notice of the eighth annual general meeting · 2019. 5. 16. · (b) dato’ dr. hj. shahir bin...

03 Notice of the Eighth Annual General Meeting05 Statement Accompanying the Notice of AGM 06 Corporate Information 08 Profile of Directors 11 Chairman’s Statement 15 Statement on Corporate Governance 23 Statement on Internal Control 26 Audit Committee Report 31 Statement on Directors’ Responsibility 32 Corporate Social Responsibility 33 Financial Statements 97 List of Properties Held 100 Analysis of Shareholdings Proxy Form

Pulai Springs BerhadA Collection of Fine Hotels & Resorts.

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NOTICE OF THE EIGHTHANNUAL GENERAL MEETING

As Ordinary Business

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

2. To re-elect the following Directors who are retiring pursuant to Article 114 of the Articles of Association of the Company:

2.1 Datuk Azzat Bin Kamaludin (Ordinary Resolution 1)2.2 Dato’ Dr. Hj. Shahir Bin Nasir (Ordinary Resolution 2)

3. To approve the directors’ fees of RM314,000 for the financial year ended 31 December 2007.(Ordinary Resolution 3)

4. To re-appoint Messrs Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration.

(Ordinary Resolution 4)

NOTICE IS HEREBY GIVEN that the Eighth Annual General

Meeting of PULAI SPRINGS BERHAD will be held at Anugraha

Hotel, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110

Pulai, Johor Darul Takzim on Friday, 27 June 2008 at 10.00 a.m.

for the following purposes:

AGENDA

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As Special Business

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

Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to allot and issue shares in the Company, at any time, at such price, upon such terms and conditions, for such purpose and to such person or persons whomsoever as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares to be issued does not exceed 10% of the issued share capital of the Company for the time being and THAT the Directors be and are hereby also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and THAT such authority shall continue to be in force until conclusion of the next annual general meeting of the Company.”

(Ordinary Resolution 5)By Order of the Board

MAH LI CHEN (MAICSA 7022751)TAN FONG SHIAN @ LIM FONG SHIAN (MAICSA 7023187)Company Secretaries

Kuala Lumpur 5 June 2008

Explanatory Note on the Special Business

Ordinary Resolution 5Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution 5, if passed, will empower the Directors of the Company, from the date of the Eighth Annual General Meeting, to issue shares (other than bonus or rights issue) of the Company up to and not exceeding in total 10% of the issued share capital of the Company for the time being for such purpose as they considered would be in the best interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

Notes :

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two) to attend and vote in his/her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.

2. A proxy may but need not be a member of the Company. Where a proxy is not a member, he need not be an advocate, an approved Company auditor or a person approved by the Companies Commission of Malaysia.

3. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the instrument appointing a proxy shall be given under the Company’s Common Seal or under the hand of an officer or attorney duly appointed.

4. The instrument appointing a proxy must be deposited with the Secretarial Office at C15-1, Level 15, Tower C, Megan Avenue II, 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof.

NOTICE OF THE EIGHTH ANNUAL GENERAL MEETING(cont’d)

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1. Names of Directors who are standing for re-election at the Eighth Annual General Meeting of the Company:

(a) Datuk Azzat Bin Kamaludin; and (b) Dato’ Dr. Hj. Shahir Bin Nasir.

2. Details of Attendance of Directors at Board Meetings

The details are set out on page 16 of this Annual Report.

3. Date, Time and Venue of Eighth Annual General Meeting of the Company

The Eighth Annual General Meeting of the Company will be held on Friday, 27 June 2008 at 10.00 a.m. at Anugraha Hotel, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim.

4. Further Details of Directors who are standing for re-election as Directors

The details of the Directors who are standing for re-election at the Eighth Annual General Meeting are set out on page 8 to 10 of this Annual Report. No individual other than the retiring Directors is seeking election as a Director at the Eighth Annual General Meeting of the Company.

No notice of nomination has been received todate from any member nominating any individual for election as a Director at the Eighth Annual General Meeting of the Company.

STATEMENT ACCOMPANYINGTHE NOTICE OF AGM

(Pursuant to Paragraph 8.28(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad)

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BOARD OF DIRECTORS

Datuk Azzat bin KamaludinIndependent Non-Executive Chairman

Mr. Mah Siew CheanExecutive Director

Mr. Leong Chew MengIndependent Non-Executive Director

Dato’ Dr. Shahir bin NasirIndependent Non-Executive Director

Dato’ Dr. Lian Chin BoonNon-Independent Non-Executive Director

Mr. Victor Chua Chee WeyNon-Independent Non-Executive Director

Cik Ruthlene binti Abu SahidNon-Independent Non-Executive Director

Tan Sri Datuk Seri Abu Sahid bin MohamedAlternate Director to Cik Ruthlene binti Abu Sahid

AUDIT COMMITTEE

Mr. Leong Chew MengIndependent Non-Executive Director (Chairman)


Cik Ruthlene binti Abu SahidNon-Independent Non-Executive Director

REMUNERATION COMMITTEE


Mr. Mah Siew CheanExecutive Director


NOMINATION COMMITTEE


Mr. Leong Chew MengIndependent Non-Executive Director


CORPORATE INFORMATION

COMPANY SECRETARIES

Mah Li Chen(MAICSA 7022751)Tan Fong Shian @ Lim Fong Shian(MAICSA 7023187)

REGISTERED OFFICE

20km, Jalan Pontian Lama81110 PulaiJohor Darul Takzim

Tel. (607) 521 2121Fax. (607) 521 1818

AUDITORS

Horwath (AF 1018)Chartered AccountantsLevel 16, Tower CMegan Avenue IINo. 12, Jalan Yap Kwan Seng50450 Kuala Lumpur

HEAD /MANAGEMENT OFFICE

20km, Jalan Pontian Lama81110 PulaiJohor Darul Takzim

Tel. (607) 521 2121Fax. (607) 521 1818E-mail : [email protected] : www.pulaisprings.com

MANAGEMENT /OPERATIONS OFFICE

Level 18, MCB PlazaChangkat Raja Chulan50200 Kuala Lumpur

Tel. (603) 2078 8727Fax. (603) 2078 7727Email : [email protected]

Sime Darby Centre896 Dunearn Road #03-01FSingapore 589472

Tel. (65) 6762 5655Fax. (65) 6762 5609Email : [email protected]

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 26, Menara Multi PurposeCapital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala Lumpur

Tel. (603) 2721 2222Fax. (603) 2721 2530

PRINCIPAL BANKERS

OSK Investment Bank Bhd(14152 – V)20th Floor, Plaza OSKJalan Ampang50450 Kuala Lumpur

RHB Bank Berhad(6171 – M)3, 3-01, 5, 5-01Jalan PembangunanDesa Rahmat81200 Johor BahruJohor Darul Takzim

Public Bank Berhad(6463 – H)1st & 12th Floor, Public Bank TowerNo. 19, Jalan Wong Ah Fook80000 Johor BahruJohor Darul Takzim

Alliance Bank Malaysia Berhad(88103 – W)Menara Multi PurposeCapital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala Lumpur

STOCK EXCHANGE LISTING

Bursa Malaysia Securities BerhadMain Board (Trading / Services)Stock Name : PSRINGStock Code : 5059

CORPORATE INFORMATION(cont’d)

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Datuk Azzat Bin Kamaludin

Malaysian aged 63, was appointed to the Board of Directors of Pulai Springs Berhad as a Non-Independent Non-Executive Chairman on 24 September 2002 and later re-designated to an Independent Non-Executive Chairman on 27 November 2007. He is also the Chairman of the Remuneration and Nomination Committees.

Datuk Azzat graduated from Queens’ College, University of Cambridge, with a Degree of Bachelor of Arts in 1968 and a Degree of Bachelor of Law in International Law in 1969. He was admitted to the Honourable Society of the Middle Temple, London and called to the “Degree of the Utter Bar” in 1970.

Datuk Azzat served in the Administrative Diplomatic Office with the Ministry of Foreign Affairs Malaysia from 1970 till 1979.

Since 1979, he has been a partner of the legal firm, Azzat & Izzat, Advocates & Solicitors (formerly known as Messrs Chua Brothers, Azzat & Izzat). He was a member of the Securities Commission from March 1993 to March 1999. He is also presently a director of Boustead Holdings Berhad, Affin Holdings Berhad, KPJ Healthcare Berhad, Celcom (M) Berhad, PSC Industries Berhad Group, Visdynamics Holdings Berhad and TM International Berhad.

Dato’ Dr Shahir bin Nasir

Malaysian aged 62, was appointed to the Board of Directors of Pulai Springs Berhad as an Independent Non-Executive Director on 24 September 2002. He is also a member of the Audit, Remuneration and Nomination Committees.

Dato’ Dr Shahir graduated with a Degree of Bachelor of Arts (Honours) from the University of Malaya in 1968. He also holds a Masters Degree and Ph.D in Public Administration from the University of Southern California, United States of America. He has served in various positions since he joined the Johor Civil Service (JCS) in May 1968, including State Financial Officer. His last appointment in JCS was as the State Secretary of Johor until he retired in 2001.

He is also a Director of Ranhill Utilities Berhad, Senai-Desaru Expressway Berhad and several private limited companies. He currently serves as Executive Director of SAJ Holdings Sdn Bhd, a wholly-owned subsidiary of Ranhill Utilities Berhad and is also Executive Deputy Chairman of YPJ Holdings Sdn Bhd.

Mr Mah Siew Chean

Malaysian aged 31, was appointed an Executive Director of Pulai Springs Berhad on 12 January 2007.

He graduated with a Bachelor of Arts Degree in Government Studies from University of Sydney. In 1999, he joined Hydro Majestic Hotel Blue Mountains as a Duty Manager and in 2000 was a Non-advisory stockbroker with Commonwealth Securities, Australia. From 2001 to 2002, Mr Mah was appointed as General Manager of a 120-bedroom hotel in Sydney, Australia. From 2002 to 2003, he moved to Shanghai, China to expand his company’s portfolio. Upon his return to Australia, he was appointed as General Manager of the Airport Hotel Sydney. In 2004, he relocated to Kunming, China as Managing Director of a hotel there. Currently, Mr Mah is the Executive Director of his family’s group of companies which includes Hydro Majestic Hotel in Kunming and Penang.

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PROFILE OF DIRECTORS

to expand his company’s portfolio. Upon his return to Australia, he was appointed as General Manager of the Airport Hotel Sydney. In 2004, he relocated to Kunming, China as

Mr Leong Chew Meng

Malaysian aged 53, was appointed to the Board of Directors of Pulai Springs Berhad as an Independent Non-Executive Director on 8 December 2006. He is also Chairman of the Audit Committee and Member of Nomination Committee.

Mr. Leong graduated from the Victoria University of Wellington, New Zealand with a Bachelor of Commerce & Administration Degree majoring in accountancy. He is a Chartered Accountant from the Malaysian Institute of Accountants and qualified as an Associate Chartered Accountant from the Institute of Chartered Accountants, New Zealand.

Mr. Leong is an Accountant by profession, having extensive working experience for over 26 years in Malaysia. Prior to diversifying into the business sector as Business Consultant & Advisor, he was the Financial Controller and Finance Director of several foreign-owned multinational companies in the manufacturing, trading and retail sectors. He is currently an Independent Non-Executive Director of Sunrise Berhad and a Non-Independant Non Executive Director of Media Chinese International Limited (formerly known as Ming Pau Enterprise Corporation Limited).

Dato’ Lian Chin-Boon

Malaysian aged 61, was appointed to the Board on 6 December 2006. He was later redesignated as a Non-Independent Non-Executive Director on 9 February 2007.

He graduated with a Bachelor of Dental Surgery (BDS) from Gujerat University in 1971. He obtained his post-graduate Fellowship in Dental Surgery from the Royal College of Physicians & Surgeons of Glasgow, Scotland (FDSRCPS) in 1979. Dato’ Lian was formerly a Professor of Oral & Maxillofacial Surgery in University Malaya, a position he held from 1991 until his retirement in 2004. He was conferred the Darjah Dato’ Paduka Mahkota Perak (DPMP) in 1997. He has also been conferred many fellowships and holds positions in numerous associations and organisations. During his career, he has delivered numerous lectures at local and international conferences as well as published many articles in local and international academic and professional journals and undertaken projects and research. Presently, Dato’ Lian is a Director of Tokio Marine Insurans (Malaysia) Berhad.

Mr Victor Chua Chee Wey

Malaysian aged 41, was appointed to the Board of Directors of Pulai Springs Berhad as an Executive Director on 24 September 2002. He was redesignated as a Non-Independent Non-Executive Director on 27 April 2007. He graduated with a LLB degree (Honours) from London Guildhall University, United Kingdom in 1992.

He also has a Masters of Finance from the Royal Melbourne Institute of Technology (RMIT) obtained in 2002. Mr. Victor Chua was appointed to the Board of Directors of Pulai Springs Resort Berhad in 1997 and is involved in the strategic planning and future development of the company. He is a businessman with interests in property development and multimedia development. He also holds directorships in several companies including Vision Development Concepts Sdn Bhd, which is principally involved in property development. He has interest in Primedia Sdn Bhd a multimedia development company.

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PROFILE OF DIRECTORS(cont’d)

Prior to diversifying into the business sector as Business Consultant & Advisor, he was the Financial Controller and Finance Director of several foreign-owned multinational companies in the manufacturing, trading and retail sectors. He is currently an Independent Non-Executive Director of Sunrise Berhad and a Non-Independant Non Executive Director of Media Chinese International Limited (formerly known as Ming Pau

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PROFILE OF DIRECTORS(cont’d)

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Cik Ruthlene binti Abu Sahid

Malaysian aged 32, was appointed to the Board of Directors of Pulai Springs Berhad as a Non-Independent Non-Executive Director on 26 September 2003. She is also a member of The Audit Committee. She graduated with a Bachelor of Business Administration in Finance (Honours) and a Bachelor in Business Administration in International Business (Honours) from George Washington University, United States of America.

Cik Ruthlene is also knowledgeable in diverse industries. In fact, her tenure with Ipmuda Berhad, Iconsiglieri Inc, and KPMG Corporate Services Sdn Bhd led her to her next role, being the Managing Director of ASM Properties Sdn Bhd. Her responsibilities included overseeing the management of Maju Perdana development which consist of two office towers and one shopping mall.

Cik Ruthlene effortlessly juggles a diverse portfolio of directorships in several companies including Maju Holdings Sdn Bhd, which is principally involved in the manufacturing, engineering, property development, infrastructure & services industries and ASM Development Sdn Bhd, the flagship property development company of Maju Holdings Sdn Bhd. Cik Ruthlene is a member of the Young Presidents Organisation (YPO), Malaysian Chapter and holds a Private Pilot’s License from the Malaysian Flying Academy.

Malaysian aged 55, was appointed as an Alternate Director to Cik Ruthlene Binti Abu Sahid, a Non-Independent Non-Executive Director of the Company, on 12 January 2007. He is a substantial shareholder of the Company.

Tan Sri Datuk Seri Abu Sahid is presently the Group Executive Chairman of Maju Group of Companies.

In 1977, he started his first company, Maju Alat Ganti Sdn Bhd (“MAG”) which was involved in the trading of motor spare parts. Subsequently, MAG became the biggest Malay spare parts company, dealing with both the private sector and the Government of Malaysia. He was Vice President of the Selangor and Federal Territory Engineering and Motor Parts Traders Association, a position he held from 1985 to 1987. He is now the Honorary President of the Association. Since then, Tan Sri Datuk Seri Abu Sahid’s business interests have broadened. The Maju Group portfolio is well diversified and at present, its activities include construction and property development, manufacturing of steel products, building materials and furniture, transport and haulage, resorts, as well as engineering, fabrication and security services.

Tan Sri Datuk Seri Abu Sahid is a Director of Konsortium Lapangan Terjaya Sdn Bhd, which has been given the Concession for the new highway directly linking Kuala Lumpur to Putrajaya and onwards to the Kuala Lumpur International Airport.

Notes to directors’ profile:

1. Family RelationshipMr Mah Siew Chean is the nephew of Dato’ Dr Lian Chin Boon whilst Cik Ruthlene Binti Abu Sahid is the daughter of Tan Sri Datuk Seri Abu Sahid Bin Mohamed who is also a major shareholder of the Company. The other Directors do not have any family relationship with any Director and/or major shareholders of the Company.

2. Conflict of InterestNone of the Directors have any conflict of interest with the Company.

3. Conviction of OffencesNone of the Directors have any conviction for offences other than traffic offences if any within the past 10 years.

4. Attendances at Board MeetingsThe details of the Directors’ attendance at Board Meetings are set out on page 16 of this Annual Report.

5. ShareholdingsThe details of the Directors’ interest in the securities of the Company are set out on page 102 of this Annual Report.

He is the Executive Chairman and major shareholder of Ipmuda Berhad, Chairman and major shareholder of Kinsteel Berhad, Group Executive Chairman of Bright Focus Berhad and a director of Perwaja Berhad. Tan Sri Datuk Seri Abu Sahid is also a director of various other private limited companies.

Tan Sri Datuk Seri Abu Sahid Bin Mohamed

Dear Valued Shareholders,

CHAIRMAN’S STATEMENT

The financial year 2007 ended with substantial increase in Group Revenue as well as improvement in the Group Gross Profit which achieved RM73.4million and RM33.5million, as compared to RM45.4million and RM13.5million respectively, in financial year 2006.

However, despite the improvements in our business operations, the Group still reported a post tax loss of RM6.5million, as compared to RM15.2million loss in 2006.

Hotel and Resort

The Group’s resort and hotel operations continue to be the main revenue generator The Group’s resort and hotel operations continue to be the main revenue generator for this financial year achieving a total revenue of RM57.5million as compared to for this financial year achieving a total revenue of RM57.5million as compared to RM34.6million in the preceding year. Through continuous efforts in increasing RM34.6million in the preceding year. Through continuous efforts in increasing revenue and managing costs, the Group’s Hospitality segment achieved a total revenue and managing costs, the Group’s Hospitality segment achieved a total Operating Profit excluding finance costs of RM1.1million as compared to a Operating Profit excluding finance costs of RM1.1million as compared to a RM11.6million loss in 2006. RM11.6million loss in 2006.

Golf

It was a challenging year for our golf operations as we were only operating with It was a challenging year for our golf operations as we were only operating with 27 holes. Nevertheless, we had managed to retain RM3.14million revenue as 27 holes. Nevertheless, we had managed to retain RM3.14million revenue as compared to RM3.15million revenue in 2006. Overall, the Gross Operating Loss compared to RM3.15million revenue in 2006. Overall, the Gross Operating Loss for FY2007 is RM101,462 compared to a loss of RM301,404 in FY 2006.for FY2007 is RM101,462 compared to a loss of RM301,404 in FY 2006.

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Cinta Ayu All Suites

The Cinta Ayu All Suites Apartment development was completed with Certificate of Fitness for Occupancy (CFO) in early 2007 and contributed RM4.4million revenue to the group in 2007. The resort will continue its push to increase the occupancy of the Cinta Ayu All Suites through aggressive sales and marketing efforts.

Novotel Hydro Majestic Kuala Lumpur

With now a full year of operations, Novotel contributed RM20.7million revenue to the group as compared to RM3.08million in 2006. Operating Profit excluding finance costs for 2007 also increased to RM1.8million as compared to an Operating Loss excluding finance costs of approximately RM480,000 in 2006.

The Pulai Desaru Beach Resort

The Resort contributed RM9.8million of revenue to the group as compared to RM10.1million in 2006. The first half year of 2007 has been challenging as unpredictable adverse weather and the prospect of floods led to many cancellations. However, Operating Profit excluding finance costs increased to approximately RM853,000 in 2007 as compared to an Operating Loss of approximately RM769,000 in 2006.

Property Development

It has been a challenging year for the Property development team, with total sales revenue of RM15.9million as compared to RM10.8million in 2006.

Cinta Ayu all Suites continues to be the main revenue generator for the property development business of the Group achieving RM12.7million in 2007 as compared to RM6.8million in 2006 and an Operating Profit after finance costs of RM2.6million in 2007 as compared to a loss of RM4.5million in 2006 after taking into account an adjustment for the costs of common area of approximately of RM1,645,000 and RM923,000 respectively.

Maharani Ayu contributed RM5.2million in revenue as compared to RM3.9million in 2006. Profitability is approximately RM689,000 as compared to RM349,000 in 2006.

The Group will continue to devote substantial effort to continue selling the remaining units.

CHAIRMAN’S STATEMENT(cont’d)

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MOVING FORWARD

Despite the tangible improvements in the business, there are still some challenging times ahead, but the management team is confident of turning around the company.

The continuous attention and efforts of the government towards the Iskandar Development as well as the expected completion of the Senai – Desaru highway in mid-2009 will have a positive impact on both the value and business of the company.

ACKNOWLEDGEMENT AND THANKS

On behalf of the Board, I would like to thank the management and staff of the Group for their dedication, hard work, loyalty and commitment to the Group.

I also extend my deepest appreciation to our stakeholders, bankers, business associates and valued customers and members for their trust, loyalty and continuous support.


CHAIRMAN’S STATEMENT(cont’d)

I also extend my deepest appreciation to our stakeholders, bankers, business associates and valued customers and members for their trust, loyalty and continuous

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The Board of Directors (“Board”) of Pulai Springs Berhad remains committed towards ensuring the highest standard of corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Board is fully dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a view to ensure the principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate Governance (“the Code”) is applied and adhered to in the best interests of the stakeholders. The Board is pleased to report to the shareholders in the manner in which the Group has applied the principles and best practices, and the best practices of the Code that were not adopted during the financial year are explained in the relevant paragraphs.

STATEMENT ON CORPORATE GOVERNANCE

THE BOARD OF DIRECTORS

(a) Composition and Balance

The Company is led by an effective and experienced Board, encompassing of seven (7) members, made up of three (3) Independent Non-Executive Directors, three (3) Non-Independent Non-Executive Directors and one (1) Executive Director. This composition satisfies the Bursa Securities Listing Requirements that requires at least 2 Directors or 1/3 of the Board whichever is higher, who are Independent Directors. The profiles of the members of the Board are set out on page 8 to page 10 of this Annual Report.

The Executive Director is primarily responsible for the implementation of policies and decisions of the Board, overseeing the Group’s operations and developing the Group’s business strategies. The role of the Independent Non-Executive Directors is to provide objective and independent judgment to the decision making of the Board and as such, provide an effective check and balance to the Board’s decision making process.

The Board composition brings together an extensive group of experienced Directors who are from diverse backgrounds and have a wide range of skills and experience in areas relevant to managing and directing the Group’s operations. With this composition of members, the Board is satisfied that it fairly reflects the investment of the minority shareholders and represents the mix of skills and experiences required for the effective discharge of Board’s duties and responsibilities.

The Board did not appoint a Senior Independent Non-Executive Director to whom concerns maybe conveyed as the Chairman of the Board encourages the active participation of each and every Board member at the Board meetings.

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STATEMENT ON CORPORATE GOVERNANCE(cont’d)

(b) Duties and Responsibilities

The main focus of the Board is on the overall strategic leadership, identification and management of principal risks and development and control of the Group. The Board has delegated specific responsibilities to Board Committees, all of which discharge the duties and responsibilities within their respective Terms of Reference.

The roles of the Chairman and Executive Director are clearly distinct to ensure that there is a balance of power and authority. The Chairman is primarily responsible for the effective and efficient conduct and working of the Board whilst the Executive Director is responsible for the daily management of the Group’s operations and implementation of the policies and strategies adopted by the Board.

(c) Board Meetings

The Board meets quarterly with additional meetings being convened when necessary. In the meetings, the Board will deliberate on and considered matters relating to the Group’s financial performance, significant investments, corporate development, strategic issues and business plan. For the financial year ended 31 December 2007, the Board met 7 times. The meeting attendance records of the Directors who held office are set out below:

Name of Director Designation No. of meetings attended

Datuk Azzat bin Kamaludin Independent 6/7(Chairman) Non-Executive Director

Mr Mah Siew Chean Executive Director 7/7

Dato’ Dr Shahir Bin Nasir Independent Non-Executive Director 5/7

Cik Ruthlene Binti Abu Sahid Non-Independent 6/7 Non-Executive Director

Mr Victor Chua Chee Wey Non-Independent 5/7 Non-Executive Director

Dato’ Dr. Lian Chin Boon Non-Independent 7/7 Non-Executive Director

Mr Leong Chew Meng Independent Non-Executive Director 6/7

Tan Sri Datuk Seri Abu Sahid Bin Mohamed Alternate Director to 1/7 Ruthlene Binti Abu Sahid

Dato’ Chua Jui Leng Managing Director 3/4(resigned on 3 July 2007)

Datuk Chua Teck Hwee Independent Non-Executive Director 4/4(resigned on 3 July 2007)

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Board meetings are structured with a pre-set agenda which encompass all aspects of matters under discussion. The Board papers are circulated to directors well in advance of the board meetings for their deliberation. All meetings of the Board are duly recorded in the Board Minutes.

Senior management may be invited to attend these meetings to explain and clarify matters being tabled.

In furtherance of their duties, the Board has unrestricted access to any information pertaining to the Group as well as to the advice and services of the Company Secretary and independent professional advisers whenever appropriate at the Group’s expense.

(d) Appointment and Re-election of Directors

Any new appointments to the Board will require deliberation by the full Board guided by formal recommendations by the Nomination Committee. Board members who are appointed by the Board are subject to retirement at the first Annual General Meeting (“AGM”) of the Company subsequent to their appointment. Article 114 of the Company’s Article of Association also provides that at least one-third (1/3) of the Directors shall retire by rotation at each AGM and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965 (“the Act”).

(e) Directors’ Training

During the year, the Directors have attended the following training programmes, either individually or collectively, to further enhance their skills and knowledge and to keep abreast with new developments in the furtherance of their duties:

1) The 8th Habit Workshop organised by Leadership Resources Malaysia Sdn Bhd on 13 March 2007;

2) Asia Pacific Audit & Governance Summit 2007 organised by Columbus Circle Governance on 3 & 4 July 2007;

3) The National Accountants Conference 2007 organised by Malaysian Institute of Accountants on 12 & 13 November 2007; and

4) Corporate Governance & Fraud - An Update organised by Horwath CPE Sdn Bhd on 16 November 2007.

The Directors will continue to attend relevant training programmes to further enhance their skills and knowledge and fully equip themselves to effectively discharge their duties.

For new Directors, the Nomination Committee ensures that they undergo an orientation program so that they are familiar with the Group’s operation and current business issues.


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BOARD COMMITTEES

Apart from the Audit Committee, there are two other additional committees established to assist the Board in execution of its responsibilities. All the committees are provided with written terms of reference. Details of the Board committees are provided below:

(a) Nomination Committee

The Nomination Committee has three (3) members, all of whom are Independent Non-Executive Directors. The members of the Nomination Committee are:

i) Chairman Datuk Azzat Bin Kamaludin – Independent Non-Executive Director

ii) Members Dato’ Dr Shahir Bin Nasir – Independent Non-Executive Director Mr Leong Chew Meng – Independent Non-Executive Director

The Nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board of Directors in their responsibilities in nominating new directors to the Board and Board Committees. The Committee also reviews the Board of Directors composition and balance as well as considering the Board of Directors’ succession planning.

Members met once during the financial year with the full attendance of its members. The purpose of the meeting was to recommend to the Board, candidate for new director. The Board considers that the current mix of skills and experience of its members is sufficient for the discharge of its duties and responsibilities effectively.

(b) Remuneration Committee

The Remuneration Committee comprises three (3) members with the majority being Independent Directors. The Remuneration Committee is to assist the Board of Directors in their responsibilities in reviewing and assessing the remuneration packages of the executive directors. The members of the Remuneration Committee are:

a) Chairman Datuk Azzat Bin Kamaludin – Independent Non-Executive Director

b) Members Dato’ Dr Shahir Bin Nasir – Independent Non-Executive Director Mr Mah Siew Chean – Executive Director


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The Remuneration Committee is responsible for recommending to the Board the remuneration framework for the remuneration package of the Executive Director. This includes recommending remuneration packages necessary to attract, retain and motivate the Directors, and is reflective of the Directors’ experience and level of responsibilities.

The Executive Director did not participate in any way in determining his individual remuneration. The remuneration of the Executive Director is to be reviewed annually. The remuneration and entitlements of the Non-Executive Director shall be a matter to be decided by the Board as a whole.

The Remuneration Committee met once during the financial year. The meeting was attended by all its members to discuss the remuneration package of the Executive Director that commensurate with corporate and individual performance.

c) Audit Committee

The report of the Audit Committee is set out on pages 26 to 30.

DIRECTORS’ REMUNERATION

The details of the remuneration of each Director during the financial year ended 31 December 2007 are as follows:

(a) Total Remuneration

Executive Directors Non-Executive Directors Total RM ‘000 RM ‘000 RM ‘000

Basic Salary 401 0 401

Bonuses 0 0 0

Fees 96 216 312

Attendance fee 8 30 38

Others 0 0 0

Total 505 246 751


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(b) Directors’ remuneration by bands

The number of Directors whose total remuneration falls within the following bands during the financial year ended 31 December 2007 is as follows:

Details of individual Director’s Remuneration are not disclosed in this report as the Board considers that the above Remuneration disclosures by band and analysis between Executive and Non Executive Directors satisfies the accountability and transparency aspects of the Code.

SHAREHOLDERS

(a) Shareholders and Investors Relations

The Board acknowledges the importance of accountability to the shareholders. Timely release of the financial results on a quarterly basis, press releases and announcements provide an overview of the Group’s performance and operations to its shareholders.

Information disseminated to the investment community is in accordance to Bursa Malaysia disclosure rules and regulations. The Board has taken steps to ensure that no market sensitive information is disclosed to any party prior to making an official announcement to Bursa Securities.

The Group has also established a website at www.pulaisprings.com from which shareholders as well as members of the public may access for the latest information on operations and activities of the Group.

(b) Annual General Meeting

The Annual General Meeting (“AGM”) is the principal platform for dialogue with the shareholders. At the AGM, the Board presents the progress and performance of the Group to provide shareholders with the opportunity to question the business issues, concerns and operations in general. The Board will also ensure that each item of special business is included in the notice of the AGM and will be accompanied by an explanation of the effects of the proposed resolutions.

Directors’ Remuneration Executive Directors Non-Executive Directors Total

Below RM50,000 2 6 8

RM50,001 to RM100,000

RM100,001 to RM150,000

RM150,001 to RM200,000 1 0 1

RM200,001 to RM250,000

RM250,001 to RM300,000

RM300,001 to RM350,000 1 0 1

* Includes Non-Executive Directors who resigned during the financial year.


ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

In presenting the annual financial statements and quarterly announcements to shareholders, the Directors aim to ensure that the financial statements and quarterly announcements are prepared in accordance with the Companies Act, 1965 and applicable approved accounting standards so as to offer a balanced and comprehensive assessment of the Group’s financial position and prospects.

A Responsibility Statement by the Directors is set out on page 31 of this Annual Report.

(b) Internal Control

The Group’s Statement on Internal Control is set out on pages 23 to 25 of the annual report to provide an overview on the state of internal control throughout the year.

In relation to the internal audit function, having considered the Group’s operational requirements, the Board is of the view that the Group should still continue to outsource its internal audit function to external consultants. Nevertheless, this outsourcing arrangement shall be reviewed annually to ensure that it continues to meet the Group’s requirements. The outsourced internal auditors assist the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal control systems. They report directly to the Audit Committee.

(c) Relationship with Auditors

The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report set out on pages 26 to 30 of the annual report.

During the financial year ended 31 December 2007, the Audit Committee has met the external auditors four times but only once without Executive Director and management’s present. The Audit Committee has taken note of the recent amendments which recommends that the Audit Committee meets the external auditors twice a year and ensure that this is observed in the forthcoming financial year.

(d) Non-Audit Fees

The Group did not pay any non-audit fees to external auditors for the current financial year.


21

22

OTHER INFORMATION

(a) Shares Buy-Back

During the financial year, there were no share buy-backs by the Company.

(b) Options, Warrants or Convertible Securities

During the financial year, there were no options, warrants or convertible securities exercised.

(c) Material Contracts involving Directors’ Interests

There were no contracts involving directors’ interests which are or may be material, not being contracts entered into in the ordinary course of business, which have been entered into by the Company and its subsidiary companies since the end of the previous financial year.

(d) Recurrent Related Party Transactions

The details of the transactions with related parties undertaken by the Company during the financial period are disclosed in note 36 on page 87 to page 88 of the notes to the financial statements.

(e) American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programmes

During the financial year, the Company did not sponsor any ADR or GDR programme.

(f) Imposition of Sanctions/Penalties There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors

or management by the authorities during the financial year.

(g) Profit Guarantees During the financial year, there were no profit guarantees given by the Company.

(h) Utilisation of Proceeds The Company did not implement any fund raising exercise during the financial year.

(i) Contracts Relating to Loans There was no contract relating to loans by the Company.

(j) Revaluation of Landed Properties The Group does not have any revaluation policy on landed properties.


23

STATEMENT ON INTERNAL CONTROLFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

INTRODUCTION

Pursuant to paragraph 15.27 (b) of the Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and as guided by the Bursa Malaysia’s Statement on Internal Control: Guidance for Directors of Public Listed Companies (“the Guidance”), the Board of Directors (“the Board”) of Pulai Springs Berhad is pleased to include a statement on the state of the Group’s internal controls in the annual report.

RESPONSIBILITY

The Board acknowledges its responsibility and re-affirms its commitment in maintaining a sound system of internal control to safeguard shareholders’ investments and the Group’s assets as well as reviewing the adequacy and integrity of the system of internal control.

However, as there are inherent limitations in any system of internal controls, such systems put into effect by Management can only reduce but cannot eliminate all risks that may impede the achievement of the Group’s business objectives. Therefore, the internal control system can only provide reasonable and not absolute assurance against material misstatement or loss.

KEY FEATURES OF THE GROUP’S INTERNAL CONTROL SYSTEM

1. CONTROL ENVIRONMENT

• OrganisationStructure&AuthorisationProcedures

The Group maintains a formal organisation structure with well-defined delegation of responsibilities and accountability within the Group’s Senior Management. It sets out the roles and responsibilities, appropriate authority limits, review and approval procedures in order to enhance the internal control system of the Group’s various operations.

• Periodicaland/orAnnualBudget

Budgetary control for every operations of the Group, where actual performance is closely monitored against budgets to identify and to address significant variances.

• GroupPoliciesandProcedures

The Group has documented policies and procedures that are regularly reviewed and updated to ensure that it maintains its effectiveness and continues to support the Group’s business activities at all times as the Group continues to grow.

• Sitevisits

Regular site visits by members of the senior management team, the internal auditor and external consultants are conducted.

24

2. RISK MANAGEMENT FRAMEWORK

Risk management is regarded by the Board to be an integral part of managing business operations. The respective Heads of Departments are responsible for managing risks related to their functions on a day-to-day basis. Periodic management meetings are held to ensure that risks faced by the Group are discussed, monitored and appropriately addressed. It is at these meetings that key risks and corresponding controls implemented are communicated amongst the Senior Management team. Significant risks identified are subsequently brought to the attention of the Board at their scheduled meetings.

The abovementioned practices and initiatives by the Management serves as the ongoing process used to identify, assess and manage key business, operational and financial risks faced by the Group.

3. INTERNAL AUDIT FUNCTION

The Group’s internal audit function is outsourced to external consultants. The outsourced internal auditors assist the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal control systems. They report directly to the Audit Committee and internal audit plans are tabled to the Audit Committee for review and approval to ensure adequate coverage.

On a quarterly basis, the Group’s internal auditors table the results of their review of the business processes of different operating units to the Audit Committee at their scheduled meetings. The status of the implementation of corrective actions to address control weaknesses are also followed up by the internal auditors to ensure that these actions have been satisfactorily implemented.

During the financial year under review, identified weaknesses in internal controls have been appropriately addressed and Senior Management will continue to ensure that appropriate action is taken to enhance and strengthen the internal control environment.


(cont’d)

25


(cont’d)

4. INFORMATION AND COMMUNICATION

Information critical to the achievement of the Group’s business objectives are communicated through established reporting lines across the Group. This is to ensure that matters that require the Board and Senior Management’s attention are highlighted for review, deliberation and decision on a timely basis.

5. MONITORING AND REVIEW

Scheduled management meetings are held to discuss and review the business planning, budgeting, financial and operational performances.

• FinancialandOperationalReview

The monthly management accounts and the quarterly financial statements containing key financial results, operational performance results and comparisons of performance against budget are presented to the Board for their review, consideration and approval.

• BusinessPlanningandBudgetingReview

The Board plays an active role in discussing and reviewing the business plans, strategies, performance and risks faced by the Group.

6. CONCLUSION

The Board is of the view that the Group’s system of internal controls is adequate to safeguard shareholders’ investments and the Group’s assets. However, the Board is also cognizant of the fact that the Group’s system of internal control and risk management practices must continuously evolve to meet the changing and challenging business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to further enhance the system of internal controls.

This statement was approved by the Board of Directors on 21 May 2008.

AUDIT COMMITTEE REPORT

Number of Attendance meetings of meetings

Chairman: Leong Chew Meng 6 6 (Independent Non-Executive Director)

Members: Dato’ Dr Shahir Bin Nasir 2 2 (Independent Non-Executive Director) (appointed on 20 August 2007)

Ruthlene Binti Abu Sahid N/A N/A (Non-Independent Non-Executive Director) (appointed on 19 February 2008)

Mah Siew Chean 6 6 (Executive Director) (resigned on 19 February 2008)

Datuk Chua Teck Hwee 4 4 (Independent Non-Executive Director) (resigned on 3 July 2007)

The Board of Directors of Pulai Springs Berhad (“PSB”) is pleased to present the report of the Audit Committee for the financial year ended 31 December 2007.

Composition and Meetings

The members of the Audit Committee and details of their attendance at meetings during the financial year ended 31 December 2007 are as follows:

Subsequent to the financial year ended 31 December 2007, Cik Ruthlene Binti Abu Sahid was appointed on 19 February 2008 as a member of the Audit Committee to replace Mr Mah Siew Chean in compliance with the recent changes to the Listing Requirements of Bursa Malaysia Securities Berhad and Malaysian Code on Corporate Governance which states the Audit Committee should comprise wholly Non Executive Directors.

Senior Management staff and the external consultants, to whom the internal audit function was outsourced to, attended the meetings at the invitation of the Audit Committee. The agenda of the meetings and relevant information are distributed to its members with sufficient notice. The proceedings of the meetings are formalised in the form of meeting minutes by the Company Secretary who is appointed by the Board to be the Secretary during the Audit Committee meetings.

26

27

Summary of Activities of the Audit Committee

The Internal Audit Function was outsourced to external consultants but there was a Group internal auditor who coordinated and assisted the external consultants in undertaking the internal audit work. The following activities were undertaken by the Audit Committee during the financial year ended 31 December 2007:-

(a) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 December 2006, 31 March 2007, 30 June 2007 and 30 September 2007.

(b) Reviewed with the external auditors the audit plan, scope of audit and the results of the external audit.

(c) Reviewed and approved the internal audit plan prepared by the Internal Audit Function.

(d) Reviewed internal audit reports which outlined recommendations towards correcting area of weaknesses and ensured that there are management action plans established for the implementation of the internal auditors’ recommendations.

(f ) Reviewed the annual audited financial statements, external auditors’ reports and their audit findings.

Summary of Activities of the Internal Audit Function

The activities of the Internal Audit Function during the financial year were as follows:

(a) develop the internal audit plan for year 2007, 2008 and 2009;

(b) execution of the approved internal audit plan;

(c) presentation of the internal audit findings at the quarterly Audit Committee meetings. All findings raised by the Internal Audit Function have been appropriately addressed by Management; and

(d) conducted follow up reviews to ensure that action plans are properly and appropriately implemented by Management.

The internal audits conducted did not reveal weaknesses which would result in material losses, contingencies or uncertainties that would require disclosure in the annual report.

AUDIT COMMITTEE REPORT(cont’d)

28

TERMS OF REFERENCE OF AUDIT COMMITTEE

The terms of reference of the Committee are as follows:

1. Composition

The Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members. All the audit committee members must be non-executive directors, with a majority of whom shall be independent directors and at least one (1) member must be a member of the Malaysian Institute of Accountants or possess such other qualifications and/or experience as approved by the Bursa Malaysia Securities Berhad (“Bursa Securities”).

In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy must be filled within three (3) months.

No alternate director shall be appointed as a member of the Audit Committee.

2. Chairman

The Chairman, who shall be elected by the Audit Committee, shall be an independent director.

3. Secretary

The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee Members.

4. Meetings

The Committee shall meet at least four (4) times in each financial year. The quorum for a meeting shall be two (2) members, provided that the majority of members present at the meeting shall be independent.

The Committee may call for a meeting as and when required with reasonable notice as the Committee Members deem fit. The Committee Members may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.

The internal auditors and external auditors have the right to appear at any meeting of the Audit Committee and shall appear before the Committee when required to do so by the Committee. The internal auditors and external auditors may also request a meeting if they consider it necessary.



5. Rights

The Audit Committee shall:

(a) have authority to investigate any matter within its terms of reference; (b) have the resources which are required to perform its duties; (c) have full and unrestricted access to any information pertaining to the Group; (d) have direct communication channels with the external auditors and person(s) carrying out the

internal audit function or activity; (e) have the right to obtain independent professional or other advice at the Company’s expense; (f ) have the right to convene meetings with the internal auditors and external auditors, excluding the

attendance of the executive directors or employees of the Group, whenever deemed necessary; (g) promptly report to the Bursa Securities matters which have not been satisfactorily resolved by the

Board of Directors resulting in a breach of the listing requirements; (h) the Chairman shall call for a meeting upon the request of the internal auditors and external

auditors; and (i) have the right to pass resolutions by a simple majority vote from the Committee and that the

Chairman shall have the casting vote should a tie arise.

6. Duties

(a) To review with the external auditors on: • theauditplan,itsscopeandnature; • theauditreport; • theresultsoftheirevaluationoftheaccountingpoliciesandsystemsofinternalaccounting

controls within the Group; and • the assistance given by the officers of the Company to external auditors, including any

difficulties or disputes with Management encountered during the audit.

(b) To do the following, in relation to internal audit function: • reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalaudit

function, and that it has the necessary authority to carry out its work; • review the internal auditprogrammeand resultsof the internal auditprocessand,where

necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

• review any appraisal or assessment of the performance of members of the internal auditfunction;

• approve any appointment or termination of senior staff members of the internal auditfunction; and

• takecognisanceofresignationsofinternalauditstaffmembersandprovidetheresigningstaffmember an opportunity to submit his reasons for resigning.

(c) To provide assurance to the Board of Directors on the effectiveness of the system of internal controls and risk management practices of the Group.

29

30

(d) To review with management: • auditreportsandmanagementletterissuedbytheexternalauditorsandtheimplementationof

audit recommendations; • interimfinancialinformation;and • theassistancegivenbytheofficersoftheCompanytoexternalauditors.

(e) To monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public, and to ensure that the Directors report such transactions annually to shareholders via the annual report, and to review conflict of interest that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

(f ) To review the quarterly reports on consolidated results and annual financial statements prior to submission to the Board of Directors, focusing particularly on:

• changesinorimplementationofmajoraccountingpolicyandpractices; • significantand/orunusualissuesarisingfromtheaudit; • thegoingconcernassumption; • compliancewithaccountingstandardsandotherlegalrequirements;and • majorjudgementalareas.

(g) To consider the appointment and/or re-appointment of internal and external auditors, the audit fee and any questions of resignation or dismissal including recommending the nomination of person or persons as auditors.

(h) To verify any allocation of options in accordance with the employees share scheme of the Company, at the end of the financial year.


31

STATEMENT ON DIRECTORS’ RESPONSIBILITYIN RESPECT OF THE PREPARATION OF THE FINANCIAL STATEMENTS

The Directors acknowledge their responsibility for ensuring that the financial statements of the Group are drawn up in accordance with applicable approved accounting standards in Malaysia and the provision of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2007 and of the results and cash flows of the Company and the Group for the financial year ended on that date.

In preparing the financial statements of the Company and the Group for the year ended 31 December 2007, the Directors have:

• ensured that relevant and appropriate accounting policies are consistently applied and that thesepolicies are in accordance with applicable approved accounting standards;

• made judgments and estimates that are reasonable and prudent; and • used the going concern basis for the preparation of the financial statements.

The Directors have ensured that proper accounting records are kept which enable the preparation of the financial statements with reasonable accuracy and that these records are kept in accordance with the Companies Act, 1965. The Directors are also responsible for taking steps as are reasonable to safeguard the Group’s assets and to prevent and detect fraud and other irregularities.

32

CORPORATE SOCIAL RESPONSIBILITY

The Resort remains committed to serving the community by organizing a charity buka puasa and the Pulai Christmas wish events that accentuate good corporate social responsibility.

The Ramadan month of November 2007 was a memorable event for 35 children of Sekolah Kebangsaan Pendidikan Khas (SKPK) Princess Elizabeth at Bukit Nong Chik. Pulai Springs Resort held a special buka puasa treat for the children accompanied by 5 teachers at Gleneagles Terrace. The SKPK Princess Elizabeth is a school for 65 children with deficiency in vision managed by the Ministry of Education. This gave Pulai Springs Resort the opportunity to play a part for the less fortunate by doing a good deed for the benefit of the local community.

In addition to the sumptuous feast comprised of 120 types of dishes and desserts prepared in a’la Selera Kampung style, the children received Hari Raya packets of RM10 each and a goody bag which contained a teddy bear, mug, sweets and chocolate. Entertainment during the evening was a performance by Ghazal Seri Murni with 5 performers entertaining all guests at the event

In December, the Resort had launched a special charity drive entitled the Pulai Christmas Wish for the children from Pusat Kebajikan Kalvari (PKK) Johor, which consisted of 2 programmes – Gifts of the Gingerbread House and Wish Upon a Star. PKK Johor, Segamat and Kedah has 27 homes and centre which take care of the helpless, abused, abandoned, homeless, needy and poor.

The Pulai Christmas Wish brings cheer to Pusat Kebajikan Kalvari Johor.

Charity Buka Puasa celebrates Ramadan with Sekolah Kebangsaan Pendidikan Khas Princess Elizabeth.

financial statements34 Director’s Report

39 Statement by Directors

39 Statutory Declaration

40 Report of the Auditors to the

Members of Pulai Springs Berhad

42 Balance Sheets

44 Income Statements

45 Statements of Changes in Equity

47 Cash Flow Statements

49 Notes to the Financial Statements

34

DIRECTORS’ REPORT

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2007.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities of the subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS THE GROUP THE COMPANY RM RM Loss for the financial year (6,533,760) (585,263)

DIVIDENDS

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) there were no changes in the authorised and issued and paid-up share capital of the Company; and

(b) there were no issues of debentures by the Company.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

35

DIRECTORS’ REPORT(cont’d)

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that there are no known bad debts and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad debts, or the additional allowance for doubtful debts in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities of the Group and of the Company are disclosed in Note 37 to the financial statements. At the date of this report, there does not exist:-

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

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

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

36


CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

DIRECTORS

The directors who served since the date of the last report are as follows:-

DATO’ DR LIAN CHIN BOON

VICTOR CHUA CHEE WEY

DATO’ DR. HJ. SHAHIR BIN NASIR

RUTHLENE BINTI ABU SAHID

LEONG CHEW MENG

DATUK AZZAT BIN KAMALUDIN

MAH SIEW CHEAN (APPOINTED ON 12 JANUARY 2007)

TAN SRI DATUK SERI ABU SAHID BIN MOHAMED (APPOINTED ON 12 JANUARY 2007,ALTERNATE TO RUTHLENE BINTI ABU SAHID)

DATO’ CHUA JUI LENG (RESIGNED ON 3 JULY 2007)

DATUK CHUA TECK HWEE (RESIGNED ON 3 JULY 2007)

37


DIRECTORS’ INTERESTS

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

(I) Indirect interest through Sepenah Emas (M) Sdn. Bhd. by virture of Section 6A of the Companies Act, 1965.(II) Indirect interest by virtue of family relationship.

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

By virtue of their interests in the Company, Tan Sri Datuk Seri Abu Sahid Bin Mohamed and Mah Siew Chean are deemed to have interests in shares in the subsidiaries, to the extent of the Company’s interest, in accordance with the Section 6A of the Company Act, 1965.

NUMBER OF ORDINARY SHARES OF RM1 EACH

AT AT

1.1.2007 BOUGHT SOLD 31.12.2007

DIRECT INTERESTS

DATUK AZZAT BIN KAMALUDIN 833,938 - (66,600) 767,338

RUTHLENE BINTI ABU SAHID 1,000,000 - - 1,000,000

TAN SRI DATUK SERI ABU SAHID BIN MOHAMED - 18,951,000 - 18,951,000

INDIRECT INTERESTS

MAH SIEW CHEAN (I) - 33,600,000 - 33,600,000

DATO’ DR LIAN CHIN BOON (II) - 20,000 - 20,000

38


DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Group and of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with a shareholder as disclosed in Note 36 to the financial statements.

Neither during nor at the end of the financial year, was the Company or any of its subsidiaries a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

AUDITORS

The auditors, Messrs. Horwath have expressed their willingness to continue in office.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 17 APRIL 2008

Mah Siew Chean

Dato’ Dr Lian Chin Boon

39


STATEMENT BY DIRECTORS

We, Mah Siew Chean and Dato’ Dr. Lian Chin Boon, being two of the directors of Pulai Springs Berhad, state that, in the opinion of the directors, the financial statements set out on pages 42 to 96 are drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and the Company at 31 December 2007 and of their results and cash flows for the financial year ended on that date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 17 APRIL 2008

Mah Siew Chean Dato’ Dr Lian Chin Boon

STATUTORY DECLARATION

I, Lim Kean Chai, I/C No. 600731-07-5209, being the officer primarily responsible for the financial management of Pulai Springs Berhad, do solemnly and sincerely declare that the financial statements set out on pages 42 to 96 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared byLim Kean Chai, I/C No. 600731-07-5209,at Kuala Lumpur in the Federal Territory on this 17 April 2008

Lim Kean ChaiBefore meDatin Hajah Raihela Wanchik (W - 275)B-16-5, Block B, Tingkat 16, Unit 5,Megan Avenue II,12, Jalan Yap Kwan Seng,50450 Kuala Lumpur.

40

REPORT OF THE AUDITORS TOTHE MEMBERS OF PULAI SPRINGS BERHAD(Incorporated in Malaysia)Company No : 514941 - K

We have audited the financial statements set out on pages 42 to 96. The preparation of the financial statements is the responsibility of the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. Our audit included examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit also included an assessment of the accounting principles used and significant estimates made by the directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our audit provides a reasonable basis for our opinion.

In our opinion,

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

(i) the state of affairs of the Group and the Company at 31 December 2007 and their results and cash flows for the financial year ended on that date; and

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

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and by the subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.

We have considered the financial statements and the auditors’ report of the subsidiary of which we have not acted as auditors, as indicated in Note 6 to the financial statements.

41

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

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under Section 174 (3) of the Companies Act, 1965.

Horwath James Chan Kuan CheeFirm No: AF 1018 Approval No: 2271/10/09 (J)Chartered Accountants Partner

Kuala Lumpur

17 April 2008

REPORT OF THE AUDITORS TOTHE MEMBERS OF PULAI SPRINGS BERHAD

(cont’d)(Incorporated in Malaysia)

Company No : 514941 - K

42

BALANCE SHEETSAT 31 DECEMBER 2007

THE GROUP THE COMPANY

2007 2006 2007 2006

NOTE RM RM RM RM

(Restated)

ASSETS

NON-CURRENT ASSETS

Investments in subsidiaries 6 - - 130,195,842 130,195,842

Property, plant and equipment 7 298,546,136 295,724,578 - -

Prepaid lease payments 8 1,759,327 1,813,531 - -

Amount owing by a subsidiary 9 - - 18,069,098 18,069,098

Goodwill on consolidation 10 3,803,919 3,803,919 - -

304,109,382 301,342,028 148,264,940 148,264,940

CURRENT ASSETS

Inventories 11 36,457,072 1,169,274 - -

Property development costs 12 19,125,378 17,956,488 - -

Trade receivables 13 6,456,295 2,833,907 - -

Other receivables, deposits and

prepayments 14 3,472,717 3,955,857 - -

Amount owing by subsidiaries 9 - - 9,415,757 19,425,541

Tax recoverable 496 87,495 - -

Fixed deposits with licensed

banks 15 2,438,397 3,117,128 - -

Cash and bank balances 5,632,634 6,297,786 24,364 182,245

73,582,989 35,417,935 9,440,121 19,607,786

TOTAL ASSETS 377,692,371 336,759,963 157,705,061 167,872,726

43


2007 2006 2007 2006

NOTE RM RM RM RM

(Restated)

EQUITY AND LIABILITIES

EQUITY

Share capital 16 105,000,000 105,000,000 105,000,000 105,000,000

Share premium 17 23,222,612 23,222,612 23,222,612 23,222,612

Capital reserve 18 - - 18,069,098 18,069,098

Exchange translation reserve 7,792 7,792 - -

Retained profits/(Accumulated

losses) 5,151,461 11,685,221 (1,769,847) (1,184,584)

SHAREHOLDERS’ EQUITY 133,381,865 139,915,625 144,521,863 145,107,126

NON-CURRENT LIABILITIES

Long-term borrowings 19 53,937,468 87,562,237 - 13,959,312

Deferred taxation 20 632,906 632,906 - -

54,570,374 88,195,143 - 13,959,312

CURRENT LIABILITIES

Trade payables 21 5,607,082 6,441,000 - -

Other payables and accruals 22 87,808,799 64,052,836 75,798 15,000

Amount owing to directors 23 312,000 351,000 312,000 351,000

Amount owing to subsidiaries - - 12,793,800 7,390,000

Provision for taxation 16,550,001 16,397,024 1,600 1,600

Short-term borrowings 24 78,532,932 19,932,886 - 1,048,688

Bank overdrafts 25 929,318 1,474,449 - -

189,740,132 108,649,195 13,183,198 8,806,288

TOTAL LIABILITIES 244,310,506 196,844,338 13,183,198 22,765,600

TOTAL EQUITY AND LIABILITIES 377,692,371 336,759,963 157,705,061 167,872,726

NET ASSETS PER SHARE (SEN) 127 133

BALANCE SHEETS AT 31 DECEMBER 2007(cont’d)

44


2007 2006 2007 2006

NOTE RM RM RM RM

(Restated)

REVENUE 29 73,476,200 45,402,744 - -

COST OF SALES (39,995,185) (31,864,277) - -

GROSS PROFIT 33,481,015 13,538,467 - -

OTHER INCOME 854,452 2,746,383 4,597 6,050

34,335,467 16,284,850 4,597 6,050

MAINTENANCE EXPENSES (1,334,938) (1,244,209) - -

HOUSEKEEPING EXPENSES (445,500) (525,193) - -

MARKETING EXPENSES (3,348,100) (931,171) - -

HUMAN RESOURCE

EXPENSES (803,090) (937,637) - -

ADMINISTRATIVE EXPENSES

(17,541,849) (18,205,500) (589,860) (682,174)

OTHER EXPENSES (6,759,545) (7,220,537) - -

FINANCE COSTS (10,483,205) (4,330,302) - -

(40,716,227) (33,394,549) (589,860) (682,174)

LOSS BEFORE TAXATION 30 (6,380,760) (17,109,699) (585,263) (676,124)

INCOME TAX EXPENSE 31 (153,000) 1,886,500 - (1,600)

LOSS ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (6,533,760) (15,223,199) (585,263) (677,724)

LOSS PER SHARE (SEN):

- Basic 32 (6.22) (14.50)

- Diluted 32 Not applicable Not applicable

INCOME STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2007

45

EXCHANGE

SHARE SHARE NEGATIVE TRANSLATION RETAINED

CAPITAL PREMIUM GOODWILL RESERVE PROFITS TOTAL

THE GROUP NOTE RM RM RM RM RM RM

Balance at 1.1.2006 105,000,000 23,222,612 22,509,075 7,792 9,488,234 160,227,713

Prior year adjustments 43 - - - - (5,088,889) (5,088,889)

Balance at 1.1.2006 (Restated) 105,000,000 23,222,612 22,509,075 7,792 4,399,345 155,138,824

Effects of adopting FRS 3 - - (22,509,075) - 22,509,075 -

Loss attributable to shareholders:

- as original stated - - - - (14,299,851) (14,299,851)

- prior year adjustments 43 - - - - (923,348) (923,348)

- - - - (15,223,199) (15,223,199)

Balance at 31.12.2006/1.1.2007 (Restated) 105,000,000 23,222,612 - 7,792 11,685,221 139,915,625

Loss attributable to shareholders - - - - (6,533,760) (6,533,760)

Balance at 31.12.2007 105,000,000 23,222,612 - 7,792 5,151,461 133,381,865

STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

46

STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007(cont’d)

SHARE SHARE CAPITAL ACCUMULATED

CAPITAL PREMIUM RESERVE LOSSES TOTAL

RM RM RM RM RM

THE COMPANY

Balance at 1.1.2006 105,000,000 23,222,612 18,069,098 (506,860) 145,784,850

Loss attributable to shareholders - - - (677,724) (677,724)

Balance at 31.12.2006/ 1.1.2007 105,000,000 23,222,612 18,069,098 (1,184,584) 145,107,126

Loss attributable to shareholders - - - (585,263) (585,263)

Balance at 31.12.2007 105,000,000 23,222,612 18,069,098 (1,769,847) 144,521,863

47


2007 2006 2007 2006

NOTE RM RM RM RM

CASH FLOWS FOR OPERATING ACTIVITIESLoss before taxation (6,380,760) (17,109,699) (585,263) (676,124)

Adjustments for:-

Allowance for doubtful debts 475,034 330,656 - -

Amortisation of prepaid lease payments 54,204 54,203

Bad debts written off - 61,905 - -

Depreciation of property, plant and equipment 7,013,305 4,798,578

- -

- -

Equipment written off 106,620 - - -

Development expenditure, plant and equipment written off - 4,111,880 - -

Interest expense 10,191,798 4,125,186 - -

Loss on disposal of equipment - 1,341 - -

Interest income (309,845) (44,311) - -

Gain on disposal of plant and equipment (99,868) (91,772) - -

Gain on disposal of property held for future development - (2,018,016) - -

Unrealised gain on foreign exchange (9,868) (4,642) - -

Writeback of allowance for doubtful debts (214,799) (30,589) - -

Operating profit/(loss) before working capital changes 10,825,821 (5,815,280) (585,263) (676,124)

(Increase)/Decrease in inventories (35,287,798) 106,854 - -

Decrease in property development costs (5,061,475) (8,923,409) - -

(Increase)/Decrease in trade and other receivables (3,389,614) 2,028,524 - -

Increase in trade and other payables 22,922,045 5,776,183 60,798 3,000

CASH FOR OPERATIONS (9,991,021) (6,827,128) (524,465) (673,124)

Interest paid (10,191,798) (4,125,186) - -

Tax refunded/(paid) 86,976 (57,805) - -

NET CASH FOR OPERATING ACTIVITIES CARRIED FORWARD (20,095,843) (11,010,119) (524,465) (673,124)

CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

48

CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007(cont’d)


2007 2006 2007 2006

NOTE RM RM RM RM

NET CASH FOR OPERATING ACTIVITIES BROUGHT FORWARD (20,095,843) (11,010,119) (524,465) (673,124)

CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES

Acquisition of a subsidiary, net cash outflow - (8,956,827) - (10,000,000)

Advances from/(to) subsidiaries - - 15,413,584 10,291,368

Development expenditure incurred - (417,296) - -

Interest received 309,845 44,311 - -

Purchase of property, plant and equipment 33 (6,304,242) (6,229,361) - -

Net proceeds from disposal of property held for future development - 22,325,016 - -

Proceeds from disposal of plant and equipment 355,211 209,909 - -

NET CASH (FOR)/FROM

INVESTING ACTIVITIES (5,639,186) 6,975,752 15,413,584 291,368

CASH FLOWS FROM/(FOR)

FINANCING ACTIVITIES

(Repayments to)/Advances from directors (39,000) 6,000 (39,000) 6,000

Repayment of term loans (50,789,981) - (15,008,000) -

Net repayment of hire purchase obligations (734,742) (659,875) - -

Drawdown of term loan 76,500,000 6,764,077 - -

NET CASH FROM/(FOR) FINANCING ACTIVITIES 24,936,277 6,110,202 (15,047,000) 6,000

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (798,752) 2,075,835 (157,881) (375,756)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 7,940,465 5,864,630 182,245 558,001

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 34 7,141,713 7,940,465 24,364 182,245

49

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

1. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Malaysian Companies Act, 1965. The domicile of the Company is in Malaysia. The registered office, which is also the principal place of business, is at 20 Km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of directors dated 17 April 2008.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities of the subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. FINANCIAL RISK MANAGEMENT POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s business whilst managing market, credit, liquidity and cash flow risks. The policies in respect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group does not have material foreign currency transactions, assets or liabilities and hence is not exposed to any significant or material currency risks.

(ii) Interest Rate Risk

The Group obtains financing through banking, leasing and hire purchase facilities. The Group’s policy is to obtain the most favourable interest rates available.

Surplus funds are placed with reputable financial institutions at the most favourable interest rates.

50

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007(cont’d)

3. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(a) Market Risk (Cont’d)

(iii) Price Risk

The Group does not have any quoted investments and hence is not exposed to market risks.

(b) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The maximum exposure to credit risk is represented by the total carrying amounts of these financial assets in the balance sheet.

The Group does not have any major concentration of credit risk related to any individual customer or counterparty.

The Group manages its exposure to credit risk by investing its cash assets safely and profitably, and by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis.

(c) Liquidity and Cash Flow Risk

The Group’s exposure to liquidity and cash flow risks arises mainly from general funding and business activities.

The Group practises prudent liquidity risk management by maintaining sufficient cash and the availability of funding through certain committed credit facilities.

4. BASIS OF PREPARATION

The financial statements of the Group and the Company are prepared under the historical cost convention, and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965.

51


(cont’d)

4. BASIS OF PREPARATION (CONT’D)

During the current financial year, the Group and the Company have adopted all the new and revised Financial Reporting Standards (“FRSs”) issued by the Malaysian Accounting Standards Board (“MASB”):

(a) FRSs issued and effective for financial periods beginning on or after 1 October 2006:

FRS 117 Leases FRS 124 Related Party Disclosures

The Group and the Company adopted FRS 117 in accordance of its effective date in the previous financial year.

(b) FRSs issued and effective for financial periods beginning on or after 1 January 2007:

FRS 6 Exploration for and Evaluation of Mineral Resources FRS 1192004 Amendment to FRS 1192004 Employee Benefits - Actuarial Gains and Losses,

Group Plans and Disclosures

The effects of adopting FRS 124 on the accounting policies are disclosed in Note 36 to the financial statements.

The adoption of FRS 6 and FRS 1192004 are not relevant to the Group’s operations.

Framework for the Preparation and Presentation of Financial Statements has been issued and is effective immediately. This Framework sets out the concepts that underline the preparation and presentation of financial statements for external users. It is not an MASB approved accounting standard and hence, does not define standards for any particular measurement or disclosure issue. The Group has applied this Framework from the financial year ended 31 December 2007 onwards.

The Group has not adopted FRS 139 - Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 as the effective date is deferred to a date to be announced by the MASB. FRS 139 establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB of FRS 139, the impact of applying FRS 139 on its financial statements upon first adoption of the standard as required by paragraph 30(b) of FRS 108 is not disclosed.

52



The following FRSs have been issued and are effective for financial periods beginning on or after 1 July 2007 and will be effective for the Group’s financial statements for the financial year ending 31 December 2008:-

FRS 107 Cash Flow StatementsFRS 111 Construction ContractsFRS 112 Income TaxesFRS 118 RevenueFRS 120 Accounting for Government Grants and Disclosure of Government AssistanceFRS 137 Provisions, Contingent Liabilities and Contingent Assets

The above FRSs align the MASB’s FRSs with the equivalent International Accounting Standards (“IASs”), both in terms of form and content. The adoption of these standards will only impact the form and content of disclosures presented in the financial statements. The Group will apply these FRSs from the financial year ending 31 December 2008 onwards.

Amendment to FRS 121 - The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign Operation has been issued and is effective for financial periods beginning on or after 1 July 2007. This amendment results in exchange differences arising from a monetary item that forms part of the Group’s net investment in a foreign operation to be recognised in equity irrespective of the currency in which the monetary item is denominated and whether the monetary item results from a transaction with the Company or any of its subsidiaries. Previously, exchange differences arising from such transactions between the Company and its subsidiaries would be accounted for in the income statement or in equity depending on the currency of the monetary item. This standard is not relevant to the Group’s operations.

IC Interpretation 1 - Changes in Existing Decommissioning, Restoration and Similar Liabilities has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation addresses the effects of events that changes the measurement of an existing decommissioning, restoration or similar liability, namely a change in the estimated outflow of resources embodying economic benefits required to settle the obligation, a change in the current market-based discount rate as defined in paragraph 48 of FRS 1372004 and an increase that reflects the passage of time. This interpretation is not relevant to the Group’s operations.

IC Interpretation 2 - Member’s Shares in Co-operative Entities and Similar Instruments has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group’s operations.

IC Interpretation 5 - Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group’s operations.

53


(cont’d)


IC Interpretation 6 - Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group’s operations.

IC Interpretation 7 - Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economies has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group’s operations.

IC Interpretation 8 - Scope of FRS 2 has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation applies to transactions in which goods or services are received, including transactions in which the entity cannot identify specially some or all of the goods or services received. Where the fair value of the share-based payment is excess of the identifiable goods or services received, it is presumed that additional goods or services have been or will be received. The whole fair value of the share-based payment will be charged to the income statement. The Group will apply this interpretation from the financial year ending 31 December 2008 onwards.

5. SIGNIFICANT ACCOUNTING POLICIES

(a) Critical Accounting Estimates And Judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

54


5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Critical Accounting Estimates And Judgements (Cont’d)

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions.

The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimates. The Company recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final 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.

(iii) Impairment of Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(iv) Property Development

The Company recognises property development revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

55


(cont’d)



(iv) Property Development (Cont’d)

Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Company evaluates based on past experience and by relying on the work of specialists.

(v) Allowance for Doubtful Debts of Receivables

The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses historical bad debt, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance for doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.

(vi) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group and the Company carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group and the Company uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and equity.

(vii) Allowance for Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

56




(viii) Revaluation of Properties

The Group’s properties which are reported at valuation are based on valuations performed by independent professional valuers.

The independent professional valuers have exercised judgement on determining discount rates, estimates of future cash flows, capitalisation rate, terminal year value, market freehold rental and other factor used in the valuation process. Also judgement has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlation can also materially affect these estimates and the resulting valuation estimates.

(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 December 2007.

A subsidiary is defined as an enterprise in which the Group has the power, directly or indirectly, to exercise control over the financial and operating policies so as to obtain benefits from its activities.

All subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of accounting, the results of subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination.

Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of the subsidiary to ensure consistency of accounting policies with those of the Group.

Minority interests are presented in the consolidated balance sheet of the Group within equity, separately from the Company’s equity holders, and are separately disclosed in the consolidated income statement of the Group.

57


(cont’d)

5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (c) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group or the Company has become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

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

Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated with each item.

(d) Functional and Foreign Currency

(i) Functional and Presentation Currency

The functional currency of the Company and each of the Group’s entity is measured using the currency of the primary economic environment in which the Company or that entity operates.

The Group financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currency are converted into the respective functional currencies of the Group and are recorded on initial recognition in the functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the balances sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are taken to the income statement.

58



(d) Functional and Foreign Currency (Cont’d)

(iii) Foreign Operations

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:-

(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;

(b) income and expenses for income statement are translated at average exchange rates for the year; and

(c) all resulting exchange differences are recognised as a separate component of equity, as a foreign currency translation reserve. On disposal, accumulated translation differences are recognised in the consolidated income statements as part of the gain or loss on sale.

(e) Goodwill on Consolidation

Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group’s share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition.

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the consolidated income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period.

If, after reassessment, the Group’s interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cash of the business combinations, the exceeds the cash of the business combinations, the excess is recognised immediately in the consolidated income statement.

59


(cont’d)


(f) Investments in Subsidiaries

Investments in subsidiaries are stated at cost in the balance sheet of the Company, and are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable.

(g) Property, Plant and Equipment

Property, plant and equipment, other than freehold land, are stated at cost or revalued amount, less accumulated depreciation and impairment losses, if any.

Freehold land is stated at cost or revalued amount, less impairment loss, if any and is not depreciated.

Depreciation is not provided on the golf course and development expenditure. The golf course is not depreciated as it is the Group’s practice to maintain the golf course in such condition that the residual values are not significantly affected. Crockery, glassware, cutlery and linen are capitalised at the minimum level required for normal operations and no depreciation is provided on these items as the amount involved is not material to the financial statements.

Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Buildings and hostel 2%Equipment 10%Furniture and fittings 10%Machinery 20%Motor vehicles 20% The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date 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 the property, plant and equipment.

60



(g) Property, Plant and Equipment (Cont’d)

Surplus arising from the revaluation of the properties are credited to a revaluation reserve. Deficits arising from the revaluation, to the extent that they are not support by any previous revaluation surplus, are charged to the income statement.

Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and the net carrying amount is recognised in the income statement and the unutilised portion of the revaluation surplus on that item is taken directly to unappropriated profits.

Fully depreciated plant and equipment with a total cost of RM20,261,566 (2006 - RM20,490,124) are retained in the balance sheet of the Group until they are no longer in use.

(h) Impairment of Assets

The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ net selling price and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in the income statement.

61


(cont’d)


(i) Prepaid Lease Payments

Leases of land under which the lessor has not transferred all the risks and benefits of ownership are classified as operating leases. Lease prepayment of land use rights is stated at cost less accumulated amortisation and impairment losses, if any. Amortisation is charged to the income statement on a straight-line basis over the term of the leases.

(j) Assets under Hire Purchase

Plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 5(g) to the financial statements. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are allocated to the income statement over the period of the respective finance lease and hire purchase agreements.

(k) Property Development Costs

Property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

Property development costs that are not recognised as an expense are recognised as an asset and carried at the lower of cost and net realisable value.

When the financial outcome of a development activity can be reliably estimated, the amount of property revenues and expenses recognised in the income statement are determined by reference to the stage of completion of development activity at the balance sheet date.

When the financial outcome of a development activity cannot be reliably estimated, the property development revenue is recognised only to the extent of property development costs incurred that are probable will be recoverable. The property development costs on the development units sold are recognised as an expense in the period in which they are incurred.

Where it is probable that the property development costs will exceed property development revenue, any expected loss is recognised as an expense immediately, including costs to be incurred over the defects liability period.

62



(l) Revaluation Reserve

Surpluses arising from the revaluation of properties are credit to the revaluation reserve account. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are charged to the income statement.

In the year of disposal of the revalued asset, the attributable remaining revaluation surplus is transferred from the revaluation reserve account to retained profits.

(m) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-out basis, and includes the cost of materials and incidentals incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated costs necessary to make the sale.

Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.

(n) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

(o) 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.

63


(cont’d)

5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (p) Income Taxes

Income taxes for the year comprise current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are 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 the tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred tax is recognised in the income statement, 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 to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

64



(q) Interest-bearing Borrowings

Interest-bearing bank borrowings, finance lease and hire purchase are recorded at the amounts of proceeds received, net of transaction costs.

All borrowing costs are charged to the income statement as expenses in the period in which they are incurred.

(r) Equity Instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(s) Segmental Information

Segment revenues and expenses are those directly attributable to the segments and include any joint venture and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment, land held for development, inventories, receivables, and cash and bank balances.

Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets do not include income tax assets, whilst segment liabilities do not include income tax liabilities and borrowings from financial institutions.

Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal commercial terms. These transfers are eliminated on consolidation.

(t) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

65


(cont’d)


(u) Employee Benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.

(ii) Defined Contribution Plans

The Group’s contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(v) Related Parties

Parties are considered to be related if one party has the ability to control the other party or exercise influence over the other party, to the extent that it prevents the other party from pursuing its own separate interests in making financial and operating decisions.

(w) Revenue Recognition

The following fees are payable upon joining as members of Pulai Springs Country Club (“PSCC”) operated by a subsidiary:

Entrance Fee

A sum payable by a member in accordance with the provisions of the membership licence agreement, being part of the consideration for the grant of the revocable non-exclusive licence to use and enjoy the facilities of PSCC or to nominate a nominee to use and enjoy the same.

The entrance fee is recognised as income upon approval of the membership by the subsidiary.

66



(w) Revenue Recognition (Cont’d)

Licence Fee

A further sum payable by a member (in addition to the Entrance Fee) towards the account of the annual licence fees to be utilised and applied in accordance with the provisions of the membership licence agreement, being part of the consideration for the grant of the revocable non-exclusive licence to use and enjoy the facilities of PSCC or to nominate a nominee to use and enjoy the same.

The licence fee in respect of memberships sold prior to year 2000 is recognised as income over the warranty period of the licensing agreement on a receipt basis.

The licence fee in respect of memberships sold on or after 1 January 2000 is recognised as income in the year of sale on an accrual basis.

A provision for refund of the licence fee in respect of memberships sold on or after 1 January 2000 is made in the financial statements based on directors’ estimate, taking into account, inter alia, the historical trend of cancellations and the amount of refunds.

Subscription Fee

Members are levied a monthly subscription fee for the use and enjoyment of the facilities of PSCC.

The subscription fee is receivable monthly in advance and is recognised as income on an accrual basis.

Property Development

Revenue from property development is recognised from the sale of completed and uncompleted development properties.

Revenue from sale of completed properties is recognised when the sale is contracted.

Revenue on uncompleted properties contracted for sale is recognised based on the stage of completion method unless the outcome of the development cannot be reliably determined in which case the revenue on the development is only recognised to the extent of development costs incurred that are recoverable.

67


(cont’d)


(w) Revenue Recognition (Cont’d)

Property Development (Cont’d)

The stage of completion is determined based on the proportion that the development costs incurred for work performed to date bear to the estimated total development costs.

Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the development will result in a loss. Foreseeable losses, if any, are recognised immediately in the income statement.

Dividends

Dividend income from investment is recognised when the right to receive dividend payment is established.

Others

Revenue from sports and recreation, golfing, rental of rooms and sale of food and beverages is recognised as income on a receivable basis.

(x) Contingent Liabilities and Contingent Assets

A contingent liabilities is a possible obligation that arises from past event and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group and the Company. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group and the Company.

68



(y) Progress Billings/Accrued Billings

In respect of progress billings:-

(i) where revenue recognised in the income statement exceeds the billings to purchasers, the balance is shown as accrued billings under current assets; and

(ii) where billings to purchasers exceed the revenue recognised to the income statement, the balance is shown as progress billings under current liabilities.

69


(cont’d)

The details of the subsidiaries are as follows:-

Name of CompanyCountry Of

IncorporationEffective Equity

Interest Principal Activities

2007 2006

Pulai Springs Resort Berhad Malaysia 100% 100% Proprietor and operator of PSCC, hotel and other sport and recreational facilities, and property development.

Wawasan Maharani Sdn. Bhd. Malaysia 100% 100% Property development and investment.

Citro Murni Sdn. Bhd. Malaysia 100% 100% Property development and investment.

Pulai Springs Management Services Sdn. Bhd.

Malaysia 100% 100% Provision of property management services.

PSB Resorts Pte. Ltd. * The Republic of Singapore

100% 100% Sales and marketing agent.

Bina Resort Corporation Sdn. Bhd. Malaysia 100% 100% Proprietor and operator of a hotel.

Pulai Springs Property Services Sdn. Bhd. #

Malaysia 100% 100% Provision of management services.

Hydro Hotels Sdn.Bhd. Malaysia 100% 100% Proprietor and operator of a hotel.

* not audited by Messrs. Horwath.# subsidiary of Pulai Springs Resort Berhad.

6. INVESTMENTS IN SUBSIDIARIES

THE COMPANY

2007 2006

RM RM

Unquoted shares, at cost

At 1 January 130,195,842 120,195,842

Additions during the financial year - 10,000,000

At 31 December 130,195,842 130,195,842

70


AT1.1.2007 RM

ADDITIONS RM

DISPOSALS RM

WRITTEN OFFRM

TRANSFERRM

RECLASSIFICATIONRM

DEPRECIATIONCHARGE RM

AT31.12.2007

RM

THE GROUP

NET BOOK VALUE

Freehold land 67,274,232 - - - - - - 67,274,232

Buildings 155,677,520 3,907,206 (59,924) - 4,943,772 196,499 (3,763,759) 160,901,314

Capital work-in-progress 4,943,772 - - - (4,943,772) - - -

Golf course and development expenditure

50,591,225 - - - - - - 50,591,225

Others * 17,237,829 6,289,620 (195,419) (106,620) - (196,499) (3,249,546) 19,779,365

295,724,578 10,196,826 (255,343) (106,620) - - (7,013,305) 298,546,136

7. PROPERTY, PLANT AND EQUIPMENT

71


(cont’d)

AT AT ACCUMULATED NET BOOK

COST VALUATION DEPRECIATION VALUE

AT 31.12.2007 RM RM RM RM

Freehold land 47,703,563 19,570,669 - 67,274,232

Buildings 191,467,661 - (30,566,347) 160,901,314


50,591,225 - - 50,591,225

Others * 52,793,801 - (33,014,436) 19,779,365

342,556,250 19,570,669 (63,580,783) 298,546,136

AT 31.12.2006

Freehold land 47,703,563 19,570,669 - 67,274,232

Buildings 182,730,107 - (27,052,587) 155,677,520

Capital work-in-progress 4,943,772 - - 4,943,772


50,591,225 - - 50,591,225

Others * 48,036,315 - (30,798,486) 17,237,829

334,004,982 19,570,669 (57,851,073) 295,724,578

As at 31 December 2007, had the freehold land been carried at cost, the carrying amount of freehold land would be RM31,924,763 (2006 – RM31,924,763).

The directors revalued the freehold land and building in 1991 using the market value basis based on valuation carried out by firms of independent valuers.

* These comprise golf course machinery and equipment, buggies, kitchen furniture and equipment, housekeeping equipment, lighting system, art and craft, furniture and fittings, office equipment, computer system, motor vehicles, golf course lighting system, maintenance equipment, library books, substation, base stock, driving range auto equipment, base stock-towels and linen and laundry equipment.

7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

72


Property, plant and equipment of the Group with net book value of RM225,408,752 (2006 - RM286,703,446) have been charged as security for term loan facilities as disclosed in Note 27 to the financial statements.

8. PREPAID LEASE PAYMENTS

The prepaid lease payments relate to a leasehold land which has been pledged to financial institutions as security for banking facilities granted to the Group.

7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Detailed below, assets acquired under hire purchase terms at the balance sheet date:-

THE GROUP

2007 RM

2006 RM

Net book value:-

Golf course machinery and equipment 151,848 202,448

Buggies 1,090,534 1,454,042

Motor vehicles 223,495 553,585

1,465,877 2,210,075

THE GROUP

2007 RM

2006 RM

At 1 January 1,813,531 1,867,734

Amortisation for the financial year (54,204) (54,203)

At 31 December 1,759,327 1,813,531

73


(cont’d)

9. AMOUNT OWING BY SUBSIDIARIES

The amount owing is unsecured and interest-free.

10. GOODWILL ON CONSOLIDATION

Goodwill on consolidation arose from the acquisition of Hydro Hotels Sdn Bhd during 2006.

Goodwill is stated at cost and reviewed for impairment annually.

During the financial year, the Group assessed the recoverable amount of goodwill, and determined that goodwill is not impaired.

11. INVENTORIES

THE COMPANY

2007 RM

2006 RM

Non-trade balances 27,484,855 37,494,639

Less: Portion repayable after twelve months (18,069,098) (18,069,098)

Portion repayable within twelve months 9,415,757 19,425,541

THE GROUP

2007 RM

2006 RM

At Cost:-

Fertilisers and chemicals 73,176 59,467

Food and beverages 540,444 469,824

Pro-shop 32,344 33,018

Trading stocks 42,130 58,221

Room supplies 90,053 91,473

Others 288,088 457,271

Cinta Ayu Resort Apartments 35,390,837 -

36,457,072 1,169,274

None of the inventories are carried at net realisable value.

74


12. PROPERTY DEVELOPMENT COSTS

THE GROUP

2007 RM

2006 RM

(RESTATED)

At 1 January

- freehold land, at cost 7,290,560 7,290,560

- development costs 58,032,977 33,949,757

65,323,537 41,240,317

Costs incurred during the financial year:

- development costs 47,341,571 24,083,220

At 31 December 112,665,108 65,323,537

Costs recognised as an expense in the income statement:

- brought forward (45,391,664) (35,809,871)

- current year (8,553,552) (9,581,793)

(53,945,216) (45,391,664)

Cumulative revenue recognised in the income statement 78,422,766 60,530,658

Cumulative billings to purchasers (78,734,058) (62,506,043)

(Progress)/Accrued billings (311,292) (1,975,385)

Less: Transfer to:

- property (3,892,585) -

- inventories (35,390,637) -

Net balance 19,125,378 17,956,488

75


(cont’d)

The Group’s normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and approved on a case-by-case basis.

The foreign currency exposure profile of the trade receivables is as follows:-

2007 2006

RM RM

Singapore Dollar 156,071 343,465

13. TRADE RECEIVABLES

14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Included in other receivables, deposits and prepayments is an amount of RM554,589 (2006 - RM722,033) which is held in a sinking fund account pursuant to the trust deed entered into between a subsidiary and the members of PSCC. Under the provisions of the trust deed, the sinking fund is set up for the purpose of covering the costs of periodic major repairs or replacements of the facilities of PSCC operated by the subsidiary.

15. FIXED DEPOSITS WITH LICENSED BANKS

The weighted effective interest rate of the fixed deposits at the balance sheet date was 3.43% (2006 - 3.7%) per annum. The fixed deposits have an average maturity period of 30 days (2006 - 30 days).

Fixed deposits amounting to RM50,000 (2006 – RM617,128) are pledged to the bank for banking facilities granted to the Group.

THE GROUP

2007 RM

2006 RM

Trade receivables 7,171,999 3,289,376

Allowance for doubtful debts:-

At 1 January (455,469) (155,402)

Additions (475,034) (330,656)

Writeback 214,799 30,589

At 31 December (715,704) (455,469)

6,456,295 2,833,907

76

19. LONG-TERM BORROWINGS


17. SHARE PREMIUM

The share premium is not distributable by way of dividends.

18. CAPITAL RESERVE

This is not distributable as cash dividends.

16. SHARE CAPITAL

THE COMPANY

2007 2006 2007 2006

NUMBER OF SHARES RM RM

ORDINARY SHARES OF RM1 EACH:-

AUTHORISED 250,000,000 250,000,000 250,000,000 250,000,000

ISSUED AND FULLY PAID-UP 105,000,000 105,000,000 105,000,000 105,000,000


2007 2006 2007 2006

RM RM RM RM

Hire purchase payables

(Note 26) 1,037,468 1,750,365 - -

Term loans (Note 27) 52,900,000 85,811,872 - 13,959,312

53,937,468 87,562,237 - 13,959,312

77


(cont’d)

20. DEFERRED TAXATION

21. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 to 60 days.

The foreign currency exposure profile of the trade payables is as follows:-


2007 RM

2006 RM

2007 RM

2006 RM

At 1 January 632,906 2,578,570 - -

Recognised in income statement (Note 31) - (1,945,664) - -

At 31 December 632,906 632,906 - -

The deferred taxation of the Group relates to temporary differences arising from the revaluation of freehold land.

2007 2006

RM RM

US Dollar 247,516 -

Singapore Dollar 4,109 22,068

78


2007 RM

2006 RM

2007 RM

2006 RM

Hire purchase payables (Note 26) 503,923 525,768 - -

Term loans (Note 27) 78,029,009 19,407,118 - 1,048,688

78,532,932 19,932,886 - 1,048,688


22. OTHER PAYABLES AND ACCRUALS

Included in other payables and accruals is an amount of RM55,298,121 (2006 – RM47,557,403) owing to a company in which a director has substantial financial interests.

The amount owing is unsecured, interest free and not subject to fixed terms of repayment. The parties are presently finalizing the terms of repayment of the amount owing.

23. AMOUNT OWING TO DIRECTORS

The amount owing is unsecured, interest-free and not subject to fixed terms of repayment.

24. SHORT-TERM BORROWINGS

25. BANK OVERDRAFTS

The bank overdrafts bore an effective interest rate of 8.50% (2006 - 8.25%) per annum at the balance sheet date and are secured as follows:-

(i) by way of a legal charge over the freehold land of the Group;

(ii) by a debenture on the fixed and floating assets of the Group; and

(iii) by a corporate guarantee from the Company.

79

THE GROUP

2007 2006

RM RM

Minimum hire purchase payments:

- not later than one year 611,526 688,369

- later than one year but not later than five years 1,129,779 1,756,457

- later than five years - 222,863

1,741,305 2,667,689

Less: Future finance charges (199,914) (391,556)

Present value of hire purchase payables 1,541,391 2,276,133


(cont’d)

26. HIRE PURCHASE PAYABLES

The net hire purchase payables are repayable as follows:-

Current:

- not later than one year (Note 24) 503,923 525,768

Non-current:

- later than one year but not later than five years 1,037,468 1,538,393

- later than five years - 211,972

Total non-current (Note 19) 1,037,468 1,750,365

1,541,391 2,276,133

The effective interest rates for hire purchase payables of the Group range from 4.3% to 9.1% (2006 - 4.3% to 9.1%) per annum.

80


2007 2006 2007 2006

RM RM RM RM

Non-current (Note 19):

- repayable between two to five years 12,200,000 31,736,884 - 10,486,875

- repayable after five years 40,700,000 54,074,988 - 3,472,437

52,900,000 85,811,872 13,959,312

Current (Note 24):

- repayable within one year

78,029,009 19,407,118 - 1,048,688

Total 130,929,009 105,218,990 - 15,008,000


27. TERM LOANS

81

Details of the term loans outstanding at the balance sheet date are as follows:-

TERM LOANNUMBER OF

INSTALMENTS INSTALMENT AMOUNTS TENURE

DATE OFCOMMENCEMENT

OF REPAYMENT

OUTSTANDING

BALANCE

RM RM

Term loan I 24 - Monthly 1 July 2007 74,869,458

Term loan II 20 165,000 Monthly 1 July 2007 948,404

Term loan III 12 125,000 Monthly 1 January 2008 1,511,147

Term loan IV 24 700,000 to 33,000,000 Quarterly 1 October 2007 53,600,000


(cont’d)

27. TERM LOANS (CONT’D)

* The term loan I is repayable by way of a 75% redemption sum from the sale of the unsold Cinta Ayu Resort Apartments within 24 months from the first drawdown date of July 2007.

The weighted average effective interest rate at the balance sheet date for the term loans was 8.2% (2006 - 7.9%) per annum. The term loans are secured by way of:-

(a) a fixed charge on the property, plant and equipment of the Group;

(b) a registered debenture on the entire fixed and floating assets of the Group;

(c) all unsold units of Cinta Ayu Resort Apartments disclosed in Note 11 to the financial statements;

(d) a joint and several guarantee of a director and a person related to a director of the Company; and

(e) a corporate guarantee of the Company.

The term loan IV is repayable based on the following quarterly instalments:-

NUMBER OF INSTALMENT TOTAL REMAINING

INSTALMENTS AMOUNTS INSTALMENTS BALANCE

RM’000 RM’000 RM’000

October 2007 to September 2008 4 700 2,800 52,200



October 2010 to September 2011 4 1,000 4,000 41,800

October 2011 to September 2012 4 1,000 4,000 37,800

October 2012 to June 2012 3 1,600 4,800 33,000

July 2013 1 33,000 33,000 -

82


2007 2006 2007 2006

RM RM RM RM

HOSPITALITY:

- annual licence fee 48,003 72,988 - -

- entrance fee 48,800 376,100 - -

- food and beverages 18,052,197 11,849,424 - -

- gift shop 214,034 244,354 - -

- golfing 3,208,784 3,170,016 - -

- membership income 92,247 94,417

- room income 21,866,180 7,492,897 - -

- service charge 1,838,384 821,717 - -

- sports and recreation 1,092,194 1,074,732 - -

- subscription fee 7,622,384 8,954,559 - -

- transportation 493,785 449,521 - -

- others 1,007,100 - - -

55,584,092 34,600,725 - -

PROPERTY DEVELOPMENT 17,892,108 10,802,019 - -

73,476,200 45,402,744 - -


28. NET ASSETS PER SHARE

The net assets per share is calculated based on the net assets value of RM133,381,865 (2006 - RM139,915,625) divided by 105,000,000 (2006 - 105,000,000) ordinary shares of RM1 each in issue at the balance sheet date.

29. REVENUE

Hospitality revenue represents the invoiced value of services rendered and goods and memberships sold less discounts and returns.

Property development revenue represents the proportionate sales value of development properties.

83


(cont’d)


2007 RM

2006 RM

2007 RM

2006 RM

Loss before taxation is arrived at after charging/(crediting):-

Allowance for doubtful debts:

- for the financial year 475,034 330,656 - -

- writeback (214,799) (30,589) - -

Amortisation of prepaid lease payments 54,204 54,203 - -

Audit fee

- for the financial year 99,200 79,200 15,000 15,000

- underprovision in the previous financial year - 100 - -

Bad debts written off - 61,905 - -

Development expenditure, plant and equipment written off - 4,111,880 - -

Depreciation of property, plant and equipment 7,013,305 4,798,578 - -

Directors’ non-fee emoluments 400,772 1,142,400 - -

Directors’ fee 314,000 351,000 312,000 351,000

Equipment written off 106,620 - - -

Interest expense 10,191,798 4,125,186

Lease of apartments 643,093 685,110 - -

Loss on disposal of equipment - 1,341 - -

Rental of:- equipment 58,600 21,869 - -

- premises 141,140 394,573 - -

Staff costs 14,789,775 16,480,767 - -

Gain on disposal of property held for future development - (2,018,016) - -

Gain on disposal of plant and equipment (99,868) (91,772) - -

Interest income (309,845) (44,311) - (6,050)

Foreign exchange

- unrealised loss - 2,601 - -

- realised gain (115,584) (216,308) - -

- unrealised gain (9,868) (4,642) - -

30. LOSS BEFORE TAXATION

84

31. INCOME TAX EXPENSE



2007 RM

2006 RM

2007 RM

2006 RM

Current tax:- for the current financial year 153,000 59,164 - 1,600

Deferred taxation(Note 20):

- overprovision in the previous financial year - (1,945,664) - -

153,000 (1,886,500) - 1,600

During the current financial year, the statutory tax rate was reduced from 28% to 27%, as announced in the Malaysian Budget 2007.

A reconciliation of income tax expense applicable to the loss before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Company is as follows:-

85


(cont’d)

31. INCOME TAX EXPENSE (CONT’D)


2007RM

2006 RM(Restated)

2007 RM

2006 RM

Loss before taxation (6,380,760) (17,109,699) (585,263) (676,124)

Tax at the applicable corporate tax rate of 27% (2006 - 28%) (1,722,805) (4,790,716) (158,021) (189,315)

Tax effects of:

Non-deductible expenses 2,081,686 3,641,904 158,021 190,915

Non-taxable gains - (570,468) - -

Investment tax allowances utilised (318,161) (45,582) - -

Deferred tax assets not recognised during the year 541,515 1,891,734 - -

Utilisation of previously unrecognised deferred tax assets (377,839) (44,681) - -

Deferred taxation

- overprovision in the previous financial year - (1,945,664) - -

Differential in tax rates (51,396) (23,027) - -

153,000 (1,886,500) - 1,600

86

32. LOSS PER SHARE

Loss per share is arrived at by dividing the Group’s loss attributable to shareholders of RM6,533,760 (2006 - RM15,223,199) by the number of ordinary shares in issue of 105,000,000 (2006 - 105,000,000).

Diluted loss is not presented as there were no potential dilutive ordinary shares during the financial year.

33. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

34. CASH AND CASH EQUIVALENTS


For the purpose of the cash flow statements, cash and cash equivalents comprise the following:-


2007 2006 2007 2006

RM RM RM RM

Fixed deposits with

licensed banks 2,438,397 3,117,128 - -

Cash and bank balances 5,632,634 6,297,786 24,364 182,245

Bank overdraft (929,318) (1,474,449) - -

7,141,713 7,940,465 24,364 182,245

Included in the cash and bank balances of the Group is RM493,210 (2006 - RM672,007) maintained under the Housing Development Accounts pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966.

THE GROUP

2007 2006

RM RM

Cost of property, plant and equipment purchased 10,196,826 8,091,101

Amount financed through hire purchase (3,892,584) (1,861,740)

Cash paid for purchase of property, plant and equipment 6,304,242 6,229,361

87


(cont’d)

35. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments received and receivable by the directors of the Group and of the Company during the financial year in bands of RM50,000 are as follows:-

NO. OFDIRECTORS

DIRECTORS’ FEE

NO. OFDIRECTORS

DIRECTORS’NON-FEE

EMOLUMENTS TOTAL

RM RM RM

GROUP

2007

Below RM50,000 11 314,000 - - 314,000

RM100,001 - RM150,000 - - 1 109,643 109,643

RM250,001 - RM300,000 - - 1 291,129 291,129

2006

Below RM50,000 11 351,000 - - 351,000

RM200,001 - RM250,000 - - 1 201,600 201,600

RM300,001- RM350,000 - - 1 336,000 336,000

RM600,001 - RM650,000 - - 1 604,800 604,800

COMPANY

2007

Below RM50,000 11 312,000 - - 312,000

2006

Below RM50,000 11 351,000 - - 351,000

36. SIGNIFICANT RELATED PARTY TRANSACTIONS/BALANCES

For the purpose of these financial statements, parties are related to the Group/the Company where the Group/the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

The Group/the Company has related party relationship with its directors, key management personnel, entities of which the directors and/or key management have significant financial interests and entities which are within the same group of companies.

88

2007 RM

2006 RM

Amount owing by/(to):-The Company:

- PSRB (5,408,650) 10,509,799

- CMSB 4,675,283 4,696,604

- BRC 22,809,572 22,288,236

- WMSB (7,300,000) (7,300,000)

- PSMS (85,150) (90,000)

The Group:

- LCSB (55,398,121) (47,557,403)

36. SIGNIFICANT RELATED PARTY TRANSACTIONS/BALANCES (CONT’D)

The following are related parties of the Group/the Company:-

Subsidiaries

Pulai Springs Resort Berhad. (“PSRB”) Citra Murni Sdn. Bhd. (“CMSB”) Bina Resort Corporation Sdn. Bhd. (“BRC”) Wawasan Maharani Sdn. Bhd. (“WMSB”) Pulai Springs Management Services Sdn. Bhd. (“PSMS”)

An entity in which a director has substantial financial interests

Little Consortium (M) Sdn. Bhd. (“LCSB”)

In addition to the balances/transactions detailed elsewhere in the financial statements, the Group/the Company carried out the following transactions and balances between related parties during the financial year.


2007 RM

2006 RM

Key management personnel compensation:

- salaries and other short-term employee benefits 2,612,518 2,397,240

The outstanding amounts of related parties will be settled in cash. No guarantees have been given or received. No expenses have been recognised during the financial year as bad and doubtful debts in respect of amounts owing by related parties.

89

(i) The Company has submitted revised tax returns for the years of assessment 1995 to 2005 to the Inland Revenue Board (“IRB”). The revised tax returns have incorporated the claim for capital allowances on the capital expenditure incurred on the golf course and the club house, other than the costs incurred for the acquisition of the golf course land. The directors are of the opinion that these capital expenditure qualify for capital allowances.

However, the IRB has not allowed the Company to claim the capital allowances as they consider the aforesaid capital expenditure to be non-qualifying.

The Company has appealed to the IRB on their decision. Should the appeal be successful, the amount of tax payable for the years of assessment 1995 to 2005 will be reduced by approximately RM14.9 million. On the other hand, if the appeal by the Company is unsuccessful, the Company may incur an additional tax liability excluding tax penalties for late payment of RM6.5 million.

The additional tax provision and the resulting late payment penalties have not been effected in the financial statements as at 31 December 2007 as the appeal process is ongoing and the next hearing is scheduled for May 2008. The solicitors are of the view that the outcome of the appeal is likely to be favourable.

(ii) The litigation claims are in respect of the following:-

(a) A third party has initiated arbitration proceedings against a subsidiary claiming RM11.0 million for general damages. The Group has disputed the claim and has filed a counterclaim of RM6.2 million for, inter alia, rectification of defective work and costs to complete the third party’s unfinished work and other related damages in respect of the works.


(cont’d)

37. CONTINGENT LIABILITIES


2007 RM

2006 RM

2007 RM

2006 RM

Potential tax liabilities - Note (i) 6,500,000 6,500,000 - -

Claims for work done - Note (ii) 13,430,000 13,430,000 - -

Corporate guarantees given to secure banking facilities granted to certain subsidiaries 75,000,000 - 75,000,000 37,700,000

94,930,000 19,930,000 75,000,000 37,700,000

90

37. CONTINGENT LIABILITIES (CONT’D)

Pending the arbitration proceedings, the Court of Appeal had allowed an appeal with costs against the decision of the High Court for refusing the Group interlocutory application for security of costs and the plaintiffs was ordered to deposit a sum of RM250,000 as security for cost of the arbitration. The plaintiffs have closed their case and the Group is now calling their witnesses. The arbitration proceedings are continuing and the next hearing is scheduled for May 2008. The claim by the third party has not been effected in the financial statements as the directors of the Group are of the opinion that the arbitration proceedings by the third party will not be successful.

(b) A third party has initiated High Court proceedings against a subsidiary for the sum of RM1.3 million for works purportedly done for the Group. The Group is defending the claim, and is counter-claiming a total sum of RM0.9 million against the third party. The third party has been subsequently awarded a summary judgement for the sum of RM865,096 plus interest and costs. The summary judgment granted by the Senior Assistant Registrar against the Group has been set aside by the Johor Bahru High Court on appeal by the Group. The written judgement by the trial Judge is pending.

(c) A third party has initiated arbitration proceedings against a subsidiary claiming a sum of approximately RM1.1 million in respect of work purportedly done for the Group. The Group is disputing the claim and has counterclaimed for approximately RM1.9 million, inter alia, for defective work and costs to complete the third party’s unfinished work and other related damages in respect of the work. Before the hearing of the arbitration commenced, the Group filed an application for security of costs in the Kuala Lumpur High Court. The Group’s application was dismissed with costs. Thereafter, the Group appealed to the Court of Appeal but which was dismissed with costs in September 2006. The Group has decided not to appeal the Court of Appeal’s decision. The arbitration proceedings are presently on-going. The claim by the third party has not been effected in the financial statements as the directors of the Group are of the opinion that the Group is likely to succeed in the arbitration proceedings.


91

38. COMMITMENTS

Detailed below are commitments of the Group at the balance sheet date:-

(i) Non-cancellable operating lease


(cont’d)

(ii) The amount owing to Little Consortium (M) Sdn. Bhd. (“LCSB”) was due on November 2006 and has been granted repayment extension to November 2008. As the result, LCSB has incurred additional borrowing costs. The Group agreed to compensate LCSB for their borrowing costs amounting to RM4.7million; and

(iii) A subsidiary, Pulai Spring Resort Berhad has entered into tenancy agreements with the beneficial owners of the Cinta Ayu Resorts Apartments whereby the beneficial owners let the premises together with all the fixtures, fittings, furniture and chattels for an initial term of 36 months commencing from the vacant possession of the said premises, with an option to renew the tenancy upon terms and conditions to be agreed upon.

39. FOREIGN EXCHANGE RATE

The principal closing foreign exchange rate used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of foreign currency balances at the balance sheet date is as follows:-

THE GROUP

2007 RM

2006 RM

Not later than one year 64,608 125,850

Later than one year and not later than five years 184,992 124,626

249,600 250,476

THE GROUP/THE COMPANY

2007 RM

2006 RM

Singapore Dollar 2.29 2.29

92


40. SEGMENTAL REPORTING

(i) By business segment:-

HOSPITALITY

PROPERTYDEVELOPMENT

ANDINVESTMENT

INVESTMENTHOLDING ELIMINATION TOTAL

THE GROUP2007

RM RM RM RM RM

REVENUE

External revenue 57,530,296 15,945,904 - - 73,476,200

RESULTS

Segment results 1,121,099 2,965,357 (585,263) 3,501,193

Interest expense (10,191,798)

Interest income 309,845

Loss before taxation (6,380,760)

Taxation (153,000)

Loss after taxation (6,533,760)

OTHER INFORMATION

Segment assets 249,753,733 127,913,778 24,364 - 377,691,895

Unallocated assets 496

377,692,371

Segment liabilities 108,740,760 117,999,041 387,798 - 227,127,599

Unallocated liabilities 17,182,907

244,310,506

Capital expenditure 6,379,148 3,817,678 - - 10,196,826

Depreciation 6,928,503 84,802 - - 7,013,305

Amortisation of prepaid lease

payments 54,204 - - - 54,204

93

HOSPITALITY

PROPERTYDEVELOPMENT

ANDINVESTMENT

INVESTMENTHOLDING ELIMINATION TOTAL

THE GROUP2006

RM RM RM RM RM (RESTATED)

REVENUEExternal revenue 34,600,725 10,802,019 - - 45,402,744

RESULTS

Segment results (11,604,845) (743,063) (680,916) (13,028,824)

Interest expense (4,125,186)

Interest income 44,311

Loss before taxation (17,109,699)

Taxation 1,886,500

Loss after taxation (15,223,199)

OTHER INFORMATION

Segment assets 307,909,166 28,581,055 182,247 - 336,672,468

Unallocated assets 87,495

336,759,963

Segment liabilities 134,048,588 30,391,020 15,374,800 - 179,814,408

Unallocated liabilities 17,029,930

196,844,338

Capital expenditure 8,090,971 130 8,091,101

Depreciation 4,791,650 6,928 - - 4,798,578

Amortisation of prepaid lease payments 54,203 - - - 54,203


(cont’d)

40. SEGMENTAL REPORTING (CONT’D)

(i) By business segment:-

SEGMENT REVENUE SEGMENT ASSETS

2007 RM

2006 RM

2007 RM

2006 RM

Malaysia 73,476,200 45,402,744 377,414,083 342,472,860

Singapore - - 278,288 299,340

73,476,200 45,402,744 377,692,371 342,772,200

(ii) By geographical market:-

94

41. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined as the amount for which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:

(a) Amounts Owing By/(To) Subsidiaries

It is not practicable to estimate the fair value of the amount owing by/(to) the subsidiaries due principally to the lack of fixed repayment terms. However, the Company does not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the values that would be eventually be received or settled.

(b) Long-Term Bank Loans

The carrying amounts approximated their fair values as these instruments bear interest at variable rates.

(c) Hire Purchase Payables

The carrying amounts approximated their fair value as the fair value of hire purchase payables are determined by discounting the relevant cash flows using current interest rates for similar types of instruments.

(d) Bank Balances and Other Liquid and Short-Term Receivables/Payables

The carrying amounts approximated their fair values due to the relatively short-term maturity of these instruments.

(e) Contingent Liabilities

The nominal amount and net fair value of financial instruments not recognised in the balance sheet of the Company are as follows:


THE COMPANY

At 31 December 2007/2006 Note Nominal Amount RM

NetFair Value

RM

Potential tax liabilities 37 6,500,000 #

Litigation claim for work done 37 13,430,000 #

Corporate guarantees 40 75,000,000 *

95


(cont’d)

ASPREVIOUSLYREPORTED

RM

EFFECT OFTHE

ADJUSTMENTSRM

AS RESTATED

RM

BALANCE SHEET (EXTRACT):-Property development costs 23,968,725 (6,012,237) 17,956,488

INCOME STATEMENT (EXTRACT):-Cost of sales (30,940,929) (923,348) (31,864,277)

41. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONT’D)

(e) Contingent Liabilities (Cont’d)

# It is not practicable to estimate the fair value due to uncertainty of timing and eventual outcome.

* The net fair value of the contingent liabilities is estimated to be minimal as the subsidiaries are expected to fulfill their obligations to repay their borrowings.

42. PRIOR YEAR ADJUSTMENTS

Cinta Ayu Resort Apartments (“CARA”) project was undertaken by the management with the intention of owning and managing CARA as a resort hotel.

Upon the completion of CARA project during the financial year, the management changed their intention that all unsold units of CARA are made available for sale to alleviate the financial constraint of the Group.

As a result of the change of the intention by the management, property development costs incurred on common areas for the purpose of a resort hotel has to be allocated to the individual units available for sale.

Prior year adjustments were made to recognise additional unit cost of the sold units of CARA based on the stage of completion method.

The restatements to the comparative figures are detailed in Note 43 to the financial statements.

43. COMPARATIVE FIGURES

The following comparative figures have been restated to account for the prior year adjustments are described in Note 42 to the financial statements:-

96


43. COMPARATIVE FIGURES (CONT’D)

The following comparative figures have been restated to account for the prior year adjustments are described in Note 42 to the financial statements:-

AS EFFECT OF

PREVIOUSLY THE AS

REPORTED ADJUSTMENTS RESTATED

RM RM RM

STATEMENT OF CHANGES IN EQUITY (EXTRACT):-

Retained profits as at 1.1.2006 9,488,234 (5,088,889) 4,399,345

Retained profits as at 31.12.2006/ 1.1.2007 17,697,458 (6,012,237) 11,685,221

CASH FLOW STATEMENT (EXTRACT):-

Increase in property development costs (9,846,757) 923,348 8,923,409

97

LIST OF PROPERTIESAS AT 31 DECEMBER 2007

Location TenureLand Area in

sq. ft.

Age of Building

YearDescription

Registered Owner

NBV as at 31/12/2007

Date of Last

Valuation

PTD 63408 HSD 248327PTD 63409 HSD 248328PTD 130053 HSD 359875PTD 63417 HSD 248336PTD 63430 HSD 248347Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

Freehold 4,807,054 N/A 18 hole golf course “Melana Course” (within Pulai Springs Resort, 20km Jalan Pontian Lama, 81110 Pulai, Johor) (PSR)

PSRB 17,576,016 26/5/00

PTD 130052 HSD 359874Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

Freehold 884,645 10 Pulai Springs Resort Clubhouse Hotel within PSR

PSRB Land 3,234,522

Building 59,105,323

26/5/00

PTD 130055 HSD 359876PTD 63414 HSD 248333Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

Freehold 169,609 N/A Vacant land approved for workers quarters development within PSR

PSRB 620,140 26/5/00

PTD 63415 HSD 248334PTD 63416 HSD 248335PTD 63426 HSD 248343PTD 63429 HSD 248346Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

Freehold 689,538 N/A Vacant land approved for condominium development

PSRB 2,521,153 9/11/07

98

LIST OF PROPERTIESAS AT 31 DECEMBER 2007(cont’d)

Location TenureLand Area in

sq. ft.

Age of Building

YearDescription

Registered Owner

NBV as at 31/12/2007

Date of Last

Valuation

PTD 63425 HSD 248342PTD 63427 HSD 248344PTD 63428 HSD 248345Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

Freehold 67,238 N/A Vacant land approved for bungalow lot development within PSR

PSRB 245,840 26/5/00


Freehold 4,985,498 N/A 18 hole golf course, “Pulai Course”, within PSR

PSRB 18,228,460 26/5/00


Freehold 4,620 13 Double storey terrace house for PSRB staff accommodation at 7, 9 and 11, Jalan Meranti 11, Taman Sri Pulai, 81110 Pulai, Johor Darul Takzim

PSRB 282,288 26/5/00

99

LIST OF PROPERTIESAS AT 31 DECEMBER 2007

(cont’d)

Location TenureLand

Area in sq. ft.

Age of Building

YearDescription

Registered Owner

NBV as at 31/12/2007

Date of Last

Valuation

PTD 1672 HSD 13065 99 years leasehold

expiring on 6/11/2088

311,631 N/A Vacant land Bina Resorts Corporation

Sdn Bhd

PTD 1673 HSD 13066 60 years leasehold expiring

on 19/12/2055 with possible extension for

35 years

436,906 N/A Vacant land Lembaga Kemajuan

Johor Tenggara

(KEJORA)


expiring on 6/11/2088

276,649 10 210 rooms resort hotel

Bina Resorts Corporation

Sdn Bhd


expiring on 19/12/2055 with possible extension for

35 years

113,308 N/A Vacant land Lembaga Kemajuan

Johor Tenggara

(KEJORA)

Mukim of Pantai Timur, District of Kota Tinggi, Johor Darul Takzim

Land 1,759,328

Building22,921,727

N/A

Geran 28301, Lot 191, Section 57, Bandar Kuala Lumpur, Wilayah Persekutuan

Freehold 21,506 18 months

28-storey hotel building with 5 levels of basement car park

Hydro Hotels

Sdn Bhd

Land 24,848,100

Building 75,327,350

N/A

100

ANALYSIS OF SHAREHOLDINGSAS AT 30 APRIL 2008

DISTRIBUTION SCHEDULE AS AT 30 APRIL 2008

Holdings No. of Shareholders % No. of shares %

1 – 99 49 4.65 178 0.00

100 – 1,000 838 79.58 220,471 0.21

1,001 – 10,000 107 10.16 415,302 0.40

10,001 – 100,000 31 2.94 848,300 0.81

100,001 – 5,249,999 (*) 23 2.18 41,829,772 39.84

5,250,000 and above (**) 5 0.47 61,685,977 58.75

Total 1,053 100.00 105,000,000 100.00

* Less than 5% of issued holdings** 5% and above of issued holdings

LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 15 MAY 2008

Authorised Share Capital : RM250,000,000.00Issued and Fully Paid-Up Capital : RM105,000,000.00Class of Shares : Ordinary Shares of RM1.00 eachVoting Right : Every member of the Company, present in person or by proxy, shall have on a show

of hands, one (1) vote or on a poll, one (1) vote for each share he holds.

Names Direct Interest Indirect Interest

No. of shares % No. of shares %

1. Sepenah Emas (M) Sdn Bhd 33,600,000 32.00 - -

2. Mah Siew Chean - - 33,600,0001 32.00

3. PSC Resort Pte Ltd 13,411,777 12.77 - -

4. Tan Sri Datuk Seri Abu Sahid Bin Mohamed 18,951,000 18.05-

-

5. PSC Corporation Limited - 13,411,7772 12.77

6. Rich Life Holdings Pte Ltd - - 13,411,7773 12.77

7. Hanny Magnetics (B.V.I.) Limited - - 13,411,7774 12.77

8. Hanny Holdings Limited - - 13,411,7775 12.77

9. Famex Investment Limited - - 13,411,7776 12.77

10. Mankar Assets Limited - - 13,411,7777 12.77

11. ITC Investment Holdings Limited - - 13,411,7778 12.77

12. ITC Corporation Limited - - 13,411,7779 12.77

101


(cont’d)



13. Galaxyway Investments Limited - - 13,411,77710 12.77

14. Chinaview International Limited - - 13,411,77711 12.77

15. Dr Chan Kwok Keung, Charles - - 13,411,77712 12.77

Notes:1. Deemed interest by virtue of his interest in Sepenah Emas (M) Sdn Bhd.2. Deemed interest by virtue of its interest in PSC Resort Pte Ltd.3. Deemed interest by virtue of its interest in PSC Corporation Limited.4. Deemed interest by virtue of its interest in Rich Life Holdings Pte Ltd.5. Deemed interest by virtue of its interest in Hanny Magnetics (B.V.I.) Limited.6. Deemed interest by virtue of its interest in Hanny Holdings Limited.7. Deemed interest by virtue of its interest in Famex Investment Limited.8. Deemed interest by virtue of its interest in Mankar Assets Limited.9. Deemed interest by virtue of its interest in ITC Investment Holdings Limited.10. Deemed interest by virtue of its interest in ITC Corporation Limited.11. Deemed interest by virtue of its interest in Galaxyway Investments Limited.12. Deemed interest by virtue of his interest in Chinaview International Limited.

LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 15 MAY 2008 (CONT’D)

102

ANALYSIS OF SHAREHOLDINGSAS AT 30 APRIL 2008(cont’d)

LIST OF DIRECTORS’ SHAREHOLDING AS AT 15 MAY 2008



1. Datuk Azzat Bin Kamaludin 767,338 0.73 - -

2. Dato’ Dr Lian Chin Boon - - 20,0001 0.02

3. Dato’ Dr Shahir Bin Nasir - - - -

4. Victor Chua Chee Wey - - - -

5. Leong Chew Meng - - - -

6. Mah Siew Chean - - 33,600,0002 32 .00

7. Ruthlene Binti Abu Sahid 1,000,000 0.95 - -

8. Tan Sri Datuk Seri Abu Sahid Bin Mohamed (Alternate Director to Ruhtlene Binti Abu Sahid)

- - - -

Notes: (1) Deemed interested by virtue of family relationship.(2) Deemed interest by virtue of his interest in Sepenah Emas (M) Sdn Bhd.

103


(cont’d)

LIST OF THIRTY (30) LARGEST SHAREHOLDERS/DEPOSITORS AS AT 30 APRIL 2008

Name No. of shares %

1. Maharani Consolidated Holdings Sdn Bhd 19,950,000 19.00

2. Abu Sahid Bin Mohamed 14,674,200 13.98

3. Sepenah Emas (M) Sdn Bhd 13,650,000 13.00

4. PSC Resort Pte Ltd 8,151,118 7.76

5. HDM Nominees (Asing) Sdn Bhd[UOB Kay Hian Pte Ltd for PSC Resort Pte Ltd]

5,260,659 5.01

6. OSK Nominees (Tempatan) Sdn Berhad[Pledged Securities Account for Rega Emas (M) Sdn Bhd]

5,205,900 4.96

7. AllianceGroup Nominees (Asing) Sdn Bhd[Alliance Merchant Nominees (Asing) Sdn Bhd for PSC Resort Pte Ltd]

5,095,000 4.85

8. OSK Nominees (Tempatan) Sdn Berhad[Pledged Securities Account for Cash Deluxe (M) Sdn Bhd]

5,065,500 4.82

9. JF Apex Nominees (Tempatan) Sdn Bhd [Pledged Securities Account for Little Equity (M) Sdn Bhd]

4,773,500 4.55

10.

MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Yeoh Eng Kong]

4,435,200 4.22

11. MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Tan Sri Abu Sahid Bin Mohamed]

4,351,000 4.14

12. Wong Ngiam Kun 2,465,858 2.35

13. Hoo Kok Yong @ Ho Kok Yong 2,077,000 1.98

14. Kenanga Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Wajibmas Jaya Sdn Bhd]

1,156,576 1.10

15. Ruthlene Binti Abu Sahid 1,000,000 0.95

16. Liew Chiew Hoye 890,900 0.85

17. Kenanga Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Hoo Kok Yong @ Ho Kok Yong]

840,800 0.80

104

Name No. of shares %

18. Azzat Bin Kamaludin 750,338 0.71

19. Chua Teck Hwee 711,700 0.68

20. Kenanga Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Nescaya Wangi Sdn Bhd]

635,800 0.61

21. Public Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Tay Moi Huat]

500,000 0.48

22. Public Nominees (Tempatan) Sdn Bhd[Pledged Securities Account for Wee Lan Hiang]

500,000 0.48

23. MKW Jaya Sdn Bhd 470,000 0.45



26. CitiGroup Nominees (Asing) Sdn Bhd[CBNY for DFA Emerging Markets Fund]

159,800 0.15

27. T.S.L. Corporation Sdn Bhd 139,900 0.13

28. Bong May Lee 105,000 0.10

29. Lim Khing Seng 91,000 0.09

30. Ching Tong Joy 66,800 0.06

LIST OF THIRTY (30) LARGEST SHAREHOLDERS/DEPOSITORS AS AT 30 APRIL 2008 (CONT’D)

ANALYSIS OF SHAREHOLDINGSAS AT 30 APRIL 2008(cont’d)

PROXY FORMPROXY FORM

Signed this day of 2008

No. of Shares heldCDS Account No. (i)

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

No. of shares Percentage

Proxy 1

Proxy 2

Total 100%

(Company No. 514941-K)

Notes :

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two) to attend and vote in his / her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless he / she specifies the proportion of his / her holdings to be represented by each proxy.

2. A proxy may but need not be a member of the Company. Where a proxy is not a member, he need not be an advocate, an approved Company auditor or a person approved by the Companies Commission of Malaysia.

3. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the instrument appointing a proxy shall be given under the Company’s Common Seal or under hand of an officer or attorney duly appointed.

4. The instrument appointing a proxy must be deposited with the Secretarial Office at C15-1, Level 15, Tower C, Megan Avenue II, 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof.

* Delete where applicable* (i) Applicable to shares held through a nominee account.

Signature/Common Seal of Member

*I/We NRIC No. / Company No. (FULL NAME IN BLOCK CAPITALS)

of (FULL ADDRESS)

being a member / members of PULAI SPRINGS BERHAD (514941-K), hereby appoint

NRIC No.(FULL NAME IN BLOCK CAPITALS)

of (FULL ADDRESS)

or failing *him / her, NRIC No. (FULL NAME IN BLOCK CAPITALS)or failing *him / her,

(FULL NAME IN BLOCK CAPITALS)or failing *him / her,

of (FULL ADDRESS)

or failing *him / her, *the Chairman of the Meeting as *my / our proxy to attend and vote on my / our behalf at the Eighth Annual General Meeting of the Company to be held at Anugraha Hotel, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim on Friday, 27 June 2008 at 10.00 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated in the space above, the proxy

will vote as he / she thinks fit.)

Resolutions FOR AGAINST

Ordinary Resolution 1 - Re-election of Datuk Azzat Bin Kamaludin

Ordinary Resolution 2 - Re-election of Dato’ Dr. Hj. Shahir Bin Nasir

Ordinary Resolution 3 - Approval of Directors’ Fees

Ordinary Resolution 4 - Re-appointment of Messrs Horwath

Ordinary Resolution 5 - Authority to Allot Shares

Fold along this line (2)

Fold here for sealing

The Company Secretaries

Pulai Springs Berhad (514941-K)C15-1, Level 15, Tower CMegan Avenue IINo. 12, Jalan Yap Kwan Seng50450 Kuala Lumpur

Postage

Fold along this line (1)

notice of the eighth annual general meeting · 2019. 5. 16. · (b) dato’ dr. hj. shahir bin...

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