQ Market of Bursa Malaysia Securities Berhad.
   The Company is principally engaged in the following two broad strategic business units:-
   (i)    Biometrics Division
          Devices and applications incorporating fingerprint verification technology for commercial usage in areas
          such as user verification for security control, physical access control and time attendance tracking.
   (ii)   Electronics Publishing System and Management Information System Division
          Information technology solutions provider of electronic publishing system and management information
          system to the Chinese language publishing industry.
   The principal activities of the subsidiaries are as disclosed in Note 12 to the Financial Statements. There have been
   no significant changes in the nature of the principal activities of the Company and its subsidiaries during the
   financial year.
   The registered office of the Company is located at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala
   Lumpur.
   The principal place of business of the Company is located at No: 6, 8 & 10, Jalan BK 3/2, Bandar Kinrara, 47100
   Puchong, Selangor Darul Ehsan.
   The financial statements are presented in Ringgit Malaysia (RM).
   The financial statements of the Company have been authorised by the Board of Directors for issuance on 2nd
   March 2009.


2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
   The financial statements of the Group and of the Company have been prepared in accordance with the provisions
   of the Companies Act 1965 and the applicable MASB Approved Accounting Standards in Malaysia for Entities
   Other Than Private Entities.

   Adoption of New and Revised Financial Reporting Standards
   At the beginning of the current financial year, the Group and the Company adopted the following new/revised
   Financial Reporting Standards (FRSs) issued by MASB that are relevant to their operations and effective for finan-
   cial periods beginning on or after 1st July 2007:
   FRS 107              Cash Flow Statements
   FRS 112              Income Taxes
   FRS 118              Revenue
   FRS 121              Amendment to FRS 121: The Effects of Changes in Foreign Exchange Rates - Net Investment
                        in a Foreign Operation
   FRS 134              Interim Financial Reporting
   FRS 137              Provisions, Contingent Liabilities and Contingent Assets
   The adoption of the abovementioned FRSs did not result in substantial changes to the Group’s and the Compa-
   ny’s accounting policies and did not have any material financial effect on the financial statements of the Group
   and of the Company for the current and prior financial years.

   Accounting Standards and IC Interpretations Issued but Not Effective
   As of the date of issuing the financial statements, the following new/revised FRSs and IC Interpretations have been
   issued but not yet effective:
   FRS 4                  Insurance Contracts **
   FRS 7                  Financial Instruments: Disclosures **
   FRS 8                  Operating Segments *
   FRS 139                Financial Instruments: Recognition and Measurement **
   IC Interpretation 9    Reassessment of Embedded Derivatives **
   IC Interpretation 10   Interim Financial Reporting and Impairment **
   * Effective for accounting periods beginning on or after 1st July 2009.
   ** Effective for accounting periods beginning on or after 1st January 2010.

   The Group and the Company have not early adopted these new/revised standards and IC Interpretations. The
   Group and the Company have applied the transitional provisions in the respective following standards which
   exempts entities from disclosing the possible impact arising from the initial application of the standards on the
   financial statements of the Group and of the Company:

                                                                                                                           33
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Notes To The Financial Statements]


          FRS 7           Financial Instruments: Disclosures
          FRS 139         Financial Instruments: Recognition and Measurement
          The preparation of financial statements in conformity with the Financial Reporting Standards requires the use of
          certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities,
          and the reported results during the reported period. It also requires directors to exercise their judgement in the
          process of applying the Group’s accounting policies. Although these estimates and judgement are based on the
          director’s best knowledge of current events and actions, actual results may differ.
          The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
          significant to the financial statements, are disclosed in Note 5 to the Financial Statements.


     3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
          The operations of the Group are subject to a variety of financial risks, including market risk, credit risk, foreign
          currency exchange risk, liquidity risk, interest rate risk and cash flow risk. The Group has formulated a financial
          risk management framework whose principal objective is to minimise the Group’s exposure to risks and/or costs
          associated with the financing, investing and operating activities of the Group.
          Market risk
          The Group has in place policies to manage its competitive risks from its competitors in providing better alterna-
          tives in terms of better services. The Group regularly takes part in various research to develop better alternatives
          or attractive packages.
          Credit risk
          The Group is exposed to credit risk mainly from trade receivables. The Group extends credit to its customers
          based upon careful evaluation of the customer’s financial condition and credit history. The Group also ensures
          sales and services are provided to large number of customers so as to limit high credit concentration in a cus-
          tomer or customers from a particular market.
          Foreign currency exchange risk
          The Group’s main foreign currency exchange exposure is in Hong Kong Dollars and United States Dollars (USD).
          The Group’s foreign currency exchange exposure arise mainly from trade transactions in foreign currencies. Man-
          agement believes that the Group’s foreign currency exchange risk is minimal and accordingly, no hedging is
          performed.
          Liquidity risk
          The Group practises prudent liquidity risk management to minimise the mismatch of financial assets and liabili-
          ties and to maintain sufficient funds for contingent funding requirement of working capital.
          Interest rate risk
          The Group enters into various interest rate risk management transactions for the purpose of reducing net interest
          costs and to achieve interest rates within predictable, desired ranges.
          Cash flow risk
          The Group reviews its cash flow position regularly to manage its exposure to fluctuations in future cash flows
          associated with its monetary financial instruments.
          Fair values
          It is not practical to estimate the fair values of the amount owing by subsidiaries due principally to a lack of repay-
          ment terms entered into by the parties involved and without incurring excessive costs. However, the carrying
          amounts recorded at the balance sheet date are anticipated not to be significantly different from the values that
          would eventually be realisable.
          The fair values of the other financial assets and financial liabilities reported in the balance sheets as of 31st
          December 2008 approximate the carrying amounts of these assets and liabilities because of the immediate or
          short-term maturity of these financial instruments.


     4) SIGNIFICANT ACCOUNTING POLICIES
          a) BASIS OF ACCOUNTING
             The financial statements of the Group and of the Company have been prepared under the historical cost
             convention.

          b) REVENUE RECOGNITION
             Revenue is recognised when it is probable that the economic benefits associated with the transaction will
             flow to the enterprise and the amount of the revenue can be measured reliably.


34
                                                                 PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
            FINANCIAL STATEMENTS [Notes To The Financial Statements]


      Revenue from goods sold is recognised upon delivery of goods and when the risks and rewards of ownership
      have passed. Revenue represents the invoiced value of goods sold and services rendered net of discounts and
      returns.

     c) FOREIGN CURRENCY CONVERSION
      i. Functional and Presentation Currency
         The individual financial statements of each entity in the Group are measured using the primary economic
         environment in which the entity operates (“the functional currency”). The consolidated financial statements
         are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.
      ii. Foreign Currency Transactions
         Foreign currency transactions are translated into the functional currency using the exchange rates prevail-
         ing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
         such transactions and from the translation at year end exchange rates of monetary assets and liabilities
         denominated in foreign currencies are recognised in the income statements.
      iii. Foreign Operations
         For the purpose of consolidation, the financial statements of the foreign incorporated subsidiaries have
         been translated into Ringgit Malaysia as follows:
         Assets and liabilities           - at closing rate
         Issued capital                   - at historical rate
         Revenue and expenses             - at average rate
         All resulting exchange differences are taken to the exchange fluctuation reserve within equity.

d) INCOME TAX
      Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected
      amount of income tax payable in respect of the taxable profit for the year and is measured using the tax rates
      that have been enacted at the balance sheet date.
      Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date be-
      tween the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle,
      deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recog-
      nised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is
      probable that taxable profit will be available against which the deductible temporary differences, unused tax
      losses and unused tax credits can be utilised.
      Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or
      the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet
      date. Deferred tax is recognised in the income statements, except when it arises from a transaction which is
      recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.

e)    GOVERNMENT GRANTS
      Government grants are recognised at fair value when there is reasonable assurance that the Group will comply
      with the conditions attaching to them and the grants will be received.
      Government grants relating to expenditure on property, plant and equipment are credited to the income
      statements on the straight-line basis over the expected lives of the related property, plant and equipment.
      Government grants used for financial support, assistance or to reimburse costs incurred by the Group are
      recognised in the income statements of the period in which they become receivable.

f)    PROPERTY, PLANT AND EQUIPMENT
      All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the
      asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
      economic benefits associated with the item will flow to the Group and the cost of the item can be meas-
      ured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
      charged to the income statements during the financial year in which they are incurred.
      Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation
      and any accumulated impairment losses.




                                                                                                                            35
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Notes To The Financial Statements]


             Freehold land is not depreciated as it has an infinite life. Depreciation of other assets is calculated to write
             off the cost of the assets on a straight-line basis over the expected useful lives of the assets concerned. The
             annual depreciation rates used are as follows:-
                                                                                  %
             Freehold building                                                    2
             Computers                                                           10
             Office equipment                                                    10
             Furniture and fittings                                              10
             Moulds, plant and machinery                                     10 - 33 1/3
             Signboard                                                           10
             Renovation                                                          10
             Motor vehicles                                                      10
             At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indica-
             tions exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A
             write down is made if the carrying amount exceeds the recoverable amount. See accounting policy Note 4 l)
             on impairment of assets.
             Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net
             disposal proceed and the carrying amount of the asset, and is recognised in the income statements.

        g) BASIS OF CONSOLIDATION
             i. Subsidiaries
                 The consolidated financial statements include the financial statements of the Company and all its sub-
                 sidiaries made up to the end of the financial year. Subsidiaries are those entities in which the Group has
                 power to exercise control over the financial and operating policies so as to obtain benefits from their
                 activities.
                 Subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of
                 accounting, subsidiaries are fully consolidated from the date on which control is transferred to the Group
                 and are no longer consolidated from the date that control ceases. The cost of acquisition is measured as
                 fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of
                 exchange, plus costs directly attributable to the acquisition.
                 Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
                 are measured initially at their fair values at the acquisition dates, irrespective of the extent of any minority
                 interest. Any excess of the cost of acquisition over the Group’s interest in the net fair value of the identifi-
                 able assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group’s interest in
                 the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition
                 is recognised immediately in the income statements.
                 All significant intercompany balances and transactions have been eliminated on consolidation.

             ii. Associates
                 Associates are those entities in which the Group exercises significant influence but not control, through
                 participation in the financial and operating policy decisions of the entities.
                 Investments in associates are accounted for in the consolidated financial statements using the equity
                 method of accounting. Under the equity method of accounting, the investment in associate is carried
                 in the consolidated balance sheet at cost adjusted for post-acquisition changes in the Group’s share of
                 net assets of the associates. The Group’s share of the net profit or loss of the associates is recognised in
                 the consolidated income statement. Where there has been a change recognised directly in the equity of
                 the associate, the Group recognises its share of such changes. In applying the equity method, unrealised
                 gains or losses on transactions between the Group and the associates are eliminated to the extent of the
                 Group’s interest in the associates. After application of the equity method, the Group determines whether
                 it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in
                 the associates. The associates are equity accounted for from the date the Group obtains significant influ-
                 ence until the date the Group ceases to have significant influence over the associate.


        h) INVESTMENTS
             Investments in subsidiaries and associates are shown at cost. Where there is an indication of impairment
             exists, the carrying amount of the investment is assessed and written down immediately to its recoverable
             amount. The policy for recognition and measurement of impairment losses is in accordance with Note 4 l).



36
                                                               PUC FOUNDER (MSC) BERHAD    | 2008 ANNUAL REPORT
               FINANCIAL STATEMENTS [Notes To The Financial Statements]


i)   INTANGIBLE ASSETS
     i. Research And Development Costs
        All research costs are recognised in the income statements as incurred.
        Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group
        can demonstrate the technical feasibility of completing the intangible asset so that it will be available for
        use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future
        economic benefits, the availability of resources to complete the project and the ability to measure reliably the
        expenditure during the development. Product development expenditures which do not meet these criteria
        are expensed when incurred.
        Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are
        amortised using the straight-line basis over the commercial lives of the underlying products not exceeding five
        years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and
        method are also reviewed at least at each balance sheet date.
     ii. Other Intangible Assets
        Intangible assets, which comprises licence rights, is measured on initial recognition at cost. The useful lives of
        the intangible assets are assessed to be finite or indefinite. Intangible assets with indefinite useful lives are not
        amortised but are tested for impairment annually or more frequently if the events or changes in circumstances
        indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The
        useful lives of intangible assets with indefinite lives are also reviewed annually to determine whether the useful
        life assessment continues to be supportable.

j)   INVENTORIES
     Inventories are valued at the lower of cost (determined principally on the first-in, first-out method) and net realis-
     able value. Cost consists of purchases and other direct costs incurred in bringing the inventories to its present
     condition and location.
     Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion
     and selling expenses.

k)   FINANCIAL INSTRUMENTS
     Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual
     provisions of the instrument.
     Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
     agreement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are
     reported as expense or income. Distributions to holders of financial instruments classified as equity are charged
     directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and
     intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
     i. Receivables
        Trade and other receivables are stated at nominal values as reduced by the appropriate allowance for esti-
        mated irrecoverable amounts. Allowance for doubtful debts is made based on estimates of possible losses
        which may arise from non-collection of certain receivable accounts.
     ii. Payables
        Payables are stated at cost which is the fair value of the consideration to be paid in the future for services
        received.
     iii. Equity Instruments
        Ordinary shares are classified as equity. Dividends are recognised in equity in the year in which they are de-
        clared.

l)   IMPAIRMENT OF ASSETS
     At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is
     any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying
     values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and
     value in use, which is measured by reference to discounted future cash flows.
     An impairment loss is recognised as an expense in the income statements immediately, unless the asset is carried
     at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of
     any unutilised previously recognised revaluation surplus for the same asset.



                                                                                                                                37
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Notes To The Financial Statements]


       m) PROVISIONS
             Provisions are recognised when the Group has a present legal and constructive obligation as a result of past
             events, when it is probable that an outflow of resources embodying economic benefits will be required to
             settle the obligation, and when a reliable estimate can be made of the amount of the obligation.

        n) EMPLOYEE BENEFITS
             i. Short term benefits
                Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in
                which associated services are rendered by employees of the Group. Short term accumulating compen-
                sated absences such as paid annual leave are recognised when services are rendered by employees that
                increase their entitlement to future compensated absences, and short term non-accumulating compen-
                sated absences such as sick leave are recognised when the absences occur.
             ii. Defined contributions plans
                As required by law, companies in Malaysia make contributions to the state pension scheme, Employees
                Provident Fund (“EPF”). Such contributions are recognised as an expense in the income statements as
                incurred.
             iii. Share-based compensation
                The Group operates an equity-settled, share-based compensation plan. The fair value of the employee
                services received in exchange for the grant of the options is recognised as an expense in the income
                statements with a corresponding increase in the share option reserve over the vesting period. The total
                amount to be recognised over the vesting period is determined by reference to the fair value of the op-
                tions granted on the date of the grant. Non-market vesting conditions are included in assumptions about
                the number of options that are expected to become exercisable on the vesting date. At each balance
                sheet date, the Group revises its estimates of the number of options that are expected to become exercis-
                able on the vesting date and recognises the impact of the revision of the estimates in the income state-
                ments, with a corresponding adjustment to the share option reserve over the remaining vesting period.
                The equity amount is recognised in the share option reserve until the option is exercised, upon which it
                will be transferred to share premium, or until the option expires, upon which it will be transferred directly
                to retained earnings.

       o) CASH FLOW STATEMENTS
             The Group and the Company adopt the indirect method in the preparation of the cash flow statements.
             Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the
             date of acquisition and are readily convertible to cash with insignificant risks of changes in value.


       p) SEGMENT REPORTING
             Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business seg-
             ments provide products or services that are subject to risks and returns that are different from those of other
             business segments. Geographical segments provide products or services within a particular economic en-
             vironment that is subject to risks and returns that are different from those components operating in other
             economic environments.
             Segment revenue, expense, assets and segment liabilities are those amounts resulting from the operating
             activities of a segment that are directly attributable to the segment and the relevant portion that can be
             allocated on a reasonable basis to the segment. Segment revenue, expense, assets and segment liabilities
             are determined before intragroup balances and intragroup transactions are eliminated as part of the con-
             solidation process, except to the extent that such intragroup balances and transactions are between group
             enterprises within a single segment.


     5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
        ESTIMATION UNCERTAINTY
           Critical judgements in applying the Group’s and the Company’s accounting
           policies
           In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 4
           above, management is of the opinion that there are no instances of application of judgement which are ex-
           pected to have significant effect on the amounts recognised in the financial statements.



38
                                                             PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
            FINANCIAL STATEMENTS [Notes To The Financial Statements]


   Key sources of estimation uncertainty
   Management believes that there are no key assumptions made concerning the future, and other key sources of
   estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to
   the carrying amounts of assets and liabilities within the next financial year (apart from those involving estimations
   which are dealt with below).

   i. Impairment of development costs
     The Group determines whether development costs are impaired at least on an annual basis. This requires an
     estimation of the value-in-use of the cash-generating units (“CGU”) to which development costs are allocated.
     Estimating a value-in-use amount requires management to make an estimate of the expected future cash
     flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those
     cash flows. The carrying amount of the development costs of the Group and of the Company as of 31st Decem-
     ber 2008 were RM642,622 (2007: RM862,178) and RM107,433 (2007: RM215,890) respectively.

   ii. Allowance for bad and doubtful debts
     The policy of allowance for bad and doubtful debts of the Group is based on the evaluation of the ability to col-
     lect and ageing analysis of accounts and on management’s judgement. A considerable amount of judgement
     is required in assessing the ultimate realisation of these receivables, including the current creditworthiness and
     the past collection history of each customer. If the financial conditions of the customers of the Group were to
     deteriorate, resulting in an impairment of their ability to make payments, allowance for bad and doubtful debts
     may be required.

  iii. Property, plant and equipment and depreciation
     The Group determines the estimated useful lives and related depreciation charges for the Group’s property,
     plant and equipment. The estimate is based on the historical experience of the actual useful lives of property,
     plant and equipment of similar nature and function. Management will revise the depreciation charge where
     useful lives are different to those previously estimated, or it will write off or write down technically obsolete or
     non strategic assets that have been abandoned or sold.

   iv. Deferred tax assets
     Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit
     will be available against which the losses can be utilised. Significant management judgement is required to
     determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of
     future taxable profits together with future tax planning strategies.


6) OTHER OPERATING EXPENSES/(INCOME)
  Included in other operating expenses/(income) are the following charges/(credits):

                                                         GROUP                            COMPANY
                                                 2008            2007              2008          2007
                                                  RM              RM                RM            RM
  Allowance for doubtful debts                     9,570           25,257              ----              ----
  Auditors’ remuneration                          37,135           35,589          10,000            10,000
  Bad debts written off                          303,832           41,727              ----              ----
  Exceptional item:
     Impairment loss                                  ----             ----       150,000           250,000
  Inventories written off                        358,302          398,923           9,387                ----
  Loss on foreign exchange                            ----         64,585              ----          50,652
  Write-down of inventories                      426,385           55,095              ----              ----
  Loss on disposal of property, plant and
      equipment                                   36,669               ----        36,669                ----
   Property, plant and equipment written off      20,044              187          20,044               187
   Operating lease rental charge on
      equipment                                    2,150            3,100           2,150             3,100
   Operating lease rental charge on office
      premises                                   243,329          138,599              ----              ----
   Interest income from fixed deposits            (8,846 )        (47,571 )        (5,215 )         (27,405 )
   Gain on foreign exchange                     (403,509 )        (11,129 )       (85,779 )              ----
   Management fee receivable                      (1,600 )         (9,600 )    (2,403,600 )      (1,651,600 )
   Operating lease income on equipment          (212,022 )       (126,309 )            ----              ----
   Rental income                                  (1,200 )        (12,000 )       (12,000 )         (12,000 )

                                                                                                                            39
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      FINANCIAL STATEMENTS [Notes To The Financial Statements]


     7) DIRECTORS’ REMUNERATION
                                                                 GROUP                        COMPANY
                                                      2008               2007          2008          2007
                                                       RM                 RM            RM            RM
           Executive directors:
            Other emoluments                          690,858            677,944      409,248          389,760
           Non-executive directors:
            Fees                                       90,000              48,000      90,000           48,000

                                                      780,858            725,944      499,248          437,760

          The number of directors of the Company whose total remuneration during the financial year fell within the fol-
          lowing bands is analysed below:
                                                                                            Number of directors
                                                                                          2008            2007
          Executive directors:
          RM200,001-300,000                                                                   ----            1
          RM300,001-RM400,000                                                                  2              1
          Non-executive directors
          RM1-100,000                                                                          7              3



     8) FINANCE COSTS
                                                                 GROUP                        COMPANY
                                                      22008              2007          2008          2007
                                                       RM                 RM            RM            RM
           Interest on:
             hire purchase                                    ----          3,925             ----       3,925
             term loan                                        ----         60,279             ----      60,279

                                                              ----         64,204             ----      64,204



     9) INCOME TAX EXPENSE/(CREDIT)
                                                                 GROUP                        COMPANY
                                                      2008               2007          2008          2007
                                                       RM                 RM            RM            RM
          Estimated income tax payable
            current year                              126,713              26,769      54,949           26,769
            overprovision in prior year                    ----            (4,024 )        ----             ----

                                                      126,713              22,745      54,949           26,769
          Deferred tax assets
           current year (Note 16)                     227,516             153,761     153,000          157,972
           underprovision in prior year                    ----          (312,265 )        ----       (310,972 )
           (Note 16)
                                                      227,516            (158,504 )   153,000         (153,000 )
          Deferred tax liabilities
           current year (Note 16)                      (23,945 )         (104,190 )   (27,023 )       (104,190 )
           underprovision in prior year                     ----          253,534          ----        253,534
            (Note 16)
                                                       (23,945 )         149,344      (27,023 )        149,344

                                                      330,284              13,585     180,926           23,113




40
                                                              PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
            FINANCIAL STATEMENTS [Notes To The Financial Statements]


   A numerical reconciliation between the income tax expense and the product of accounting profit/(loss) multi-
   plied by the applicable statutory income tax rate, is as follows:

                                                          GROUP                           COMPANY
                                                 2008              2007            2008          2007
                                                  RM                RM              RM            RM

   Accounting profit/(loss)                    1,173,414           268,003        879,022          (173,633 )
   Tax at the applicable statutory
     income tax rate of 27%/26%/20%              279,544             60,111       228,546           (46,881 )
   Tax effects in respect of:
     expenses that are not deductible for
        tax purposes                             141,050             89,803        99,647          127,432
     unused tax losses and unabsorbed
        capital allowances not recognised         55,703            105,018               ----           ----
     effect on temporary difference               19,731           (204,354 )             ----           ----
     underprovision in prior year                     ----          (62,755 )             ----      (57,438 )
     utilisation of previous year’s
        unrecognised tax losses                   (17,355 )               ----            ----           ----
     net deferred tax assets not
        recognised in prior year                (147,267 )               ----    (147,267 )              ----
     difference tax rates in other countries      (1,122 )           25,762            ----              ----

   Income tax expense                            330,284             13,585       180,926            23,113



10) EARNINGS PER ORDINARY SHARE
   Basic earnings per share
   The basic earnings per share of the Group is calculated based on the profit attributable to equity holders of the
   Company for the year of RM843,130 (2007: RM254,418) and on the weighted average number of ordinary shares
   of RM0.10 each in issue during the financial year of 75,568,549 (2007: 75,504,000).
   Diluted earnings per share
   The diluted earnings per share of the Group in 2008 has not been presented as there are no dilutive potential
   ordinary shares during the financial year.
   For the purpose of calculating diluted earnings per share in 2007, the profit for the year and the weighted aver-
   age number of ordinary shares in issue have been adjusted for the dilutive effect of potential ordinary shares i.e.
   share options granted to employees.

                                                                                                 2007
                                                                                                  RM
   Profit attributable to equity holders of the Company                                            254,418

   Weighted average number of ordinary shares in issue                                           75,504,000
   Effect of dilution:
     Share options                                                                                 401,308
   Adjusted weighted average number of ordinary shares
     in issue and issuable                                                                       75,905,308



   Diluted earnings per share (sen)                                                                     0.34




                                                                                                                         41
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Notes To The Financial Statements]


                                11) PROPERTY, PLANT AND EQUIPMENT

                                    GROUP                             Freehold       Freehold                      Office
                                                                        land         building       Computers    equipment
                                                                         RM             RM             RM           RM
                                    2008
                                    Cost
                                    As of 01.01.2008                   155,665       1,241,098       574,739         290,164
                                    Additions                                -               -        40,313          14,862

                                    Disposals                                    -              -          -               -
                                    Written off                                  -              -    (82,292 )        (2,630 )
                                    Exchange differences                         -              -          -               -

                                    As of 31.12.2008                   155,665       1,241,098       532,760         302,396


                                    Accumulated depreciation
                                    As of 01.01.2008                        -         105,036        337,145         187,797
                                    Charge for the year                     -          24,714         50,354          19,796
                                    Disposals                               -               -              -               -
                                    Written off                             -               -        (62,940 )        (1,937 )
                                    Exchange differences                    -               -              -               -

                                    As of 31.12.2008                        -         129,750        324,559         205,656

                                    Net book value as of 31.12.2008   155,665        1,111,348       208,201          96,740




                                    GROUP                             Freehold       Freehold                      Office
                                                                        land         building       Computers    equipment
                                                                         RM             RM             RM           RM
                                    2007
                                    Cost
                                    As of 01.01.2007                   155,665       1,241,098       533,665         288,122
                                    Additions                               ---             ---       41,074           2,397
                                    Written off                             ---             ---           ---           (355 )
                                    Exchange differences                    ---             ---           ---             ---


                                    As of 31.12.2007                   155,665       1,241,098       574,739         290,164


                                    Accumulated depreciation
                                    As of 1.1.2007                           ---        80,321       285,208         165,043
                                    Charge for the year                      ---        24,715        51,937          22,922
                                    Written off                              ---            ---           ---           (168 )
                                    Exchange differences                     ---            ---           ---             ---


                                    As of 31.12.2007                         ---       105,036       337,145         187,797

                                    Net book value as of 31.12.2007    155,665       1,136,062       237,594         102,367




42
                                                         PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                        FINANCIAL STATEMENTS [Notes To The Financial Statements]



             Moulds,
Furniture     plant
   and         and                                    Motor
 fittings   machinery      Signboard   Renovation    vehicles         Total
    RM         RM             RM          RM           RM              RM




311,743      220,786          8,210     377,868      278,000         3,458,273
 30,807      221,138              -      62,830      323,150           693,100

       -            -              -           -    (278,000 )       (278,000 )
       -            -              -           -           -          (84,922 )
   7,288            -              -           -           -            7,288

349,838      441,924          8,210     440,698      323,150         3,795,739



170,672      101,732          3,256     164,553      159,849        1,230,040
 72,431       88,881            821      40,330       41,499         338,826
      -             -             -           -     (178,082 )       (178,082 )
      -            -              -           -            -           (64,877 )
    658             -             -           -             -             658

243,761      190,613          4,077     204,883        23,266        1,326,565

106,077      251,311          4,133     235,815      299,884         2,469,174




             Moulds,                                  Motor
Furniture     plant                                  vehicles
   and         and                                  under hire-
 fittings   machinery      Signboard   Renovation    purchase         Total
    RM         RM             RM          RM           RM              RM




171,891      158,668          8,210     366,618      278,000         3,201,937
147,760       62,118             ---     11,250           ---          264,599
     ---          ---            ---         ---          ---             (355 )
 (7,908 )         ---            ---         ---          ---           (7,908 )


311,743      220,786          8,210     377,868      278,000         3,458,273



112,543       61,098          2,435     126,813      132,049          965,510
 63,769       40,634            821      37,740       27,800          270,338
     ---          ---            ---         ---          ---           (168)
 (5,640 )         ---            ---         ---          ---          (5,640 )


170,672      101,732          3,256     164,553      159,849         1,230,040

141,071      119,054          4,954     213,315      118,151         2,228,233




                                                                                                           43
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
     FINANCIAL STATEMENTS [Notes To The Financial Statements]




                                    COMPANY                           Freehold     Freehold                    Office
                                                                        land       building     Computers    equipment
                                                                         RM           RM           RM           RM
                                    2008
                                    Cost
                                    As of 1.1.2008                     155,665     1,241,098     574,739         287,539
                                    Additions                               ---           ---     40,313          14,826
                                    Disposals                               ---           ---         ---             ---
                                    Written Off                             ---           ---    (82,292 )        (2,630 )


                                    As of 31.12.2008                   155,665     1,241,098     532,760         299,771


                                    Accumulated depreciation
                                    As of 1.1.2008                           ---     105,036     337,145         186,965
                                    Charge for the year                      ---      24,714      50,354          19,411
                                    Disposals                                ---          ---         ---             ---
                                    Written Off                              ---          ---    (62,940 )        (1,937 )


                                    As of 31.12.2008                         ---     129,750     324,559         204,439

                                    Net book value as of 31.12.2008    155,665     1,111,348     208,201          95,332




                                    COMPANY                           Freehold     Freehold                    Office
                                                                        land       building     Computers    equipment
                                                                         RM           RM           RM           RM
                                    2007
                                    Cost
                                    As of 1.1.2007                     155,665     1,241,098     533,665         285,497
                                    Additions                               ---           ---     41,074           2,397
                                    Written Off                             ---           ---         ---           (355 )


                                    As of 31.12.2007                   155,665     1,241,098     574,739         287,539


                                    Accumulated depreciation
                                    As of 1.1.2007                           ---      80,321     285,208         164,594
                                    Charge for the year                      ---      24,715      51,937          22,539
                                    Written Off                              ---          ---         ---           (168 )


                                    As of 31.12.2007                         ---     105,036     337,145         186,965

                                    Net book value as of 31.12.2007    155,665     1,136,062     237,594         100,574




44
                                                         PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
                        FINANCIAL STATEMENTS [Notes To The Financial Statements]




             Moulds,
Furniture     plant
   and         and                                    Motor
 fittings   machinery      Signboard   Renovation    vehicles         Total
    RM         RM             RM          RM           RM              RM




 53,015       74,698          8,210     377,868      278,000         3,050,832
  1,900           ---            ---     62,830      323,150           443,055
     ---          ---            ---         ---    (278,000 )        (278,000 )
     ---          ---            ---         ---          ---          (84,922 )


 54,915       74,698          8,210     440,698      323,150         3,130,965



 33,062       43,700          3,256     164,553      159,849         1,033,566
  5,339        7,468            821      40,330       41,499           189,936
     ---          ---            ---         ---    (178,082 )        (178,082 )
     ---          ---            ---         ---          ---          (64,877 )


 38,401       51,168          4,077     204,883       23,266          980,543

 16,514       23,530          4,133     235,815      299,884         2,150,422



             Moulds,                                  Motor
Furniture     plant                                  vehicles
   and         and                                  under hire-
 fittings   machinery      Signboard   Renovation    purchase         Total
    RM         RM             RM          RM           RM              RM




 53,015       74,698          8,210     366,618      278,000         2,966,466
     ---          ---            ---     11,250            ---          54,721
     ---          ---            ---         ---          ----            (355 )


 53,015       74,698          8,210     366,618      278,000         3,050,832



 27,761       36,232          2,435     126,813      132,049          855,413
  5,301        7,468            821      37,740       27,800          178,321
     ---          ---            ---         ---          ----           (168 )


 33,062       43,700          3,256     164,553      159,849         1,033,566

 19,953       30,998          4,954     213,315      118,151         2,017,266




                                                                                                           45
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      FINANCIAL STATEMENTS [Notes To The Financial Statements]


     12) INVESTMENTS IN SUBSIDIARIES                                                                 COMPANY
                                                                                            2008                 2007
                                                                                             RM                   RM
          Unquoted shares - At cost                                                     1,486,611               686,611
          Less: Impairment loss                                                          (400,000 )            (250,000 )
          Net                                                                           1,086,611              436,611

          The amount owing by subsidiaries comprise principally trade transactions, advances given and payments on
          behalf which are unsecured, interest-free and bear no fixed terms of repayments.
          The details of the subsidiaries are as follows:
                                                     Country of    Equity Interest
          Name of Company                          Incorporation    2008 2007        Principal Activities
                                                                     %        %
          Fingertec Worldwide Sdn. Bhd.            Malaysia          100 100         Marketing of fingerprint
                                                                                     verification products
          PUC Founder Technology Sdn. Bhd.         Malaysia          100 100         Engaged in information technology
                                                                                     solutions provider of electronic publish-
                                                                                     ing system and management informa-
                                                                                     tion system to the Chinese language
                                                                                     publishing industry
          Founder GlobalTech Limited               Hong Kong         100 100         Engaged in the business of providing
                                                                                     publishing services and trading of dig-
                                                                                     ital camera and software
          Founder GlobalTech (Shenzhen)            The People’s      100 100         Engaged in software system design and
             Limited # *                           Republic                          consultancy services. Ceased its
                                                   of China                          business operations during the year.
          Fingertec Worldwide Limited*             Hong Kong         100 100         Dormant
          # Held indirectly through Founder GlobalTech Limited
          * Audited by firms of auditors other than auditors of the Company


     13) INVESTMENTS IN ASSOCIATE                                                                      GROUP
                                                                                            2008                 2007
                                                                                             RM                   RM
          Unquoted shares - At cost                                                          2,235                   ---
          Amount owing by associate                                                         20,115                   ---
          Less: Share of post-acquisition loss                                             (12,170 )                 ---

                                                                                            10,180                   ---

          The associate of the Group is iLanguage Limited, a company incorporated in Hong Kong, in which the Group
          effectively holds 50% equity interest via its subsidairy, Founder Global Tech Limited. The associate is principally
          involved in the provision of online services.
          The summarised financial information of the associate are as follows:
                                                                                                       GROUP
                                                                                            2008                 2007
                                                                                             RM                   RM
          Assets                                                                            27,450                   ---
          Liabilities                                                                      (48,654 )                 ---
          Net loss                                                                         (25,973 )                 ---

          The amount owing by associate arose mainly from expenses paid on behalf and interest-free advances given
          with no fixed terms of repayment.




46
                                                             PUC FOUNDER (MSC) BERHAD    | 2008 ANNUAL REPORT
            FINANCIAL STATEMENTS [Notes To The Financial Statements]


14) DEVELOPMENT COSTS
                                                           GROUP                             COMPANY
                                                  2008               2007             2008               2007
                                                   RM                 RM               RM                 RM

   Balance as of beginning of the year         2,898,317         2,953,583      2,122,772            2,122,772
   Additions during the year                     126,188                ---            ---                  ---
   Exchange differences                           35,380           (55,266 )                   ---          ---

                                               3,059,885         2,898,317      2,122,772            2,122,772
   Less :
   Accumulated amortisation
      At beginning of the year                (2,036,139 )      (1,609,508 )    (1,906,882 )         (1,609,508 )
      Charge for the year                       (381,124 )        (426,631 )      (108,457 )           (297,374 )

      At end of the year                      (2,417,263 )      (2,036,139 )    (2,015,339 )         (1,906,882 )

   Net                                           642,622           862,178        107,433              215,890

   The above development costs consist of expenditure incurred in the design and development of biometrics
   using fingerprint verification technology, electronic publishing system and management information system as
   well as e-book projects and Founder Fit Software.


15) INTANGIBLE ASSETS                                                                          GROUP
                                                                                      2008               2007
                                                                                       RM                 RM
   Balance as of beginning of the year                                            992,921                   ---
   Additions during the year                                                           ---             992,921
   Exchange differences                                                            51,638                   ---

                                                                                1,044,559              992,921
   Less:
   Accumulated amortisation
      At beginning of the year                                                    (49,646 )                  ---
      Charge for the year                                                        (104,728 )             (49,646 )

      At end of the year                                                         (154,374 )             (49,646 )

   Net                                                                            890,185              943,275

   This represents license right to exclusively distribute a software in Hong Kong.


16) DEFERRED TAXATION
                                                         GROUP                               COMPANY
                                                  2008               2007             2008               2007
                                                   RM                 RM               RM                 RM
   Deferred tax assets
   Balance as of beginning of the year       373,865                215,361       153,000                    ---
   Recognised in income statements (Note 9) (227,516 )             (153,761 )    (153,000 )            (157,972 )
   Underprovision in prior year (Note 9)          ---               312,265            ---              310,972

   Balance as of end of the year                 146,349           373,865               ---           153,000

   Deferred tax liabilities
   Balance as of beginning of the year           149,344                 ---      149,344                    ---
   Recognised in income statements (Note 9)      (23,945 )         (104,190 )     (27,023 )            (104,190 )
   Underprovision in prior year (Note 9)                 ---        253,534            ---              253,534

   Balance as of end of the year                 125,399           149,344        122,321              149,344




                                                                                                                    47
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      FINANCIAL STATEMENTS [Notes To The Financial Statements]


          The recognised deferred tax assets and liabilities are made up of the following:

                                                                  GROUP                          COMPANY
                                                         2008              2007          2008               2007
                                                          RM                RM            RM                 RM
          Deferred tax assets
          Tax effects of:
          Temporary differences between tax capital
            allowances and book depreciation of
            property, plant and equipment                ---                  177               ---             ---
          Unutilised tax losses                     143,961               373,688               ---        153,000
          Unrealised foreign exchange differences     2,388                    ---              ---             ---

                                                    146,349               373,865               ---        153,000
          Deferred tax liabilities
          Tax effects of:
          Temporary differences between tax capital
            allowances and book depreciation of
            property, plant and equipment           108,916               149,344      105,660             149,344
          Unrealised foreign exchange differences    16,483                    ---      16,661                  ---

                                                       125,399            149,344      122,321             149,344


     17) INVENTORIES                                            GROUP                           COMPANY
                                                       2008               2007           2008          2007
          At cost:                                      RM                 RM             RM            RM
          Finished goods                              3,166,548         2,001,204        33,141             39,098
          At net realisable value:
          Finished goods                               312,092            111,742               ---             ---

                                                      3,478,640         2,112,946        33,141             39,098



     18) TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES
                                                                  GROUP                          COMPANY
                                                         2008              2007          2008               2007
                                                          RM                RM            RM                 RM


          Trade Receivables                           2,697,980         2,607,243      384,403             730,033
          Less: Allowance for doubtful debts            (49,905 )         (38,242 )         ---                 ---

          Net                                         2,648,075         2,569,001      384,403             730,033


          Trade receivables comprise amounts receivable for sale of goods and services provided.
          The Group and the Company’s normal trade credit terms range from 30 to 60 days. Other credit terms are as-
          sessed and approved on a case by case basis.
          Other receivables and prepaid expenses consist of:

                                                                  GROUP                          COMPANY
                                                         2008              2007          2008               2007
                                                          RM                RM            RM                 RM

          Other receivables                            124,805            533,467            ---            21,300
          Refundable deposits                          862,578            336,773           168              4,604
          Prepaid expenses                             120,090             28,369        85,543                 ---
          Staff advances                                 2,773              6,907            ---                ---
          Tax recoverable                               92,014             26,884            ---            26,884

                                                      1,202,260           932,400        85,711             52,788




48
                                                             PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
            FINANCIAL STATEMENTS [Notes To The Financial Statements]


   The currency profile of trade and other receivables is as follows:

                                                             GROUP                          COMPANY
                                                   2008                2007          2008              2007
                                                    RM                  RM            RM                RM

   Ringgit Malaysia                               628,624        1,580,962          373,661           329,234
   Hong Kong Dollar                             1,275,636        1,226,620               ---               ---
   US Dollar                                      843,361          189,834           10,742            15,940
   Renminbi                                        15,416           41,501               ---               ---
   Singapore Dollar                                    ---              ---              ---          406,159
   New Taiwan Dollar                                9,843           63,551               ---               ---

                                                2,772,880        3,102,468          384,403           751,333


19) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES
   Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to the
   Group and the Company for trade purchases range from 30 to 60 days and certain credit terms granted by the
   suppliers were based on negotiation.
   Other payables and accrued expenses consist of:
                                                             GROUP                          COMPANY
                                                   2008                2007          2008              2007
                                                    RM                  RM            RM                RM

   Other payables                               1,620,583        1,875,021           59,959            29,292
   Accrued expenses                               206,832          129,843          173,099            96,939
   Deferred revenue                               316,751          317,773               ---               ---

                                                2,144,166        2,322,637          233,058           126,231

   Deferred revenue represents maintenance service income and is recognised on a straight-line basis over the
   agreement terms.
   The currency profile of trade and other payables is as follows:

                                                             GROUP                          COMPANY
                                                   2008                2007          2008              2007
                                                    RM                  RM            RM                RM

   Ringgit Malaysia                               245,813          516,403          110,433            86,094
   Hong Kong Dollar                             2,189,292        1,932,292          303,693           303,693
   US Dollar                                      865,204          638,279            1,561                ---
   Renminbi                                       110,124          241,634          103,700           165,812
   Euro Dollar                                     19,522               ---              ---               ---
   New Taiwan Dollar                                   ---          40,048               ---               ---

                                                3,429,955        3,368,656          519,387           555,599

20) SHARE CAPITAL
                                                    GROUP AND COMPANY
                                            No. of ordinary shares of RM0.10 each    GROUP AND COMPANY
                                                    2008              2007           2008          2007
                                                     RM                RM             RM            RM
   Authorised:
   Balance as of beginning and
       end of the year                        100,000,000        100,000,000        10,000,000    10,000,000
   Issued and fully paid:
   Balance as of beginning of the year          75,504,000           75,504,000      7,550,400        7,550,400
   Issued during the year                          525,000                   ---       525,000               ---

   Balance as of end of the year              76,029,000             75,504,000      7,602,900        7,550,400


   During the financial year, the Company increased its issued and paid-up share capital from RM7,550,400 to
   RM7,602,900 by the issuance of 525,000 new ordinary shares of RM0.10 each for cash pursuant to the Employees’
   Share Option Scheme of the Company at an exercise price of RM0.10 per ordinary share.


                                                                                                                   49
     PUC FOUNDER (MSC) BERHAD     | 2008 ANNUAL REPORT
      FINANCIAL STATEMENTS [Notes To The Financial Statements]


          The new ordinary shares rank pari passu with the then existing ordinary shares of the Company.
          The Company’s ESOS was approved by the shareholders at the Extraordinary General Meeting held on 16th Octo-
          ber 2003 which became effective on 10th November 2003 (“effective date”).

          The salient features of the ESOS are as follows:
          a)    the total number of new shares which may be made available under the scheme shall not exceed thirty per
                cent (30%) of the total issued and paid-up share capital of the Company at any point of time during the exist-
                ence of the ESOS;
          b) eligible persons are confirmed employees including executive directors of the Group and has been in the
             employment of the Group for a period of at least twelve (12) months of continuous service on or prior to the
             date of allocation. However, where the employee/executive director is serving under an employment con-
             tract, the contract should be for a duration of at least two (2) years and in addition, a foreign employee of the
             Company, serving on a full-time capacity and whose contribution is vital to the Company may be considered
             for participation, provided that no foreign employee who is serving under an employment contract may be
             considered for participation unless the employment contract is for a duration of at least two (2) years or such
             other period as may be required by the relevant authority;
          c)    not more than fifty per cent (50%) of the shares under the ESOS will be granted to the directors and senior
                management. In addition, not more than twenty five per cent (25%) of the shares under the ESOS will be
                granted to any individual staff. No option shall be granted for less than 1,000 shares;
          d) the option price may be at a discount of not more than ten per cent (10%) from the five (5) days weighted
             average market price of the underlying shares preceding the date of offer or at par value of the ordinary
             shares of the Company, whichever is higher;
          e)    the ESOS shall be in force for a period of five (5) years and extendable to ten (10) years from the effective date;
                and
          f)    the options granted may be exercised in full immediately or in parts within the duration of the scheme.

          The exercise period for the above options expired on 9th November 2008.



     21) RESERVES
                                                                      GROUP                          COMPANY
                                                             2008             2007            2008              2007
                                                              RM               RM              RM                RM
          Non-distributable reserve:
            Share Premium                                5,577,081        5,577,081       5,577,081         5,577,081
            Share option                                        ---         276,933              ---          276,933
            Exchange fluctuation                            56,765           27,208              ---               ---

                                                         5,633,846        5,881,222        5,577,081         5,854,014
               Accumulated loss                         (3,710,641 )     (4,830,704 )     (2,617,915 )      (3,592,944 )

                                                         1,923,205        1,050,518       2,959,166         2,261,070



          Share premium reserve
          This reserve comprises the premium paid on subscription of shares in the Company over and above the par value
          of the shares net of share issue expenses.

          Share option reserve
          The share option reserve represents the equity-settled share options granted to employees. This reserve is made
          up of the cumulative value of services received from employees recorded on grant of share options.

          Exchange fluctuation reserve
          The exchange fluctuation reserve is used to record exchange differences arising from the translation of the fi-
          nancial statements of foreign operations whose functional currencies are different from that of the Group’s pres-
          entation currency. It is also used to record the exchange differences arising from monetary items which form
          part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the
          functional currency of the reporting entity or the foreign operation.



50
                                                                 PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
               FINANCIAL STATEMENTS [Notes To The Financial Statements]


22) SIGNIFICANT RELATED PARTY DISCLOSURES
 a) In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other
    significant related party transactions. The related party transactions listed below were carried out on terms and
    conditions obtainable in transactions with unrelated parties unless otherwise stated.

    Significant related party transactions are as follows:-
                                                                GROUP                        COMPANY
                                                     2008                2007         2008              2007
                                                      RM                  RM           RM                RM
    Office rental payable to Founder
      (Hong Kong) Ltd, the holding
      company of its corporate shareholder           94,637             81,370              ---             ---
    Management fee payable to
      Founder (Hong Kong) Ltd, the holding
      company of its corporate shareholder           38,446             33,056              ---             ---
    Sales to Founder GlobalTech Limited,
      a subsidiary                                        ---               ---     248,756            145,162
    Purchases from Founder GlobalTech
      Limited, a subsidiary                               ---               ---             ---         11,326
    Management fee receivable from Fingertec
      Worldwide Sdn. Bhd., a subsidiary                   ---               ---    2,390,000       1,630,000
    Management fee receivable from PUC
      Founder Technology Sdn. Bhd.,
      a subsidiary                                        ---               ---       12,000            12,000


 b) Compensation of key management personnel
    The remuneration of directors and other members of key management during the year was as follows-

                                                                GROUP                        COMPANY
                                                     2008                2007         2008              2007
                                                      RM                  RM           RM                RM

       Short-term employee benefits               1,160,830        1,157,915        580,415            577,500
       EPF expenses                                  50,144           85,192         25,072             60,120

       Total                                      1,210,974        1,243,107        605,487            637,620


    Key management personnel are those persons having authority and responsibility for planning, directing and
    controlling the activities of the Group and of the Company, directly or indirectly. The key management personnel
    of the Group and the Company includes the directors, Head of Sales and the Head of Finance.
    Included in the total key management personnel are:

                                                                GROUP                        COMPANY
                                                     2008                2007         2008              2007
                                                      RM                  RM           RM                RM


    Directors’ remuneration (Note 7)               780,858           725,944        499,248            437,760



23) CASH AND CASH EQUIVALENTS
                                                                GROUP                        COMPANY
                                                     2008                2007         2008              2007
                                                      RM                  RM           RM                RM


    Cash and cash equivalents carried forward consist of:

      Fixed deposits with licensed banks            600,737          504,332        200,737            504,332
      Cash and bank balances                      1,616,649        2,089,255        344,306            278,663

                                                  2,217,386        2,593,587        545,043            782,995

                                                                                                                        51
     PUC FOUNDER (MSC) BERHAD   | 2008 ANNUAL REPORT
      FINANCIAL STATEMENTS [Notes To The Financial Statements]


          The currency profile of fixed deposits, cash and bank balances is as follows:
                                                                   GROUP                           COMPANY
                                                          2008             2007             2008              2007
                                                           RM               RM               RM                RM
          Ringgit Malaysia                            2,072,989       1,011,083            545,043           782,995
          Hong Kong Dollar                               95,074       1,371,026                 ---               ---
          Renminbi                                       46,770         184,484                 ---               ---
          US Dollar                                       2,553          26,994                 ---               ---

                                                      2,217,386       2,593,587            545,043           782,995

          The average interest rates per annum of deposits, cash and bank balances that was effective as of the balance
          sheet date were as follows:
                                                                                              GROUP &COMPANY
                                                                                            2008          2007
                                                                                             RM            RM
                                                                                             %             %
          Fixed deposits with licensed banks                                                 2.4               2.5
          Deposits of the Group and of the Company have an average maturity period of 30 days. Bank balances are de-
          posits held at call with banks.



     24) SEGMENTAL INFORMATION
          Primary reporting-                                          Electronics Publishing
          Business segments                                          System and Management
                                            Biometrics Division    Information System Division         Eliminations             Consolidated
          REVENUE                           2008         2007         2008          2007             2008        2007       2008          2007
                                             RM           RM           RM            RM               RM          RM         RM            RM

          External sales                10,776,192    6,472,618      9,483,688    8,790,320            ---   (14,282) 20,259,880       15,248,656
          RESULTS
          Profit/(Loss) from operations    834,747         5,684       350,837     326,523                               1,185,584       332,207
          Finance costs                                                                                                         ---      (64,204)
          Share of results in associate                                                                                    (12,170 )           ---

          Profit before tax                                                                                              1,173,414       268,003
          Income tax expense                                                                                              (330,284 )     (13,585)

          Profit after tax                                                                                                843,130        254,418

          OTHER INFORMATION
          Segment assets                 6,249,971    3,552,305      7,454,900    9,063,180                             13,704,871     12,615,485
          Segment liabilities              212,205      109,868      3,966,561    3,904,699                              4,178,766      4,014,567
          Capital expenditure              221,138       62,118        598,150    1,195,402                                819,288      1,257,520
          Depreciation                      81,658       33,409        257,168      236,929                                338,826        270,338
          Non-cash expenses                 79,942      287,435      1,560,712      710,031                               1,640,654       997,466
             other than depreciation

          The following is an analysis of the Group’s sales by geographical market:-

                                                                       2008         2007
                                                                        RM           RM
          Malaysia                                                   3,099,784     2,836,881
          Hong Kong                                                  9,232,702     8,216,345
          Indonesia                                                  1,151,754       961,647
          Other countries                                            6,775,640     3,233,783

                                                                    20,259,880    15,248,656




52
                                                                              PUC FOUNDER (MSC) BERHAD      | 2008 ANNUAL REPORT
                                   FINANCIAL STATEMENTS [Notes To The Financial Statements]



25) RENTAL COMMITMENT
  As of 31st December 2008, the Group has the following commitments in respect of rental of office premises:

                                                                 Future premium
                                                                 Lease payments
                                                                      GROUP
                                                               2008         2007
                                                                RM           RM

  Within 1 year                                                48,187         27,411
  2-5 years                                                        ---            ---

                                                               48,187         27,411




                                                                     ANALYSIS OF SHAREHOLDINGS

             AS AT 30 APRIL 2009
             Authorised Capital                                RM10,000,000.00
             Issued and fully paid-up Capital                  RM7,602,900.00
             Class of Shares                                   Ordinary shares of RM0.10 each fully paid up
             Voting Rights                                     One vote per RM0.10 share



             ANALYSIS BY SIZE OF HOLDING
                                                                                   No of                  No of
             Size of Holdings                                                   Shareholders             Shares      %
             Less than 100 shares                                                          8               338        0.00
             100 to 1,000 shares                                                         396           322,800        0.42
             1,001 to 10,000 shares                                                      556         2,732,700        3.59
             10,001 to 100,000 shares                                                    242         7,863,900       10.34
             100,001 to less than 5% of issued shares                                     73        28,088,662       36.94
             5% and above of issued shares                                                 3        37,020,600       48.69

             Total                                                                      1,278       76,029,000      100.00



             DIRECTORS’ SHAREHOLDING
                                                                                         No of Shares Held
             Name                                                    Direct             %                Indirect    %


             Teh Hon Seng                                        8,475,000              11.15            *1,000          ---
             See Chiu Yeung                                        257,500               0.34                ---         ---



             *Deemed interest by virtue of spouse’s interest




                                                                                                                                   53
     PUC FOUNDER (MSC) BERHAD            | 2008 ANNUAL REPORT
      ANALYSIS OF SHAREHOLDINGS




     SUBSTANTIAL SHAREHOLDERS
                                                                                                    No of Shares Held
     Name                                                                    Direct               %                    Indirect    %
     PUC Founder (M) Sdn Bhd                     26,950,000                                     35.45                     ---         ---
     Teh Hon Seng                                 8,475,000                                     11.15               (1)1,000          ---
     Evergreen Assets Holding Sdn Bhd             4,095,600                                      5.39                     ---         ---
     Datin Tea Guat Ngo                             640,400                                      0.84          (2)4,095,600         5.39
     Dato’ Low Kok Chuan                            500,000                                      0.66          (3)4,736,000         6.23
     Founder (Hong Kong) Limited                         ---                                       ---        (4)26,950,000        35.45
     Founder Holdings Limited                            ---                                       ---        (5)26,950,000        35.45
     Peking University Founder Group Corporation         ---                                       ---        (6)26,950,000        35.45

     (1)   Deemed interested by virtue of spouse’s interest
     (2)   Deemed interested by virtue of having substantial interest in Evergreen Assets Holding Sdn Bhd.
     (3)   Deemed interested by virtue of spouse’s interest and substantial interest in Evergreen Assets Holding Sdn Bhd.
     (4)   Deemed interested by virtue of being the holding company of PUC Founder (M) Sdn Bhd
     (5)   Deemed interested by virtue of being the holding company of Founder (Hong Kong) Limited
     (6)   Deemed interested by virtue of having substantial interest in Founder Holdings Limited.



     THIRTY LARGEST SHAREHOLDERS                                                                                   NO OF SHARES
     NAME                                                                                                         OF RM0.10 EACH   %
     1.    PUC FOUNDER (M) SDN BHD                                                                                 26,950,000      35.45
     2.    TEH HON SENG                                                                                             5,975,000       7.86
     3.    EVERGREEN ASSETS HOLDING SDN BHD                                                                         4,095,600       5.39
     4.    KENANGA NOMINEES (TEMPATAN) SDN BHD
           - PLEDGED SECURITIES ACCOUNT FOR CHIA KEE SIONG                                                          3,250,000          4.27
     5.    TEH HON SENG                                                                                             2,500,000          3.29
     6.    YAP SHING @ YAP SUE KIM                                                                                  2,390,900          3.14
     7.    WONG II LE                                                                                               1,931,000          2.54
     8.    HOW TECK SANG                                                                                            1,000,000          1.32
     9.    LEE FOOK LIN                                                                                               925,000          1.22
     10.   WON CHEE KHEONG                                                                                            787,500          1.04
     11.   ECML NOMINEES (TEMPATAN) SDN BHD
           - PLEDGED SECURITIES ACCOUNT FOR WONG KHAI SHIANG                                                          696,200          0.92
     12.   TEA GUAT NGO                                                                                               640,400          0.84
     12.   TEH OOI HEONG                                                                                              595,300          0.78
     14    TING HUA LEONG                                                                                             589,000          0.77
     15.   MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD
           - PLEDGED SECURITIES ACCOUNT FOR YONG KIM FAR (REM 148-MARGIN)                                             500,000          0.66
     16.   DATO’ LOW KOK CHUAN                                                                                        500,000          0.66
     17.   LAI YUEN KUAN                                                                                              473,000          0.62
     18.   STRILLION TI-GOLD SDN BHD                                                                                  440,000          0.58
     19.   TIONG TOH SIONG HOLDINGS SDN BHD                                                                           429,000          0.56
     20.   CHUA NYAK SIEW                                                                                             421,000          0.55
     21.   LOO LEONG FATT                                                                                             408,000          0.54
     22.   WONG KHAI SHIANG                                                                                           382,800          0.50
     23.   HENG LAI KOUI                                                                                              376,000          0.49
     24.   FONG LAI CHOO                                                                                              333,700          0.44
     25.   HDM NOMINEES (TEMPATAN) SDN BHD
           - PLEDGED SECURITIES ACCOUNT FOR SIM KEAN HEE (M06)                                                        317,700          0.42
     26.   AMSEC SECURITIES (TEMPATAN) SDN BHD
           - PLEDGED SECURITIES ACCOUNT FOR THAM AH NGAN                                                              312,300          0.41
     27.   NG KWAI YAN                                                                                                291,100          0.38
     28.   LOH SAI ENG                                                                                                266,400          0.35
     29.   SEE CHIU YEUNG                                                                                             257,500          0.34
     30.   KEE NGENG HONG                                                                                             250,000          0.33

           Total                                                                                                  58,284,400       76.66

54
                                                    PUC FOUNDER (MSC) BERHAD
                                                                   (Company No: 451734-A)
                                                                  (Incorporated in Malaysia)

                                                                                                                No. of ordinary shares held
FORM OF PROXY
(Before completing this form please refer to the notes below)



I/We                                                                                  I.C. No/Co.No/CDS No.:
                                                              [ Full name in block letters ]


of
                                                    [ Full address ]
                being a member/members of PUC FOUNDER (MSC) BERHAD hereby appoint the following person(s):-


      Name of proxy, NRIC No. & Address                                                  No. of shares to be represented by proxy

1.

2.

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Eleventh Annual General
Meeting of the Company to be held at Perdana 1, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on
Thursday 18 June 2009 at 10.30 a.m. My/our proxy is to vote as indicated below:-


                                                                           FIRST PROXY                                         SECOND PROXY
                                                                   FOR                     AGAINST                       FOR                    AGAINST

     Ordinary Resolution 1

     Ordinary Resolution 2

     Ordinary Resolution 3

     Ordinary Resolution 4

     Ordinary Resolution 5

     Ordinary Resolution 6


(Please indicate with a “3” or “7” in the space provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy
will vote or abstain from voting at his/her discretion. The first named proxy shall be entitled to vote on a show of hands).




Dated this_________________________day of_________2009                                                _________________________________________
                                                                                                                                 Signature/Common Seal
Notes    1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy/proxies to attend and vote in his/her stead. A proxy need not be a
            member of the Company.
         2. A member may appoint up to two (2) proxies to attend at the same meeting. Where a member appoints more than one (1) proxy, the appointment
            shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.
         3. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney duly authorised.
         4. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala
            Lumpur, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.
                                       Stamp




          Company Secretary
PUC FOUNDER (MSC) BERHAD
    Level 15-2, Faber Imperial Court
           Jalan Sultan Ismail
             P.O.Box 12337
          50774 Kuala Lumpur

				
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