CONTENTS

Page

NoticeofMeeting 1

Corporate Information 5Directors’ Profile 6

CorporateGovernance Statement 10

Statement on InternalControl 14

AuditCommittee Report 15

NominationCommittee 18

Remuneration Committee 18

5YearsGroup FinancialHighlights 19

TheGroup’sBusinesses 20

Chairman’s Statement:

BahasaMalaysia 21

English 24

Chinese 27

Financial Statements:

Directors’ Report 29

Statement byDirectors 36

Statutory Declaration 36

Report of theAuditors 37

Income Statements 38

Balance Sheets 40

Consolidated Statement ofChanges in Equity 42

Company Statement ofChanges in Equity 44

Cash FlowStatements 45

Notes to the Financial Statements 47

Analysis of Shareholdings 93

MaterialContracts 97

List ofGroupProperties 97

Other Information 98

Formof Proxy Enclosed

1

NOTICEISHEREBYGIVENTHATtheTwenty-FourthAnnualGeneralMeetingofParksonHoldingsBerhadwillbeheldattheMeetingHall,Level48,MenaraCitibank,165JalanAmpang,50450KualaLumpuron30November2007at9.00amforthefollowingpurposes:

AGENDA

1. ToreceiveandadopttheDirectors’ReportandAuditedFinancialStatementsforthefinancialyearended30June2007.

2. ToapprovethepaymentofDirectors’feesamountingtoRM185,000(2006:RM175,500).

3. Tore-electDirectors:

InaccordancewithArticle98oftheCompany’sArticlesofAssociation,thefollowingDirectorsretirebyrotationand,beingeligible,offerthemselvesforre-election:

Y.Bhg.TanSriWilliamH.J.ChengMrFolkJeeYoongMrChengSinYeng

4. Toconsiderandifthoughtfit,passthefollowingresolutionpursuanttoSection129(6)oftheCompaniesAct,1965asanordinaryresolution:

“THATpursuanttoSection129(6)oftheCompaniesAct,1965,Y.Bhg.TanSriDato’JaffarbinAbdulbeandisherebyre-appointedDirectoroftheCompanytoholdofficeuntilthenextannualgeneralmeetingoftheCompany.”

5. Tore-appointAuditorstoholdofficeuntiltheconclusionofthenextannualgeneralmeetingandtoauthorisetheDirectorstofixtheirremuneration.

6. SpecialBusiness

Toconsiderandifthoughtfit,passthefollowingresolutionsasordinaryresolutions:

6.1 AuthoritytoDirectorstoissueshares

“THATpursuanttoSection132DoftheCompaniesAct,1965andsubjecttotheapprovalofallrelevantauthoritiesbeingobtained,theDirectorsbeandareherebyempoweredtoissuesharesintheCompanyatanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharesissuedpursuanttothisresolutiondoesnotexceed10%oftheissuedandpaid-upcapitaloftheCompanyforthetimebeingandthatsuchauthorityshallcontinueinforceuntiltheconclusionofthenextannualgeneralmeetingoftheCompany.”

6.2 ProposedShareholders’MandateforRecurrentRelatedPartyTransactions

“THATapprovalbegivenfortheCompanyanditssubsidiariestoenterintorecurrentrelatedpartytransactionsofarevenueortradingnaturewhicharenecessaryforitsday-to-dayoperationsasdetailedinparagraph3.3andwiththoserelatedpartiesassetoutinparagraph3.2oftheCirculartoShareholdersoftheCompanydated14November2007(“RelatedParties”)providedthatsuchtransactionsareundertakenintheordinarycourseofbusinessandareonnormalcommercialtermswhichareconsistentwiththeGroup’susualbusinesspracticesandpolicies,andontermsnotmorefavourabletotheRelatedPartiesthanthosegenerallyavailabletothepublicandarenottothedetrimentoftheminorityshareholdersoftheCompany.

Resolution1

Resolution2

Resolution3Resolution4Resolution5

Resolution6

Resolution7

Resolution8

Resolution9

NOTICEOFMEETING

2

ANDTHATauthorityconferredbythisordinaryresolutionshallcontinuetobeinforceuntil:

(i) theconclusionofthenextannualgeneralmeetingoftheCompanyatwhichtimeitwilllapse,unlessbyaresolutionpassedatthemeeting,theauthorityisrenewed;

(ii) theexpirationof theperiodwithinwhich thenextannualgeneralmeetingafter thatdateisrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheCompaniesAct,1965);or

(iii) revokedorvariedbyresolutionpassedbytheshareholdersoftheCompanyingeneralmeeting;

whicheveristheearlier,

ANDTHAT theDirectorsof theCompanybeauthorised tocompleteanddoall suchactsandthingstogiveeffecttothetransactionscontemplatedand/orauthorisedbythisordinaryresolution.”

6.3 ProposedShareBuy-Back

“THATsubjectalwaystotheCompaniesAct,1965,theprovisionsoftheArticlesofAssociationoftheCompany,theListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”),andtheapprovalsofallrelevantgovernmentaland/orregulatoryauthorities,theCompanybeauthorised,tobuy-backsuchnumberofordinarysharesofRM1.00eachintheCompanyasmaybedeterminedbytheDirectorsoftheCompanyfromtimetotimethroughBursaSecuritiesuponsuchtermsandconditionsastheDirectorsmaydeemfitandexpedientintheinterestoftheCompanyprovidedthat:

(i) theaggregatenumberofsharesbought-backdoesnotexceed10%ofthetotalissuedandpaid-upcapitaloftheCompanyatanypointoftime;and

(ii) themaximumamountoffundstobeallocatedforthesharebuy-backshallnotexceedtheaggregateoftheretainedprofitsand/orsharepremiumoftheCompany

(hereinafterreferredtoasthe“ProposedShareBuy-Back”);

ANDTHATtheauthorityconferredbythisresolutionshallcommenceimmediatelyuponthepassingofthisresolutionandshallremaininforceuntil:

(i) theconclusionofthenextannualgeneralmeetingoftheCompany,unlessbyordinaryresolutionpassedatthatmeeting,theauthorityisrenewed,eitherunconditionallyorsubjecttoconditions;or

(ii) theexpirationoftheperiodwithinwhichthenextannualgeneralmeetingafterthedateitisrequiredbylawtobeheld;or

(iii) revokedorvariedbyordinaryresolutionpassedbyshareholdersoftheCompanyatageneralmeetingoftheCompany,

whicheveroccursfirst;

ANDTHATauthoritybeandisherebygiventotheDirectorsoftheCompanytodecideintheirabsolutediscretiontoretaintheordinarysharesofRM1.00eachintheCompanysopurchasedbytheCompanyastreasurysharesand/orcancelthemand/orresellthetreasurysharesand/ortodistributethemassharedividendsand/orsubsequentlycancelthem;

ANDFURTHERTHATauthoritybeandisherebyunconditionallyandgenerallygiventotheDirectorsoftheCompanytotakeallsuchstepsasarenecessaryorexpedientand/orenterintoanyandallagreements,arrangementsandguaranteewithanypartyorpartiestoimplement,finaliseandgivefulleffecttotheProposedShareBuy-Backwithfullpowerstoassenttoanyconditions, modifications, revaluations, variations and/or amendments (if any) as may beimposedbytherelevantauthorities.”

Resolution10

3

6.4 ProposedExecutiveShareOptionScheme

“THAT,subjecttotheapproval-in-principleofBursaMalaysiaSecuritiesBerhadforthelistingofandquotationforthenewordinarysharestobeissuedhereunderandtheapprovalsofanyotherauthorities(ifrequired),theDirectorsbeandareherebyauthorised:

(a) toestablishandadminister for thebenefitof eligibleexecutives includingExecutiveDirectors of the Company and its subsidiaries which are not dormant (“EligibleExecutives”),anexecutiveshareoptionschemetobeidentifiedasthe“ParksonHoldingsBerhadExecutiveShareOptionScheme”(“ESOS”)underwhichoffersofoptionsshallbegrantedinaccordancewiththeprovisionsoftheESOSBylawsascontainedinAppendixIoftheCirculartoShareholdersdated7November2007(“Bylaws”)forthesubscriptionofnewordinarysharesofRM1.00each(“Shares”)inthecapitaloftheCompanyandtogiveeffecttotheESOSwithfullpowertoassenttoanyconditions,variations,modificationsand/oramendmentsasmayberequiredorapprovedbytherelevantauthorities;

(b) toallotandissuefromtimetotimeduringthedurationoftheESOSsuchnumberofnewSharestoEligibleExecutivesupto15%oftheissuedandpaid-upcapitaloftheCompanyatanyonetimeasmayberequiredtobeissuedpursuanttotheexerciseoftheoptionsandthatsuchnewSharesshall,uponallotmentandissue,rankpari passuinallrespectswithexistingSharesintheCompanyinaccordancewiththeprovisionsoftheBylawsexceptthatthenewShareswillnotbeentitledtoanydividends,rights,allotmentsand/oranyotherdistributions,theentitlementdateofwhichispriortothedateonwhichthenewSharesarecreditedintothegrantee’sindividual/nomineesecuritiesaccountmaintainedwithBursaMalaysiaDepositorySdnBhd;and

(c) tomodifyand/oramendthetermsandconditionsoftheESOSfromtimetotimeand/orextendthedurationoftheESOS,providedthatsuchmodifications,amendmentsand/orextensionsareeffectedinaccordancewiththeprovisionsoftheBylaws,andtodoallsuchacts,enterintoallsuchtransactions,arrangements,agreementsorundertakings,makesuchrulesorregulations,imposesuchtermsandconditions,ordelegatesuchpartoftheirpowersasmaybenecessaryorexpedientinordertogivefulleffecttotheESOS.”

6.5 ProposedGrantofOptionstoMsShumYuenMing,Rita

“THATcontingentuponthepassingofOrdinaryResolution11,authoritybeandisherebygiventotheCompanyspecificallytoofferandgranttoMsShumYuenMing,Rita,anexecutiveemployeeofasubsidiaryoftheCompanywhoisapersonconnectedwithDatukChengYongKim,amajorshareholderoftheCompany,optionstosubscribeforupto200,000newSharesinthecapitaloftheCompany,subjectalwaystosuchtermsandconditionsand/oranyadjustmentwhichmaybemadeinaccordancewiththeprovisionsoftheBylaws.”

6.6 ProposedGrantofOptionstoMsChengHuiYen,Natalie

“THATcontingentuponthepassingofOrdinaryResolution11,authoritybeandisherebygiventotheCompanyspecificallytoofferandgranttoMsChengHuiYen,Natalie,anexecutiveemployeeofasubsidiaryoftheCompanywhoisapersonconnectedwithTanSriWilliamH.J.Cheng,theChairman,ManagingDirectorandamajorshareholderoftheCompany,optionstosubscribeforupto30,000newSharesinthecapitaloftheCompany,subjectalwaystosuchtermsandconditionsand/oranyadjustmentwhichmaybemadeinaccordancewiththeprovisionsoftheBylaws.”

7. Totransactanyotherbusinessforwhichduenoticeshallhavebeengiven.

ByOrderoftheBoard

CHANPOHLANLIMKWEEPENGSecretaries

KualaLumpur7November2007

Resolution11

Resolution12

Resolution13

4

Notes:

1. Proxy

• A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or the hand of an officer or attorney duly authorised.

• An instrument appointing a proxy executed in Malaysia need not be witnessed. The signature to an instrument appointing a proxy executed outside Malaysia shall be attested by a solicitor, notary public, consul or magistrate.

• The instrument of proxy shall be deposited at the Registered Office of the Company, Level 46, Menara Citibank, 165 Jalan Ampang, 50450 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the Meeting.

• Form of Proxy sent through facsimile transmission shall not be accepted.

2. Resolution 8

This authorisation will empower the Directors of the Company to issue shares in the Company up to an amount not exceeding in total 10% of the issued and paid-up capital of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next annual general meeting of the Company.

3. Resolution 9

This approval will allow the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with those related parties as set out in paragraph 3.2 of the Circular to Shareholders dated 14 November 2007, which are necessary for the Group’s day-to-day operations undertaken in the ordinary course of business and are on normal commercial terms which are consistent with the Group’s usual business practices and policies, and on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company.

The Circular to Shareholders setting out the details on the Proposed Shareholders’ Mandate for Recurrent Related Party Transactions will be despatched on 14 November 2007.

4. Resolution 10

This approval will empower the Directors of the Company to purchase the Company’s share up to 10% of the issued and paid-up capital of the Company at any point of time. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next annual general meeting of the Company.

The Circular to Shareholders setting out the details on the Proposed Share Buy-Back will be despatched on 14 November 2007.

5. Resolution 11

This approval will:

(i) allow Eligible Executives to participate in the ESOS under which offers of options shall be granted to subscribe for new Shares in the Company; and

(ii) empower the Directors of the Company to allot and issue from time to time during the duration of the ESOS such number of new Shares to Eligible Executives up to 15% of the issued and paid-up capital of the Company at any one time.

The Circular to Shareholders setting out the details on the Proposed Executive Share Option Scheme will be despatched on 14 November 2007.

6. Resolutions 12 and 13

This authorisation will empower the Company to offer and grant to Ms Shum Yuen Ming, Rita and Ms Cheng Hui Yen, Natalie, who are persons connected with a major shareholder and a Director respectively, options to subscribe for new Shares in the Company pursuant to the ESOS.

The Circular to Shareholders setting out details on the Proposed Grant of Options to Ms Shum Yuen Ming, Rita and Ms Cheng Hui Yen, Natalie will be despatched on 14 November 2007.

DetailsoftheDirectorsstandingforre-election/re-appointmentattheTwenty-FourthAnnualGeneralMeetingoftheCompanyaresetoutintheDirectors’Profileonpages6to9ofthe2007AnnualReport.

STATEMENTACCOMPANYINGNOTICEOFANNUALGENERALMEETING

5

BoardofDirectors : Y.Bhg.TanSriWilliamH.J.Cheng (Chairman and Managing Director) Y.Bhg.TanSriDato’JaffarbinAbdul Y.Bhg.DatoMuradMohamedHashim Y.Bhg.Dato’HassanbinAbdulMutalip MrLinChungDien MrChengSinYeng MrFolkJeeYoong EncikMohamedHusseinbinNabiBux MrLimPoonThoo MrYeowTeckChai

Secretaries : MsChanPohLan MsLimKweePeng

CompanyNo. : 89194-P

RegisteredOffice : Level46,MenaraCitibank 165JalanAmpang 50450KualaLumpur TelNos:03-21622155,03-21613166 FaxNo:03-21623448 Homepage:http://www.lion.com.my

ShareRegistrar : SecretarialCommunicationsSdnBhd Level46,MenaraCitibank 165JalanAmpang 50450KualaLumpur TelNos:03-21622155,03-21648411 FaxNo:03-21623448

Auditors : Ernst&Young Level23A,MenaraMilenium JalanDamanlela PusatBandarDamansara 50490KualaLumpur

PrincipalBankers : CIMBBankBerhad RHBBankBerhad BangkokBankBerhad

StockExchangeListing : BursaMalaysiaSecuritiesBerhad(“BursaSecurities”)

StockName : PARKSON

BursaSecuritiesStockNo. : 5657

ReutersCode : PRKN.KL

ISINCode : MYL5657OO001

CORPORATE INFORMATION

6

DIRECTORS’ PROFILE

TanSriWilliamH.J.ChengNon-Independent Chairman and Managing Director

Y.Bhg.TanSriWilliamH.J.Cheng,aMalaysian,aged64,wasappointedtotheBoardon30March1989.Hewasappointed theManagingDirectorand theChairmanof theCompanyon16August2006and13November2006respectively.

TanSriWilliamChenghasmorethan35yearsofexperienceinthebusinessoperationsoftheLionGroupencompassingsteel,motor,tyre,computer,retail,trading,plantation,andpropertyandcommunitydevelopment.

TanSriWilliamChengisthePresidentofTheAssociatedChineseChambersofCommerceandIndustryofMalaysiaandTheChineseChamberofCommerceandIndustryofKualaLumpurandSelangor.

TanSriWilliamCheng’sotherdirectorshipsinpubliccompaniesareasfollows:

• Chairman of Silverstone Corporation Berhad, Lion Diversified Holdings Berhad and Lion Forest IndustriesBerhad

• ChairmanandManagingDirectorofLionCorporationBerhadandSilverstoneBerhad

• DirectorofAmsteelCorporationBerhadSaveforSilverstoneCorporationBerhad,SilverstoneBerhadandAmsteelCorporationBerhad,alltheabovecompaniesarelistedonBursaMalaysiaSecuritiesBerhad.

HisshareholdingsintheCompanyaredisclosedonpage95ofthisAnnualReport.ByvirtueofhissubstantialinterestintheCompany,heisdeemedtobeinterestedinthesubsidiariesoftheCompany,bothwholly-ownedandthosesetoutonpages95and96ofthisAnnualReport.

TanSriWilliamChengistheuncleofDatukChengYongKim,amajorshareholderoftheCompany.

TanSriWilliamChengattendedallfive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

TanSriDato’JaffarbinAbdulIndependent Non-Executive Director

Y.Bhg.TanSriDato’JaffarbinAbdul,aMalaysian,aged75,wasappointedtotheBoardon30December1991.HeisalsotheChairmanoftheCompany’sNominationCommittee.

TanSriDato’JaffarjoinedthePoliceForcein1951androsetobecomeDirectorofAnti-NarcoticBranch,FederalPoliceHeadquarters,in1982.From1982to1984,hewastheChiefPoliceOfficerinJohorandbetween1984and1985,hewastheDirectorofManagementPoliceHeadquartersinBukitAman.HewasalsotheDeputyInspectorGeneraloftheRoyalMalaysianPolicesince1985beforeretiringfromthecivilservicein1989.

TanSriDato’Jaffar’sotherdirectorshipsinpubliccompaniesareasfollows:

• ChairmanofCoswayCorporationBerhad,MycomBerhadandYinsonHoldingsBerhad

• DirectorofSilverstoneCorporationBerhad,BerjayaSportsTotoBerhadandOlympiaIndustriesBerhadSaveforCoswayCorporationBerhadandSilverstoneCorporationBerhad,alltheabovecompaniesarelistedonBursaMalaysiaSecuritiesBerhad.TanSriDato’Jaffarattendedallfive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

7

DatoMuradMohamedHashimIndependent Non-Executive Director

Y.Bhg.DatoMuradMohamedHashim,aMalaysian,aged74,wasappointedtotheBoardon29August2001.HeisalsotheChairmanoftheCompany’sAuditCommitteeandRemunerationCommittee,andamemberoftheNominationCommittee.

DatoMuradobtainedhisBachelorofArtsdegree in InternationalRelations/Economics fromtheBostonUniversity,Boston,UnitedStatesofAmerica.HewaswithESSOMalaysiaBerhad(“ESSO”)from1959to1984.In1984,hewasappointedSeniorVicePresidentandamemberof theBoardofPetroliamNasionalBerhad(“Petronas”),Malaysia’snationalpetroleumcorporation,bythethenPrimeMinisterofMalaysiaandaftercompletinghis5-yearcontractwithPetronas,wassubsequentlyre-appointedbythethenPrimeMinisterin1989toestablishandheadtheMalaysianPalmOilPromotionCouncil(“MPOPC”)topromotepalmoilworldwideandtofighttheanti-palmoilcampaigninitiatedintheUnitedStatesofAmerica.In1993,heretiredasChiefExecutiveOfficerofMPOPC.HeisalsoamemberoftheBoardofTrusteesofWorldWildlifeFund.

Dato Murad is also a Director of Lion Diversified Holdings Berhad and Mycom Berhad, both public listedcompanies.

DatoMuradattendedallfive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

DatoMuradwhoisabovetheageof70yearswillberetiringattheforthcomingAnnualGeneralMeetinganddoesnotseekre-appointmentasDirectoroftheCompany.

Dato’HassanbinAbdulMutalipIndependent Non-Executive Director

Y.Bhg.Dato’HassanbinAbdulMutalip,aMalaysian,aged62,wasappointedtotheBoardon4July2001.HeisalsoamemberoftheCompany’sAuditCommittee,NominationCommitteeandRemunerationCommittee.

Dato’HassanholdsaDiplomainPoliceSciencefromUniversitiKebangsaanMalaysia,aCertificateinManagementfromLouisianaStateUniversity,UnitedStatesofAmerica,aCertificateinSeniorPoliceAdministratorsfromNationalPoliceAcademy,JapanandaCertificateinProsecutionfromPoliceCollege,PolisDiRajaMalaysia.Dato’HassanisaretiredDeputyCommissionerofPolicewithmorethan30yearsofexperienceinthepoliceforce.

Dato’Hassanattendedthree(3)ofthefive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

LinChungDienNon-Independent Non-Executive Director

MrLinChungDien,aTaiwanese,aged64,wasappointedtotheBoardon23July1990.

MrLinholdsaBachelorofMechanicalEngineeringdegreefromtheNationalTaiwanUniversity.HeistheChairmanandChiefExecutiveOfficerofBichainTradingCoLtdsince1972.HewasanExportManager(TaipeiBranch)withSanyoSeikeTradingCoLtd(1967-1972)andaMechanicalEngineerwithDa-EngSteel&IronCoLtd(1966-1967).

MrLinattendedallfive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

8

ChengSinYengNon-Independent Non-Executive Director

MrChengSinYeng,aMalaysian,aged55,wasappointedtotheBoardon29August2001.HeisalsoamemberoftheCompany’sAuditCommitteeandRemunerationCommittee.

Mr Cheng is a member of the Malaysian Institute of Certified PublicAccountants and the Malaysian Institute ofAccountants.Hewasattached toCoopers&Lybrand (nowknownasPricewaterhouseCoopers) for seven (7)yearsasanauditassistant.AftercompletinghisprofessionalexaminationasaCertifiedPublicAccountant,hejoinedtheHongLeongGroupandwaswithitsPropertyDivisionforthree(3)yearsasanAccountant.MrChengjoinedtheLionGroupin1982andwastheChiefAccountantofPosimBerhad(nowknownasLionForestIndustriesBerhad).HewassubsequentlypromotedtoSeniorChiefAccountantoftheProperty&ConstructionDivision.HeiscurrentlytheGeneralManager-AccountsoftheLionGroupFinanceDivision.

MrChengisalsoaDirectorofSilverstoneBerhad,apubliccompany.

MrChengattendedallfive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

FolkJeeYoongIndependent Non-Executive Director

MrFolkJeeYoong,aMalaysian,aged46,wasappointedtotheBoardon18October2001.HeisalsoamemberoftheCompany’sAuditCommittee.

MrFolkreceivedhisBachelorofBusinessdegreeinAccounting&SecretarialAdministrationfromCurtinUniversityofTechnologyinPerth,WesternAustralia,BachelorofEconomicsdegreefromUniversityofWesternAustraliaandMasterofCommercedegree inAccounting fromUniversityofAuckland,NewZealand.Currently,he ispursuingdoctoralstudiesinbusinessadministration.HeisamemberoftheAustralianSocietyofCertifiedPractisingAccountantsandtheMalaysianInstituteofAccountants.

MrFolkhasovertwentyyearsofexperienceincorporatefinance,restructurings,auditsandfinancialmanagementindiversifiedindustriessuchasmortgagebanking,propertydevelopment,construction,seafoodtrawling&processing,pulp&paper,jewellery,officefurniture,multi-levelmarketing,plasticinjectionmoulding,timberplantation&processingandtravel.Between1984and1990,amongstotherpublicaccountingfirms,hewasattachedtoDeloitte,Haskins&Sells,NewZealandandMcLaren&Stewart,Perth,Australia.Hehasalsoworkedwithmulti-nationalssuchasSinarMasGroup,RajaGarudaMasGroupandFletcherChallengeGroupinvariouscountriessuchasNewZealand,IndiaandIndonesia.

MrFolkattendedfour(4)ofthefive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

MohamedHusseinbinNabiBuxNon-Independent Non-Executive Director

EncikMohamedHusseinbinNabiBux,aMalaysian,aged55,wasappointedtotheBoardon19December2002.

EncikMohamedHusseinisagraduateofUniversityMalayawithaBachelorofEconomics(BusinessAdministration)SecondClassHonoursdegreein1977.Hehasmorethan20yearsofworkingexperienceinthefieldoffinanceandcorporatebankingservices,housingdevelopmentandlogisticsbusiness.HewaswithMalayanBankingBerhad(1997-1983),MBfGroup-AbrarGroup(1984-1992)andCCMCreditCorporationBerhad(1993-1997).HeventuredintothelogisticbusinesswithSriBayanemasSdnBhdbasedinPenangbeforejoiningAmsteelMillsSdnBhdinMarch1999asitsLogisticsManager.InOctober2001,hewastransferredtotheHumanResourcesDepartmentofAmsteelMillsSdnBhd.

EncikMohamedHusseinattendedallfive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

9

LimPoonThooNon-Independent Non-Executive Director

MrLimPoonThoo,aMalaysian,aged53,wasappointedtotheBoardon6October2005.

MrLimobtainedhisMasterofBusinessAdministrationfromSouthernCaliforniaUniversityforProfessionalStudies.

MrLimhasover30yearsofworkingexperienceinaudit,tax,financeandcorporatedevelopment,andotherrelatedfields.MrLimfirstjoinedtheLionGroupin1984asaTaxPlanningManagerandin1994wasappointedtheGeneralManager-GroupFinanceDivision,Tax.In1998,healsoassumedthepositionofSpecialAssistanttotheLionGroupChairmanandChiefExecutiveOfficer(“CEO”).In2002,hewasappointedExecutiveDirectorofMahkotaMedicalCentreSdnBhdandcontinuedtoservetheLionGroupasaConsultantandSpecialAssistanttoitsGroupChairmanandCEO.MrLimiscurrentlyaGroupDirectorcumSpecialAssistanttotheGroupChairmanandCEOoftheLionGroupandDirectorofCorporatePlanningofMegasteelSdnBhd.InFebruary2006,hewasappointedCEOofMahkotaMedicalCentreSdnBhd.HealsositsontheboardofvariouscompaniesintheLionGroupandHealthManagementInternationalLimited,Singapore.

MrLimattendedfour(4)ofthefive(5)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007.

YeowTeckChaiIndependent Non-Executive Director

MrYeowTeckChai,aMalaysian,aged57,wasappointedtotheBoardon16August2006.HeisalsoamemberoftheCompany’sAuditCommittee.

MrYeowholdsaBachelorofEconomics(Hons)degreefromtheUniversityofMalaya.

MrYeowservedtheMalaysianIndustrialDevelopmentAuthority(“MIDA”)for32yearsandheldthepostofDeputyDirectorGeneralprior tohis retirement inAugust2006.Hewas responsible for thepromotion, coordinationanddevelopmentofthemanufacturingandservicessectorsinMIDA.

MrYeowattendedthree(3)oftheremainingfour(4)BoardMeetingsoftheCompanyheldduringthefinancialyearended30June2007subsequenttohisappointment.

Saveasdisclosed,noneoftheDirectorshas(i)anyinterestinsharesintheCompanyoritssubsidiaries;(ii)anyfamilyrelationshipwithanyDirectorand/ormajorshareholderoftheCompany;(iii)anyconflictofinterestwiththeCompany;and(iv)anyconvictionforoffenceswithinthepast10years.

10

CORPORATEGOVERNANCESTATEMENT

TheBoardofDirectors(“Board”)recognisestheimportanceofpractisingandmaintaininggoodcorporategovernancetodirectthebusinessesoftheGrouptowardsenhancingbusinessprosperityandlongtermvalueforitsshareholders.TheBoardisfullycommittedinensuringthatthehigheststandardofcorporategovernanceispractisedandmaintainedthroughouttheGroupastheunderlyingprincipleindischargingitsresponsibilities.

TheBoardispleasedtopresentbelowadescriptionofhowtheGrouphasappliedtheprinciplesofgoodgovernanceandtheextenttowhichithascompliedwiththebestpracticessetoutintheMalaysianCodeonCorporateGovernance(“Code”).Theseprinciplesandbestpracticeshavebeenappliedconsistentlythroughoutthefinancialyearended30June2007exceptwhereotherwisestatedherein.

1. DIRECTORS

TheBoard

TheBoardisentrustedwiththeresponsibilityinleadinganddirectingtheGrouptowardsrealisinglongtermshareholders’values.TheBoardretainsfullandeffectivecontroloftheGroup’sstrategicplans,overseeingtheconductoftheGroup’sbusinesses,implementinganappropriatesystemofriskmanagementandensuringtheadequacyandintegrityoftheGroup’ssystemofinternalcontrol.

TheBoardmeetsonaquarterlybasis,withadditionalmeetingsconvenedasandwhennecessary.Duringthefinancialyearended30June2007,five(5)boardmeetingswereheldandeachDirectorattendedatleast50%ofthetotalboardmeetingsheldduringthefinancialyear.DetailsofattendanceandabriefprofileofeachmemberoftheBoardaresetoutintheDirectors’ProfilesectionofthisAnnualReport.

BoardCompositionandBalance

TheBoardcomprisesten(10)Directors,nine(9)ofwhomarenon-executive.ThecurrentBoardcompositioncomplies with the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).The broadrangeofexperience, skillsandknowledgeof theDirectorseffectively facilitates thedischargeof theBoard’sstewardship.

RepresentedontheBoardarefive(5)independentnon-executiveDirectorswhobringtheirindependentadvice,viewsandjudgementtobearonthedecision-makingprocessoftheGrouptoensurethatabalancedandunbiaseddeliberationprocessisinplacetosafeguardtheinterestsofotherstakeholders.Asandwhenapotentialconflictofinterestarises,itismandatorypracticefortheDirectorsconcernedtodeclaretheirinterestsandabstainfromthedecision-makingprocess.

TheGroupChairmanalsoassumesthepositionoftheGroup’sManagingDirector.Hebringswithhimawealthofover35yearsofexperienceinthebusinessoperationsoftheGroupandpossessesthecalibretoensurethepoliciesandstrategiesapprovedbytheBoardareeffectively implemented. Inviewof thevastexperienceoftheGroupChairman/ManagingDirector,theBoardconsidersthedeparturefromtherecommendedpracticeofseparatingthefunctionsasappropriateunderthepresentcircumstances.

BoardCommittees

TheBoarddelegatescertainfunctionstoseveralcommittees,namelytheAuditCommittee,NominationCommitteeandRemunerationCommitteetosupportandassistindischargingitsfiduciarydutiesandresponsibilities.TherespectivecommitteesreporttotheBoardonthemattersconsideredandtheirrecommendationsthereon.Theultimateresponsibilityforthefinaldecisiononallmatters,however,lieswiththeBoard.

TheBoardmayformothercommitteesdelegatedwithspecificauthoritiestoactontheirbehalfwheneverrequired.ThesecommitteesoperateunderapprovedtermsofreferenceorguidelinessetoutbytheBoard.

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SupplyofInformation

TheBoardmembers,intheirindividualcapacities,haveunrestrictedaccesstocompleteinformationonatimelybasisintheformandqualitynecessaryforthedischargeoftheirdutiesandresponsibilities.PriortoeachBoardmeeting,allBoardmembersarefurnishedwiththerelevantdocumentsandsufficientinformationtoenablethemtoobtainacomprehensiveunderstandingoftheissuestobedeliberateduponinordertoarriveataninformeddecision.

Besidesdirectaccesstomanagementstaff,externalindependentprofessionaladvisersarealsomadeavailabletorendertheirindependentviewsandadvicetotheBoard,wheneverdeemednecessaryandunderappropriatecircumstances,attheCompany’sexpense.

TheDirectorsalsohaveaccesstotheadviceandservicesoftheCompanySecretaries,whoareresponsibleforensuringthatBoardmeetingproceduresarefollowedandthatapplicablerulesandregulationsarecompliedwith.

AppointmentstotheBoard

TheNominationCommitteeisresponsibleforrecommendingtherightcandidateswiththenecessarymixofskill,experienceandcompetencytobeappointedtotheBoardandBoardCommittees.ThemembersandtermsofreferenceoftheNominationCommitteearepresentedonpage18ofthisAnnualReport.

Re-electionofDirectors

InaccordancewiththeArticlesofAssociationoftheCompany,one-third(1/3)oftheDirectorsshallretirefromofficeateveryannualgeneralmeetingandallDirectorsshallretirefromofficeatleastonceineverythree(3)years.RetiringDirectorscanofferthemselvesforre-election.DirectorswhoareappointedbytheBoardduringthefinancialyeararesubjecttore-electionbytheshareholdersatthenextannualgeneralmeetingfollowingtheirappointment.

Directors’Training

AllmembersoftheBoardhaveattendedBursaSecurities’MandatoryAccreditationProgramme.

TheDirectorsarealsoencouragedtoattendvariousexternalprofessionalprogrammesasnecessarytokeepabreastofissuesfacingthechangingbusinessenvironmentwithinwhichtheGroupoperates.

Duringthefinancialyear,anin-houseseminarwasheldforthebenefitoftheDirectors.CertainDirectorshavealsoattendedotherseminarsandprogrammesotherthanthatinrelationtothein-houseseminar.

Inaddition,theCompanyarrangessitevisitsfortheDirectors,whenevernecessary,toenhancetheirunderstandingoftheGroup’sbusinessesandhaveabetterawarenessoftherisksassociatedwiththeGroup’soperations.

The Directors are also updated on a continuing basis by the Company Secretaries on new and/or revisedrequirementstotheListingRequirementsofBursaSecuritiesasandwhenthesamewereadvisedbyBursaSecurities(“ContinuingUpdates”).

TheBoard views the attendanceof theDirectors at the aforementioned seminars andprogrammes, and theContinuingUpdatesasadequatetoenhancetheirskillsandknowledgetocarryouttheirdutiesasDirectors.

TheBoardwill,onacontinuingbasis,evaluateanddeterminethetrainingneedsofeachDirector,particularlyonrelevantnewlawsandregulations,andessentialpracticesforeffectivecorporategovernanceandriskmanagementtoenabletheDirectorstoeffectivelydischargetheirduties.

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2. DIRECTORS’REMUNERATION

TheCompanyhasadoptedtheobjectiveasrecommendedbytheCodeindeterminingtheremunerationofexecutiveDirectorssoastoensurethatitattractsandretainstheDirectorsneededtomanagetheCompanyandtheGroupeffectively.Directorsdonotparticipateindecisionsregardingtheirownremuneration.TheresponsibilitiesfordevelopingtheremunerationpolicyanddeterminingtheremunerationpackagesofexecutiveDirectorsliewiththeRemunerationCommittee.Nevertheless,itistheultimateresponsibilityoftheBoardtoapprovetheremunerationoftheseDirectors.ThemembersandtermsofreferenceoftheRemunerationCommitteearepresentedonpage18ofthisAnnualReport.

Directors’feesarerecommendedbytheBoardfortheapprovalbyshareholdersoftheCompanyatannualgeneralmeetings.

For confidentiality, thedetails of theDirectors’ remunerationarenotdisclosed for each individualDirector.The transparency and accountability aspects of corporate governance applicable to Directors’ remunerationrecommendedbythebestpracticesoftheCodearedeemedappropriatelyservedbythedisclosuresintheensuingparagraphs.

TheaggregateremunerationofDirectorswhoservedduringthefinancialyearended30June2007arecategorisedasfollows:

Salaries &Other Fees Emoluments Total RM’000 RM’000 RM’000

ExecutiveDirector 10 120 130Non-executiveDirectors* 175 – 175 185 120 305

ThenumberofDirectorswhosetotalremunerationfallintotherespectivebandsareasfollows:

NumberofDirectorsRangeofRemuneration(RM) Executive Non-executive

25,000&below – 10*25,001–50,000 – 1100,001–150,000 1 –

* IncludingDirectorswhoretiredatthepreviousAnnualGeneralMeetingandaDirectorwhowasappointedduringthefinancialyear.

3. RELATIONSWITHSHAREHOLDERSANDINVESTORS

Theannualgeneralmeetingistheprincipalforumfordialoguewithshareholders.ShareholdersareprovidedwithanopportunitytoparticipateinthequestionandanswersessioninwhichshareholdersmayraisequestionsregardingtheproposedresolutionsatthemeetingaswellasonmattersrelatingtotheGroup’sbusinessesandaffairs.TheChairmanandtheBoardmembersareinattendancetorespondtoshareholders’queries.

TheGroupalsovaluesdialogueswithinstitutionalinvestors,fundmanagersandanalysts.TheGrouphasbeenpractisingopendiscussionswithinvestors/fundmanagers/analystsuponrequest.Inthisregard,informationisdisseminatedwithstrictadherencetothedisclosurerequirementsofBursaSecurities.

TheBoardhasidentifiedtheCompanySecretariestowhomconcernsmaybeconveyedandwhowouldbringthesametotheattentionoftheBoard.

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4. ACCOUNTABILITYANDAUDIT

TheAuditCommitteesupportstheBoardinitsresponsibilitytooverseethefinancialreportingandtheeffectivenessoftheinternalcontrolsoftheGroup.TheAuditCommitteecomprisesfive(5)Directors,majorityofwhomareindependent.ThetermsofreferenceandactivitiesoftheAuditCommitteearesetoutintheAuditCommitteeReportonpages15to17ofthisAnnualReport.

FinancialReporting

TheBoardaimstopresentabalancedandclearassessmentoftheGroup’spositionandprospecttotheCompany’sshareholdersthroughtheannualfinancialstatementsandquarterlyannouncements.TheBoardisalsoresponsibleforensuringthattheaccountingrecordsoftheGroupareproperlykept.TheBoarddiscussesandreviewstherecommendationsproposedbytheAuditCommitteepriortotheadoptionofthefinancialstatementsoftheGroupandoftheCompany.

Directors’ResponsibilityinFinancialReporting

TheBoardissatisfiedthatforthefinancialyearended30June2007,thefinancialstatementspresentedgiveatrueandfairviewofthestateofaffairs,resultsandcashflowsoftheGroupandoftheCompany.Inpreparingthefinancialstatements,theGrouphasapplied,onaconsistentbasis,theapplicableapprovedaccountingstandardsandtheprovisionsoftheCompaniesAct,1965.

InternalControl

TheBoardhasoverallresponsibilityinmaintainingasoundinternalcontrolsystemfortheGrouptoachieveitsobjectiveswithinanacceptableriskprofileaswellassafeguardingshareholders’investmentandtheGroup’sassets.AnoverviewofthestateofinternalcontrolwithintheGroupissetoutintheStatementonInternalControlonpage14ofthisAnnualReport.

RelationshipwiththeAuditors

TheBoardhasestablishedaformalandtransparentrelationshipwiththeauditors.TheAuditCommitteerecommendstheappointmentof theexternalauditorsandtheirremuneration.Theappointmentof theexternalauditors issubjecttotheapprovalofshareholdersattheannualgeneralmeetingwhilsttheirremunerationisdeterminedbytheBoard.TherolesofboththeexternalandinternalauditorsarefurtherdescribedintheAuditCommitteeReport.

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STATEMENTON INTERNALCONTROL

Introduction

TheBoardofDirectors(“Board”)acknowledgestheimportanceofmaintainingasoundsystemofinternalcontroltosafeguardshareholders’investmentsandtheGroup’sassets.GuidedbytheStatement on Internal Control: Guidance for Directors of Public Listed Companies,theBoardispleasedtopresenttheStatementonInternalControloftheGroup(excludingassociatedcompanies,as theBoarddoesnothavecontrolover theiroperations)pursuant to theListingRequirementsofBursaMalaysiaSecuritiesBerhad.

BoardResponsibility

TheBoardaffirmsitsoverallresponsibilityfortheGroup’ssystemofinternalcontrolandriskmanagement,andforreviewingtheadequacyandintegrityofthesesystems.However,inviewoftheinherentlimitationsinanysystem,suchinternalcontrolsystemsaredesignedtomanageratherthantoeliminaterisksthatmayimpedetheachievementoftheGroup’sobjectives.Thesystemscanthereforeonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatements,fraudsorlosses.Thesystemofinternalcontrolcoversriskmanagementandfinancial,organisational,operationalandcompliancecontrols.

TheBoardconfirmsthatthereisanon-goingprocessofidentifying,evaluatingandmanagingsignificantrisksbythemanagement.ThisprocesshasbeenputinplacefortheyearandisreviewedperiodicallybytheBoardthroughitsAuditCommitteewhichissupportedbytheInternalAuditors.

RiskManagement

TheBoardregardsriskmanagementasanintegralpartofbusinessoperations.ACorporateRiskManagementFrameworkwasdevelopedanddocumentedviaaCorporateRiskManagementManualwhichsetsoutinacomprehensivemannertheprocessadoptedbytheGrouptowardsriskidentification,evaluation,controlandmonitoring.TheRiskManagementCommittee continues toplay apivotal role inoverseeing the implementationof the riskmanagement framework,periodicallyreviewingtheriskmanagementscorecardsandreportingthestatustotheAuditCommittee.

ControlandMonitoringProcess

TheBoardiscommittedtomaintainingastronginternalcontrolstructurefortheproperconductoftheGroup’sbusinessoperations.Thekeyelementsinclude:

• Anoperationalstructurewithdefinedlinesofresponsibilityanddelegationofauthoritytogetherwithahierarchicalstructureofreportingandaccountability

• Internal policies and procedures that are regularly updated to reflect changing risks or resolve operationaldeficienciesincludingtoclearlydefinelimitsofauthority

• Adetailedbudgetingprocesswhichrequiresallbusinessunitstopreparebudgetandbusinessplanonanannualbasis

• ReviewofkeybusinessvariablesandthemonitoringoftheachievementsoftheGroup’sperformanceonaquarterlybasisbytheBoardandtheAuditCommittee

• ConfirmationoftheeffectivenessofinternalcontrolandriskassessmentprocessbythechiefexecutiveofficerorgeneralmanagerofkeyoperatingcompaniesbywayofcompletionoftheInternalControl–Self-AssessmentQuestionnaireonanannualbasis

• PeriodicexaminationofbusinessprocessesandsystemsofinternalcontrolbytheinternalauditfunctionwhichregularlysubmitsitsreportstotheAuditCommittee

Thesystemofinternalcontrolwasgenerallysatisfactoryandhasnotresultedinanymateriallosses,contingenciesoruncertaintiesthatwouldrequiredisclosureintheGroup’sAnnualReport.

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AUDITCOMMITTEEREPORT

COMPOSITION

AsatthedateofthisAnnualReport,thecompositionoftheAuditCommitteeisasfollows:

• Members

Y.Bhg.DatoMuradMohamedHashim(Chairman, Independent Non-Executive Director)

Y.Bhg.Dato’HassanbinAbdulMutalip(Independent Non-Executive Director)

MrChengSinYeng(Non-Independent Non-Executive Director)

MrFolkJeeYoong(Independent Non-Executive Director)

MrYeowTeckChai(Independent Non-Executive Director)

ThecompositionoftheAuditCommitteecomplieswithparagraphs15.10and15.11oftheListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).

• Secretaries

TheSecretariesofParksonHoldingsBerhad,MsChanPohLanandMsLimKweePeng,arealsoSecretariesoftheAuditCommittee.

TERMSOFREFERENCE

• Membership

TheAuditCommitteeshallbeappointedbytheBoardfromamongsttheirnumberandshallconsistofnotlessthanthree(3)members,amajorityofwhomshallbeindependentDirectors.ThecompositionoftheAuditCommitteeshallfulfilltherequirementsasprescribedintheListingRequirementsofBursaSecurities.TheChairmanoftheAuditCommitteeshallbeanindependentDirectorappointedbytheBoard.

• MeetingsandMinutes

TheAuditCommitteeshallmeetatleastfour(4)timesannuallyandtheChiefInternalAuditorandtheChiefFinancialOfficershallnormallybeinvitedtoattendthemeetings.Atleastonceayear,theAuditCommitteeshallmeetwiththeexternalauditorswithoutthenon-independentDirectorsbeingpresent.AmajorityofindependentDirectorspresentshallformaquorum.

MinutesofeachmeetingshallbekeptanddistributedtoeachmemberoftheAuditCommitteeandtheBoard.TheChairmanoftheAuditCommitteeshallreportoneachmeetingtotheBoard.

• Authority

Inconductingitsdutiesandresponsibilities,theAuditCommitteeshallhave:

(a) theauthoritytoinvestigateanymatterwithinitstermsofreference.(b) theresourceswhicharerequiredtoperformitsduties.(c) fullandunrestrictedaccesstoanyinformationpertainingtotheCompanyandtheGroup.(d) directcommunicationchannelswiththeexternalandinternalauditors.(e) therighttoobtainindependentprofessionalorotheradviceasnecessary.(f) the right to invite other Directors and/or management of the Company to attend any particularAudit

Committeemeetingtodiscussspecificissues.

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• Duties

ThedutiesoftheAuditCommitteeare:

(i) Toconsidertheappointment,resignationanddismissalofexternalauditorsandtheauditfee.

(ii) Todiscusswiththeexternalauditors,priortothecommencementofaudit,thenatureandscopeofauditandtoensureco-ordinationofauditwheremorethanoneauditfirmisinvolved.

(iii) Toreviewandassess theannualandquarterlyfinancialstatementsprior to theapprovalof theBoard,focusingon:

- goingconcernassumption- compliancewithaccountingstandardsandregulatoryrequirements- changesinaccountingpoliciesandpractices- significantissuesarisingfromaudit.

(iv) Todiscussproblemsandreservationsarisingfromtheinterimandfinalexternalaudits,andanymattertheexternalauditorsmaywishtodiscuss(intheabsenceofmanagement,wherenecessary).

(v) Toreviewtheexternalauditors’managementletterandmanagement’sresponsethereto.

(vi) Toestablishthefollowingwiththeinternalauditfunction:

- reviewtheadequacyofthescope,functionsandresourcesoftheinternalauditfunctionandthatithasthenecessaryauthoritytocarryoutitswork

- reviewinternalauditprogramme- ensureco-ordinationofexternalauditwithinternalaudit- considerthemajorfindingsofinternalauditreviews/investigationsandmanagement’sresponse,and

ensurethatappropriateactionsaretakenontherecommendationsoftheinternalauditfunction.

(vii) ToreviewanyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompanyandtheGroup.

(viii) Toconsidertheappointmentofindependentadvisersforcorporateproposalsinvolvingrelatedparties.

(ix) Toassessthequalityandeffectivenessofthesystemofinternalcontrolandefficiencyofoperations,andtoreviewtheriskpolicyandimplementationoftheriskmanagementframework.

(x) TopromptlyreporttoBursaSecuritiesonanymatterwheretheAuditCommitteeisoftheviewthatthematterreportedbyittotheBoardhasnotbeensatisfactorilyresolvedresultinginabreachoftheListingRequirementsofBursaSecurities.

(xi) Toreviewanyappraisalorassessmentoftheperformanceofthemembersoftheinternalauditfunction,approveanyappointmentor terminationof seniorstaffmembersof the internalaudit functionandbeinformedofanyresignationofinternalauditstaffmembersandreasonsthereof.

(xii) ToperformanyothersuchfunctionasmaybeagreedtobytheAuditCommitteeandtheBoard.

ACTIVITIESDURINGTHEFINANCIALYEAR

Duringthefinancialyearunderreview,seven(7)AuditCommitteeMeetingswereheld.ExceptforthefollowingDirectors,allothermembersattendedalltheseven(7)AuditCommitteeMeetingsheldinthefinancialyear:

(i) Y.Bhg.Dato’HassanbinAbdulMutalipattendedfive(5)oftheseven(7)meetingsheld;

(ii) MrFolkJeeYoongattendedsix(6)oftheseven(7)meetingsheld;and

(iii) MrYeowTeckChaiwhowasappointedon16August2006,attendedfour(4)oftheremainingfive(5)AuditCommitteeMeetingsheldduringthefinancialyearended30June2007subsequenttohisappointment.

TheAuditCommitteecarriedoutitsdutiesinaccordancewithitsTermsofReferenceduringtheyear.

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ThemainactivitiesundertakenbytheAuditCommitteeduringtheyearwereasfollows:

• FinancialResults

(a) ReviewedtheinterimunauditedfinancialstatementsoftheGrouppriortorecommendingthemforapprovalbytheBoard.

(b) ReviewedtheannualfinancialstatementsoftheGrouppriortosubmissiontotheBoardfortheirconsiderationandapprovalfocusingparticularlyonchangesinaccountingpolicies,significantandunusualeventsandcompliancewithapplicableaccountingstandardsapprovedbytheMalaysianAccountingStandardsBoard(“MASB”)andotherlegalrequirements.

• InternalAudit

(a) ReviewedtheannualauditplantoensureadequatescopeandcoverageontheactivitiesoftheGroup,takingintoconsiderationtheassessmentofkeyriskareas.

(b) Reviewedtheauditprogrammes,resourcerequirementsandskilllevelsoftheinternalauditorsfortheyearandassessedtheperformanceoftheinternalauditfunction.

(c) Reviewedthe internalaudit reports,audit recommendationsmadeandmanagementresponse to theserecommendationsandactionstakentoimprovethesystemofinternalcontrolandprocedures.

(d) Monitoredtheimplementationoftheauditrecommendationstoensurethatallkeyrisksandcontrolshavebeenaddressed.

(e) Reviewed the Internal Control – Self-Assessment ratings submitted by the respective operationsmanagement.

• ExternalAudit

(a) Reviewed with external auditors the audit planning memorandum covering the audit objectives andapproach,auditplan,keyauditareasandrelevanttechnicalpronouncementsandaccountingstandardsissuedbyMASB.

(b) Reviewedwithexternalauditorstheresultsoftheauditandtheauditreportinparticular,accountingissuesandsignificantauditadjustmentsarisingfromtheexternalaudit.

(c) Reviewedwithexternalauditorsthememorandumofcommentsandrecommendationsarisingfromtheirstudyandevaluationofthesystemofinternalandaccountingcontrolstogetherwithmanagement’sresponsetothefindingsoftheexternalauditors.

(d) Evaluated theperformanceof theexternalauditorsandmade recommendations to theBoardon theirappointmentandremuneration.

(e) Convenedameetingwiththeexternalauditorswithoutthenon-independentDirectorbeingpresenttodiscussissuesarisingfromtheirreview.

• RiskManagement

ReviewedtheCorporateRiskScorecardofkeyoperationsandthemitigatingcontrolstoaddressidentifiedrisks.

• RelatedPartyTransactions

ReviewedtherelatedpartytransactionsenteredintobytheGroup.ReviewedrecurrentrelatedpartytransactionsofarevenueortradingnatureonaquarterlybasisforcompliancewiththeShareholders’Mandate.

• MaterialTransactions

ReviewedmaterialtransactionenteredintobytheGroup.

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NOMINATION COMMITTEE

REMUNERATION COMMITTEE

Chairman : Y.Bhg.TanSriDato’JaffarbinAbdul (Non-Independent Non-Executive Director)

Members : Y.Bhg.DatoMuradMohamedHashim (Independent Non-Executive Director)

Y.Bhg.Dato’HassanbinAbdulMutalip (Independent Non-Executive Director)

TermsofReference : • TorecommendtotheBoard,candidatesfordirectorshipsinParksonHoldingsBerhad

• Toconsider,inmakingitsrecommendations,candidatesfordirectorshipsproposedbytheChiefExecutiveOfficerand,within theboundsofpracticability,byanyotherseniorexecutiveoranyDirectororshareholder

• TorecommendtotheBoard,DirectorstofilltheseatsonBoardCommittees

• ToassisttheBoardinreviewingonanannualbasis,therequiredmixofskillsandexperienceandotherqualities,including core competencies which non-executiveDirectorsshouldbringtotheBoard

• Toassess,onanannualbasis, theeffectivenessof theBoardasawhole,thecommitteesoftheBoardandthecontributionofeachindividualDirector,basedontheprocessandprocedurelaidoutbytheBoard

Chairman : Y.Bhg.DatoMuradMohamedHashim (Independent Non-Executive Director)

Members : Y.Bhg.Dato’HassanbinAbdulMutalip (Independent Non-Executive Director)

MrChengSinYeng (Non-Independent Non-Executive Director)

TermsofReference : • To recommend to the Board the remuneration of theexecutiveDirectorsinallitsforms,drawingfromoutsideadviceasnecessary

• Tocarryoutotherresponsibilities,functionsorassignmentsasmaybedefinedbytheBoardfromtimetotime

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5YEARSGROUP FINANCIALHIGHLIGHTS

Financialyearsended30June 2003 2004 2005 2006 2007 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 255,524 262,272 324,560 239,482 343,876

Profit/(loss)beforetaxation (3,651) 11,053 19,708 (18,746) (4,484)

Profit/(loss)aftertaxation (6,783) 8,768 16,715 (17,380) (6,309)

Dividends:

Rate(%) 0.1 0.1 1.0 0.1 –

Amount(Netoftax) 54 54 538 54 –

Totalassetsemployed 268,121 290,577 367,898 311,132 326,234

Netassets 64,839 72,901 87,485 56,236 49,546

Sen Sen Sen Sen Sen

Netassetspershare 86.8 97.6 117.1 75.3 66.3

Earnings/(loss)pershare (12.8) 10.8 20.1 (23.9) (9.0)

Note: The Group’s financial highlights have been adjusted to account for the new or revised Financial Reporting Standards (“FRSs”) of which certain FRSs have been adopted retrospectively.

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THE GROUP’S BUSINESSES

Malaysia

China

Vietnam