DIRECTORS' REPORT

Company No :

477002W

ANUAR M INTERIORS SDN. BHD.

(Incorporated in Malaysia)

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2010The Directors have pleasure in submitting their report together with the audited financial statements of the Company for the year ended 31 December 2010.PRINCIPAL ACTIVITY

The Company is principally engaged in a business of interior designer. There has been no significant change in the nature of this activity during the year.

FINANCIAL RESULTS

RM

Loss after taxation (167,987)

Accumulated losses brought forward(397,144)

Accumulated losses carried forward(565,131)

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year.

DIVIDENDS

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

ISSUE OF SHARES

There was no movement in shares of the Company during the financial year.

DIRECTORS OF THE COMPANY

Directors who served since the date of last report until the date of this report made are: -

ANUAR BIN MOHAMED

MOHAMAD ZAINAL ASRI BIN NAWI

AZRAI @ AZRY BIN MUHAMMED GHALIP

The holdings in the ordinary shares of the Company of those who were directors at year end are as follows:-

Number of ordinary shares of RM1 eachAs at01.01.10BoughtSoldAs at31.12.10

ANUAR BIN MOHAMED225,001--225,001

MOHAMAD ZAINAL ASRI BIN NAWI25,001--25,001

DIRECTORS BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements) by reason of a contract made by the Company or a related company 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.

There were no arrangements during and at the end of the financial year, which had the object of enabling directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate.

STATUTORY INFORMATION ON FINANCIAL STATEMENTSBefore the financial statements of the Company were made out, the Directors took reasonable steps:

i) to ascertain that action had been taken in relation to the writing-off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance has been made for doubtful debts.

ii) to ensure that any current assets which were unlikely to realise their book value in the ordinary course of business were written down to an amount which they might be expected so to realise.At the date of this report, the Directors are not aware of any circumstances which would render:-

i) the amount written off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Company inadequate to any substantial extent;

ii) the values attributed to current assets in the financial statements of the Company misleading;

iii) the adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate.

No contingent liability or other liability of the Company has become enforceable or are 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 affect the ability of the Company to meet its obligations as and when they fall due.

At the date of this report:

i) there are no charges on the assets of the Company that have arisen since the end of the financial year to secure the liabilities of any other person, and

ii) there are no contingent liabilities in respect of the Company which have arisen since the end of the financial year.

OTHER STATUTORY INFORMATION

The Directors state that:

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.

In the opinion of the Directors:a)the results of the Companys operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

b)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 Company for the current financial year in which this report is made.AUDITORS

The auditors, Messrs. ARIFIN AHMAD & CO, have indicated their willingness to accept appointment.

Signed in accordance with a resolution of the directors:

ANUAR BIN MOHAMED

Director

AZRAI @ AZRY BIN MUHAMMED GHALIP

Director

Kuala Lumpur

Date :

STATEMENT BY DIRECTORS PURSUANT TO

SECTION 169(15) OF THE COMPANIES ACT, 1965

We, ANUAR BIN MOHAMED and AZRAI @ AZRY BIN MUHAMMED GHALIP, being the directors of ANUAR M INTERIORS SDN. BHD., state that, in our opinion, the financial statements set out on pages 9 to 21 are drawn up in accordance with the Private Entity Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Company at 31 December 2010 and of its results and cash flows for the financial year ended on that date.

In accordance with a resolution of the Directors:

ANUAR BIN MOHAMED

Director

AZRAI @ AZRY BIN MUHAMMED GHALIP

Director

Kuala Lumpur

Date :

DECLARATION PURSUANT TO

SECTION 169(16) OF THE COMPANIES ACT, 1965

I, ANUAR BIN MOHAMED, being the director primarily responsible for the financial management of ANUAR M INTERIORS SDN. BHD., do solemnly and sincerely declare that the financial statements set out on pages 9 to 21 are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the)

abovenamed ANUAR BIN MOHAMED

(I/C No: 570719-04-5803) at Batu Caves in the state of Selangor Darul Ehsan)

)

)ANUAR BIN MOHAMED

Before me:

Commissioner for Oaths

Batu CavesDate : INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF

SIERRA ENERGY SDN BHD

Company No.: 477002-W

Report on the Financial Statements

We have audited the financial statements of ANUAR M INTERIORS SDN. BHD., which comprise the balance sheet as at 31 December 2010, and the income statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 9 to 21.Directors Responsibility for the Financial Statements

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

Auditors Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessment, we consider internal control relevant to the entitys preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

INDEPENDENT AUDITORS REPORT

TO THE MEMBERS OF

ANUAR M INTERIORS SDN. BHD.

Company No.: 477002-WOpinion

In our opinion, the financial statements have been properly drawn up in accordance with Private Entity Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Company as of 31 December 2010 and of its financial performance and cash flows for the year then ended.

Emphasis of matterWithout qualifying our opinion, we draw attention to Note 3 in the financial statements which discloses the premise upon which the Company has prepared its financial statements by applying the going concern assumption, notwithstanding that the Company incurred a net loss of RM 167,987 during the year ended 31 December 2010, and as of that date, the Companys current liabilities exceeded its current assets by RM 322,568, thereby indicating the existence of a material uncertainty which may cast significant doubt about the Companys ability to continue as a going concern.Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report that in our opinion the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions 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.

ARIFIN AHMAD & CO

Chartered Accountants (Malaysia)

AF 1080BASRI BIN HARUN

Partner of the firm

2358/10/12 (J)

Chartered Accountant

Date :

BALANCE SHEET AS AT 31 DECEMBER 2010

The notes on pages 13 to 21 form part of these financial statements.

INCOME STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2010

The notes on pages 13 to 21 form part of these financial statements.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2010

The notes on pages 13 to 21 form part of these financial statements.

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL STATEMENTS

1. PRINCIPAL ACTIVITIES

The Company is principally engaged in a business of interior designer. There has been no significant change in the nature of this activity during the year.2. GENERAL INFORMATION

The financial statements were authorized for issue by the board of Directors in accordance with a resolution of the Directors onThe Company is a private limited liability Company, incorporated and domiciled in Malaysia. The registered office of the Company is located at No. 85B, Jalan SG 3/10, Pusat Bandar Sri Gombak, 68100 Batu Caves, Selangor Darul Ehsan.

The principal place of business is located at 19-2 Jalan 26/70A, Desa Sri Hartamas, Off Jalan Bukit Kiara, 50480 Kuala Lumpur.3.GOING CONCERN

As at 31 December 2010, the Company has a net current liabilities of RM 322,568 (2009: RM 158,450) and capital deficiency of RM 315,129 (2009: RM 147,142). The financial statements of the company have been prepared in accordance with the accounting policies applicable to a going concern. This basis presumes that the Company will continue to receive financial support from its shareholders, the director or creditor, and that future operating results of the Company will improve. Should any of the above underlying assumption be negated or substantially altered, the accompanying financial statements may be affected materially.4.FINANCIAL RISK MANAGEMENT POLICIES

The Companys financial risk management policy seeks to ensure that adequate financial resources are available for the development of Companys businesses whilst managing its risk. The Company operates within clearly defined guidelines that are approved by the Board and the Companys policy is not to engage in speculative transactions.The main areas of financial risks faced by the Companys and the policy in respect of the major areas of treasury activity are out as follows:

a) Liquidity and cash flow risk.

The Company seeks to achieve a balance between certainty of funding and flexible, cost-effective borrowing structure. This is to ensure at minimum, all projected net borrowing needs are covered by committed facilities. Also, the objective for debts maturity is to ensure that the amount of debts maturing in any one year is not beyond the Company means to repay and refinance.

NOTES TO THE FINANCIAL STATEMENTS

4.FINANCIAL RISK MANAGEMENT POLICIES (CONTD)b) Credit risk

The credit risk is controlled by the application of credit approvals, limits and monitoring procedures. An internal credit review is conducted if the credit risk is material.

c) Market risk

For key product purchases, the Company establishes floating and fixed price levels that the Company considers acceptable and enters into physical supply agreements, where necessary, to achieve these levels. The Company does not face significant exposure from the risk from changes in price levels.5.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

The financial statements of the Company have been prepared in accordance with the Private Entity Reporting Standards and Companies Act, 1965 in Malaysia.

The financial statements have been prepared on the historical cost basis unless otherwise disclosed in the accounting policies below.

b) Accounting convention.

The financial statements of the Company are prepared under the historical cost convention, unless otherwise indicated in the other significant accounting policies.

c)

Property, plant and equipment and depreciation

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

Property, plant and equipment are depreciated on a straight-line basis to write off the cost of the assets over the term of their estimated useful lives.

The principal annual rates of depreciation used are as follows:

Computer and software40%

Furniture and fittings10%

Motor vehicles20%

Office equipment10%

Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal.

NOTES TO THE FINANCIAL STATEMENTS (CONTD)5.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

c) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off in the year in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the financial year.

d) Payables

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

e) Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprises of cash in hand and deposits held a call with banks.

f) Impairment of assets

The carrying values of assets are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount is the higher of net realizable value and value in use, which is measured by reference to discounted future cash flows.

An impairment loss is charged to the income statement immediately.

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognized to the extent of the carrying amount of the asset that would have determined (net of amortization and depreciation) had no impairment loss been recognized. There reversal is recognized in the income statement immediately.

g)Income taxes

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes 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 liabilities and assets are under the liability method at the current tax rate in respect of all temporary differences between the amounts of an asset or liability in the balance sheet and its tax base including unused tax losses and capital allowances.

A deferred tax asset is recognized only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. The carrying amount of a deferred tax asset is reviewed at each balance sheet date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.

NOTES TO THE FINANCIAL STATEMENTS (CONTD)

5.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)

h) Provision

Provisions are recognized when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation.

i) Financial instruments

Financial instruments are recognized when a contractual relationship has been established.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual agreement. Interest, dividends, gains and losses relating to the financial instruments classified as liability are reported as expenses or income and distributions in respect of financial instruments classified as equity charged to equity.

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

The Companys accounting policies and the method adopted in respect of each class of financial; instruments and further information thereof are disclosed in the individual accounting policy statements or notes to the financial statements associated with those financial instruments.

j)Employee benefits

(i)Short term benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the financial year in which the associated services are rendered by employees of the Company. (ii)Defined contribution plan

The Companys contributions to defined contribution plans are charged to the income statement in the financial year to which they relate. Once contributions have been paid, the Company has no further payment obligation. Companies incorporated in Malaysia contribute to the Employees Provident Fund, the national defined contribution plan.

k) Revenue recognition

Revenue from services is recognised when services are rendered and invoice issued to customers.NOTES TO THE FINANCIAL STATEMENTS (CONTD)6.PROPERTY, PLANT AND EQUIPMENTCostParticularsAs at 01.01.2010AcquiredDisposedAs at 31.12.2010

RMRMRMRM

Computer and software81,244--81,244

Furniture and fittings9,969--9,969

Motor vehicle202,188--202,188

Office equipment28,714--28,714

322,115--322,115

Accumulated Depreciation

ParticularsAs at 01.01.2010DepreciationDisposedAs at 31.12.2010

RMRMRMRM

Computer and software81,243--81,243

Furniture and fittings8,567997-9,564

Motor vehicle202,187--202,187

Office equipment18,8092,872-21,681

310,8063,869-314,675

Net Book Value

Net Book ValueDepreciation

Particulars201020092009

RMRMRM

Computer and software11-

Furniture and fittings4051,401997

Motor vehicle11-

Office equipment7,0339,9052,872

7,44011,3083,869

a) Included in property, plant and equipment of the Company are fully depreciated property, plant and equipment with a total cost of RM 283,432 (2009: RM 283,432) which are still in used.

b) Included in the property, plant and equipment of the Company are motor vehicles that acquired under hire purchase installment with a total net book value of RM 1 (2009: RM 1)NOTES TO THE FINANCIAL STATEMENTS (CONTD)7.OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS2010RM2009RM

Non-trade receivables8,69111,491

Included in non-trade receivables is an amount owing by the company in which the director is also director of the Company.

8.AMOUNT OWING BY DIRECTOR

The amount owing by the director is unsecured, bears no interest and has no scheme of repayment has been arranged.

9.SHARE CAPITAL

2010RM2009RM

Authorized capital:

500,000 ordinary shares of RM 1 each500,000500,000

Issued and paid-up capital:

250,002 ordinary shares of RM 1 each250,002250,002

10.OTHER PAYABLES AND ACCRUALS2010RM

2009RM

Non-trade payables489,571402,684

Accrual of expenses4,4004,200

493,971406,884

Included in non-trade payables is an amount owing to the company in which the director is also director of the Company.NOTES TO THE FINANCIAL STATEMENTS (CONTD)11.HIRE PURCHASE PAYABLE2010RM2009RM

Minimum instalment payments

Within 1 year -3,422

After 1 year but not later than 5 years--

-3,422

Interest on suspense-(600)

-2,822

Present value:

Within 1 year-2,822

After 1 year but not later than 5 year--

-2,822

12.REVENUE

Revenue represents income derived from provision of interior design.13.LOSS BEFORE TAXATION

Note20102009

RMRM

This is derived at after charging the following:

Audit fees2,0001,800

Depreciation3,8693,868

Directors remuneration190,61772,000

Office rental22,00021,800

Interest on hire purchase-3,600

Staff costs (i)177,886245,684

NOTES TO THE FINANCIAL STATEMENTS (CONTD)13.LOSS BEFORE TAXATION (CONTD)(i)Staff cost

2010RM2009RM

Salaries, bonus and allowance134,235220,320

EPF and SOCSO30,25122,964

Duit raya13,400-

Staff refreshment-2,400

177,886245,684

The number of employees of the Company at the end of the year was 6 (2009: 4) persons.

14.TAXATION

No taxation has been provided in the financial statements as the Company had incurred a tax loss in the financial year.

Subject to the Inland Revenue Board, the Company had unabsorbed tax losses and capital allowance carried forward of approximately RM 423,809 (2009: RM 259,690) and RM 19,559 (2009: RM 16,725) respectively, to be set off against the Companys future taxable income.The tax reconciliation of income tax expenses applicable to profit before taxation at the statutory tax rate of income tax expenses to the effective tax rate of the Company is as follows:-

20102009

RMRM

Loss before taxation(167,987)(208,285)

Tax calculated at Malaysian rate of 20%(33,597)(41,657)

Tax effects of:

-Non allowable expenses -4,163

-Deferred tax asset not recognised87,80354,206

-Utilisation of deferred tax not recognised in prior year(54,206)(16,712)

Taxation--

NOTES TO THE FINANCIAL STATEMENTS (CONTD)15.DEFERRED TAXATIONThe tax effect of timing differences which would give rise to net future tax benefit are generally recognized only where there is a reasonable expectation of realization. As at 31 December 2010, the estimated amount of deferred taxation benefit calculated at current tax rate which has not been recognized in the financial statement, are as follows:

20102009

RMRM

Tax effect of timing differences in respect of the

excess of tax capital allowance over book depreciation(870)(1,077)

Tax effect of unabsorbed capital allowances3,9123,345

Tax effects of unabsorbed business losses84,76151,938

Deferred tax assets87,80354,206

The potential deferred tax asset of the Company is not provided for in the financial statements as it is anticipated that the tax effects of such deferrals will not reverse in the foreseeable future.

18.FINANCIAL INSTRUMENTS

a)Credit risk

The maximum credit risk associated with recognized financial assets is the carrying amount shown in the balance sheet.

b) Fair value

The carrying amounts of financial assets and liabilities of the Company at the balance sheet date approximate their fair values.

EMBED Excel.Sheet.8

164

_1367313840.xlsSheet1

ShareAccumulated

CapitalLossesTotal

RMRMRM

Balance as at 31 December 2008250,002(188,859)61,143

Net loss for the year- 0(208,285)(208,285)

Balance as at 31 December 2009250,002(397,144)(147,142)

Net loss for the year- 0(167,987)(167,987)

Balance as at 31 December 2010250,002(565,131)(315,129)

_1367318328.xlsSheet1

NOTE20102009

RMRM

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment67,44011,308

CURRENT ASSETS

Trade receivables118,306195,396

Other receivables, deposits and prepayments78,69111,491

Amount owing by director8$ 1,232$ 1,232

Tax recoverable$ 1,648$ 1,648

Cash and bank balances41,52541,489

171,402251,256

TOTAL ASSETS$ 178,842$ 262,564

EQUITY AND LIABILITIES

Equity attributable to the shareholders of the Company

Share capital9250,002250,002

Unappropriated losses(565,131)(397,144)

(315,129)(147,142)

LIABILITIES

Current Liabilities

Other payables and accruals10493,971406,884

Hire purchase payable11- 02,822

493,971409,706

TOTAL EQUITY AND LIABILITIES178,842262,564

_1367318863.xlsSheet1

20102009

RMRM

CASH FLOWS FROM OPERATING ACTIVITIES

Loss Before Taxation(167,987)(208,285)

Adjustments for :

Depreciation3,8693,868

Operating loss before working capital(164,118)(204,417)

(Increase) / Decrease in :

Receivables79,89019,751

Directors- 0(1,232)

Increase / (Decrease) in:

Payables87,08751,499

Net Cash Generated From / (Used In) Operating Activities2,859(134,399)

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of plant, property and equipment- 0(1,315)

Net Cash Generated From / (Used In) Investing Activities- 0(1,315)

CASH FLOW FROM FINANCING ACTIVITIES

Repayment of hire purchase(2,822)(17,148)

Net Cash Used In Financing Activities(2,822)(17,148)

NET INCREASE / (DECREASE) IN CASH AND

CASH EQUIVALENTS DURING THE FINANCIAL YEAR37(152,862)

CASH AND BANK BALANCES AT THE

BEGINNING OF THE FINANCIAL YEAR41,489194,351

CASH AND BANK BALANCES AT THE

END OF THE FINANCIAL YEAR41,52641,489

Cash and cash equivalents at end of the financial

year comprise the following :

Cash and bank balances41,52641,489

_1367044538.xlsSheet1

20102009

NOTERMRM

Revenue12335,261210,926

Cost of sales- 0(6,236)

Gross profit335,261204,690

Other income62- 0

Total income335,323204,690

Administrative expenses$ (502,486)$ (409,063)

Loss from operation(167,163)(204,373)

Financial cost$ (824)$ (3,912)

Loss before taxation13(167,987)(208,285)

Taxation14- 0- 0

Loss after taxation(167,987)(208,285)