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Notes to Financial StatementsFor the year ended 31 December 2007

31ANNUAL REPORT 2007

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

(b) Adoption of new and revised Financial Reporting Standards (“FRS”)

The following applicable FRSs have been adopted by the Group and the Company:-

(a) FRSs that are mandatory for financial periods beginning on or after 1 October 2006:-

(i) FRS 117 - Leases

FRS 117 is not relevant to the Company.

(ii) FRS 124 - Related Party Disclosures

The adoption of FRS 124 does not have significant financial impact on the Group and the Company.

(b) FRSs and amendment that are mandatory for financial periods beginning on or after 1 January 2007:-

(i) FRS 6 - Exploration for and Evaluation of Mineral Resources

FRS 6 is not relevant to the Group and the Company.

(ii) Amendment to FRS 1192004: Employee Benefits – Actuarial Gains and Losses, Group Plans and Disclosures

Amendment to FRS 1192004 is not relevant to the Group and the Company.

(c) The amendment to published standards, IC Interpretations to existing standards and new revised FRSs effective for the Group and the Company for financial periods beginning on or after 1 July 2007 are as follows:-

1) Amendment to FRS 121 - The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation

2) IC Interpretation 1 - Changes in Existing Decommissioning, Restoration and Similar Liabilities

3) IC Interpretation 2 - Members’ Shares in Co-operative Entities and Similar Instruments

4) IC Interpretation 5 - Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

5) IC Interpretation 6 - Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment

6) IC Interpretation 7 - Applying the Restatement Approach under FRS 1292004 – Financial Reporting in Hyperinflationary Economies

7) IC Interpretation 8 - Scope of FRS 2

8) FRS 107 - Cash Flow Statements

9) FRS 111 - Construction Contracts

10) FRS 112 - Income Taxes

11) FRS 118 - Revenue


ANNUAL REPORT 200732


(b) Adoption of new and revised Financial Reporting Standards (“FRS”) (Cont’d)

(c) The amendment to published standards, IC Interpretations to existing standards and new revised FRSs effective for the Group and the Company for financial periods beginning on or after 1 July 2007 are as follows (Cont’d):-

12) FRS 120 - Accounting for Government Grants and Disclosure of GovernmentAssistance

13) FRS 134 - Interim Financial Reporting

14) FRS 137 - Provisions, Contingent Liabilities and Contingent Assets

The Group and the Company have not early adopted the above Amendment, Interpretations and FRSs.

The above Amendment, Intrepretations and FRS 120 are not applicable to the Group and the Company.

The initial application of the above applicable FRSs are not expected to have any material impact on the financial statements of the Group and the Company.

(d) Deferred FRS 139 – Financial Instruments: Recognition and Measurement

Malaysian Accounting Standards Board has yet to announce the effective date of this standard.

(e) The adoption of FRS 124 – Related Party Disclosures does not have significant financial impact on the Group and the Company. The principal effects of the changes in accounting policy resulting from the adoption of FRS 117 - Leases are as follows:-

Leasehold land held for own use

Prior to 1 January 2007, leasehold land held for own use was classified as property, plant and equipment and was stated at cost less accumulated depreciation and impairment losses. The adoption of FRS 117 has resulted in a change in the accounting policy relating to the classification of leases of land and buildings. 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. Leasehold land held for own use is now classified as operating lease and where necessary, the minimum lease payments or the up-front payments made are allocated 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 land lease payments and are amortised on a straight-line basis over the remaining lease term.

The Group has applied the change in accounting policy in respect of leasehold land in accordance with the transitional provisions of FRS 117. At 1 January 2007, the unamortised amount of leasehold land is retained as the surrogate carrying amount of prepaid land lease payments as allowed by the transitional provisions. The reclassification of leasehold land as prepaid land lease payments has been accounted for retrospectively and as disclosed in Note 3(b)(g), certain comparatives have been restated. The effects on the consolidated balance sheet as at 31 December 2007 are set out in Note 3(b)(f). The leasehold land of the Group was revalued at comparison method in the financial year 2006.




(b) Adoption of new and revised Financial Reporting Standards (“FRS”) (Cont’d)

(f) The following tables provide estimates of the extent to which each of the line items in the balance sheets and income statements for the financial year ended 31 December 2007 is higher or lower than it would have been had the previous policy been applied in the current financial year.

(i) Effects on balance sheets as at 31 December 2007:- Increase/(Decrease)

Before the FRS 117 After theeffect of Note effect of new FRS 3(b)(a)(i) new FRS

RM RM RM

Property, plant and equipment 92,883,915 (86,687,032) 6,196,883 Prepaid land lease payments - 86,687,032 86,687,032

(ii) There is no effect to the income statements.

(g) The following comparative amounts have been restated as a result of adopting FRS 117:-

Increase/(Decrease) Previously FRS 117 As

stated Note restated 2006 3(b)(a)(i) 2006 RM RM RM

Property, plant and equipment 93,816,696 (87,686,330) 6,130,366 Prepaid land lease payments - 87,686,330 87,686,330

(c) Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group's accounting policies and reported amounts of assets, liabilities, income, expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual result may differ from these estimates.

(i) Key sources of estimation uncertainty

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

Income tax

The Group and the Company is exposed to income taxes in numerous jurisdictions. Significant judgement is involved in determining the Group’s and the Company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognised tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.




(c) Significant accounting estimates and judgements (Cont’d)

(i) Key sources of estimation uncertainty (Cont’d)

Income tax (Cont’d)

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

Depreciation of property, plant and equipment

Property, plant and equipment are depreciated in a straight-line basis over their useful life. Management estimated the useful life of these assets to be within 3 to 50 years. Changes in the expected level of usage and technological developments could impact the economic useful life and the residual values of these assets, therefore future depreciation charges could be revised.

Impairment of property, plant and equipment, biological assets, investment properties, investment in subsidiary companies and investment in associate company

The Group and the Company carried out the impairment test based on a variety of estimation including the value-in-use of the cash-generating units to which the property, plant and equipment, biological assets, investment properties, investment in subsidiary companies and investment in associate company are allocated. Estimating the value-in-use requires the Group and the Company to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

(ii) Critical judgement made in applying accounting policies

The following is the judgement made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.




(c) Significant accounting estimates and judgements (Cont’d)

(ii) Critical judgement made in applying accounting policies (Cont’d)

Construction contract

Construction contract accounting requires reliable estimation of the costs to complete the contract and reliable estimate of the stage of contract completion. Using experience gained on each contract and taking into account of the expectation of the time and materials required to complete the contract, management uses budgeting tools to estimate the profitability of the contract at any time.

Construction contract accounting requires that variation, claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customer. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly.

(d) Basis of consolidation

The Group financial statements consolidate the audited financial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Group’s accounting policies.

All intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated on consolidation unless cost cannot be recovered.

The financial statements of the Company and its subsidiary companies are all drawn up to the same reporting date.

Acquisition of subsidiary companies is accounted for using the purchase method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.

Any excess of the cost of the business combination 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 business combination is recognised as income on the date of acquisition.

Minority interests represent the portion of profit or loss and net assets in subsidiary companies not held by the Group. They are presented in the consolidated balance sheets within equity, separately from the parent shareholders' equity, and are separately disclosed in the consolidated income statements.

Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets together with any unamortised or unimpaired balance of goodwill on acquisition and exchange differences.




(e) Property, plant and equipment

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on the straight line method in order to write off the cost of each asset over its estimated useful lives. No depreciation is provided on freehold land and work-in-progress.

Revaluation is made at least once in every five years by an independent valuer on an open market value basis. Any revaluation increase is credited to equity as a revaluation surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case, the increase is recognised in the income statement to the extent of the decrease previously recognised. A revaluation decrease is first offset against an increase on unutilised revaluation surplus previously recognised in respect of the same asset and is thereafter recognised as an expense. Upon the disposal of revalued assets, the attributable revaluation surplus remaining in the revaluation reserve is transferred to accumulated losses.

The principal annual depreciation rates used are as follows:-

Buildings 2% - 15% Plant and machinery 10% - 33% Furniture, fittings and office equipment 10% - 15% Motor vehicles 20%

Restoration cost relating to an item of property, plant and equipment is capitalised only if such expenditure is expected to increase the future benefits from the existing property, plant and equipment beyond its previously assessed standard of performance.

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

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 property, 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. Any gain or loss arising on derecognition of the asset is included in the income statements in the financial year the asset is derecognised.

(f) Subsidiary companies

A subsidiary company is a company in which the Company or the Group either directly or indirectly owns a power to govern its financial and operating policies so as to obtain benefits from its activities.

Investment in subsidiary companies is stated at cost. Where an indication of impairment exists, the carrying amount of the subsidiary companies is assessed and written down immediately to their recoverable amount.

(g) Associate companies

An associate company is a company in which the Company or the Group has a long term equity interest of between 20 to 50 percent and where it exercise significant influence over its financial and operating policies through management participation but not to exert control over those policies.




(g) Associate companies (Cont’d)

Investment in associate company is accounted for in the consolidated financial statements using equity accounting which involves recognising in the income statement the Group’s share of the results of associate company based on the audited financial statements of the associate company. The Group’s investment in associate company are carried in the balance sheet at an amount that reflects its share of the net assets of the associate company. Equity accounting is discontinued when the carrying amount of the investment in an associate company reaches zero, unless the Group has incurred obligations or guaranteed obligations in respect of the associate company.

Investment in associate company is stated at cost. Where an indication of impairment exists, the carrying amount of the associate company is assessed and written down immediately to their recoverable amount.

(h) Non-current assets held for sale and discontinued operations

A component of the Group is classified as discontinued operation when the criteria to be classified as held for sale have been met or it has been disposed of and such a component, represents a separate major line of business or geographical area of operations, is part of a single co-ordinated major line of business or geographical area of operations or is a subsidiary company acquired exclusively with a view to resale.

Disposal groups or non-current assets are deemed to be held for sale if their carrying amount is recovered principally through a sale transaction rather than through a continuing use.

Classification as the asset (or disposal group) held for sale occurs only when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary and the sale must be highly probable. Management must be committed to a plan to sell the assets which is expected to qualify for recognition as a completed sale within one year from the date of classification. Action required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn.

Immediately before the initial recognition of the asset (or disposal group) as held for sale, the carrying amounts of the asset (or all the assets and liabilities in the Group) are measured in accordance with the applicable FRSs. Upon classification as held for sale, non-current assets and disposal groups are measured at the lower of carrying amount and fair value less costs to sell and is not depreciated. Any differences are recognised in the income statement.

(i) Investments properties

Investment properties consist of land and buildings held for capital appreciation or rental purpose and not occupied or only an insignificant portion is occupied for use or in the operations of the Group.

Investment properties are stated at fair value, which reflects market conditions at the balance sheet date by external valuers. Changes in the fair values of investments properties are included in the income statement in the financial year in which they arise.

Investment properties are derecognised when either they are disposed off or when they are permanentlywithdrawn from use and no future economic benefit is expected from the disposal. Any gain or loss onthe retirement or disposal of an investment property is recognised in the income statement in the financial year of retirement or disposal.

(j) Inventories

Inventories are stated at the lower of cost and net realisable value after adequate allowance has been made for deteriorated, obsolete and slow moving inventories.




(j) Inventories (Cont’d)

Cost is determined on a first-in-first-out method. The costs of raw materials comprise costs of purchase. The cost of finished goods comprises raw materials, direct labour, other direct costs and appropriate proportions of production overheads.

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.

(k) Receivables

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

(l) Payables

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

(m) Assets acquired under hire purchase and lease arrangements

Finance leases

Lease of property, plant and equipment acquired under hire purchase and finance lease arrangements which transferred substantially all the risks and rewards of ownership to the Group are capitalised. The depreciation policy on these assets is similar to that of the Group’s property, plant and equipment depreciation policy.

Outstanding obligation due under hire purchase and finance lease arrangements after deducting finance expenses are included as liabilities in the financial statements. Finance charges on hire purchase and finance lease arrangements are allocated to income statement over the period of the respective agreements.

Operating leases

Leased payments for operating leases, where substantially all the risk and benefits remain with the lessor, are charged as expenses in the period in which they are incurred.

Leased assets

Leasehold land that normally has an indefinite economic life and title which is not expected to pass to the Group by the end of the lease term is treated as operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid land lease payment and is amortised over the respective lease period of 79 to 99 years.

The Directors have applied the transitional provisions of FRS 117-Leases, treating the leasehold land as prepaid land lease payment which was previously classified as property, plant and equipment and allow the Group to retain the unamortised revalued amount of the previously revalued leasehold land as the surrogate carrying amount of prepaid land lease payment and such prepaid land lease payment shall be amortised on a straight line basis over the lease term.




(n) Construction contracts

Construction contracts are contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised over the period of contract as revenue and expenses respectively by reference to the percentage of completion of the contract activity at the balance sheet date.

The Group uses the percentage of completion method to determine the appropriate amount of revenue and costs to be recognised in a period of the contract to the proportion that contract costs incurred for work performed to date bear to the estimated total contract cost.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that is probably recoverable and contract costs are recognised as expenses in the period in which they are incurred.

Irrespective whether the outcome of a construction contract can be estimated reliably, when it is probable that contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings up to the financial year end. Where costs incurred and recognised profits (less recognised losses) exceed progress billings, the balance is shown as amounts due from customers on contracts under current assets. Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers on contracts under current liabilities.

(o) Income tax

Income tax on the profit or loss for the financial year comprises current and deferred tax. Current tax expenses are the expected amount of income taxes payable in respect of the taxable profit for the financial year and are measured using the tax rates that have been enacted by the balance sheet date.

Deferred tax liabilities and assets are provided for under the liability method at the current tax rate in respect of all temporary differences at the balance sheet date between the carrying amount of an asset or liability in the balance sheet and its tax base including unutilised tax losses and unabsorbed capital allowances.

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

Deferred tax is recognised in the income statements, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.

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 by the balance sheet date.




(p) Biological assets

The biological assets comprise new planting expenditure of a different produce crop incurred up to the time of maturity and is capitalised until the trees attain maturity which are stated at cost or valuation. Replanting expenditure are recognised as an expense in the income statement in the period in which they are incurred.

The biological assets are tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying amount may be impaired. The Group’s biological assets comprise oil palm plantations and are not amortised.

(q) Financial instruments

Financial instruments carried on the balance sheet include cash and bank balances, fixed deposits with licensed financial institutions, investments, receivables, payables and borrowings. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item.

Financial instruments are offset when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

(r) Impairment of assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication of impairment.

If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. Recoverable amount of an asset is the higher of its 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.

An impairment loss is recognised as an expense in the income statements immediately, unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any unutilised previously recognised revaluation surplus for the same asset.

An assessment is made at each balance sheet date as to whether there is any indication that previously recognised impairment losses for an asset may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

All reversals of impairment losses are recognised as income immediately in the income statements unless the asset is carried at revalued amount, in which case the reversal in excess of impairment loss previously recognised through the income statements is treated as revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the revised carrying amount of the asset, less any residual value, on a systematic basis over its remaining useful life.




(s) Revenue recognition

Revenue from sale of goods are recognised as income upon delivery of goods and customers’ acceptance net of discount and sales return.

Revenue from construction contracts are accounted for under the percentage of completion method. The stage of completion is measured by reference to actual costs incurred to date to estimated total costs for each contract. Any anticipated loss will be recognised in full.

Interest income is recognised on a time proportion basis that reflects the effective yield on the assets.

Dividend income is included in the income statement when the shareholder’s right to receive has been established.

(t) Employee benefits

(i) Short term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the financial 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, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occurred.

(ii) Defined contribution plan

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities of funds and will have no legal or constructive obligation to pay further contribution 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 recongised as expenses in the income statements as incurred. As required by law, the Group made such contributions to Employee Provident Fund (“EPF”).

(u) Interest-bearing borrowings

Interest-bearing borrowings are recorded at the amount of proceeds received.

(v) Borrowing costs

Borrowing costs attributable to the acquisition, construction or production of an asset during periods when activities necessary to prepare the asset for its intended use are in progress, are capitalised as a component of the cost of the asset. Such capitalisation ceases when substantially all activities necessary to prepare the asset for its intended use are completed.

All other borrowing costs are recognised as expenses in the income statement in the period in which they are incurred.

(w) Dividends

Dividends on ordinary shares are accounted for in shareholders’ equity as an appropriation of unappropriated profit in the period on which they are declared.




(x) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, fixed deposits with licensed financial institutions and short term demand deposits which are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

(y) Segmental results

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash and cash equivalents, receivables, inventories, intangibles assets and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. Segment liabilities include all liabilities used by a segment and consist principally of payables and borrowings. The majority of the segment assets and liabilities can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include tax payable and deferred taxation.

(z) Intersegment transfers

Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the Group at an arm’s length transactions. These transfers are eliminated on consolidation.

4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

The Company is principally engaged in investment holding. The principal activities of its subsidiary companies and associate company are disclosed in Note 14 and 15 to the financial statements.

There have been no significant changes in the nature of activities of the Company, its subsidiary companies and associate company during the financial year.

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

The registered office and principal place of business of the Company is located at No. 67 & 69, Jalan SBC 1, Taman Sri Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan.

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

5. SHARE CAPITAL Group and Company2007 2006RM RM

Authorised:- Ordinary shares of RM1 each 150,000,000 150,000,000

Issued and fully paid:- Ordinary shares of RM1 each 119,997,000 119,997,000



6. REVALUATION RESERVE Group

2007 2006RM RM

Brought forward 56,824,465 27,336,231 Additions - 40,955,881 Transferred from/(to) deferred taxation 135,000 (11,467,647) Realisation of revaluation reserve upon disposal of revalued assets (1,816,968) -

55,142,497 56,824,465

The revaluation reserve arose from the revaluation of properties.

The above reserve is not available for distribution as dividends.

7. FINANCE CREDITORS Group

2007 2006RM RM

Minimum payments - not later than 1 year 476,643 483,081 - later than 1 year but not later than 5 years 328,297 511,785

804,940 994,866 Less : Interest in suspense (65,843) (88,828)

Present value of finance creditors 739,097 906,038

Present value of finance creditors - not later than 1 year 470,726 428,867 - later than 1 year but not later than 5 years 268,371 477,171

739,097 906,038

The amount payable not later than 1 year has been included in other payables.

8. BORROWINGS Group

2007 2006RM RM

Secured:- Term loans 383,282 413,851 Bank overdrafts - 292,373

383,282 706,224

Amount payable within 1 year 33,656 325,721 Amount payable after 1 year 349,626 380,503

383,282 706,224

The term loan is repayable by 180 monthly instalments of RM2,779 each.

The term loans are secured by buildings of a subsidiary company. Interest is charged at a rate of 7.75% (2006: 6.00%) per annum.

In the previous financial year, the bank overdrafts were secured by leasehold land and biological assets of a subsidiary company. Interest is charged at a rate of 8.37% per annum.



9. DEFERRED TAX LIABILITIES AND DEFERRED TAX ASSETSGroup

2007 2006RM RM

Deferred tax liabilities

Brought forward 34,817,091 16,813,444 Transferred (to)/from income statements (372,000) 390,000 Transferred (to)/from revaluation reserves (135,000) 17,613,647 Realisation of deferred tax upon disposal of revalued assets (706,599) -

Carried forward 33,603,492 34,817,091

The balance in the deferred tax liabilities is made up of temporary differences arising from:-

Group2007 2006RM RM

Carrying amount of qualifying property, plant and equipment in excess of their tax base 16,124,845 17,203,444 Revaluation of properties 17,478,647 17,613,647

33,603,492 34,817,091 Deferred tax assets

Brought forward/Carried forward 257,000 257,000

The balance in the deferred tax assets is made up of temporary differences arising from unutilised tax losses of a subsidiary company.

The tax effects of temporary differences which would give rise to net future tax benefit are generally recognised only where there is a reasonable expectation of realisation. As at 31 December 2007, the estimated amount of deferred tax assets calculated at current tax rate, which have not been recognised in the financial statements, are as follows:-

Group2007 2006RM RM

Unabsorbed capital allowances 219,000 613,000 Unutilised tax losses 18,345,000 19,618,000

18,564,000 20,231,000

The potential deferred tax assets are not recognised in the financial statements as the subsidiary companies have a recent history of making losses.



10. PROPERTY, PLANT AND EQUIPMENTFurniture,

fittings RestatedFreehold Freehold Plant and and office Motor Work-in- Total Total

Group land buildings machinery equipments vehicles progress 2007 2006RM RM RM RM RM RM RM RM

Cost or valuation

Brought forward - cost 65,000 - 10,756,880 2,669,996 6,781,469 139,462 20,412,807 27,038,038 - valuation - 5,314,175 - - - - 5,314,175 65,608,308Effect of adopting FRS 117 (Note 11) - - - - - - - (58,926,728)

65,000 5,314,175 10,756,880 2,669,996 6,781,469 139,462 25,726,982 33,719,618Additions - 128,717 66,971 199,687 440,672 178,415 1,014,462 5,994,511 Revaluation - - - - - - - 24,619,002 Disposals - (225,100) (1,208,000) (21,900) (359,577) - (1,814,577) (2,220,955) Written off - - - (39,648) - - (39,648) (53,516) Transfer to biological assets - - - - - - - (96,000) Transfer to assets classified as held for sale - - - - - - - (6,187,801) Effect of adopting FRS 117 (Note 11) - - - - - - - (30,047,877)

Carried forward 65,000 5,217,792 9,615,851 2,808,135 6,862,564 317,877 24,887,219 25,726,982

Representing - At cost 65,000 - 9,615,851 2,808,135 6,862,564 317,877 19,669,427 20,412,807- At valuation - 5,217,792 - - - - 5,217,792 5,314,175

Carried forward 65,000 5,217,792 9,615,851 2,808,135 6,862,564 317,877 24,887,219 25,726,982

Accumulated depreciation

Brought forward - 1,610,966 10,601,287 2,033,652 5,350,711 - 19,596,616 23,817,498Effect of adopting FRS 117 (Note 11) - - - - - - - (564,642)

- 1,610,966 10,601,287 2,033,652 5,350,711 - 19,596,616 23,252,856 Charge for the financial year - 175,267 37,414 189,158 371,172 - 773,011 1,766,102 Disposals - (108,048) (1,170,000) (21,900) (359,577) - (1,659,525) (2,098,502) Written off - - - (19,766) - - (19,766) (53,371) Transfer to assets classified as held for sale - - - - - - - (2,546,836) Effect of adopting FRS 117 (Note 11) - - - - - - - (723,633)

Carried forward - 1,678,185 9,468,701 2,181,144 5,362,306 - 18,690,336 19,596,616

Net carrying amount

2007 65,000 3,539,607 147,150 626,991 1,500,258 317,877 6,196,883 -

2006 65,000 3,703,209 155,593 636,344 1,430,758 139,462 - 6,130,366

Depreciation charge for the financial year ended31 December 2006 - 286,369 140,993 231,956 383,151 - - 1,042,469



10. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Company Office Total Totalequipment 2007 2006

RM RM RM

Cost

Brought forward/Carried forward 5,330 5,330 5,330

Accumulated depreciation

Brought forward 3,874 3,874 3,341 Charge for the financial year 533 533 533

Carried forward 4,407 4,407 3,874

Net carrying amount

2007 923 923 -

2006 1,456 - 1,456

Depreciation charge for the financial year ended 31 December 2006 533 - 533

(a) Buildings of the Group were revalued in the financial year 2006 by VPC Alliance (East Coast) Sdn. Bhd., a registered valuer. The comparison method was adopted in arriving at the market value of the buildings.

(b) Had the buildings been stated at historical cost less accumulated depreciation, the net carrying amount would have been RM2,546,007 (2006: RM2,727,312).

(c) The net carrying amount of property, plant and equipment of the Group which are acquired under hire purchase and finance lease arrangements amounted to RM1,209,830 (2006: RM1,066,374).

11. PREPAID LAND LEASE PAYMENTS Group

Restated2007 2006

At valuation RM RM

Brought forward 88,974,605 - Effect of adopting FRS 117 (Note 10) - 58,926,728

88,974,605 58,926,728 Additions - 5,638,165 Revaluation - 24,409,712

Carried forward 88,974,605 88,974,605

Accumulated amortisation

Brought forward 1,288,275 - Effect of adopting FRS 117 (Note 10) - 564,642

1,288,275 564,642 Charge for the financial year 999,298 723,633

Carried forward 2,287,573 1,288,275

Net carrying amount 86,687,032 87,686,330



11. PREPAID LAND LEASE PAYMENTS (Cont’d)

(a) The prepaid land lease payments were previously classified as leasehold land within property, plant and equipment.

(b) Leasehold land was revalued in the financial year 2006 by VPC Alliance (East Coast) Sdn. Bhd., a registered valuer. The comparison method was adopted in arriving at the market value of the leasehold land.

(c) Leasehold land with a net carrying amount of RM57,679,500 (2006: RM58,350,240) is registered in the name of a shareholder of a subsidiary company, Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang.

(d) Had the leasehold land been stated at historical cost less accumulated amortisation, the carrying amount would have been RM32,112,750 (2006: RM33,362,677).

(e) Leasehold land with a net carrying amount of RM50,570,508 were pledged to financial institutions for overdraft facilities granted to the subsidiary companies.

12. BIOLOGICAL ASSETS Group

2007 2006Cost or valuation RM RM

Brought forward 86,198,658 47,769,777 Additions 40,324 46,113 Revaluation - 38,286,768 Transfer from property, plant and equipment - 96,000

Carried forward 86,238,982 86,198,658

Representing:- At cost 40,324 - At valuation 86,198,658 86,198,658

86,238,982 86,198,658

The biological assets were revalued in the financial year 2006 by VPC Alliance (East Coast) Sdn. Bhd., a registered valuer using comparison method in arriving at the market value.

Had the biological assets been stated at historical cost, the net carrying amount would have been RM26,326,392 (2006: RM26,286,068).

The biological assets with an amount of RM66,490,458 were pledged as a security for bank overdrafts facilities granted to a subsidiary company.

13. INVESTMENTS PROPERTIES Group

2007 2006Cost or valuation RM RM

Brought forward 1,830,000 - Cost - 500,000 Fair value adjustment of investment properties - 1,330,000

Carried forward 1,830,000 1,830,000



13. INVESTMENTS PROPERTIES (Cont’d)

Investment properties are stated at fair value, which have been determined based on valuations performed by Rahim & Co. International Property Consultants, a registered valuer using comparison method on 13 May 2006.

The comparison method entails critical analysis of recent evidence of values of comparable properties in the neighbourhood and making adjustments for any differences noted.

There is no direct operating expense incurred and no income generated on the above investment properties.

14. INVESTMENT IN SUBSIDIARY COMPANIES

Group2007 2006RM RM

Unquoted shares, at cost 48,403,772 48,403,772 Compensation received from profit guarantee (9,200,000) (9,200,000) Less: Accumulated impairment losses (19,766,500) (19,766,500)

19,437,272 19,437,272

The compensation received from profit guarantee was in respect of a shortfall of profit guarantee and has been treated as a reduction in the cost of acquisition over a subsidiary company in the financial statements of the Company.

The particulars of the subsidiary companies are as follows:-

Place of EffectiveName of company incorporation interest Principal activities

2007 2006% %

1. Tasja Sdn. Bhd. Malaysia 100 100 Civil engineering and building contractor

2. TAA Piling and Geotechnical Sdn. Bhd. Malaysia 100 100 Dormant

3. PTJ Concrete Products Sdn. Bhd. Malaysia 100 100 Dormant

4. Astral Plantation Sdn. Bhd. Malaysia 100 100 Dormant

5. Tasja Development Sdn. Bhd. Malaysia 100 100 Property development

6. Woodland Water Sdn. Bhd. Malaysia 100 100 Ceased operations

7. Syarikat Ladang LKPP Sdn. Bhd.* Malaysia 65 65 Operations of oil palm estates and provision of estates management

Subsidiary company of Syarikat Ladang LKPP Sdn. Bhd.:-

8. LKPP Building Products Sdn. Bhd.* Malaysia 100 100 Ceased operations

* Subsidiary companies not audited by SJ Grant Thornton



15. INVESTMENT IN ASSOCIATE COMPANY Group

2007 2006

Unquoted shares, at cost 2,450,000 2,450,000 Share of post-acquisition loss (887,825) (849,546) Less: Accumulated impairment losses (892,506) (854,227)

669,669 746,227

Represented by:- Share of net assets 692,595 769,153 Discount on acquisition (22,926) (22,926)

669,669 746,227

The particulars of the associate company are as follows:-

Place of EffectiveName of company incorporation interest Principal activities

2007 2006% %

Johor Concrete ProductsSdn. Bhd. (436690 - T)* Malaysia 49 49 Ceased operations

* Associate company not audited by SJ Grant Thornton

The summarised financial information of the associate company is as follows:- Group

2007 2006RM RM

Current assets 669,105 679,328 Non-current assets 3,387,198 3,911,259

Total assets 4,056,303 4,590,587

Total liabilities 1,327,745 1,333,908

Other income 2,640 21,539

Loss for the financial year (78,121) (64,027)

The amount due to associate company is unsecured, bears no interest and no fixed term of repayment has been arranged.

16. AMOUNT DUE FROM SUBSIDIARY COMPANIES Company

2007 2006RM RM

Amount due from subsidiary companies 101,928,607 100,296,743 Less: Allowance for doubtful debts (83,161,150) (83,161,150)

18,767,457 17,135,593

The amount due from subsidiary companies is unsecured, bears no interest and not repayable within the next 12 months.

16. AMOUNT DUE FROM SUBSIDIARY COMPANIES (Cont’d)

As at balance sheet date, even though the subsidiary companies recorded capital deficiencies, the directors are in the opinion that no further allowance for doubtful debts was required as the subsidiary companies are able to generate sufficient cashflow from future operations to meets its obligation.

17. INVENTORIES

Group2007 2006RM RM

At costs:- Raw materials and stores 693,030 745,107Finished goods - 9,089

693,030 754,196

18. AMOUNT DUE FROM/(TO) CUSTOMERS ON CONTRACTS

Group2007 2006RM RM

Costs incurred on contracts to date 126,348,597 105,199,454 Attributable profits less foreseeable losses (15,770,707) (17,899,539)

110,577,890 87,299,915 Progress billings (106,565,240) (82,564,609)

4,012,650 4,735,306

Amount due from customers on contracts 5,321,788 4,735,306 Amount due to customers on contracts (1,309,138) -

4,012,650 4,735,306

19. TRADE RECEIVABLES

Group2007 2006RM RM

Trade receivables 6,867,709 4,730,679 Less: Allowance for doubtful debts (1,093,743) (1,775,463)

5,773,966 2,955,216 Retention sums on contracts 835,224 229,750

6,609,190 3,184,966

The normal credit terms granted by the Group to the trade receivables ranging from 30 days to 60 days.



20. OTHER RECEIVABLESGroup Company

2007 2006 2007 2006RM RM RM RM

Non-trade receivables 2,243,207 2,854,492 5,303 284 Deposits 75,459 220,544 1,000 1,000 Prepayments 65,172 57,443 - - Interest receivable - 26,870 - - Advances to staff 55,560 5,000 - - Amount due from related parties 870,074 418,830 - - Amount due from a corporate shareholder 1,361,409 - - -

4,670,881 3,583,179 6,303 1,284 Less: Allowance for doubtful debts (1,298,798) (3,007,276) - -

3,372,083 575,903 6,303 1,284

Included in deposits is an amount of Nil (2006: RM140,055) paid to a corporate shareholder for the lease of long leasehold agricultural land.

The corporate shareholder refers to Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang, who is a shareholder of the Company and a minority shareholder of a subsidiary company, Syarikat Ladang LKPP Sdn. Bhd.. The amount due is unsecured, bears no interest and no fixed terms of repayment have been arranged.

Related parties are companies related to the corporate shareholder. The amount due is unsecured, bears no interest and no fixed terms of repayment have been arranged.

21. ASSET CLASSIFIED AS HELD FOR SALE/DISCONTINUED OPERATIONS

On 17 April 2006, the subsidiary company, Woodland Water Sdn. Bhd. accepted a letter of offer dated 4 April 2006 for the disposal of its mineral water plant, land and factory building located at the District Bentong, Pahang Darul Makmur for a total cash consideration of RM5.0 million. A formal sale and purchase agreement was signed on 20 September 2006 and the transfer of the assets was completed on 15 February 2007.

The total disposal comprises plant and machinery worth RM1.56 million and two pieces of freehold industrial land held under GM 2320 Lot 7399 and GM 2321 Lot 8081, both at Mukim of Sabai, Bentong amounting to RM3.44 million. The total consideration for the disposal was arrived at on a willing buyer-willing seller basis and on an “as-is-where-is” basis after taking into consideration the physical condition of the machinery and the market value of the subject properties of RM3.6 million as appraised by a firm of independent professional valuer, Rahim & Co. International Property Consultants, on 27 February 2004 for internal management purposes.

The major class of assets of the subsidiary company classified as held for sale on the consolidated balance sheet as at 31 December 2006 were as follows:-

Group2006RM

Non-current assets Property, plant and equipment 3,640,965





21. ASSET CLASSIFIED AS HELD FOR SALE/DISCONTINUED OPERATIONS (Cont’d)

An analysis of the financial results of discontinued operations were as follows:- Group2006RM

Revenue 1,407,956 Other income 87,457 Expenses (1,646,113)

Loss before tax of discontinued operations (150,700) Taxation -

Loss for the financial year from discontinued operations (150,700)

The following amounts have been included in arriving at loss before tax of discontinued operations:-

Group2006RM

Audit fee 3,200 Allowance for doubtful debts 30,706 Depreciation 130,052 Interest expenses 101 Rental of store 18,500 Interest income (26,870)

The cash flows attributable to the discontinued operations were as follows:- Group2006RM

Net cash from operating activities 187,446 Net cash used in investing activity (13,221) Net cash used in financing activity (7,084)

Net cash inflows 167,141

22. FIXED DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS

The fixed deposits with licensed financial institutions amounted to RM5,649,258 (2006: RM5,632,250) are pledged for the guarantee facilities granted to subsidiary companies.

23. TRADE PAYABLES

Included in trade payables is retention sums on contracts amounted to RM4,654,127 (2006: RM7,028,449).

The normal credit terms granted by the trade payables ranging from 30 days to 60 days.



24. OTHER PAYABLES

Group Company2007 2006 2007 2006RM RM RM RM

Non-trade payables 983,200 1,551,783 - - Accrual of expenses 996,938 1,051,817 19,000 13,000 Finance creditors 470,726 428,867 - - Amount due to related parties 196,760 196,760 - - Deposit received 362,352 324,102 - - Advances from customers - 5,702,875 - - Amount due to a corporate shareholder - 663,655 537,986 572,576 Dividend payable 2,682,750 2,222,640 - -

5,692,726 12,142,499 556,986 585,576

The amount due to a corporate shareholder and related parties are unsecured, bear no interest and no fixed terms of repayments have been arranged.

Dividend payable represents the amount payable to a minority shareholder.

25. REVENUE


Gross dividends from a subsidiary company - - 6,825,000 7,215,000 Revenue from operations of oil palm estates 22,441,685 18,727,229 - - Contract revenue from civil engineering

and building works 24,064,780 15,913,203 - -

46,506,465 34,640,432 6,825,000 7,215,000

26. COST OF SALES

Group2007 2006RM RM

Cost of oil palm produce 9,494,806 5,869,936 Construction contract costs 23,018,569 16,130,752

32,513,375 22,000,688



27. PROFIT BEFORE TAXATION

Profit before taxation has been determined:-Group Company

2007 2006 2007 2006RM RM RM RM

After charging:- Allowance for doubtful debts 100,324 4,416 - - Auditors’ remuneration - statutory audit 42,000 35,800 14,000 13,000 - other auditors 20,500 20,500 - - - others 5,000 - 5,000 - - underprovision in prior years 5,000 1,500 5,000 - Amortisation of prepaid land lease payments 999,298 723,633 - - Bad debt written off 958,611 - - - Depreciation 773,011 1,042,469 533 533 Directors’ remuneration - fee 557,000 469,600 150,000 141,000- other emoluments 814,660 676,801 - -Impairment loss of investment in

associate company 38,279 31,373 - - Interest expenses - borrowings 38,139 128,565 - - - finance creditors 39,562 25,987 - - - bank overdrafts - 3,756 - - Lease rental 394,521 394,521 - - Property, plant and equipment written off 19,882 145 - - Loss on disposal of marketable securities - 12,913 - - Rental of building 11,234 13,843 - -

And crediting:- Allowance for doubtful debts no longer required (2,490,522) (3,424) - - Fair value adjustment of investment properties - (1,330,000) - - Gain on disposal of property, plant and equipment (904,497) (834,923) - - Gain on disposal of assets held for sale (1,359,035) - - - Interest income (663,853) (687,990) - - Rental income (59,298) (54,000) - -

The details of remuneration receivable by Directors of the Group and of the Company during the financial year are as follows:-


Executive:- Salaries and other emoluments 849,408 764,748 90,000 90,000 Bonus 145,613 115,872 - - Defined contribution plan 75,607 64,692 - -

1,070,628 945,312 90,000 90,000 Non-executive:-

Salaries and other emoluments 301,032 201,089 60,000 51,000

Total 1,371,660 1,146,401 150,000 141,000



28. TAXATION


Current year’s taxation 3,565,997 1,915,668 1,785,643 2,020,200 (Over)/Under provision in prior years (185) 1,058,406 (185) - Transferred (from)/to deferred taxation (372,000) 390,000 - -

3,193,812 3,364,074 1,785,458 2,020,200

Malaysian income tax rate is calculated at the statutory rate of 27% (2006: 28%) of the estimated assessable profits for the financial year. The Malaysian statutory tax rate will be reduced to 26% and 25% effective years of assessment of 2008 and 2009 respectively, from the current year’s rate of 27%. The computation of deferred tax as at 31 December 2007 has reflected these changes.

The reconciliation of income tax expenses applicable to profit before taxation at the statutory tax rate to income tax expenses at the effective tax rate of the Group and of the Company are as follows:-


Profit before taxation 16,827,901 9,915,576 6,526,126 7,019,712

Taxation at Malaysian statutory tax rate of 27%/28% 4,543,533 2,776,361 1,762,054 1,965,519

Tax effects in respect of:- Expenses not deductible for tax purposes 339,411 290,261 23,589 54,681 Income not subject to tax (803,099) (304,828) - - (Over)/under provision in prior years (185) 1,058,406 (185) - Losses of subsidiary companies not allowable for group relief 32,152 74,874 - - Utilisation of previously unrecognised deferred tax assets (1,667,000) (531,000) - - Effect of changes in tax rate on opening deferred taxation 749,000 - - -

Effective tax expenses 3,193,812 3,364,074 1,785,458 2,020,200

The Group’s unutilised tax losses and unabsorbed capital allowances which can be carried forward to offset against future taxable profit amounted to approximately RM70,556,000 (2006: RM72,661,500) and RM843,730 (2006: RM2,268,600) respectively.

The amount of tax savings of the subsidiary company for which credit is taken as a result of the realisation of unutilised tax losses and unabsorbed capital allowances that had not been accounted for in the period of loss amounted to approximately RM1,280,000 (2006: RM394,000) and RM29,000 (2006: RM195,300) respectively.

However, the above amounts are subject to the approval of the Inland Revenue Board of Malaysia.



29. EARNINGS/(LOSS) PER SHARE

The basic earnings/(loss) per share has been calculated based on the profit attributable to equity holders of the Company and the weighted average number of shares in issue during the financial year.

Group2007 2006RM RM

Profit from continuing operations attributable to equity holders of the Company 11,003,634 4,847,038

Loss from discontinued operations attributable to equity holders of the Company - (150,700)

Profit attributable to equity holders of the Company 11,003,634 4,696,338

Weighted average number of ordinary shares in issue 119,997,000 119,997,000

There is no fully diluted effect to the earnings per share.

30. DIVIDEND

Company2007 2006RM RM

First interim dividend in respect of financial year ended 31 December 2006 of 1.5 sen per ordinary share less 28% income tax - 1,295,968

Second interim dividend in respect of financial year ended 31 December 2006 of 3.5 sen per ordinary share less 27% income tax 3,065,923 -

3,065,923 1,295,968

Dividend per share recognised as distribution to ordinary equity holders of the Company (sen) 3.5 1.5

On 25 April 2008, a first and final dividend of 5 sen per ordinary share less 26% income tax in respect of financial year ended 31 December 2007 amounting to RM4,439,889 was recommended by the Board of Directors and payable on 3 July 2008. The financial statements of the current financial year do not reflect this proposed dividend. Such dividends, will be accounted for in the shareholders’ equity as an appropriation of retained profits for the financial year ending 31 December 2008.

31. EMPLOYEE BENEFITS EXPENSE

Group2007 2006RM RM

Staff costs 4,577,354 3,977,142

Included in employee benefits expense of the Group is Directors’ emoluments and defined contribution plan of RM814,660 (2006: RM676,801) and RM319,815 (2006: RM255,221) respectively.



32. MATERIAL LITIGATION

Suit involving building contract for work done by Tasja Sdn. Bhd. (“Plaintiff”). The claims is RM3,212,689. The Plaintiff filed an application to amend the Statement of Claim to RM1,316,784 with interest at the rate of 8% per annum on the sum of RM1,316,784 from 30.6.1999 until full and final settlement and another sum of RM1,895,905 with interest at the rate of 8% per annum on the sum of RM1,895,905 from 30.8.2000 until full and final settlement and costs. Golden Approach Sdn. Bhd.’s (“the Defendant”) contention is that the Plaintiff claim is barred by the Limitation Act 1953 and the Defendant has successfully filed an application to strike out the Plaintiff case and the appeal is dismissed with costs. Thereafter, the Plaintiff has filed for appeal to the Court of Appeal. No hearing date has been fixed as at to date.

33. CAPITAL COMMITMENT

Capital expenditure in respect of the followings are not provided for in the financial statements:-

Group2007 2006RM RM

Approved but not contracted for:- Property, plant and equipment 1,794,000 919,000

34. CONTINGENT LIABILITIES

(a) Bank guarantee Company

2007 2006RM RM

Secured:- Guarantees given to financial institutions for banking facilities granted to subsidiary company 1,933,100 11,491,706

(b) Claims by third parties via court cases

As at 31 December 2007, the outstanding contingent liabilities of the Group are:-

Group2007 2006RM RM

(i) Tasja Sdn. Bhd. (“Tasja”), appointed Syarikat P.C. Jaya Sdn. Bhd. (“the Defendant”) as a sub-contractor for a project and at the Defendant’s request, provided goods and services to complete the project on behalf of the Defendant. Tasja had filed claims for the sum of RM207,399 for goods delivered, services rendered and for the delay in completing the project. The Defendant had counter-claimed against Tasja for the sum of RM1,768,323 with interest at the rate of 1.5% per month amounting to RM1,060,995 as at 31 August 2001. Full trial fixed on 6, 7 and 8 May 2008.

The Directors of the Company are of the opinion that Tasja has a fair chance to succeed in its claims. 2,829,318 2,829,318



34. CONTINGENT LIABILITIES (Cont’d)

(b) Claims by third parties via court cases (Cont’d)

As at 31 December 2007, the outstanding contingent liabilities of the Group are:- (Cont’d)

Group2007 2006RM RM

35. RELATED PARTY DISCLOSURES

(a) Significant related party disclosures during the financial year are as follows:- Company

2007 2006RM RM

Dividend received from subsidiary company 6,825,000 7,215,000

Group2007 2006RM RM

Purchases of long leasehold land from corporate shareholder 1,400,500 5,638,165

Deposits paid to a corporate shareholder for acquisition of long leasehold agricultural land - 140,055

Management fee charged to a corporate shareholder 41,936 48,094

Lease rental paid to a corporate shareholder 394,521 394,521

Profit sharing from a corporate shareholder 675,533 87,957

(b) The remuneration of key management personnel is same with the Directors’ remuneration as disclosed in Note 27 to the financial statements. The Group and the Company have no other members of key management personnel apart from the Board of Directors.

(ii) In March 2002, Tasja appointed Maju Egatt Sdn. Bhd. (“the Plaintiff”) as a sub-contractor for a low cost project. The Plaintiff alleged that Tasja had instructed the Plaintiff to carry out repairs and replace missing items (“rectification works”) caused by a flood at the project site in December 2001. The Plaintiff is now claiming from Tasja the cost of the rectification works amounting to RM2,289,260 inclusive of interest from December 2003 until full and final settlement. Tasja contends that the Plaintiff’s claims are baseless and without merits.

Tasja deny owing to the Plaintiff any money and filed an application to amend the Statement of Defence and counterclaim of RM268,398 with interest at the rate of 8% per annum from 30.12.2003 until full and final settlement together with damages and losses. The matter is yet to set down for full trial.

The Directors of the Company are of the opinion that the Company has a strong defence to the Plaintiff’s claims. 2,289,260 2,289,260

5,118,578 5,118,578



36. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 25 September 2007, the subsidiary company, Syarikat Ladang LKPP Sdn. Bhd. (“SLKPP”) has proposed to develop its existing estate into a mixed property development, incorporating High-Tech Park to be named as Kuantan High-Tech Park with an estimated gross development value of RM2.8 billion. SLKPP intends to enter into a Joint Venture Agreement with Tasja Development Sdn. Bhd. upon terms and conditions to be mutually agreed at a later date.

On 18 October 2007, SLKPP has received the approval in principle from Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang for the proposed development and also endorsed the proposed developmentto be part of the proposed East Coast Economic Region (“ECER”) master plan. However, this proposal is subject to detail perusal and approvals from the Central Agency of Government, Malaysia.

(b) On 26 October 2007, the Company entered into a Memorandum of Understanding (“MOU”) with Myanmar Combiz Services Co. Ltd. and Green Future Co. Ltd. to jointly develop 170,000 acres of virgin land into oil palm plantations in the Southern Division of the Union of Myanmar. However, this MOU had lapsed and terminated on 25 April 2008.

37. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

On 3 March 2008, the Company incorporated a new wholly-owned subsidiary company known as AAB International Sdn. Bhd.. The authorised share capital of AAB International Sdn. Bhd. is RM100,000 comprising of 100,000 ordinary shares of RM1 each and the current paid up capital is RM2. The principal activity of AAB International Sdn. Bhd. is intended to be that of investment holding company.

38. FINANCIAL INSTRUMENTS

(a) Interest rate risk

The interest rate risk that financial instruments’ values will fluctuate as a result of changes in market interest rates, and the effective weighted average interest rates on classes of financial asset and financial liabilities, are as follows:-

Effective interestLess than 2 to 5 rate during the

Group 1 year years Total financial yearRM RM RM

2007

Financial assetFixed deposits with licensed

financial institutions 17,796,915 - 17,796,915 2.90% - 3.30%

Financial liabilities Term loans 33,656 349,626 383,282 7.75% Finance creditors 470,726 268,371 739,097 2.30% - 7.64%

2006

Financial asset Fixed deposits with licensed

financial institutions 20,063,067 - 20,063,067 2.50% - 3.40%

Financial liabilities Term loans 33,348 380,503 413,851 6.00% Bank overdrafts 292,373 - 292,373 8.37% Finance creditors 428,867 477,171 906,038 4.38% - 7.64%



38. FINANCIAL INSTRUMENTS (Cont’d)

(b) Credit risk

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

Group

The Group has significant concentration of credit risk with the following parties:-

2007

(i) 30% of trade receivables as at balance sheet date was due from a customer.

(ii) 40% of other receivables as at balance sheet date was due from corporate shareholder of a subsidiary company.

2006

(i) 63% of trade receivables as at balance sheet date was due from a customer.

(ii) 73% of other receivables as at the balance sheet date was due from companies related to the corporate shareholder of a subsidiary company.

Company

The Company has no significant concentration of credit risk with any single counterparty.

(c) Fair values

The carrying amounts of financial assets and liabilities of the Group and of the Company as at the balance sheet date approximated their fair values except as set out below:-

2007 2006Carrying Carryingamount Fair value amount Fair value

RM RM RM RM

Group

Unquoted shares in associate company 669,669 * 746,227 *

Company

Unquoted shares in subsidiary companies 19,437,272 * 19,437,272 *

* It was not practicable within the constraints of timeliness and cost to estimate these fair values reliably. However, at the end of the financial year, the net assets reported by the subsidiary companies and associate company were as follow:-

2007 2006Group RM RM

Unquoted shares in associate company 2,728,558 3,256,679

Company

Unquoted shares in subsidiary companies 20,237,378 8,958,383



39. SEGMENTAL REPORTING - GROUP

(a) Primary segmental reporting - Business segment

The Group is organised into three major business segments as follows:-

Business segments Business activities

Construction Civil engineering and building contractor

Plantation Operations of oil palm estates and provision of estates management

Trading Trading of bottled mineral water

2007 Investment Construction Plantation Trading Eliminations TotalRM RM RM RM RM RM

Revenue

External revenue - 24,064,780 22,429,348 12,337 - 46,506,465

Intersegment revenue 6,825,000 - - - (6,825,000) -

Total revenue 6,825,000 24,064,780 22,429,348 12,337 (6,825,000) 46,506,465

Results

Segment results 6,526,126 5,795,187 10,665,907 1,100,664 (7,728,446) 16,359,438

Interest income - 585,024 39,885 38,944 - 663,853

Finance costs - (106,904) (50,207) - - (157,111)

Share of results of associate company - - - - (38,279) (38,279)

Profit/(Loss) before taxation 6,526,126 6,273,307 10,655,585 1,139,608 (7,766,725) 16,827,901

Taxation (1,785,458) (111,104) (3,140,000) - 1,842,750 (3,193,812)

Profit/(Loss) after taxation 4,740,668 6,162,203 7,515,585 1,139,608 (5,923,975) 13,634,089

Other information

Segment assets 58,043 35,788,889 181,633,376 1,476,254 (110,144) 218,846,418

Investment in associate company - 1,557,494 - - (887,825) 669,669

Deferred tax assets - - 257,000 - - 257,000

Tax recoverable 100,576 - - - - 100,576

Consolidated total assets 158,619 37,346,383 181,890,376 1,476,254 (997,969) 219,837,663

Segment liabilities 564,460 13,561,309 8,113,322 66,451 (560,838) 21,744,704

Tax payable - 213,830 1,750,803 - - 1,964,633

Deferred tax liabilities - 127,404 38,476,943 - (5,000,855) 33,603,492

Consolidated total liabilities 564,460 13,902,543 48,341,068 66,451 (5,561,693) 57,312,829

Capital expenditure on property, plant and equipment - 392,426 622,036 - - 1,014,462

Depreciation 533 282,325 471,550 18,603 - 773,011

Amortisation of prepaid land lease payments - 3,058 996,240 - - 999,298

Property, plant and equipment written off - - 19,882 - - 19,882



39. SEGMENTAL REPORTING - GROUP (Cont’d)

(a) Primary segmental reporting - Business segment (Cont’d)Discontinued

Continuing operations operations

2006 Investment Construction Plantation Eliminations Total Manufacturing TotalRM RM RM RM RM RM

Revenue

External revenue - 15,913,203 18,727,229 - 34,640,432 1,407,956 36,048,388

Intersegment revenue 7,215,000 - - (7,215,000) - - -

Total revenue 7,215,000 15,913,203 18,727,229 (7,215,000) 34,640,432 1,407,956 36,048,388

Results

Segment results 7,019,712 1,332,615 7,560,498 (6,492,990) 9,419,835 (177,570) 9,242,265

Interest income - 509,240 178,750 - 687,990 26,870 714,860

Finance costs - (32,311) (128,565) - (160,876) - (160,876)

Share of results of associate company - - - (31,373) (31,373) - (31,373)

Profit/(Loss) before taxation 7,019,712 1,809,544 7,610,683 (6,524,363) 9,915,576 (150,700) 9,764,876

Taxation (2,020,200) 303,594 (2,740,786) 1,093,318 (3,364,074) - (3,364,074)

Profit/(Loss) after taxation 4,999,512 2,113,138 4,869,897 (5,431,045) 6,551,502 (150,700) 6,400,802

Other information

Segment assets 35,689 33,347,856 180,351,902 427,842 214,163,289 4,169,588 218,332,877

Investment in associate company - 1,595,773 - (849,546) 746,227 - 746,227

Deferred tax assets - - 257,000 - 257,000 - 257,000

Tax recoverable 106,804 - - - 106,804 - 106,804

Consolidated total assets 142,493 34,943,629 180,608,902 (421,704) 215,273,320 4,169,588 219,442,908

Segment liabilities 591,215 19,869,715 7,695,780 28,156,710 140,052 28,296,762

Tax payable - 285,531 2,209,705 - 2,495,236 - 2,495,236

Deferred tax liabilities - 499,347 38,612,000 (5,000,855) 34,110,492 706,599 34,817,091

Consolidated total liabilities 591,215 20,654,593 48,517,485 (5,000,855) 64,762,438 846,651 65,609,089

Capital expenditure on property, plant and equipment - 28,037 5,953,253 - 5,981,290 13,221 5,994,511

Depreciation 533 367,605 544,279 - 912,417 130,052 1,042,469

Amortisation of prepaid land lease payments - 2,900 720,733 - 723,633 - 723,633

Property, plant and equipment written off - - 145 - 145 - 145



39. SEGMENTAL REPORTING – GROUP (Cont’d)

(b) Secondary segmental reporting - Geographical segment

No geographical segmental information being presented as the Group principally operates within Malaysia.

40. COMPARATIVE INFORMATION

Certain comparative figures have been restated to conform with the changes in presentation resulting from the adoption of new and revised Financial Reporting Standards (“FRS”) as disclosed in Note 3(b) to the financial statements.

Analysis of Shareholdingsas at 30 April 2008


SHARE CAPITAL

Authorized capital : RM150,000.000Issued and fully paid-up : RM119,997,000Class of shares : Ordinary shares of RM1.00 eachVoting rights : One vote per ordinary share

ANALYSIS BY SIZE OF SHAREHOLDINGS

Size of Shareholdings No. of shareholders % No. of shareholdings %

Less than 100 61 3.79 4,138 0.03100 – 1000 258 16.03 212,937 0.171001 - 10,000 1,086 67.50 4,788,038 3.9910,001 – 100,000 174 10.81 4,643,399 3.86100,000 – less than 5% of issued shares 24 1.49 40,128,600 33.445% and above issued shares 3 0.19 52,540,226 43.78Directors’ shareholdings 3 0.19 17,679,662 14.73

Total 1,609 100 119,997,000 100

SUBSTANTIAL SHAREHOLDERS

Name of shareholders Direct shareholdings % Indirect shareholdings %

1. Dato’ Lim Kang Poh 26,864,469 22.39 - -2. Lembaga kemajuan Perusahaan

Pertanian Negeri Pahang 32,294,999 26.91 - -3. Agur Tegap Sdn Bhd 10,520,420 8.76 - -

DIRECTORS SHAREHOLDINGS

Name of shareholders Direct shareholdings % Indirect shareholdings %

1. Tan Sri Dato’ Hj Husein Bin Ahmad 510,000 0.42 - -2. Dato’ Lim Kang Poh 26,864,469 22.39 - -3. Md Adanan Bin Abdul Manap 30,000 0.02 - -

Analysis of Shareholdings (Cont’d)as at 30 April 2008


THIRTY (30) LARGEST SHAREHOLDERS

No. Name of shareholders No. of Shareholdings %

1. Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang 32,294,999 26.912. Dato’ Lim Kang Poh 17,139,662 14.283. Agur Tegap Sdn Bhd 10,520,420 8.764. Ambank (M) Berhad

Pledged Securities Account for Lim Kang Poh 9,724,807 8.105. Terusan Al-Maju Sdn Bhd 5,600,000 4.666. Jamaliah Binti Saad 5,150,800 4.297. Wong Chooi Fah 4,053,000 3.378. Prestige Status Sdn Bhd 3,297,000 2.749. Rahaimi Bin Abdul Rahman 3,238,600 2.6910. EB Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Yap Kong Wooi 3,075,000 2.5611. Lim Kang Yew 2,975,700 2.4712. Lim Hai 2,935,500 2.4413. Prestige Status Sdn Bhd 2,334,000 1.9414. Ngai Chong Sing 1,630,000 1.3515. Kencang Kuasa Sdn Bhd 1,253,400 1.0416. Lee Hun Kheng 1,032,000 0.8617. Yap Kong Wooi 889,400 0.7418. Wong Chooi Lin 682,700 0.5619. Tan Sri Dato’ Husein Bin Ahmad 510,000 0.4220. Chan Ling Lee 337,800 0.2821. Tiong Seng Yoke 281,300 0.2322. AIBB Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Lee Kok Sing 260,100 0.2123. Soh Ai Moi 258,900 0.2124. Ng Kim Vooy 180,000 0.1525. AIBB Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Ng Kim Tan 155,200 0.1226. AIBB Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Chew Hun Seng 147,400 0.1227. Phung Tze Thiam @ John Phung 129,300 0.1028. Chin Kim Yong 127,500 0.1029. Kua Kee Hock 104,000 0.0830. Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Ung Yak Nguang 99,000 0.08

TOTAL 110,417,488 91.86

Group’s Propertiesas at December 2007


Address/Location Description/ Land Area Built Up Tenure Age of Net Book YearExisting Area Building Value Revalued/

Acquired

1 P.N. 1877 Lot 35696 Oil palm 1,874 - Leasehold 37,180,823 2006Mukim of Kuala Kuantan estate acres expiring inDistrict of Kuantan year 2090Pahang

2 HS (D) 28295 PT 86317 Oil palm 560 - Leasehold 1,400,550 2007Mukim of Kuala Kuantan estate acres expiringDistrict of Kuantan, in year 2106Pahang.

3 HS(D) 853 PT 631 Oil palm 7,504 - Leasehold 134,399,260 2006HS(D) 854 PT 632 estate acres expiringHS(D) 406 PT 608 betweenMukim of Kertau years 2094HS(D) 609 PT 5616 and 2101HS(D) 852 PT 6566Mukim of LuitHS(D) 610 PT 11316HS(D) 611 PT 11317HS(D) 612 PT 11318HS(D) 849 PT 21456HS(D) 850 PT 21457HS(D) 851 PT 21458Mukim of ChenorDistrict of Maran, Pahang

4 HS(D) 19959 PT 22427 Two units of 278 1151 Freehold 10 Years 1,958,480 2006HS(D) 19960 PT 22428 4 1/2 storey Square SquareMukim of Batu, District of shop office metres metresGombak, Selangor

5 HSM 61911 (PT 85592) to 51 Units 6,976 - Leasehold Vacant 1,830,000 2006HSM 61961 (PT 85642), Vacant square year 2104Mukim of Kuala Kuantan Shoplot metresDistrict of KuantanPahang

6 B28, Lorong Tun Ismail 11 3-storey 184 square 954 Freehold 4 Years 1,176,000 2006Jalan Tun Ismail 1 Corner Shop metres Square25000 Kuantan office metres

7 HS(D) 2820 PT 6156 Bungalow 8,924 - Leasehold Vacant 296,942 2006HS(D) 2821 PT 6157 lots square expiring inHS(D) 2854 PT 6190 metres year 2095HS(D) 2855 PT 6191HS(D) 2856 PT 6192HS(D) 3096 PT 6422HS(D) 3088 PT 6430Mukim Bernam TimurDaerah Batang PadangPerak

Notice of Annual General Meeting


AGENDA

1. To receive the Report of the Directors and the Audited Financial Statements for the year ended 31 December 2007 together with the Report of the Auditors thereon.

2. To approved the payment of Directors’ Fees for the financial year ended 31 December 2007.

3. To re-elect the following Directors who retire by rotation in accordance with the Article 76 of the Company’s Article of Association and being eligible offer themselves for re-election :i) Dato’ Lim Kang Pohii) Y.H Dato’ Amihamzah Bin Ahmad

4. To re-elect Tan Sri Dato’ Haji Husien Bin Ahmad who retire pursuant to Section 129(6) of the Companies Act 1965 upon attaining the age of seventy.

5. To approve the payment of the first and final dividend of 5 sen less 26% income tax in respect of the financial year ended 31 December 2007.

6. To re-appoint Messrs. SJ Grant Thornton 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 resolutions:

7. Ordinary Resolution

Authority To Issue Shares Pursuant To Section 132D Of The Companies Act, 1965

“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.’

NOTICE IS HEREBY GIVEN THAT the 12th Annual General Meeting of Astral Asia Berhad (“AAB” or “the Company”)will be held at Kenanga Room No. 1, Templer Park Resort, 48000 Rawang, Selangor Darul Ehsan on Friday, 27June 2008 at 11.00 a.m for the following purposes:

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

Notice of Annual General Meeting


8. Special Resolution

Proposed amendments to the Articles of Association

“THAT the proposed alterations, modifications, amendments, and/or deletions to the Articles of Association of the Company as contained in Appendix 1 of the Annual Report , be and hereby approved and adopted.”

9. To transact any other business for which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

By Order of the Board,

Hoon Hui KitCompany Secretary

5th day of June 2008Selangor Darul Ehsan

(Resolution 9)

Notes:

1. Section 149(1)(b) of the Act shall not apply to the Company, a proxy may but need not be a Member of the Company.

2. This instrument duly completed must be deposited at the registered office of the Company at 67 & 69, Jalan SBC 1, Taman Sri Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan not less than forty eight (48) hours before the time for holding the meeting.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or if such appointor is a corporation, under its common seal or the hand of its attorney.

4. A member shall not be entitled to appoint more than ten (10) proxies to attend and vote at the same meeting where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the portion of his shareholding to be represented by each proxy. Each proxy appointed, shall represent a minimum of 100 shares.

EXPLANATORY NOTES TO RESOLUTIONS UNDER SPECIAL BUSINESS

The Resolution proposed under Agenda 7Resolution Pursuant to Section 132 of the Companies Act, 1965The Ordinary Resolution proposed under Agenda 7, if passed, will give the Directors of the Company, from the date of theforthcoming Annual General Meeting, the authority to issue and allot ordinary shares from the unissued capital of the Companybeing for such purposes as the Directors consider would be in the interest of the Company. This authority will, unless revokedor varied by the Company in a General Meeting, expire at the next Annual General Meeting of the Company.

Proposed Amendments to the Article of Association of the Company under Agenda 8 The proposed Resolution 9, if passed, will bring the Articles of Association of the Company in line with the amendments to theListing Requirements of the Bursa Malaysia Securities Berhad. Kindly refer to the Appendix 1 accompanying the Annual Report2007 for details.

Statement Accompanying Notice of Annual General Meeting


1. Directors who are standing for re-election at the 12th Annual General Meeting are Tan Sri Dato’ Husein Bin Ahmad, Dato’ Lim Kang Poh and Y.H Dato’ Amihamzah Bin Ahmad

The profiles of the Directors are set out on pages 3, 4 & 5 of this annual report.

2. Board meetings held during the financial year ended 31 December 2007.

A total of four (4) Board Meetings were held during the financial year ended 31 December 2007 is as follows:

Date of Meetings

27 February 200724 April 200716 August 200730 November 2007

3. Detail of attendance at Board Meetings held in the financial year ended 31 December 2007 are as follow:

Name of Director No. of Meetings attended

Tan Sri Dato’ Husein Bin Ahmad 3/4

Dato’ Lim Kang Poh 4/4

YH Dato’ Md Adanan Bin Sulaiman 3/4

YH Dato’ Amihamzah Bin Ahmad 4/4

Tuan Haji Md Adanan Bin Abdul Manap 4/4

Mr. Tan En Chong 4/4

APPENDIX 1


DETAILS OF THE PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The Company proposes to amend the following Articles of its Articles of Association (for which differences arehighlighted in bold) to comply with the recent changes to the Listing Requirements.

Article Number

Article 2

Existing Articles

Interpretation

Approved Market Place meansA stock exchange which is specified to bean approved market place in the SecuritiesIndustry (Central Depositories) Exemption(No.2) Order, 1998 as may be amended,modified or altered from time to time.

Central Depository means Malaysian Central Depository Sdn Bhd(Company No. 165570-W)

Exchange meansKuala Lumpur Stock Exchange and suchother stock exchange where the shares ofthe Company is listed or quoted

Foreign Register meansThe register of foreign holders maintainedby the registrar of the Company in thejurisdiction of the Approved Market Place

Member meansAny person/persons for the time beingholding shares in the Company andwhose names appear in the Register ofMembers (except the Malaysian CentralDepository Nominees Sdn Bhd) includingDepositors who shall be treated asMembers pursuant to Section 35 of theSecurities Industry (Central Depositories)Act 1991 but excludes the CentralDepository in its capacity as a bare trusteemember.

Record of Depositors meansA record provided by the CentralDepository to the Company underChapter 24 of the Rules

Proposed Amendments

Deleted

Depository meansBursa Malaysia Depository Sdn Bhd(165570-W) or such other name bywhich it may be known from time totime (All reference to CentralDepository throughout the wholeArticles of Association be changed toDepository accordingly)

Exchange meansBursa Malaysia Securities Berhad(635998-W) and/or any other Exchangeon which the Company is listed

Foreign Register meansThe register of foreign holders maintainedby the registrar of the Company in thejurisdiction of the other stock exchange

Member meansAny person/persons for the time beingholding shares in the Company andwhose names appear in the Register ofMembers including Depositors whoshall be treated as Members pursuantto Section 35 of the CentralDepositories Act but excludes theDepository (or its nominee company) inits capacity as a bare trustee member.

Record of Depositors meansA record provided by the Depository tothe Company or its registrar asdefined in the Central DepositoriesAct

APPENDIX 1 (Cont’d)


Existing Articles

Rules meansThe Rules of the Central Depository andany appendices thereto

Securities Account meansAn account established by the CentralDepository for a Depositor for therecording of deposit or withdrawal ofsecurities and for dealing in such securitiesby the Depositor

Shares Buy Back

Subject to and in accordance with the Actand the regulations made pursuantthereto and the guidelines of theExchange and any other relevantauthorities, the Company shall be entitledat any time and from time to time and onany terms it deems fit, purchase and/oracquire all or any of its own shares fromany party(ies) whatsoever provided that:-

(a) the Company is solvent at the date of the purchase;

(b) the purchase is made through the stock exchange on which the shares are quoted; and

(c) the purchase is made in good faith and in the interest of the Company.

Allotment of Shares

Every issue of shares or options toemployees and/or the Directors shall beapproved by the Members in a generalmeeting and no Director shall participatein such issues of shares or options unless:

(i) the Members in a general meeting have approved the specific allotment to be made to such Director; and

(ii) he holds office in the Company in an executive capacity PROVIDED ALWAYS that a non-executive Director may so participate in an issue of shares pursuant to a public issue or public offer.

Proposed Amendments

Rules meansThe Rules of the Depository and anyappendices thereto

Securities Account meansAn account established by theDepository for a Depositor for therecording of deposit or withdrawal ofsecurities and for dealing in such securitiesby the Depositor

Share Buy Back

Subject always to the compliance ofthe Act, and the requirements of theExchange and such other applicablelaws, rules, regulations or guidelinesfor the time being in force, theCompany shall be empowered topurchase its own shares and to dealwith the shares so purchased in themanner provided by the Act and theListing Requirements. (Thisamendment will ensure that theArticles of Association will not berequired to be amended in the eventsubsequent amendments are made tothe Act and the Listing Requirements)

Allotment of Shares

Every issue of shares or options toemployees and/or the Directors shall beapproved by the Members in a generalmeeting and no Director shall participatein such issues of shares or options unlessthe members in a general meeting haveapproved the specific allotment to bemade to such Director.

Deleted

Article Number

Article 2 (Cont’d)

Article 4A

Article 5 (e)


Existing Articles

Rights of Preference Shareholders

Subject to the Act, any preference sharesmay with the sanction of an ordinaryresolution be issued on the terms that theyare or at the option of the Company areliable to be redeemed but the totalnominal value of the issued preferenceshares shall not exceed the total nominalvalue of the issued ordinary shares at anytime and the Company shall not issuepreference shares ranking in priority overpreference shares already issued but mayissue preference shares ranking equallytherewith.

The holder of preference shares must beentitled to a return of capital in preferenceto holders of ordinary shares when theCompany is wound up.

Notice of Books Closing Date

Any notice of intention to fix a BooksClosing Date and the reason thereof shallbe published in a daily newspapercirculating in Malaysia and shall also begiven to the Exchange where such noticeshall state the Books Closing Date, whichshall be at least twelve (12) Market Daysafter the date of notification to theExchange or such other period as may beprescribed under the ListingRequirements, the Rules or by theExchange from time to time, and theaddress of the share registry at whichdocuments will be accepted forregistration. In relation to such closure,the Company shall give written notice inaccordance to the Rules to issue theappropriate Record of Depositors.

Transmission of Securities

Where :-

(a) the securities of the Company are listed on a stock exchange which is specified to be an approved market place in the Securities Industry (Central Depositories) Exemption Order, 1998 (“the Approved Market Place”); and

Proposed Amendments

Rights of Preference Shareholders

Subject to the Act, any preference sharesmay with the sanction of an ordinaryresolution be issued on the terms that theyare or at the option of the Company areliable to be redeemed and the Companyshall not unless with the consent of theexisting preference shareholders at aclass meeting issue further preferenceshares ranking in priority over preferenceshares already issued but may issuepreference shares ranking equallytherewith.

Deleted

Notice of Books Closing Date

Any notice of intention to fix a BooksClosing Date and the reason thereof shallbe published in a daily newspapercirculating in Malaysia and shall also begiven to the Exchange where such noticeshall state the Books Closing Date, whichshall be at least ten (10) Market Daysafter the date of notification to theExchange or such other period as may beprescribed under the ListingRequirements, the Rules or by theExchange from time to time, and theaddress of the share registry at whichdocuments will be accepted forregistration. In relation to such closure,the Company shall give written notice inaccordance to the Rules to issue theappropriate Record of Depositors.

Transmission of Securities

Where:-

(a) the securities of the Company are listed on another stock exchange;and

Article Number

Article 6 (1)

Article 6 (3)

Article 27

Article 33 (1)



Existing Articles

(b) the Company is exempted from compliance with Section 14 of the Central Depositories Act or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act, 1998, as the case may be, under the Rules in respect of such securities

the Company shall, upon request of ashareholder, permit a transmission ofsecurities held by such securities holderfrom the register of holders maintained bythe registrar of the Company in thejurisdiction of the Approved Market Place(“the Foreign Register”) to the register ofholders maintained by the registrar of theCompany in Malaysia (“the MalaysianRegister”) subject to the followingconditions:-

(i) there shall be no change in the ownership of such securities; and

(ii ) the transmission shall be executed by causing such securities to be credited directly into the Securities Account of such securities holder

For the avoidance of doubt, no companywhich fulfils the requirements ofparagraphs (a) and (b) of subsection (1)above shall allow any transmission ofsecurities from the Malaysian Register intothe Foreign Register.

Notice of Meeting

(a) The notices for convening meetings shall specify the place, the date and the hour of the meeting and shall be given to all Members at least fourteen (14) days before the meeting or at least twenty one (21) days before the meeting where any Special Resolution is to be proposed or where it is an annual general meeting. Any notice of a meeting called to consider special business shall be accompanied by a statement regarding the effect of any proposed resolution in respect of such special business. At least fourteen (14) days’ notice or twenty one (21) days’

Proposed Amendments

(b) the Company is exempted from compliance with Section 14 of the Securities Industry (Central Depositories) Act 1991 or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act 1998, as the case may be, under the Rules of the Depository in respect of such securities,

the Company shall, upon request of asecurities holder, permit a transmission ofsecurities held by such securities holderfrom the register of holders maintained bythe registrar of the Company in thejurisdiction of the other stock exchange,to the register of the company in Malaysiaand vice versa provided that there shall beno change in the ownership of suchsecurities.

Deleted

Notice of Meeting

(a) The notices for convening meetings shall specify the place, the date and the hour of the meeting and shall be given to all Members at least fourteen (14) days before the meeting or at least twenty one (21) days before the meeting where any Special Resolution is to be proposed or where it is an annual general meeting. Any notice of a meeting called to consider special business shall be accompanied by a statement regarding the effect of any proposed resolution in respect of such special business. At least fourteen (14) days’ notice or twenty one (21) days’

Article Number

Article 33 (1)(Cont’d)

Article 33 (2)

Article 54



Existing Articles

notice in the case where any Special Resolution is proposed or where it is the annual general meeting, of every such meeting shall be given by advertisement in the daily press and in writing to the Exchange.

(b) The Company shall request the Central Depository in accordance with the Rules to prepare a Record of Depositors to whom notices of general meetings shall be given by the Company

(c) The Company shall request the Central Depository in accordance with the Rules to prepare a Record of Depositors as at a date not less than three (3) Market Days before the general meeting (“the General Meeting Record of Depositors”)

(d) Subject to the Securities Industry (Central Depositories) (Foreign Ownership) Regulations 1996 (where applicable) and notwithstanding any provisions in the Act, a Depositor shall not be regarded as a Member entitled to attend any general meetings and to speak and vote there at unless his name appears in the General Meeting Record of Depositors

Number of Directors

All the Directors shall be natural personsand until otherwise determined bygeneral meeting, the number ofDirectors shall not be less than two (2) normore than nine (9) but in the event of anycasual vacancy occurring and reducingthe number of Directors below theaforesaid minimum, the continuingDirector or Directors may except in anemergency act only for the purpose ofincreasing the number of Directors to suchminimum number or to summon ageneral meeting of the company.

Proposed Amendments

notice in the case where any Special Resolution is proposed or where it is the annual general meeting, of every such meeting shall be given by advertisement in at least one nationally circulated Bahasa Malaysia or English daily newspaper and in writing to the Exchange.

(b) The Company shall request the Depository in accordance with the Rules, to issue a Record of Depositors to whom notices of general meetings shall be given by the Company

(c) The Company shall also request the Depository in accordance with the Rules, to issue a Record of Depositors, as at the latest date which is reasonably practicable which shall in any event be not less than three (3) Market Days or any other period prescribed or allowed under the Listing Requirements before the general meeting (hereinafter referred to as “the General Meeting Record of Depositors”)

Number of Directors

The number of Directors shall not be lessthan two (2) nor more than nine (9) but inthe event of any casual vacancy occurringand reducing the number of Directorsbelow the aforesaid minimum, thecontinuing Director or Directors mayexcept in an emergency act only for thepurpose of increasing the number ofDirectors to such minimum number or tosummon a general meeting of thecompany.

Article Number

Article 54(Cont’d)

Article 75



Existing Articles

When offices of Director deemed vacant

The office of a Director shall becomevacant if the Director:-

(a) has a Receiving Order in Bankruptcy made against him or makes any arrangement or composition with his creditors generally;

(b) becomes prohibited from being a Director by reason of any order made under the Act or contravenes Section 130 of the Act;

(c) ceases to be or is prohibited from being a Director by virtue of the Act;

(d) becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to mental disorder;

(e) resigns his office by notice in writing to the Company and deposited at the Office;

(f) is removed from his office as Director by resolution of the Company in general meeting of which special notice has been given;

(g) becomes prohibited from being a Director by reason of Section 129(1) of the Act unless otherwise reappointed pursuant to the provision of the Act; and

(h) absents himself from more that fifty per centum (50%) of the total board of Directors’ meetings held during a financial year (subject to waiver from the Exchange).

New Provision

Proposed Amendments

When offices of Director deemed vacant

The office of a Director shall becomevacant if the Director:-

(a) has a Receiving Order in Bankruptcy made against him or makes any arrangement or composition with his creditors generally during his term of office;

(b) No change

(c) No change

(d) becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to mental disorderduring his term of office;

(e) No change

(f) No change

(g) No change

(h) Deleted.

Report in CD-ROM or DVD ROM format

Subject to the compliance with therequirement of the exchange and anyother relevant authorities, if any, theCompany may issue its annual report incompact disc read-only memory (“CD-ROM”) or digital video disc read only

Article Number

Article 87

Article 126A



Existing Articles

To whom copies of profit and lossaccounts etc may be sent

The Directors shall from time to time inaccordance with Section 169 of the Actcause to be prepared and laid before theCompany in general meeting such profitand loss accounts, balance sheets andreport as are referred to in the Section. Theinterval between the close of a financialyear of the Company and the issue of theannual audited accounts, the Directors’and Auditors’ reports shall not exceed four(4) months. A copy of each suchdocuments shall not be less than twentyone (21) days before the date of themeeting be sent to every Member of andto every holder of debentures of thecompany under the provisions of the Actor of these presents. The requisite numberof copies of each such documents as maybe required by the Exchange and/or otherstock exchange(s), if any, upon which theCompany’s shares may be listed shall atthe same time be likewise sent to theExchange and/or such other stockexchange(s), provided that this Articleshall not require a copy of thesedocuments to be sent to any person ofwhose address the Company is not awarebut any Member to whom a copy of thesedocuments has not been sent shall beentitled to receive a copy free of charge onapplication at the Office.

Proposed Amendments

memory (‘DVD-ROM”) format or suchother format (whether available nowor in the future) through whichimages, data, information or othermaterial may be viewed whetherelectronically or digitally or howsoever.

To whom copies of profit and lossaccounts etc may be sent

The Directors shall from time to time inaccordance with Section 169 of the Actcause to be prepared and laid before theCompany in general meeting such profitand loss accounts, balance sheets andreport as are referred to in the Section. Theinterval between the close of a financialyear of the Company and the issue of theannual audited accounts, the Directors’and Auditors’ reports shall not exceed four(4) months. The Company must issue tothe Members an annual report relatingto it within six (6) months after theexpiry of its financial year end inprinted format or in CD-ROM or DVD-ROM format or such other format notless than twenty one (21) days before thedate of the meeting and be sent to everyMember of the Company under theprovisions of the Act or of these Articles.The requisite number of copies of eachsuch documents as may be required bythe Exchange and/or other stockexchange(s), if any, upon which theCompany’s shares may be listed shall atthe same time be likewise sent to theExchange and/or such other stockexchange(s), provided that this Articleshall not require a copy of thesedocuments to be sent to any person ofwhose address the Company is not awarebut any Member to whom a copy of thesedocuments has not been sent shall beentitled to receive a copy free of charge onapplication at the Office. In the eventthat the annual report is sent in CD-ROM or DVD-ROM format or such otherformat and a Member requires aprinted format of such documents, theCompany shall send such documentsto the Members within four (4) marketdays from the date of receipt of theMembers’ request.

Article Number

Article 126A(Cont’d)

Article 127



Existing Articles

The instrument appointing a proxy shallbe in writing under the hand of appointoror of his attorney duly authorized inwriting or if the appointor is acorporation, either under seal or underthe hand of an officer or attorney dulyauthorized. Section 149 (1) (b) of the Actshall not apply to the Company; a proxymay but need not be a member. Theinstrument appointing a proxy shall bedeemed to confer authority to demand orjoin in demanding a poll. A Member shallnot be entitled to appoint more than ten(10) proxies to attend and vote at thesame meeting and each proxiesappointed, shall represent a minimum of1,000 shares. Where the Memberappoints more than one (1) proxy, toattend and vote at the same meeting,such appointments shall be invalid unlessthe Member specifies the proportion of hisshareholding to be represented by eachproxy.

Proposed Amendments

The instrument appointing a proxy shallbe in writing under the hand of theappointor or of his attorney dulyauthorized in writing or if the appointor isa corporation, either under seal or underthe hand of an officer or attorney dulyauthorized. Section 149(1)(b) of the Actshall not apply to the Company. A proxymay but need not a member. Theinstrument appointing a proxy shall bedeemed to confer authority to demand orjoin in demanding a poll. A Members shallnot be entitled to appoint more thanthree (3) proxies to attend and vote atthe same meeting. Where the Memberappoints more than one (1) proxy, toattend and vote at the same meeting,such appointment shall be invalid unlessthe Member specifies the proportion of hisshareholding to be represented by eachproxy.

Article Number

Article 70


This page is intentionally left blank

I/We,

NRIC No./Passport No./Company No

CDS Account No/Name of beneficial owner

of

being a member(s) of ASTRAL ASIA BERHAD hereby appoint(s)

NRIC No/Passport No/Company No

of

or the Chairman of the meeting as my/our proxy on my/our behalf at the 12th Annual General Meeting of theCompany to be held on Friday, 27 June 2008 at 10.00 a.m. at Kenanga Room, No. 1 Templer Park Resort, 48000Rawang, Selangor Darul Ehsan.

My/Our proxy is to vote either on a show of hands or on a poll as indicated below with an “X”:

RESOLUTIONS FOR AGAINST

Resolution 1 Adoption of Directors’ Report, AuditedAccounts and the Auditors’ Report for the financial year ended 31 December 2007

Resolution 2 Approval of Directors’ Fees

Resolution 3 Re-election of Dato’ Lim Kang Poh

Resolution 4 Re-election of Dato’ Amihamzah Bin Ahmad

Resolution 5 Re-appointment of Tan Sri Dato’ Husein Bin Ahmad

Resolution 6 Approval for the first & final dividend payment

Resolution 7 Re-appointment of Auditors – Messrs. SJ Grant Thornton

Resolution 8 Ordinary Resolution :Approval pursuant to Section 132D of the Companies Act 1965

Resolution 9 Special Resolution :Approval for the amendment Articles of Association of the Company

Dated this day of 2008 Number of shares held

Signature of Shareholder(s)

Notes:

1. Section 149(1)(b) of the Act shall not apply to the Company, a proxy may but need not be a Member of the Company.

2. This instrument duly completed must be deposited at the registered office of the Company not less than forty eight (48) hours before the time for holding the meeting.

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

4. A member shall not be entitled to appoint more than ten (10) proxies to attend and vote at the same meeting where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his shareholding to be represented by each proxy. Each proxy appointed, shall represent a minimum of 1,000 shares.

✃

Proxy Form

Fold here

The Company Secretary

Astral Asia Berhad67 & 69, Jalan SBC 1Taman Sri Batu Caves68100 Batu CavesSelangor Darul Ehsan

Fold here

AFFIX30 senSTAMP

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