our vision - meda · our vision to establish the ... the group views its human capital as the...

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OUR VISION

To establish the Group’s reputation as a pioneer in perfectinginnovative development concept and a leading developer of projectswith excellent location and value.

OUR MISSION

To create and introduce innovative concepts and solutions to all theCompany’s businesses via exemplary and dynamic leadership andconsultative networking.

To strive and thrive hard in order to achieve excellence and carve areputation as an ‘innovative, reliable and dependable’ developer.

To constantly provide expedient and effective services to ourcustomers at all levels of operations.

To continually deliver good and quality products as promised and ontime.

To create, develop and provide challenging and rewarding careers forall employees as well as safeguard and enhance the interests of thestakeholders.

To remain creative, firm, adventurous and dynamic as a leadingdeveloper.

CONTENTS

Corporate InformationCorporate StructureChairman’s StatementOperations ReviewBoard Of DirectorsProfile Of DirectorsCorporate Social ResponsibilitiesStatement On Corporate GovernanceStatement Of Directors’ ResponsibilitiesAudit Committee ReportStatement On Internal ControlOther InformationFinancial StatementsAnalysis Of ShareholdingsList Of PropertiesNotice Of Annual General MeetingStatement Accompanying Notice Of

Annual General MeetingProxy Form

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MEDA AT A GLANCE

Meda started its operations in 1993 and was listed on the Main Board of the Bursa Malaysia Securities Bhd under the propertysector on 19 March 2002. The Group’s core activities are property development, investment of properties and hotel business.The Group has successfully completed various properties such as The Summit Subang USJ, The Summit Bukit Mertajam and 10Semantan. The Group also has several on-going property development projects and they are ‘Nusa Dusun Orchard Resort’, KualaLinggi, Melaka; ‘Kota Malim Prima’ in Tanjung Malim Perak and ‘Aman Larkin’, Johor.

Strong customer orientation and innovative products and services are the foundation of Meda’s business. Meda is committed todeliver quality products and services on time. Meda aspires to be a leader in the market by adding value to its core businessesand meeting customers’ needs.

The Group views its human capital as the primary source of success towards achieving its vision and mission. The Group’semployees have a diverse educational and operational background whom will be able to lead the Group. The overall thrust ofMeda Human Resource Strategy is to recruit, reward and retain the best employees.

As Meda moves ahead, it will continue to focus on creating innovative concepts and solutions to its customers and stakeholderswhilst maintaining the highest degree of professionalism and integrity.

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SustainableGrowthGuaranteed

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CORPORATE INFORMATION

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BOARD OF DIRECTORS

Dato’ (Dr.) Teoh Seng FooNon-Executive Director/Chairman

Teoh Seng KianExecutive Director

You Kong HeanExecutive Director/Chief Executive Officer

Chiam Tau MengIndependent Non-Executive Director

Ooi Giap Ch’ngIndependent Non-Executive Director

Kee Lian YongIndependent Non-Executive Director

AUDIT COMMITTEE

ChairmanChiam Tau Meng

MembersOoi Giap Ch’ngKee Lian Yong

REGISTERED OFFICE

9th Floor, Menara SummitPersiaran Kewajipan, USJ 147600 UEP Subang JayaSelangor Darul EhsanWebsite : www.meda.com.myTel : 03-8024 8866Fax : 03-8024 8966

COMPANY SECRETARY

Hew Ling Sze

AUDITORS

Baker Tilly Monteiro Heng(formerly known as Monteiro & Heng)Chartered Accountants22-1, Jalan Tun Sambanthan 350470 Kuala Lumpur

STOCK EXCHANGE LISTING

Bursa Malaysia Securities BerhadMain Board

BANKERS

Affin Bank BerhadAlliance Bank Malaysia BerhadAmInvestment Bank BerhadCIMB Bank BerhadMalayan Banking BerhadPublic Bank BerhadSME Bank Berhad

SHARE REGISTRAR

Symphony Share Registrars Sdn. Bhd.Level 26, Menara Multi-PurposeCapital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala LumpurEmail : [email protected] : 03-2721 2222Fax : 03-2721 2530 / 2721 2531

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CORPORATE STRUCTUREM

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CHAIRMAN’S STATEMENT

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Dear Shareholders

On behalf of the Board of Directors of Meda Inc. Berhad (the Company),

I am pleased to present the Annual Report and Financial Statements of the

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Dato’ (Dr.) Teoh Seng FooChairman

FINANCIAL PERFORMANCE

For the financial year ended 31 December 2007, the Group has a revenue of RM72.4 million. The Group registered a post-tax lossof RM99.9 million for the current financial year largely due to recognition of impairment losses of RM92.6 million from certainproperties within the Group.

The Group’s total assets and shareholders’ fund stood at RM602.3 million and RM168.96 million respectively as at 31 December2007.

CORPORATE DEVELOPMENTS

In its endeavour to improve its cashflow position, the Group continues to review and implement various strategies including assetsrealization, restructuring of borrowings, re-launching of existing projects and actively exploring the opportunities in acquiring morelandbanks for property development.

DISPOSAL OF THE SUMMIT SUBANG USJ

On 1 August 2007, Meda Development Sdn Bhd, a wholly-owned subsidiary of the Company entered into a Conditional Sale andPurchase Agreement with Mayban Trustee Berhad, the trustee of AmFIRST Real Estate Investment Trust, to dispose its propertyknown as The Summit Subang USJ comprising of a retail podium, an office tower block, a hotel building and car parking bays fora total cash consideration of RM260.0 million.

The proposed disposal of the property was approved by shareholders via an Extraordinary General Meeting held on 18 January2008 and the approval was granted by the Securities Commission on 12 March 2008. The disposal was completed on 31 March2008.

CHAIRMAN’S STATEMENT(cont’d)

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GROWINGOURVALUES

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PROPERTY DEVELOPMENT

Currently, the Group has the following unlaunched landbanks which are earmarked for the following proposed developments:

First parcel of landed properties at Larkin, Johor which comprises 21/2 storey terrace houses shall be launched in 3rd quater 2008.The Group shall be launching the resort homes and/or bungalow lots project located at Kuala Linggi, Melaka in the 3rd quarter ofYear 2008.

PROPERTY INVESTMENT

Despite the disposal of The Summit Subang USJ, the Group still has The Summit Bukit Mertajam which comprises of retailpodium, hotel and office tower.

HUMAN RESOURCE DEVELOPMENT

The Group will continue to hire experienced/professionally trained employees as part of the team to steer the Group in achievingits objectives. Regular trainings will be conducted to further develop and enhance the employees’ competencies and skills. TheGroup will continue to provide conducive working environment and opportunities for employee’s career advancements, and toboost their morale, dedication and commitment in the performance of their duties.

AWARDS AND ACHIEVEMENTS

The Company was awarded the BS EN ISO 9001 : 2000 certification by AJA Registrars Ltd, UK (UKAS Quality Management) on1 April 2008 which covers the scope of Provision of Property Development & Project Management, including ContractAdministration and After Sales Service.

FUTURE PROSPECT

Consumer sentiments, especially in the property sector, are envisaged to further improve with the increase in disposablehousehold income arising from increments in wages in the private sector and in civil service, relaxation of regulation on EPFwithdrawals to service housing loans, waiver of real property gains tax, government relaxations of approval process and foreignproperty investors.

Notwithstanding the aforesaid, the property industry continues to face many challenges particularly the escalating prices ofbuilding materials. The Group is prepared to meet the challenges ahead and will remain conscientious and proactive in dealing withall opportunities or any threats which may arise.

Proposed Developments Location Size (Acres)

a) Mixed Development Larkin, Johor 61.83b) Resort Home, Bungalow, Bungalow Lots Kuala Linggi, Melaka 444.63

and Orchard Lots

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The Group endeavours to actively focus on local niche market property developments, i.e. pocket conceptual development orrather “boutique” development, and continues to be on the lookout for prime lands based on strategic locations and marketdemand to increase the current size of its landbanks.

The completion of the disposal of The Summit Subang USJ represents an opportunity for the Group to unlock its investment inthe property to substantially reduce its borrowings, interest expenses and gearing, thus improving its balance sheet and cashflowposition and providing the Group with the resources needed by the Group to expand and further grow its core business in propertydevelopment with the ultimate objective to enhance shareholders’ value and returns in the future.

DIVIDEND

The Board does not recommend the payment of any dividend for the financial year ended 31 December 2007.

APPRECIATION

I would like to extend my gratitude to our Board of Directors, management team and staff for their dedication and commitmentshown to the Group.

Heartfelt appreciation is also extended to our customers, business associates, consultants and bankers for their continued supportand understanding and to all government agencies and regulatory authorities for their invaluable guidance and assistance.

Finally, on behalf of the Board of Directors, I wish to express our profound appreciation for the patience and support shown by ourshareholders as we continue to develop plans and implement strategies in driving our Group forward.

Dato’ (Dr.) Teoh Seng FooChairman


Property Development Property Investment Property Management

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PropertyInvestment49%

PropertyInvestment28%

PropertyDevelopment35%

PropertyDevelopment34%

Hotel15%

Hotel36%

Others1%

Others2%

Revenue Generated by Division

The revenue generated and assets employed by each of the divisions for the financial year ended 31 December2007 are shown below.

Assets Employed by Division

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Property DevelopmentThe 2007 investment climate in Malaysia has been classified between average inthe suburban to active, especially in Klang Valley. This is due to the interestshown from both the local and foreign investors more particularly since theabolishment of real property gain tax and the amendments of the REIT regulationsby the securities.

2007 marks an eventful year for the retail subsector in Klang Valley with thecompletion of KL Pavilion, The Gardens and Sunway Pyramid 2. Tagging along arethe several upmarket residential properties near to KLCC with most of theseproperties chalking up more than 80% sales.

Niche high end development will continue to grab the attention of investors asdemand for prime location which is scarce and lifestyle projects are strong inselected locations.

Boutique developments, rather than township developments will attract theattention of young professional as these projects would definitely be unique andcreatively designed, satisfying the appetite of these future buyers.

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OPERATIONS REVIEW (cont’d)

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10 Semantan,Kuala Lumpur

10 Semantan, Kuala Lumpur

During this financial year, the Group has appointed Messrs Kong & Jaafar(Property Management) Sdn Bhd to manage this project. Messrs Kong &Jaafar (Property Management) Sdn Bhd has on record managed more than30 exclusive projects in Klang Valley and this appointment is based on itspool of resources and expertise in managing upmarket residentialproperties.

Similarly, Peninsula Residence All Suite Hotel has been officially opened byThe Minister of Federal Territories, YB Datuk Seri Zulhasnan Rafique on 28May 2007.

Currently registering an encouraging 60% occupancy rate, PeninsulaResidence All Suite Hotel is offering its services to all its hotel guests aswell as the residents in Block B.

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Nusadusun Orchard Resort, Linggi, Melaka

During the financial year, more effort in respects of upkeeping, maintenanceand improvement has been put into this resort township. As of todate, thisproject has been fully sold for both Phase 1 and 2, and plans are underway tolaunch its Phase 3 development known as Nusavilla, a 342 units of KampungBungalow and/or bungalow lots which shall be launched in 3rd quarter of Year2008.

With these improvements, it is anticipated that more owners shall submit theirbuilding plans to develop their weekend resort bungalows. In addition, it is alsopleasing to note that more owners have started to move into their newbungalow and started to harvest their fruits.

Nusadusun Orchard Resort,Melaka

We are committed to thinking ahead andstaying ahead – in ways that matter mostto our clients

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Located only 30 minutes from Port Dickson and 40 minutes from Melakatown, Nusadusun Orchard Resort offers affordable resort properties,coupled with unique and natural environment situated within the state’stourism belt of Kuala Linggi, it would be interesting to see more developmentundertaken by the state government in this tourism belt which will definitelyincrease the value of properties nearby especially in Nusadusun.

One of the developments successfully undertaken by the state is the KualaLinggi barter trade centre and this port has been very active with its activitiesof barter trading with traders from Indonesia. Very soon, ferry servicesundertaken by a private consortium would be ferrying tourist from Indonesiato Melaka, and this would definitely increase commercial activities in thisregion.

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Semaba Park, Kuching, Sarawak

During this financial year, Semaba Park has been completed with the issuanceof Certificate for Occupation for both its link houses and semi detachedhouses. The Group is open to more investment opportunity in East Malaysiaand hope to continue to make its presence felt in East Malaysia.

Kota Malim Prima, Tanjung Malim, Perak

During this financial year, property development in Tanjung Malim suffered aserious setback, especially when the numbers of unsold properties in TanjungMalim built by other property developers have increased dramatically. Severalnew developments have been launched by other property developers but didnot garner positive response. In view of this poor market demand, the Groupdecides to defer its development of Kota Malim Prima Township until themarket sentiment in Tanjung Malim improves.

Semaba Park, Sarawak

Kota Malim Prima, Perak

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Aman Larkin, Johor

Aman Larkin, Johor Bahru

During this financial year, the Group is preparing for its launch of Parcel G,179 units of 21/2 storey link houses in 3rd quarter of Year 2008.

Affordably price from RM268,800.00 onwards, the Group expects to achievesatisfactory result in its launch.

Located right in the centre of Johor Bahru, Aman Larkin is easily accessibleto other major parts of the city. This prime location, coupled with thedevelopment of landed properties instead of multi storey apartments, willdefinitely attract favourable responses from investors and owner occupiers.

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Property Investment

DeliveringGrowth

andExcellence

The Summit Hotel, Bukit Mertajam

Further to the recent Malaysian Property Summit 2008 organized by the Association of Valuers & PropertyConsultants in Private Practice Malaysia in Kuala Lumpur, the Group believes that the local hospitality industrywould continue performing well in parallel to tourism sector growth and growing foreign investments, which arestrongly promoted by Malaysia Government, and also attributed by the expanding leisure markets in Malaysia.

During the financial year, The Summit Hotel, Bukit Mertajam has recorded revenue of RM4.25 million against RM3.7million in Year 2006.

The Summit Hotel, Bukit Mertajam is strategically located in the heart of Bukit Mertajam, which is very near to thePrai Industrial Estate, Kulim Hi-Tech Park, Juru Industrial Park, Bukit Minyak and Bukit Tengah Industrial Estate andthe Auto City Township. The hotel has 168 bedrooms comprising Superior, Deluxe and Suite. Other facilities andoutlets include the Aquarius Restaurant overlooking the pool, the pillarless Grand Ballroom designed toaccommodate 400 persons and 2 meeting rooms with capacity of 50 persons each. The Group has put in place anew management team for The Summit Hotel, Bukit Mertajam and the performance of The Summit Hotel, BukitMertajam is expected to be further improved.

Retail Complex, Carpark & Hotel, Bukit Mertajam

On the other hand, The Summit Retail Complex, Bukit Mertajam also had undergone a series of strategic exercisesin optimizing the tenants mix and other necessary improvement works.

Peninsula Residence All Suite Hotel, Jalan Semantan, Kuala Lumpur

The latest and newest brand under The Summit Hotels & Resorts is the Peninsula Residence All Suite Hotel, aboutique business class suite that emphasizes on refined services, state-of-the-art amenities, and modern comfortscomprising 120 unit suites with a selection of room sizes from Studio Suite to luxurious Premier Suite. Each of thesuite features a thoughtfully decorated living room, a separate bedroom with a queen-sized bed, en-suite bathroomand a well equipped dry kitchen. Located strategically in the heart of Damansara Heights, Peninsula Residence AllSuite Hotel is a mere 15-minute drive to the Kuala Lumpur city centre, and within reach to both the commercial hubof Kuala Lumpur and Bangsar. Peninsula Residence All Suite Hotel was launched officially on 28 May 2007 by TheMinister of Federal Territories, YB Datuk Seri Zulhasnan Rafique. For the financial year, the Peninsula Residence AllSuite Hotel registers a sales turnover of RM2.4 million.

Looking forward, the hotel division financial performance shall be further enhanced due to the anticipated room ratesincrease and the growing tourism and hospitality market.

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Property Management

We’re CreatingOpportunities for

GROWTH through

Innovation.

The Summit Subang USJ Comprising Hotel, Retail Podium, Carparks& Office

The Group is expecting further enhancement in the performance of the operation ofThe Summit Subang USJ comprising hotel, retail podium, carparks and office towerafter the completion of sale of The Summit Subang USJ based on the expertise ofAmARA, the Real Estate Investment Trust manager of AmFIRST Real EstateInvestment Trust, which is part of the ARA group involved in the management of RealEstate Investment Trusts in Hong Kong, Malaysia and Singapore.

AmARA will bring a wealth of international property management experience andexposure which the Group believes will enhance the performance and returns of theProperty.

The Group is further of the opinion that there are rooms for improvement in terms ofthe rental rate and occupancy rate as AmFIRST Real Estate Investment Trust hasbetter financial capability and expertise to maximize returns of the Property.

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BOARD OF DIRECTORS

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Standing from left to right

Kee Lian Yong

Ooi Giap Ch’ng

You Kong Hean

Chiam Tau Meng

Sitting from left to right

Teoh Seng Kian

Dato’ (Dr.) Teoh Seng Foo(Chairman)

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DIRECTORS’ PROFILE

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Dato’ (Dr.) Teoh Seng Foo, aged 51, was appointed to the Board as President on28 December 2001 and re-designated to non-executive position on 1 May 2007.Dato’ was appointed Chairman of the Board on 29 June 2007.

An Accountant by profession, Dato’ is a Chartered Accountant of the MalaysianInstitute of Accountants and a Fellow Member of the Chartered Institute ofManagement Accountants, United Kingdom. Dato’ also holds a Diploma inCommerce from Tunku Abdul Rahman College. Dato’ was conferred the HonoraryDoctorate in Business Administration by University of Abertay Dundee, UnitedKingdom on 2 November 2002 and he is currently a Patron of the University ofAbertay Foundation.

Dato’ has wide experience in commerce and industry, having held seniormanagement positions in multi-nationals such as Intel Technology, Woodward &Dickerson Inc. and PricewaterhouseCoopers. Dato’ is currently the Chairman ofthe Education Committee in the Malaysian-China Business Council. In addition,Dato’ holds these board positions in the following public listed companies:

EcoFirst Consolidated BerhadSEG International Bhd

Dato’ is the Chairman of the Executive, Nominating and RemunerationCommittees.

Dato’ has direct and indirect shareholdings of 25,657,824 and 44,065,008 ordinaryshares of RM0.50 each respectively in the Company. He is deemed to have aninterest in all the shares held by the Company in the subsidiaries by virtue of hissubstantial interest in shares in the Company.

Dato’ is a brother to Teoh Seng Aun, a substantial shareholder of the Companyand Teoh Seng Kian, the Director cum substantial shareholder of the Company.Aside from this, he has no other family relationship with any other Director and/ormajor shareholder of the Company nor any convictions for offences within the past10 years.

Dato’ has not entered into any transaction, whether directly or indirectly, whichhave a conflict of interest with the Company, other than those disclosed in Note38 in the accompanying financial statements.

DATO’ (DR.)TEOH SENG FOO

Chairman(Non-Independent /

Non-Executive) - Malaysian

- Executive Deputy Chairman- President / Executive Director

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TEOH SENG KIAN

Director(Non-Independent /Executive) - Malaysian

Teoh Seng Kian, aged 48, was appointed to the Board on 28 December 2001. Hegraduated with a Bachelor of Engineering (Mechanical) degree from Australia in1984.

He started his career with an Australian company specializing in manufacturing ofbuilding materials. Upon returning to Malaysia, he served as a director in acompany involved in quarrying and infrastructure construction. He has been withthe Meda Inc. Group since 1993 as the Group Project Director.

He is also the Chairman of the Risk Management Committee and a member of theExecutive and Tender Committees of the Company.

He has direct and indirect shareholdings of 33,526,024 and 44,065,008 ordinaryshares of RM0.50 each respectively in the Company. He is deemed to have aninterest in all the shares held by the Company in the subsidiaries by virtue of hissubstantial interest in shares in the Company.

He is a brother to Dato’ (Dr.) Teoh Seng Foo, the Chairman cum substantialshareholder and Teoh Seng Aun, a substantial shareholder of the Company. Asidefrom this, he has no other family relationship with any other Director and/or majorshareholder of the Company nor any convictions for offences within the past 10years.

He has not entered into any transaction which have a conflict of interest with theCompany, other than those disclosed in Note 38 in the accompanying financialstatements.

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DIRECTORS’ PROFILE (cont’d)

YOU KONG HEAN

Chief Executive Officer(Non-Independent / Executive)

- Malaysian

You Kong Hean, aged 48, was appointed to the Board on 28 February 2008 as theChief Executive Officer of the Company. He is a Mechanical Engineer byprofession & an incorporated member of IEM. He also holds a MBA(Entrepreneurship).

He started his career as a M & E Engineer in 1983 from which time he hadundertaken various construction and engineering works in the property andconstruction industries.

He has garnered a rich background in the areas of business development, contractadministration, property development, project management (construction andengineering industry) and water concessionaire in Asia covering countries such asChina, Vietnam, Cambodia, Sri Langka and Malaysia.

He has been the Executive Director for Shandong Changle Salcon Water SupplyCo. Ltd. and a property company.

He is also the Chairman of the Tender Committee and a member of the Executiveand Risk Management Committees of the Company.

He does not hold any shares in the Company and subsidiaries neither does hehave any family relationship with any Director and/or major shareholder. He doesnot have any conflict of interest with the Company nor any convictions for offenceswithin the past 10 years.

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Chiam Tau Meng, aged 54, was appointed to the Board on 28 December 2001. Hegraduated with a Bachelor of Commerce Degree majoring in Accountancy from theUniversity of Otago, Dunedin, New Zealand in 1976. He was admitted as anAssociate Chartered Accountant of the Institute of Chartered Accountants of NewZealand in 1980. He is also a Chartered Accountant of the Malaysian Institute ofAccountants.

He started his career in 1976 as Finance Manager of Tolley Industries Ltd (NewZealand) and in 1979, he joined Malaysian Containers (1974) Berhad as FinanceManager cum Company Secretary. In 1984, he joined Menang Corporation (M)Berhad as General Manager-Corporate Services and in 1989, he joined Bee HinHoldings Sdn. Bhd. as General Manager-Corporate Finance in charged of thereconstruction scheme under Section 176 of the Companies Act, 1965 (the“Scheme”) on Kuala Lumpur Industries Berhad. Upon successful completion ofthe Scheme in 1992, he joined the management consultancy practice of aninternational accounting organization and in 1994, he set up his own consultingpractice namely CTM Consulting.

He currently sits on the Board of Menang Corporation (M) Berhad, ComintelCorporation Berhad and Yikon Corporation Berhad as an Independent Non-Executive Director and on LCL Corporation Berhad as Non-Independent Non-Executive Director.

He is the Chairman of the Audit Committee and a member of the NominatingCommittee of the Company.


CHIAM TAU MENG

Director(Independent / Non-Executive)- Malaysian


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OOI GIAP CH’NG

Director(Independent / Non-Executive)

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Ooi Giap Ch’ng, aged 49, was appointed to the Board on 28 December 2001. Hegraduated with a Bachelor of Law degree and a Bachelor of Economics degreefrom the Australian National University and was called to the Malaysian Bar in1987. He has more than 21 years’ experience in law practice, mainly in area ofcommercial, property and corporate law. He is partner of a legal firm in KualaLumpur. He currently sits on the Board of CME Group Berhad and InfortechAlliance Berhad.

He is also a member of the Audit, Nominating and Remuneration Committees ofthe Company.


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Kee Lian Yong, aged 51, was appointed to the Board on 28 February 2008. He isa Chartered Accountant of the Malaysian Institute of Accountants and a FellowMember of the Chartered Association of Certified Accountants, United Kingdom.

He has held senior management positions in several public listed companiesbefore venturing into business and has wide experience in corporate andmanagement. He was a director of SEG International Berhad and SYF ResourcesBerhad and Chief Executive Officer of EcoFirst Consolidated Berhad until the year2005. He then joined Metroplex Berhad and was appointed as ManagingDirector/Chief Executive Officer from year 2005 to 2007. He is currently on hisown business and also as a management consultant.

He is a member of the Audit and Remuneration Committees of the Company.


KEE LIAN YONG

Director(Independent / Non-Executive)- Malaysian


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CORPORATE SOCIALRESPONSIBILITY

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ANG POW WITH LOVE 2007

Those who are less fortune will not be forgotten by corporate citizen like Meda.80 children from Compassion home and RECTAR were invited to celebrate theChinese New Year in advance on 10 Feb 2007 at The Summit Subang USJ. Thisevent offered an opportunity to share our love with the children from the homes.

BALIK KAMPUNG, RUMAH SELAMAT AWARENESS CAMPAIGN

Meda worked together with Subang Jaya Alert - the eyes and ears of Subang Jayato launch the Campaign “Balik Kampung – Rumah Selamat”. This campaign was toprevent crimes that may happen at the neighbourhood during the festival session.Under the programme, the Subang Jaya neighbourhood can register their name toOCS Balai or community representative to take an eye on the community safety.The launch was graced by YDH Dato’ HJ Ismail bin Omar, Ketua Polis Ibu PejabatPolis Di Raja Selangor at The Summit Subang USJ dated 11 Febuary 2007.

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Meda is committed in discharging its Corporate Social Responsibility with a view that such a commitment willenhance Meda’s stakeholders value in the longer term.

During the financial year, Meda had organized/involved in various community or social events as described herein aspart of its Corporate Social Responsibility.

As a property Developer, Meda had embraced the Corporate Social Responsibility efforts in its product perspectiveswhen planning and implementing its property development projects to ensure a sustainable built environment andenhancing quality of lives to its customers.

Highlight of Corporate Social Responsibility activities undertaken by Meda in Year 2007:

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KEMPEN GERAKAN MEMBACA – DISTRICT PETALING JAYA

An annual campaign, Selangor Public Library Corporation was held at The SummitSubang USJ on 12 August 2007. Themed “Bangsa Membaca, Bangsa Berjaya”(a reading society, a successful society).

UNVEILING OF RUKUN NEGARA LOGO

In response to the government’s call to the nation to embrace Rukun Negara, TheSummit Subang USJ participated in the Rukun Negara campaign on 8 October2007.

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CORPORATE SOCIAL RESPONSIBILITY(cont’d)

CORPORATE SOCIAL RESPONSIBILITY(cont’d)

JOY OF COMBINED FESTIVAL

An eventful celebration of Festival organized by the Rukun Tetangga USJ 2/ USJ6 was held at The Summit Subang USJ on 15 December 2007. More then 300people from the old folk’s homes, orphanage, residents of drug rehabilitationcenters, welfare homes such as Beautiful Gate, Rumah Juara, Grace Home,Sapheads Home, Compassion Home, Rumah Kids, Rumah Anak Yatim Al-Amin,Pusat Jagaan Baitul Siqah, Special Kids of SMK USJ 4 and Lifezone DrugRehabilitation Center joined the celebration.

WINTER SOLSTICE CELEBRATION CUM CHARITY SALES 2007

Meda hosted the first time ever largest winter solstice celebration at The SummitSubang USJ, Subang area in conjunction with Yayasan Humanistic from 15December 2007 to 16 December 2007. The objective was to spread a festivecheer and promote togetherness among Malaysian. 100 guests from Ti-Ratana oldfolks home, Sg Way old folk home and Beautiful Gate Disable Centre were invitedto attend the celebration. 32

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CORPORATE SOCIAL RESPONSIBILITY

INTRODUCTION

The Board of Directors (“the Board”) recognises the importance of the Principles and Best Practices set out in the MalaysianCode of Corporate Governance (“the Code”) as a key factor towards achieving optimal governance framework and process inmanaging the business and operational activities of the Group.

The Board is committed to ensure that good corporate governance practice is observed throughout the Group as a fundamentalpart of discharging its responsibilities towards enhancing business sustainability and corporate governance with the ultimate aimof enhancing stakeholders’ value. The statement below sets out how the Group has applied the Principles of the Code ofCorporate Governance and the extent of compliance with the Best Practices of good corporate governance as set out in Part 1and 2 of the Code.

BOARD OF DIRECTORS

Composition and Balance

The Board, led by a Non-Executive Chairman, is made up of six (6) members, comprising two (2) Executive Directors (inclusiveof Chief Executive Officer) and four (4) Non-Executive Directors. The profiles of the members of the Board are provided in theAnnual Report.

The Board comprises Directors from different professional backgrounds and collectively bring with them depth and diversity inexperience and expertise to the Group’s operation. The Directors’ wide-ranging experience and expertise provide the Group withthe strategic thinking which is vital for the success of the Group.

There are three (3) Independent Non-Executive Directors on the Board. These Independent Non-Executive Directors play a pivotalrole in ensuring corporate accountability as they provide an essential source of impartial and professional advice and judgment.

There is a clear division of responsibilities between the Chairman and the Chief Executive Officer (CEO)/ Executive Director toensure a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and standards of conduct.The CEO has overall responsibility for the Group’s business operations, organizational effectiveness and the implementation ofBoard policies and decision. Generally, the Executive Directors are responsible for making and implementing operational andcorporate decisions. Non-Executive Directors play key supporting roles, contributing their knowledge and experience towards theformulation of policies and in the decision-making process. Where a potential conflict of interest may arise, it is mandatorypractice for the Director concerned to declare his interest and abstain from the decision-making process.

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Name of Directors Attendance % of Attendance

Dato’ (Dr.) Teoh Seng Foo 7/8 88Teoh Seng Kian 6/8 75You Kong Hean (appointed on 28.2.08) N/A N/AChiam Tau Meng 8/8 100Ooi Giap Ch’ng 8/8 100Kee Lian Yong (appointed on 28.2.08) N/A N/ATan Sri Dato’ Mohd Ramli Bin Kushairi (resigned on 4.6.07) 3/4 75Ong Bok Siong (resigned on 29.6.07) 4/4 100Dato’ Dr. Loga Bala Mohan a/l Jaganathan (resigned on 29.6.07) 3/4 75Lim Hock Chye (resigned on 15.2.08) 4/4 100

Supply of Information

The Directors have full and timely access to information concerning the Company and the Group. Prior to the Board meeting, alldirectors receive the agenda together with relevant reports and Board papers containing adequate information to the business ofthe meeting. The Directors are also given sufficient time to obtain further explanation or clarification. In furtherance of their duties,the Directors have access to the advice and services of the Company Secretary and to all information within the Companywhether as a full Board or in their individual capacity. Where necessary, the Directors engage independent professionals foradvice at the Company’s expense to enable them to discharge their duties with full knowledge of the cause and effect.

Board Committees

The Board has delegated specific responsibilities to the established board committees. Each committee operates under theirrespective approved terms of reference. These committees have the authority to examine particular issues and report to theBoard their recommendations. The ultimate responsibility for decisions lies with the Board.

Audit Committee

The composition, terms of reference of the Audit Committee are set out separately in the Audit Committee Report.

Nomination Committee

In line with the terms of reference, the Committee had evaluated the effectiveness of the Board as a whole, the variousCommittees and each individual Director’s contribution to the effectiveness on the decision-making process. The NominationCommittee comprises the following members:

1. Dato’ (Dr.) Teoh Seng Foo - Chairman (Non Independent Non-Executive Director)

2. Chiam Tau Meng (Independent Non-Executive Director)

3. Ooi Giap Ch’ng (Independent Non-Executive Director)

Board Meetings

During the financial year ended 31 December 2007, eight (8) Board meetings were held and the summary of attendance of theBoard from 1 January 2007 to 31 December 2007 is as follows:

STATEMENT ONCORPORATE GOVERNANCE (cont’d)

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Remuneration Committee

The Remuneration Committee is responsible for drawing up the remuneration policy framework and making recommendations tothe Board on the remuneration packages and benefits extended to the Executive Directors. The Executive Directors do notparticipate in decisions relating to their own remuneration. The Board as a whole determines the remuneration package of Non-Executive Directors including the Non-Executive Chairman with the Director concerned abstaining from participating on decisionsin respect of his individual remuneration. The Remuneration Committee comprises the following members:

1. Dato’ (Dr.) Teoh Seng Foo - Chairman(Non Independent Non-Executive Director)

2. Ooi Giap Ch’ng(Independent Non-Executive Director)

3. Kee Lian Yong (appointed on 3.3.08)(Independent Non-Executive Director)

The details relating to the remuneration of Directors of the Company for the financial year under review are as follows:

a. Aggregate remuneration of the Directors categorised into appropriate components

Directors’ Training

All Directors except new appointment are in the process of completing the Mandatory Accreditation Programme prescribed bythe Bursa Malaysia Securities Berhad (“Bursa Malaysia”). During the year, the Directors attended various conferences andprogrammes, amongst others, including legal updates, financial reporting standards and taxation. The Directors continue toundergo other relevant training programmes as appropriate, to broaden their perspective and keep abreast with developments inregulations and business practices.

Number of DirectorsRange of Remuneration Executive Non-Executive

Below RM50,000 - 4RM50,001 to RM100,000 - 1RM100,001 to RM150,000 1 -RM150,001 to RM200,000 1 -RM200,001 to RM250,000 1 -

b. The number of Directors whose total remuneration fall within the following bands:

Meeting Benefits StatutorySalary Fees Allowances in kind Contribution Total

(RM) (RM) (RM) (RM) (RM) (RM)

Executive Directors 508,000 - - 23,698 145,986 677,684Non-Executive Directors 48,000 132,000 35,000 - 12,572 227,572


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Re-election

All Directors will retire at regular intervals by rotation once at least every three years and they shall be eligible for re-election.

In accordance with the Articles of Association of the Company, all Directors who are appointed by the Board during the year aresubject to election by shareholders at the forthcoming annual general meeting.

RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The Group recognises the importance of keeping shareholders and investors informed of the Group’s business activities,corporate development and financial performance. Such information is disseminated via the Company’s Annual Report, quarterlyfinancial results and various announcements made through Bursa Malaysia.

Shareholders and members of the public may access the Group’s website at www.meda.com.my and Bursa Malaysia’s websiteto obtain the latest information on the Group. Queries or concerns regarding the Group may be directed to Chiam Tau Meng,senior independent Non-Executive Director.

Annual General Meeting

The annual general meeting (“AGM”) remains the principal forum for dialogue with shareholders. It provides shareholders with anopportunity to seek clarifications on the Group’s business and performance. Shareholders are encouraged to meet andcommunicate with the Board at AGM and to vote on all resolutions.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Company’s financial statements are prepared in accordance with the requirements of the applicable approved FinancialReporting Standards (“FRS”), the approved accounting standards for entities other than private entities issued by the MalaysianAccounting Standards Board in Malaysia and the provisions of the Companies Act, 1965. The Board is responsible to ensure thatthe financial statements of the Group and the Company give a true and fair view of the state of affairs of the Group and theCompany.

The Company presents the Group’s financial results on a quarterly basis as well as on an annual basis via public announcements.The Audit Committee assists the Board to ensure accuracy and adequacy of all information for disclosure.


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Internal Control

The Board is responsible for maintaining a sound system of internal control, which provides reasonable assessment of effectiveand efficient in operations, financial controls and compliance with laws and regulations as well as with internal procedures andguidelines. A Statement on Internal Control of the Group is set out on Pages 43 to 45 of the Annual Report.

The Board and Management developed an ongoing process for identifying, evaluating and managing significant risks that may befaced by the Company.

The Risk Management Committee comprises the following members:

1. Teoh Seng Kian (Chairman)2. You Kong Hean3. Tan Ken Boo

The purpose of the Risk Management Committee is to assist in:

1. Maintaining integrity and confidence among shareholders and the public;2. Strengthening the Group’s competitive, strategic and operational efficiency to enhance the shareholders’ value;3. Minimizing unexpected adverse impact to earnings and returns to shareholders; and4. Safeguarding the assets and resources within the Group.

Relationship with Auditors

The Board through the establishment of an Audit Committee maintains a formal and transparent arrangement with the Company’sauditors, both external and internal. The Audit Committee meets with the External Auditors at least twice a year. These meeting(s)enable exchange of views on issues requiring attention. The role of the auditors and their participation during the financial yearare stated in the report of the Audit Committee of this Annual Report.

Compliance Statement

The Board is satisfied that in 2007 the Company has complied with the best practices of the Code save for the disclosure ofdetails of the remuneration of each Director. The Board is of the view that the transparency and accountability aspects ofCorporate Governance as applicable to Directors’ Remuneration are appropriately served by the band disclosure pursuant to theListing Requirements of the Bursa Malaysia.


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The Directors are legally required to prepare financial statements for each financial year which have been made out in accordancewith the applicable approved accounting standards and give a true and fair view of the state of affairs of the Group and theCompany at the end of the financial year and of the results and cash flows of the Group and Company for the financial year.

In preparing the financial statements, the Directors have used appropriate accounting policies that are consistently applied andsupported by reasonable as well as prudent judgements and estimates, and that all accounting standards which they considerapplicable have been followed during the preparation of the financial statements.

The Directors are responsible for ensuring that the Group keeps proper accounting records which disclose with reasonableaccuracy the financial position of the Group and Company and which enable them to ensure that the financial statements complywith applicable approved accounting standards.

The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets ofthe Group, and to detect and prevent fraud and other irregularities.

STATEMENT OF DIRECTORS’RESPONSIBILITIES INRESPECT OF THE AUDITEDFINANCIAL STATEMENTS

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The Board is pleased to present the report of the Audit Committee for the financial year ended 31 December 2007.

Member

The present members of the Audit Committee comprises the following:

Chiam Tau Meng – Chairman(Independent Non-Executive Director)Ooi Giap Ch’ng(Independent Non-Executive Director)Kee Lian Yong (Independent Non-Executive Director)

Terms of Reference

The Audit Committee (“the Committee”) is governed by the terms of reference that was formally endorsed by the Board on 29December 2001 and 17 March 2008. The terms of reference are set out in pages 40 to 42.

Meetings

The Committee convened six (6) meetings for the financial year ended 31 December 2007. The details of attendance of the AuditCommittee members are as follows:

Summary of Activities during the Financial Year

The Audit Committee is empowered to carry out the following duties in accordance with its terms of reference:

• Reviewed the external auditors’ scope of work and audit plans for the financial year. Prior to the audit, representatives from the external auditors presented their audit strategy and plan.

• Reviewed with the external auditors the results of the audit and the audit report.

• Considered the appointment of external auditor, the audit fee and any question of resignation or dismissal.

• Reviewed the Group’s internal audit plan.

Members Attendance % of Attendance

Chiam Tau Meng 6 100Ooi Giap Ch’ng 6 100Teoh Seng Kian (resigned on 28.2.08) 5 83Kee Lian Yong (appointed on 28.2.08) N/A N/A

AUDIT COMMITTEEREPORT

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• Assessed the effectiveness of the system of internal control of the Group by reviewing the internal audit reports and management responses and ensuring significant findings are adequately addressed by management.

• Reviewed the audited financial statements of the Company prior to submission to the Board for their consideration and approval. The review was to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act 1965 and the applicable approved Financial Reporting Standards in Malaysia (“FRS”).

• Reviewed the Group’s compliance in particular the quarterly and year-end financial statements with the Listing Requirements of the Bursa Malaysia Securities Berhad, FRS and other relevant legal and regulatory requirements.

• Reviewed pertinent issues of the Group which had a significant impact on the results of the Group.

• Reviewed the quarterly unaudited financial results announcements before recommending them for the Board’s approval. The review and discussions were conducted with the CEO and the Deputy General Manager, Corporate Finance & Accounts.

• Reviewed related party transactions entered into by the Group.

• Reviewed and report to the Board the extent of the Group’s compliance with the provisions set out under Part 2 Guideline BB of the Malaysian Code on Corporate Governance for the purpose of preparing the Corporate Governance Statement and Statement on Internal Control pursuant to the Bursa Malaysia Securities Berhad Listing Requirements.

Internal Audit Function

The internal audit department is independent of the activities or operations of other operating units. The principal role of thedepartment is to undertake independent regular and systematic reviews of the systems of internal control so as to providereasonable and not absolute assurance that such systems continue to operate satisfactorily and effectively. It is the responsibilityof the internal audit department to provide Committee with independent and objective review that reports on the state of internalcontrol of the various operating units within the Group and the extent of compliance with the Group’s established policies andprocedures as well as the relevant statutory requirements.

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

Objectives

The objective of the Audit Committee is to review the adequacy and the integrity of the Company’s internal control systems andmanagement information systems, including systems for compliance with applicable laws, regulations, rules, directives andguidelines, as well as to oversee the conduct of the Company’s business and to ensure proper management thereof.

AUDIT COMMITTEE REPORT(cont’d)

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The terms of reference of the Audit Committee shall be as follows:

Membership

The Committee shall be appointed by the Board from amongst it Directors (except alternate directors) which fulfils the followingrequirements:

(a) the audit committee must be composed of no fewer than three (3) members;(b) all the audit committee members must be non-executive directors, with a majority of them being independent directors; and(c) at least one member of the audit committee:

(i) must be a member of the Malaysian Institute of Accountants; or(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and;

(aa) he must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act 1967; or(bb) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the

Accountants Act 1967; or(iii) fulfils such other requirements as prescribed or approved by the Exchange.

The members of the Committee shall select a chairman from among their number who shall be an independent director.

The Board shall within three (3) months of a vacancy occurring in the Committee which result in the number of members reducedbelow three (3), appoint such number of new members as may be required to make up the minimum number of three (3) members.

The Board shall review the term of office and performance of the Committee and each of its members at least once every three(3) years.

Authority

The Committee shall, in accordance with the procedure determined by the Board and at the cost of the Company:

(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 Company;(d) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or

activity;(e) be able to obtain independent professional or other advice; and (f) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other

directors and employees of the Company, whenever deemed necessary.


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Functions

The functions of the Committee shall include the following:

(a) to review the following and report the same to the Board

(i) with the external auditor, the audit plan;(ii) with the external auditor, his evaluation of the system of internal controls during the course of their audit;(iii) with the external auditors, his audit report;(iv) the assistance given by the employees of the Company to the external auditor;(v) the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the

necessary authority to carry out its work;(vi) the internal audit programme, processes, the results of the internal audit programme, processes or investigation

undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;(vii) the quarterly results and year end financial statements, prior to the approval by the Board, focusing particularly on:

(a) changes in or implementation of major accounting policy changes;(b) significant and unusual events; and(c) compliance with accounting standards and other legal requirements;

(viii) any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(ix) any letter of resignation from the external auditors of the Company;(x) whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-

appointment; and

(b) to consider the nomination of a person or persons as auditors together with such other functions as may be agreed to by the Audit Committee and the Board of Directors.

Meetings

Meetings of the Committee shall be held not less that four (4) times a year. The external auditors may request a meeting if theyconsider that one is necessary and shall have the right to appear and be heard at any meeting of the Committee. The Chairmanshall convene a meeting whenever any member of the Committee requests for a meeting by giving not less than three (3) cleardays notice thereof unless such requirement is waived by all members. Written notice of the meeting together with the agendashall be given to the members and external auditor where applicable. The quorum for a meeting for the Committee shall be two(2), provided always that the majority members present must be independent directors.

The Committee meet with the external auditors without executive board members present at least twice a year.

Other Board members and employees may attend any particular meeting only at the Committee’s invitation.

The Chairman shall not have a casting vote.

Reporting procedures

The Secretary shall maintain minutes of the proceedings of the meetings of the Committee and circulate such minutes to allmembers of the Board.


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INTRODUCTION

The board of directors (“the Board”) is pleased to provide the following Statement on Internal Control, which outlines the featuresof internal controls within the Group to safeguard shareholders’ investment and Group’s assets for the financial year ended 31December 2007. This disclosure on the Group’s state of internal controls fulfils Chapter 15.27 (b) of the Listing Requirements ofBursa Malaysia Securities Berhad.

RESPONSIBILITY

The Board acknowledges the importance of maintaining a sound system of internal control and risk management practices to goodcorporate governance and is responsible for doing so. The system of internal controls at Meda Inc. Berhad is designed to managerisks at an acceptable level rather than eliminate them.

Hence, in pursuing the Group’s objectives, internal controls provide reasonable and not absolute assurance for risk mitigation.Furthermore, the system of internal controls designed is not restricted to addressing risks relating to financial matters but alsooperations and compliance with applicable laws and regulations.

The Group has also established an on-going process for identifying, evaluating, monitoring and managing significant risks facedby the Group in meeting its business objectives.

RISK MANAGEMENT FRAMEWORK

The Board regards risk management as a crucial component of the Group’s operations and it forms the focal point for theincorporation of controls. The management has been vested the responsibility for managing risks and internal controls associatedwith the operations of the Group and for ensuring compliance with the applicable laws and regulations.

The Internal Audit Department was established to coordinate the effort to build structured risk management framework for theGroup’s divisions and subsidiaries. Preliminary risk assessment is carried out as a measure to identify, evaluate and mitigate risk.

OTHER KEY ELEMENTS OF INTERNAL CONTROL

The control environment of the Group comprises the following elements:

• Group Vision, Mission and Strategic Objectives, which are communicated to employees.

• Human resource policy and management system with defined authorities and responsibilities as well as segregation of duties.

• The Group’s organisation structure that is aligned to business and operational requirements.

• Board participation at the macro perspective in the performance monitoring of all divisions under the Group.

STATEMENT ONINTERNAL CONTROL

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OTHER KEY ELEMENTS OF INTERNAL CONTROL (cont’d)

• Active participation of non-executive committees such as the Audit Committee, the Nominating Committee, Remuneration Committee in specific areas with enhanced control and governance.

• Risk Management Committee is tasked with the responsibility to oversee the risk management activities of the group.

• Emphasize on the quality and competency of employees through continuing education, training and development schemes and programmes.

• Periodic reporting of key performance indicators.

• Delegation of responsibilities to committees of the Board, management and operating units including authorisation levels for all aspects of business.

• Risk-based approach to the preparation of policies and procedures and audit plan.

• Documentation of management review of internal policies and processes and procedures.

• Review of new contracts and legally enforceable agreements by the Legal Practice Unit.

• Budgeting process with approval both at the respective operating units level and by the key personnel management.

• Proper identification of accountabilities and segregation of duties in terms of purchases of goods and services and capital expenditure for each level of management within the Group.

• Fortnightly Operational Meeting which involve the Group Managing Director and/or the Group Chief Executive Officer/ Executive Director and key Management team, are held in order to identify and address any problems encountered by the Group for adequate actions to be taken.

• Review of signatories for letters, correspondence and other documents to assess the associated principal risks from strategic point of view.

• Reporting of internal audit findings and recommendations to the Audit Committee.

• Preparation and reporting of quarterly and full year financial results.

• Announcing material state of affairs of the Group to the public through Bursa Malaysia Securities Berhad on a timely basis.

• Group website covering corporate, strategic and business information within the Group.

• Reporting of financials, operations and legal issues to the Board on a quarterly basis. Budgets for the financial year are also reviewed on a yearly basis and major variances are followed up and remedial actions are taken where necessary.

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OTHER KEY ELEMENTS OF INTERNAL CONTROL (cont’d)

• Regular internal audit visits to monitor compliance with policies and procedures to assess the integrity of both financial and non-financial information provided. Processes and policies for internal audits are formulated on preliminary risk assessment. Follow-up visits are then subsequently conducted by the internal auditors to ensure proper implementation of agreed action plans by the respective process owners.

CONCLUSION

The Board will continue to take measure to strengthen its processes and acknowledges that its internal controls could be furtherimproved to mitigate potential risks encountered by the Group. Notwithstanding this, the Group is committed to adopt appropriatemeasures to develop a written manual of procedures and controls to enhance the control environment of the Group.

This statement is made in accordance with the minutes of the Board of Directors’ Meeting held on 25 April 2008.

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IN COMPLIANCE WITH THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

Share BuybacksThe Company did not enter into any share buyback transactions during the financial year ended 31 December 2007.

Options, Warrants or Convertible SecuritiesNo options, warrants or convertible securities were excercised during the financial year ended 31 December 2007.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) ProgrammeThe Company did not sponsor any ADR or GDR programme during the financial year ended 31 December 2007.

Sanctions and/ or PenalitiesThere were no public sanctions and/ or penalties imposed on the Company and its subsidiaries, Directors or management by anyrelevant regulatory bodies during the financial year.

Non-Audit FeesThe amount of non-audit fees incurred for services rendered by external auditors for the financial year was RM34,400.

Variation In ResultsThere were no material variations between the audited results for the financial year ended 31 December 2007 and the unauditedresults released for the financial quarter ended 31 December 2007.

Profit GuaranteeDuring the financial year, there were no profit guarantees given by the Company.

Material ContractsThere were no material contracts entered into by the Company and/ or its subsidiaries involving Directors and majorshareholders.

Revaluation Policy on Landed PropertiesIt is the policy of the Group to revalue the landed properties excluding development properties every five years or at such shorterperiod as may be considered to be appropriate taking into account the prevailing market conditions and industry outlook as wellas advice of professional valuers and appraisers.

Utilisation of ProceedsThere were no utilisation of proceeds during the financial year as the proposed sale of The Summit Subang USJ has not beencompleted at the end of the financial year.

Recurrent Related Party Transaction of a Revenue NatureThere were no related party transaction of a revenue nature, which requires shareholders’ mandate during the financial year.

Internal Audit FunctionThe Company has an internal audit department. During the financial year, the cost incurred for the internal audit functionamounting to RM65,000.

OTHER INFORMATION

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FINANCIAL STATEMENTS

Directors’ Report

Balance Sheets

Income Statements

Statements of Changes in Equity

Cash Flow Statements

Notes to the Financial Statements

Statement by Directors

Statutory Declaration

Report of the Auditors

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54

55

56

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DIRECTORS’ REPORTThe directors hereby submit their report together with the audited financial statements of the Group and of the Company for thefinancial year ended 31st December 2007.

PRINCIPAL ACTIVITIESThe principal activity of the Company is that of investment holding. The principal activities of the subsidiaries and associates areset out in Note 6 and Note 7 to the financial statements.

There have been no significant changes to the nature of these principal activities during the financial year.

RESULTS

DIVIDENDNo dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend any dividend in respect of the financial year ended 31st December 2007.

RESERVES AND PROVISIONSAll material transfers to and from reserves and provisions during the financial year have been disclosed in the financial statements.

BAD AND DOUBTFUL DEBTSBefore the income statements and balance sheets of the Group and of the Company were made out, the directors tookreasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowancefor doubtful debts, and had satisfied themselves that all known bad debts had been written off and adequate allowance had beenmade for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would render the amount written off for baddebts, or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the Company inadequateto any substantial extent.

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Group CompanyRM’000 RM’000

Net loss for the financial year (99,977) (16,493)

Attributable to:Equity holders of the Company (99,977) (16,493)Minority interests

(99,977) (16,493)

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CURRENT ASSETSBefore the income statements and balance sheets of the Group and of the Company were made out, the directors tookreasonable steps to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course ofbusiness, their values as shown in the accounting records of the Group and of the Company had been written down to an amountthat they might be expected to realise.

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

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

CONTINGENT AND OTHER LIABILITIESAt 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 in respect of the Group and of the Company that has arisen since the end of the financial year.

Subject to satisfactory resolution of the contingent liabilities as disclosed in Note 35 to the financial statements, no contingentliability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within theperiod of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affectthe ability of the Group and of the Company to meet their obligations as and when they fall due.

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

ITEMS OF AN UNUSUAL NATUREThe results of the operations of the Group and of the Company for 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 eventof a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of theGroup and of the Company for the financial year in which this report is made.

ISSUE OF SHARES AND DEBENTURESDuring the financial year, the Company has not issued any shares and debentures.

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DIRECTORSThe directors in office since the date of the last report are:

DIRECTORS’ INTERESTSAccording to the Register of Directors’ Shareholdings, the interests of those directors who held office at the end of the financialyear in shares in the Company and its related corporations during the financial year ended 31st December 2007 as recorded inthe Register of Director’s Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 were as follows:

By virtue of their interest in shares of the Company, Dato’ (Dr.) Teoh Seng Foo and Mr. Teoh Seng Kian are deemed to beinterested in the shares of all the subsidiary companies to the extent that the Company has a substantial interest.

Other than disclosed in the above, none of the other Directors in office at the end of the financial year held any interest in theshares of the Company and its related corporations.

DIRECTORS’ BENEFITSSince the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit(other than as disclosed in Note 31 and Note 38 to the financial statements) by reason of a contract made by the Company or arelated corporation with the director or with a firm of which the director is a member, or with a company in which the director hasa substantial financial interest.

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


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At At1.1.2007 Bought Sold 31.12.2007

The CompanyMeda Inc. BerhadShareholdings in which the directors have direct interestDato’ (Dr.) Teoh Seng Foo 23,326,824 3,300,000 (4,079,000) 22,547,824Teoh Seng Kian 36,121,224 2,832,300 (8,182,900) 30,770,624

Shareholdings in which the directors have deemed interestDato’ (Dr.) Teoh Seng Foo 48,165,008 - (4,100,000) 44,065,008Teoh Seng Kian 48,165,008 - (4,100,000) 44,065,008

Number of ordinary shares of RM0.50 each

Dato’ (Dr.) Teoh Seng FooTeoh Seng KianChiam Tau MengOoi Giap Ch’ngKee Lian Yong (Appointed on 28.2.2008)You Kong Hean (Appointed on 28.2.2008)Lim Hock Chye (Appointed on 29.6.2007 and resigned on 15.2.2008)Tan Sri Dato’ Mohd Ramli Bin Kushairi (Resigned on 4.6.2007)Dato’ Dr. Loga Bala Mohan A/L Jaganathan (Resigned on 29.6.2007)Ong Bok Siong (Resigned on 29.6.2007)

SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEARSignificant events during and after the financial year are disclosed in Note 41 to the financial statements.

MATERIAL LITIGATIONDetails of material litigation are disclosed in Note 37 to the financial statements.

AUDITORSThe auditors, Messrs Baker Tilly Monteiro Heng, formerly known as Monteiro & Heng, have expressed their willingness tocontinue in office.

On behalf of the Board,

TEOH SENG KIANDirector

YOU KONG HEANDirector

Kuala Lumpur25 April 2008


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Group Company2007 2006 2007 2006

Note RM’000 RM’000 RM’000 RM’000

ASSETSNon-current assetsProperty, plant and equipment 5 24,670 108,882 44 52Investments in subsidiaries 6 - - 143,663 160,428Investments in associates 7 3,110 3,236 - -Investment properties 8 90,265 218,591 - -Land held for property development 9(a) 70,900 62,957 - -Goodwill on consolidation 10 811 811 - -

189,756 394,477 143,707 160,480

Current assetsAssets held for sale 11 250,382 - - -Property, plant and equipment 5 - 16,203 - -Property development costs 9(b) 33,871 76,387 - -Inventories 12 9,336 26,352 - -Investment properties 8 - 77,719 - -Accrued billings 531 1,088 - -Amounts due from customers

for contract work 13 3 3 - -Trade receivables 14 36,080 54,915 3 3Other receivables, deposits and

prepayments 15 77,722 74,390 394 170Amounts due from subsidiaries 16 - - 42,414 42,247Tax recoverable 111 111 91 91Deposits placed with licensed banks 17 228 625 - -Cash and bank balances 18 4,312 7,166 17 4

412,576 334,959 42,919 42,515

Total assets 602,332 729,436 186,626 202,995

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

BALANCE SHEETSas at 31st December 2007

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BALANCE SHEETS (cont’d)as at 31st December 2007

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Group Company2007 2006 2007 2006

Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIESEquity attributable to equity

holders of the CompanyShare capital 19 213,470 213,470 213,470 213,470Share premium 20,013 20,013 20,013 20,013(Accumulated losses)/Retained profits 35,455Total equity 168,961 268,938 168,292 184,785

Non-current liabilitiesBorrowings (interest bearing) 20 37,203 131,803 - -Deferred tax liabilities 21 10,873 24,704 - -Other long term payables 22 1,663 1,663 - -

49,739 158,170 - -

Current liabilitiesTrade payables 23 29,677 32,053 468 360Other payables, accruals and deposits 24 59,304 51,927 939 838Progress billings 8,290 20,159 - -Amounts due to subsidiaries 25 - - 16,927 17,012Borrowings (interest bearing) 20 228,924 139,112 - -Tax payables 57,437 59,077 - -

383,632 302,328 18,334 18,210Total liabilities 433,371 460,498 18,334 18,210TOTAL EQUITY AND LIABILITIES 602,332 729,436 186,626 202,995

(64,522) (65,191) (48,698)

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Group Company2007 2006 2007 2006

Note RM’000 RM’000 RM’000 RM’000

Revenue 29 72,372 153,573 - -Cost of sales 30 - -

GROSS PROFIT 37,383 60,032 - -

Other operating income 1,825 9,849 3,486 3,187Selling and distribution expenses - -Administrative expensesOther operating expenses- impairment loss- allowance for doubtful debts - - -

OPERATING (LOSS)/PROFIT 31 25,981

Finance costs (net) 32 - -Share of results of associates - -

(LOSS)/PROFIT BEFORE TAXATION 6,348

Taxation 33 15,113 9,304 - -

NET (LOSS)/PROFIT FORTHE FINANCIAL YEAR 15,652

Attributable to:Equity holders of the Company 15,652Minority interests - - - -

15,652

Basic (loss)/earnings per ordinaryshare (sen) 34 3.67

Dilluted (loss)/earnings per ordinaryshare (sen) 34 3.67

(34,989) ( 93,541)

(4,602) (1,708)(38,313) (31,549) (3,214) (2,162)

(92,586) (10,643) (16,765) (27,647)(4,015)

(96,293) (16,493) (30,637)

(18,671) (19,513)(126) (120)

(115,090) (16,493) (30,637)

(99,977) (16,493) (30,637)

(99,977) (16,493) (30,637)

(99,977) (16,493) (30,637)

(23.42)

(23.42)

INCOME STATEMENTSfor the year ended 31st December 2007

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Attributable to Equity Holders of the CompanyDistributable

Non- retaineddistributable earnings/

Share share (accumulatedcapital premium loses) Total

RM’000 RM’000 RM’000 RM’000

Group

Balance as at 1st January 2006 213,470 20,013 19,803 253,286Net profit for the financial year - - 15,652 15,652

Balance as at 31st December 2006 213,470 20,013 35,455 268,938Net loss for the financial year - -

Balance as at 31st December 2007 213,470 20,013 168,961

Company

Balance as at 1st January 2006 213,470 20,013 215,422Net loss for the financial year - -

Balance as at 31st December 2006 213,470 20,013 184,785Net loss for the financial year - -

Balance as at 31st December 2007 213,470 20,013 168,292

(99,977) (99,977)

(64,522)

(18,061)(30,637) (30,637)

(48,698)(16,493) (16,493)

(65,191)

STATEMENTS OFCHANGES IN EQUITYfor the year ended 31st December 2007

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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss)/profit before taxation 6,348

Adjustments for:Share of loss in associates 126 120 - -Allowance for doubtful debts 32 1,813 - 4,015Bad debts written off 33 77 - -Deposit forfeited - - -Depreciation of property, plant and equipment 6,463 6,456 19 18Allowance for doubtful debts on

amounts due by subsidiaries - - 692 -Impairment loss on investment in subsidiaries - - 16,765 27,647Impairment loss on assets held for sale 83,866 - - -Impairment losses on- investment properties - 5,595 - -- property, plant and equipment - 5,048 - -- land held for property development 8,721 - - -Interest expense 18,671 19,513 - -Gain on disposal of property,

plant and equipment - -Revaluation of investment properties - - -Reversal of liquidated and ascertained damages - - -Interest income - -

Operating profit before workingcapital changes 2,591 35,699 983 1,043

(115,090) (16,493) (30,637)

(550)

(93) (92)(6,827)

(966)(138) (836)

CASH FLOW STATEMENTSfor the year ended 31st December 2007

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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Changes In Working Capital:Property development costs 34,454 - -Balances with customers for contract works - 9 - -Trade receivables 18,770 - -Accrued billings 557 4,040 - -Other receivables, deposits and prepayments 8Inventories - -Trade payables 12,015 108 134Progress billings - -Other payables, deposits and accruals 4,626 10,885 101

39,587 42,089 968Interest received 138 836 - -Tax paid - -

Net Operating Cash Flow 39,366 41,713 968

CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property, plant and equipment* Additions to investment properties - - -Additional investment in subsidiaries - - -Acquisition of a subsidiary - - -Development expenditure incurred on

land held for property development - - -Proceeds from disposal of

property, plant and equipment 220 6,648 - -Withdrawal/(placement) of fixed deposits 390 - 52

Net Investing Cash Flow 1,239

(239)

(15,672)

(3,370) (2,139) (224)(3,796) ( 122)(2,376)

(11,869) (2,387)(1,528)

(343)

(359) (1,212)

(343)

(2,125) (5,201) (11) (2)(12,546)

(8,750)(50)

(6,253)

(208)

(20,314) (11) (8,750)

CASH FLOW STATEMENTS (cont’d)for the year ended 31st December 2007

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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

CASH FLOWS FORM FINANCING ACTIVITIES:

Drawdown of bank loans - 5,496 - -Repayment of bank loans - -Repayment of hire purchase liabilities - -Advances from subsidiaries - - - 13,220Advances to subsidiaries - -Interest paid - -

Net Financing Cash Flow 9,017

NET CHANGE IN CASH AND CASH EQUIVALENTS 2,397 13CASH AND EQUIVALENTS AT BEGINNING OF

THE FINANCIAL YEAR 4 80CASH AND CASH EQUIVALENTS AT END OF

THE FINANCIAL YEAR 17 4

ANALYSIS OF CASH AND CASH EQUIVALENTS:Deposits placed with licensed banks 228 625 - -Cash and bank balances (Note18) 4,312 7,166 17 4Bank overdrafts - -

17 4Less: Deposits held as security value (Note17) - -

Cash and cash equivalents 17 4

(9,049) (23,397)(577) (3,141)

(944) (4,203)(12,290) (19,513)

(21,916) (40,555) (944)

(2,864) (76)

(7,940) (10,337)

(10,804) (7,940)

(15,116) (15,113)

(10,576) (7,322)(228) (618)

(10,804) (7,940)

Group* During the financial year, the Group acquired property, plant and equipment amounting to RM3.167 million (2006 : RM6.402

million) of which RM1.700 million (2006 : RM3.609 million) were acquired under hire purchase instalment plans. Cash payments amounting to RM0.658 million (2006 : RM2.408 million) were made towards the hire purchase.

CASH FLOW STATEMENTS (cont’d)for the year ended 31st December 2007

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1. GENERAL INFORMATIONThe principal activity of the Company is that of investment holding. The principal activities of the subsidiaries and associatesare set out in Notes 6 and 7 to the financial statements.

There have been no significant changes to the nature of these principal activities during the financial year.

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

The registered office of the Company and its principal place of business is located at the 9th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan.

The average number of employees (including executive directors) for the financial year of the Group and of the Company was 105 (2006 : 405) and 34 (2006 : 5) respectively.

The financial statements are expressed in Ringgit Malaysia.

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

2. FUNDAMENTAL ACCOUNTING CONCEPTDuring the financial year, the Group and the Company incurred a net loss of RM99,977,000/- and RM16,493,000/- respectively. As at the balance sheet date, the Group’s borrowings repayable within next twelve months amounted to RM228,924,000/-.

On 30th November 2007, the Group announced that Meda Development Sdn. Bhd. (“MD”), a wholly-owned subsidiary , and Mayban Trustees Berhad, being the trustee for AmFirst Real Estate Investment Trust (“Purchaser”), had entered into a revised sale and purchase agreement of the proposed sale. The proposed sale was segregated as follows:

(i) the proposed sale by MD of property units owned by MD in the retail podium, the hotel and car parking bays located within the commercial mixed development buildings known as “The Summit Subang USJ” to the Purchaser for an aggregate cash consideration of RM230 million (“Proposed Unaffected Property Sale”), and

(ii) the proposed sale by MD of property units owned by MD in the office tower block located within The Summit Subang USJ to the Purchaser, for a cash consideration of RM30 million subject to, amongst others, the settlement of a legal matter pertaining to the office tower block (“Proposed Affected Property Sale”).

The proposed sale was completed on 31st March 2008 in accordance with the terms and conditions stipulated in the conditional Sale and Purchase Agreement dated 30th November 2007.

After taking into consideration the effects of the proposed sale and settlement of borrowings as stated in the circular to shareholders, dated on 2nd January 2008, and the viability of the continuing business operations, the Group’s financial position reflect an improvement in the Group’s shareholders’ funds and net current assets position.

In view of the above, the financial statements of the Group are prepared on a going concern basis.

NOTES TO THEFINANCIAL STATEMENTS

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES3.1 Basis of Preparation

The financial statements of the Group and of the Company have been prepared under the historical cost convention as modified by the revaluation of certain freehold land and buildings and, unless otherwise indicated in the significant accounting policies.

The financial statements of the Group and of the Company comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards (“FRS”), the approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (“MASB”).

The preparation of financial statements in conformity with applicable Financial Reporting Standards (“FRS”), the approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (“MASB”) requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Company’s accounting policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results may differ.

3.2 Adoption of New and Revised FRSs and Amendments to FRSsDuring the financial year, the Group and the Company have adopted the following new and revised FRS issued by MASB that are relevant to their operations and are mandatory for the current financial year.

FRS 117 LeasesFRS 124 Related Party Disclosures

The adoption of the above new and revised FRSs does not result in significant changes in the accounting policies of the Group and the Company.

3.3 Standards and Interpretations Issued but Not Yet EffectiveThe Group and the Company have not adopted the following FRSs, amendments to FRSs and Issues Committee Interpretations (“IC Int”) that have been issued as at the date of authorisation of these financial statements but are not yet effective for the Group and the Company:

NOTES TO THE FINANCIAL STATEMENTS(cont’d)

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Effective forfinancial periods

beginning onor after

FRS, Amendments to FRS and IC InterpretationsFRS 107 Cash Flow Statements 1 July 2007FRS 111 Construction Contracts 1 July 2007FRS 112 Income Taxes 1 July 2007FRS 118 Revenue 1 July 2007FRS 119 Employee Benefits 1 July 2007

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.3 Standards and Interpretations Issued but Not Yet Effective (cont’d)


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Effective forfinancial periods

beginning onor after

FRS, Amendments to FRS and IC InterpretationsFRS 120 Accounting for Government Grants and Disclosure of Government 1 July 2007

AssistanceFRS 126 Accounting and Reporting by Retirement Benefit Plans 1 July 2007FRS 129 Financial Reporting in Hyperinflationary Economics 1 July 2007FRS 134 Interim Financial Reporting 1 July 2007FRS 137 Provisions, Contingent Liabilities and Contingent Assets 1 July 2007Amendment to The Effects of Changes in Foreign Exchange Rates – 1 July 2007FRS 121 Net Investment in a Foreign OperationIC Int 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities 1 July 2007IC Int 2 Members’ Shares in Co-operative Entities and Similar Instruments 1 July 2007IC Int 5 Rights to Interests Arising from Decommissioning, Restoration and 1 July 2007

Environmental Rehabilitation Funds

IC Int 6 Liabilities arising from Participating in a Specific Market 1 July 2007– Waste Electrical and Electronic Equipment

IC Int 7 Applying the Restatement Approach under FRS 1292004 1 July 2007– Financial Reporting in Hyperinflationary Economies

IC Int 8 Scope of FRS 2 1 July 2007

Effective date deferred indefinitely:FRS 139 Financial Instruments : Recognition and Measurement

The directors anticipate that the adoption of these FRSs, amendments to FRSs and IC Interpretations in future periods will have no material financial impact on the financial statements of the Group and of the Company. Entities are exempted from disclosing the impact of FRS 139 prior to its effective date.

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.4 Significant Accounting Policies

(a) Basis of ConsolidationThe consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the financial year. The financial statements of the parent and its subsidiaries are all drawn up to the same reporting date.

With effect from 1st January 2002, all the subsidiaries acquired are consolidated on the acquisition method of accounting. The Group has adopted the transitional provision permitted under FRS 3 Business Combination, which allows the Group to apply the standard prospectively.

All subsidiary companies acquired before 1st January 2002 are consolidated using the merger method of accounting permitted by Malaysian Accounting Standard No. 2 – Accounting for Acquisition and Mergers, the accounting standard which was applicable then, except for Cemerlang Land Sdn. Bhd. which was consolidated using the acquisition method of accounting.

Under the merger method of accounting, the results of subsidiaries are accounted for on a full year basis irrespective of the date of the merger.

Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the financial year are included in the consolidated financial statements 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 balance sheet.

Any excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill.

Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in the income statement.

Intra group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator if the asset transferred. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in the similar circumstances.

Minority interest represents the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.

The gain or loss on disposal of a subsidiary is the difference between the net disposal proceeds and the Group’s share of its net assets as of the date of disposal is recognised in the consolidated income statement.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.4 Significant Accounting Policies (cont’d)

(b) Goodwill on ConsolidationGoodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fair value of the Group’s share of the identifiable net assets at the date of acquisition.

Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include carrying amount of goodwill relating to the entity sold.

(c) SubsidiariesSubsidiaries are those enterprises in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.4(t). On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is charged or credited to the income statement.

(d) AssociatesAssociates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the associates but not the power to exercise control over those policies.

Investments in associates are stated at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.4(t).

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Equity accounting involves recognising in the income statement of the Group’s share of the results of associates for the period. The Group’s investments in associates are carried on balance sheet at an amount that reflects its share of the net assets of the associates and includes goodwill on acquisition. Equity accounting is discontinued when the carrying amount of theinvestment in associates reaches zero, unless the Group has incurred obligations or guaranteed obligations in respect of the associates. In applying the equity method, unrealised gains and losses on transactions between Group and the associate are eliminated to the extent of the Group’s interest in the associate.

On the disposal of such investments, the difference between the net disposal proceeds and their carrying amounts is charged or credited to the income statement.

(e) Other InvestmentsInvestments are stated at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.4(t).

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statement.


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(f) Property, Plant and Equipment and DepreciationProperty, plant and equipment are initially stated at cost. Freehold land and buildings which have been subsequently revalued, are stated at valuation less accumulated depreciation and impairment loss, if any. All other property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.4(t).

In addition, freehold land and buildings are revalued by independent professional valuers at a regular interval of at least once in every five years with additional valuations in the intervening years where market conditions indicate that the carrying values of the revalued land and buildings materially differ from the market values.

Surpluses arising on revaluations are credited to revaluation reserve. Any deficit arising from revaluation is charged against the revaluation reserve to the extent of a previous surplus held in the revaluation reserve for the same asset. In all other cases, a decrease in carrying amount is charged to income statement. Each year the difference between the depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost is transferred from ‘revaluation reserves’ to ‘retained earnings’.

Freehold land is not depreciated as it has an infinite useful life. Work-in-progress are also not depreciated as these assets are not available for use. Long leasehold land and buildings is amortised over the remaining leasehold period.

Depreciation on other property, plant and equipment is calculated to write off the cost of each asset on the straight line basis over the estimated useful lives of the assets concerned. The principal annual rates used for this purpose are as follows:

Fully depreciated assets are retained in the accounts until the assets are no longer in use.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amounts and are included in profit/(loss) from operations. On disposal of revalued assets, amounts in revaluation reserve relating to those assets are transferred to retained earnings.

Freehold buildings 1% - 2%Leasehold buildings 2%Renovation 10% - 33 1/3%Furniture, fittings, office and other equipment 2.5% - 50%Motor vehicles 20%Show village and sales office 10% - 20%


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(g) Property Development Activities

(i) Land held for property developmentLand held for property development consists of land on which no significant development work has been undertaken or where development activities are not expected to be completed within normal operating cycle. Land held for property development is classified as non-current asset and carried at cost less any accumulated impairment losses.

Land held for property development is transferred to property development costs (under current assets) when development activities have commenced and is expected to be completed within the normal operating cycle.

(ii) Property development costsProperty development costs comprise costs that are directly attributable to the development activities or that can be allocated on a reasonable basis to such activities. They comprise the costs of land under development, construction costs and other related development costs common to the whole project including administrative overheads and borrowing costs.

When the outcome of the development activity can be estimated reliably, property development revenue and expenses are recognised by using the stage of completion method. The stage of completion is measured by reference to the proportion that property development costs incurred bear to the estimated total costs for the property development.

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

Any expected loss on a development project, including costs to be incurred over the defect liability period, is recognised as an expense immediately.

Where revenue recognised in the income statement exceeds billings to purchasers, the balance is shown as accrued billings under receivables (within current assets). Where the billings to purchasers exceed revenue recognised in the income statement, the balance is shown as progress billings under payables (within current liabilities).

(iii) Developed properties held for saleCompleted properties held for sale are stated at the lower of cost and net realisable value. Cost consists of costs associated with the acquisition of land, direct costs and an appropriate proportion of common costs attributable to developing the properties to completion.


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(h) Investment PropertiesInvestment properties consist of land and buildings held for long term rental income or for capital appreciation or both, and are not occupied by the Group.

Investment properties are stated at fair value, representing open-market value determined annually by external valuers. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active market or discounted cash flow projections. These valuations are reviewed annually by registered independent valuers having an appropriate recognised professional qualification and recentexperience in the location and category of the properties being valued.

On disposal of an investment property, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal, it shall be derecognised. The difference between the net disposal proceeds and the carrying amount is recognised in income statement in the period of the retirement or disposal.

(i) InventoriesInventories are stated at the lower of cost and net realisable value. Cost of trading goods, raw materials and construction materials are determined on the weighted average method. Cost is dertermined on a first-in-first-out basis and comprises the original cost of purchase plus the cost of bringing the inventories to their present location and condition.

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

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

(k) Assets Acquired Under Hire PurchaseAssets financed by hire purchase arrangements which transfer substantially all the risks, and rewards of ownership to the Group are capitalised as property, plant and equipment, and the corresponding obligations are treated as liabilities.

The assets so capitalised are depreciated in accordance with the accounting policy on property, plant and equipment. Finance charges are charged to the income statement over the period to give a constant periodic rate of interest on the remaining hire purchase liabilities.

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


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(m) Amount due from/to Customers for Contract WorkAmount due from customers for contract work is the net amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings.

Amount due to customers for contract work is the net amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses).

(n) Construction ContractsWhen the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

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

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The aggregate of the costs incurred and the profit/loss recognised on each contract is and recognised profits (less recognised losses) exceed progress billings, the balance is shown as amounts due from customers on construction contracts under receivables, deposits and prepayments (within current assets). Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers on construction contracts under payables (within current liabilities).

Costs on construction contracts include the cost of materials, direct labour, subcontract costs and attributable overheads paid or payable to date.

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

(p) Revenue Recognition

(i) Sale of property development projectsRevenue from sale of property development projects is recognised on the percentage of completion method. No profit is recognised where development is in its initial stage or has not reached a stage of completion where it is possible to determine the financial outcome of the development with reasonable accuracy. Provision for foreseeable losses is made when estimated future revenues realisable are lower than the carrying amount of the project.


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(p) Revenue Recognition (cont’d)

(ii) Sale of hotel rooms, food and beverages and other ancillary servicesRevenue from services rendered in respect of sale of hotel rooms, food and beverages and other ancillary services is recognised in the income statement upon rendering of services.

(iii) Revenue from construction contractRevenue from construction contracts is accounted for by the stage of completion method as described in Note 3.4(n).

(iv) Sale of fresh fruit bunchesRevenue from sales of fresh fruit bunches is measured at the fair value of the consideration receivable and is recognised in the income statement upon delivery of goods and customers’ acceptance.

(v) Revenue from landscaping servicesRevenue from provision of landscaping services is recognised in the income statement upon rendering of services accepted by customers, net of returns, discount and allowance.

(vi) Revenue from consultancy servicesRevenue from consultancy services is recognised in the income statement upon rendering of services accepted by customers, net of returns, discounts and allowances.

(vii) Collection from car park operationsCollection from car park operations is recognised on receipt basis except for season parking of which accrual basis is used.

(viii) Interest incomeInterest income is recognised on a time proportion basis taking into account the effective yield of the assets.

(ix) Rental incomeRental income is recognised on the accrual basis. Inter-company sales are excluded from the revenue of the Group.

(q) Borrowing CostsInterest, dividends, losses and gains relating to a financial instrument, or a component part classified as a financial liability is reported as finance cost in the income statement.

Cost incurred on borrowings to finance the acquisition, construction or production of a qualifying asset is capitalised as part of the cost of asset until when substantially all the activities necessary to prepare the asset for its intended use or sale are completed, after which such expense is charged to the income statement. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

Borrowing costs are charged to the income statement as an expense in the period which they are incurred.


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(r) Income TaxThe tax expense in the income statement represents the aggregate amount of current tax and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or the amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination or from the initial recognition of an asset or liability in atransaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or theliability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the income statement for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirer’s interest in the net fair value of the acquirer’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.

(s) Financial InstrumentsFinancial instruments are recognised on the balance sheet when the Company has become a party to the contractual provisions of the instruments. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item.

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 liability are reported as expense or income. Distributions to holders of financial instruments classified as equity are recognised directly to equity. Financial instruments are offset when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.


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(t) Impairment of AssetsAt each balance sheet date, the carrying values of assets, other than inventories, deferred tax assets and financial assets, are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount is the higher of an asset’s net selling price and its value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets, or if it is not possible, for the cash-generating unit.

The recoverable amount is the higher of an asset’s net selling price and its value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets, or if it is not possible, for the cash-generating unit.

An impairment loss is charged to the income statement immediately. Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is 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.

(u) Employees Benefits

(i) Short term employee benefitsWages, salaries, social security contribution, bonuses and non-monetary benefits are recognised as an expense in the period in which the associated services are rendered by the employees. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.

(ii) Post-employment benefitsThe Group contributes to the Employees’ Provident Fund, the national defined contribution plan. The contributions are charged to the income statement in the period to which they are related. Once the contributions have been paid, the Group has no further payment obligations.

(v) Ordinary SharesOrdinary shares are classified as equity. Dividends on the ordinary shares are recognised as liabilities when proposed or declared before the balance sheet date. A dividend proposed or declared after the balance sheet date, but before the financial statements are authorised for issue, is not recognised as a liability at the balance sheet date.

The transaction costs of an equity transaction are accounted for as deductions from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.


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(w) Cash and Cash EquivalentsFor the purpose of cash flow statement, cash and cash equivalents consist of cash in hand, demand deposits, balances with banks and other 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. Cash and cash equivalents are stated net of bank overdrafts which are repayable on demand.

(x) Segment InformationSegment information is presented in respect of the Group’s business and geographical segment. The primary reporting segment information is in respect of business segments as the Group’s risks and returns are affected predominantly by differences in the nature of its businesses, whilst the secondary information is reported geographically.

A segment with a majority of operating income earned from providing product or services to external customers and whose operating income, results or assets are 10 percent or more of all the segments is reported separately.

Segment results, assets and liabilities include items that are directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise finance costs and corporate administrative expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one financial period.

(y) Assets Held For SaleThe Group shall classify an asset as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.

The assets classified as assets held for sale will be measured at the lower of its carrying amount and fair value less costs to sell.

No depreciation or amortisation is provided against the assets while it is classified as assets held for sale.

The assets shall be derecognised on disposal and the difference between the net disposal proceeds and the carrying amount is recognised as profit or loss in the period of disposal.

An asset that ceases to be classified as assets held for sale shall be measured at the lower of its carrying amount before the asset was classified as assets held for sale, adjusted for any depreciation, amortisation or revaluations that would be recognised had the asset not be classified as assets held for sale, and its recoverable amount at the date of the subsequent decision not to sell.


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4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

(a) Critical Judgements Made in Applying Accounting PoliciesThe management has made the necessary assessments upon the adoption of FRSs as mentioned in Note 3.2. However, there is no critical judgement made in applying the Group’s and the Company’s accounting policies.

(b) Key Sources of Estimation UncertaintyThe key assumption concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as stated below:

(i) Impairment of Investment in SubsidiariesThe Company determines whether investments in subsidiaries are impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash generating units (“CGU”) to which investments in subsidiaries isallocated. Estimating a value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of investments in subsidiaries as at 31st December 2007 less accumulated impairment losses were RM143,663,000/- (2006 : RM160,428,000/-).

(ii) Impairment of GoodwillThe Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units (“CGU”) to which goodwill is allocated. Estimating a value in use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of goodwill as at 31st December 2007 were RM811,000/- (2006 : RM811,000/-).

(iii) Impairment of Property, Plant and EquipmentThe Group assesses impairment of assets whenever the events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable i.e. the carrying amount of the asset is more than the recoverable amount.

Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flow derived from that asset discounted at anappropriate discount rate. Projected future cash flows are based on Group’s estimates calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information.

(iv) Useful Lives of Property, Plant and EquipmentThe Group estimates the useful lives of property, plant and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewedperiodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the relevant assets. In addition, the estimation of useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in these factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the property, plant and equipment would increase the recorded expenses and decrease the non-current assets.


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4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)

(b) Key Sources of Estimation Uncertainty (cont’d)

(v) Allowance for InventoriesReviews 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.

(vi) Allowance for Doubtful DebtsThe 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 analysed historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance of doubtful debts of receivables. Where the expectation is different from the original estimates, such difference will impact the carrying value of receivables.

(vii) Property DevelopmentThe Group recognises property development revenue and expenses in the income statement by using the stage ofcompletion 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.

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 thedevelopment projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.

(viii) Construction ContractsThe Group recognises contract revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs.

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

(ix) Deferred Tax AssetsDeferred tax assets are recognised for all unutilised tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying values of unrecognised tax losses and capital allowances of the Group was RM212.127 million (2006 : RM193.03 million).

(x) Contingent LiabilitiesDetermination of the treatment of contingent liabilities is based on management’s view of the expected outcome of the contingencies after consulting legal counsel for litigation cases and internal and external experts to the Group for matters in the ordinary course of business.


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Furniture ShowFreehold Fittings Village

Land Office and and Workand Hotel Leasehold Other Motor Sales In

Group Buildings Buildings Renovation Equipment Vehicles Office Progress Total2007 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost or ValuationAt 1st January 2007- at cost 2,252 2,975 23,996 18,819 3,405 1,139 113 52,699- at valuation 126,693 - - - - - - 126,693Additions - 98 183 2,489 380 17 - 3,167Transferred to assets held

for sale (Note 11) - - -Disposals - - - -At 31st December 2007 28,168 3,073 13,953 13,172 2,919 1,151 113 62,549

Representing- at cost 211 3,073 13,953 13,172 2,919 1,151 113 34,592- at valuation 27,957 - - - - - - 27,957

28,168 3,073 13,953 13,172 2,919 1,151 113 62,549

Accumulated Depreciationand Impairment Losses

At 1st January 2007Accumulated depreciationat cost 2,252 40 16,105 15,175 1,884 744 - 36,200- at valuation 5,145 - - - - - - 5,145Impairment losses 12,962 - - - - - - 12,962Depreciation for the yearat cost 4 61 3,416 1,044 521 151 - 5,197- at valuation 1,266 - - - - - - 1,266Transferred to assets held

for sale (Note 11)- at cost - - -- at valuation - - - - - -Disposals - - - - -At 31st December 2007 12,337 101 12,879 9,808 1,859 895 - 37,879Representing- at cost 211 101 12,879 9,808 1,859 895 - 25,753- at valuation 12,126 - - - - - - 12,126

12,337 101 12,879 9,808 1,859 895 - 37,879

Net Book ValueAt 31st December 2007- at cost - 2,972 1,074 3,364 1,060 256 113 8 ,839- at valuation 15,831 - - - - - - 15,831

15,831 2,972 1,074 3,364 1,060 256 113 24,670

(100,777) (10,226) (8,112) (388) (119,503)(24) (478) (5) (507)

(11) (6,642) (6,410) (167) (13,230)(9,281) (9,281)

(1) (379) (380)

5. PROPERTY, PLANT AND EQUIPMENT


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5. PROPERTY, PLANT AND EQUIPMENT (cont’d)


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Furniture ShowFreehold Fittings Village

Land Office and and Workand Hotel Leasehold Other Motor Sales In

Group Buildings Buildings Renovation Equipment Vehicles Office Progress Total2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost or ValuationAt 1st January 2006- at cost 369 - 23,892 16,965 3,466 1,092 7,566 53,350- at valuation 122,928 - - - - - - 122,928- effect of adopting FRS 140 3,765 - - - - - - 3,765Additions- at cost 1,883 - 104 1,890 546 47 1,932 6,402Disposals - - - -Reclassification - 9,385 - - - - -At 31st December 2006 128,945 2,975 23,996 18,819 3,405 1,139 113 179,392Representing- at cost 2,252 2,975 23,996 18,819 3,405 1,139 113 52,699- at valuation 126,693 - - - - - - 126,693

128,945 2,975 23,996 18,819 3,405 1,139 113 179,392

Accumulated Depreciationand Impairment Losses

At 1st January 2006Accumulated depreciationat cost 10 - 12,643 14,436 1,768 550 - 29,407- at valuation 5,893 - - - - - - 5,893Impairment losses 8,000 - - - - - - 8,000Impairment losses for the year 4,962 - - 86 - - - 5,048Depreciation for the year- effect of adopting FRS 140 225 - - - - - - 225- at cost 3 40 3,462 689 577 194 - 4,965- at valuation 1,266 - - - - - - 1,266Disposals - - - - -At 31st December 2006 20,359 40 16,105 15,175 1,884 744 - 54,307Representing- at cost 2,252 40 16,105 15,175 1,884 744 - 36,200- at valuation 18,107 - - - - - - 18,107

20,359 40 16,105 15,175 1,884 744 - 54,307

Net Book ValueNon-currentAt 31st December 2006- at cost - 2,935 7,885 3,591 1,477 395 113 16,396- at valuation 92,486 - - - - - - 92,486Total 92,486 2,935 7,885 3,591 1,477 395 113 108,882

CurrentAt 31st December 2006- at cost - - 6 53 44 - - 103- at valuation 16,100 - - - - - - 16,100Total 16,100 - 6 53 44 - - 16,203Grand Total 108,586 2,935 7,891 3,644 1,521 395 113 125,085

(6,410) (36) (607) (7,053)(9,385)

(36) (461) (497)

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5. PROPERTY, PLANT AND EQUIPMENT (cont’d)

The freehold land and buildings which are charged as security for banking facilities granted to the Group (Note 28(iv)) were revalued on 14th February 2007 and 27th September 2006 respectively by the Directors based on independent professional valuations on the open market value basis.

Included in property, plant and equipment of the Group, the net book value of RM15.831 million (2006 : RM18.358 million) of freehold land and buildings to which legal title has not yet been transferred to the Group.


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FurnitureFittings

Office andCompany Equipment Total2007 RM’000 RM’000

CostAt 1st January 2007 102 102Additions 11 11

At 31st December 2007 113 113

Accumulated DepreciationAt 1st January 2007 50 50Charge for the financial year 19 19At 31st December 2007 69 69

Net Book Value at 31st December 2007 44 44

2006

CostAt 1st January 2006 100 100Additions 2 2

At 31st December 2006 102 102

Accumulated DepreciationAt 1st January 2006 32 32Charge for the financial year 18 18At 31st December 2006 50 50

Net Book Value at 31st December 2006 52 52

5. PROPERTY, PLANT AND EQUIPMENT (cont’d)Included in property, plant and equipment of the Group are assets acquired under hire purchase instalment plans with net book values as follows:

The Group’s equity interest in the subsidiaries which are all incorporated in Malaysia and their respective principal activities are as below:

6. INVESTMENTS IN SUBSIDIARIES

Had the revalued assets been carried at cost less accumulated depreciation, the carrying amounts would have been as follows:


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Group2007 2006

RM’000 RM’000

Furniture, fittings, office and other equipment 1,194 778Motor vehicles 1,092 1,467

Company2007 2006

RM’000 RM’000

Unquoted shares at cost 196,899 196,899Less: Impairment loss recognised

143,66 160,428

Name of Company 2007 2006 Principal Activities% %

Direct subsidiaries* Meda Development Sdn. Bhd. (“MD”) 100 100 Property development, property management and

investment, operation of a hotel and car park.

* ZKP Development Sdn. Bhd. (“ZKP”) 100 100 Property development, property management and investment, operation of a hotel and car park.

Effective EquityInterest

Group2007 2006

RM’000 RM’000

Net Book ValueFreehold land and hotel buildings 15,831 90,974

(53,236) (36,471)

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6. INVESTMENTS IN SUBSIDIARIES (cont’d)


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Direct subsidiaries

* Litaran Bayu Sdn. Bhd. (“LB”) 100 100 Investment holding.

Cemerlang Land Sdn. Bhd. (“CL”) 100 100 Property development.

Nandex Development Sdn. Bhd. (“ND”) 100 100 Property development.

Impressive Performance Sdn. Bhd. (“IP”) 100 100 Property development.

Everlasting Growth Sdn. Bhd. (“EG”) 100 100 Property development.

* Meda Project Management 100 100 Project management services.Sdn. Bhd. (“MPM”)

Meda Realty Sdn. Bhd. (“MR”) 100 100 Property development.

MIB Construction Sdn. Bhd. (“MIBC”) 100 100 Building contractor.

Nandex Land Sdn. Bhd. (“NL”) 100 100 Provision of landscaping services.

Sri Lingga Sdn. Bhd. (“SL”) 100 100 Property development and cultivation of oil palm.

Golden Sceptre (MM2H) Sdn. Bhd. (“GS”) 100 100 Provision of services in relation to Malaysia My Second Home Program.

Indirect subsidiaries

Subsidiary of LB* Kota Malim Sdn. Bhd. (“KM”) 100 100 Property development.

Subsidiary of SLPerformance Sciences Sdn. Bhd. (“PS”) 60 60 Provision of adventure facilities, design and installation,

management training and consultancy services.

Subsidiary of ND10 Semantan Management Sdn. Bhd. 100 100 Dormant company.

* Not audited by Baker Tilly Monteiro Heng for financial year ended 31st December 2006.


7. INVESTMENTS IN ASSOCIATES

The summarised financial information of the associates are as follows:

The Group’s equity interest in the associates, all incorporated in Malaysia, and their respective principal activities are disclosed as follows:


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Group2007 2006

RM’000 RM’000

Unquoted shares - at cost 3,600 3,600Share of post-acquisition results

3,110 3,236

Group2007 2006

RM’000 RM’000

Assets and liabilitiesCurrent assets 411 435Non-current assets 21,102 18,514Total assets 21,513 18,949

Current liabilities 11,509 10,374Non-current liabilities 2,232 489Total liabilities 13,741 10,863

ResultsRevenue - 133Loss for the financial year 315 303


AssociateNusarhu Sdn. Bhd. 40 40 Operation of a resort hotel and chalets under

construction.

Associate of PSPerformance Sciences (M) Sdn. Bhd. (“PSM”) 29 29 Management training and consultancy services.


(490) (364)

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8. INVESTMENT PROPERTIES

The titles to The Summit Bukit Mertajam Plaza have not yet been transferred to the Group.

The investment properties which are charged as security for banking facilities granted to the Group (Note 28(iv)) were revalued by the Directors on 14th February 2007 and 27th September 2006 respectively based on independent professional valuations on the open market value basis and comparison method basis accordingly.


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Group2007 2006

RM’000 RM’000

Investment properties represent the retained portion of:A 6-storey shopping complex known as The Summit, Subang USJand an adjoining 13-storey office tower known as Menara Summit- at cost - -- at valuation 218,590 222,356

218,590 222,356Shop Lot at 10 Semantan Avenue, Kuala Lumpur- at cost 12,546 -- at valuation - -

12,546 -A 5-storey shopping complex together with a 10-storey office towerknown as The Summit Bukit Mertajam Plaza- at cost - -- at valuation 77,719 77,719

77,719 77,719308,855 300,075

Less: Transferred to assets held for sale (Note 11) -Effect of adopting FRS 140 -

At 31st December 90,265 296,310

Represented by:Current- at valuation - 77,719Non-Current- at cost 12,546 -- at valuation 77,719 218,591

90,265 218,591

Total 90,265 296,310

(218,590)(3,765)

9. PROPERTY DEVELOPMENT ACTIVITIES(a) Land held for property development

The land stated at valuation was land previously used for plantation purposes which was reclassified from property, plant and equipment in financial year 2001 for the commencement of property development activities. This land was revalued by the Directors based on independent professional valuation carried out in 1996 on the open market value basis. As allowed by the transitional provision of FRS 201 – Property Development Activities, the carrying amount of this land shown at valuation has been retained on the basis of its previous revaluation as this surrogate cost.

The development rights included in land held for property development and property development cost were acquired from Kumpulan Prasarana Rakyat Johor Sdn. Bhd. (“KPRJ”), the registered land owner of one of the Group’s development projects known as Aman Larkin Project.

The title to a long term leasehold land of a subsidiary which amounted to RM12.8 million (2006: RM12.8 million) is registered under the name of Perbadanan Kemajuan Negeri Perak. The subsidiary is the beneficial owner of the land, vested by the Sale and Purchase Agreement dated 14th March 1995.

The entire freehold and long term leasehold land have been charged as security for banking facilities granted to the Group (Notes 27(i) and 28(i)).

Included in development expenditure is borrowing costs capitalised during the financial year amounting to RM1,862,000/- (2006 : RM1,822,000/-).


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Group2007 2006

RM’000 RM’000

Balance as at 1st JanuaryAt valuationFreehold land 576 576Long term leasehold land 23,019 22,516At costLong term leasehold land 12,800 12,800Development rights 4,470 4,470Development expenditure 22,092 22,763

62,957 63,125

Additions during the financial year 7,943 503Cost incurred as expense in income statements -

7,943

Balance as at 31st December 70,900 62,957Represented by:At valuationFreehold land 576 576Long term leasehold land 23,019 23,019At costLong term leasehold land 12,800 12,800Development rights 4,470 4,470Development expenditure 30,035 22,092

70,900 62,957

(671)(168)

82

9. PROPERTY DEVELOPMENT ACTIVITIES (cont’d)(b) Property development costs


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Group2007 2006

RM’000 RM’000

Balance as at 1st JanuaryAt valuationLong term leasehold land 9,869 6,473At costLong term leasehold land 22,501 22,501Development rights 1,938 1,938Development expenditure 88,677 223,773

122,985 254,685

Costs incurred during the financial yearAt costLong term leasehold land - 3,396Development expenditure 7,973 81,493

7,973 84,889Other movements during the financial year

Allowance for impairment loss -Transfer to investment properties -Transfer to inventories -

-Recognised as an expense in income statements

In previous years During the financial year

Balance as at 31st December 33,871 76,387

(8,721)(12,546)

(3,749)(25,016)

(46,597) (178,705)(25,474) (84,482)(72,071) (263,187)

The long term leasehold land under development have been charged as security for banking facilities granted to the Group (Notes 27(ii) and 28(ii)).

Included in the development expenditure is borrowing costs capitalised during the financial year amounting to RM1,111,000/- (2006 : RM746,000/-).

10. GOODWILL ON CONSOLIDATION

Group2007 2006

RM’000 RM’000

Balance as at 1st January / 31st December 811 811

11. ASSETS HELD FOR SALEOn 1st August 2007, the Group has announced a proposed sale by Meda Development Sdn. Bhd. (“MD”), a wholly-owned subsidiary of the Company, of all property units owned by MD located within the commercial mixed development buildings known as “The Summit Subang USJ” comprising, inter-alia, a retail podium, an office tower block, a hotel building and car parking bays to Mayban Trustees Berhad, being the trustee for AmFirst Real Estate Investment Trust.

The Proposed Sale was completed on 31st March 2008 in accordance with the terms and conditions stipulated in the conditional Sale and Purchase Agreement dated 30th November 2007.

The assets held for sale are as follows:

12. INVENTORIES


Med

a Inc. B

erhad

(Co. N

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Inco

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83

Group2007 2006

RM’000 RM’000

Amounts transferred from:- Property, plant and equipment (Note 5) 96,992 -- Inventories (Note 12) 20,812 -- Investment properties (Note 8) 218,590 -- Other receivables, deposits and prepayments (Note 15) 38 -- Other payables, accruals and deposits (Note 24) -

334,248 -Less: Impairment loss -

250,382 -

Group2007 2006

RM’000 RM’000

At CostCompleted development properties 29,744 25,993Food and beverages 166 179Room supplies and consumables 238 180

30,148 26,352Less: Transferred to assets held for sale (Note 11) -

9,336 26,352

(2,184)

(83,866)

(20,812)

84

13. AMOUNTS DUE FROM CUSTOMERS FOR CONTRACT WORK

14. TRADE RECEIVABLES

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Included in trade receivables are amounts owing by companies in which certain Directors of the Company and a brother of certain Directors of the Company have substantial financial interests amounting to approximately RM6,902,525/- (2006 : RM4,672,000/-). The amounts due by these companies are unsecured and interest-free.

The credit terms offered by the Group in respect of trade receivables are 7 days from the date of invoice and 21 days from the date of progress billing for property buyers. Other credit terms are assessed and approved on a case-by-case basis.

In addition, the Group offers an instalment plan to the buyers of a property development project that allow the buyers to settle the remaining 90% of the purchase consideration of the properties in monthly instalments over a period of 48 to 60 months from the date of Sale and Purchase Agreements.

There is no foreign currency exposure as at the end of the financial year.


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Group2007 2006

RM’000 RM’000

Aggregate costs incurred to date 101 101Add: Attributable profits 7 7

108 108Less: Progress billings

3 3

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Trade receivables 48,439 67,242 3 3Less: Allowance for doubtful debts - -

36,080 54,915 3 3

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Other receivables 39,223 36,786 763 545Less: Allowance for doubtful debts

36,034 33,597 360 142

(105)(105)

(12,327)(12,359)

(403)(403)(3,189) (3,189)

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont’d)


Med

a Inc. B

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(Co. N

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Inco

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85

b) The turnkey deposits of RM16.527 million (2006 : RM16.527 million) represent deposits paid to the turnkey contractors for housing development projects upon award of the said development projects which will be refunded upon completion of the projects.

The remaining RM12.577 million (2006 : RM12.577 million) of the turnkey deposits is made to a single turnkey contractor. The advance billing of RM19.357 million (2006 : RM19.188 million) paid to the same turnkey contractor will be recovered from a related company of the turnkey contractor, via assignment of the proceeds from sale of its property development project.

Group2007 2006

RM’000 RM’000

a) Included in other receivables are:Liquidated and ascertained damages (“AD”) receivable from turnkey contractors- owing by companies in which certain Directors of the Company and a brother

of certain directors of the Company has substantial financial interest 4,000 4,000Development expenditure on relocation of squatters recoverable from KPRJ

in accordance with development agreement (Note 9(a)) , net of KPRJ entitlementon the sale value 5,840 5,776

Group2007 2006

RM’000 RM’000

Included in the turnkey deposits are:Deposits held by turnkey contractors- owing by a company in which certain directors of the Company and a brother

of certain directors of the Company have substantial financial interest 3,950 3,950

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Turnkey deposits 25,967 25,967 - -Less: Allowance for doubtful debts - -

16,527 16,527 - -

Advance billings by a turnkey contractor 19,357 19,188 - -Other deposits 3,645 2,653 27 28Less: Transferred to assets held for sale (Note 11) - - -

3,607 2,653 27 28Prepayments 2,197 2,425 7 -

77,722 74,390 394 170

(9,440)(9,440)

(38)

86

16. AMOUNTS DUE FROM SUBSIDIARIES

The amounts due from subsidiaries represent advances and payments made on behalf which are unsecured, interest free and have no fixed terms of repayment.

17. DEPOSITS PLACED WITH LICENSED BANKS

GroupFixed deposits of the Group amounting to RM228,000/- (2006 : RM618,000/-) are pledged to licensed banks to secure banking facilities granted to the Group.

18. CASH AND BANK BALANCES

Cash held under Housing Development Account by subsidiaries represents receipts from purchasers of residential properties less payments or withdrawals provided pursuant to Section 7A of the Housing Developers (Control and Licensing) Act, 1966.

19. SHARE CAPITAL


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Company2007 2006

RM’000 RM’000

Amounts due from subsidiaries 57,106 56,247Less: Allowance for doubtful debts

42,414 42,247

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 3,928 6,859 17 4Cash held under Housing Development Account 384 307 - -

4,312 7,166 17 4

2007 2006Number Number

of Shares of SharesUnit RM’000 Unit RM’000

Ordinary shares of RM0.50 each

Authorised:At 1st January/31st December 500,000 250,000 500,000 250,000

Issued and fully paid:At 1st January/31st December 426,940 213,470 426,940 213,470

Group and Company

(14,000)(14,692)

20. BORROWINGS (INTEREST BEARING)

21. DEFERRED TAX(a) The deferred tax assets and liabilities are made up of the following:


Med

a Inc. B

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(Co. N

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87

Group2007 2006

RM’000 RM’000

Current liabilitiesHire purchase liabilities (Note 26) 992 839Bank overdrafts (Note 27) 15,116 15,113Bank loans - secured (Note 28) 212,816 123,160

228,924 139,112Non-current liabilitiesHire purchase liabilities (Note 26) 1,877 1,565Bank loans - secured (Note 28) 35,326 130,238

37,203 131,803Total borrowingsHire purchase liabilities (Note 26) 2,869 2,404Bank overdrafts (Note 27) 15,116 15,113Bank loans - secured (Note 28) 248,142 253,398

266,127 270,915

Group2007 2006

RM’000 RM’000

Balance as at 1st January 24,704 34,542Reclassified to current tax liabilities -Recognition in the income statements- current year - effect of adopting FRS140 -- under / (over) accrual in prior years (Note 33) 637


Presented after appropriate offsetting as follows:Deferred tax assetsDeferred tax liabilities 13,580 28,682

10,873 24,704

(1,844)

(14,468) (6,495)(12)

(1,487)(13,831) (7,994)

(2,707) (3,978)

88

21. DEFERRED TAX (cont’d)(b) The movement of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:


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Group2007 2006

RM’000 RM’000

Deferred tax assetsBalance as at 1st January 3,978 4,607

Recognition in the income statementsUnabsorbed tax lossesUnutilised capital allowancesProvisions -


Group2007 2006

RM’000 RM’000

Deferred tax liabilitiesBalance as at 1st January 28,682 39,149

Recognition in the income statementsExcess of depreciation over corresponding capital allowance - 1,011Reversal or realisation of deferred tax on revaluation

reserve through depreciation -Cystallisation of deferred tax on revaluation reserveProvisions 5

13,580 30,526Reclassified to current tax liabilities -


(622) (621)(1) (8)

(648) (1,271) (629)

(1,049)(15,107) (7,086)

(1,499)(15,102) (8,623)

(1,844)

21. DEFERRED TAX (cont’d)(c) The components of deferred tax assets and liabilities as at the end of the financial year comprise the following:

22. OTHER LONG TERM PAYABLES

The unpaid land acquisition cost is due to Perbadanan Kemajuan Negeri Perak, the former substantial shareholder of KM. The amount is unsecured, interest-free and is not expected to be paid within the next 12 months.

23. TRADE PAYABLES

GroupThe credit terms available to the Group in respect of trade payables range from 14 to 60 days from the date of invoices and progress billing.

There is no foreign currency exposure as at the end of the financial year.


Med

a Inc. B

erhad

(Co. N

o. 507785-P)

Inco

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89

Group2007 2006

RM’000 RM’000

Deferred tax assetsUnabsorbed tax losses 2,676 3,964Unutilised capital allowances 31 14


Deferred tax liabilitiesExcess of tax written down value over correspondingnet book value 1,740 16,635Revaluation reserve 11,840 10,291Fair value adjustment on acquisition of a subsidiary - 1,756


Group2007 2006

RM’000 RM’000

Unpaid land at acquisition cost 1,663 1,663

90

24. OTHER PAYABLES, ACCRUALS AND DEPOSITS

All the above amounts are unsecured, interest-free and are to be settled in accordance with normal credit terms ranging from 14 to 60 days from the date of invoice.

25. AMOUNTS DUE TO SUBSIDIARIESThe amounts due to subsidiaries represent advances and payments made on behalf which are unsecured, interest free and have no fixed terms of repayment.

26. HIRE PURCHASE LIABILITIES


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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Other payables 29,217 26,435 472 443Accruals 26,802 20,000 467 395Deposits 5,469 5,492 - -Less: Transferred to assets held for sale (Note 11) - - -

3,285 5,492 - -

59,304 51,927 939 838

Group2007 2006

RM’000 RM’000

Minimum hire purchase payments- not later than one year 1,141 965- later than one year and not later than five years 2,102 1,652- later than five years 16 89

3,259 2,706Future interest chargesPresent value of hire purchase liabilities 2,869 2,404

Current- not later than one year 992 839Non-current- later than one year and not later than five years 1,861 1,517- later than five years 16 48

1,877 1,565

2,869 2,404

(2,184)

(390) (302)

27. BANK OVERDRAFTS – SECUREDThe bank overdrafts of the Group are secured by:

(i) first legal charges over the Group’s land held for property development (Note 9a);

(ii) first legal charges over the Group’s land under development, included in property development costs (Note 9b);

(iii) corporate guarantees by the Company; and

(iv) joint and several guarantees by certain Directors of the Company and a brother of certain Directors of the Company.

28. BANK LOANS – SECURED


Med

a Inc. B

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91

Group2007 2006

RM’000 RM’000

(a) Term Loans

RM125.0 million term loan I repayable as follows:- 6 monthly instalments of RM300,000/- until 30th June 2007.- 6 monthly instalments of RM400,000/- until 31st December 2007.Subsequently, the settlement of the term loan has been deferred to 31st March 2008

and to be set aside by a portion of the proposed sales proceeds. 135,442 132,182

RM30.0 million term loan II repayable as follows:- 6 monthly instalments of RM200,000/- until 30th June 2007.- 6 monthly instalments of RM300,000/- until 31st December 2007.Subsequently, the settlement of the term loan has been deferred to 31st March 2008

and to be set aside by a portion of the proposed sales proceeds. 26,369 25,836

RM40.0 million term loan III repayable as follows:- 12 monthly instalments of RM617,400/- until 31st December 2007.Subsequently, the term loan has been restructured with combining RM20.0 million

term loan IV (Note 28(a)). 34,740 34,740

RM20.0 million term loan IV repayable as follows:- 1 quarterly instalment of RM3.39 million each commencing on 30th December 2006.- 3 quarterly instalments of RM1.0 million each commencing on 30th March 2007.- Final instalment payment on 30th December 2007.Subsequently, the term loan has been restructured with combining

RM40.0 million term loan III (Note 28(a)). 17,944 18,561

92

28. BANK LOANS – SECURED (cont’d)


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Group2007 2006

RM’000 RM’000

(a) Term Loans (cont’d)

RM10.0 million term loan V and RM10.0 million bridging loan repayable as follows:- 3 monthly instalments ranging from RM50,000/- to RM200,000/- until

31st March 2007.- 12 monthly instalments of RM50,000/- each commencing 1st April 2007.- 12 monthly instalments of RM100,000/- each commencing 1st April 2008.- 24 monthly instalments of RM200,000/- each commencing 1st April 2009.- Balance to be paid in 6 equal monthly instalments between 1st April 2011

to 1st October 2011. 5,665 6,259

RM13.16 million term loan VI repayable by monthly instalments ofRM219,330/- each commencing 18th August 2005. 4,810 7,543

RM1.0 million term loan VIII repayable by 60 equal instalments ofRM20,227/- each commencing 1st September 2007. 656 737

RM4.0 million term loan IX repayable by 36 equal monthly instalments ofRM126,000/- each commencing 30th November 2008. 4,000 4,000

Total Term Loans 229,626 229,858

(b) Bridging Loans

RM5.0 million bridging loan II repayable by 30th June 2007 or uponredemption of titles, whichever is earlier.

During the financial year, the bridging loan II has been extended until30th April 2008 or upon redemption of titles, whichever is earlier. 1,145 2,650

RM32.0 million term loan and bridging loan III repayable by 8 quarterlyinstalments ranging from RM2.0 million to RM6.0 million commencing16th December 2004, or upon redemption of titles, whichever is earlier.

During the financial year, the term loan and bridging loan III has benrestructured to RM4.0 million term loan and repayable by 47 monthlyinstalments of RM80,000/- each commencing 14th January 2007and a final instalment of RM240,000/-. 1,476 5,160

Total Bridging Loans 2,621 7,810

28. BANK LOANS – SECURED (cont’d)

(a) Subsequent to the completion of proposed sales, the repayable term of the total RM40.0 million term loan III and RM20.0 million term loan IV will be re-aligned with the following settlement scheme:

(i) RM25.0 million on or before 31st March 2008 from the proposed sales proceeds;

(ii) 12 monthly instalments of RM350,000/- each commencing 20th April 2008;

(iii) 12 monthly instalments of RM400,000/- each commencing 20th April 2009;

(iv) 24 monthly instalments of RM450,000/- each commencing 20th April 2010;

(v) 36 monthly instalments of RM500,000/- each commencing 20th April 2012;and

(vi) a final bullet payment on balance in 20th March 2015.

(b) Fixed loan I and II totalling RM13.335 million (2006 : RM12.966 million) have been acquired by Danaharta Urus Sdn. Bhd. on 3rd April 2000 pursuant to the corporate restructuring of the bank. The Group is in the midst of negotiations with the banks to extend the fixed loans repayable on 31st December 2008.


Med

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Inco

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93

Group2007 2006

RM’000 RM’000

(c) Other Borrowings

RM5.0 million revolving loan repayable on demand.

Subsequently, the settlement of the term loan has been deferred to 31st March 2008and to be set aside by a portion of the proposed sales proceeds. 2,560 2,764

RM11.4 million fixed loan I repayable by 31st December 2007 in bullet paymentor upon redemption of titles, whichever is earlier, with adjustments to final interest.(Note 28(b)) 11,464 11,464

RM1.9 million fixed loan II repayable by monthly instalments of RM163,000commencing 1st April 2007 with full settlement by 31st December 2007.(Note 28(b)) 1,871 1,502

Total Other Borrowings 15,895 15,730

GRAND TOTAL 248,142 253,398

94

28. BANK LOANS – SECURED (cont’d)(b) The bank loans are repayable as follows:

The term loans, bridging loans and other borrowings are secured by:

(i) first and second legal charges over certain of the Group’s land held for property development (Note 9a);

(ii) first legal charges over the Group’s land under development, included in property development costs (Note 9b);

(iii) first legal charge over KPRJ leasehold land on which the Group’s development project known as Aman Larkin Project is situated;

(iv) first and second legal charges over the Group’s entire freehold land and buildings (Note 5) and investment properties (Note 8);

(v) legal assignment over the sales, rental income proceeds and such other income receivable from the Group’s investment properties (Note 8);

(vi) legal assignment of the surplus proceeds from the ongoing and future development projects carried out/to be carried out by Group;

(vii) debentures over MD, ZKP and PS’s fixed and floating assets;

(viii) corporate guarantees from the Company and certain substantial shareholders;and

(ix) joint and several guarantees by certain Directors of the Company and a brother of certain Directors of the Company.


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Group2007 2006

RM’000 RM’000

Current liabilities- not later than one year 212,816 123,160Non-current liabilities- later than one year and not later than five years 35,326 130,238

Total bank loans - secured 248,142 253,398

29. REVENUE

30. COST OF SALES


Med

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95

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Proportionate sales value of development properties 24,546 109,879 - -Sale of hotel rooms, food and beverages and other

ancillary services 26,031 23,429 - -Gross rental income 16,146 15,759 - -Car park operations 3,764 3,247 - -Others 1,885 1,259 - -

72,372 153,573 - -

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Proportionate cost value of development properties 24,349 84,351 - -Cost of hotel services rendered 4,690 3,859 - -Properties letting direct expenses 5,832 3,743 - -Cost of car park operations - 812 - -Others 118 776 - -

34,989 93,541 - -

96

31. OPERATING (LOSS)/PROFITOperating (loss)/profit has been arrived at:


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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

After charging:Allowance for doubtful debts included in other

operating expenses 32 1,813 - 4,015Allowance for doubtful debts on amounts due

by subsidiaries - - 692 -Auditors' remuneration- current year 146 112 67 32- underaccrual in prior years - 6 - -Bad debts written off 33 77 - -Depreciation of property, plant and equipment 6,463 6,456 19 18Directors’ remuneration- fees 132 121 132 121- salaries, bonuses and allowances :- Company’s directors 745 864 554 403- Subsidiary companies' Directors - 135 - -- others 35 29 21 29Staff costs- salaries, overtime and allowance 5,971 6,870 606 575- defined contribution plan 407 402 143 65- other employee benefits 1,290 1,552 16 111Impairment loss on- property, plant and equipment - 5,048 - -- property development cost 8,721 - - -- investment properties - 5,595 - -- investment in subsidiaries - - 16,765 27,647- assets held for sale 83,866 - - -Rental of- equipment 18 9 2 -- motor vehicle 39 - 39 -- premises 123 369 188 237Tax penalty 3,983 - - -

And crediting:Bad debts written back - 159 - -Deposit forfeited 147 550 - -Gain on disposal of property, plant and equipment 93 92 - -Interest income 16 836 - 6Late payment interest income 122 91 - -Provision for liquidated ascertained damages

no longer required - 966 - -Revaluation of investment properties - 6,827 - -

32. FINANCE COSTS (NET)

33. TAXATION

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

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


Med

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Inco

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97

Group2007 2006

RM’000 RM’000

Bank loans 17,863 19,360Hire purchase liabilities 162 129Interest on late payments 601 -Others 45 24

18,671 19,513

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Current year- income tax - -- deferred tax (Note 21(a)) 14,468 6,495 - -

14,060 1,915 - -(Under)/overaccrual of tax in prior year- income tax 1,690 5,890 - -- deferred tax (Note 21(a)) 1,487 - -- effect of adoption FRS 140 - 1 2 - -

1,053 7,389 - -15,113 9,304 - -

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

(Loss)/profit before taxation (115,090) 6,348 (16,493) (30,637)

(408)

(637)

(4,580)

98

33. TAXATION (cont’d)

Further, the deferred tax assets have not been recognised for the following items:

The unabsorbed tax losses and unutilised capital allowances are available indefinitely to offset against future taxable profits of the subsidiaries in which those items arose.

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group. They have arisen in subsidiaries that have a recent history of losses of which it is not probable that taxable profits will be available against which the deductible temporary differences can be utilised.


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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Tax at the applicable tax rate of 27%(2006 : 28%) 33,834 4,453 8,578Tax effects arising from- SME tax savings 5 138 - -- depreciation on non-qualifying property, plant

and equipment - -- non-deductible expenses- non-taxable income - - -- deferred tax recognised at different tax rates -- (origination) / reversal of deferred tax assets not

recognised in the financial statements 640 -- cyrstallisation of deferred tax on revaluation

reserves 15,091 7,086 - -- temporary differences 1,303 9 30 -- utilisation of previously unrecognised capital

allowance and tax losses 241 353- underaccrual in prior years 1,053 7,389 - -- change of tax rate 1,928 - 323 -

Income tax expense for the financial year 15,113 9,304 - -

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Excess of net book value over corresponding taxwritten down value -

Excess of tax written down value over correspondingnet book value 322 1,539 - 97

Unabsorbed tax losses 131,172 112,698 30,918 32,071Unutilised capital allowances 80,955 80,332 - 123

Balance as at 31st December 210,408 192,973 30,899 32,291

(1,840)

(139) (772)(29,914) (903) (4,798) (8,931)

(74)(4,214) (268) (618)

(3,730) (1,776)

(30) (30)

(2,041) (1,596) (19)

34. (LOSS) / EARNINGS PER ORDINARY SHARE(a) Basic (loss) / earnings per share amounts are calculated by dividing (loss) / profit for the year attributable to ordinary

equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

(b) There is no diluted earnings per share as the Company does not have any dilutive potential ordinary share.

35. CONTINGENT LIABILITIESAs at 31st December 2007, the Group and the Company are contingently liable for the following:

The Group’s bank guarantees are secured over certain properties and fixed deposits of the Group and are also jointly and severally guaranteed by certain directors of the Company.

36. CONTINGENT ASSETS(i) In consideration of the acquisition of the sale, Cemerlang Land Sdn. Bhd. (“CL”), from the substantial shareholder of

the Company, Ecofirst Consolidated Berhad (“ECO”), ECO has granted a guarantee via a profit guarantee agreement (“PGA”) dated 27 December 2001 that the aggregate audited profit after tax of CL for the three financial years commencing from 1st January 2002 or until the termination of the development agreement with KPRJ, the registered land owner of the project of CL, whichever is earlier, shall not be less than RM6 million.

The PGA has expired on 31st December 2004 and the shortfall of the profit guarantee is determined at RM4,531,073/. During the financial year, ECO has transferred a lot from its investment property worth RM2,341,922/- to Majlis Perbadanan Subang Jaya as a settlement of assessment owing by a subsidiary of the Company. The transfer is treated as part settlement of the profit guarantee.

In year 2006, ECO has the intention to settle the balance of RM2,189,151/- by the transfer of another lot from the same investment property.

In addition, the Company is currently in negotiation with the ECO to finalise the settlement plan.


Med

a Inc. B

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(Co. N

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Inco

rpo

rate In M

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99

Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Guarantees given to financial institutions for creditfacilities granted to subsidiaries - - 345,000 312,240

Guarantees given to financial institutions for creditfacilities granted to associate 18,000 18,000 - -

18,000 18,000 345,000 312,240

2007 2006RM’000 RM’000

(Loss)/profit attributable to ordinary equity holders of the Company 15,652

Weighted average number of ordinary shares in issue 426,940 426,940

Basic (loss)/earnings per shares (sen) 3.67

(99,997)

(23.42)

100

36. CONTINGENT ASSETS (cont’d)(ii) In relation to the material litigation as disclosed in Note 37(c) to the financial statements, the directors have been

advised by their solicitors that ZKP Development Sdn. Bhd. has a good case against AM Assurance Berhad.

37. MATERIAL LITIGATION

(a) Companion Park Sdn Bhd (“CPSB”) Vs Meda Development Sdn Bhd (“MDSB”)

CPSB has made a claim of RM3.5 million together with interest accrued thereon against MDSB in respect of properties buy back arrangement via a Put Option Agreement dated 1st October 1998. CPSB has also issued another notice to certain directors of the Company and a director of certain subsidiary companies, as guarantors, to pay the balance outstanding sum.

The Court had allowed CPSB’s application to reinstate the matter and MDSB has filed its appeal against the court’s decision. The Appeal has been dismissed with no order as to costs.

CPSB and MDSB have on 26th March 2008 settled the matter amicably by payment of cash and in kind.

(b) The Store Corporation Berhad & The Store (Malaysia) Sdn Bhd (“The Store”) Vs ZKP Development Sdn Bhd (“ZKP”)

This matter arose out of a tenancy agreement entered into between the two parties whereby The Store agreed to rent all the premises known as Shoplots S2.67, F1.19, G0.58 and LG0.57 of The Summit Bukit Mertajam.

The Store applied for a declaration order against ZKP to seek inter alia the Court’s declaration that the outstanding arrears in rental of RM4.7 million claimed by ZKP as at year 2002 to be unlawful and a declaration from the Court of what ought to be the applicable rental rate per square foot for the respective term of the tenancy.

The Court granted Order In Terms to convert the originating summons into a Writ Action on 21st Oct 2004 and in the same action, ZKP filed a counter claim inter alia, for the sum of RM8,972,258/- being the shortfall of rental payable by The Store as at 2004 and continuing together with interest at the rate of 12% per annum.

Pursuant thereto, ZKP filed an application for Summary Judgement against The Store which was dismissed on 12th August 2005.

ZKP’s appeal was dismissed with costs on 24th July 2006 and has filed its appeal against the Judge’s decision. The Court of Appeal has dismissed ZKP’s appeal with costs on 18th July 2007.

The High Court has fixed 27th May 2008 for case management.

(c) ZKP Development Sdn Bhd (“ZKP”) Vs AMAssurance Berhad (“AM”)

This is a contract of insurance where AM agreed to insure and indemnify ZKP up to total sum of RM74,000,000/-. ZKP had submitted a claim for the sum of RM6,016,155/- being loss and damage suffered to its properties during the insured period.

AM had repudiated their liability in the contract of insurance. A Writ Of Summons was initiated thereafter by ZKP against AM to claim amongst others the aforesaid sum of RM6,016,155/-.

The Timbalan Pendaftar had allowed AM’s application to strike out ZKP’s Writ and Statement Of Claim on reason that it was time-barred and ZKP has filed its appeal against the Timbalan Pendaftar’s decision.

The Judge in Chambers has fixed 21st May 2008 for clarification and decision.


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37. MATERIAL LITIGATION (cont’d)

(d) Lembaga Hasil Dalam Negeri (“LHDN”) Vs ZKP Development Sdn Bhd (“ZKP”)

A Writ of Summon was initiated by LHDN against ZKP to claim the sum of RM9,603,548/- in respect of outstanding tax assessment and tax penalty for the Years of Assessment from 1998 to 2001 on 2nd November 2006.

ZKP has filed its Statement of Defence on 14th February 2007 and currently pending LHDN’s reply.

(e) Lembaga Hasil Dalam Negeri (“LHDN”) Vs Meda Development Sdn Bhd (“MD”)

Writs of Summons were filed by LHDN against MD to claim the total sum of RM22,466,768/- in respect of outstanding tax assessment and tax penalty from years 2001 to 2007.

MD has entered appearances and filed its Statements of Defence and the matter is now currently pending LHDN’s reply.

(f) Lembaga Hasil Dalam Negeri (“LHDN”) Vs Sri Lingga Sdn Bhd (“SL”)

A Writ of Summon was initiated by LHDN against SL to claim the sum of RM6,863,148/- in respect of outstanding tax assessment and tax penalty for the Year of Assessment 2002 and 2003 on 21st September 2007.

SL has appointed its solicitors to defend the claim and the said solicitors have entered appearance on behalf of SL.

(g) Nandex Development Sdn Bhd (“ND”) Vs Intra Design Sdn Bhd (“ID”)

ND had initiated an injunction action against ID via an Originating Summons dated 8th August 2007 to refrain ID from presenting a winding up petition against ND in relation to two (2) Notices under Section 218, Companies Act 1965 bothdated 20th July 2007 over the alleged debts of RM1,358,371/- and RM242,964/- based on the interim certificates of payment together with 2.5% Retention Sum of which ID claimed that the final certificates for payment have yet to be issued by the consultants.

The court has granted ND’s application for an injunction to restrain ID from filing a winding-up petition.

ID has since appealed against the decision.

(h) Chow Tat Meng & 150 Others (“CTM & 150 Others”) Vs Meda Development Sdn Bhd (“MD”) (“First Defendants”) & 10 Others (“Defendants”)

CTM & 150 Others had on 16th April 2005 commenced a legal action against MD & 10 Others seeking from the Court, inter alia, declaration for breaches of sale and purchase agreements, deeds of mutual covenants, advertisement brochures and newsletters, damages for misrepresentations and refunds of sinking fund charges. CTM & 150 Others are claiming for a sum of RM16,979,033/- as liquidated damages against MD & 10 Others.


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37. MATERIAL LITIGATION (cont’d)

(h) Chow Tat Meng & 150 Others (“CTM & 150 Others”) Vs Meda Development Sdn Bhd (“MD”) (“First Defendants”) & 10 Others (“Defendants”) (cont’d)

MD had been informed by the solicitors of CTM & 150 Others vide a letter dated 27th February 2008 that CTM & 150 Others have withdrawn the summons in chambers filed on 16th January 2008 which sought for an injunction, inter-alia, the following:

(i) to restrain the Company from, inter alia, disposing, charging, mortgaging or assigning its movable and immovable assets including monies held in the bank account or any other accounts in its own name up to the sum of RM30,000,000/- or such other sum that the Court deems fit until the full and final disposal of the current material litigation matter; and/or

(ii) MD & 10 Others to furnish a bank guarantee in the sum of RM30,000,000/- or such other sum that the Court deems fit as security to the Plaintiffs.

However, CTM & 150 Others have filed a fresh application against MD & 10 Others to preserve a sum of RM30,000,000/- in a stakeholders’ account, in which a sealed copy of the preservation application in respect of Civil Suit no. S6-22-145-2005 has been served on MD & 10 Others on 19th February 2008.

The matter has been fixed for the Decision of CTM & 150 Others’ Application on 15th May 2008.

(i) Azizah Rahman (“AR”) & 35 Others Vs Meda Development Sdn Bhd (“MD”) & 7 Others (“Defendants”)

AR & 35 Others had on 7th June 2006 commenced a legal action against MD & 7 Others seeking from the Court, inter alia, declaration for breaches of sale and purchase agreements, deeds of mutual covenants, advertisement brochures and newsletters, damages for misrepresentations and refunds of sinking fund charges. AR & 35 Others are claiming for a sum of RM5,466,184/- as liquidated damages against MD & 7 Others.

MD had been informed by the solicitors of AR & 35 Others vide a letter dated 27th February 2008 that AR & 35 Others have withdrawn the summons in chambers filed on 16th January 2008 which sought for an injunction, inter-alia, the following:

(i) to restrain the Company from, inter alia, disposing, charging, mortgaging or assigning its movable and immovable assets including monies held in the bank account or any other accounts in its own name up to the sum ofRM9,000,000/- or such other sum that the Court deems fit until the full and final disposal of the current material litigation matter; and/or

(ii) MD & 7 Others to furnish a bank guarantee in the sum of RM9,000,000/- or such other sum that the Court deems fit as security to AR & 35 Others.

However, AR & 35 Others have filed a fresh application against MD & 7 Others to preserve a sum of RM9,000,000/- in a stakeholders’ account, in which an unsealed copy of the preservation application in respect of Civil Suit no. S6-22-308-2006 has been served on MD & 7 Others on 30th January 2008.

The matter has been fixed for the Hearing of AR & 35 Others’ Application on 10th June 2008.


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38. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Identities of Related PartiesThe Company has controlling related party relationship with its direct and indirect subsidiaries.

The Group also has related party relationships with the following parties:

(i) Substantial shareholders of the CompanyEcofirst Consolidated Berhad (“ECO”) (formerly known as Kumpulan Emas Berhad).

(ii) Associates of ECOSEG International Berhad (“SEG”)

(iii) A company in which directors of the Company, Dato’ (Dr.) Teoh Seng Foo, Teoh Seng Kian and their brother have substantial financial interestMeda Complex Management (USJ) Sdn. Bhd. (“MCMU”)

(iv) A company in which Dato’ (Dr.) Teoh Seng Foo, a director of the Company and his brother have substantial financial interestsMeda Complex Management (Bukit Mertajam) Sdn. Bhd. (“MCMB”)

(v) A company in which Teoh Seng Kian, a director of the Company and his brother are the DirectorsCasa Andaman Sdn Bhd (“CASB”)

(vi) A company in which a brother of Dato’ (Dr.) Teoh Seng Foo and Teoh Seng Kian, directors of the Company has substantial financial interestPharma Exel Sdn Bhd (“PESB”)

(b) Significant Related Party Transactions and BalancesIn the normal course of business, the Group undertakes transactions with certain of its related parties listed above. Set out below are the significant related party transactions for the financial year (in addition to related party disclosuresmentioned elsewhere in the financial statements). The related party transactions described below were carried out on terms and conditions mutually agreed between the respective parties.


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38. SIGNIFICANT RELATED PARTY DISCLOSURES (cont’d)

(b) Significant Related Party Transactions and Balances (cont’d)


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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Hotel and related services rendered to- MCMU - 53 - -- MCMB 11 8 - -- SEG - 95 - -- ECO - 57 - -

Rental income from- MCMU 504 510 - -- MCMB 247 247 - -- ECO 573 233 - -- CASB - 20 - -- PESB - 308 - -

Service charges paid and payable to- MCMU 1,751 2,473 88 110- MCMB - 867 - -

Rental expenses to- MD - - 188 237

Administrative fees charged to- ND - - 780 840- SL - - 360 300- KM - - 120 120- MD - - 240 120- MPM - - 60 60- ZKP - - 60 60- EG - - 720 840- IP - - 720 840- CL - - 180 -- MR - - 30 -

38. SIGNIFICANT RELATED PARTY DISCLOSURES (cont’d)

(c) Key Management Personnel CompensationThe remuneration of key management during the year is as follows:

* Key management personnel comprise persons other than the directors of the Group entities, having authority and responsibility for planning, directing and controlling the activities of the Group entities either directly or indirectly.

39. CAPITAL COMMITMENTS

40. SEGMENT INFORMATION

The Group’s operations comprise the following business segments:

Property development : Development of residential and commercial properties and agricultural lots

Property investment : Rental collection from investment properties

Hotel operations : Hotel operations

Car park operation : Operation of car park in commercial properties

Others : Business involved in cultivation of oil palm, provision of landscaping, project management services, provision of adventure facilities and consultancy services and building contractor.

Inter-segment sales represent the car park rental charged by the property investment segment to the car park operation segment. Inter-segment pricing is determined on an arm’s length basis under terms, conditions and prices not materially different from transactions with unrelated parties.


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Group Company2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Key management personnel *- short-term employee benefits 1,878 2,560 404 175- post-emploment benefits:

• defined contribution plan 229 199 47 20- termination benefits - 59 - 12

2,107 2,818 451 207

Group2007 2006

RM’000 RM’000

Approved but not contracted for 19 115

106

40. SEGMENT INFORMATION (cont’d)


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CarProperty Property Hotel Park

Development Investment Operations Operations Others Elimination Consolidated2007 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal Sales 24,546 16,146 26,031 3,764 1,885 - 72,372Inter-segment sales - 206 - - - -

Total 24,546 16,352 26,031 3,764 1,885 72,372

ResultsSegment results 2,952 985 -Unallocated items:Corporate expensesInterest income 138Finance costsShare of results in associate - - - - -Loss before taxTax expense 15,113Loss after taxMinority interests -Net loss for the financial year

AssetsSegment assets 205,773 293,585 92,564 1,767 5,422 - 599,111Tax assets - - - - 111 - 111Investment in associate 3,109 - - - 1 - 3,110Unallocated corporate assets - - - - - - -Total assets 602,332

LiabilitiesSegment liabilities 45,912 37,605 1 3,118 3 64 1,935 - 98,934Tax liabilities - - - - - - 68,310Borrowings - - - - - - 266,127Total liabilities 433,371

Other segment informationCapital expenditure - - - - 19,200 - 19,200Depreciation 303 2,852 2,885 190 233 - 6,463Other significant non-cash expenses

other than depreciation 8,721 59,425 24,539 - - - 92,685

(206)

(206)

(13,885) (61,916) (21,224) (93,088)

(3,343)

(18,671)(126) (126)

(115,090)

(99,977)

(99,977)

40. SEGMENT INFORMATION (cont’d)


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CarProperty Property Hotel Park

Development Investment Operations Operations Others Elimination Consolidated2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal Sales 109,249 16,145 23,600 3,320 1,259 - 153,573Inter-segment sales - 73 - - 237 -

Total 109,249 16,218 23,600 3,320 1,496 153,573

ResultsSegment results 18,532 5,610 1,906 1,907 - 27,307Unallocated items:Corporate expenses Interest income 836Finance costs Share of results in associate - - - - -Profit before tax 6,348Tax expense 9,304Profit after tax 15,652Minority interests -Net profit for the financial year 15,652

AssetsSegment assets 170,518 430,165 113,509 757 10,281 - 725,860Tax assets - - - - 111 - 111Investment in associate 3,235 - - - 1 - 3,236Unallocated corporate assets - - - - - - 229Total assets 729,436

LiabilitiesSegment liabilities 49,038 45,001 6,961 20 4,782 - 105,802Tax liabilities - - - - - - 83,781Borrowings - - - - - - 270,915Total liabilities 460,498

Other segment informationCapital expenditure 177 1,351 402 - 2,588 - 4,518Depreciation 354 3,187 2,706 - 209 - 6,456Other significant non-cash expenses

other than depreciation - 6,878 4,961 607 86 - 12,532

(310)

(310)

(648)

(2,162)

(19,513)(120) (120)

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41. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR(i) On 1st August 2007, the Company has announced that through its wholly owned subsidiary, Meda Development Sdn.

Bhd. (“MD”), had entered into the original Sale and Purchase Agreement (“SPA”) and original Guarantee Agreement (“GA”) with the Purchaser for the sale of the property for an aggregate consideration of RM260.0 million.

Following the announcement, the proposed utilisation of the First Consideration was announced on 29th August 2007.

The Purchaser was notified by Companion Park, a third party, of its claims in relation to the sale and purchase of the individual lots within the Office Tower (“Legal Matters”) and on 30th November 2007, MD had entered into the Revised Agreement as a result of the Legal Matter, to replace and substitute the terms as set out in the Original SPA. Correspondingly, the revised Proposed Utilisation was announced on the same date.

Under the terms of the Revised Agreement, the Proposed Sale of Property will be segregated into the Proposed Unaffected Property Sale and Proposed Affected Property Sale respectively, both of which will be satisfied entirely in cash.

The Proposed Sale was completed on 31st March 2008 in accordance with the terms and conditions stipulated in the conditional Sale and Purchase Agreement dated 30th November 2007.

(ii) On 19th March 2007, the Receivers and Managers were appointed by CIMB Bank Berhad (“CIMB”) to ZKP Development Sdn. Bhd.(“ZKP”), a wholly owned subsidiary of the Company, pursuant to the Debentures dated 18th November 1999 and 29th July 2000.

ZKP owns and operates a shopping complex, office, hotel in Bukit Mertajam, Penang having a net book value of RM93.544 million. As at 31st December 2007, the outstanding claims under banking facilities were RM52.684 million.

As at 31st December 2006, the financial statements of this subsidiary were prepared on a break-up basis and adjustments have been made to restate the carrying values of the assets to their recoverable amounts and reclassified non-current assets and long term liabilities as current assets and current liabilities respectively.

The CIMB has uplifted the receivership of the subsidiary and rescheduled the repayments of the remaining term loan balances, as a result of the Company willutilise part of the sale proceeds as stated in Note 41(i). The subsidiary is no longer under receivership with effect from 16th January 2008.

42. FINANCIAL INSTRUMENTS

(a) Financial Risk ManagementThe Board of Directors recognises the importance of financial risk management in the overall management of the Company’s business. A sound risk management system will not only mitigate financial risk but will be able to create opportunities if risk elements are properly managed.

The Group seeks to manage effectively the various risks namely credit, liquidity and interest rate risks, to which the Group is exposed to in its daily operations.


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42. FINANCIAL INSTRUMENTS (cont’d)(a) Financial Risk Management (cont’d)

(i) Credit riskAs at 31st December 2007, the Group had trade receivables of RM9,233 million (2006 : RM5.610 million) and RM7.251 million (2006 : RM9,379 million) in respect of property buyers and tenants receivables respectively which have been outstanding for more than 1 year. Out of the long outstanding tenant receivables, RM3.53 million is currently under legal proceedings as disclosed in Note 37. Concentration of credit risk with respect to trade receivables of property buyers is limited by withholding legal ownership before the full consideration is received. The Directors believe that no additional credit risk beyond amounts provided for doubtful debts is inherent in the Group’s trade and other receivables.

In respect of the deposits, cash and bank balances placed with major financial institutions, the Directors believe that the possibility of non-performance by these financial institutions is remote on the basis of their financial strength.

Other than as mentioned, the Group has no significant concentration of credit risk. The maximum exposures to credit risk are represented by the carrying amounts of the financial assets in the balance sheet.

(ii) Liquidity riskThe Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all financing, repayment and funding needs are met.

(iii) Interest rate riskThe Group’s primary interest rate risk relates to interest-bearing debts as at 31st December 2007. The investments in financial assets are mainly short term in nature and they are not held for speculative purposes.


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Effective MoreGroup Interest Within 1-5 thanAs at 31st December 2007 Rate 1 Year Years 5 Years Total

% RM’000 RM’000 RM’000 RM’000

Financial AssetDeposits placed with licensed banks 3.0 - 3.7 228 - - 228

Financial LiabilitiesBank overdrafts 8.75 15,116 - - 15,116Bank loans 3.75 - 10.5 212,816 35,326 - 248,142Hire purchase liabilities 2.3 - 5.0 992 1,861 16 2,869

GroupAs at 31st December 2006

Financial AssetDeposits placed with licensed banks 3.0 - 3.7 625 - - 625

Financial LiabilitiesBank overdrafts 8.75 15,113 - - 15,113Bank loans 3.75 - 8.75 123,160 130,238 - 253,398Hire purchase liabilities 2.3 - 5.0 839 1,517 48 2,404

110

42. FINANCIAL INSTRUMENTS (cont’d)(b) Fair Values

(i) Recognised financial instrumentsThe fair values of financial assets and financial liabilities approximate their respective carrying values on the balance sheets of the Group and of the Company, except for amounts due by/(to) related companies and amounts due by/(to) subsidiaries.

It is not practical to estimate the fair values of the amounts due by/(to) related companies and amounts due by/(to) subsidiaries. This is principally due to the lack of fixed repayment terms and the inability to estimate fair value without incurring excessive costs. However, the Group and the Company do not anticipate the carrying amounts recorded in the balance sheets to be significantly different from the values that would be eventually received orsettled.

(ii) Unrecognised financial instrumentsThere are no fair values for financial instruments not recognised in the balance sheets as at 31st December 2007 that are required to be disclosed.

43. RESTATEMENT OF COMPARATIVESThe following comparative amounts have been reclassified in order to conform to the presentation in the current year:


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Group CompanyAs As

previously As previously Asreported restated reported restatedRM’000 RM’000 RM’000 RM’000

Balance SheetsAt 31st December 2006Cash and bank balances 6,536 7,166 - -Tax payables - -

Cash Flow StatementsTax paid - -Cash and cash equivalents - -

(58,447) (59,077)

(1,842) (1,212)(8,570) (7,940)

We, TEOH SENG KIAN and YOU KONG HEAN, being two of the directors of Meda Inc. Berhad, do hereby state that in theopinion of the directors, the accompanying financial statements set out on pages 52 to 110 are drawn up so as to give a true andfair view of the state of affairs of the Group and of the Company as at 31st December 2007 and of the results and cash flows ofthe Group and of the Company for the financial year ended on that date in accordance with the provisions of the Companies Act,1965 and applicable Financial Reporting Standards, the approved accounting standards for entities other than private entitiesissued by the Malaysian Accounting Standards Board.

On behalf of the Board,

TEOH SENG KIANDirector


I, TAN KEN BOO , being the officer primarily responsible for the financial management of Meda Inc. Berhad, do solemnly andsincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 52 to 110 are correct,and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

TAN KEN BOO

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 25 April 2008.

Before me,

S.MASOHOOD OMARDJN, PKT, PJK, PJM(NO. W. 354)Commissioner for Oaths

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

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YOU KONG HEANDirector

112

We have audited the financial statements set out on pages 52 to 110.

These financial statements are the responsibility of the Company’s directors.

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

We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we plan andperform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by directors, as well as evaluating theoverall financial statements presentation. We believe that 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 Financial Reporting Standards, the approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company as at 31st December 2007 and of the results and cash flows of the Group and of the Company 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 of 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 its subsidiaries have been properly kept in accordance with the provisions of the said Act.

REPORT OF THE AUDITORSTO THE MEMBERS OFMEDA INC. BERHAD (Incorporated in Malaysia)

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

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

In forming our opinion, we have considered the adequacy of the disclosure made in Note 2 to the financial statements whichexplains the circumstances and consideration the Directors have taken into account in preparing the financial statements. Wehave considered, that these factors are of significance, and draw your attention to it, but our opinion is not qualified in thisrespect.

Baker Tilly Monteiro HengNo. AF 0117Chartered Accountants

M. J. MonteiroNo. 828/05/08 (J/PH)Partner


REPORT OF THE AUDITORSTO THE MEMBERS OFMEDA INC. BERHAD (cont’d)(Incorporated in Malaysia)

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Class of Securities : Ordinary shares of RM0.50 eachAuthorised Share Capital : RM250,000,000.00Issued and Fully Paid-up Share Capital : RM213,470,471.00No. of Shareholders : 20,989

LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS

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

Holdings No. of Holders Total Holdings Percentage

1-99 32 885 0.00100-1,000 12,967 12,923,317 3.031,001-10,000 5,358 25,959,364 6.0810,001-100,000 2,269 73,875,695 17.30100,001- 21,347,046 (*) 362 291,968,381 68.3921,347,047 and above (**) 1 22,213,300 5.20

Total 20,989 426,940,942 100

ANALYSIS OFSHAREHOLDINGSAS AT 28 APRIL 2008

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No. Name No. of Shares held Percentage

1. TA Nominees (Tempatan) Sdn Bhd 22,213,300 5.20Pledged Securities Account for Purewise Sdn Bhd

2. CIMB Group Nominees (Tempatan) Sdn Bhd 12,000,000 2.81Pledged Securities Account for EcoFirst Consolidated Bhd (49983 ALAM)

3. RHB Capital Nominees (Tempatan) Sdn Bhd 11,030,000 2.58Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok (611002)

4. Malacca Equity Nominees (Tempatan) Sdn Bhd 9,444,000 2.21Pledged Securities Account for Teoh Seng Kian

5. TA Nominees (Tempatan) Sdn Bhd 9,181,400 2.15Pledged Securities Account for Teoh Seng Kian

6. Public Nominees (Tempatan) Sdn Bhd 8,550,000 2.00Pledged Securities Account for EcoFirst Consolidated Bhd (KLC)

7. PM Nominees (Tempatan) Sdn Bhd 7,199,000 1.69Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok (D)

8. TA Nominees (Tempatan) Sdn Bhd 6,510,000 1.52Pledged Securities Account for Teoh Seng Foo

ANALYSIS OF SHAREHOLDINGS AS AT 28 APRIL 2008 (cont’d)

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LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS (cont’d)


9. Alliancegroup Nominees (Tempatan) Sdn Bhd 6,411,500 1.50Pledged Securities Account for Teoh Seng Kian (100387)

10. HDM Nominees (Tempatan) Sdn Bhd 6,200,000 1.45Pledged Securities Account for EcoFirst Consolidated Bhd (M09)

11. Alliancegroup Nominees (Tempatan) Sdn Bhd 5,833,500 1.37Pledged Securities Account for Teoh Seng Aun (100386)

12. Alliancegroup Nominees (Tempatan) Sdn Bhd 5,832,000 1.37Pledged Securities Account for Teoh Seng Foo (100265)

13. EB Nomimees (Tempatan) Sendirian Berhad 5,816,000 1.36Pledged Securities Account for Bernas Bermutu Sdn Bhd (BB)

14. M.I.T Nominees (Tempatan) Sdn Bhd 5,670,000 1.33Pledged Securities Account for Cheam Shaw Fin (MG0033-319)

15. Alliancegroup Nominees (Tempatan) Sdn Bhd 5,445,000 1.28Alliance Merchant Nominees (Tempatan) Sdn Bhd for Sawitani Sdn Berhad

16. Malacca Equity Nominees (Tempatan) Sdn Bhd 5,300,000 1.24Pledged Securities Account for Teoh Seng Foo

17. TA Nominees (Tempatan) Sdn Bhd 5,000,000 1.17Pledged Securities Account for Teoh Seng Aun

18. SEG Equity Sdn Bhd 4,997,000 1.17

19. Kenanga Nominees (Tempatan) Sdn Bhd 4,746,000 1.11Pledged Securities Account for Teoh Seng Foo

20. MKW Jaya Sdn Bhd 4,529,000 1.06

21. Malacca Equity Nominees (Tempatan) Sdn Bhd 4,032,244 0.94Pledged Securities Account for Teoh Seng Aun

22. OSK Nominees (Tempatan) Sdn Berhad 3,945,000 0.92Pledged Securities Account for Purewise Sdn Bhd

23. OSK Nominees (Tempatan) Sdn Berhad 3,860,016 0.90Pledged Securities Account for EcoFirst Consolidated Bhd

24. TA Nominees (Tempatan) Sdn Bhd 3,700,000 0.87Pledged Securities Account for EcoFirst Consolidated Bhd

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LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS (cont’d)

SUBSTANTIAL SHAREHOLDERS

According to the register required to be kept under Section 69L of the Companies Act, 1965, the substantial shareholders(beneficial owners only) of the Company are as follows:

Direct Interest (%) Indirect Interest (%) Total Interest (%)Name of Substantial Shareholder (A) (B) (A + B)

Dato’ (Dr.) Teoh Seng Foo 25,657,824 44,065,008 69,722,832Teoh Seng Aun 19,694,532 44,065,008 63,759,540Teoh Seng Kian 33,526,024 44,065,008 77,591,032EcoFirst Consolidated Berhad 25,620,016 18,444,992 44,065,008Purewise Sdn Bhd 29,850,200 - 29,850,200

(6.01) (10.32) (16.33)(4.61) (10.32) (14.93)(7.85) (10.32) (18.17)(6.00) (4.32) (10.32)(6.99) (6.99)


25. Lembaga Tabung Angkatan Tentera 3,500,000 0.82

26. PM Nominees (Tempatan) Sdn Bhd 3,053,700 0.72Pledged Securities Account for Jumbo Mark Sdn Bhd (D)

27. PM Nominees (Tenpatan) Sdn Bhd 2,874,000 0.67Pledged Securities Account for Cheam Tow Yong (D)

28. HLB Nominees (Tempatan) Sdn Bhd 2,848,700 0.67Pledged Securities Account for Teoh Seng Aun

29. HDM Nominees (Asing) Sdn Bhd 2,700,000 0.63DBS Vickers Secs (S) Pte Ltd for Ng Chee Meng

30. Kenanga Nominees (Tempatan) Sdn Bhd 2,623,000 0.61Pledged Securities Account for Chin Kiam Hsung

Total 185,044,360 43.34

@@@#

STATEMENT OF DIRECTORS’ INTERESTS IN THE COMPANY AND RELATED CORPORATIONS

@ Deemed interested by virtue of their shareholdings in EcoFirst Consolidated Berhad and its wholly owned subsidiary, Sawitani Sdn. Bhd.

# Deemed interested by virtue of its shareholding in Sawitani Sdn. Bhd.

No. of shares held No. of shares heldDirect Interest (%) Indirect Interest (%) Total Interest (%)

Name (A) (B) (A + B)

Dato’ (Dr.) Teoh Seng Foo 25,657,824 (6.01) 44,065,008 (10.32) 69,722,832 (16.33)Teoh Seng Kian 33,526,024 (7.85) 44,065,008 (10.32) 77,591,032 (18.17)You Kong Hean - - -Chiam Tau Meng - - -Ooi Giap Ch’ng - - -Kee Lian Yong - - -


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Lot No./Location Description Built-Up / Tenure Approximate Net Book ValueLand Area Age of Building as at 31.12.07

(Year) (RM'000)

1 Lot 14, Geran 43528, Shopping Mall, 35,276 Freehold 8 250,382Pekan Subang Jaya, office tower and sq.metreDaerah Petaling, hotelSelangor (As disclosed under Note 41 to the Accounts, this property was sold on 31 March 2008.)

2 Lot 2020, Geran 61288, Shopping Mall, 17,196 Freehold 9 98,726Bandar Bukit Mertajam, office tower and sq. metreSeksyen 4, Daerah hotelSeberang Perai Tengah,Pulau Pinang

3 Mukim Hulu Bernam Timur, Land under mixed 424.19 Leasehold N/A 35,928Daearah Batang Padang, development acres 99 yearsPerak

4 Lot PTB 20184, H.S.(D) 303962 Land under mixed 61.83 Leasehold N/A 5,177Lot PTB 20185, H.S.(D) 303963 development acres 99 yearsLot PTB 20202, H.S.(D) 303964Lot PTB 20203, H.S.(D) 303965Lot PTB 20455, H.S.(D) 303966Lot PTB 20456, H.S.(D) 303967Lot PTB 20457, H.S.(D) 303968Lot PTB 20458, H.S.(D) 303969Township and District ofJohor Bahru, Johor

5 H.S.(D) 566, Mukim Kuala Linggi, Orchard land, 1,287.76 Freehold & N/A 89,817H.S.(D) 567, Geran 2110 and mixed development acres LeaseholdGeran 2111, and resort under 99 yearsMukim Kuala Sungei Baru, developmentDaerah Alor Gajah, Melaka

LIST OF PROPERTIES

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Lot No./Location Description Built-Up / Tenure Approximate Net Book ValueLand Area Age of Building as at 31.12.07

(Year) (RM'000)

6 Mukim of Kuala Lumpur, Land under 2.247 Leasehold N/A 16,360District of Kuala Lumpur, commercial acres 99 yearsFederal Territory of developmentKuala LumpurPN 14014, Lot 47080PN 9359, Lot 47081PN 6419, Lot 47082PN 11334, Lot 47083PN 7465, Lot 47084PN 6420, Lot 47085

7 Lot 381, Block 233 Land under 19.148 Leasehold N/A 6,161Kuching North residential acres 60 yearsLand District development

502,551

LIST OF PROPERTIES(cont’d)

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AGENDA

1. To receive and adopt the Audited Financial Statements for the year ended 31 December 2007 together with the Directors’ and Auditors’ Reports thereon. (RESOLUTION 1)

2. To approve the payment of Directors’ fee. (RESOLUTION 2)

3. To re-elect the following Directors who retire in accordance with the Company’s Articles of Association:(a) Dato’ (Dr.) Teoh Seng Foo (RESOLUTION 3)(b) You Kong Hean (RESOLUTION 4)(c) Kee Lian Yong (RESOLUTION 5)

4. To re-appoint Messrs Baker Tilly Monteiro Heng (formerly known as Monteiro & Heng) as Auditors of the Company and authorize the Directors to fix their remuneration. (RESOLUTION 6)

5. As SPECIAL BUSINESS, to consider and if thought fit, to pass the following resolution:

ORDINARY RESOLUTION

AUTHORITY TO ALLOT AND ISSUE SHARES IN GENERAL PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965“That, subject to the Companies Act, 1965 and the Articles of Association of the Company and approvals from the SecuritiesCommission and Bursa Malaysia Securities Berhad and other relevant governmental or regulatory authorities, the Directors be andare hereby empowered pursuant to Section 132D of the Companies Act, 1965 to allot and issue shares in the capital of the Companyfrom time to time upon such terms and conditions and for such purposes as the Directors may in their discretion deem fit providedthat the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of theCompany for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting ofthe Company.” (RESOLUTION 7)

6. To transact any other business appropriate to an Annual General Meeting.

BY ORDER OF THE BOARD

HEW LING SZESecretarySubang Jaya, Selangor Darul Ehsan4 June 2008

NOTICE IS HEREBY GIVEN that the Eighth Annual General Meeting ofthe Company will be held at Ballroom 1, Level 5, The Summit HotelSubang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya,Selangor Darul Ehsan on Thursday, 26 June 2008 at 10:00 a.m.

NOTICE OF ANNUALGENERAL MEETING

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Notes:(a) A member of the Company who is entitled to attend and vote at the meeting may appoint a maximum of two (2) proxies to attend

and vote in his stead. A proxy need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply. Where a member appoints two (2) proxies, the appointment shall be invalid unless such member specifies the proportion of his/her holding to be represented by each proxy.

(b) In the case of a corporate body, the proxy appointed must be in accordance with the 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 of the corporation duly authorized.

(c) The Form of Proxy must be deposited at the Company’s Registered Office at 9th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the meeting or at any adjournment thereof.

(d) Any alteration in the Form of Proxy must be initialed.

EXPLANATORY NOTES TO SPECIAL BUSINESS

RESOLUTION NO. 7The proposed Ordinary Resolution, if passed, will give the Directors of the Company the power to issue shares in the Company up toan amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider wouldbe in the interest of the Company. This would avoid any delay and cost involved in convening a general meeting to specifically approvesuch an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meetingof the Company.

NOTICE OF ANNUALGENERAL MEETING(cont’d)

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1. Directors Standing for Election and Re-Election

Director who is standing for re-election in accordance with Article 96(1) of the Company’s Articles of Association:

(a) Dato’ (Dr.) Teoh Seng Foo

Directors who are standing for election in accordance with Article 103 of the Company’s Articles of Association:

(a) You Kong Hean(b) Kee Lian Yong

The profiles of the above Directors are set out in the Section entitled “Profile of Directors”. Their shareholdings in the Company and the subsidiary companies are set out in the Section entitled “Directors’ Report” on pages 48 to 51.

2. Attendance of Board Meetings

The attendance of the Directors are set out on page 34 in the Corporate Governance Statement of this Annual Report.

3. Eighth Annual General Meeting

Place : Ballroom 1, Level 5, The Summit Hotel Subang USJ, Persiaran Kewajipan,USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan

Date : 26 June 2008

Time : 10:00 a.m.

STATEMENT ACCOMPANYINGNOTICE OF ANNUALGENERAL MEETING

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PROXY FORM

(Company No.: 507785-P)

I/We (full name in block letters)

of (address)

being a member(s) of MEDA INC. BERHAD hereby appoint (full name in block letters)

of (address)

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Eighth Annual GeneralMeeting of the Company to be held at Ballroom 1, Level 5, The Summit Hotel Subang USJ, Persiaran Kewajipan, USJ 1, 47600UEP Subang Jaya, Selangor Darul Ehsan on Thursday, 26 June 2008 at 10:00 a.m. and at any adjournment thereof.

RESOLUTION NO. * FOR * AGAINST

1. Adoption of Audited Financial Statements and Reports

2. Payment of Directors’ fee

3. Re-election of Dato’ (Dr.) Teoh Seng Foo

4. Election of You Kong Hean

5. Election of Kee Lian Yong

6. Re-appointment of Auditors

7. Authority to allot and issue shares pursuant to Section 132D of the Companies Acts,

1965

* Please indicate with “X” how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion

Dated this day of 2008

Signature of Shareholder(s)

NOTES:(a) A member entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A

proxy need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

(b) In the case of a corporate body, the proxy appointed must be in accordance with the 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 of the corporation duly authorized.

(c) The Form of Proxy must be deposited at the Company’s Registered Office at 9th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the meeting or at any adjournment thereof.

(d) Any alteration in the Form of Proxy must be initialed.

NUMBER OF SHARES HELD

Fold Here

Fold Here

STAMP

The Company SecretaryMEDA INC. BERHAD (Co. No. 507785-P)

9th Floor, Menara SummitPersiaran Kewajipan, USJ 147600 UEP Subang JayaSelangor Darul EhsanMalaysia

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