contents dato’ cecil wilbert mohanaraj abraham independent ... abdul wahab bin nasir @ mohd nasir,...

5 Year Financial HighlightsBoard of Directors

Corporate InformationProfile of Directors

Chairman’s StatementPenyata PengerusiOperations Review

Corporate Social ResponsibilityStatement on Corporate Governance

Audit Committee ReportStatement on Internal Control

Compliance with Bursa MalaysiaSecurities Berhad Listing Requirements

Directors’ ReportStatement by Directors

Statutory DeclarationReport of the Auditors

Income StatementsBalance Sheets

Statements of Changes in EquityCash Flow Statements

Notes to the Financial StatementsRegional Distribution Centres

Particulars of PropertiesDisclosure of Recurrent Related Party Transactions

Notice of Annual General MeetingStatement Accompanying Notice

of Thirteenth Annual General MeetingAnalysis of Shareholdings

Proxy Form

CONTENTSannual report 2007

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5 YEAR FINANCIAL HIGHLIGHTS

1Amway (Malaysia) Holdings Berhad (340354 U)

2003 2004 2005 2006 2007

Sales Revenue (RM Million) 422 456 507 724 584Profit Before Taxation (RM Million) 74 72 73 112 120Net Profit (RM Million) 52 54 52 81 88Net Earnings Per Share (Sen) 31.7 32.6 31.6 49.0 53.5Core Distributor Force (In Thousand) 158 161 165 177 * 188

2003 - 2005 - Results for financial years ended 31st August2006 - Results for the 16-month period from 1st September 2005 to 31st December 20062007 - Results for financial year ended 31st December 2007* - Results for a 12-month period from 1st January 2006 to 31st December 2006

900

800

700

600

500

400

300

200

100

0

Sales Revenue(RM Million)

03’ 04’ 05’ 06’ 07’

180

160

140

120

100

80

60

40

20

0

Profit Before Taxation(RM Million)

03’ 04’ 05’ 06’ 07’

90

80

70

60

50

40

30

20

10

0

Net Profit(RM Million)

03’ 04’ 05’ 06’ 07’

90

80

70

60

50

40

30

20

10

0

Net Earnings Per Share(Sen)

03’ 04’ 05’ 06’ 07’

270

240

210

180

150

120

90

60

30

0

Core Distributor Force(In Thousand)

03’ 04’ 05’ 06’ * 07’

422 456 507 724 584 74 72 73 112 120 52 54 52 81 88

31.7 32.6 31.6 49.0 53.5 158 161 165 177 188

BOARD OF DIRECTORS

2 Amway (Malaysia) Holdings Berhad (340354 U)

Dato’ Ab. Halim BinMohyiddin DPMSChairman, Senior IndependentNon-Executive Director

Scott Russell BalfourNon-IndependentNon-Executive Director

Low Han KeeManaging Director

Abdul Wahab Bin Nasir@ Mohd Nasir AMN, SMPNon-IndependentNon-Executive Director

REGISTERED OFFICELot 6.05, Level 6KPMG Tower8 First AvenueBandar Utama47800 Petaling JayaSelangor Darul EhsanTel : 03 - 7720 1188 Fax : 03 - 7720 1111

COMPANY SECRETARIESTai Yit Chan (MAICSA No. 7009143)Saw Bee Lean (MAICSA No. 0793472)

SHARE REGISTRARSTenaga Koperat Sdn Bhd20th Floor, Plaza PermataJalan KamparOff Jalan Tun Razak50400 Kuala LumpurTel : 03 - 4047 3883 Fax : 03 - 4042 6352

CORPORATE INFORMATION

PLACE OF INCORPORATIONMALAYSIA

PRINCIPAL BUSINESS ADDRESS34 Jalan 22346100 Petaling JayaSelangor Darul EhsanTel : 03 - 7964 5222 Fax : 03 - 7964 5199E-mail : [email protected] : www.amway2u.com


Yee Kee BingExecutive Director

Eva Cheng Li Kam FunNon-IndependentNon-Executive Director

Prof. Datuk Dr. Nik Mohd Zain Bin Nik YusofIndependentNon-Executive Director

Dato’ Cecil Wilbert Mohanaraj AbrahamIndependentNon-Executive Director

PRINCIPAL BANKERSPublic Bank BerhadStandard Chartered Bank

Malaysia BerhadMalayan Banking BerhadAmInvestment Bank BerhadCIMB Bank Berhad

AUDITORSErnst & YoungChartered AccountantsLevel 23A Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala Lumpur

SOLICITORSShearn Delamore & Co7th Floor Wisma Hamzah-Kwong HingNo 1 Leboh Ampang50100 Kuala Lumpur

STOCK EXCHANGE LISTINGMain Board of Bursa Malaysia

Securities BerhadStock Code : 6351

PROFILE OF DIRECTORS


Dato’ Ab. Halim Bin Mohyiddin DPMS

Chairman, Senior Independent Non-Executive Director

Dato' Ab. Halim Bin Mohyiddin, a Malaysian, aged 62, wasappointed Director of Amway (Malaysia) Holdings Berhad("AMHB") on 25 November 2002. He was appointed theChairman of AMHB on 12 January 2006 and is also theSenior Independent Director of AMHB. He also serves asthe Chairman of the Audit Committee and member of theRemuneration Committee and Nominating Committee.

He graduated with a Bachelor of Economics (Accounting)from the University of Malaya in 1971 and thereafter joinedUniversiti Kebangsaan Malaysia as a Faculty member ofthe Faculty of Economics. He obtained his Masters ofBusiness Administration degree from University of Alberta,Edmonton, Alberta, Canada in 1973. He retired fromKPMG/KPMG Desa Megat & Co. on 1 October 2001, a firmhe joined in 1977 and had his early accounting training inboth Malaysia and United States of America. He was madepartner of the Firm in 1985. At the time of his retirement,he was Partner-in-Charge of the Assurance and FinancialAdvisory Services Divisions and was also looking after theSecured e-Commerce Practice of the Firm. He hasextensive experience in tax, audit, corporate turnaroundand financial restructuring of various companies and hasalso acted as receiver and manager and liquidator forseveral companies during his tenure with KPMG.

He is a member of the Malaysian Institute of CertifiedPublic Accountants ("MICPA") and Malaysian Institute ofAccountants ("MIA"). He is currently the Chairman of theEducation and Training Committee of MICPA. He served asa member of the Education Committee of the InternationalFederation of Accountants ("IFAC") from 2001 to 2005.He was the President of the MICPA from June 2004 to June2007 and a council member of MIA from 2001 to 2007.

Presently, he is a Board member of Kumpulan PerangsangSelangor Berhad, MCM Technologies Berhad, HeiTechPadu Berhad, Utusan Melayu (Malaysia) Berhad, DiGi.ComBerhad, Idris Hydraulic (Malaysia) Berhad, KNM GroupBerhad, Idaman Unggul Berhad, Bank PembangunanMalaysia Berhad, BI Credit & Leasing Berhad, ECM LibraFinancial Group Berhad (formerly known as ECM LibraAvenue Berhad) and AMDB Berhad.

Dato' Ab. Halim Bin Mohyiddin is a shareholder of theCompany. He does not have any family relationship withany Director and/or major shareholder of the Companyand has no conflict of interest with the Company. He hasno convictions for offences.

Dato' Ab. Halim Bin Mohyiddin attended all the fourBoard meetings held during the financial year ended31 December 2007.

Low Han KeeManaging Director

Low Han Kee, a Malaysian, aged 48, was appointedDirector of AMHB and Amway (Malaysia) Sdn Bhd("AMSB") on 6 June 1996 and 16 October 1995respectively. On 1 September 1998, he took over the helmas the Managing Director of AMHB. He is also a Director ofAmway (B) Sdn Bhd ("ABSB"), a subsidiary of AMSB since 1998.

He joined AMSB in 1990 as Divisional Manager, Finance &Administration and was promoted to General Managerresponsible for Amway operations in Malaysia and Brunei,in January 1993. He qualified as a Certified PublicAccountant in 1984 whilst serving in Ernst & Whinney (nowknown as Ernst & Young), an international accounting firm.He has since accumulated more than 20 years of financialexpertise, having held senior positions in finance incompanies listed on Bursa Malaysia Securities Berhad("Bursa Securities"), including Mulpha InternationalTrading Corporation Berhad, a group involved in trading,construction and engineering, where he last held theposition of Group Chief Accountant, from 1985 to 1990before leaving to join AMSB.

Low Han Kee is a shareholder of the Company. He doesnot have any family relationship with any Director and/ormajor shareholder of the Company and has no conflict ofinterest with the Company. He has no convictions for offences.

Low Han Kee attended all the four Board meetings heldduring the financial year ended 31 December 2007.



Abdul Wahab Bin Nasir@ Mohd Nasir AMN, SMP

Non-Independent Non-Executive Director

Abdul Wahab Bin Nasir @ Mohd Nasir, a Malaysian, aged55, was appointed Director of AMHB on 18 June 2004.

He graduated with a Bachelor of Social Science (Hons),Sociology & Anthropology from Universiti SainsMalaysia in 1983. He obtained a Master of DevelopmentAdministration from Western Michigan University,Kalamazoo, United States of America in 1995.

He is currently a Senior General Manager in HumanResource Department of Employees Provident FundMalaysia ("EPF"). He held various positions in theGovernment sector, including the Education Ministry,Department of Fisheries, Department of Inland Revenueand National Institute of Public Administration ("INTAN")from 1972 till 1983.

Since 1983, he joined EPF Malaysia in the Training andCareer Development Division as an AdministrativeOfficer before becoming the Senior Manager of thatDivision in 1992. He was promoted to General Managerof Corporate Services Department in 1996 andthereafter the General Manager of Human ResourceDepartment in 1999. He was promoted to SeniorGeneral Manager of Human Resource Department in2001 and thereafter the Senior General Manager ofEmployees Provident Fund Social Security TrainingInstitute ("ESSET") in 2006.

Abdul Wahab Bin Nasir @ Mohd Nasir is not ashareholder of the Company. He does not have anyfamily relationship with any Director and/or majorshareholder of the Company and has no conflict of interestwith the Company. He has no convictions for offences.

Abdul Wahab Bin Nasir @ Mohd Nasir attended all thefour Board meetings held during the financial year ended31 December 2007.

Scott Russell BalfourNon-Independent Non-Executive Director

Scott Russell Balfour, an American, aged 46, wasappointed Director of AMHB on 15 January 2004.He also serves as a member of the Audit Committee.He is a member of the American Bar Association, theGrand Rapids Bar and the Michigan Bar Association.He has authored several articles regarding Korean andAsian jurisprudence and co-authored the book entitled"Korean Labor and Employment Laws".

Currently, he is also the Deputy General Counsel andVice President of International Legal of Alticor Inc.Through the International Legal Group, he coordinatesand oversees Alticor's diverse legal issues for over 50markets, including 13 Asian affiliates in Australia,China, Korea, India, Indonesia, Malaysia, Philippines,Singapore, Taiwan and Thailand.

Prior to joining Alticor in 1999, he spent 8 years as aSenior Foreign Legal Consultant for the law firm of Kim &Chang in Seoul, South Korea. His clients included Amway,Citibank, Pepsico, Morgan Stanley, Nike, McDonald,Gerber, Unilever, P&G and Duracell to name a few.

He graduated with a Bachelor of Science Degree fromMichigan State University in 1983. After serving in theUS military, he attended the University of Detroit wherehe received a Juris Doctorate Degree cum laude in 1990.

Scott Russell Balfour is not a shareholder of theCompany. He does not have any family relationship withany Director and/or major shareholder of the Companyand has no conflict of interest with the Company. He hasno convictions for offences.

Scott Russell Balfour attended all the four Boardmeetings held during the financial year ended 31 December 2007.



Eva Cheng Li Kam FunNon-Independent Non-Executive Director

Eva Cheng Li Kam Fun, a British National (Overseas), aged55, was appointed Director of AMHB on 19 October 2005.She also serves as the Chairperson of the RemunerationCommittee, and the Nominating Committee and analternate member of Audit Committee. Eva Chengcurrently serves as Executive Vice President of AlticorGlobal Holdings Inc, the ultimate holding company, and ispart of its senior management team responsible forAmway's global business development. Eva Cheng is alsothe Chairperson of Amway (China) Co. Ltd. and ChiefExecutive Officer ("CEO") of Amway in Greater China andSoutheast Asia which encompasses Mainland China,Taiwan, Hong Kong SAR, Macau SAR, Thailand, Malaysia,Singapore, Indonesia, the Philippines, Brunei and Vietnam.

Since the beginning of her career with Amway in 1977,Eva Cheng has held senior management positions withinthe Amway Group. In the early 1990s, it was herenthusiasm for the China market that led Amway to investin manufacturing facilities in Guangzhou and launch salesoperations throughout China. Today, Amway China is oneof the top 100 foreign invested enterprises in China andthe largest market for Amway.

Eva Cheng's leadership is well recognized in the businesscommunity. Recently, she was awarded "China TalentManagement Award" at the China Business LeadersAwards 2007. She has won many awards among those;"China's Top 10 Talents in Doing Business in Year 2004","Top 10 Best Marketing Executives in Year 2004" and wasnamed "Honorary Citizen of Guangzhou City" by theGuangzhou Municipal Government. Eva Cheng also hasan extensive involvement in public and community servicein Mainland China and Hong Kong.

Eva Cheng graduated with a Bachelor of Arts Degree withhonours in 1975. She obtained a Master's Degree inBusiness Administration from the University of Hong Kongin 1989. Eva Cheng is not a shareholder of the Company.She does not have any family relationship with any Directorand/or major shareholder of the Company and has noconflict of interest with the Company. She has noconvictions for offences.

Eva Cheng attended all the four Board meetings heldduring the financial year ended 31 December 2007.

Yee Kee BingExecutive Director

Yee Kee Bing, a Malaysian, aged 48, was appointedDirector of AMSB on 28 November 2000. He wasappointed Executive Director of AMHB on 16 July 2004.On 1 September 2004, he assumed his responsibility asthe General Manager of AMSB.

He started his career as the Accounts Servicing Executiveat Art Beat Communications Sdn Bhd in July 1983.He joined AMSB as Communications Executive,in November 1984 before being promoted toCommunications Co-ordinator in 1988, and assuming theposition of Communications Manager in 1990.

In 1992, he moved over to take the position of GroupProduct Manager and later became the Manager ofBusiness Development Department in January 1993.He was subsequently promoted to Divisional Manager -Marketing Division in August 1994, and promoted again toAssistant General Manager for Marketing & BusinessDevelopment in 1999 before taking over as GeneralManager (Operations) in January 2000.

He is currently the President of Direct Selling Associationof Malaysia ("DSAM") and has held the position since2001. He is also the Chairman of the Malaysia Chapter ofthe Asia Pacific Economic Cooperation ConsumerEducation and Protection Initiative ("APEC CEPI")Committee and a member of the Board of Directors of theWorld Federation of Direct Selling Associations.

He graduated with a Bachelor's Degree in Social Science(Major : Communications) from Universiti KebangsaanMalaysia in 1983.

Yee Kee Bing is not a shareholder of the Company.He does not have any family relationship with any Directorand/or major shareholder of the Company and has noconflict of interest with the Company. He has noconvictions for offences.

Yee Kee Bing attended all the four Board meetings heldduring the financial year ended 31 December 2007.



Prof. Datuk Dr. Nik Mohd Zain Bin Nik YusofIndependent Non-Executive Director

Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof, a Malaysian,aged 61, was appointed Director of AMHB on 9 February2006. He also serves as a member of the Audit Committeeand Remuneration Committee. He graduated with aBachelor of Arts (Honours) from Universiti Malaya in 1969.He obtained a Master of Arts from the University ofWisconsin, Madison, United States of America in 1979 andlater gained a PhD in Law from the University of Kent,Canterbury United Kingdom in 1989.

Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof has vast localand international experience through his years ofinvolvement in various councils, committees and landsettlement schemes. He previously held key positions inboth private and government bodies including being theDirector of Bank Rakyat, Director of FELDA Group ofCompanies, Director of Land Settlement Scheme of Perlisand Kelantan and Director General of Department of Landand Mines, Malaysia. Prof. Datuk Dr. Nik Mohd Zain BinNik Yusof was the Secretary General of the Ministry ofLand and Cooperative Development, Malaysia from 1995to 2002.

Presently, he is a Board member of Eastern & OrientalProperty Development Berhad as well as Island andPeninsular Berhad. He is the Chairman of YayasanPeneroka Negara, Malaysia since 2000 and an adjunctProfessor for Universiti Putra Malaysia since 2006.

Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof is not ashareholder of the Company. He does not have any familyrelationship with any Director and/or major shareholder ofthe Company and has no conflict of interest with theCompany. He has no convictions for offences.

Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof attended allthe four Board meetings held during the financial yearended 31 December 2007.

Dato’ Cecil WilbertMohanaraj AbrahamIndependent Non-Executive Director

Dato' Cecil Wilbert Mohanaraj Abraham, a Malaysian,aged 62, was appointed Director of AMHB on 9 February2006. He also serves as a member of the Audit Committeeand Nominating Committee.

Dato' Cecil Wilbert Mohanaraj Abraham had his tertiaryeducation in Malaysia and the schools which he attendedinclude, inter-alia, the Federation Military College, nowknown as the Royal Military College, which is one of thepremier schools in the country. He read law at Queen MaryCollege, University of London and graduated with an LL.BHons. Degree in 1968. He was called by the HonourableSociety of Middle Temple as a Barrister at Law in May1969. He was admitted as an Advocate & Solicitor of theHigh Court of Malaya in February 1970. He was a Partnerof Shearn Delamore & Co. from 1976 to 31 July 2007.

He is currently a Consultant of Zul Rafique & Partners.He has an extensive litigation as well as domestic andinternational arbitration practice.

Dato' Cecil Wilbert Mohanaraj Abraham is not ashareholder of the Company. He does not have any familyrelationship with any Director and/or major shareholder ofthe Company and has no conflict of interest with theCompany. He has no convictions for offences.

Dato' Cecil Wilbert Mohanaraj Abraham attended three ofthe four Board meetings held during the financial yearended 31 December 2007.

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CHAIRMAN’S STATEMENT

On behalf of the Board of Directors (“Board”) ofAmway (Malaysia) Holdings Berhad (“Amway”), I ampleased to present the Annual Report and AuditedFinancial Statements of the Company for the yearended 31 December 2007.

The financial year ended 31 December2007 marked another record year foryour Company, achieving a new high in its 31-year presence in Malaysia.The ability to weather the challenges ofa mature yet increasingly competitivemarket reflect the strong fundamentalsthat have been tried and tested over and over again. The strongentrepreneurial determination ofAmway Distributors partnering closelywith your Company continues todeliver exceptional value to consumers,reinforcing your Company’s leadershipin the direct selling industry.

During the year, your Companyheightened its Sales and Marketingfocus, launched new innovativeproducts, intensified brand buildingand promotion activities to spur greater retailing and productivity fromthe Distributor force; and AmwayDistributors rose to the occasion,with indelible drive, determinationand enterprise, to contribute to acommendable performance for the year.

FINANCIAL PERFORMANCE

It should be noted that following achange in Amway's financial year endfrom 31 August to 31 December to bealigned with its ultimate holdingcompany, Alticor Global Holdings Inc.,the previous financial period ran from 1 September 2005 to 31 December2006. Given this one-off anomaly of a16-month financial period, comparisonis made difficult when done against theprevious financial term.

For the financial year ended 31 December 2007, I am pleased toreport that your Company recorded asales revenue of RM584.3 million.Profit before tax rose to RM120.3million with a profit after tax of RM87.9million. Earnings to sales ratio increasedto 15% in the year under review.

The revenue recorded was in line with expectations and our profitperformance was aided by a strongerRinggit against the US Dollar and theimplementation of a staggered priceincrease in November 2006 andFebruary 2007. Your Company alsomade a RM7.2 million gain on thedisposal of the current headquarters in Petaling Jaya.


Dato’ Ab. Halim Bin Mohyiddin



DIVIDEND

For the year in review, I am pleased to announce that the Board ofDirectors is recommending a fourthquarter dividend of 9.0 sen per shareless 26% income tax amounting toRM10.9 million. Together with theinterim and special dividends declaredearlier in the year, the gross dividendper share for the current year stands at 56.5 sen, which amounts to a total distribution to shareholders of RM67.9 million. The total dividend pay-out would translate into a yield of8.5%, demonstrating the Company’scontinued aim to consistently return its earnings to loyal shareholders in a systematic and orderly manner.

OPERATIONAL OVERVIEW

During the year, your Companycontinued to draw strength from the core drivers of the business: agood range of quality products, aresilient Distributor force and afocused management team. A total of14 new products were launched in the year under review, contributing RM97 million to Amway’s total salesrevenue. The introduction of two majorproducts, namely the technologically-superior eSpringTM Water TreatmentSystem, Amway’s third generationwater treatment system, and theflagship health food supplement,NUTRILITE DOUBLE XTM, also sawyour Company kicking off an advertisingand brand building blitz for the twobrands and products. For the thirdconsecutive year, Amway’s NUTRILITEand Water Treatment System received

due recognition and were awarded theReader’s Digest Trusted Brand GoldAwards for Malaysia and Asia in 2007.

CORPORATE GOVERNANCE

The Company remains committed toupholding high standards of corporategovernance, ensuring the highestlevels of accountability, integrity andresponsibility to our stakeholders.Strong internal controls are in place toensure the Board and its various sub-committees oversee the Company’soperations to uphold the long termviability and ensure shareholder valueis protected. The Directors have alsoparticipated in professional programmesmandated by the regulators to ensurethat your Company maintains highlevels of compliance and ethicalconduct that underpin Amway’sfundamental philosophies.

CORPORATE SOCIALRESPONSIBILITY (CSR)

As a leading direct selling companywith its business deeply rooted in the community, we place strongimportance on our CSR and remainfully committed to being a responsiblecompany in the conduct of ourbusiness and in fulfilling our corporateand social obligations.

The One By One Campaign initiatedback in 2003 provided your Companyan avenue to continue to reach out tothe community, particularly to children.Your Company had two projectsrunning simultaneously during theyear in review; the Happy HealthyMinds and the Happy Healthy Wardsprogrammes. Both programmesregistered very favourable responseand feedback. Further details of ourCSR efforts and initiatives arehighlighted in the CSR section foundfurther on in this annual report.



direct connections between intentions,actions and outcomes. Every effort willalso be made to nurture and promotean innovative culture in how weinteract with consumers, brands,products and Distributors to ensurethat the Amway business remainsdynamic and at the forefront of thedirect selling industry in Malaysia.

With these initiatives in place and the continued support of our loyal base of Distributors and consumers,your Company expects to mitigatesome of the pressures exerted by rising local inflation and globalgrowth uncertainties, and foreseessatisfactory sales growth in the newfinancial year.

DATO’ AB. HALIM BIN MOHYIDDINChairman

OUTLOOK

Looking ahead into 2008, we expect some uncertainty in the global economic situation, currencyfluctuations and rising inflationarypressures domestically to impact onCompany performance. Nevertheless,we will continue to leverage on ourstrengths and resources to fuel growth,while initiatives are being planned tocontinue to provide your Companywith a competitive edge.

Going forward, your Company willstrive for greater customer focus,bringing Amway and our productscloser to our customers and themarket-place through an expansion of our existing distribution channelsand enhanced service and supportmeasures. We will move to becomemore performance-driven in all that wedo, linking rewards and recognition tokey business drivers so that there are

PENYATA PENGERUSI


Saya bagi pihak Lembaga PengarahAmway (Malaysia) Holdings Berhad("Amway"), dengan sukacitanyamembentangkan Laporan Tahunan danPenyata Kewangan Syarikat bagi tahunkewangan berakhir 31 Disember 2007.

Tahun kewangan berakhir 31 Disember2007 menunjukkan satu lagi tahunmencatat rekod bagi Syarikat andakerana mampu mencipta kejayaanpaling tinggi sejak 31 tahun berada diMalaysia. Kemampuan menanganipelbagai cabaran di pasaran yangbukan sahaja matang, malah semakinbersaingan ini, menggambarkan asas-asas yang kami miliki tetap teguhwalaupun diuji berulangkali. Kekuatantekad keusahawanan para PengedarAmway yang menjadi rakan kongsi erat Syarikat anda membawa nilaitinggi secara berterusan kepada para pengguna sekaligus membantumemantapkan lagi kepimpinan Syarikatanda dalam industri jualan langsung.

Pada tahun ini, Syarikat andameningkatkan lagi fokus terhadapJualan dan Pemasaran melaluipelancaran pelbagai produk inovatif,memperhebatkan aktiviti pembinaanjenama dan promosi bagi mendorongtahap peruncitan dan produktiviti yanglebih tinggi di kalangan Pengedar. ParaPengedar Amway pula menyahutnyadengan tekad, keazaman dansemangat keusahawan kental yangtelah menyumbang kepada pencapaianprestasi yang memberangsangkanpada tahun ini.

PRESTASI KEWANGAN

Adalah dimaklumkan bahawa berikutanperubahan akhir tahun kewanganAmway daripada 31 Ogos kepada 31 Disember supaya selaras denganakhir tahun kewangan syarikat indukmuktamadnya, Alticor Global HoldingsInc., tempoh kewangan sebelumnyaadalah meliputi jangkamasa dari 1 September 2005 hingga 31 Disember2006. Berasaskan perbezaan tempohkewangan selama 16 bulan yang berlaku

untuk sekali sahaja, perbandinganadalah sukar untuk dilakukan jikadibandingkan dengan jangkamasakewangan sebelumnya.

Untuk tahun kewangan berakhir 31Disember 2007 ini, saya berasasukacita untuk melaporkan bahawaSyarikat anda mencatat hasil jualanrekod sebanyak RM584.3 juta.Keuntungan sebelum cukai meningkatkepada RM120.3 juta, sementarakeuntungan selepas cukai adalahsebanyak RM87.9 juta. Di samping itu,nisbah pendapatan kepada jualanpada tahun yang ditinjau pulameningkat kepada 15%.

Keputusan yang dicapai adalah selarasdengan jangkaan. Prestasi keuntungankita dibantu oleh keteguhan nilaiRinggit berbanding Dolar AS sertapelaksanaan kenaikan harga secaraberperingkat pada bulan November2006 dan Februari 2007. Syarikat andajuga mencapai keuntungan sebanyakRM7.2 juta daripada penjualanbangunan ibu pejabat sedia ada diPetaling Jaya.

DIVIDEN

Saya berasa bangga untukmengumumkan bahawa pada tahunyang ditinjau, Lembaga Pengarahmengesyorkan dividen bagi tempohsuku keempat sebanyak 9.0 sensesaham, ditolak 26% cukaipendapatan menjadikan pembayarannyaberjumlah RM10.9 juta. Bersamadividen interim dan dividen khas yangdiisytiharkan terdahulu pada tahun ini,jumlah dividen kasar sesaham padatahun semasa adalah 56.5 senmanakala pengagihan kepada parapemegang saham berjumlah RM67.9juta. Jumlah pembayaran dividenkeseluruhan akan menjana hasilsebanyak 8.5%, sekaligus menunjukkanhasrat berterusan Syarikat untukmengembalikan pendapatannya secaraberterusan kepada para pemegangsaham yang setia secara sistematikdan tersusun.

Dato’ Ab. Halim Bin Mohyiddin

TINJAUAN OPERASI

Pada tahun yang ditinjau, Syarikatanda terus memperolehi kejayaan hasil daripada pendorong terasperniagaan iaitu rangkaian produkberkualiti, tenaga Pengedar yangmantap dan kumpulan pengurusanyang berfokus. 14 produk barudilancarkan pada tahun yang ditinjau;menyumbang RM97 juta kepada hasiljualan Amway. Pengenalan dua produkutama iaitu Sistem Rawatan AireSpringTM berteknologi canggih yangmerupakan sistem rawatan air generasiketiga daripada Amway serta suplemenkesihatan yang unggul, NUTRILITEDOUBLE XTM, turut dipertingkatkanmelalui usaha pengiklanan danpembinaan jenama Syarikat untukkedua-dua produk dan jenamaberkenaan. NUTRILITE dan SistemRawatan Air Amway mendapatpengiktirafan daripada Reader's Digestdengan penganugerahan TrustedBrand Gold Awards untuk Malaysiadan Asia pada tahun 2007 untuk tahunketiga berturut-turut.

TADBIR URUS KORPORAT

Syarikat kekal komited menjunjungtaraf piawaian tadbir urus korporatyang tinggi untuk memastikanpencapaian tahap akauntabiliti,kewibawaan dan tanggungjawab palingtinggi yang memanfaatkan pemegangkepentingan kami. Kawalan dalamanyang teguh telah tersedia bagimemastikan Lembaga Pengarah danpelbagai jawatankuasa kecilnya mampu

mengawalselia operasi Syarikat supayadapat mengekalkan daya majunyauntuk jangkamasa panjang sertamemastikan nilai pemegang sahamterpelihara. Para Pengarah juga menyertaibeberapa program profesional yangdimandatkan oleh para pengawalseliauntuk memastikan supaya Syarikat andadapat mengekalkan tahap pematuhandan perlakuan paling beretika yangmenjadi falsafah asas Amway.

TANGGUNGJAWAB SOSIALKORPORAT (CSR)

Sebagai sebuah syarikat jualanlangsung terkemuka dengan perniagaanyang mengutamakan masyarakat, kamimementingkan tanggungjawab sosialkorporat kami. Justeru, Syarikatmemberikan komitmen sepenuhnyauntuk menjalankan kewajipan semasamengendalikan urusan perniagaan dandalam memenuhi kewajipan korporatdan kemasyarakatan.

Kempen One By One yang dimulakanpada tahun 2003 menyediakan peluangkepada Syarikat anda untuk terusmendekati masyarakat, terutamanyakanak-kanak. Syarikat anda mempunyaidua projek yang berjalan serentakpada tahun yang ditinjau iaitu programMinda Sihat Ceria dan Wad SihatCeria. Kedua-dua program ini mendapatsambutan dan maklum balas yangmenggalakkan. Butiran lanjut mengenaiusaha CSR dan inisiatif Syarikatdipaparkan di bahagian CSR dalamlaporan tahunan ini.

PENYATA PENGERUSI


PENYATA PENGERUSI


SUASANA MASA DEPAN

Pada tahun 2008, kami menjangka ketidaktentuanekonomi global, turun naik kadar matawang dantekanan inflasi dalam negeri yang semakinmeningkat bakal membawa kesan kepada prestasiSyarikat. Walau bagaimanapun, kami akan terusmemanfaatkan keteguhan dan sumber Syarikatuntuk menjana pertumbuhan, sementara pelbagaiusaha sedang dirancang untuk terus menyediakankelebihan daya saing kepada Syarikat anda.

Sebagai langkah ke hadapan, Syarikat anda akanmemantapkan lagi fokus terhadap pelanggan,membawa Amway dan rangkaian produknyadengan lebih dekat kepada pelanggan dan pasaranmelalui perluasan saluran pengedaran sedia adaserta penyediaan perkhidmatan dan sokongan yanglebih baik. Kami akan menjadi lebih berteraskanprestasi dalam semua perkara yang dilakukan,mengaitkan ganjaran dan pengiktirafan kepadapendorong utama perniagaan supaya wujud kaitanlangsung antara hasrat, tindakan dan natijah. Usahagigih akan digerakkan untuk memupuk danmenggalakkan pembentukan budaya inovatif dalamcara kami berinteraksi dengan pengguna, jenama,produk dan para Pengedar bagi memastikanperniagaan Amway kekal dinamik dan terkemukadalam industri jualan langsung di Malaysia.

Dengan semua usaha yang dijalankan sertasokongan berterusan daripada para Pengedar danpengguna setia, Syarikat anda menjangka dapatmengurangkan sebahagian daripada tekanan yangtimbul akibat peningkatan kadar inflasi tempatanserta ketidaktentuan pertumbuhan global, danmeramal pertumbuhan jualan yang memuaskanakan dicapai pada tahun kewangan akan datang.

DATO’ AB. HALIM BIN MOHYIDDINPengerusi

NUTRILITE is the only global vitamin and mineral brand to grow, harvest

and process plants on their own certified organic farms

Based on an independent review by international market research firm Euromonitor Consultancy in 2006.

During the year, the Companycontinued its focus on businessfundamentals to achieve its growthobjectives and help Distributors do their business better. Among thesuccessful initiatives implementedwere the introduction of new products,a renewed focus on brand-building,enhancements to the Sales IncentiveProgrammes and the roll-out of newtraining curriculum to develop andgroom future Distributor leaders. TheCompany's thrust behind theseinvestments provided opportunities forincreased Distributor activity andproductivity and paved the way forAmway to chart new growth in the year.

POWER BRANDS BRINGINNOVATION

The financial year 2007 saw newproduct introductions that werebacked by robust R & D and leadingedge technology in each of Amway'spower brands, NUTRILITETM,ARTISTRY TM and eSpringTM, Amway'sWater Treatment System. The strong

product positioning offered by thesehigh performance items createdrenewed excitement in the field andfurther profiled Amway's power brandsas those synonymous with innovationand high quality.

Amway launched its flagship product,the NUTRILITE DOUBLE XTM, amultivitamin, multimineral concentratethat comprises a unique blend of 12vitamins, nine minerals and 17 plantconcentrates for broader antioxidantprotection and health benefits. Thelaunch of this eagerly-awaited product,was attended by Dr Sam Rehnborg,President of Nutrilite Health Institute.His presence played a significant rolein profiling NUTRILITE DOUBLE X andthe Optimal Health philosophy, andproviding an impetus to the debutsales performance of NUTRILITEDOUBLE X. The introduction ofNUTRILITE DOUBLE X was a keyfactor behind the 8.4% sales growthrecorded for the Nutrition and Wellnesscore line in 2007 compared to samepreceding period.

OPERATIONS REVIEW



The Home Tech core line was further enhanced with the introduction of the eSpring Water Treatment System to replace the Amway Water Treatment System 2 (WTS2). The technologically-superior eSpring combines the best watertreatment technologies available: patented carbon block filter, patented UV light,patented inductive coupling technology and an electronic monitoring system totrack the lifespan of the UV bulb and carbon filter unit. Backed by over 20 yearsof research and more than 338 patents worldwide, eSpring is targeted at thegrowing number of consumers who care about getting the best quality water froma reliable and superior water treatment system. Following the launch, attractiveincentives to spur product sales allowing WT1 and WT2 owners to upgrade toeSpring via a trade-in promotion and easy payment plans for eSpring purchaseswere implemented. As a result, retailing efforts for eSpring bore promising resultsand coupled with the favourable response to ATMOSPHERETM Air TreatmentSystem launched in 2006, grew the Home Tech core line by 14.1% for the yearunder review.

ARTISTRY, Amway's cosmetic and skincare power brand, received four newadditions to complement the growing age-defying products under the TIMEDEFIANCETM range. The Cleansing Treatment, Conditioning Toner and FirmingCrème Foundation were introduced into the existing line of basic skincareproducts, followed by the 3D Lifting Serum, which is formulated with a patent-pending Derma III lifting complex to provide firmer, more visually lifted skin in just20 minutes. The inclusion of these new products provided additional opportunitiesfor Distributors to retail cosmetic and skincare solutions that are at the forefrontof technological developments in research and formulations under the ARTISTRYbrand.

Meanwhile, the Personal Shoppers Catalogue continued to be an effective tool,opening doors for Distributors with the attractive products, pricing andpromotions offered. Greater emphasis was placed this year on demonstrationsand sampling activities which helped generate a higher turnover, especially in thefood and beverage, as well as the household and decorative product categories.

OPERATIONS REVIEW

Amway (Malaysia) Holdings Berhad (340354 U)

18

BUILDING BRANDS FORCUSTOMER LOYALTY

Building upon the foundations we laidin 2003, Amway has continued tofocus on more strategic brandinitiatives to advance the brand equityfor both the company and its productsby extending the recognition anddemand for the Amway power brandsto a broader base of consumers.

In tandem with the major productlaunches by Amway this year, theCompany embarked on a holisticcampaign via print, outdoor andelectronic media, further articulatingthe brand strengths and connectingwith Distributors and their customers'experience. The launch of NUTRILITEDOUBLE XTM prominently featuredNUTRILITE global spokespersons,100-meter sprint world record holderAsafa Powell and Liu Xiang, theOlympic 110m hurdles champion in amajor press advertisement campaign.These two record-breaking world-classathletes provided a strong focalelement in the branding execution inview of their eagerly anticipatedparticipation in the Beijing 2008Olympics, further promoting theNUTRILITE brand and creatingexcitement among Amway Distributorsand customers.

The launch campaign also incorporatedthe NUTRILITE DOUBLE X Challenge,an on-the-ground competition held in five major towns nationwide to create further brand engagement withDistributors and the general public.The NUTRILITE DOUBLE X Challengerequired team participants to have highenergy levels who were tested on theirstrength, endurance, mental agility,team spirit and determination tosucceed. This was done to exemplifythe key features of this multivitamin,multimineral concentrate that providesreal energy all day.

The Company also made targetedinvestments in building the eSpringTM

brand upon its introduction to themarket, recognising the key role

the water treatment system plays in the Amway Distributor business.Extensive advertising in the print mediawas complemented with 3-minuteinfomercials broadcast over selectedAstro channels to communicateeSpring's technologically-superiorfeatures and product benefits to the public at large. This integratedapproach to the overall brandingcampaign was a key success factor in extending brand loyalty andconfidence in Amway and its stable ofpower brands.

DISTRIBUTORS LEAD WITHCONFIDENCE

For the Fiscal Year 2007, Amway'sCore Distributor Force (CDF) increasedby 6.3% to 188,000. Leveraging on thetenacity and resolve of the strongDistributor force, the Company put inplace several key initiatives during the year to incentivise Distributorproductivity and lay the foundations forfuture growth within the Distributornetwork.

The introduction of a new SilverProducer Achievers Seminar (SPAS)during the year was one of the newinitiatives aimed at strengthening new business builders' understanding of the Amway fundamentals andhelping them to develop a sustainableand profitable business. The programmeincluded topics on the basic businessfundamentals, rules of conduct, financialwisdom and leadership principles,underscoring the Company's recognitionof the vital role that future Distributorleaders play in building and strengtheningthe business foundation. A total of 10 SPAS were conducted in the year throughout Malaysia, reaching out to 444 new Silver Distributors. The Company also continued theACES (Acquire, Commit, Earn andShare) programme into 2007, where 12workshops on financial wisdom were held, while 285 product-related training and workshops ensured thatDistributors were updated on theirproduct knowledge and retailing skills.

OPERATIONS REVIEW


19

Sales Incentive Programmes (SIP) andNon-Cash Awards (NCA) were alsogiven an added boost, providingstronger incentives for growth. Theseincluded the enhancement of the SQ bonus with higher rewards at each qualification level and the newPlatinum Seminars in Guangzhouwhich will begin in January 2008 aimedat building confidence among the newleaders in Amway, while expandingtheir knowledge of the power brandswith visits to Amway China's BrandCentre and manufacturing facility. Inaddition, the Company also introducednew initiatives to intensify sponsoringand activation activities, bringinggreater focus to these areas within theDistributor network whilst ensuringcontinued engagement with newDistributors.

New plans and initiatives announcedat the 2007 National LeadershipConference met with positive responsefrom Distributor leaders includingthe announcement of the AmwayLeadership Seminar 2008 to Japan.Additionally, Amway announced thefirst ever 2009 Global 50th AnniversaryDiamond Invitational to be held in Las Vegas, and the 2009 Global 50th Anniversary Executive Diamond Forum at the Amway headquarters in Ada, Michigan in conjunction withAmway Corporation's 50th Anniversarycelebrations. The announcementgenerated great excitement and willprovide impetus to achieve higherqualification as Distributor Leaders settheir goals to be at this once-in-a-lifetime event.

Our strong partnership with theDistributors is in no small measure dueto the open dialogue, communicationand feedback through various platformssuch as the quarterly Direct DistributorForum and more than 90 Distributorrallies held throughout the country in 2007. Through these fora, we havecontinued to ensure timely disseminationof company news and effectivelyaddressed Distributor concerns inorder to better assist them in theirretailing and sponsoring activities.

SUPPORTING FUTUREBUSINESS GROWTH

Following the ground-breaking eventlast year, work progressed towards theconstruction of Amway Malaysia's new headquarters in 2007. Finalapprovals on the building plan from theauthorities were received in Octoberthis year, paving the way for thecommencement of construction thatbegan in the same month with pilingworks. Using the Hydraulic InjectionPile methodology, an environmentally-friendly piling method that producesless noise, dust and no groundvibration, piling works are scheduledfor completion in February 2008, whileconstruction of the warehouse andoffice blocks are expected to beginthereafter. The new headquarters,targeted for completion in 2009, isexpected to be two and a half timesthe size of the current premises inanticipation of the increasing businessvolume in the coming years.

Going forward, the Company expectsto build on the strong fundamentalsthat have sustained us thus far, andaggressively pursue strategies andinitiatives that will lead us into the nextlevel of growth. Through an enhancedfocus on the consumer, inculcating aculture of innovation and consistentlyseeking performance improvement ineverything we do, we are determinedto continue to maintain Amway'sadmirable track record and chart newheights for 2008 and beyond.

OPERATIONS REVIEW

Amway (Malaysia) Holdings Berhad (340354 U)

Amway has long subscribed to acorporate philosophy of helping otherslive better lives. After more than threedecades, your Company remains fullycommitted to CSR, implementinginitiatives aimed at giving back to thecommunities in which we build ourbusiness and creating value to ensurethe long-term sustainability of theCompany.

BUILDING ON THE ONE BY ONE CAMPAIGN

Believing in the unlimited potential ofevery child, we have over the yearsdedicated substantial resources, inpartnership with our Distributors andemployees, towards helping children inMalaysia achieve their fullest potentialby offering them the chance to leadhealthier lives, be it physically ormentally. The campaign is part of theglobal campaign to support the unifiedcause of children in need - the One byOne Campaign for Children, which hasbeen supported by Amway affiliatesworldwide since 2003. During the year,the Company continued to pursue itstwo projects under the One by OneCampaign, namely the Happy HealthyMinds programme and the HappyHealthy Wards project.

The Happy Healthy Minds camps andworkshops, aimed at helping childrenincrease their self-esteem and self-confidence, have been runningsuccessfully for five years in collaborationwith a team of child psychologists and assisted by our own staff and Distributor volunteers. For 2007, the Company held two half-dayinteractive camps specially tailored for underprivileged children fromhomes and centres in Selangor and Wilayah Persekutuan. Separatedialogue sessions for caregivers werealso organized at these camps, aimedat empowering them with additionalskills to increase children's self-esteem, improve their relationshipswith children and allow them to controldifficult behaviours in the mosteffective manner. To date the HappyHealthy Minds programme hasbenefited a total of 1,129 children,providing them with basic skills for healthy social interaction, andimpacted close to 2,000 parents,teachers and caregivers throughoutthe country.

CORPORATE SOCIAL RESPONSIBILITY



The Happy Healthy Wards project is an expansion of Amway Malaysia’s One By One programme dedicated to improving the well-being of children,through the creation of a morewelcoming and child-friendly enviromentfor children receiving treatment atgovernment hospitals. The Companyadded two more paediatric facilities tothe project in 2007, namely thePaediatric Day Care Centre in HospitalBatu Pahat, Johor and the PaediatricClinic in Hospital Ipoh, Perak, bringingthe number of Amway's Happy HealthyWards to a total four since the project was initiated in 2006. Weremain on track with our initial target ofrefurbishing paediatric facilities in sixgovernment hospitals over a period ofthree years and expect to completetwo more Happy Healthy Wards in 2008.

Amway's commitment to CSR extendsbeyond pure corporate philanthropy aswe actively seek the involvement andparticipation of our employees andDistributors as volunteers in ourprogrammes. Using the collectivestrength of Amway staff and Distributors,574 volunteer hours during the year

were channeled into One By Oneworkshops and camps, as well as atspecially organized activities to bringcheer to the children, nurses anddoctors at the paediatric facilities werefurbished. Since 2003, the Amwayfamily of staff and Distributors haveclocked approximately 1,700 hours as volunteers for One By Oneprogrammes, forging strong bondswithin the lives of the communitiesthey touch and sacrificing that mostvaluable of all commodities time.

Amway Distributors also hold regularvisits to Rumah Tunas Harapan, aprogramme funded and sponsored byAmway since 1986, where a cluster ofhomes were built for underpriviledgedchildren to live in a unique family-likeenviroment under the care of fosterparents. Six Distributors visits wereconducted in 2007, involving 500individuals volunteering a considerableamount of their time to interact andengage with the children of the home,and contributing in cash and kind.Their involvement has ensured thecontinuation of Amway's charitablelegacy at Rumah Tunas Harapan.


chemical pesticides, herbicides orfertilizers. NUTRILITE is the only globalvitamin and mineral brand to grow,harvest and process plants on theirown certified organic farms*. Internally,we have also taken measures toreduce the use of paper for printedmaterials, by making the fortnightlydistributor publication, Newsgram, an electronic publication in 2007, and consciously taking the effort to reduce energy consumption within theorganization.

Looking ahead, the Company willcontinue its tradition of service to the community and strive to furtherintegrate our social responsibility into our business and operations. We hope that as we develop our CSRprogrammes we will continue to makea difference in the lives of thecommunities we come into contactwith and strive to create a brighterfuture for all.

*based on an independent review byEuromonitor Consultancy in 2006.

COMMITTED BEYOND THECOMMUNITY

The Company also undertakesinitiatives and activities to effectivelydischarge its responsibilities in thework place covering areas of employeeengagement, health and safety andhuman capital development. TheCompany regularly has meetingsbetween staff and management, whilesafety and health matters are reviewedperiodically to ensure a safe andhealthy working environment for its employees. Internal and externaltraining programmes were alsoinvested in by the Company focusingon soft skills and upgrading our servicestandards.

Long service with Amway is recognisedtangibly for the loyalty and dedicationdemonstrated by staff who haveachieved service milestones at five-year intervals. During the year, 55long serving employees were awardedfor their service, motivating staff todevelop their careers further within

Amway and inspiring colleaguesyounger in service to contribute to theprogress of the Company. Generalknowledge talks covering health,financial and safety topics are alsoregularly organized for staff, whilesports and recreation activities such asbadminton, yoga and bowling sessionsallow staff a platform to interact andfoster greater team spirit in a healthyenvironment.

As a caring and concerned corporatecitizen, Amway is also committed to exploring ways to sustain andimprove the environment we live in. Our products have long been at the forefront of Amway'scommitment to the environment. Forinstance, L.O.CTM offered one of the earliest biodegradable products, while biodegradable surfactants areused in SA8TM laundry detergent and other cleaning products. Many ofthe plants used in the concentratesfound in the NUTRILITETM supplementsare organically grown on certifiedorganic farms that do not use synthetic




TIME DEFIANCE™ Intensive Repair Serumis a revolutionary concentrate developed throughadvanced skin care technology, giving usersclinically-proven results1 within just 14 nights of use. As skin repair works best while we rest,let its matrix of 33 specialized ingredients workdeep inside your skin to help repair and protect damage at the skin cellular level while you sleep.

1 Results of studies showed a 99% improvement in appearance of fine lines, 98% improvement in skin moisture, 83% improvement in skin smoothness and 261% improvement in skin clarity.

TIME STOPS FOR YOURSKIN IN JUST 14 NIGHTS

STATEMENT ON CORPORATE GOVERNANCE

Amway (Malaysia) Holdings Berhad ("AMHB") fully subscribes to the recommendations of the revised Malaysian Code onCorporate Governance ("Code") in 2007. The Board of Directors ("Board") of AMHB is committed to ensure that goodgovernance is practised to maximise shareholders value.

In view of this, AMHB has in place measures to ensure compliance with the Code as follows:

The Board recognises the key role they play in charting the strategic direction, developmentand control of the Group and have adopted the six specific responsibilities as listed in the Code.

The Board currently has eight members, comprising six Non-Executive Directors, includingthe Chairman and two Executive Directors. Of the six Non-Executive Directors, three areindependent, satisfying the requirement of the Code for Independent Non-Executive Directorsto make up at least one third of the Board membership.

There is clear division of responsibility between the Chairman and the Managing Director toensure that there is a balance of power and authority. The Managing Director implements thepolicies and decisions of the Board, overseeing the operations and business development.He also has the responsibility of reporting, clarifying and communicating matters to the Board.

The Independent Directors bring to bear objective and independent judgement on variousissues dealt with at the Board and Board Committees, with Dato' Ab. Halim Bin Mohyiddin asthe Chairman and Senior Independent Non-Executive Director to whom concerns may beconveyed. They play a strong and vital role in entrenching good governance practices in theaffairs of the Group and through their participation in the Audit, Remuneration andNominating Committees.

Independent Directors together with the other Non-Executive Directors also contributesignificantly in the areas of policy, performance monitoring and allocation of resources andenhancement of controls and governance.

The Board is supplied with relevant information and reports on financial, operational,corporate, regulatory, business development and audit matters, by way of Board reports orupon specific requests, for informed decision making and effective discharge of itsresponsibilities.

Procedures have been established for timely dissemination of such information and reportsfor the Board or Board Committee meetings, to give effect to Board decisions and to dealwith matters arising from such meetings. Directors may obtain independent professionaladvice in accordance with established procedure which has been communicated to them infurtherance of their duties.

The Board has access to the advice and services of both Company Secretaries.

BOARD OF DIRECTORSThe Board

Board balance

Supply of information




A selection process for new appointees to the Board as recommended by the NominatingCommittee has been adopted by the Board. The Nominating Committee, comprises whollyNon-Executive Directors, with the majority consisting of Independent Non-ExecutiveDirectors as follows:

1. Eva Cheng Li Kam Fun (Non-Independent Non-Executive Director; appointed Chairperson of the Committee on 12 January 2006)

2. Dato' Ab. Halim Bin Mohyiddin (Senior Independent Non-Executive Director; appointed on 19 October 2005)

3. Dato' Cecil Wilbert Mohanaraj Abraham (Independent Non-Executive Director; appointed on 9 February 2006)

The Committee is responsible for making recommendation to the Board on the optimum sizeof the Board, formalising a transparent procedure for proposing new nominees to the Boardand Board Committees and ensuring that the investment of the minority shareholders arefairly reflected on the Board. The Committee will review annually the required mix of skills,experience and other qualities of the Board including core-competencies whichNon-Executive Directors should bring to the Board. The Committee will also assess annuallythe effectiveness of the Board as a whole, the Committees of the Board and contribution ofeach individual Director and the effectiveness and performance of the Executive Directors.

All Directors shall submit themselves for re-election at regular intervals in accordance with theCompany's Articles of Association and regulatory requirements.

The Board meets at least quarterly to review and approve the quarterly results forannouncement. Due notice is given of scheduled meetings and matters to be dealt with.Additional meetings are convened when urgent and important decisions need to be takenbetween scheduled meetings.

The Board has in place a formal schedule of matters specifically reserved to it for decision toensure that the direction and control of the Group are firmly in its hand. To promote business andcorporate efficacy and efficiency, specific responsibilities or authorities are also delegated toits Board Committees and Management where appropriate. Key matters reserved for theBoard include approving strategic plans, annual operating and capital budgets, quarterly andannual financial statements and monitoring of financial and operating performance.

Appointments to the Board

Re-election of Directors

Board meetings



For the financial year ended 31 December 2007, the Board met four (4) times withdetails and attendance as follows:

Directors No. of Meetingsattended

Dato’ Ab. Halim Bin Mohyiddin (Chairman) 4/4

Low Han Kee (Managing Director) 4/4

Scott Russell Balfour 4/4

Abdul Wahab Bin Nasir @ Mohd Nasir 4/4

Yee Kee Bing 4/4

Eva Cheng Li Kam Fun 4/4

Dato’ Cecil Wilbert Mohanaraj Abraham 3/4

Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof 4/4

All Directors have successfully completed the Mandatory Accreditation Programme.The Board continues to identify and attend appropriate seminars, conferences andcourses to keep abreast of changes in legislation and regulations affecting the Group.

The Directors are committed to continue undergo other relevant training programmes asappropriate to keep abreast with the developments of the business environment andfurther enhance their skills and knowledge. The training programmes and seminarsattended by the Directors during the financial year are in areas relating to business,corporate governance and finance including updates on the new Financial ReportingStandards.

The Company Secretaries circulated the relevant guidelines on statutory and regulatoryrequirements from time to time for the Board's references and briefed the Board onthese updates quarterly.

Directors’ training



The Group has adopted the objective as recommended by the Code to determine theremuneration of the Board so as to ensure that the Group attracts and retains its Directorsneeded to run the Group successfully. The component parts of their remuneration arestructured so as to link rewards to corporate and individual performance in the case ofExecutive Directors. In the case of Non-Executive Directors, the level of remuneration reflectsthe experience and level of responsibilities undertaken by the individual Non-ExecutiveDirector concerned.

The Remuneration Committee comprises wholly Non-Executive Directors as follows:

1. Eva Cheng Li Kam Fun (Non-Independent Non-Executive Director; appointed as Chairperson of the Committee on 19 October 2005)

2. Dato' Ab. Halim Bin Mohyiddin (Senior Independent Non-Executive Director; appointed on 19 October 2005)

3. Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof (Independent Non-Executive Director; appointed on 9 February 2006)

The Remuneration Committee is responsible for recommending to the Board, theremuneration of Executive Directors and Non-Executive Directors of the Group in all its forms.The Executive Directors concerned play no part in the decision of their own remuneration butmay attend the committee meetings at the invitation of the Chairperson of the Committee iftheir presence is required. The determination of remuneration of Non-Executive Directors,including Non-Executive Chairman is a matter for the Board as a whole, with individualDirector abstaining from discussion of their own remuneration. The Company's Articles ofAssociation provides that any increase in Directors' fees should be approved at a generalmeeting.

The details of the remuneration of the Directors of the Company for the financial year ended31 December 2007 are as follows:

GROUP COMPANY

Executive Non-Executive Executive Non-ExecutiveRM'000 RM'000 RM'000 RM'000

Director fees - 200 - 189Salaries 889 - - -Bonuses 431 - - -EPF (Employer) 218 - - -Allowances 43 15 - 15Benefits-in-kind 51 - - -

Total 1,632 215 - 204

Bonuses are performance based and related to individual and Company achievement ofspecific goals. The Non-Executive Directors do not receive any performance related remuneration.

DIRECTORS'REMUNERATION Level and make up ofremuneration

Procedures

Disclosure



SHAREHOLDERS,INVESTORS ANDFINANCIAL COMMUNITYRelationship withShareholders, Investorsand Financial Community

Annual General Meeting("AGM")

ACCOUNTABILITYAND AUDIT Audit Committee

Financial Reporting

The number of directors in each remuneration band are as follows:

GROUP COMPANY

Executive Non-Executive Executive Non-Executive

RM0 - RM50,000 - 6 - 5RM50,001 - RM100,000 - 1 - 1RM550,001 - RM600,000 1 - - -RM1,050,001 - RM1,100,000 1 - - -

Total 2 7 - 6

The Company recognises the importance of being accountable to its investors and as suchhas maintained an active and constructive communication policy that enables the Board andmanagement to communicate effectively with its investors, stakeholders and the publicgenerally. The various channels of communications are through the quarterly announcementson financial results to Bursa Securities, relevant announcements and circulars, whennecessary, bi-annual briefings to the financial community, Annual General Meetings andthrough its website www.amway2u.com where shareholders have access to the corporateinformation, press releases, financial information, share prices and social responsibility reporting.

However, any information that may be regarded as undisclosed material information aboutthe Group will not be given to any single shareholder or shareholder group.

The AGM is the principal forum for dialogue with public shareholders. There is an openquestion and answer session in which shareholders may ask about the resolutions beingproposed at the meeting, the financial performance and business operations in general.Notice of the AGM is circulated at least 21 days prior to the meeting.

The Audit Committee comprises wholly Non-Executive Directors with Dato' Ab. Halim BinMohyiddin as Chairman. The composition of the Audit Committee is set out on page 30 of theannual report. The Audit Committee met four times during the financial year ended 31 December 2007.

In presenting the annual audited financial statements to shareholders, the Board aims topresent a clear, balanced and understandable assessment of the Group's position andprospects. The Statement by Directors pursuant to section 169 of the Companies Act, 1965is set out on page 42 of the Financial Statements.



The Board acknowledges its overall responsibility for maintaining a sound system of internalcontrol to safeguard shareholders' investment and the Group's assets by identifying principalrisks and ensuring the implementation of appropriate systems to manage these risks, andreviewing the adequacy and integrity of the system of internal control. A Statement on InternalControl is set out on pages 36 to 37 of the annual report.

The role of the Audit Committee in relation to the external auditors is stated on pages 30 to35 of the annual report.

The Group has complied with the best practices of the Code throughout the financial yearended 31 December 2007.

The Directors are required by the Companies Act, 1965 to prepare financial statements whichare in accordance with applicable approved accounting standards and give a true and fairview of the state of affairs of the Group and the Company at the end of the financial year andof the results and cash flows of the Group and the Company for the financial year.

In preparing the financial statements, the Directors have:

• adopted suitable accounting policies and applied them consistently;• made judgements and estimates that are prudent and reasonable;• ensured that applicable accounting standards have been followed; and• prepared the financial statements on the going concern basis.

The Directors have prepared the annual financial statements in compliance with theCompanies Act, 1965.

Internal Control

Relationship withthe Auditors

Compliance withthe Code

Statement of Directors'Responsibility forPreparing the FinancialStatements

The composition of the Company's Audit Committee, appointed by the Board from amongstits members, comprises four members of which three are Independent Non-Executive Directors.

Dato’ Ab. Halim Bin Mohyiddin (Senior Independent Non-Executive- appointed on 25 November 2002 Director)

i) Scott Russell Balfour (Non-Independent Non-Executive- appointed on 19 October 2005 Director)

ii) Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof (Independent Non-Executive Director)- appointed on 9 February 2006

iii) Dato’ Cecil Wilbert Mohanaraj Abraham (Independent Non-Executive Director)- appointed on 14 February 2006

iv) Eva Cheng Li Kam Fun (Non-Independent Non-Executive

- alternate to Scott Russell Balfour Director)- appointed on 19 October 2005

The primary function of the Audit Committee (the "Committee"), formed by the Board, is toassist the Board of Directors in fulfilling its fiduciary duties as well as the following oversightobjectives on the activities of the Group [comprising AMHB and its subsidiaries]:

• oversee financial reporting; and

• evaluate the internal and external audit processes, including issues pertaining to the system of internal control and risk management within the Group.

The Board shall elect the Committee members from amongst themselves, comprising nofewer than three (3) directors (none of whom shall be Executive) and the majority shall beIndependent Non-Executive Directors. In this respect, the Board adopts the definition of"independent directors" under the Listing Requirements of Bursa Securities. All the membersshall be financially literate and at least one (1) member of the Committee shall be:

• a member of the Malaysian Institute of Accountants ("MIA"); or

• if he is not a member of the MIA, he must have at least three (3) years of working experience and:

- he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

- he must be a member of the associations of accountants specified in Part II of the Accountants Act, 1967.

- fulfils such other requirements as prescribed or approved by Bursa Securities.

AUDIT COMMITTEE REPORT


MEMBERSHIP

COMPOSITIONChairman of the AuditCommittee

Members of the AuditCommittee

TERMS OF REFERENCEFOR AUDIT COMMITTEE1. Objectives

2. Composition



If a member of the Committee resigns, dies or for any reason ceases to be a member withthe result that the number of members is reduced to below three (3), the Board shall withinthree (3) months of the event appoint such number of new members as may be required to fillthe vacancy.

The Chairman of the Committee shall be an Independent Non-Executive Director.No alternate Director of the Board shall be appointed as a member of the Committee.

The term of office and performance of the Committee and each of its members shall bereviewed by the Board at least once in every three (3) years to determine whether the Committeeand its members have carried out their duties in accordance with the terms of reference.

Meetings shall be conducted at least four (4) times annually, or more frequently ascircumstances dictate. The Chairman may call for a meeting of the Committee if a request ismade by any Committee member, the Managing Director, or the internal or external auditors.

In order to form a quorum for the meeting, the majority of the members present must beIndependent Non-Executive Directors. In the absence of the Chairman, the members presentshall elect a Chairman for the meeting from amongst the members present.

The Company Secretary shall be appointed Secretary of the Committee (the "Secretary").The Secretary, in conjunction with the Chairman shall draw up an agenda, which shall becirculated together with the relevant support papers, at least one (1) week prior to eachmeeting to the members of the Committee. The minutes of all Committee meetings shall becirculated to the members of the Board.

The Committee may, as and when deemed necessary, invite other Board members andSenior Management members to attend the meetings.

The Chairman shall submit an annual report to the Board, summarising the Committee'sactivities during the year and the related significant results and findings thereof, includingdetails of relevant training attended by each Committee member.

The Committee shall meet at least twice annually with the external and internal auditorswithout the presence of any executive Board members, Management or employees.In addition, Management, the internal auditor and external auditors may request for a privatesession with the Committee to discuss any matter of concern.

The Committee shall regulate the manner of proceedings of its meetings, having regard tonormal conventions on such matter.

The Committee is authorised by the Board to investigate any activity within its terms ofreference. It is also authorised to seek any information it requires from any employee andemployees are directed to co-operate with any request made by the Committee.

3. Quorum and MeetingProcedures

4. Authority



The Committee can obtain, at the expense of the Company, outside legal or otherindependent professional advise it considers necessary in the discharge of its responsibilities.

The Committee shall have full and unlimited access to any information pertaining to theGroup. The Committee shall have direct communication channels with the internal andexternal auditors and with Senior Management of the Group and shall be able to convenemeetings with the external auditors, the internal auditors or both excluding the attendance ofother directors and employees of the Group, whenever deemed necessary. The Committeeshall have the resources that are required to perform its duties.

Where the Committee is of the view that a matter reported by it to the Board has not beensatisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities,the Committee shall promptly report such matter to Bursa Securities.

In fulfilling its primary objectives, the Committee shall undertake the following responsibilitiesand duties:

• review the Committee's terms of reference as conditions dictate;

• review with the external auditors, the audit scope and plan, including any changes to thescope of the audit plan;

• ensure the internal audit function is independent of the activities it audits and the head of internal audit reports functionally to the Audit Committee directly and review their performance on an annual basis. The head of internal audit shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control, and governance processes within the Company;

• take cognisance of resignations of any internal audit member and provide the resigning internal audit member an opportunity to submit his reasons for resigning;

• review the adequacy of the internal audit scope and plan, including the internal audit programme; functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;

• review the external and internal audit reports to ensure that appropriate and prompt remedial action is taken by Management on major deficiencies in controls or procedures that are identified;

• review major audit findings and Management's response during the year with Management, external auditors and internal auditors, including the status of previous audit recommendations;

• review the assistance given by the Group's officers to the auditors, and any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information;

5. Responsibilities andduties



• review the independence and objectivity of the external auditors and their services, including non-audit services and the professional fees, so as to ensure a proper balance between objectivity and value for money;

• review the appointment and performance of external auditors, the audit fee and any question of resignation or dismissal before making recommendations to the Board;

• review the risk profile of the Group (including risk registers) and the Risk Management team's plans to mitigate business risks as identified from time to time;

• review the adequacy and integrity, including effectiveness, of risk management and internal control systems, management information system, and the internal auditors' and/or external auditors' evaluation of the said systems;

• direct and, where appropriate, supervise any special projects or investigation considered necessary, and review investigation reports on any major defalcations, frauds and thefts;

• review the quarterly results and the year-end financial statements, prior to approval by the Board, focusing particularly on:

- changes in or implementation of major accounting policy changes;

- significant or unusual events; and

- compliance with accounting standards and other legal requirements;

• review procedures in place to ensure that the Group is in compliance with the Companies Act1965, Listing Requirements of Bursa Securities and other legislative and reporting requirements;

• review any related party transaction and conflict of interest situation that may arise within the Company or the Group, including any transaction, procedure or course of conduct that raises question on Management's integrity;

• prepare reports, at least once (1) a year, to the Board summarising the activities/work performed in fulfilling the Committee's primary responsibilities, including details of relevant training attended by each Committee member; and

• any other activities, as authorised by the Board

The Chairman of the Committee shall engage on a continuous basis with SeniorManagement, such as the Managing Director, Financial Controller, the head of internal auditand the external auditors in order to be kept informed of matters affecting the Group.



During the financial year ended 31 December 2007, the Committee held four (4) meetings asfollows:

12 February 20073 May 200720 August 200719 November 2007

Audit Committee No. of Meetings attended

Dato' Ab. Halim Bin Mohyiddin (Chairman) 4/4

Scott Russell Balfour 4/4

Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof 4/4

Dato' Cecil Wilbert Mohanaraj Abraham 3/4

During the financial year, the Audit Committee has carried out its duties in accordance withits terms of reference as set out on pages 30 to 33 of the annual report. Other main issuesreviewed by the Audit Committee were as follows:

• reviewed the revised Term of Reference for Audit Committee pursuant to the revised Malaysian Code on Corporate Governance;

• appointed Messrs KPMG as Internal Auditors for years 2007 and 2008.

The Audit Committee members have attended the relevant training programmes andseminars relating to areas of business, corporate governance and finance including updateson the new Financial Reporting Standards during the financial year to enhance theirknowledge to enable them to discharge their duties more effectively.

The internal audit function of the Group is outsourced to an independent professionalservices firm to carry out internal audit services for the Group. Internal audit reports arepresented, together with Management's response and proposed action plans to the AuditCommittee quarterly.

To further complement the above in maintaining a sound system of internal control,the Internal Audit team from Alticor Inc. (the parent Company of the Group) carries outrotational audits guided by the global Internal Audit Programme and enterprise risksassessment of the Group. This team is staffed by highly competent personnel with wideknowledge of the industry to assess business and operational risks of the Group and tobenchmark global affiliates efficiencies and controls to best practices. The findings from thisteam are also shared with the Audit Committee after the visits.

SUMMARY OF ACTIVITIES

AUDIT COMMITTEETRAINING ANDEDUCATION

INTERNAL AUDITFUNCTION



The Internal Auditors undertake internal audit functions based on the operational, complianceand risk-based audit plan that is reviewed by the Audit Committee and approved by theBoard. The risk-based audit plan covers the review of key operational and financial activitiesincluding the efficacy of risk management practices, efficiency and effectiveness ofoperational controls and compliance with relevant laws and regulations.

During the financial year, the internal audit function carried out internal audit projects toassess the adequacy and integrity of the system of internal control as established by theManagement. The scope of work, as approved by the Audit Committee, was essentiallybased on the risk profiles of companies in the Group, where areas of higher risk were includedfor internal audit. The internal audit covered key operational, financial and compliancecontrols, including the risk management process deployed by Management.

The cost incurred in outsourcing of the internal audit function to an independent professionalfirm during the financial year amounted to approximately RM98,000 which included expenses.

The Risk Management team met 4 times during the financial year namely March 2007,July 2007, October 2007 and December 2007 to review the business risk register. At themeeting, the Risk Management team and Management jointly updated the risk register andrisk mitigation action plans.

During the financial year, selected business continuity plans were tested to enhance theGroup's crisis readiness.

The Audit Committee was briefed by the Management on the Group's risk register in May2007 and November 2007.

RISK MANAGEMENT ANDBUSINESS CONTINUITYPLAN


The Board of Directors acknowledges its responsibility for maintaining a sound system ofinternal control to safeguard shareholders' investment and the Group's assets and forreviewing its adequacy and integrity.

The Board has an established on-going process for identifying, evaluating and managing thesignificant risks encountered by the Group. The Board through its Audit Committee regularlyreviews the results of this process.

The system of internal control covers not only financial controls but operational andcompliance controls and risk management procedures. In view of the limitations inherent inany system of internal controls, the system is designed to manage, rather than to eliminate,the risk of failure to achieve the Group's business objectives. The systems can therefore onlyprovide reasonable, and not absolute assurance against material misstatement or loss.

The Audit Committee assists the Board to review the adequacy and integrity of the system ofinternal controls in the Group and to ensure that an appropriate mix of techniques is used toobtain level of assurance required by the Board.

The Group has an establishment of a formal Enterprise Risk Management. The process ison-going and has resulted in compilation of a Corporate Risk Register with specific riskprofiles and action plans for mitigating the identified risks. The risk responses and internalcontrols that the Management have taken and/or are taking are documented in the minutesof the Risk Management Committee's ("RMC") meetings. For each of the risks identified, thedivisional head or manager is assigned to ensure appropriate risk response actions arecarried out.

During the year, the RMC met to review the Risk Register in accordance with the terms ofreference of Enterprise Risk Management framework. Existing risks were reassessed oreliminated and appropriate actions to mitigate the risks were discussed during these meetings.

The results of this process is regularly reviewed by the Board through the Audit Committeewhich is being informed of the progress of plans for mitigation of all business risks identified.

• Clearly defined delegation of responsibilities to the Board and the management including charters, organisation structures and appropriate authority limits;

• Clearly defined documented internal policies and procedures which are in place and updated to reflect changing risks or resolve operational deficiencies;

• Comprehensive information provided to management for monitoring of performance against strategic plan, covering all key financial and operational indicators;

• Established strategic planning and budgeting process requiring all functional divisions to prepare annual operating and capital budgets which are discussed and approved by the Board;

• A reporting system in place to generate monthly performance and variance reports for review by management and action taken, where necessary;

Board Responsibilities

Risk ManagementFramework andEnterprise RiskManagement

Other key elements ofinternal control

STATEMENT ON INTERNAL CONTROL

STATEMENT ON INTERNAL CONTROL


• Established capital expenditure approval process with set authority limits and Board's approval;

• Established management information systems with documented processes, including change request to computer programmes and access to data files;

• Established Business Continuity Plan to ensure that the essential business functions are able to continue in the event of unforeseen circumstances;

• Independent internal audit functions that provide assurance to the Audit Committee through the execution of internal audit visits based on an approved risk-based internal audit plan. Findings arising from these visits are presented, together with Management's response and proposed action plans, to the Audit Committee for its review. Further details of the activities of the internal audit functions are provided in the Audit Committee's Report.

The system of internal control is satisfactory and has not resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group's annual report. The Group continues to take measures to strengthen the internal control environment.

Pursuant to paragraph 15.24 of the Listing Requirements, the external auditors have reviewed this statement for inclusion in the annual report of the Group for the year ended 31 December 2007 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.


COMPLIANCE WITH BURSA MALAYSIA SECURITIES BERHAD LISTING REQUIREMENTS

There was no share buy-back effected during the financial year ended 31 December 2007.

There were no options, warrants or convertible securities issued by the Company during thefinancial year ended 31 December 2007.

During the financial year ended 31 December 2007, the Company did not sponsor any ADRor GDR programme.

There were no sanctions and/or penalties imposed on the Company and its subsidiaries,directors or management, by the relevant authorities.

The amount of non-audit fees incurred for services rendered to the Company or itssubsidiaries for the financial year amounted to not more than RM44,000 by the Company'sAuditors or a firm or a company affiliated to the Auditor's firm.

There were no profit guarantees during the financial year ended 31 December 2007 by theCompany.

Save as disclosed below, neither we nor any of our subsidiaries have entered into anymaterial contracts (not being contracts entered into in the ordinary course of business) duringthe two (2) years immediately preceding the date of the Notice of Annual General Meeting:

(i) Sale and purchase agreement dated 3 August 2007 entered into between Amway (Malaysia) Sdn Bhd (“AMSB”) and Salcon Building Services Sdn Bhd (“SBS”) wherein AMSB disposed to SBS and entered into a tenancy agreement with SBS in respect of a piece of industrial land measuring approximately 5,932 square metres held under H.S.(D) 175343 PT 34, Jalan 223, Section 20, Town of Petaling Jaya, State of Selangor together with a building erected thereon at a disposal price of RM13.5 million (“Transaction”). On 20 November 2007, the Transaction was completed and the disposal consideration was fully satisfied in cash. The tenancy commenced on 20 November 2007.

There were no contracts relating to loans by the Company involving Directors' and majorshareholders' interests.

The Company does not have the revaluation policy on its landed properties.

At an Annual General Meeting ("AGM") held on 3 May 2007, the Company obtained ashareholders' mandate to allow the Group to enter into recurrent related party transactions ofa revenue or trading nature.

The disclosure of the recurrent related party transactions conducted during the financial yearended 31 December 2007 is set out on pages 80 to 81 of the annual report.

The disclosure on the Corporate Social Responsibility ("CSR") activities or practicesundertaken during the financial year ended 31 December 2007 is stated on pages 20 to 22 ofthe annual report.

Share Buy-Back

Options, Warrants orConvertible Securities

American DepositoryReceipt ("ADR") or GlobalDepository Receipt("GDR") Programme

Imposition of Sanctions /Penalties

Non-audit Fees

Profit Guarantees

Material Contracts

Contracts Relating toLoans

Revaluation policy

Recurrent Related PartyTransaction of a Revenueor Trading Nature

Corporate SocialResponsibility

The directors present their report together with the audited financial statements of the Group and of the Company for thefinancial year ended 31 December 2007.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiaries consist of thedistribution of consumer products principally under the “Amway” trademark. There have been no significant changes in thenature of these activities during the financial year.

RESULTS

Group CompanyRM'000 RM'000

Profit for the year 87,912 63,292

There were no material transfers to or from reserves during the financial year other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year werenot substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

The amount of dividends paid by the Company since 31 December 2006 were as follows:

In respect of the financial period ended 31 December 2006 as reported in the directors' report of that period.

RM'000(i) Fifth interim dividend of 7.5 sen per share less 27% taxation, on 164,385,645

ordinary shares, declared on 12 February 2007 and paid on 20 March 2007. 9,000

In respect of the financial year ended 31 December 2007 were as follows:

(i) First interm dividend of 7.5 sen per share less 27% taxation, on 164,385,645ordinary shares, declared on 3 May 2007 and paid on 1 June 2007; 9,000

(ii) Second interim dividend of 7.5 sen per share less 27% taxation, on 164,385,645ordinary shares, declared on 20 August 2007 and paid on 20 September 2007; 9,000

(iii) Third interim dividend of 7.5 sen per share less 27% taxation, on 164,385,645ordinary shares, declared on 19 November 2007 and paid on 18 December 2007; and 9,000

(iv) Special interim dividend of 25.0 sen per share less 27% taxation, on 164,385,645ordinary shares, declared on 19 November 2007 and paid on 18 December 2007. 30,001

57,001

Total dividends paid 66,001


DIRECTORS’ REPORT

Subsequent to balance sheet date the directors declared a fourth interim dividend in respect of the financial year ended 31December 2007, of 9.0 sen per share less 26% taxation on 164,385,645 ordinary shares, amounting to RM10,948,000 (6.7sen net per ordinary share). The financial statements for the current financial year do not reflect this proposed dividend. Suchdividend, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2008.

DIRECTORS

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

Dato’ Ab. Halim Bin MohyiddinLow Han Kee (Managing Director)Scott Russell BalfourAbdul Wahab Bin Nasir @ Mohd NasirYee Kee BingEva Cheng Li Kam FunProf. Datuk Dr. Nik Mohd Zain Bin Nik YusofDato’ Cecil Wilbert Mohanaraj Abraham

DIRECTORS' BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which theCompany was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures ofthe Company or any other body corporate.

Since the end of the previous financial period, no director has received or become entitled to receive a benefit (other thanbenefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salaryof a full-time employee of the Company as shown in Note 8 to the financial statements) by reason of a contract made bythe Company or a related corporation with any director or with a firm of which he is a member, or with a company in whichhe has a substantial financial interest.

DIRECTORS' INTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year inshares in the Company and its related corporations during the financial year were as follows:

Number of Ordinary Shares of RM1 EachAt 1.1.2007 Acquired Sold At 31.12.2007

The Company

Direct interestDato’ Ab. Halim Bin Mohyiddin 1,000 - - 1,000Low Han Kee 20,000 - - 20,000

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its relatedcorporations during the financial year.

OTHER STATUTORY INFORMATION

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

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

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

DIRECTORS’ REPORT


DIRECTORS’ REPORT


(b) 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 the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

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

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

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

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

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

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

(f) In the opinion of the directors:

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

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

AUDITORS

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

Signed on behalf of the Board in accordance with a resolution of the directors dated 25 February 2008.

Dato’ Ab. Halim Bin Mohyiddin Low Han Kee

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, Dato’ Ab. Halim Bin Mohyiddin and Low Han Kee, being two of the directors of Amway (Malaysia) Holdings Berhad, dohereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 44 to 77 are drawnup in accordance with the provisions of Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia soas to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2007 and of theresults and the cash flows of the Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 25 February 2008.

Dato’ Ab. Halim Bin Mohyiddin Low Han Kee

I, Lim Ai Lin, being the officer primarily responsible for the financial management of Amway (Malaysia) Holdings Berhad, dosolemnly and sincerely declare that the accompanying financial statements set out on pages 44 to 77 are in my opinioncorrect, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions ofthe Statutory Declarations Act, l960.

Subscribed and solemnly declared bythe abovenamed Lim Ai Lin atKuala Lumpur in the Federal Territoryon 25 February 2008. Lim Ai Lin

Before me,

SOH AH KAU, AMN

Commissioner for OathsKuala Lumpur


STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965


REPORT OF THE AUDITORSTO THE MEMBERS OF AMWAY (MALAYSIA) HOLDINGS BERHAD (Incorporated in Malaysia)

We have audited the accompanying financial statements set out on pages 44 to 77. These financial statements are the responsibilityof the Company's directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report ouropinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do notassume responsibility to any other person for the content of this report.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit includes assessing the accounting principles used and significant estimates made by thedirectors, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides areasonable basis for our opinion.

In our opinion:

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

(i) the financial position of the Group and of the Company as at 31 December 2007 and of the results and the cash flows of the Group and of the Company for the year then ended; and

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

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

We have considered the financial statements and the auditors’ reports thereon of a subsidiary of which we have not actedas auditors, as indicated in Note 15 to the financial statements, being financial statements that have been included in theconsolidated financial statements.

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

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

Ernst & Young George KoshyAF:0039 No. 1846/07/09 (J)Chartered Accountants Partner

Kuala Lumpur, Malaysia25 February 2008

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

Note RM'000 RM'000 RM'000 RM'000

Revenue 3 584,251 723,660 84,488 90,345Cost of sales 4 (401,839) (526,907) - -

Gross profit 182,412 196,753 84,488 90,345Other income 5 14,964 8,480 2,953 3,690Distribution expenses (18,852) (25,697) - -Selling and administrative expenses (57,019) (65,693) (602) (778)Other expenses (1,193) (2,025) (24) (18)

Profit before tax 6 120,312 111,818 86,815 93,239Income tax expense 9 (32,400) (31,253) (23,523) (22,885)

Profit for the year/period 87,912 80,565 63,292 70,354

Earnings per share attributableto equity holders of theCompany (sen)- Basic, for profit for the year/period 10 53.5 49.0

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

INCOME STATEMENTSfor the year ended 31 December 2007


Group Company2007 2006 2007 2006

Note RM'000 RM'000 RM'000 RM'000

ASSETS

Non-current assetsProperty, plant and equipment 12 6,677 11,732 - -Intangible asset 13 4,782 4,782 - -Prepaid land lease payments 14 16,827 19,248 - -Investment in subsidiaries 15 - - 86,202 86,202Deferred tax assets 16 11,757 9,523 - -

40,043 45,285 86,202 86,202

Current assetsInventories 17 46,997 45,551 - -Trade and other receivables 18 19,146 10,610 448 152Cash and cash equivalents 19 201,623 167,107 82,484 85,499

267,766 223,268 82,932 85,651

TOTAL ASSETS 307,809 268,553 169,134 171,853

EQUITY AND LIABILITIES

Equity attributable to equityholders of the Company

Share capital 20 164,386 164,386 164,386 164,386Share premium 685 685 685 685Other reserves 1,497 1,526 1,365 1,365Retained earnings 21 59,346 37,435 2,274 4,983

Total equity 225,914 204,032 168,710 171,419

Current liabilitiesTrade and other payables 22 72,819 62,084 316 325Income tax payable 9,076 2,437 108 109

Total liabilities 81,895 64,521 424 434

TOTAL EQUITY ANDLIABILITIES 307,809 268,553 169,134 171,853



BALANCE SHEETSas at 31 December 2007

Non - Distributable DistributableCapital

Share Share redemption Translation Retained Totalcapital premium reserve reserve earnings equity

Note RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group

At 1 September 2005 164,386 685 1,365 72 32,487 198,995Foreign exchange

translation differences - - - 89 - 89Profit for the period - - - - 80,565 80,565Dividends 11 - - - - (75,617) (75,617)

At 31 December 2006 164,386 685 1,365 161 37,435 204,032Foreign exchange

translation differences - - - (29) - (29)Profit for the year - - - - 87,912 87,912Dividends 11 - - - - (66,001) (66,001)

At 31 December 2007 164,386 685 1,365 132 59,346 225,914

STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 December 2007


Non - Distributable DistributableCapital

Share Share redemption Retained Totalcapital premium reserve earnings equity

Note RM'000 RM'000 RM'000 RM'000 RM'000

Company

At 1 September 2005 164,386 685 1,365 10,246 176,682Profit for the period - - - 70,354 70,354Dividends 11 - - - (75,617) (75,617)

At 31 December 2006 164,386 685 1,365 4,983 171,419Profit for the year - - - 63,292 63,292Dividends 11 - - - (66,001) (66,001)

At 31 December 2007 164,386 685 1,365 2,274 168,710


< <

< <

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Cash Flows from Operating ActivitiesProfit before tax 120,312 111,818 86,815 93,239Adjustments for:

Amortisation of premium oninvestments - 10 - 3

Amortisation of prepaid landlease payments 301 323 - -

Depreciation of property,plant and equipment 2,292 4,386 - -

Gain on disposal of prepaid land leasepayments, property, plant and equipment (7,282) (245) - -

Interest income (7,355) (7,733) (2,953) (3,690)Property, plant and equipment written off - 7 - -Dividend income - - (84,488) (90,345)Net writeback of provision for

doubtful debts (88) (47) - -Inventories written down 672 1,462 - -Inventories written off 303 728 - -Unrealised foreign exchange (gain)/loss (256) 498 24 15

Operating profit/(loss) before workingcapital changes 108,899 111,207 (602) (778)

(Increase)/decrease in receivables (12,558) 2,251 (296) 409Increase in inventories (2,421) (2,532) - -Increase/(decrease) in payables 10,764 (17,320) (52) 70

Cash generated from/(used in) operations 104,684 93,606 (950) (299)Tax paid (27,995) (31,955) (712) (988)

Net cash generated from/(used in) operating activities 76,689 61,651 (1,662) (1,287)

CASH FLOW STATEMENTSfor the year ended 31 December 2007


Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Cash Flows from Investing ActivitiesAcquisition of property, plant

and equipment (1,375) (1,800) - -Prepayment of land lease - (9,094) - -Proceeds from disposal of prepaid land lease

payments, property, plant and equipment 13,540 12,759 - -Dividend received - - 61,676 68,378Interest received 7,355 7,733 2,953 3,690Disposal of investments - 10,100 - 5,000

Net cash generated from investing activities 19,520 19,698 64,629 77,068

Cash Flows from Financing ActivitiesDividends paid (66,001) (75,617) (66,001) (75,617)Payments made on behalf by/

(repayment to) related companies 4,481 (3,555) - -(Repayment to)/payments made on

behalf by penultimate holding company (144) 183 - -Payments made on behalf by/

(repayment to) subsidiary - - 43 (14)

Net cash used in financing activities (61,664) (78,989) (65,958) (75,631)

Net increase/(decrease) in cash andcash equivalents 34,545 2,360 (2,991) 150

Effects of foreign exchange ratechanges (29) 111 (24) -

Cash and cash equivalents atbeginning of year/period 167,107 164,636 85,499 85,349

Cash and cash equivalents atend of year/period (Note 19) 201,623 167,107 82,484 85,499


CASH FLOW STATEMENTSfor the year ended 31 December 2007


1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 7, Setia 1, 15 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia. The principal place of business of the Company is located at No 34, Jalan 223, 46100 Petaling Jaya, Selangor Darul Ehsan, Malaysia.

The immediate holding company is GDA B.V. (formerly known as Amway Global Development B.V.), a company incorporated in Netherlands. The ultimate and penultimate holding companies are Alticor Global Holdings Inc. and Solstice Holdings Inc. respectively. Both companies are incorporated in the United States of America.

The Company is the parent company of Amway (Malaysia) Sdn. Bhd. and Amway (B) Sdn. Bhd.. The principal activity of the Company is investment holding. The principal activities of the subsidiaries consist of the distribution of consumer products principally under the “Amway” trademark. There have been no significant changes in the nature of these activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 25 February 2008.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards (“FRS”) in Malaysia.

The financial statements of the Group and of the Company have been prepared on the historical basis unless otherwise indicated in the summary of significant accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the nearest thousand (RM'000) except when otherwise indicated.

2.2 Summary of Significant Accounting Policies

(a) Subsidiaries and Basis of Consolidation

(i) Subsidiaries

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

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

(ii) Basis of Consolidation

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

NOTES TO THE FINANCIAL STATEMENTS31 December 2007


2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

2.2 Summary of Significant Accounting Policies (Contd.)

(a) Subsidiaries and Basis of Consolidation (Contd.)

(ii) Basis of Consolidation (Contd.)

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

Amway (Malaysia) Sdn. Bhd. ("AMSB") and Amway (B) Sdn. Bhd. are accounted for using the merger and the purchase methods of consolidation respectively. Under the merger method of accounting, the cost of the merger is cancelled with the nominal values of the shares received. Any resulting credit difference is clarified as equity and reported as a non-distributable reserve. Any resulting debit differences is adjusted against any suitable reserve.

The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assetsacquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of anacquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

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

(b) Intangible Asset

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.





(c) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s 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 measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

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

Freehold land has an unlimited useful life and therefore is not depreciated.

Capital work in progress comprises the construction of buildings and renovation in progress which have not been commissioned. Capital work in progress is not depreciated.

Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings 2%Building improvements 10%Leasehold fixtures and improvements 33%Furniture fittings and equipment 10% - 33%Motor vehicles 25%

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

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss.

(d) Inventories

Inventories are stated at lower of cost and net realisable value.

Cost is determined using the first in, first out method. The cost comprises purchase price of inventories plus the cost of bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.





(e) Leases

(i) Classification

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

(ii) Operating Leases - the Group as Lessee

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

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term.

(iii) Operating Leases - the Group as Lessor

Assets leased out under operating leases are presented on the balance sheets according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease (Note 2.2(h)(iii)). Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

(f) Provisions

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

(g) 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 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 is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised 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 not recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.





(g) Income Tax (Contd.)

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 as income or an expense and included in the profit or loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirer’s interest is the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.

(h) Revenue Recognition

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

(i) Sale of Goods

Revenue is recognised net of discounts upon the transfer of significant risks and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Interest Income

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

(iii) Rental Income

Rental income is recognised on a straight-line basis over the term of the lease.

(i) Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of 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

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date.

Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

NOTES TO THE FINANCIAL STATEMENTS


31 December 2007



(i) Foreign Currencies (Contd.)

(ii) Foreign Currency Transactions (Contd.)

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period.

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

(j) Impairment of Non-financial Assets

The carrying amounts of the Company’s assets, other than inventories and deferred tax assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual assetbasis unless the asset does not generate cash flows that are largely independent of those from other assets.If this is the case, recoverable amount is determined for the cash-generating unit (“CGU”) to which the asset belongs to.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

An impairment loss is recognised in profit or loss in the period in which it arises. An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss.

(k) Employee Benefits

(i) Short Term Benefits

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





(k) Employee Benefits (Contd.)

(ii) Defined Contribution Plans

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

(l) 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 arrangement. 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 recognised directly in equity. Financial instruments are offset when the Company 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) Cash and Cash Equivalents

For the purpose of the cash flow statements, cash and cash equivalents include cash on hand and at bank and deposit at call which have an insignificant risk of changes in value.

(ii) Receivables

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

(iii) Payables

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

(iv) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.




2.3 Standards and Interpretations Issued but Not Yet Effective

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

Effective forfinancial periodsbeginning on or

afterFRS, Amendments to FRS and Interpretations

FRS 139 - Financial Instruments DeferredAmendment to FRS 121 - The Effects of Changes in Foreign

Exchange Rates : Net Investment in a Foreign Operation 1 July 2007IC Interpretation 1 - Changes in Existing Decommissioning, Restoration

and Similar Liabilities 1 July 2007IC Interpretation 2 - Members' Shares in Co-operative Entities and

and Similar Instruments 1 July 2007IC Interpretation 5 - Rights to Interests Arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds 1 July 2007IC Interpretation 6 - Liabilities Arising from Participating in a Specific

Market - Waste Electrical and Electronic Equipment 1 July 2007IC Interpretation 7 - Applying the Restatement Approach Under

FRS1292004 - Financial Reporting in Hyperinflationary Economics 1 July 2007IC Interpretation 8 - Scope of FRS 2 1 July 2007Amendment to FRS 107 - Cash Flow Statements 1 July 2007Amendment to FRS 111 - Construction Contracts 1 July 2007Amendment to FRS 112 - Income Taxes 1 July 2007Amendment to FRS 118 - Revenue 1 July 2007Amendment to FRS 120 - Accounting for Government Grants and

Disclosure of Government Assistance 1 July 2007Amendment to FRS 134 - Interim Financial Reporting 1 July 2007Amendment to FRS 137 - Provisions, Contingent Liabilities and

Contingent Assets 1 July 2007

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




2.4 Significant Accounting Judgements and Estimates

(a) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of acccounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in Note 13 - measurement of the recoverable amounts of cash-generating units.

3. REVENUE

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Sales of consumer products 584,251 723,660 - -Dividends - - 84,488 90,345

584,251 723,660 84,488 90,345

4. COST OF SALES

Cost of sales represent cost of inventories sold and attributable cost relating to the sale of consumer products.

5. OTHER INCOME

Included in other income are the following:

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Interest income 7,355 7,733 2,953 3,690Gain on disposal of prepaid land lease

payments, property, plant andequipment 7,282 245 - -



6. PROFIT BEFORE TAX

The following amounts have been included at arriving at profit before tax:

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Employee benefits expense (Note 7) 18,782 25,534 - -Non-executive directors'

remuneration excludingbenefits-in-kind (Note 8) 215 279 204 263

Auditors' remuneration- statutory 100 90 20 14- other services 10 10 10 10

Amortisation of premiumon investments - 10 - 3

Depreciation of property, plantand equipment 2,292 4,386 - -

Amortisation of prepaid land lease payments 301 323 - -Property, plant and equipment written off - 7 - -Unrealised loss on foreign exchange - 498 24 15Realised loss on foreign exchange 1,448 1,507 - -Unrealised gain on foreign exchange (256) - - -Net writeback of provision for doubtful debts (88) (47) - -Inventories written down 672 1,462 - -Inventories written off 303 728 - -Rental of premises 982 1,110 - -Rental of equipment (742) (124) - -Support charges paid/payable

to related companies 4,210 1,214 - -



7. EMPLOYEE BENEFITS EXPENSE

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Wages, salaries and others 16,434 22,129 - -Contribution to defined

contribution plan 2,348 3,405 - -

18,782 25,534 - -

Included in employee benefits expense of the Group are executive directors' remuneration amounting to RM1,581,000 (2006: RM1,905,000) as further disclosed in Note 8.

8. DIRECTORS' REMUNERATION

The directors' remuneration are as follows:

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Executive directors' remuneration(Note 7):Other emoluments 1,581 1,905 - -

Non-executive directors' remuneration(Note 6):Fees 200 261 189 245Other emoluments 15 18 15 18

215 279 204 263

Total directors' remuneration 1,796 2,184 204 263Estimated money value of

benefit-in-kind 51 58 - -Total directors' remuneration

including benefit-in-kind 1,847 2,242 204 263



8. DIRECTORS' REMUNERATION (CONTD.)

The details of remuneration receivable by directors of the Company during the year are as follows:

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Executive:Salaries and other emoluments 889 1,105 - -Bonus 431 480 - -Defined contribution plan 218 263 - -Allowances 43 57 - -Estimated money value of

benefit-in-kind 51 58 - -

1,632 1,963 - -

Non-Executive:Fees 200 261 189 245Allowances 15 18 15 18

1,847 2,242 204 263

The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:

Number of DirectorsCompany

2007 2006

Executive directors:RM550,001 - RM600,000 1 -RM700,001 - RM750,000 - 1RM1,000,001 - RM1,300,000 1 1

Non-executive directors:RM0 - RM50,000 5 5RM50,001 - RM100,000 1 1

8 8



9. INCOME TAX EXPENSE

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Current tax expense:Malaysian income tax 33,928 28,854 23,523 22,885Foreign tax 340 126 - -

34,268 28,980 23,523 22,885Under/(over)provision in prior years

Malaysian income tax 369 147 - -Foreign tax (3) (23) -

34,634 29,104 23,523 22,885

Deferred tax (Note 16)Relating to origination and reversal

of temporary differences (3,257) 2,315 - -Under/(over)provision in prior years 697 (166) - -Reduction in Malaysian income tax rate 326 - - -

(2,234) 2,149 - -

Total income tax expense 32,400 31,253 23,523 22,885

Domestic income tax is calculated at the Malaysian statutory tax rate of 27% (2006: 28%) of the estimated assessable profit for the year. The domestic statutory tax rate will be reduced to 26% from the current year's rate of 27%, effective year of assessment 2008 and to 25% in subsequent years of assessment. The computation of deferred tax as at31 December 2007 has reflected these changes.

Taxation for other jurisdiction is calculated at the rate prevailing in that jurisdiction.



9. INCOME TAX EXPENSE (CONTD.)

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

Group Company1.1.2007 1.9.2005 1.1.2007 1.9.2005

to to to to31.12.2007 31.12.2006 31.12.2007 31.12.2006

RM'000 RM'000 RM'000 RM'000

Profit before tax 120,312 111,818 86,815 93,239

Taxation at Malaysian statutory taxrate of 27% (2006: 28%) 32,484 31,309 23,440 26,107

Effect of change in tax rates 125 - - -Effect of different tax rate in other countries 33 10 - -Deferred tax recognised at

reduced tax rates 326 - - -Income not subject to tax (2,231) (456) (5) (3,334)Expenses not deductible for tax purposes 600 432 88 112Under/(over)provision of deferred tax in prior years 697 (166) - -Underprovision of tax expense in prior years 366 124 - -

Income tax expense for the year/period 32,400 31,253 23,523 22,885

10. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of theCompany by the weighted average number of ordinary shares in issue during the financial year held by the Company.

Group1.1.2007 1.9.2005

to to31.12.2007 31.12.2006

RM'000 RM'000

Profit attributable to ordinary equity holders of the Company 87,912 80,565

Weighted average number of ordinary shares in issue 164,386 164,386

Group1.1.2007 1.9.2005

to to31.12.2007 31.12.2006

Sen Sen

Basic earnings per share 53.5 49.0

There are no shares in issuance which have a dilutive effect to the earnings per share of the Group.




11. DIVIDENDS

TotalSen per amount

1.1.2007 to 31.12.2007 share RM'000 Date of payment

Fifth quarter interim 2006 ordinary 7.5 9,000 20 March 2007First quarter interim 2007 ordinary 7.5 9,000 1 June 2007Second quarter interim 2007 ordinary 7.5 9,000 20 September 2007Third quarter interim 2007 ordinary 7.5 9,000 18 December 2007Special interim 2007 ordinary 25.0 30,001 18 December 2007

Total amount 66,001

1.9.2005 to 31.12.2006

Fourth quarter interim 2005 ordinary 7.5 8,877 30 November 2005First quarter interim 2006 ordinary 10.0 11,836 2 March 2006Second quarter interim 2006 ordinary 7.5 8,877 6 June 2006Third quarter interim 2006 ordinary 7.5 8,877 12 September 2006Special interim 2006 ordinary 10.0 11,836 12 September 2006Special interim 2006 ordinary (tax exempt) 10.0 16,437 12 September 2006Fourth quarter interim 2006 ordinary 7.5 8,877 20 December 2006

Total amount 75,617

After the balance sheet date, the following dividend was declared by the Directors and this dividend will be recognised in subsequent financial reports.

TotalNet sen amount

per share RM'000

Fourth interim dividend 6.7 10,948





12. PROPERTY, PLANT AND EQUIPMENT

Leasehold Furniture, CapitalFreehold Building fixtures and fittings and Motor work-in-

land Buildings improvements improvements equipment vehicles progress TotalGroup RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 31 December 2007

Cost

At 1 January 2007 1,420 7,781 3,211 1,455 15,443 1,999 - 31,309Additions - - 37 3 332 106 897 1,375Disposals - (5,536) (1,669) - (1,161) (79) - (8,445)Effect of movements

in exchange rates - - - (1) (1) - - (2)

At 31 December 2007 1,420 2,245 1,579 1,457 14,613 2,026 897 24,237

AccumulatedDepreciation

At 1 January 2007 - 2,333 1,857 1,259 13,026 1,102 - 19,577Charge for the year - 146 228 137 1,360 421 - 2,292Disposals - (2,048) (1,060) - (1,120) (79) - (4,307)Effect of movements

in exchange rates - - - (1) (1) - - (2)

At 31 December 2007 - 431 1,025 1,395 13,265 1,444 - 17,560

Net Carrying Amount 1,420 1,814 554 62 1,348 582 897 6,677



12. PROPERTY, PLANT AND EQUIPMENT (CONTD.)

Leasehold Furniture,Freehold Building fixtures and fittings and Motor

land Buildings improvements improvements equipment vehicles TotalGroup (contd.) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 31 December 2006

Cost

At 1 September 2005 20,016 7,781 2,880 1,293 22,162 1,907 56,039Additions - - 337 158 661 644 1,800Disposals (18,596) - - - (27) (552) (19,175)Write off - - (6) - (7,358) - (7,364)Effect of movements

in exchange rates - - - 4 5 - 9

At 31 December 2006 1,420 7,781 3,211 1,455 15,443 1,999 31,309

AccumulatedDepreciation andImpairment Losses

At 1 September 2005 6,225 2,126 1,548 1,029 17,278 994 29,200Charge for the period - 207 315 226 3,121 517 4,386Disposals (6,225) - - - (27) (409) (6,661)Write off - - (6) - (7,351) - (7,357)Effect of movements

in exchange rates - - - 4 5 - 9

At 31 December 2006 - 2,333 1,857 1,259 13,026 1,102 19,577

Net Carrying Amount 1,420 5,448 1,354 196 2,417 897 11,732

12. PROPERTY, PLANT AND EQUIPMENT (CONTD.)

(i) During the year, a subsidiary entered into a sale and purchase agreement to dispose the land and building for a consideration of RM13,500,000. The disposal was completed on 20 November 2007 and at the same time the Group entered into a tenancy agreement with the party concerned to rent the building for a period of 2 years. Details of the lease obligations are disclosed in Note 25 (a).

(ii) Included in capital work-in-progress of the Group is an amount RM897,000 (2006: RM Nil) incurred in relation to the construction of the new headquarters building.

(iii) Included in the cost of property, plant and equipment of the Group are cost of fully depreciated assets which are still in use amounting to RM11,486,000 (2006: RM10,693,000).

13. INTANGIBLE ASSET

Group2007 2006

RM'000 RM'000

GoodwillCostAt beginning of the year/period 4,782 7,630Effect of adopting FRS 138 - (2,848)

At end of the year/period 4,782 4,782

Accumulated amortisationAt beginning and end of year/period - 2,848Effect of adopting FRS 138 - (2,848)

At end of the year/period - -

Carrying amount 4,782 4,782

(i) This represents the unamortised balance of goodwill arising from consolidation of Amway (B) Sdn. Bhd.

(ii) Value in use was determined by discounting the future cash flows generated from the continuing use of the unit and was based on the following key assumptions:

• Cash flows were projected based on actual operating results.• The subsidiary will continue its operation indefinitely.• The size of operation will remain with at least or not lower than the current results.

The key assumptions represent management’s assessment of future trends in the direct selling industry and are based on both external sources and internal sources (historical data).



14. PREPAID LAND LEASE PAYMENTS

Leaseholdland

RM'000

At 31 December 2007CostAt 1 January 2007 19,993Disposal (2,500)

At 31 December 2007 17,493

Accumulated amortisationAt 1 January 2007 745Amortisation for the year 301Disposal (380)

At 31 December 2007 666

Net carrying amount 16,827

At 31 December 2006CostAt 1 September 2005 10,899Additions 9,094

At 31 December 2006 19,993

Accumulated amortisationAt 1 September 2005 422Amortisation for the period 323


Net carrying amount 19,248

The leasehold land has unexpired period of more than 50 years.

15. INVESTMENT IN SUBSIDIARIES

Company2007 2006

RM'000 RM'000

Unquoted shares at cost 86,202 86,202



15. INVESTMENT IN SUBSIDIARIES (CONTD.)

Details of the subsidiaries are as follows:

Proportion ofOwnership Interest

Issued and Paid-up 2007 2006 PrincipalName of subsidiaries Share Capital % % Activities

Held by the Company:Amway (Malaysia) RM35,499,000 100 100 Distribution

Sdn. Bhd., of consumerincorporated in productsMalaysia principally

under the"AMWAY"trademark

Amway (B) Sdn. Bhd., BND10,000 100 100 Distributionincorporated in of consumerNegara Brunei productsDarussalam * principally

under the"AMWAY"trademark

* Audited by a member firm of Ernst & Young.

16. DEFERRED TAX ASSETS

Group2007 2006

RM'000 RM'000

At beginning of year/period 9,523 11,672Recognised in income statement (Note 9) 2,234 (2,149)

At 31 December 11,757 9,523

Presented after appropriate offsetting as follows:

Deferred tax assets 12,096 9,888Deferred tax liabilities (339) (365)

11,757 9,523



16. DEFERRED TAX ASSETS (CONTD.)

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

Deferred tax liabilities of the Group:

Property,plant and

equipmentRM'000

At 1 January 2007 365Recognised in income statement (26)


At 1 September 2005 958Recognised in income statement (593)


Deferred tax assets of the Group:Accrued

expensesRM'000

At 1 January 2007 (9,888)Recognised in income statement (2,208)

At 31 December 2007 (12,096)

At 1 September 2005 (12,630)Recognised in income statement 2,742

At 31 December 2006 (9,888)

17. INVENTORIES

Group2007 2006

RM'000 RM'000

Consumer products:At cost 46,855 45,183At net realisable value 142 368

46,997 45,551

During the financial year, inventories recognised as cost of sales amounted to RM239,837,000 (2006: RM323,298,000). The write-down of inventories to net realisable value amounted to RM672,000 (2006: RM1,462,000) and is included in cost of sales.



18. TRADE AND OTHER RECEIVABLES

Group Company2007 2006 2007 2006

RM'000 RM'000 RM'000 RM'000

Trade receivablesThird parties 15,351 1,924 - -Less: Provision for doubtful debts (295) (383) - -

15,056 1,541 - -Amount due from related companies 352 475 - -

15,408 2,016 - -

Other receivablesAmount due from related companies 892 4,879 - -Sundry receivables 884 372 443 146Deposits 437 434 5 6Prepayments 1,525 2,909 - -

3,738 8,594 448 152

19,146 10,610 448 152

The movement in provision for doubtful debts is as follows:

Group2007 2006

RM'000 RM'000

At beginning of year/period 383 430Add: Provisions during the year/period 30 11Less: Writeback of provision (118) (58)

At end of year/period 295 383

(a) Credit riskTrade receivables are non-interest bearing and a significant amount of the outstanding balance is repayable by way of monthly instalment plans ranging from 120 to 180 (2006: 120) days. The group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors.

(b) Amount due from related companiesRelated companies are companies within the Alticor Global Holdings Inc. group of companies. Amount due from all related parties are non-interest bearing and are repayable on demand. All related parties receivables are unsecured and are to be settled in cash.

Further details on related party transactions are disclosed in Note 26.

Other information on financial risks of other receivables are disclosed in Note 27.



19. CASH AND CASH EQUIVALENTS

Group Company2007 2006 2007 2006

RM’000 RM’000 RM'000 RM'000

Cash on hand and at banks 7,933 8,788 218 88Deposits with:

Licensed banks 193,318 158,029 82,266 85,411Licensed finance companies 372 290 - -

Cash and bank balances 201,623 167,107 82,484 85,499

Other information on financial notes of cash and cash equivalents are disclosed in Note 27.

20. SHARE CAPITAL

Number of OrdinaryShares of RM1 each Amount

2007 2006 2007 2006000 000 RM'000 RM'000

Authorised share capital:At beginning of year/period and

at end year/period 250,000 250,000 250,000 250,000

Issued and fully paid:At beginning of year/period and

at end year/period 164,386 164,386 164,386 164,386

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

21. RETAINED EARNINGS

Prior to the year of assessment 2008, Malaysian companies adopt the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders and such dividends will be exempted from tax in the hands of the shareholders ("single tier system"). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional period, the Company may utilise the credit in the 108 balance as at 31 December 2007 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007.

The Company has sufficient tax credit under Section 108 of the Income Tax 1967 and the balance in the tax exempt income of approximately RM213,000 (2006: RM193,000) account to frank the payment of dividends out of its entire retained profits as at 31 December 2007.



22. TRADE AND OTHER PAYABLES

Group Company2007 2006 2007 2006

RM'000 RM'000 RM'000 RM'000

Trade payablesThird parties 12,398 12,540 - -Amount due to related companies 8,117 8,151 - -

20,515 20,691 - -

Other payablesAmount due to related parties:

Penultimate holding company 103 247 - -Subsidiary - - 43 -Related companies 151 2 - -

Sundry payables 349 6,800 - 15Accrued expenses 51,701 34,344 273 310

52,304 41,393 316 325

Total 72,819 62,084 316 325

(a) Trade payables

Amount due to third parties are non-interest bearing and the normal credit term granted to the Group range from 30 to 90 (2006: 30 to 90) days.

(b) Amount due to related companies

The amount due to related companies are unsecured and bear interest at the federal rate as defined by the United States Treasury Regulation and Internal Revenue Code on overdue balances exceeding 90 (2006: 90) days from the date of invoice. The non-trade amounts due to related companies are mainly in respect of payments made on behalf. These amounts are to be settled in cash.

(c) Amount due to penultimate holding company

The amount due to penultimate holding company is in respect of support charges payable, which are unsecured and bear interest at the federal rate as defined by the United States Treasury Regulation and Internal Revenue Code on overdue balances exceeding 90 (2006: 90) days from the date of invoice. These amounts are to be settled in cash.

(d) Amount due to subsidiary

The amount due to subsidiary is in respect of advances, which are unsecured, interest free and repayable on demand.

(e) Accrued expenses

Included in accrued expenses of the Group is RM43,926,000 (2006: RM30,257,000) being the accruals for distributors’ bonuses and seminars.

Further details on related party transactions are disclosed in Note 26. Other information on financial risks of other payables are disclosed in Note 27.



23. SEGMENT REPORTING

The Group operates solely in the direct selling industry and distribution of its products is principally in Malaysia. The results and total assets of the subsidiary in Negara Brunei Darussalam are insignificant to the Group. Accordingly, information on geographical and business segments of the Group’s operations are not presented.

24. CAPITAL COMMITMENTS

Group2007 2006

RM'000 RM'000

Capital expenditure in respect ofProperty, plant and equipment including

the construction of headquarters building- Approved and contracted for 3,596 -- Approved and not contracted for 35,666 22

25. OPERATING LEASE ARRANGEMENTS

(a) The Group as lessee

The Group has entered into non-cancellable operating lease agreements for the use of land and building and equipment. These leases have an average life of between 3 and 5 years with renewal option included in the contracts. There are no restrictions placed upon the Group by entering into the leases.

The future aggregate minimum lease payments under the non-cancellable operating lease contracted for as at the balance sheet date but not recognised as liabilities are as follows:

Group2007 2006

RM'000 RM'000

Future minimum rentals payments

Not later than 1 year 1,869 717Later than 1 year and not later than 5 years 1,310 754

3,179 1,471

The lease payments recognised in profit or loss during the financial year are disclosed in Note 6.

(b) The Group as lessor

The Group has entered into non-cancellable operating lease agreements on its equipment. These leases have remaining non-cancellable lease term of 3 years.



25. OPERATING LEASE ARRANGEMENTS (CONTD.)

(b) The Group as lessor (contd.)

The future minimum lease payments receivable under non-cancellable operating leases contracted for as at the balance sheet date but not recognised as receivables, are as follows:

Group2007 2006

RM'000 RM'000

Not later than 1 year 742 742Later than 1 year and not later than 5 years 680 1,484

1,422 2,226

Rental income recognised in profit or loss during the financial year is disclosed in Note 6.

The Group leases a number of shop offices cum warehouse and shop lots under operating leases. The leases typically run for initial periods ranging from three (3) to five (5) years with the following options upon expiry of the initial lease periods:

One (1) lease renew the lease for a period of twelve (12) months by notifying the lessor in writing at least two (2) months before expiry.

Two (2) leases renew the lease for a period of twenty four (24) months by notifying the lessor in writing at least three (3) months before expiry or the lease will be renewed automatically in absence of written notice.

Three (3) leases renew the lease for a period of twenty four (24) months by notifying the lessor in writing at least three (3) months before expiry.

Two (2) leases renew the lease for a period of thirty six (36) months by notifying the lessor in writing at least three (3) months before expiry.

One (1) lease renew the lease for a period of forty eight (48) months by notifying the lessor in writing at least three (3) months before expiry.

Four (4) leases renew the lease for a further term by notifying the lessor in writing at least three (3) months before expiry.



26. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group had the following transactions with related parties during the financial year/period.

Group1.1.2007 1.9.2005

to to31.12.2007 31.12.2006

RM'000 RM'000

Sales of goods and services- Related company, Amway (Singapore) Pte. Ltd. (3,399) (4,613)Purchases- Related company, Access Business Group International LLC 165,237 220,912Support charges- Penultimate holding company, Solstice Holdings Inc. 515 515- Intermediate holding company, Amway Corporation 324 714- Related company, Amway IT Services Sdn. Bhd. 3,777 659- Related company, Amway Vietnam Co. Ltd. (788) (33)Rental of equipment- Related company, Amway IT Services Sdn. Bhd. (742) (124)Royalties paid- Related company, Access Business Group International LLC 519 538

Information regarding outstanding balances arising from related party transaction as at 31 December 2007 are disclosed in Notes 18 and 22.

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year/period was as follows:

Group1.1.2007 1.9.2005

to to31.12.2007 31.12.2006

RM'000 RM'000

Short-term employee benefits 2,300 2,789Post-employment benefits:

Defined contribution plan 381 471Allowances 106 147

2,787 3,407Included in the total key

management personnel are:

Executive directors' remuneration (Note 7) 1,581 1,905



27. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

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

(b) Interest Rate Risk

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

The weighted average effective interest rates (“WAEIR”) during the year and the remaining maturities of the Group’s and the Company's financial instruments that are exposed to interest rate risk are as follows:

Within 1 Within 1-2WAEIR year years Total

% RM'000 RM'000 RM'000

At 31 December 2007

GroupDeposits with licensed banks

and finance companies 3.78 193,690 - 193,690

CompanyDeposits with licensed banks


At 31 December 2006

GroupDeposits with licensed banks

and finance companies 3.73 153,281 5,038 158,319

CompanyDeposits with licensed banks


(c) Foreign Currency Risk

The Group is exposed to transactional currency risk primarily through purchases that are denominated in a currency other than the functional currency to which they relate. The currency giving rise to this risk is primarily United StatesDollar (“USD”).



27. FINANCIAL INSTRUMENTS (CONTD.)

(c) Foreign Currency Risk (Contd.)

The net unhedged financial assets and financial liabilities of the Group that are not denominated in their functional currencies are as follows:

Group2007 2006

RM'000 RM'000

Due to related companiesUnited States Dollar 8,087 7,681

Cash and bank balancesUnited States Dollar 28,468 26,135Euro 451 1,296

(d) Liquidity Risk

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash to meet its working capital requirements.

(e) Credit Risk

The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

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

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

(f) Fair Values

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

28. COMPARATIVE FIGURES

The comparative figures were audited by another firm of Chartered Accountants other than Ernst & Young.

As the previous financial statements covered a period of 16 months, the comparative amounts for the income statements, statements of changes in equity, cash flow statements and related notes are not comparable.



HEADQUARTERS34, Jalan 22346100 Petaling JayaSelangor Darul EhsanTel : 03 - 7964 5222Fax : 03 - 7964 5199

BUTTERWORTH10, Lorong Nagasari 4Taman Nagasari13600 Prai, PenangTel : 04 - 390 5222Fax : 04 - 390 5688

JOHOR BAHRU1, Jalan Sri Plentong 5Taman Perindustrian Sri Plentong81750 Masai, Johor Darul TakzimTel : 07 - 388 5111Fax : 07 - 387 5111

IPOH34, Hala Rapat Baru 22Taman Perusahaan Ringan Kinta JayaOff Jalan Gopeng, 31350 IpohPerak Darul RidzuanTel : 05 - 313 8222Fax : 05 - 313 3111

KUANTANLot 48/4, 48/5 & 48/6Kawasan Perindustrian Semambu 525350 KuantanPahang Darul MakmurTel : 09 - 568 1111

09 - 568 2222Fax : 09 - 566 0555

REGIONAL DISTRIBUTION CENTRES31 December 2007


MALACCA18, 18-1, 20 & 22Jalan PPM 2, Plaza PandanMalim Business Park75250 MelakaTel : 06 - 336 3600Fax : 06 - 335 7096

ALOR STARNo. 179, 179A & 180Jalan Shahab 5, Shahab PerdanaJalan Sultanah Sambungan05150 Alor StarKedah Darul AmanTel : 04 - 735 4266

04 - 735 4255Fax : 04 - 732 4277

MIRILot 302 Ricemill RoadMCLD, 98000 MiriSarawakTel : 085 - 429 222

085 - 432 795085 - 418 609

Fax : 085 - 427 222

KUCHINGLot 40 & 41Jalan Tun Ahmad Zaidi Adruce93200 Kuching, SarawakTel : 082 - 418 923

082 - 418 932Fax : 082 - 248 244

KOTA KINABALULot 30 Jalan Sembulan LamaKaramunsing88000 Kota Kinabalu, SabahTel : 088 - 245 111

088 - 245 222Fax : 088 - 245 666

SANDAKANLot 7 & 8, Block 12, Mile 4Jalan Labuk, Bandar Indah90000 Sandakan, SabahTel : 089 - 236 222

089 - 237 222Fax : 089 - 238 222

SIBUNo. 7 & 9 Ground FloorLorong Chew Siik Hiong 196000 Sibu, SarawakTel : 084 - 218 222Fax : 084 - 210 222

BRUNEINo. 6 & 7, Block AKompleks ShakirinKampong KiulapBandar Seri Begawan BE1518Brunei DarussalamTel : 00 - 673 - 2 - 236 164

00 - 673 - 2 - 236 165Fax : 00 - 673 - 2 - 236 167

PARTICULARS OF PROPERTIES

The properties held by the Group and the Company as at 31 December 2007 are as follows:-

Land Area Land Year Net Book Age of Date of(Sq. Metres) Tenure Of Expiry Value building Acquisition

Location Usage RM `000 (Years)

No. 28,

Jalan 223, Leasehold

46100 Petaling Jaya Construction expiring

Selangor Darul Ehsan in Progress 10,007 2 May 2071 2071 9,350 N/A 9/3/06

No. 26 & 26A,

Jalan 223,

Section 51A, Leasehold

46100 Petaling Jaya Construction expiring

Selangor Darul Ehsan in Progress 7,934 26 March 2069 2069 8,252 N/A 19/11/04

1, Jalan Sri Plentong 5,

Taman Perindustrian

Sri Plentong,

81750 Masai, Office &

Johor Warehouse 3,841 Freehold - 2,561 7 6/3/00

34, Hala Rapat Baru 22,

Taman Perusahaan

Ringan Kinta Jaya, Leasehold

Off Jalan Gopeng, Office & expiring

31350 Ipoh, Perak Warehouse 1,271 18 August 2094 2094 620 12 21/8/95

10, Lorong Nagasari 4,

Taman Nagasari, Office &

13600 Prai, Penang Warehouse 975 Freehold - 729 16 19/6/91



DISCLOSURE OF RECURRENT RELATED PARTY TRANSACTIONS

At the Twelfth Annual General Meeting held on 3 May 2007, the Company obtained a shareholders' mandate to allow theGroup to enter into recurrent related party transaction of a revenue or trading nature.

In accordance with Paragraph 4.1.5 of Practice Note No. 12/2001 of Listing Requirements of Bursa Malaysia SecuritiesBerhad, the details of recurrent related party transactions conducted during the financial year ended 31 December 2007pursuant to the shareholders' mandate are disclosed as follows:

Transacting Parties

Amounttransacted

Companies during the Nature of transactionswithin our Name of other financial year by companies within

Related parties Group Related Parties RM'000 our Group

Access Business Amway Alticor Global 14 (1) Payment of royalties onGroup International (Malaysia) Sdn Holdings Inc. any Substitute ProductLLC ("ABGIL") Bhd ("AMSB") and ("AGH"), Solstice incorporating or

Amway (B) Sdn Holdings Inc. ("SHI"), manufactured usingBhd ("ABSB") Alticor Inc. any ABGIL Intellectual

("Alticor"), Amway Property to ABGIL.Corporation,Amway Nederland 14 (2) Payment of sublicenseLtd. ("Amway fees on SubstituteNederland") and Products and/orGDA B.V. ("GDA") Additional Products

(formerly known bearing theas Amway Global sublicensedDevelopment B.V.) trademarks to ABGIL

491 (3) Payment of sublicensefees on SubstituteProducts and/orAdditional Productsthat are distributedunder the "AMWAY"trade name butwithout the sublicensedtrademarks and arenot manufacturedusing any ABGILIntellectual Propertyto ABGIL

ABGIL AMSB AGH, SHI, Alticor, 165,237 Purchase of consumerAmway Corporation, products from ABGILAmway Nederlandand GDA

83


Transacting Parties

Amounttransacted

Companies during the Nature of transactionswithin our Name of other financial year by companies within

Related parties Group Related Parties RM'000 our Group

Amway (Singapore) AMSB AGH, SHI, Alticor, 3,399 Sale of products to ASPLPte Ltd (“ASPL”) Amway Corporation,

Amway Nederlandand GDA

Amway IT Services AMSB and ABSB AGH, SHI, Alticor, 4,519 Procurement of IT supportSdn Bhd (“AlTS”) Amway Corporation, services from AITS

Amway Nederland,GDA and AmwayInternationalDevelopment, Inc(“AID”)

Notes:

1. ABGIL, a company incorporated in the United States of America, is effectively a wholly-owned subsidiary of AGH which is also the ultimate holding company of the Company.

2. Alticor, a company incorporated in the United States of America, is a wholly-owned subsidiary of SHI which is in turn a wholly-owned subsidiary of AGH.

3. Amway Corporation, a company incorporated in the United States of America, is a wholly-owned subsidiary of Alticor.

4. ASPL, a company incorporated in Singapore, is a wholly-owned subsidiary of Amway Corporation.

5. AITS, a wholly-owned subsidiary of AID which is in turn 60%-owned by Amway Corporation and 40%-owned by Alticor.

6. The Company is a 51.70%-owned subsidiary of GDA, a company incorporated in the Netherlands, which in turn is wholly-owned by Amway Nederland. Amway Nederland, a company incorporated in the United States of America, is a wholly-owned subsidiary of Amway Corporation, which in turn is wholly-owned by Alticor. Further, Alticor is an indirect holding company of ABGIL.

DISCLOSURE OF RECURRENT RELATED PARTY TRANSACTIONS


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Thirteenth Annual General Meeting of AMWAY(MALAYSIA) HOLDINGS BERHAD will be held at the Ballroom (Mezzanine Floor),Hotel Equatorial Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur on Wednesday,21 May 2008 at 2.00 p.m. for the following purposes:

AGENDA

As Ordinary Business

1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2007 together with the Directors' and the Auditors' Reports thereon.

2. To re-elect Mr Low Han Kee who is retiring pursuant to Article 87.1 of the Company's Articles of Association.

3. To re-elect Encik Abdul Wahab bin Nasir @ Mohd Nasir who is retiring pursuant to Article 87.1 of the Company's Articles of Association.

4. To re-elect Mr Yee Kee Bing who is retiring pursuant to Article 87.1 of the Company's Articles of Association.

5. To approve the increase in Directors' fees to RM215,000.00 for the financial year ending 31 December 2008.

6. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration.

As Special Business

To consider and, if thought fit, to pass the following resolution:

7. Proposed Renewal of Shareholders' Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature with Access Business Group International LLC ("ABGIL"), Alticor Inc. ("ALTICOR"), Amway Corporation, Amway (Singapore) Pte Ltd ("AMWAY (S)"), Amway IT Services Sdn Bhd ("AMWAY IT") and Amway Vietnam Co Ltd ("AMWAY (V)")

(The detailed text and rationale on Item 7 are contained in the Circular dated 25 April 2008 which is enclosed together with the Annual Report)

BY ORDER OF THE BOARD

TAI YIT CHAN (MAICSA 7009143)

SAW BEE LEAN (MAICSA 0793472)

Company Secretaries

Date : 25 April 2008

Ordinary Resolution 1







NOTES:

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

2. A member shall not be entitled to appoint more than two (2) proxies. Where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.

4. The instrument appointing a proxy must be deposited with the Share Registrar of the Company at Tenaga Koperat Sdn Bhd, 20th Floor, Plaza Permata, Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or at any adjournment thereof.

Explanatory Notes on the Special Business

5. Ordinary Resolution 7, if passed, will allow the Group to enter into recurrent related party transactions with ABGIL, Alticor, Amway Corporation, Amway (S), Amway IT and Amway (V) in the ordinary course of business and the necessity to convene separate general meetings from time to time to seek shareholders' approval as and when such recurrent related transactions occur would not arise. Besides facilitating a smoother and more efficient conduct of business, this would substantially reduce administrative time, inconvenience, expenses associated with the convening of such meetings and would place the Group in a better position to take advantage of business opportunities as and when they may arise, without compromising the corporate objectives of the Group. The shareholders' mandate is subject to renewal on an annual basis.

NOTICE OF ANNUAL GENERAL MEETING



Pursuant to the Paragraph 8.28(2) of the Bursa Securities Listing Requirements appended hereunder are:

a) Further details of Directors standing for re-election at the Thirteenth Annual General Meeting are as follows:-

Mr Low Han KeeManaging Director

• Malaysian, aged 48.• Qualified as a Certified Public Accountant in 1984 whilst serving in Ernst & Whinney (now known as Ernst & Young)• Took over the helm as the Managing Director of Amway (Malaysia) Holdings Berhad ("AMHB") on 1 September 1998.• Currently a Director of Amway (Malaysia) Sdn Bhd ("AMSB") and Amway (B) Sdn Bhd ("ABSB"), a subsidiary of AMSB.• Joined AMSB in 1990 as Divisional Manager, Finance & Administration. Promoted to General Manager responsible

for Amway operations in Malaysia and Brunei in January 1993. Prior to his appointment with the Group, he held senior positions in finance in companies listed on Bursa Securities, including Mulpha International Trading Corporation Berhad, a group involved in trading, construction and engineering, where he last held the position of Group Chief Accountant, from 1985 to 1990 before leaving to join AMSB.

• Appointed Director of AMHB on 6 June 1996. No directorship in other public listed companies.• Holds 20,000 shares, directly in the Company, however does not hold shares in any of its subsidiaries.• No family relationship with any Director and/or major shareholder of the Company.• No conflict of interest with the Company. • No convictions for offences.

Encik Abdul Wahab Bin Nasir @ Mohd Nasir AMN, SMPNon-Independent Non-Executive Director

• Malaysian, aged 55.• Graduated with a Bachelor of Social Science (Hons), Sociology & Anthropology from Universiti Sains Malaysia,

Pulau Pinang in 1983. • Obtained a Master of Development Administration from Western Michigan University, Kalamazoo, United States of

America in 1995.• Currently a Senior General Manager in Human Resource Department of Employees Provident Fund Malaysia

(“EPF”)• Prior to his current position, he held various positions in the Government sector, including the Education Ministry,

Department of Fisheries, Department of Inland Revenue and National Institute of Public Administration ("INTAN") from 1972 till 1983.

• Since 1983, he joined EPF Malaysia in the Training and Career Development Division as an Administrative Officer before becoming the Senior Manager of that Division in 1992.

• Promoted to General Manager of Corporate Services Department in 1996 and thereafter the General Manager of Human Resource Department in 1999.

• Promoted to Senior General Manager of Human Resource Department in 2001 and thereafter the Senior General Manager of Employees Provident Fund Social Security Training Institute ("ESSET") in 2006.

• Appointed Director of AMHB on 18 June 2004. No directorship in other public listed companies.• Does not hold shares in the Company or any of its subsidiaries.• No family relationship with any Director and/or major shareholder of the Company.• No conflict of interest with the Company. • No convictions for offences.

STATEMENT ACCOMPANYING NOTICE OF THIRTEENTH ANNUAL GENERAL MEETING

Mr Yee Kee BingExecutive Director

• Malaysian, aged 48.• Graduated with a Bachelor's Degree in Social Science (Major: Communications) from Universiti Kebangsaan

Malaysia in 1983.• Currently a Director and General Manager of AMSB.• President of Direct Selling Association of Malaysia ("DSAM").• Chairman of the Malaysia Chapter of the Asia Pacific Economic Cooperation Consumer Education and Protection

Initiative ("APEC CEPI") Committee.• Board Member of the World Federation of Direct Selling Associations.• Working Experience:-

a) July 1983 - October 1984: Accounts Servicing Executive, Art Beat Communications Sdn Bhd.b) November 1984 - 1988: Communications Executive, AMSB.c) 1988 - 1990: Communications Co-ordinator, AMSB.d) 1990 - 1992: Communications Manager, AMSB.e) 1992 - 1993: Group Product Manager, AMSB.f) 1993 - 1994: New Business Development Manager, AMSB.g) 1994 - 1999: Divisional Manager for Marketing Division, AMSB.h) 1999 - 2000: Assistant General Manager for Marketing & Business Development, AMSB.i) 2000 - 2004: General Manager of Operations, AMSB.

• Appointed Director of AMHB on 16 July 2004. No directorship in other public listed companies.• Does not hold shares in the Company or any of its subsidiaries.• No family relationship with any Director and/or major shareholder of the Company.• No conflict of interest with the Company.• No convictions for offences.

STATEMENT ACCOMPANYING NOTICE OF THIRTEENTH ANNUAL GENERAL MEETING



ANALYSIS OF SHAREHOLDINGSAs at 17 March 2008

Authorised Share Capital : RM250,000,000Issued and Paid-Up Share Capital : RM164,385,645Class of Shares : Ordinary Share of RM1.00 eachVoting Rights : One vote per share

ANALYSIS OF SHAREHOLDINGSDistribution of shareholdings according to size:

No. OfShareholders/ % Of Shareholders/ No. Of % Of

Size Of Holdings Depositors Depositors Shares Held Issued Capital

1 - 99 132 3.7660 5,133 0.0031100 - 1,000 1,117 31.8688 932,079 0.5670

1,001 - 10,000 2,062 58.8302 6,623,204 4.029110,001 - 100,000 159 4.5364 4,490,717 2.7318

100,001 - 8,219,281 32 0.9130 30,889,496 18.79098,219,282 and above 3 0.0856 121,445,016 73.8781

Total 3,505 100.0000 164,385,645 100.0000

SUBSTANTIAL SHAREHOLDERS

Direct IndirectNo. of No. of

Name Of Shareholders Shares held % Shares held %

GDA B.V. (“GDA”) (formerly known as 84,990,283 51.7018 - -Amway Global Development B.V.)

Amway Nederland Ltd - - *i84,990,283 51.7018

Amway Corporation - - *ii84,990,283 51.7018

Alticor Inc. - - *iii84,990,283 51.7018

Solstice Holdings Inc ("SHI") - - *iv84,990,283 51.7018

Alticor Global Holdings Inc ("AGH")*vi - - *v84,990,283 51.7018

Amanah Raya Nominees (Tempatan) Sdn Bhd 27,076,000 16.4710 - -- Skim Amanah Saham Bumiputera

Employees Provident Fund Board 9,378,733 5.7053 - -

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Notes:

*i Deemed interested by virtue of interest in GDA pursuant to Section 6A of the Companies Act, 1965.

*ii Deemed interested by virtue of interest in Amway Nederland Ltd pursuant to Section 6A of the Companies Act, 1965.

*iii Deemed interested by virtue of interest in Amway Corporation pursuant to Section 6A of the Companies Act, 1965.

*iv Deemed interested by virtue of interest in Alticor Inc. pursuant to Section 6A of the Companies Act, 1965.

*v Deemed interested by virtue of interest in SHI pursuant to Section 6A of the Companies Act, 1965.

*vi The equity interests in AGH are wholly held by certain trusts established by Jay Van Andel and Richard M. DeVos, the co-founders of the AGH group of companies.

SHAREHOLDING OF DIRECTORS

No. Of % OfName Of Directors Shares Held Issued Capital

1. Dato' Ab. Halim Bin Mohyiddin 1,000 **

2. Low Han Kee 20,000 0.0122

3. Scott Russell Balfour - -

4. Abdul Wahab Bin Nasir @ Mohd Nasir - -

5. Yee Kee Bing - -

6. Eva Cheng Li Kam Fun - -

7. Prof. Datuk Dr. Nik Mohd Zain Bin Nik Yusof - -

8. Dato' Cecil Wilbert Mohanaraj Abraham - -

**Negligible

ANALYSIS OF SHAREHOLDINGS


As at 17 March 2008

THIRTY LARGEST SHAREHOLDERS

No. Of % Of Shares Held Issued Capital

1 GDA B.V. 84,990,283 51.70182 Amanah Raya Nominees (Tempatan) Sdn Bhd 27,076,000 16.4710

- Skim Amanah Saham Bumiputera3 Employees Provident Fund Board 9,378,733 5.70534 Valuecap Sdn Bhd 6,958,100 4.23285 Lembaga Tabung Haji 6,296,331 3.83026 Amanah Raya Nominees (Tempatan) Sdn Bhd 4,904,566 2.9836

- Amanah Saham Malaysia7 Amanah Raya Nominees (Tempatan) Sdn Bhd 2,948,700 1.7938

- Amanah Saham Didik8 Permodalan Nasional Berhad 1,087,466 0.66159 MCIS Zurich Insurance Berhad 940,400 0.572110 Kurnia Insurans (Malaysia) Berhad 833,300 0.506911 OCBC Bank (Malaysia) Berhad 780,300 0.4747

- As Beneficial Owner (Prop)12 Amanah Raya Nominees (Tempatan) Sdn Bhd 575,000 0.3498

- Dana Al-Aiman13 Malaysian Reinsurance Berhad 500,000 0.304214 Cartaban Nominees (Tempatan) Sdn Bhd 480,333 0.2922

- Petronas For Petroliam Research Fund15 Cartaban Nominees (Tempatan) Sdn Bhd 424,000 0.2579

- Petroliam Nasional Berhad (Trading PF)16 Citigroup Nominees (Asing) Sdn Bhd 396,700 0.2413

- CBNY For DFA Emerging Markets Small Cap Series17 Amanah Saham Mara Berhad 389,500 0.236918 Citigroup Nominees (Asing) Sdn Bhd 382,600 0.2327

- Goldman Sachs International19 HSBC Nominees (Tempatan) Sdn Bhd 380,000 0.2312

- HSBC (M) Trustee Bhd For MAAKL Al-Fauzan (5170)20 Citigroup Nominees (Tempatan) Sdn Bhd 274,500 0.1670

- Uni.Asia Life Assurance Berhad (Life Fund)21 MCIS Zurich Insurance Berhad 249,400 0.151722 Cartaban Nominees (Tempatan) Sdn Bhd 219,000 0.1332

- Petronas For Petronas Retirement Benefit Scheme23 Tabung Amanah Warisan Negeri Johor 194,500 0.118324 Malaysian Reinsurance Berhad

- As Beneficial Owner (MMIP Fund) 185,900 0.113125 HSBC Nominees (Tempatan) Sdn Bhd 180,000 0.1095

- HSBC (M) Trustee Bhd For MAAKL Dividend Fund (5311-401)26 PM Nominees (Tempatan) Sdn Bhd 160,000 0.0973

- PCB Asset Management Sdn Bhd For MUI Continental Insurance Berhad27 AMSEC Nominees (Tempatan) Sdn Bhd 150,000 0.0912

- Amtrustee Berhad For HLG Dividend Fund (UT-HLG-Div)28 Amanah Raya Nominees (Tempatan) Sdn Bhd 145,000 0.0882

- Amanah Saham Nasional 3 Imbang29 Cartaban Nominees (Tempatan) Sdn Bhd 140,000 0.0852

- MIDF Amanah Asset Nominees (Tempatan) Sdn Bhd For Lembaga Tabung Haji (JG283)30 Amanah Raya Nominees (Tempatan) Sdn Bhd 136,000 0.0827

- Dana Bestari

151,756,612 92.3173

ANALYSIS OF SHAREHOLDINGSAs at 17 March 2008


I/We, _______________________________________________________ (name of shareholder as per NRIC, in capital letters) IC No./IDNo./Company No. _________________________________________________________ (new) _____________________________________________(old) of _______________________________________________________________________________________ (full address) being a member ofAMWAY (MALAYSIA) HOLDINGS BERHAD, hereby appoint ________________________________________________ (name of proxy as perNRIC, in capital letters) IC No. ___________________________________________________ (new) ________________________(old) of_________________________________________________________________________________________ (full address) or failing him/her____________________________________________________________________________ (name of proxy as per NRIC, in capital letters)IC No. _____________________________________________ (new) ______________________________ (old) of _________________________________________________________________________________________ (full address) or failing him/her, the Chairman of the Meeting asmy/our proxy to vote for me/us on my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at the Ballroom(Mezzanine Floor), Hotel Equatorial Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur on Wednesday, 21 May 2008 at 2.00 p.m or atany adjournment thereof.

My/our proxy is to vote as indicated below.

RESOLUTIONS FOR AGAINST

1. OrdinaryResolution 1







(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstainfrom voting at his/her discretion.)

Signature/Common Seal

Number of shares held :

Date :

NOTES:

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

2. A member shall not be entitled to appoint more than two (2) proxies. Where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.

4. The instrument appointing a proxy must be deposited with the Share Registrar of the Company at Tenaga Koperat Sdn Bhd, 20th Floor, Plaza Permata, Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or at any adjournment thereof.

AMWAY (MALAYSIA) HOLDINGS BERHAD (340354 U)Incorporated in Malaysia

PROXY FORM

For appointment of two proxies, percentage ofshareholdings to be represented by the proxies:

No. of shares Percentage

Proxy 1 %

Proxy 2 %

Total 100%

CDS account no. of authorised nominee

Adoption of Audited Financial Statements and Directors’ and Auditors’Reports for the financial year ended 31 December 2007

Re-election of Mr Low Han Kee as Director

Re-election of Encik Abdul Wahab bin Nasir @ Mohd Nasir as Director

Re-election of Mr Yee Kee Bing as Director

Approval of Directors’ fees for the financial year ending 31 December 2008

Re-appointment of Messrs Ernst & Young as Auditors of the Company andto authorise the Directors to fix their remuneration

Proposed Renewal of Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature with Access Business GroupInternational LLC, Alticor Inc, Amway Corporation, Amway (Singapore) PteLtd, Amway IT Services Sdn Bhd and Amway Vietnam Co. Ltd.

The Share RegistrarsTENAGA KOPERAT SDN. BHD. (118401-V)

20th Floor, Plaza PermataJalan Kampar, Off Jalan Tun Razak

50400 Kuala LumpurP.O.Box 12216, 50770 Kuala Lumpur

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