penyata pengerusi - malaysiastock.biz 21 penyata pengerusi bagi pihak lembaga pengarah, saya dengan...

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PENYATAPENGERUSI

BagipihakLembagaPengarah,sayadengansukacitanyamembentangkanLaporanTahunandanPenyataKewanganBerauditParksonHoldingsBerhadbagitahunkewanganberakhir30Jun2007.

LAPORANKEWANGAN

Kumpulan mencatat prestasi lebih baik dalam segmenoperasiutamapadatahunini.Bahagiankelulikitakembalimeraih keuntungan berikutan kenaikan harga keluli,manakalasyarikatbersekutuyangtersenaraidiSingapura,LionAsiapacLimited(“LAP”)telahmenunjukkanprestasioperasi yang lebih baik dan mencatat keuntungandaripada pelupusan perniagaan motorsikal di China.Segmen-segmeninidiklasifikasikansebagaioperasiyangdiberhentikanberikutanpenjualanBrightSteelSdnBhd(“BrightSteel”),anaksyarikatyangmempunyaipelaburandalamoperasikelulidanLAPkepadaLionCorporationBerhad(“LCB”).

Susulan kepada tindakan menamatkan perniagaankeluli, Kumpulan telah mengiktiraf sejumlah besarperuntukanrosotnilaimewakililebihannilaiasetbersihsyarikat-syarikatyangdilupuskandaripadapertimbanganpelupusan mereka. Keuntungan operasi Kumpulanmenyusutkeranaperuntukanyangdikenakanhanyasekaliinidansehubunganitu,KumpulantelahmencatatkerugiansebelumcukaisebanyakRM4.5juta.

PERKEMBANGANKORPORAT

(1) PadaSeptember2006,Syarikattelahmengumumkancadanganuntukmengambilalihkeseluruhanekuitikepentingan dalam PRG Corporation Limited,ParksonCorporationSdnBhd,ParksonVenturePteLtd,SerbadagangHoldingsSdnBhddanSeaCoralLimiteddaripadaLionDiversifiedHoldingsBerhaduntuk pertimbangan berjumlah RM4,299.73 jutadipenuhimelaluiterbitan3,799.73jutasahambiasabarubernilaiRM1.00sesahamdanRM500jutastokpinjamanberjaminbolehubahbolehtebusdengankadar kupon 3.5% bertempoh matang 3 tahun(“CadanganPengambilanAlih”),danmelupuskankeseluruhanekuitikepentingandalamBrightSteelkepadaLCBdenganpertimbangantunaiberjumlahRM53.47juta(“CadanganPelupusan”).

Syarikat jugamencadangkanpenguranganmodalsebanyak RM0.75 setiap saham biasa bernilaiRM1.00 sesaham dalam Syarikat dan seterusnyamelaksanakan penggabungan saham pada asasempatsahambernilaiRM0.25sesahamkepadasatusaham biasa bernilai RM1.00 di dalam Syarikat.(“Penggabungan Saham”)(“Cadangan PembinaanSemulaModal”).

Cadangan Pengambilan Alih dan CadanganPelupusan telah diselesaikan pada 19 September2007.Sehubungandenganitu,namaSyarikattelahditukarkepadaParksonHoldingsBerhad.

MahkamahTinggiKualaLumpur,pada24September2007, mengesahkan dan membenarkan petisyenSyarikatuntukmendapatkanPerintahPenguranganModal mengikut Cadangan Pembinaan SemulaModal,danPerintahpetisyentelahberjayadiperolehpada25September2007danmelaluipengemukaanyangjugadilakukandenganSuruhanjayaSyarikatMalaysiapadatarikhyangsama,PenyusutanModaldikuatkuasakan.

Syarikat,pada25September2007,telahmenetapkantarikh kelayakan hak bagi Penggabungan Sahamadalah pada 9 Oktober 2007. SeterusnyaPenggabungan Saham telah disempurnakan padahariyangsama.

(2) ShanghaiHongqiaoParksonDevelopmentCo.,Ltd,anak syarikat milik penuh Parkson Retail GroupLimited (“Parkson Retail”), telah pada 21 May2007memeteraiperjanjiandenganSichuanFulinIndustrialGroupCo.,Ltd,untukmemperolehbaki40% ekuiti kepentingan dalam Mianyang FulinParkson Plaza Co., Ltd (“Mianyang Fulin”) yangbelumdimilikiolehKumpulanuntukpertimbanganbayaranberjumlahRmb99,928,800.MianyangFulinmemiliki dan mengendalikan gedung serbaneka“Parkson” di Mianyang City,Wilayah Sichuan diChina.

(3) Pada27September2007,ParksonRetailDevelopmentCo.,Ltd,anaksyarikatmilikpenuhParksonRetail,memeteraiperjanjianjualbeliuntukmemperolehdaripada Shaanxi Chang’an Information PropertyInvestmentCo., Ltdbaki 49%ekuiti kepentingandalamXi’anChang’anParksonStoreCo.,LtdyangbelumdimilikiolehKumpulanuntukpertimbangantunaiberjumlahRmb61,000,000.

KAJIANOPERASI

Bahagian Pusat Perkhidmatan Besi Keluli – OperasiDiberhentikan

Bahagian keluli kita memperoleh keputusan yangmemuaskandalamtahundibawahkajian.Pemulihanhargakeluliantarabangsadanpermintaantelahmenyebabkanparapelangganmenerusdanmengekalkanparasinventoriyang lebih tinggi. Jumlah jualan danpengeluaran yangtinggi membolehkan pengurusan kos-kos pengeluarantetap yang lebih baik, dan seterusnya meningkatkanmargin.

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Dalamtahunkewangan,besigulunganpanasberpotongdanberkelaryangmenyumbanglebihkurang50%daripadajumlahjualankeseluruhan,mencatatpeningkatan65%didalamperolehanberbandingtahunlalu.MeskipunterdapatkelewatandalampelaksanaanpelbagaiprojekinfrastrukturdibawahRancanganMalaysiaKe-9,Kumpulanberjayamemperoleh pesanan yang tinggi daripada pelangganbaru di MalaysiaTimur. Jualan eksport turut meningkatsebanyak48%berikutanpermintaanyanglebihtinggidariSingapuradanSriLanka.

Penghantaranbesigulungansejukberpotongdan‘pickled’dan‘oiled’turutmeningkatberikutanpelancaranprojekbaru PeroduaViva. Perkhidmatan memotong gegelungjugameningkatsebanyak23%darisegijumlahdaganganberikutanperpindahanoperasipengeluarangegelungketapakbersebelahankilangMegasteeldiBanting.

OperasiSyarikatBersekutu–OperasiDiberhentikan

BerikutanpenstrukturansemulaLAPpadatahunkewangansebelumnya, Bahagian Elektronik terus menyumbangkepadapertumbuhanperniagaan,melengkapi tahuninidenganbermulanyaoperasibarudidalampemprosesanbatukapurdanperusahaankomponenautomotif.

Di sebalik berdepan dengan pasaran yang kompetitifdanpermintaanyangmerosot,BahagianElektronikyangditerajui olehAdvent Electronics Pte Ltd (“Advent”),berjayamencatatpertumbuhanperolehanyangbaikdanmargin keuntungan yang memberangsangkan. SegmenpengurusanprojekmendahuluipertumbuhanBahagianitudenganpeningkatanjualandipasaranAmerikaSyarikatdanEropah.DiIndia,Adventterusmencapaikemajuandalam perniagaan produk rangkaian, dengan prestasiyang baik untuk menembusi pasaran tempatan yangmencabar.

Kilang pemprosesan batu kapur di Banting, Malaysia,dikendalikanolehCompactEnergySdnBhd(“Compact”),memulakan pengeluaran pada April 2007 dan kiniberoperasi pada kapasiti yang optima. Disebabkankapur tohor yang dihasilkan berkualiti tinggi, Compacttelah berjaya mendapatkan kontrak-kontrak yangpentingdaripadabeberapakilangbesikelulidiMalaysiadan mencatat keuntungan dalam tempoh tiga bulanpertamaberoperasi.Perniagaanperdagangankomponenautomotif yang melibatkan penjualan chasis automotifdankomponen-komponenkepadapemasangtrakringan,turutmenjanakeuntungandalamtempohbeberapabulanpertamaoperasi.

PERNIAGAANBARU

Penyelesaian pengambilan alih aset peruncitan pada19September2007merupakanperistiwapentingkeranaiamengubahKumpulanmenjadipengusahaperuncitan

tulenyangberoperasidibawahjenama“Parkson”diChina,MalaysiadanVietnam.

ParksonChina

ParksonmerupakanrangkaiangedungserbanekaterbesardiPRCdengan39buahgedungserbanekayangdimiliki/diurusdi26buahbandarutamatermasukBeijing,Shanghai,ChongqingdanXi’an.OperasiperuncitandiChinatelahdisenaraikandiBursaSahamHongKongmelaluiParksonRetail,yangmanaEastCrestInternationalLimitedsyarikatpelaburankitamemegang55%kepentinganekuiti.

Parksondisokongolehjenamafrancaisyangkukuhsertalokasigedungyangbaikuntukmembolehkannyaberadadihadapanparapesaing.Modelpendapatanberasaskanpemegang konsesi yang berisiko rendah membolehkanParkson menyesuaikan gabungan jenama secara lebihefektif berikutan perubahan pantas di dalam popularitijenamadinegarayangpesatberkembangdiChina.

Olehitu,ekuitijenamaParksonyangkukuhmemastikanKumpulanmeraihfaedahdaripadaperkembanganindustriperuncitandiChina. Mengikutperancangan,ParksonRetailterusmencaripeluanguntukmelakukanpengambilanalihstrategikdigedungberkepentinganminoriti,gedungyangdiurus dan gedung milik pihak ketiga, serta membukagedungbarudilokasistrategikdiChina.

ParksonMalaysia

Parksonmerupakansebuahrangkaiangedungserbanekaterkemuka sejak tahun 1987. Pada masa ini, 31 buahgedungyangadadinegaradikategorikankepadatigajeniskonsepiaitu,(1)gedungUParkson/Parksonbagipelangganyang bercita rasa mewah (2) gedung Parkson Granddisasarkankepadapelangganberpendapatansederhana,dan(3)gedungParksonRiaditumpukankepadapasaranpelangganberpendapatanrendah.

Pada bulan September 2007, Parkson Pavilion, denganruang peruncitan seluas 240,000 kaki persegi telahdilancarkan.Gedunginimemperkenalkanbanyakjenamaeksklusifbusanaanggun ‘yangpertamakali terdapatdiMalaysia’ bertujuan menaikkan taraf jenama “Parkson”diMalaysia.

ParksonVietnam

Parksonmerupakangedungserbanekamilikasingyangpertama diberi lesen untuk beroperasi diVietnam.Gedung utamanya yang pertama dibuka di Bandar HoChi Minh pada bulan Jun 2005 menawarkan produkpertengahanhinggamewah.PadabulanDisember2006,gedungkeduatelahdibukadiHaiPhongdiikutidengangedung berikutnya di Bandar Ho Chi Minh pada Jun2007. Perancangankinidibuatuntukmengembangkanperniagaan diVietnam dengan membuka lebih banyakgedungdalamtempohbeberapatahunakandatang.

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TANGGUNGJAWABSOSIALKORPORAT

Kita menyedari akan pentingnya tanggungjawab sosialkorporat (“CSR”) sebagai sebahagian dari pelengkapperniagaan dan telah menerapkan rangka kerjakebertanggungjawaban dan ketelusan CSR dalamrancangan perniagaan untuk meningkatkan keyakinanpara pemegang kepentingan. Sehubungan dengan itu,CSR menjadi satu komponen penting dalam amalanperniagaan yang baik yang disasarkan untuk kebaikanbersamamasyarakatdanjugaalamsekitar.

Dalammelaksanakanaktivitiperniagaannya,Kumpulansentiasaprihatinakantanggungjawabnyasebagaiwargakorporat,untukmenyumbangkembalikepadamasyarakatsambilmeningkatkanhasilperolehandanjuganilaiparapemegangsaham.Kumpulanmemberikantumpuanuntukmembantu masyarakat dalam bidang pendidikan danpenjagaankesihatanmenerusiduabuahyayasan.

Yayasan Lion-ASM menyalurkan dana untuk pelbagaikeperluansepertipendidikan,kebajikandanpenyelidikansaintifik;danpadasetiaptahuniamemberikanbiasiswadanpinjamanpendidikankepadapelajaryangmelanjutkanpelajarandiuniversiti-universititempatan.DanaBantuanPerubatan Kumpulan Lion pula menawarkan bantuankewangankepadarakyat.

PROSPEK

Berikutan selesainya pengambilan alih aset peruncitan,Kumpulantidaklagiterlibatdalamperniagaankelulidanoperasisyarikat-syarikatsekutusebaliknyamenumpukankepadaperniagaanperuncitanserantau.

Dalam menuju ke hadapan, sektor peruncitandijangka mencatat pertumbuhan yang kukuh berikutanperkembanganekonomidilokasi-lokasiutama.PeristiwapentingsepertiSukanOlimpik2008diBeijingdanTahunMelawatMalaysia,dijangkaakanmendorongpertumbuhanoperasiberkenaan.

LEMBAGAPENGARAH

SayainginmerakamkanrasaterimakasihdanpenghargaanLembagaPengarahkepadaY.Bhg. Jen (B)TanSriDato’ZainMahmudHashimyangbersaradaripadaLembagaPengarah atas kepimpinan dan juga peranan yangdimainkanbeliausepanjangmemegangjawatanPengerusidanPengarahSyarikat.

Dalam MesyuaratAgungTahunan yang akan datang,Y. Bhg. Dato Murad Mohamed Hashim akan bersaradanbeliau tidakakanmemohonuntukdilantik semulasebagai Pengarah. Bagi pihak Lembaga Pengarah, sayaingin merakamkan penghargaan yang ikhlas di atassumbangan beliau sepanjang tempoh perlantikannyasebagaiPengarah.

PENGHARGAAN

Bagipihak LembagaPengarah, saya inginmerakamkanpenghargaankepadasemuakakitangandisetiapperingkatdiatasdedikasi,komitmendansumbanganmerekakepadaKumpulan. Saya juga ingin mengucapkan terima kasihkepada para pelanggan, pembiaya, sekutu perniagaan,pihak berkuasa Kerajaan dan pemegang saham yangdihargaiatassokongan,kerjasamadankeyakinanmerekayangberterusankepadaKumpulan.

Akhir kata, saya juga merakamkan penghargaan danterimakasihkepadaparaPengarahdiataspanduandansumbanganmerekadisepanjangtahun.

TANSRIWILLIAMH.J.CHENGPengerusi

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OnbehalfoftheBoardofDirectors,IampleasedtopresenttheAnnualReport andAuditedFinancial StatementsofParksonHoldingsBerhadforthefinancialyearended30June2007.

FINANCIALRESULTS

TheGroupachievedbetterperformanceinitskeyoperatingsegmentsthisyear.Oursteeldivisionregainedprofitabilityin the light of the recovery in steel prices whilst LionAsiapacLimited(“LAP”),ourSingaporelistedassociatedcompanyregisteredimprovedoperatingperformanceandrecordedagainfromthedisposalofitsmotorcyclebusinessinChina.Thesesegmentswereclassifiedasdiscontinuedoperations due to the disposal of Bright Steel Sdn Bhd(“Bright Steel”), a subsidiary which had investments inthesteeloperationsandLAP,toLionCorporationBerhad(“LCB”).

Following its exit from the steel business, the Grouphas recognised a substantial impairment allowancerepresenting the excess of the net asset value of thedisposedcompaniesovertheirdisposalconsideration.TheoperatingprofitoftheGroupwasnegatedbythisone-offallowance and accordingly, the Group recorded a lossbeforetaxationofRM4.5million.

CORPORATEDEVELOPMENTS

(1) In September 2006, the Company announced itsproposed acquisition of the entire equity interestinPRGCorporationLimited,ParksonCorporationSdn Bhd, ParksonVenture Pte Ltd, SerbadagangHoldings Sdn Bhd and Sea Coral Limited fromLion Diversified Holdings Berhad for a totalconsiderationofRM4,299.73milliontobesatisfiedbytheissuanceof3,799.73millionnewordinarysharesofRM1.00eachandRM500million3-year3.5%couponredeemableconvertiblesecuredloanstocks(“ProposedAcquisitions”),andtodisposeofitsentireequityinterestinBrightSteeltoLCBforacashconsiderationofRM53.47million(“ProposedDisposal”).

TheCompanyalsoproposedacapitalreductionofRM0.75perordinaryshareofRM1.00eachintheCompanyandthereafterashareconsolidationonthebasisofeveryfourresultantsharesofRM0.25each into one ordinary share of RM1.00 in theCompany (“Share Consolidation”) (“ProposedCapitalReconstruction”).

The Proposed Acquisitions and the ProposedDisposalwerecompletedon19September2007.Consequently, the name of the Company waschangedtoParksonHoldingsBerhad.

TheKualaLumpurHighCourthadon24September2007 confirmed and sanctioned the Company’spetition for an Order for the Capital Reductionpursuant to theProposedCapitalReconstruction,andthesealedOrderofthepetitionfortheCapitalReductionwasobtainedon25September2007anduponthelodgementofthesamewiththeCompaniesCommission of Malaysia on the same date, theCapitalReductiontookeffect.

The Company had on 25 September 2007 fixedtheentitlementdatefortheShareConsolidationtobe9October2007.TheShareConsolidationwascompletedonthesamedate.

(2) Shanghai Hongqiao Parkson Development Co.,Ltd, a wholly-owned subsidiary of Parkson RetailGroupLimited(“ParksonRetail”),hadon21May2007enteredintoanagreementwithSichuanFulinIndustrialGroupCo.,Ltdtoacquiretheremaining40%equityinterestinMianyangFulinParksonPlazaCo.,Ltd(“MianyangFulin”)notalreadyownedbytheGroupforaconsiderationofRmb99,928,800.Mianyang Fulin owns and operates a “Parkson”departmentstoreinMianyangCity,SichuanProvinceinChina.

(3) On27September2007,ParksonRetailDevelopmentCo., Ltd, a wholly-owned subsidiary of ParksonRetail,enteredintoasaleandpurchaseagreementtoacquirefromShaanxiChang’anInformationPropertyInvestmentCo.,Ltdtheremaining49%interestinXi’anChang’anParksonStoreCo.,LtdnotalreadyownedbytheGroupforatotalcashconsiderationofRmb61,000,000.

REVIEWOFOPERATIONS

SteelServiceCentreDivision–DiscontinuedOperation

OurSteelDivisionpostedfavourableresultsfortheyearunderreview.Therecoveryininternationalsteelpricesanddemandhadpromptedcustomerstoresumeandmaintainhigher inventory levels. Higher sales and productionvolumehaveledtobetterutilisationoffixedproductioncosts,andthusimprovedmargins.

During the year, cut and slitted hot rolled coils whichcontributed approximately 50% of total sales volume,recordedanimprovementof65%inrevenuecomparedto lastyear.Despite thedelay in the implementationofvariousinfrastructureprojectsundertheNinthMalaysiaPlan,theGroupmanagedtosecurehigherordersfromnewcustomersinEastMalaysia.Exportsalesalsoimprovedby48%onaccountofhigherdemandfromSingaporeandSriLanka.

CHAIRMAN’S STATEMENT

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DeliveryofcutcoldrolledcoilsandpickledandoiledcoilshavepickedupfollowingthelaunchofthenewPeroduaViva project. Coils shearing services also improved by23%intermsofvolumefollowingtherelocationof thecoilsoperationtoasiteadjacenttotheMegasteelplantinBanting.

Associate’sOperations–DiscontinuedOperations

Following the restructuringexerciseundertakenbyLAPin the previous financial year, its Electronics Divisioncontinuedtocontributetobusinessgrowth,complementedthis year by the commencement of its new operationsin limestone processing and automotive componenttrading.

Despite being faced with a competitive market anddeclining demand, the Electronics Division headed byAdventElectronicsPteLtd(“Advent”),didwelltoachievegood revenue growth and healthy profit margins.Theprojectmanagement segment led theDivision’s growthwithimprovedsalessecuredintheAmericanandEuropeanmarkets.InIndiatoo,Adventcontinuedtomakeprogressinitsnetworkproductbusiness,performingwelltopenetratethechallenginglocalmarket.

The limestone processing plant in Banting, Malaysia,undertaken by Compact Energy Sdn Bhd (“Compact”),beganproductioninApril2007andiscurrentlyworkingatoptimumcapacity.Duetothehighqualityquicklimeproduced,Compacthassuccessfullysecuredsignificantcontracts fromanumberof steelmills inMalaysiaandmanaged to break even within its first three months ofoperation.The automotive component trading businesswhichis involvedinthesaleofautomotivechassisandcomponentstothelighttrucksassemblers,alsogeneratedprofitsinitsfirstfewmonthsofoperation.

NEWBUSINESSES

The completion of the acquisition of the retail assetson19September2007wasasignificanteventasithadtransformedtheGroupintoapureretailplayer,operatingunder the “Parkson” banner in China, Malaysia andVietnam.

ParksonChina

ParksonisthelargestdepartmentstorechaininthePRC,with39self-owned/manageddepartmentstoresacross26majorcitiesincludingBeijing,Shanghai,ChongqingandXi’an.TheChinaretailoperationsarelistedonTheStockExchangeofHongKongLimitedthroughParksonRetail,inwhichEastCrestInternationalLimited,ourinvestmentarmholds55%equityinterest.

Parksonhasstrongbrandfranchisesupportandgoodstorelocationsthatenableittostayaheadofthecompetition.A low-risk concessionaire-based revenue model allowsParksontoadjustitsbrandmixeffectivelygiventherapidchangesinbrandpopularityinafastmovingcountryasChina.

Thus,thestrongbrandequityofParksonenablestheGrouptobenefitfromtheexpansionofChina’sretailindustry.Initsplans,ParksonRetailcontinuestoseekopportunitiesinstrategicacquisitionsofminorityinterests,managedandthird-partydepartmentstores,andthesettingupofnewstoresinstrategiclocationsinChina.

ParksonMalaysia

Parkson is an established department store chain since1987.Currently,the31storesinthecountryarecategorisedintothreemainconceptsie,(1)UParkson/Parksonstoresforthehigh-endcustomers,(2)ParksonGrandstoresformiddle-incomeshoppersand, (3)ParksonRiastores forthelow-incomemarket.

InSeptember2007,ParksonPavilion,witharetailspaceof240,000sqftwaslaunched.Theoutletboastsofmanyexclusive “first-time-in-Malaysia” haute couture brandsintendedtoenhancethe“Parkson”brandinMalaysia.

ParksonVietnam

Parksonwasthefirstforeign-owneddepartmentstoretobegivenalicencetooperateinVietnam.ItsfirstflagshipstorewasopenedinHoChiMinhCityinJune2005,offeringmidtohigh-endproducts.InDecember2006,asecondstorewasopenedinHaiPhongfollowedbyanotherstorebeingopenedinHoChiMinhCityinJune2007.PlansareinthepipelinetoexpandourpresenceinVietnambyopeningmorestoresoverthenextfewyears.

CORPORATESOCIALRESPONSIBILITY

We recognise the importance of Corporate SocialResponsibility(“CSR”)asanintegralpartofbusinessandincorporating a CSR framework into our business planto enhance stakeholder confidence, accountability andtransparency.Inthisregard,CSRisbecominganimportantcomponentofgoodbusinesspracticeaimedatimprovingsocietyandtheenvironment.

Incarryingoutitsbusinessactivities,theGroupismindfulofitsresponsibilityasacorporatecitizen,ingivingbackto society while contributing to the bottom-line andshareholders’value.TheGroupisfocusedonimprovingthecommunitythrougheducationandmedicalcarethroughtwoFoundations.

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The Lion-ASM Foundation disburses funds for variousneedssuchaseducation,charityandscientificresearch;andeveryyear,givesoutscholarshipsandeducationloanstoundergraduatesinthelocaluniversities.TheLionGroupMedicalAssistanceFundprovidesfinancialassistancetoneedyMalaysianswhorequiremedicaltreatment.

PROSPECTS

Followingthecompletionofacquisitionsoftheretailassets,theGroupwillexitfromthesteelbusinessandassociate’soperationsandfocusonitsregionalretailbusiness.

Goingforward,theretailsectorisexpectedtorecordstronggrowthinviewoftherobusteconomicexpansioninthevariousgeographicallocations.Majoreventssuchasthe2008OlympicGamesinBeijingandVisitMalaysiaYearareexpectedtoprovidetheimpetusforgrowthintheseoperations.

BOARDOFDIRECTORS

Iwouldliketorecordavoteofthanksandappreciationfrom the Board toY. Bhg. Jen (B)Tan Sri Dato’ ZainMahmud Hashim who retired from the Board, for hisableleadershipandprominentroleduringhistenureasChairmanandDirectoroftheCompany.

AttheforthcomingAnnualGeneralMeeting,Y.Bhg.DatoMuradMohamedHashimwillberetiringandwillnotbeseeking re-appointmentasaDirector.Onbehalfof theBoard, Iwould like to expressmy sincere appreciationforhiscontributionsduringhistenureasDirectoroftheCompany.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to record myappreciation to our employees at all levels for theirdedication,commitmentandcontributionstotheGroup.Ialsowishtoextendmysincerethankstoallourvaluedcustomers, financiers, business associates, Governmentauthoritiesandshareholdersfortheircontinuedsupport,co-operationandconfidenceintheGroup.

Last but not least, I would like to convey my sincereappreciation and gratitude to my fellow Directors fortheir invaluable guidanceandcontributions throughouttheyear.

TANSRIWILLIAMH.J.CHENGChairman

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我谨代表董事部，欣然提呈百盛控股有限公司截至2007年

6月30日为止会计年度内的常年报告和经审核财务报告。

财务业绩

本集团的主要营业部门在本年度内取得更佳的表现。钢铁

价格的回升使我们的钢铁组再次获得利润。另外，我们在

新加坡上市的联号公司，Lion Asiapac Limited (“LAP”) 的营运业绩也有所改善，更从出售中国摩多车业务中获得

盈利。由于我们脱售拥有钢铁业务投资和持有LAP股权的

子公司, Bright Steel SdnBhd (“Bright Steel”) 给 LionCorporationBerhad (“LCB”), 这些部门被列为终止的业

务。

随着本集团退出钢铁营业，而且其脱售的公司净资产额超

过其脱售价格，本集团做出颇大的资产减值准备。本集团的

营业利润被这些一次性的亏损所抵消，因此蒙受450万令吉

的税前亏损。

企业发展

(1) 在2006年9月,本公司宣布其建议,以42亿9千973万

令吉向 Lion Diversified Holdings Berhad收购下

述公司的全部股权：PRG Corporation Limited, Parkson Corporation Sdn Bhd, ParksonVenturePteLtd, SerbadagangHoldingsSdnBhd 以及 SeaCoralLimited, 分别以发行37亿9千973万新普通股

以及价值5亿令吉3年期限3.5％可赎回可转换有担

保债券股来完成 (“建议收购”)。本公司也建议以

现金5千347万令吉脱售其 BrightSteel的全部股权

给 LCB (“建议脱售”)。

本公司也建议把每股1令吉的普通股削资75仙,随后

再将每4股每股25仙的普通股统合为每股1令吉的普

通股(“股票统合”)(“建议资本重组”)。

这两项建议收购和建议脱售已在2007年9月19日完

成。本公司也因此易名为百盛控股有限公司。

吉隆坡高等法庭在2007年9月24日证实和批准本公

司的申请,根据建议资本重组,发出削资指令。本

公司的削资申请也在2007年9月25日获得经过盖章

的指令,并在同一天向马来西亚公司委员会申报,

削资因此生效。

本公司在2007年9月25日规定股票统合应得权利的

生效期为2007年10月9日。股票统合也在同一日完

成。

(2) ParksonRetailGroupLimited (“ParksonRetail”)的独资子公司,Shanghai Hongqiao ParksonDevelopmentCo.,Ltd在2007年5月21日和 Sichuan

主席报告

FulinIndustrialGroupCo.,Ltd 签订协议, 以人民

币9千992万8千800元收购 MianyangFulinParksonPlazaCo., Ltd (“MianyangFulin”)不属于本集

团的其余40%股权。Mianyang Fulin 在绵阳市四川

省拥有和经营“百盛”百货公司。

(3) Parkson Retail 的独资子公司,Parkson RetailDevelopmentCo.,Ltd在2007年9月27日和 ShaanxiChang’anInformationPropertyInvestmentCo.,Ltd签订协议,以人民币6千100万元收购 Xi’anChang’anParksonStoreCo.,Ltd不属于本集团的其余49%股

权。

业务检讨

钢铁服务中心组 – 终止的业务

在检讨年度内，本集团的钢铁组业绩良好。国际钢铁价格

的回升和需求量的增加使客户恢复并维持高存货水平。较

高的销售量和产量，致使本集团更好的利用固定生产成本,

从而改进盈利率。

在这一年内，占总销售量约50%的热轧钢板，其营业额比上

一年度增加65%。尽管在第九大马计划下各种基层建设工程

的推行受到拖延，本集团成功从东马的新客户取得更多定

单。随着新加坡和斯里兰卡的需求量增加，本集团出口销售

额也相应增加48%。

随着 Perodua Viva 计划的推行，热轧钢板和 PickledandOiled Coils 的运交量也相应增加。另外，在轧钢加工运作

厂搬迁至毗邻万津的美佳钢铁厂后，轧钢服务运作的销售

量也增加了23%。

联号公司的业务 – 终止的业务

继 LAP上一个会计年度进行重组之后，其电子组继续对业

务的成长作出贡献，并从今年新开始营业的石灰岩加工业

和汽车零部件贸易的业务获得辅助。

尽管面对竞争的市场以及需求量的减少，以AdventElectronicsPteLtd (“Advent”)为首的电子组取得良好的

营业额增长率和盈利率。计划管理部业务的提高，带领本组

在美国和欧洲市场销售量的增加。在印度，Advent在其网

络产品分销业务继续取得成长，其业务已成功扩散至当地

充满挑战性的市场。

由 CompactEnergySdnBhd (“Compact”)操作，位于马

来西亚万津的石灰岩加工厂在2007年4月已展开生产，目前

以最佳产能操作。由于 Compact 生产高品质的生石灰，所

以成功的从马来西亚好几家钢铁厂获得无数的合同，以致

在投入生产的首三个月内达至收支平衡。其汽车零件贸易

业务，从事售卖汽车底盘和部件给轻型罗里装配工厂 ,也在

投入营业的首几个月取得盈利。

28

新业务

在2007年9月19日完成收购零售业的资产对本集团来说具有重大意义，使本集团转变为纯零售业经营者，以“百盛”旗舰在中国、马来西亚及越南营业。

中国百盛

百盛是中华人民共和国最大规模的百货公司连锁店，在全中国26个大城市，包括北京、上海、重庆和西安拥有/管理39家百货公司。本集团中国的零售业务通过ParksonRetail在香港股票交易所上市。我们的投资公司 EastCrestInternationalLimited在 ParksonRetail拥有55%的股权。

由于百盛拥有强大品牌特许经销商的支持，而且其百货公

司坐落在良好的地点，因此能在竞争中领先。在发展迅速, 品牌的知名度改变迅速的中国，百盛以低风险的特许经销权为基础的销售模式，有效的调整其品牌混合。

因此，百盛的强而有力的品牌权益，使到本集团在中国迅速扩展的零售业中受惠。Parkson Retail 在其计划中，继续寻找机会，策略性的收购少数股东权益，受其管理的百货公司和第三方的百货公司，也要在中国的良好地点开设百货公司。

马来西亚百盛

自1987年，百盛是马来西亚基础稳健的百货公司连锁

集团。目前在国内的31家百货公司分为三大概念,

(1) U Parkson/Parkson百货公司为上层阶级顾客而设,(2)ParksonGrand百货公司吸引中产阶级顾客，(3) ParksonRia 百货公司注重低收入阶层市场。

在2007年9月，ParksonPavilion开始营业。它有240,000 平方尺的零售面积，拥有许多专有的“马来西亚第一次”的高级女子时装品牌，旨在提高“Parkson”品牌在马来西亚的知名度。

越南百盛

百盛是第一家外国百货公司获得越南发给经营执照。它的第一家旗舰百货公司於2005年6月在胡志明市开业，提供中档至高档产品。在2006年12月，第二家百货公司在海防市开业，随继另一家百货公司在2007年6月在胡志明市开业。本集团计划要扩展在越南的知名度，在未来几年内开设更多家百货公司。

企业社会责任我们认同企业社会责任的重要性并把它视为公司治理框架中不可或缺的一部分，以加强利益相关者的信心、责任感和透明度。在这方面，企业社会责任是良好营商手法不可或缺的一部分，目的是要改善社会服务和环境发展。

本公司在展开商业活动时，深切了解作为企业公民的责任，在对股东在企业的价值作出贡献的同时，也要回馈社会。因此本集团通过两项基金，以教育和医疗服务来回馈社会。

Lion-ASM 基金拨款作各种用途，诸如教育、慈善及科学研究；每年提供奖学金和贷学金给在本地大学深造的在籍大学生。金狮集团医药援助基金则为迫切需要医疗的马来西亚人提供财务援助。

展望

在完成收购零售资产之后，本集团将退出钢铁业和其联号公司的业务，专注于区域性的零售业务。

展望未来，由于各区域经济的茁壮扩展，零售业预料会有强劲的成长，其中2008北京奥运会和马来西亚旅游年更会推动零售业的增长。

董事部

我谨代表董事部，感谢荣休的 Y.Bhg.Jen(B)TanSriDato’ZainMahmudHashim在担任董事部主席及董事期间领导有方和卓越的任务。

在行将举行的常年大会中，Y.Bhg.DatoMuradMohamedHashim 将荣休并不寻求重新委为董事。我谨代表董事部, 真诚感谢他在担任董事期间的贡献。

鸣谢

我谨代表董事部，感谢我们的各级雇员对本集团的尽忠职守和为工作献身的精神。我也要真诚感谢所有尊贵的客户、融家、商业伙伴、政府当局及股东们对本集团的持续支持,合作和信心。

最后，对于董事们这一年来不懈的领导和贡献，我谨表达最深切的谢意。

主席丹斯里钟廷森

29

FINANCIAL STATEMENTS

2007For The Financial Year Ended 30 June 2007

DIRECTORS’REPORT

DIRECTORS’REPORT

TheDirectorsherebypresenttheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended30June2007.

PRINCIPALACTIVITIES

TheprincipalactivityoftheCompanyisinvestmentholding.

Theprincipalactivitiesofthesubsidiariesanditsassociateconsistofsteelservices,internationaltradinganddistributionof electronic components, automotive component trading, limestone processing and investment holding. Save forEastCrestInternationalLimited,whoseprincipalactivityisinvestmentholding,theactivitiesofallothersubsidiariesanditsassociatewerediscontinueduponthecompletionofthedisposalsofthesaidsubsidiariesandassociateon19September2007.Concurrently,theCompanyacquirednewsubsidiarieswhoseprincipalactivitiesareintheoperationsofdepartmentstores.

TherehavebeennosignificantchangesinthenatureoftheprincipalactivitiesoftheGroupandoftheCompanyduringthefinancialyearexceptforthediscontinuedoperationsasdisclosedinNote8tothefinancialstatements.

CHANGEOFNAME

On19September2007,theCompanychangeditsnamefromAmalgamatedContainersBerhadtoParksonHoldingsBerhad.

RESULTS

Group Company RM’000 RM’000

Lossfortheyear: -fromcontinuingoperations (3,598) (39,883)-fromdiscontinuedoperations (2,711) –

(6,309) (39,883)

Attributableto: EquityholdersoftheCompany (6,688) (39,883)Minorityinterests 379 –

(6,309) (39,883)

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanasdisclosedinthefinancialstatements.

IntheopinionoftheDirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnatureotherthantheeffectsarisingfromthechangesinaccountingpoliciesduetotheadoptionofthenewandrevisedFinancialReportingStandardsasdisclosedinNote2.3tothefinancialstatements.

30

DIVIDENDS

TheamountofdividendpaidbytheCompanysince30June2006wasasfollows: RM’000

Inrespectofthefinancialyearended30June2006asreportedintheDirectors’report ofthatyear:

Firstandfinaldividendof0.1senpershareon74,711,000ordinaryshares,lessincometax of28%paidon28December2006. 54

TheDirectorsdonotrecommendanydividendpaymentinrespectofthecurrentfinancialyear.

DIRECTORS

TheDirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:

TanSriWilliamH.J.Cheng TanSriDato’JaffarbinAbdul DatoMuradMohamedHashim Dato’HassanbinAbdulMutalip LinChungDien ChengSinYeng FolkJeeYoong MohamedHusseinbinNabiBux LimPoonThoo YeowTeckChai Jen(B)TanSriDato’ZainMahmudHashim (Retiredon13.11.2006)TsaiCharngYi (Retiredon13.11.2006)

InaccordancewithArticle98oftheCompany’sArticlesofAssociation,Y.Bhg.TanSriWilliamH.J.Cheng,MrFolkJeeYoongandMrChengSinYengretirebyrotationattheforthcomingAnnualGeneralMeetingand,beingeligible,offerthemselvesforre-election.

PursuanttoSection129(6)oftheCompaniesAct,1965,Y.Bhg.TanSriDato’JaffarbinAbdulretiresandoffershimselfforre-appointmentasDirectoroftheCompanytoholdofficeuntilthenextAnnualGeneralMeeting.

Y.Bhg.DatoMuradMohamedHashim,beingover theageof70years, retiresat the forthcomingAnnualGeneralMeetingandwillnotseekre-appointmentasDirector.

DIRECTORS’BENEFITS

Neitherattheendofthefinancialyear,noratanytimeduringthatyear,didtheresubsistanyarrangementtowhichtheCompanywasaparty,wherebytheDirectorsmightacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate.

Sincetheendofthepreviousfinancialyear,noDirectoroftheCompanyhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebytheDirectorsasshowninNote6ofthefinancialstatementsorthefixedsalaryofafulltimeemployeeoftheCompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanyDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhasasubstantialfinancialinterest,exceptasdisclosedinNote31tothefinancialstatements.

31

DIRECTORS’INTERESTS

AccordingtotheRegisterofDirectors’Shareholdings,theinterestsofDirectorsinofficeattheendofthefinancialyearinsharesintheCompanyduringandattheendofthefinancialyearwereasfollows:

NumberofOrdinarySharesofRM1.00each 1.7.2006 Acquired Disposed 30.6.2007

Indirectinterestinshares TanSriWilliamH.J.Cheng 42,318,772 – – 42,318,772

TheinterestsofDirectorsinofficeattheendofthefinancialyearinsharesinitsrelatedcorporationsduringandattheendofthefinancialyearwereasfollows:

IntheHoldingCompany

LionCorporationBerhad(“LCB”)

NumberofOrdinarySharesofRM1.00each 1.7.2006 Additions Disposals 30.6.2007

Directinterest TanSriWilliamH.J.Cheng 458,685 – – 458,685LimPoonThoo 10,490 – – 10,490TanSriDato’JaffarbinAbdul 237,533 – – 237,533LinChungDien 1,126,791 – – 1,126,791MohamedHusseinbinNabiBux 10,000 – – 10,000

IndirectinterestTanSriWilliamH.J.Cheng 731,971,605 16,559,848 (500,000) 748,031,453

Inadditiontotheabove,TanSriWilliamH.J.ChengisalsodeemedtohaveaninterestinsharesinLCBbyvirtueof:

(a) OptionsgrantedpursuanttotheLCB’sExecutiveShareOptionScheme

NumberofOptionsoverOrdinarySharesofRM1.00each 1.7.2006 Granted Exercised 30.6.2007

TanSriWilliamH.J.Cheng 245,000 245,000 – 490,000

(b) WarrantswitharighttosubscribeforordinarysharesinLCBonthebasisofonenewordinaryshareforeveryonewarrantheld

NumberofWarrants 1.7.2006 Additions Disposals 30.6.2007

TanSriWilliamH.J.Cheng 42,160,189 – – 42,160,189

32

DIRECTORS’INTERESTS(continued)

InRelatedCompanies Nominal valueper ordinary NumberofOrdinaryShares share 1.7.2006 Additions Disposals 30.6.2007

IndirectinterestTanSriWilliamH.J.Cheng BrightSteelServiceCentre SdnBhd RM1 11,420,000 – – 11,420,000BrightEnterprise(Sdn)Berhad RM1 816,000 – – 816,000B.A.P.IndustriesSdnBhd RM1 4,650,000 – – 4,650,000BersatuInvestmentsCompany Limited HK$10 42,644 – – 42,644KinabaluMotorAssembly SendirianBerhad RM1 26,985,030 – – 26,985,030LogicConcepts(M)SdnBhd RM1 71,072 – – 71,072LogicFurniture(M)SdnBhd RM1 91,000 – – 91,000Lyn(Pte)Ltd # 1,225,555 – – 1,225,555MegasteelSdnBhd RM1 540,000,001 – – 540,000,001

NumberofPreference“D”SharesofRM0.01each 1.7.2006 Additions Disposals 30.6.2007

IndirectinterestTanSriWilliamH.J.Cheng

MegasteelSdnBhd 49,000,000 – – 49,000,000

NumberofPreference“F”SharesofRM0.01each 1.7.2006 Additions Disposals 30.6.2007

IndirectinterestTanSriWilliamH.J.Cheng

MegasteelSdnBhd 26,670,000 – – 26,670,000

# SharesincompaniesincorporatedinSingaporedonothaveaparvalue. Otherthanasdisclosedabove,noneoftheotherDirectorsinofficeattheendofthefinancialyearhadanyinterestinsharesintheCompanyoritsrelatedcorporationsduringandattheendofthefinancialyear.

OTHERSTATUTORYINFORMATION

(a) BeforetheincomestatementsandbalancesheetsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps:

(i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebtsandsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateallowancehadbeenmadefordoubtfuldebts;and

(ii) toensurethatanycurrentassetswhichwereunlikelytorealisetheirvaluesasshownintheaccounting

records in theordinarycourseofbusinesshadbeenwrittendowntoanamountwhich theymightbeexpectedsotorealise.

33

OTHERSTATUTORYINFORMATION(continued)

(b) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichwouldrender:

(i) theamountwrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebtsinthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent;and

(ii) thevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

(c) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

(d) Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreport

or thefinancialstatementsof theGroupandof theCompanywhichwouldrenderanyamountstatedin thefinancialstatementsmisleading.

(e) Atthedateofthisreport,theredoesnotexist:

(i) anychargeontheassetsoftheGroupandoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) anycontingentliabilityinrespectoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyear.

(f) IntheopinionoftheDirectors: (i) nocontingentorotherliabilityhasbecomeenforceableorislikelytobecomeenforceablewithintheperiod

oftwelvemonthsaftertheendofthefinancialyearwhichwillormayaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationswhentheyfalldue;and

(ii) noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.

SIGNIFICANTEVENTS

(A) On10August2006,CenturyContainerIndustriesSdnBhd(“CCI”),awholly-ownedsubsidiaryofBrightSteelSdnBhd,whichisinturnawholly-ownedsubsidiaryoftheCompanythen,enteredintoaSaleandPurchaseAgreementtodisposeofapieceofleaseholdindustriallandtogetherwiththebuildingstructureserectedthereonforacashconsiderationofRM23million(“Disposal”),asdisclosedinNote22.TheDisposalwascompletedon12April2007.CCIceasedtobeasubsidiaryoftheCompanyon19September2007pursuanttotheProposedDisposalasdisclosedbelow.

34

SIGNIFICANTEVENTS(continued)

(B) On28September2006,theCompanyannouncedthefollowing:-

(a) TheCompanyanditswholly-ownedsubsidiary,EastCrestInternationalLimited(“EastCrest”),hadon27September2006,enteredintoaconditionalMasterSaleAgreementwithLionDiversifiedHoldingsBerhad(“LDHB”)andExcelStepInvestmentsLimited(“ExcelStep”),awholly-ownedsubsidiaryofLDHB,toacquirethefollowingfromLDHB:

(i) 100%oftheequityinterestinPRGCorporationLimitedwhichowns55.5%equityinterestinParksonRetailGroupLimited(“ParksonRetail”)foraconsiderationofRM4,025.94million;

(ii) 100% of the equity interest in Parkson Corporation Sdn Bhd for a consideration of RM180.21million;

(iii) 100%eachoftheequityinterestinParksonVenturePteLtdandSerbadagangHoldingsSdnBhdforatotalconsiderationofRM93.58million;and

(iv) 100%oftheequityinterestinSeaCoralLimitedforaconsiderationofRM1.00;

tobesatisfiedbytheissuanceof3,799.73millionnewordinarysharesofRM1.00eachintheCompanyatanissuepriceofRM1.00pershareandRM500millionnominalvalueof3-year3.5%couponredeemableconvertiblesecuredloanstocks,tobeissuedat100%ofthenominalvalueofRM1.00each.

(hereinaftercollectivelyreferredtoasthe“ProposedAcquisitions”).

(b) TheCompanyhadon27September2006,enteredintoaconditionalBSSBShareSaleAgreementwithLionCorporationBerhad(“LCB”)andTotalTriumphInvestmentsLimited(“TotalTriumph”),awholly-ownedsubsidiaryofLCB,fortheproposeddisposalbytheCompanyof32,143,500ordinarysharesofRM1.00eachinBrightSteelSdnBhd(“BrightSteel”),representingtheentireissuedandpaid-upsharecapitalofBrightSteeltoTotalTriumphforacashconsiderationofRM53.47million(“ProposedDisposal”).

(c) TheCompanyproposedtoincreasetheauthorisedsharecapitaloftheCompanyfromRM100,000,000dividedinto100,000,000ordinarysharesofRM1.00eachtoRM4,500,000,000dividedinto4,500,000,000ordinarysharesofRM1.00each(“ProposedIncreaseinAuthorisedShareCapital”).

(d) TheCompanyproposedacapitalreductionofRM0.75perordinaryshareofRM1.00eachintheCompany(“CapitalReduction”)andthereafterashareconsolidationonthebasisofeveryfour(4)resultantshareofRM0.25eachintoone(1)ordinaryshareofRM1.00intheCompany(“ShareConsolidation”)(“ProposedCapitalReconstruction”).

(e) TheCompanyproposedtochangethenameoftheCompanyfromAmalgamatedContainersBerhadtoParksonHoldingsBerhad(“ProposedChangeofName”).

(TheProposedAcquisitions, theProposedDisposal, theProposed Increased inAuthorisedShareCapital, theProposedCapitalReconstructionandtheProposedChangeofNameshallhereinaftercollectivelybereferredtoasthe“Proposals”).

TheshareholdersoftheCompanyhadon17August2007approvedtheProposalsandtheauthorisedsharecapitaloftheCompanywasincreasedon17August2007.

TheProposedAcquisitionsandtheProposedDisposalwerecompletedon19September2007andthenameoftheCompanywaschangedtoParksonHoldingsBerhadonthesameday.

TheKualaLumpurHighCourthadon24September2007confirmedandsanctionedtheCompany’spetitionforanOrderfortheCapitalReductionpursuanttotheProposedCapitalReconstruction,andthesealedOrderofthepetitionfortheCapitalReductionwasobtainedon25September2007anduponthelodgementofthesamewiththeCompaniesCommissionofMalaysiaonthesamedate,theCapitalReductiontookeffect.

SubsequenttotheCapitalReduction,theShareConsolidationwillbeundertakenandtheCompanyhadon25September2007,fixedtheentitlementdatefortheShareConsolidationon9October2007.

35

EVENTSSUBSEQUENTTOBALANCESHEETDATE

(A) On27September2007,theCompanyannouncedthatShanghaiHongqiaoParksonDevelopmentCo.,Ltd,awholly-ownedsubsidiaryofParksonRetail,whichinturnisasubsidiaryoftheCompanyandlistedonTheStockExchangeofHongKongLimited,hadextendedtheperiodforthefulfilmentoftheconditionsinrelationtoitsproposedacquisitionfromSichuanFulinIndustrialGroupCo.,Ltd,thesolelegalandbeneficialownerofthe40%equityinterestinMianyangFulinParksonPlazaCo.,Ltd(theremaining60%equityinterestofwhichisheldindirectlybyParksonRetail)whichistheownerandoperatorofthe“Parkson”departmentstorelocatedatLevel1andLevel2,No.17,AnchangRoad,MianyangCity,SichuanProvinceofthePeople’sRepublicofChina,atatotalconsiderationofRmb99,928,800.00for60dayscommencing18September2007.

(B) On27September2007,ParksonRetailDevelopmentCo.,Ltd,awholly-ownedsubsidiaryofParksonRetail,enteredintoasaleandpurchaseagreementtoacquirefromShaanxiChang’anInformationPropertyInvestmentCo.,Ltd,thesolelegalandbeneficialownerofthe49%interestinXi’anChang’anParksonStoreCo.,Ltd(theremaining51%equityinterestiscurrentlyownedbyParksonRetailthroughits91%ownedsubsidiary,Xi’anLuckyKingParksonPlazaCo.,Ltd)atatotalcashconsiderationofRmb61,000,000.00.

AUDITORS

Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectorsdated1October2007.

TANSRIWILLIAMH.J.CHENG CHENGSINYENGChairmanandManagingDirector Director

KualaLumpur,Malaysia

36

STATEMENTBY DIRECTORSPURSUANTTOSECTION169(15)OFTHECOMPANIESACT, 1965

STATUTORY DECLARATIONPURSUANTTOSECTION169(16)OFTHECOMPANIESACT, 1965

We,TANSRIWILLIAMH.J.CHENGandCHENGSINYENG,beingtwooftheDirectorsofPARKSONHOLDINGSBERHAD(formerlyknownasAMALGAMATEDCONTAINERSBERHAD),doherebystatethat,intheopinionoftheDirectors, theaccompanyingfinancial statementssetoutonpages38 to92aredrawnup inaccordancewith theapplicableFinancialReportingStandardsinMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat30June2007andoftheresultsandthecashflowsoftheGroupandoftheCompanyfortheyearthenended.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectorsdated1October2007.

TANSRIWILLIAMH.J.CHENG CHENGSINYENGChairmanandManagingDirector Director

KualaLumpur,Malaysia

I,TANSRIWILLIAMH.J.CHENG,beingtheDirectorprimarilyresponsibleforthefinancialmanagementofPARKSONHOLDINGS BERHAD (formerly known asAMALGAMATED CONTAINERS BERHAD), do solemnly and sincerelydeclarethattheaccompanyingfinancialstatementssetoutonpages38to92areinmyopinioncorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

SubscribedandsolemnlydeclaredbyTANSRIWILLIAMH.J.CHENGatKualaLumpurintheFederalTerritoryon1October2007. TANSRIWILLIAMH.J.CHENG

Beforeme,

W392ABASBINHASANCommissionerforOathsKualaLumpur

37

REPORTOFTHEAUDITORSTOTHEMEMBERSOFPARKSONHOLDINGSBERHAD

Wehaveauditedtheaccompanyingfinancialstatementssetoutonpages38to92.ThesefinancialstatementsaretheresponsibilityoftheCompany’sDirectors.

Itisourresponsibilitytoformanindependentopinion,basedonouraudit,onthefinancialstatementsandtoreportouropiniontoyou,asabody,inaccordancewithSection174oftheCompaniesAct,1965andfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

WeconductedourauditinaccordancewithapplicableApprovedStandardsonAuditinginMalaysia.Thosestandardsrequire thatweplanandperformtheaudit toobtainreasonableassuranceaboutwhether thefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.AnauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebytheDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditprovidesareasonablebasisforouropinion.

Inouropinion:

(a) thefinancialstatementshavebeenproperlydrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableFinancialReportingStandardsinMalaysiasoastogiveatrueandfairviewof:

(i) thefinancialpositionoftheGroupandoftheCompanyasat30June2007andoftheresultsandthecashflowsoftheGroupandoftheCompanyfortheyearthenended;and

(ii) themattersrequiredbySection169oftheCompaniesAct,1965tobedealtwithinthefinancialstatements;and

(b) theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyandbyitssubsidiariesofwhichweactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

Wehaveconsideredthefinancialstatementsandtheauditors’reportsthereonofthesubsidiariesofwhichwehavenotactedasauditors,asindicatedinNote13tothefinancialstatements,beingfinancialstatementsthathavebeenincludedintheconsolidatedfinancialstatements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financialstatementsoftheCompanyareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

Theauditors’reportsonthefinancialstatementsofthesubsidiarieswerenotsubjecttoanyqualificationmaterialtotheconsolidatedfinancialstatementsanddidnotincludeanycommentrequiredtobemadeunderSection174(3)oftheAct.

Ernst&Young LeeSengHuatAF:0039 No.2518/12/07(J)CharteredAccountants Partner

KualaLumpur,Malaysia 1October2007

38

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000 (restated)

ContinuingoperationsRevenue 3 – – 563 –Otherincome 1 – 1,827 2,107Staffcosts 4 (136) (134) (136) (134)Otherexpenses (1,673) (713) (1,661) (713)

Operating(loss)/profit (1,808) (847) 593 1,260Financecosts 5 (1,717) (3,039) (1,717) (3,039)Impairmentofinvestment inasubsidiarycompany – – (38,686) –

Lossbeforetax 6 (3,525) (3,886) (39,810) (1,779)Taxation 7 (73) – (73) –

Lossfortheyearfrom continuingoperations (3,598) (3,886) (39,883) (1,779)

Discontinuedoperations 8Revenue 3 343,876 239,482 – –Otherincome 13,325 1,080 – –Changesininventoriesoffinished goodsandwork-in-progress 20,479 (18,115) – –Rawmaterialsand consumablesused (332,086) (204,542) – –Staffcosts 4 (10,904) (9,664) – –Depreciationand amortisationcharges (2,668) (4,107) – –Otherexpenses (16,899) (19,851) – –

Operatingprofit/(loss) 15,123 (15,717) – –Financecosts 5 (5,689) (6,583) – –Shareofresultoftheassociate 14,651 7,440 – –Lossrecognisedonthe remeasurementofassets ofdisposalgroup 8 (25,044) – – –

Lossbeforetax 6 (959) (14,860) – –Taxation 7 (1,752) 1,366 – –

Lossfortheyearfrom discontinuedoperations (2,711) (13,494) – –

Totallossfortheyear fromcontinuingand discontinuedoperations (6,309) (17,380) (39,883) (1,779)

INCOMESTATEMENTSFORTHEYEARENDED30 JUNE2007

39


Attributableto:EquityholdersoftheCompany (6,688) (17,827) (39,883) (1,779)Minorityinterests 379 447 – –

Lossfortheyear (6,309) (17,380) (39,883) (1,779)

Losspershareattributable toordinaryequityholdersof theCompany 10 Basic,for:-lossfromcontinuingoperations(sen) (4.81) (5.20) -lossfromdiscontinuedoperations(sen) (4.14) (18.66)

Basic,forlossfortheyear(sen) (8.95) (23.86)

INCOMESTATEMENTSFORTHEYEARENDED30 JUNE2007 (continued)

Theaccompanyingnotesformanintegralpartofthefinancialstatements.

40

BALANCESHEETSASAT 30 JUNE2007


ASSETS

Non-currentassetsProperty,plantandequipment 11 – 32,335 – –Prepaidlandleasepayments 12 – 7,717 – –Investmentsinsubsidiaries 13 – – – 38,686Investmentinassociate 14 – 90,994 – –Otherinvestments 15 28 996 28 28Goodwill 16 – 3 – –Amountsduefromsubsidiaries 17 – – 51,030 77,174Deferredtaxassets 29 – 1,383 – –

28 133,428 51,058 115,888

CurrentassetsInventories 18 – 105,024 – –Tradeandotherreceivables 19 25 51,337 25 17Taxrecoverable 137 1,823 137 204Amountsduefrom relatedcompanies 20 – 3,303 – –Cashandbankbalances 21 64 2,405 64 19

226 163,892 226 240Assetsheldforsale 22 – 13,812 – –Assetsofdisposalgroup classifiedasheldforsale 8 325,980 – – –

326,206 177,704 226 240

TOTALASSETS 326,234 311,132 51,284 116,128

EQUITYANDLIABILITIES

Equityattributabletoequity holdersoftheCompanySharecapital 23 74,711 74,711 74,711 74,711Sharepremium 11,856 11,856 11,856 11,856Otherreserves 24 – 11,127 – –(Accumulatedlosses)/ retainedprofits (43,641) (41,458) (36,336) 3,601Amountrecogniseddirectlyin equityrelatingtodisposalgroup classifiedasheldforsale 6,620 – – –

49,546 56,236 50,231 90,168Minorityinterests – 15,305 – –Minorityinterestsrelatingto disposalgroupclassified asheldforsale 15,499 – – –

Totalequity 65,045 71,541 50,231 90,168

41


Non-currentliabilitiesPost-employmentbenefit obligations 25 – 1,846 – –Borrowings 26 – 6,131 – –Hirepurchaseliabilities 28 – 93 – –Deferredtaxliabilities 29 – 191 – –

– 8,261 – –

CurrentliabilitiesTradeandotherpayables 30 1,059 56,815 1,053 350Amountsduetorelated companies 20 – 70,389 – –Borrowings 26 – 104,084 – 25,610Hirepurchaseliabilities 28 – 39 – –Taxliabilities – 3 – –

1,059 231,330 1,053 25,960Liabilitiesdirectlyassociated withdisposalgroupclassified asheldforsale 8 260,130 – – –

261,189 231,330 1,053 25,960

Totalliabilities 261,189 239,591 1,053 25,960

TOTALEQUITYANDLIABILITIES 326,234 311,132 51,284 116,128

BALANCESHEETSASAT 30 JUNE2007 (continued)


42

CONSOLIDATEDSTATEMENTOFCHANGES INEQUITYFORTHEYEARENDED30 JUNE2007

AttributabletoequityholdersoftheCompany Minority Non-distributable interests Relatingto relatingto disposal disposal group group classified classified Share Share Other asheld Accumulated Minority asheld Total Note capital premium reserves forsale losses Total interests forsale equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1July2006Aspreviouslystated 74,711 11,856 11,127 – (41,458) 56,236 15,305 – 71,541EffectofadoptingFRS3 2.3(a)(ii) – – (3,116) – 4,559 1,443 – – 1,443

74,711 11,856 8,011 – (36,899) 57,679 15,305 – 72,984

Translationdifferences:-Equityaccountinginshare oftheassociate’smovement 24 – – 672 – – 672 – – 672-Onnetequityoftheforeign associate 24 – – (2,063) – – (2,063) – – (2,063)Amountrecogniseddirectlyin equityrelatingtodisposal groupheldforsale – – (6,620) 6,620 – – (15,499) 15,499 –

Netincomeandexpense recogniseddirectlyinequity – – (8,011) 6,620 – (1,391) (15,499) 15,499 (1,391)Profit/(loss)fortheyear – – – – (6,688) (6,688) 379 – (6,309)

Totalrecognisedincome andexpensefortheyear – – (8,011) 6,620 (6,688) (8,079) (15,120) 15,499 (7,700)

Dividends 9 – – – – (54) (54) (185) – (239)

At30June2007 74,711 11,856 – 6,620 (43,641) 49,546 – 15,499 65,045

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CONSOLIDATEDSTATEMENTOFCHANGES INEQUITYFORTHEYEARENDED30 JUNE2007 (continued)

AttributabletoequityholdersoftheCompany Non-distributable Share Share OtherAccumulated Minority Total Note capital premium reserves losses Total interests equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At1July2005 74,711 11,856 25,006 (24,088) 87,485 15,043 102,528

Equityaccountingforshare oftheassociate’stransfer fromincomestatementto reserves 24 – – (995) 995 – – –Translationdifferences:-Equityaccountinginshareof theassociate’smovement 24 – – (462) – (462) – (462)-Onnetequityoftheforeign associate 24 – – 3,439 – 3,439 – 3,439Equityaccountinginshareof theassociate’sreserves 24 – – (15,340) – (15,340) – (15,340)Disposalofequityinterest intheassociate 24 – – (521) – (521) – (521)

Netincomeandexpense recogniseddirectlyinequity – – (13,879) 995 (12,884) – (12,884)Profit/(loss)fortheyear – – – (17,827) (17,827) 447 (17,380)

Totalrecognisedincome andexpensefortheyear – – (13,879) (16,832) (30,711) 447 (30,264)

Dividends 9 – – – (538) (538) (185) (723)

At30June2006 74,711 11,856 11,127 (41,458) 56,236 15,305 71,541


44

COMPANY STATEMENTOFCHANGES INEQUITYFORTHEYEARENDED30 JUNE2007

Distributable Non- (Accumulated distributable losses)/ Share Share retained Note capital premium profits Total RM’000 RM’000 RM’000 RM’000

At1July2006 74,711 11,856 3,601 90,168

Lossfortheyear,representing totalrecognisedincomeand expensefortheyear – – (39,883) (39,883)

Dividends 9 – – (54) (54)

At30June2007 74,711 11,856 (36,336) 50,231

At1July2005 74,711 11,856 5,918 92,485

Lossfortheyear,representing totalrecognisedincomeand expensefortheyear – – (1,779) (1,779)

Dividends 9 – – (538) (538)

At30June2006 74,711 11,856 3,601 90,168


45

CASHFLOWSTATEMENTSFORTHEYEARENDED30 JUNE2007

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

CASHFLOWSFROM OPERATINGACTIVITIES

Lossbeforetaxfrom: Continuingoperations (3,525) (3,886) (39,810) (1,779)Discontinuedoperations (959) (14,860) – –Adjustmentsfor: Interestexpense 7,406 9,622 1,717 3,039 Depreciationandamortisationcharges 2,668 4,107 – – Goodwillwrittenoff 3 – – – Baddebts: -writtenoff – 19 – – -recovered – (163) – – Lossondisposalofequityinterest intheassociate – 1,425 – – Writebackofallowancefordoubtfuldebts (616) – – – Impairmentofinvestmentsin: -asubsidiarycompany – – 38,686 – -theassociate 7,162 5,000 – – -others 5 40 – – Lossrecognisedontheremeasurement ofassetsofdisposalgroup 25,044 – – – Provisionfordefinedbenefitplan 150 341 – – Slowmovinginventories: -allowance – 323 – – -writebackofallowance (363) – – –Unrealisedlossonforeignexchange – 6 – – Shareofresultoftheassociate (14,651) (7,440) – – Interestincome (44) (44) (1,827) (2,107) Gainondisposalofproperty, plantandequipment (26) (185) – – Gainondisposalofassetsheldforsale (9,039) – – – Reversalofprovisionforinterests (2,147) – – – Dividendincome(gross) (4) (9) (563) –

Operatingprofit/(loss)before workingcapitalchanges 11,064 (5,704) (1,797) (847)

Changesinworkingcapital: (Increase)/decreaseininventories (18,939) 32,168 – –(Increase)/decreaseintradeandother receivables (27,885) 12,568 28,114 20,712Increase/(decrease)intrade,otherpayables andproductfinancingliability 39,735 (10,820) 703 58

Netcashgeneratedfromoperations 3,975 28,212 27,020 19,923

(Taxpaid)/refund (773) (3,256) (6) 194Interestpaid (7,359) (7,408) (1,717) (3,039)Interestreceived 44 44 1 –Definedbenefitpaid – (22) – –

Netcash(usedin)/generatedfrom operatingactivities (4,113) 17,570 25,298 17,078

46

CASHFLOWSTATEMENTSFORTHEYEARENDED30 JUNE2007 (continued)


CASHFLOWSFROM INVESTINGACTIVITIES

Purchaseofproperty,plantand equipment (688) (19,707) – –Proceedsfromdisposalof property,plantandequipment 92 222 – –Proceedsfromdisposalof assetsheldforsale 22,851 – – –Proceedsfromdisposalof equityinterestintheassociate – 1,015 – –Dividendreceivedfrom:-asubsidiarycompany – – 411 –-theassociate – 15,044 – –-quotedinvestments 3 6 – –

Netcashgeneratedfrom/(usedin) investingactivities 22,258 (3,420) 411 –

CASHFLOWSFROM FINANCINGACTIVITIES

Dividendpaidto:-shareholdersoftheCompany (54) (538) (54) (538)-minorityshareholdersof asubsidiary (185) (185) – –Drawdownofborrowings 182,559 118,490 – –Repaymentofborrowings (205,313) (129,049) (25,610) (16,800)Hirepurchaseprincipalpayments (72) (27) – –

Netcashusedinfinancingactivities (23,065) (11,309) (25,664) (17,338)

NET(DECREASE)/INCREASEIN CASHANDCASHEQUIVALENTS (4,920) 2,841 45 (260)

CASHANDCASHEQUIVALENTS ATBEGINNINGOFYEAR (2,395) (5,236) 19 279

CASHANDCASHEQUIVALENTS ATENDOFYEAR(NOTE21) (7,315) (2,395) 64 19


47

NOTESTOTHE FINANCIAL STATEMENTS

1. CORPORATEINFORMATION

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandlistedontheMainBoardofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).TheregisteredofficeandprincipalplaceofbusinessoftheCompanyislocatedatLevel46,MenaraCitibank,165JalanAmpang,50450KualaLumpur.

TheprincipalactivityoftheCompanyisinvestmentholding.

Theprincipalactivitiesofthesubsidiariesanditsassociateconsistofsteelservices, internationaltradinganddistribution of electronic components, automotive component trading, limestone processing and investmentholding.SaveforEastCrestInternationalLimited,whoseprincipalactivityisinvestmentholding,theactivitiesofallothersubsidiariesanditsassociatewerediscontinueduponthecompletionofthedisposalsofthesaidsubsidiariesandassociateon19September2007.Concurrently,theCompanyacquirednewsubsidiarieswhoseprincipalactivitiesareintheoperationsofdepartmentstores.

TheDirectorsregardLionCorporationBerhad(“LCB”),acompanyincorporatedinMalaysiaandlistedontheMainBoardofBursaSecurities,astheultimateholdingcompanyduringthefinancialyear.

ConsequentupontheacquisitionbyExcelStepInvestmentsLimited(“ExcelStep”),acompanyincorporatedinBritishVirgin Islands,awholly-ownedsubsidiaryofLionDiversifiedHoldingsBerhad (“LDHB”),acompanyincorporated inMalaysiaand listedon theMainBoardofBursaSecuritiesof42,318,772ordinarysharesofRM1.00 each, representing 56.64% of the then issued and paid-up capital in the Company from LCB andLimpahjayaSdnBhdon14September2007andtheissuanceof3,799.73millionnewordinarysharesofRM1.00eachintheCompanyatanissuepriceofRM1.00pershareandRM500millionnominalvalueof3-year3.5%couponredeemableconvertiblesecuredloanstockstoExcelStepon19September2007asconsiderationfortheacquisitionbyEastCrestInternationalLimited,awholly-ownedsubsidiaryoftheCompany,fromLDHBoftheRetailAssets,theDirectorsregardExcelStepastheimmediateholdingcompanyandLDHBastheultimateholdingcompany.

ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionoftheDirectorson1October2007.

2. SIGNIFICANTACCOUNTINGPOLICIES

2.1 BasisofPreparation

ThefinancialstatementscomplywiththeprovisionsoftheCompaniesAct,1965andapplicableFinancialReportingStandards(“FRS”)inMalaysia.Atthebeginningofthecurrentfinancialyear,theGroupandtheCompanyhadadoptednewandrevisedFRSswhicharemandatoryforfinancialperiodsbeginningonorafter1January2006asdescribedfullyinNote2.3.

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedunderthehistoricalcostconvention.

ThefinancialstatementsarepresentedinRinggitMalaysia(RM)andallvaluesareroundedtothenearestthousand(RM’000)exceptwhenotherwiseindicated.

2.2 SummaryofSignificantAccountingPolicies

(a) SubsidiariesandBasisofConsolidation

(i) Subsidiaries

SubsidiariesareentitiesoverwhichtheGrouphas theability tocontrol thefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities.Theexistenceandeffectofpotential voting rights that are currently exercisable or convertible are considered whenassessingwhethertheGrouphassuchpoweroveranotherentity.

IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesarestatedatcostlessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.

48

2. SIGNIFICANTACCOUNTINGPOLICIES(continued)

2.2 SummaryofSignificantAccountingPolicies(continued)

(a) SubsidiariesandBasisofConsolidation(continued)

(ii) BasisofConsolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasatthebalancesheetdate.ThefinancialstatementsofthesubsidiariesarepreparedforthesamereportingdateastheCompany.

Subsidiariesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtains control, andcontinue tobeconsolidateduntil thedate that suchcontrol ceases.In preparing the consolidated financial statements, intragroup balances, transactions andunrealisedgainsorlossesareeliminatedinfull.Uniformaccountingpoliciesareadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances.

Acquisitions of subsidiaries are accounted for using the purchase method.The purchasemethodofaccountinginvolvesallocatingthecostoftheacquisitiontothefairvalueoftheassetsacquiredandliabilitiesandcontingentliabilitiesassumedatthedateofacquisition.Thecostofanacquisitionismeasuredastheaggregateofthefairvalues,atthedateofexchange,oftheassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissued,plusanycostsdirectlyattributabletotheacquisition.

AnyexcessofthecostoftheacquisitionovertheGroup’sinterestinthenetfairvalueofthe

identifiable assets, liabilities and contingent liabilities represents goodwill.Any excess oftheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofacquisitionisrecognisedimmediatelyinprofitorloss.

Minority interests represent theportionofprofitor lossandnetassets in subsidiariesnotheldbytheGroup.Itismeasuredattheminorities’shareofthefairvalueofthesubsidiaries’identifiableassetsandliabilitiesattheacquisitiondateandtheminorities’shareofchangesinthesubsidiaries’equitysincethen.

(b) Associate

AnassociateisanentityinwhichtheGrouphassignificantinfluenceandthatisneitherasubsidiarynoraninterestinajointventure.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutnotincontrolorjointcontroloverthosepolicies.

Investmentinassociateisaccountedforintheconsolidatedfinancialstatementsusingtheequitymethod of accounting. Under the equity method, the investment in associate is carried in theconsolidatedbalancesheetatcostadjustedforpost-acquisitionchangesintheGroup’sshareofnetassetsoftheassociate.TheGroup’sshareofthenetprofitorlossoftheassociateisrecognisedintheconsolidatedprofitorloss.Wheretherehasbeenachangerecogniseddirectlyintheequityoftheassociate,theGrouprecognisesitsshareofsuchchanges.

Inapplyingtheequitymethod,unrealisedgainsandlossesontransactionsbetweentheGroupandtheassociateareeliminatedtotheextentoftheGroup’sinterestintheassociate.Afterapplicationof theequitymethod, theGroupdetermineswhether it isnecessary to recogniseanyadditionalimpairmentlosswithrespecttotheGroup’snetinvestmentintheassociate.TheassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificantinfluenceovertheassociate. Goodwillrelatingtoanassociateisincludedinthecarryingamountoftheinvestmentandisnotamortised.AnyexcessoftheGroup’sshareofthenetfairvalueoftheassociate’sidentifiableassets,liabilitiesandcontingent liabilitiesover thecostof theinvestment isexcludedfromthecarryingamountoftheinvestmentandisinsteadincludedasincomeinthedeterminationoftheGroup’sshareoftheassociate’sprofitorlossintheperiodinwhichtheinvestmentisacquired.

49



(b) Associate(continued)

When theGroup’sshareof losses inanassociateequalsorexceeds its interest in theassociate,includinganylong-termintereststhat,insubstance,formpartoftheGroup’snetinvestmentintheassociate,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.

ThemostrecentavailableauditedfinancialstatementsoftheassociateareusedbytheGroupinapplyingtheequitymethod.Uniformaccountingpoliciesareadoptedforliketransactionsandeventsinsimilarcircumstances.

IntheCompany’sseparatefinancialstatements,investmentinassociateisstatedatcostlessimpairmentlosses.

Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.

(c) IntangibleAssets-Goodwill

GoodwillacquiredinabusinesscombinationisinitiallymeasuredatcostbeingtheexcessofthecostofbusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilities.Followingtheinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.Goodwillisnotamortisedbutinstead,itisreviewedforimpairment,annuallyormore frequently ifeventsorchanges incircumstances indicate that thecarryingvaluemaybeimpaired.Gainsandlossesonthedisposalofanentityincludethecarryingamountofgoodwillrelatingtotheentitysold.

(d) Property,PlantandEquipmentandDepreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs areincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtotheincomestatementduringthefinancialperiodinwhichtheyareincurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulateddepreciationandanyaccumulatedimpairmentlosses.

Depreciationofproperty,plantandequipmentisprovidedforonastraight-linebasistowriteoffthecostofeachoftheassettoitsresidualvalueovertheestimatedusefullife,atthefollowingannualrates: Buildings 2%-7.32%Plantandmachinery 10%Factoryequipment 10%Officeequipmentandvehicles 10%-20%Furniture,fittingsandotherequipment 10%-20%

Theresidualvalues,usefullifeanddepreciationmethodarereviewedateachfinancialyear-endtoensurethattheamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Thedifferencebetweenthenetdisposalproceeds,ifanyandthenetcarryingamountisrecognisedinprofitorlossandtheunutilisedportionoftherevaluationsurplusonthatitemistakendirectlytoretainedearnings.

50



(e) ImpairmentofNon-FinancialAssets

ThecarryingamountsoftheGroup’sassets,otherthaninventories,deferredtaxassetsandnon-currentassets(ordisposalgroups)heldforsale,arereviewedateachbalancesheetdatetodeterminewhetherthereisanyindicationofimpairment.Ifanysuchindicationexists,theasset’srecoverableamountisestimatedtodeterminetheamountofimpairmentloss.

Forgoodwill,therecoverableamountisestimatedateachbalancesheetdateormorefrequentlywhenindicatorsofimpairmentareidentified.

For the purpose of impairment testing of these assets, recoverable amount is determined on anindividualassetbasisunlesstheassetdoesnotgeneratecashflowsthatarelargelyindependentofthosefromotherassets.Ifthisisthecase,recoverableamountisdeterminedforthecash-generatingunit(CGU)towhichtheassetbelongs.Goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtoeachoftheGroup’sCGUs,orgroupsofCGUs,thatareexpectedtobenefitfromthesynergiesofthecombination,irrespectiveofwhetherotherassetsorliabilitiesoftheGroupareassignedtothoseunitsorgroupsofunits.

Anasset’srecoverableamountisthehigherofanasset’sorCGU’sfairvaluelesscoststosellanditsvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount,theassetisconsideredimpairedandiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen,toreducethecarryingamountoftheotherassetsintheunitorgroupsofunitsonapro-ratabasis.

Animpairmentlossisrecognisedinprofitorlossintheperiodinwhichitarises. Impairmentlossongoodwillisnotreversedinasubsequentperiod.Animpairmentlossforanasset

other thangoodwill is reversedif,andonly if, therehasbeenachangein theestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Thecarryingamountofanassetother thangoodwill is increasedtoitsrevisedrecoverableamount,providedthat thisamountdoesnotexceedthecarryingamount thatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedinprofitorloss.

(f) Inventories

Inventoriesarestatedatlowerofcostandnetrealisablevalue.

Costofrawmaterials,finishedgoodsandwork-in-progressisdeterminedonaweightedaverageorfirst-in-first-outbasis,asappropriate,accordingtothecategoryofinventoriesconcerned.Thecostofrawmaterialscomprisescostsofpurchase.Thecostsoffinishedgoodsandwork-in-progresscomprisecostsofrawmaterials,directlabour,otherdirectcostsandappropriateproportionsofmanufacturingoverheadsbasedonnormaloperatingcapacity.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.

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(g) FinancialInstruments

FinancialinstrumentsarerecognisedinthebalancesheetwhentheGrouphasbecomeapartytothecontractualprovisionsoftheinstrument.

Financialinstrumentsareclassifiedasliabilitiesorequityinaccordancewiththesubstanceofthecontractual arrangement. Interest, dividends, gains and losses relating to a financial instrumentclassified as a liability, are reported as expenseor income.Distributions to holders of financialinstrumentsclassifiedasequityarechargeddirectlytoequity.FinancialinstrumentsareoffsetwhentheGrouphasalegallyenforceablerighttooffsetandintendstosettleeitheronanetbasisortorealisetheassetandsettletheliabilitysimultaneously.

(i) CashandCashEquivalents

Forthepurposesofthecashflowstatements,cashandcashequivalentsincludecashonhandandatbankanddepositsatcallwhichhaveaninsignificantriskofchangesinvalue,netofoutstandingbankoverdrafts.

(ii) OtherNon-CurrentInvestments

Non-currentinvestmentsotherthaninvestmentsinsubsidiariesandassociatesarestatedatcostlessimpairmentlosses.Ondisposalofaninvestment,thedifferencebetweennetdisposalproceedsanditscarryingamountisrecognisedinprofitorloss.

(iii) MarketableSecurities

Marketablesecuritiesarecarriedatthelowerofcostandmarketvalue,determinedonanaggregatebasis.Cost is determinedon theweightedaveragebasiswhilemarket value isdeterminedbasedonquotedmarketvalues.Increasesordecreasesinthecarryingamountofmarketable securitiesarecreditedorcharged to the incomestatement.Ondisposalofmarketablesecurities,thedifferencebetweennetdisposalproceedsandthecarryingamountisrecognisedinprofitorloss.

(iv) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off whenidentified.Anestimateismadefordoubtfuldebtbasedonareviewofalloutstandingamountsasatthebalancesheetdate.

(v) Payables

Payablesarestatedatcostwhichisthefairvalueoftheconsiderationtobepaidinthefutureforgoodsandservicesreceived.

(vi) InterestBearingLoansandBorrowings

Allloansandborrowingsareinitiallyrecognisedatthefairvalueoftheconsiderationreceivedless directly attributable transaction costs.After initial recognition, interest bearing loansand borrowings are subsequently measured at amortised cost using the effective interestmethod.

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(g) FinancialInstruments(continued)

(vii) EquityInstruments

Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.

Thetransactioncostsofanequitytransactionareaccountedforasadeductionfromequity,netoftax.Equitytransactioncostscompriseonlythoseincrementalexternalcostsdirectlyattributabletotheequitytransactionwhichwouldotherwisehavebeenavoided.

(h) Leases

(i) Classification

AleaseisrecognisedasafinanceleaseifittransferssubstantiallytotheGroupalltherisksandrewardsincidentaltoownership.Leasesoflandandbuildingsareclassifiedasoperatingorfinanceleasesinthesamewayasleasesofotherassetsandthelandandbuildingselementsofaleaseoflandandbuildingsareconsideredseparatelyforthepurposesofleaseclassification.Allleasesthatdonottransfersubstantiallyalltherisksandrewardsareclassifiedasoperatingleases.

(ii) FinanceLeases-theGroupasLessee

Assetsacquiredbywayofhirepurchaseorfinanceleasesarestatedatanamountequaltotheloweroftheirfairvaluesandthepresentvalueoftheminimumleasepaymentsattheinceptionoftheleases,lessaccumulateddepreciationandimpairmentlosses.Thecorrespondingliabilityisincludedinthebalancesheetashirepurchaseliabilities.Incalculatingthepresentvalueoftheminimumleasepayments,thediscountfactorusedistheinterestrateimplicitinthelease,whenitispracticabletodetermine;otherwise,theGroup’sincrementalborrowingrateisused.Anyinitialdirectcostsarealsoaddedtothecarryingamountofsuchassets.

Leasepaymentsareapportionedbetweenthefinancecostsandthereductionoftheoutstandingliability.Financecosts,whichrepresentthedifferencebetweenthetotalleasingcommitmentsandthefairvalueoftheassetsacquired,arerecognisedintheprofitorlossoverthetermoftherelevantleasesoastoproduceaconstantperiodicrateofchargeontheremainingbalanceoftheobligationsforeachaccountingperiod.

Thedepreciationpolicyforleasedassetsisinaccordancewiththatfordepreciableproperty,plantandequipmentasdescribedinNote2.2(d).

(iii) OperatingLeases-theGroupasLessee

Operatingleasepaymentsarerecognisedasanexpenseonastraight-linebasisoverthetermoftherelevantlease.

Inthecaseofaleaseoflandandbuildings,theminimumleasepaymentsortheup-frontpayments made are allocated, whenever necessary, between the land and the buildingselementsinproportiontotherelativefairvaluesforleaseholdinterestsinthelandelementandbuildingselementoftheleaseattheinceptionofthelease.Theup-frontpaymentrepresentsprepaidleasepaymentsandareamortisedonastraight-linebasisovertheleaseterm.

(i) BorrowingCosts

Borrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.

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(j) IncomeTax

Incometaxontheprofitorlossfortheyearcomprisescurrentanddeferredtax.Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthebalancesheetdate.

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities arerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.

Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxisrecognisedasincomeoranexpenseandincludedintheprofitorlossfortheperiod,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsorecogniseddirectlyinequity,orwhenitarisesfromabusinesscombinationthatisanacquisition,inwhichcasethedeferredtaxisincludedintheresultinggoodwillortheamountofanyexcessoftheacquirer’sinterestisthenetfairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofthecombination.

(k) ProvisionforLiabilities

ProvisionsarerecognisedwhentheGrouphasapresentobligationasaresultofapasteventanditisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountcanbemade.Provisionsarereviewedateachbalancesheetdateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasfinancecost.

(l) EmployeeBenefits

(i) ShortTermBenefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichtheassociatedservicesarerenderedbyemployeesoftheGroup.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences,andshorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.

(ii) DefinedContributionPlans

Definedcontributionplansarepost-employmentbenefitplansunderwhichtheGrouppaysfixed contributions into separate entities or funds and will have no legal or constructiveobligationtopayfurthercontributionsifanyofthefundsdonotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeservicesinthecurrentandprecedingfinancialyears.Suchcontributionsarerecognisedasanexpenseintheprofitorlossasincurred.Asrequiredbylaw,companiesinMalaysiamakesuchcontributionstotheEmployeesProvidentFund.CertainsubsidiariesalsocontributetotheACBGroupProvidentFundScheme,anapproveddefinedcontributionplan.

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(l) EmployeeBenefits(continued)

(iii) DefinedBenefitPlan

TheGroupoperatesanunfunded,definedbenefitretirementbenefitscheme(“theScheme”)for itseligibleemployees.TheGroup’sobligationunder theScheme,calculatedusingtheProjectedUnitCreditMethod,isdeterminedbasedonactuarialcomputationsbyindependentactuaries,whocarriesoutafullvaluationoftheplaneverythreeyears,throughwhichtheamountofbenefitthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandprioryearsisestimated.Thatbenefitisdiscountedinordertodetermineitspresentvalue.

ActuarialgainsandlossesarerecognisedasincomeorexpenseovertheexpectedaverageremainingworkinglivesoftheparticipatingemployeeswhenthecumulativeunrecognisedactuarialgainsorlossesfortheSchemeexceed10%ofthehigherofthepresentvalueofthedefinedbenefitobligationandthefairvalueofplanassets.Pastservicecostsarerecognisedimmediatelytotheextentthatthebenefitsarealreadyvested,andotherwiseareamortisedonastraight-linebasisovertheaverageperioduntiltheamendedbenefitsbecomevested.

The amount recognised in the balance sheet represents the present value of the definedbenefitobligationsadjustedforunrecognisedactuarialgainsandlossesandunrecognisedpastservicecosts,andreducedbythefairvalueofplanassets.Anyassetresultingfromthiscalculationislimitedtothenettotalofanyunrecognisedactuariallossesandpastservicecosts,andthepresentvalueofanyeconomicbenefitsintheformofrefundsorreductionsinfuturecontributionstotheplan.

(m) ForeignCurrencies

(i) FunctionalandPresentationCurrency

TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia(RM),whichisalsotheCompany’sfunctionalcurrency.

(ii) ForeignCurrencyTransactions

In preparing the financial statements of the individual entities, transactions in currenciesotherthantheentity’sfunctionalcurrency(foreigncurrencies)arerecordedinthefunctionalcurrencies using the exchange rates prevailing at the dates of the transactions.At eachbalancesheetdate,monetaryitemsdenominatedinforeigncurrenciesaretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesaretranslatedattheratesprevailingonthedatewhenthefairvaluewasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenottranslated.

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(m) ForeignCurrencies(continued)

(ii) ForeignCurrencyTransactions(continued)

Exchangedifferencesarisingonthesettlementofmonetaryitems,andonthetranslationofmonetaryitems,areincludedinprofitorlossfortheperiodexceptforexchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperation.ExchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperation,wherethatmonetaryitemisdenominatedineitherthefunctionalcurrencyofthereportingentityortheforeignoperation,areinitiallytakendirectlytotheforeigncurrencytranslationreservewithinequityuntilthedisposaloftheforeignoperations,atwhichtimetheyarerecognisedinprofitorloss.ExchangedifferencesarisingonmonetaryitemsthatformpartoftheCompany’snetinvestmentinforeignoperation,regardlessofthecurrencyofthemonetaryitem,arerecognisedinprofitorlossintheCompany’sfinancialstatementsortheindividualfinancialstatementsoftheforeignoperation,asappropriate.

Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingonthetranslationofnon-monetaryitemsinrespectofwhichgainsandlossesarerecogniseddirectlyinequity.Exchangedifferencesarisingfromsuchnon-monetaryitemsarealsorecogniseddirectlyinequity.

Theprincipalexchangerateusedforeachrespectiveunitofforeigncurrencyrulingatthebalancesheetdateisasfollow:

2007 2006 RM RM

1USDollar 3.45 3.67 1SingaporeDollar 2.25 2.31 1HongKongDollar 0.44 0.47

(iii) ForeignOperations

Theresultsandfinancialpositionofforeignoperationsthathaveafunctionalcurrencydifferentfromthepresentationcurrency(RM)oftheconsolidatedfinancialstatementsaretranslatedintoRMasfollows:

- Assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrate

prevailingatthebalancesheetdate;

- Incomeandexpensesforeachincomestatementaretranslatedataverageexchangeratesfortheyear,whichapproximatestheexchangeratesatthedatesofthetransactions;and

- Allresultingexchangedifferencesaretakentotheforeigncurrencytranslationreserve

withinequity. Goodwillandfairvalueadjustmentsarisingontheacquisitionofforeignoperationsonorafter

1January2006aretreatedasassetsandliabilitiesoftheforeignoperationsandarerecordedinthefunctionalcurrencyoftheforeignoperationsandtranslatedattheclosingrateatthebalancesheetdate.Goodwillandfairvalueadjustmentswhicharoseontheacquisitionofforeignsubsidiarybefore1January2006aredeemedtobeassetsandliabilitiesoftheparentcompanyandarerecordedinRMattheratesprevailingatthedateofacquisition.

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(n) RevenueRecognition

RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbereliablymeasured.Thefollowingspecificrecognitioncriteriamustalsobemetbeforerevenueisrecognised:

(i) SaleofGoods

Revenue on sale of goods is recognised net of sales taxes and discount upon transfer ofsignificant risksandrewardsofownership to thebuyer.Revenue isnot recognised to theextentwheretherearesignificantuncertaintiesregardingrecoveryoftheconsiderationdue,associatedcostsorthepossiblereturnofgoods.

(ii) RevenuefromServices

Revenuefromservicesrenderedisrecognisednetofservicetaxesanddiscountsandwhentheservicesarerendered.

(iii) DividendIncome

DividendincomeisrecognisedwhentheGroup’srighttoreceivepaymentisestablished.

(iv) InterestIncome

Interestincomeisrecognisedonanaccrualbasisusingtheeffectiveinterestmethod.

(o) Non-CurrentAssets(orDisposalGroup)HeldforSaleandDiscontinuedOperations Non-currentassetsordisposalgroupareclassifiedasheldforsaleiftheircarryingamountwillberecoveredprincipallythroughasaletransactionratherthanthroughcontinuinguse.Thisconditionisregardedasmetonlywhenthesaleishighlyprobableandtheasset(ordisposalgroup)isavailableforimmediatesaleinitspresentconditionsubjectonlytotermsthatareusualandcustomary.

Immediatelybeforeclassificationasheldforsale,themeasurementofthenon-currentassets(orallassetsandliabilitiesinadisposalgroup)isbroughtup-to-dateinaccordancewithapplicableFRSs.Then,oninitialclassificationasheldforsale,non-currentassetsordisposalgroup(otherthandeferredtaxassets,employeebenefitsassets,financialassetsandinventories)aremeasuredinaccordancewithFRS5thatisatthelowerofcarryingamountandfairvaluelesscoststosell.Anydifferencesareincludedinprofitorloss.

AcomponentoftheGroupisclassifiedasadiscontinuedoperationwhenthecriteriatobeclassifiedasheldforsalehavebeenmetorithasbeendisposedandsuchacomponentrepresentsaseparatemajorlineofbusinessorgeographicalareaofoperations,ispartofasingleco-ordinatedmajorlineofbusinessorgeographicalareaofoperationsorisasubsidiaryacquiredexclusivelywithaviewtoresale.

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2.3 ChangesinAccountingPolicies,EffectsandChangesinComparativesArisingfromAdoptionofNewandRevisedFRSs

On1July2006,theGroupandtheCompanyadoptedthefollowingapplicableFRSsmandatoryforfinancialperiodsbeginningonorafter1January2006:

FRS3 BusinessCombinationsFRS5 Non-currentAssetsHeldforSaleandDiscontinuedOperationsFRS101 PresentationofFinancialStatementsFRS102 InventoriesFRS108 AccountingPolicies,ChangesinAccountingEstimatesandErrorsFRS110 EventsaftertheBalanceSheetDateFRS116 Property,PlantandEquipmentFRS121 TheEffectsofChangesinForeignExchangeRatesFRS127 ConsolidatedandSeparateFinancialStatementsFRS128 InvestmentsinAssociatesFRS132 FinancialInstruments:DisclosureandPresentationFRS133 EarningsPerShareFRS136 ImpairmentofAssetsFRS138 IntangibleAssets

TheGrouphasearlyadoptedthenewandrevisedFRS117Leasesforthefinancialperiodbeginning1July2006.Exceptforthechangesinaccountingpoliciesandtheireffectsasdiscussedbelow,theadoptionoftheabovenewandrevisedstandardsandtheearlyadoptionofFRS117donotresultinsignificantchangestotheaccountingpoliciesanddonothaveasignificantfinancialimpactontheGroup.

(a) FRS3:BusinessCombinations,FRS136:ImpairmentofAssetsandFRS138:IntangibleAssets

ThenewFRS3hasresultedinconsequentialamendmentstotwootheraccountingstandards,FRS136andFRS138.Inaccordancewiththetransitionalprovisions,FRS3hasbeenappliedforbusinesscombinationsforwhichtheagreementdateisonorafter1January2006.

(i) Goodwill

Priorto1July2006,goodwillwasamortisedonastraight-linebasisoveraperiodof25yearsandateachbalancesheetdate,theGroupassessediftherewasanyindicationofimpairmentofthecash-generatingunitinwhichthegoodwillisattachedto.TheadoptionofFRS3andtherevisedFRS136hasresultedintheGroupceasingannualgoodwillamortisation.Goodwillisnowcarriedatcostlessaccumulatedimpairmentlossesandistestedforimpairmentannually,ormorefrequentlyifeventsorchangesincircumstancesindicatethatitmightbeimpaired.

InaccordancewithtransitionalprovisionsofFRS3,theGrouphasappliedtherevisedaccountingpolicyforgoodwillprospectivelyfrom1July2006.ThetransitionalprovisionsofFRS3alsorequiredtheGrouptoeliminatethecarryingamountoftheaccumulatedamortisationat1July2006amountingtoRM1,000againstthecarryingamountofgoodwill.Thenetcarryingamountofgoodwillasat1July2006ofRM3,000ceasedtobeamortisedthereafter.Subsequenttothis,theGrouphasfullywrittenofftheremainingbalanceofgoodwill.

According to the transitionalprovisionsof FRS3, theGrouphasalsoceased to includeannualamortisation of goodwill included in the carrying amount of investment in associate in thedeterminationof theGroup’s shareof profits or losses of associate.Thenet carrying amount ofgoodwillincludedininvestmentinassociateasat1July2006wasRM7,162,000.Subsequenttothis,theGrouphasfullyimpairedtheremainingbalanceofgoodwill.

Becausetherevisedaccountingpolicyhasbeenappliedprospectively,thechangehadnoimpactonamountsreportedfor2006orpriorperiods.Theeffectsontheconsolidatedbalancesheetasat30June2007andconsolidatedincomestatementfortheyearended30June2007aresetoutinNote2.3(e)(i)andNote2.3(e)(ii)respectively.ThischangehasnoimpactontheCompany’sfinancialstatements.

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2.3 ChangesinAccountingPolicies,EffectsandChangesinComparativesArisingfromAdoptionofNewandRevisedFRSs(continued)

(a) FRS3:BusinessCombinations,FRS136:ImpairmentofAssetsandFRS138:IntangibleAssets(continued) (ii) Excess of Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and

contingentliabilitiesovercost(previouslyknownasnegativegoodwill)

Priorto1July2006,negativegoodwillwasnotamortisedovertheweightedaverageusefullifeofthenon-monetaryassetsacquired.UnderFRS3,anyexcessoftheGroup’sinterestinthenetfairvalueofacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesovercostofacquisitions,afterreassessment,isnowrecognisedimmediatelyinprofitorloss.

In accordancewith transitional provisions of FRS3, thenegative goodwill as at 1 July 2006ofRM3,116,000wasderecognisedwithacorrespondingdecreaseinopeningaccumulatedlosses.TheGrouphasalsoderecognisedtheremainingunamortisednegativegoodwillincludedinthecarryingamountofinvestmentinassociateasat1July2006amountingtoRM1,443,000withacorrespondingdecreaseinopeningaccumulatedlosses.

Becausetherevisedaccountingpolicyhasbeenappliedprospectively,thechangehadnoimpactonamountsreportedfor2006orpriorperiods.Theeffectontheconsolidatedbalancesheetasat30June2007issetoutinNote2.3(e)(i).ThischangehasnoimpactontheGroup’sconsolidatedincomestatementandtheCompany’sfinancialstatements.

(iii) Accountingforacquisitions

Priorto1July2006,theGroupdidnotrecogniseseparatelytheacquiree’scontingentliabilitiesattheacquisitiondateaspartofallocatingthecostofabusinesscombination.UpontheadoptionofFRS3,contingentliabilitiesarenowseparatelyrecognised,providedtheirfairvaluescanbemeasuredreliably. Inaddition, theGroupwaspreviouslyallowed to recognise restructuringprovisions inconnectionwithanacquisitionregardlessofwhethertheacquireehadrecognisedsuchprovisions.UpontheadoptionofFRS3,theGroupisnowpermittedtorecognisesuchprovisionsonlywhentheacquireehas,attheacquisitiondate,anexistingliabilityforrestructuringrecognisedinaccordancewithFRS137.

ThechangedidnothaveanyeffecttothefinancialstatementsoftheGroupandoftheCompany.

(b) FRS5:Non-CurrentAssetsHeldforSaleandDiscontinuedOperations

Prior to 1 July 2006, non-current assets (or disposal groups) held for sale were neither classified norpresentedascurrentassetsorliabilities.Therewerenodifferencesinthemeasurementofnon-currentassets(ordisposalgroups)heldforsaleandthoseforcontinuinguse.UpontheadoptionofFRS5,non-currentassets(ordisposalgroups)heldforsaleareclassifiedascurrentassets(andcurrentliabilities,inthecaseofnon-currentliabilitiesincludedwithindisposalgroups)andarestatedatthelowerofcarryingamountandfairvaluelesscoststosell.

Priorto1July2006,theGroupwouldhaverecognisedadiscontinuedoperationattheearlierofthedatetheGroupentersintoabindingsaleagreementandthedatetheBoardofDirectorshaveapprovedandannouncedaformaldisposalplan.FRS5requiresacomponentofanentitytobeclassifiedasadiscontinuedoperationwhenthecriteriatobeclassifiedasheldforsalehavebeenmetorithasbeendisposedofandsuch a component represents a separatemajor lineof business or geographical areaof operations, ispartofasingleco-ordinatedmajorlineofbusinessorgeographicalareaofoperationsorisasubsidiaryacquiredexclusivelywithaviewtoresale.TheprincipalimpactofthischangeinaccountingpolicyisthatadiscontinuedoperationisrecognisedbytheGroupatalaterpointthanitwouldbeunderthepreviousaccountingpolicyduetostrictercriteriainFRS5.

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(b) FRS5:Non-CurrentAssetsHeldforSaleandDiscontinuedOperations(continued)

TheGrouphasappliedFRS5prospectivelyinaccordancewiththetransitionalprovisions.However,asrequiredbyFRS5,certaincomparativesoftheGrouphavebeenre-presentedduetothecurrentfinancialyear’sdiscontinuedoperation.Theeffectsontheincomestatementsfortheyearsended30June2007and30June2006havebeenpresentedonthefaceoftheconsolidatedincomestatements.Theeffectsonthebalancesheetasat30June2007andthecashflowfortheyearended30June2007ofthediscontinuedoperationsaresetoutinNote8.ThischangehasnoimpactontheCompany’sincomestatementfortheyearended30June2007.

(c) FRS101:PresentationofFinancialStatements

Priorto1July2006,minorityinterestsatthebalancesheetdatewerepresentedintheconsolidatedbalancesheetseparatelyfromliabilitiesandequity.UpontheadoptionoftherevisedFRS101,minorityinterestsarenowpresentedwithintotalequity.Intheconsolidatedincomestatement,minorityinterestsarepresentedasanallocationofthetotalprofitorlossfortheyear.Asimilarrequirementisalsoapplicabletothestatementofchangesinequity.TherevisedFRS101alsorequiresdisclosure,onthefaceofthestatementofchangesinequity,totalrecognisedincomeandexpensesfortheyear,showingseparatelytheamountsattributabletoequityholdersoftheCompanyandtominorityinterests.

Prior to1July2006, theGroup’sshareof taxationofassociateaccountedforusingtheequitymethodwasincludedaspartoftheGroup’sincometaxexpenseintheconsolidatedincomestatement.UpontheadoptionoftherevisedFRS101,theshareoftaxationofassociateaccountedforusingtheequitymethodisnowincludedintherespectiveshareofprofitorlossreportedintheconsolidatedincomestatementbeforearrivingattheGroup’sprofitorlossbeforetax.

ThesechangesinpresentationhavebeenappliedretrospectivelyandasdisclosedinNote2.3(f),certaincomparativeshavebeenrestated.Theeffectsontheconsolidatedbalancesheetasat30June2007andconsolidatedincomestatementfortheyearended30June2007aresetoutinNote2.3(e)(i)andNote2.3(e)(ii)respectively.ThesechangesinpresentationhasnoimpactontheCompany’sfinancialstatements.

(d) FRS117:Leases

Priorto1July2006,leaseholdlandheldforownusewasclassifiedasproperty,plantandequipmentandwasstatedatcostlessaccumulateddepreciationandimpairmentlosses.TheadoptionoftherevisedFRS117hasresultedinachangeintheaccountingpolicyrelatingtotheclassificationofleasesoflandandbuildings.Leasesoflandandbuildingsareclassifiedasoperatingorfinanceleasesinthesamewayasleasesofotherassetsandthelandandbuildingselementsofaleaseoflandandbuildingsareconsideredseparatelyforthepurposesofleaseclassification.Leaseholdlandheldforownuseisnowclassifiedasoperatingleaseandwherenecessary,theminimumleasepaymentsortheup-frontpaymentsmadeareallocatedbetweenthelandandthebuildingselementsinproportiontotherelativefairvaluesforleaseholdinterestsinthelandelementandbuildingselementoftheleaseattheinceptionofthelease.Theup-frontpaymentrepresentsprepaidleasepaymentsandareamortisedonastraight-linebasisovertheleaseterm.

TheGrouphasappliedthechangeinaccountingpolicyinrespectofleaseholdlandinaccordancewith

thetransitionalprovisionsofFRS117.At1July2006,theunamortisedamountofleaseholdlandisretainedasthesurrogatecarryingamountofprepaidleasepaymentsasallowedbythetransitionalprovisions.ThereclassificationofleaseholdlandasprepaidleasepaymentshasbeenaccountedforretrospectivelyandasdisclosedinNote2.3(f),certaincomparativeshavebeenrestated.Theeffectsontheconsolidatedbalancesheetasat30June2007aresetoutinNote2.3(e)(i).TherewerenoeffectsontheconsolidatedincomestatementandtheCompany’sfinancialstatementsfortheyearended30June2007.

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(e) SummaryofEffectsofAdoptingNewandRevisedFRSsontheCurrentYear’sFinancialStatements

Thefollowingtablesprovideestimatesoftheextenttowhicheachofthelineitemsinthebalancesheetsandincomestatementsasat30June2007ishigherorlowerthanitwouldhavebeenhadthepreviouspoliciesbeenappliedinthecurrentyear.

(i) EffectsonBalanceSheetsAsAt30June2007

Increase/(Decrease)Description FRS3 FRS3 FRS101 FRS117 ofChange Note Note Note Note 2.3(a)(i) 2.3(a)(ii) 2.3(c) 2.3(d) Total RM’000 RM’000 RM’000 RM’000 RM’000

GroupDisposalgroupheldforsale, majorclasses: -Property,plantandequipment – – – (7,602) (7,602) -Prepaidlandleasepayments – – – 7,602 7,602 -Goodwill 1 – – – 1 -Otherreserves – (3,116) – – (3,116) -Investmentinassociate 743 1,443 – – 2,186Accumulatedlosses (744) (4,559) – – (5,303)Totalequity – – 15,499 – 15,499

(ii) EffectsonIncomeStatementsfortheYearEnded30June2007

Increase/(Decrease)Description FRS3 FRS3 FRS101 FRS117 ofChange Note Note Note Note 2.3(a)(i) 2.3(a)(ii) 2.3(c) 2.3(d) Total RM’000 RM’000 RM’000 RM’000 RM’000

GroupDiscontinuedoperations: -Depreciationandamortisation charges (744) – – – (744) -Shareofresultoftheassociate – – (1,646) – (1,646) -Lossbeforetax (744) – 1,646 – 902 -Taxation – – (1,646) – (1,646) -Lossfortheyear (744) – – – (744) -Basiclosspershare(sen) (1.00) – – – (1.00)

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(f) RestatementofComparatives

ThefollowingcomparativeamountshavebeenrestatedasaresultofadoptingthenewandrevisedFRSs:

Increase/(Decrease) Previously FRS101 FRS117 stated Note2.3(c) Note2.3(d) Restated RM’000 RM’000 RM’000 RM’000 At30June2006GroupProperty,plantandequipment 40,052 – (7,717) 32,335Prepaidlandleasepayments – – 7,717 7,717Totalequity 56,236 15,305 – 71,541

Fortheyearended30June2006 GroupDiscontinuedoperations: Shareofresultoftheassociate 9,459 (2,019) – 7,440Taxation (653) 2,019 – 1,366

2.4 FinancialReportingStandardsandInterpretationsIssuedButNotYetEffective

Atthedateofauthorisationofthesefinancialstatements,thefollowingFRSs,amendmentstoFRSsandInterpretationswereissuedbutnotyeteffectiveandhavenotbeenappliedbytheGroupandtheCompany:

Effectivefor financialperiods beginning onorafter

(i) FRS124:RelatedPartyDisclosures 1October2006(ii) FRS139:FinancialInstruments-RecognitionandMeasurement Deferred(iii) FRS6:ExplorationforanEvaluationofMineralResources 1January2007(iv) AmendmenttoFRS1192004:EmployeeBenefits-ActuarialGains andLosses,GroupPlansandDisclosures 1January2007(v) AmendmenttoFRS121:TheEffectsofChangesin ForeignExchangeRates-NetInvestmentinaForeignOperation 1July2007(vi) ICInterpretation1:ChangesinExistingDecommissioning, RestorationandSimilarLiabilities 1July2007(vii) ICInterpretation2:Members’SharesinCo-operativeEntitiesand SimilarInstruments 1July2007(viii) ICInterpretation5:RightstoInterestsArisingfromDecommissioning, RestorationandEnvironmentalRehabilitationFunds 1July2007(ix) ICInterpretation6:LiabilitiesArisingfromParticipatingina SpecificMarket-WasteElectricalandElectronicEquipment 1July2007(x) ICInterpretation7:ApplyingtheRestatementApproachunder FRS1192004-FinancialReportinginHyperinflationaryEconomies 1July2007(xi) ICInterpretation8:ScopeofFRS2 1July2007(xii) FRS107:CashFlowStatements 1July2007

62


2.4 FinancialReportingStandardsandInterpretationsIssuedButNotYetEffective(continued)

Effectivefor financialperiods beginning onorafter

(xiii) FRS111:ConstructionContracts 1July2007(xiv) FRS112:IncomeTaxes 1July2007(xv) FRS118:Revenue 1July2007(xvi) FRS120:AccountingforGovernmentGrantsandDisclosureof GovernmentAssistance 1July2007(xvii) FRS134:InterimFinancialReporting 1July2007(xviii) FRS137:Provision,ContingentLiabilitiesandContingentAssets 1July2007

TheimpactofapplyingFRS124andFRS139onthefinancialstatementsuponfirstadoptionofthesestandardsasrequiredbyparagraph30(b)ofFRS108:AccountingPolicies,ChangesinAccountingEstimatesandErrorsisnotdisclosedbyvirtueoftheexemptionsprovidedintherespectivestandards.

FRS6isnotrelevanttotheGroup’sandtheCompany’soperationsandtheadoptionoftheaboveamendmentsandinterpretationswillhavenomaterialimpactonthefinancialstatementsoftheGroupandoftheCompany.TheamendmenttoFRS119:EmployeeBenefits-ActuarialGainsandLosses,GroupPlansandDisclosuresintroducestheoptionofanalternativerecognitionapproachforactuarialgainsandlossesarisingfrompost-employmentdefinedplans.

2.5 SignificantAccountingEstimatesandJudgements

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthebalancesheetdate,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow: (i) Recognitionofdeferredtaxassets

Deferredtaxassetsarerecognisedforallunusedtaxlosses,unabsorbedcapitalallowancesandprovisionstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelosses,capitalallowancesandprovisionscanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwith future taxplanningstrategies.Theunrecognised tax losses,capitalallowancesandotherdeductibletemporarydifferencesoftheGroupwasRM89,424,000(2006:RM99,055,000).

(ii) Depreciationofplantandmachinery

The cost of plant and machinery is depreciated on a straight-line basis over the assets’ useful lives.Managementestimatestheusefullivesoftheseplantandmachinerytobewithin10years.Changesintheexpectedlevelofusageandtechnologicaldevelopmentscouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.

3. REVENUE


ContinuingoperationsDividendfromasubsidiary – – 563 –

Discontinuedoperations Salesofgoods 340,240 236,921 – –Renderingofservices 3,636 2,561 – –

343,876 239,482 – –

63

4. STAFFCOSTS


ContinuingoperationsWages,salariesandbonuses 120 120 120 120Definedcontributionplans-EmployeesProvidentFund 14 14 14 14-ACBGroupProvidentFundScheme 2 – 2 –

136 134 136 134

DiscontinuedoperationsWages,salariesandbonuses 9,046 7,817 – –Definedcontributionplans-EmployeesProvidentFund 868 798 – –-ACBGroupProvidentFundScheme 28 41 – –Definedbenefitplan(Note25) 150 341 – –Otheremployeebenefits 812 667 – –

10,904 9,664 – –

IncludedinstaffcostsistheremunerationofanexecutiveDirectoroftheGroupandoftheCompanybutexcludesDirectors’feesasfurtherdisclosedinNote6(b)tothefinancialstatements.

5. FINANCECOSTS


ContinuingoperationsInterestexpenseson:-termloans 1,717 3,039 1,717 3,039

DiscontinuedoperationsInterestexpenseson: -amountduetorelatedparties 386 2,117 – –-termloans 618 447 – –

-revolvingcredits,bankers’ acceptances,trustreceipts andletterofcredits 3,973 3,247 – –-bankoverdrafts 674 767 – –-hirepurchaseliabilities 6 5 – –-others 32 – – –

5,689 6,583 – –

64

6. LOSSBEFORETAX

(a) Thefollowingamountshavebeenincludedinarrivingatlossbeforetax:


ContinuingoperationsStaffcosts(Note4) 136 134 136 134Directors’remuneration:-salaries 120 120 120 120-fees 185 176 185 176Auditors’remuneration:-currentyear 27 20 21 20Dividendincome(gross) – – (563) –Interestincomefrom:-subsidiaries – – (1,826) (2,107)-others (1) – (1) –

DiscontinuedoperationsStaffcosts(Note4) 10,904 9,664 – –Auditors’remuneration:-currentyear 71 70 – –-(over)/underprovision inprioryear (3) 2 – –Rentalexpenses 986 1,042 – –Amortisationofgoodwill – 744 – –Amortisationofprepaid landleasepayments 115 168 – –Property,plantandequipment:-depreciationcharge 2,553 3,195 – –-gainondisposal (26) (185) – –Lossondisposalofequity interestintheassociate – 1,425 – –Goodwillwrittenoff 3 – – –Baddebts:-writtenoff – 19 – –-recovered – (163) – –Impairmentofinvestmentsin:-theassociate 7,162 5,000 – –-others 5 40 – –Slowmovinginventories:-allowance – 323 – –-writebackofallowance (363) – – –Gainondisposalof assetsheldforsale (9,039) – – –Writebackofallowance fordoubtfuldebts (616) – – –(Gain)/lossonforeignexchange: -realised (163) (40) – –-unrealised – 6 – –Reversalofprovisionforinterests (2,147) – – –Rentalincome (188) – – –Interestincome (43) (44) – –Dividendincome(gross) (4) (9) – –

65

6. LOSSBEFORETAX(continued)

(b) TheDirectors’remunerationarecategorisedasfollows:


ExecutiveDirectors:-fees 10 18 10 18-salaries 120 120 120 120

Non-executiveDirectors*:-fees 175 158 175 158

305 296 305 296

ThenumberofDirectorswhosetotalremunerationfallintotherespectivebandsareasfollows:

Group Company 2007 2006 2007 2006

Rangeofremuneration:

ExecutiveDirectors-RM25,000andbelow – 1 – 1-RM100,001toRM150,000 1 1 1 1

Non-executiveDirectors*-RM25,000andbelow 10 8 10 8-RM25,001toRM50,000 1 1 1 1

* IncludingDirectorswhoretiredatthepreviousAnnualGeneralMeetingandaDirectorwhowasappointedduringthefinancialyear.

7. TAXATION


Continuingoperations Malaysianincometax: -current 73 – 73 –

Discontinuedoperations Malaysianincometax: -current 642 (19) – – -prioryears (3) – – – 639 (19) – –

66

7. TAXATION(continued)


Discontinuedoperations(continued) Deferredtax: - relatingtooriginationand reversaloftemporarydifferences 13 (988) – – - relatingtochangesintaxrates 5 – – – - under/(over)provisioninprioryear 1,095 (359) – –

1,113 (1,347) – – Totalincometaxfrom discontinuedoperations 1,752 (1,366) – –

Totalincometaxexpense/(credit) 1,825 (1,366) 73 –

Domestic income tax is calculatedat theMalaysian statutory tax rateof27% (2006:28%)of theestimatedassessableprofitfortheyear.Thedomesticstatutorytaxratewillbereducedto26%effectiveyearofassessment2008.Thecomputationofdeferredtaxasat30June2007hasreflectedthesechanges.

AreconciliationofincometaxexpenseapplicabletolossbeforetaxatthestatutoryincometaxratetoincometaxexpenseattheeffectiveincometaxrateoftheGroupandoftheCompanyisasfollows:


Lossbeforetaxfrom: Continuingoperations (3,525) (3,886) (39,810) (1,779) Discontinuedoperations (959) (14,860) – – Shareofresultoftheassociate (14,651) (7,440) – –

(19,135) (26,186) (39,810) (1,779)

TaxationatMalaysianstatutory taxrateof27%(2006:28%) (5,166) (7,332) (10,749) (498)Effectofchangesintaxrateson openingbalanceofdeferredtax 5 – – –Incomesubjecttotaxrateof20% (16) 247 – –Expensesnotdeductiblefor taxpurposes 9,036 3,137 10,822 498Utilisationofunabsorbedlosses broughtforward (346) (487) – –Utilisationofunabsorbedcapital allowancesbroughtforward (2,852) – – –Deferredtaxassetsnotrecognised 72 3,428 – –Under/(over)provisionofdeferred taxinprioryear 1,095 (359) – –Overprovisionoftaxationinprioryear (3) – – –Taxexpense/(credit) 1,825 (1,366) 73 –

67

8. DISCONTINUEDOPERATIONSANDDISPOSALGROUPCLASSIFIEDASHELDFORSALE

On28September2006,theCompanyannouncedthedecisiontodisposeofitswholly-ownedsubsidiary,BrightSteelSdn.Bhd.(“BrightSteel”),comprisingtheentireissuedandpaid-upsharecapitalofBrightSteelforacashconsiderationofRM53.47million.ThedisposalrepresentstheGroup’sintentiontoexitfromthesteelservices,internationaltradinganddistribution(electroniccomponents),automotiveandothers(automotivecomponenttrading,limestoneprocessingandinvestmentholding)segmentswhicharebeingcarriedonbyBrightSteel,itssubsidiariesandtheassociate(“BrightSteelGroup”).

ThedisposalofBrightSteelwascompletedon19September2007.Asat30June2007,theassetsandliabilitiesoftheBrightSteelGrouphavebeenpresentedontheconsolidatedbalancesheetasadisposalgroupheldforsaleanditsresultsispresentedseparatelyontheconsolidatedincomestatementasdiscontinuedoperations.ThecarryingamountoftheinvestmentinBrightSteelhasalsobeenpresentedasanon-currentassetheldforsaleontheCompany’sbalancesheetasat30June2007.

Thecashflowsattributabletothediscontinuedoperationsareasfollows:

Group 2007 2006 RM’000 RM’000

Operatingcashflows (29,817) 492Investingcashflows 22,254 (3,420)Financingcashflows 2,599 6,030

Totalcashflows (4,964) 3,102

ThemajorclassesofassetsandliabilitiesoftheBrightSteelGroupclassifiedasheldforsaleontheconsolidatedbalancesheetasat30June2007areasfollows:

Carrying amounts immediately Carrying before Allocationof amountsasat classification remeasurement 30.6.2007 RM’000 RM’000 RM’000

Assets

Property,plantandequipment 30,404 (2,190) 28,214Prepaidlandleasepayments 7,602 (548) 7,054Investmentinassociate 98,880 (7,123) 91,757Otherinvestments 963 (69) 894Deferredtaxassets 256 (18) 238Inventories 124,326 (8,957) 115,369Tradeandotherreceivables 79,821 (5,752) 74,069Taxrecoverable 1,835 (132) 1,703Amountsduefromrelatedcompanies 3,545 (255) 3,290Cashandbankbalances 3,392 – 3,392

Assetsofdisposalgroupclassifiedasheldforsale 351,024 (25,044) 325,980

Liabilities

Tradeandotherpayables 58,676 – 58,676Taxliabilities 337 – 337Hirepurchaseliabilities 60 – 60Borrowings 93,432 – 93,432Productfinancingliabilities 5,296 – 5,296Amountsduetorelatedcompanies 100,156 – 100,156Post-employeebenefitobligations 1,996 – 1,996Deferredtaxliabilities 177 – 177

Liabilitiesdirectlyassociatedwith disposalgroupclassifiedasheldforsale 260,130 – 260,130

68

9. DIVIDENDS Yearended Yearended 30June2007 30June2006

Gross Amountof Gross Amountof dividend dividend, dividend dividend, pershare netoftax pershare netoftax Sen RM’000 Sen RM’000

Firstandfinaldividendpaid inrespectof: -financialyearended30June2005 – – 1.0 538 -financialyearended30June2006 0.1 54 – –

TheDirectorsdonotrecommendanydividendpaymentinrespectofthecurrentfinancialyear.

10. LOSSPERSHARE

ThebasiclosspershareiscalculatedbydividinglossfortheyearattributabletoordinaryequityholdersoftheCompanybythenumberofordinarysharesinissueduringthefinancialyear.

Group 2007 2006 RM’000 RM’000

LossattributabletoordinaryequityholdersoftheCompany:-fromcontinuingoperations (3,598) (3,886)-fromdiscontinuedoperations (3,090) (13,941)

(6,688) (17,827)

2007 2006 ’000 ’000

Numberofordinarysharesinissue 74,711 74,711

2007 2006 sen sen

Basiclosspershare:-fromcontinuingoperations (4.81) (5.20)-fromdiscontinuedoperations (4.14) (18.66)

Basic,forlossfortheyear (8.95) (23.86)

ThedilutedearningspershareisnotshownasitisnotapplicabletotheGroup.

69

11. PROPERTY,PLANTANDEQUIPMENT

Office Furniture, equipment fittings Plantand Factory and andotherGroup Buildings machinery equipment vehicles equipment TotalAt30June2007 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At1July2006 25,161 33,352 5,925 3,975 359 68,772Additions 69 305 229 85 – 688Disposals – – – (144) – (144)Reclassifiedtodisposalgroup heldforsale(Note8) (25,230) (33,657) (6,154) (3,916) (359) (69,316)

At30June2007 – – – – – –

Accumulateddepreciation

At1July2006 2,713 24,594 5,440 3,341 349 36,437Depreciationchargefortheyear 505 1,663 237 148 – 2,553Disposals – – – (78) – (78)Reclassifiedtodisposalgroup heldforsale(Note8) (3,218) (26,257) (5,677) (3,411) (349) (38,912)

At30June2007 – – – – – –

Netbookvalue

At30June2007 – – – – – –

70

11. PROPERTY,PLANTANDEQUIPMENT(continued)

Office Furniture, Longterm equipment fittings leasehold Plantand Factory and andotherGroup lands Buildings machinery equipment vehicles equipment TotalAt30June2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At1July2005 13,601 38,478 27,465 5,867 3,770 359 89,540Additions – 12,481 7,038 58 205 – 19,782Disposals – – (1,151) – – – (1,151)Transfertoprepaid landleasepayments (8,974) – – – – – (8,974)Reclassification(Note22) (4,627) (25,798) – – – – (30,425)

At30June2006 – 25,161 33,352 5,925 3,975 359 68,772

Accumulated depreciation

At1July2005 1,829 17,157 24,390 5,076 3,144 342 51,938Depreciationchargefor theyear – 1,309 1,318 364 197 7 3,195Amortisationofprepaid landleasepayments 168 – – – – – 168Disposals – – (1,114) – – – (1,114)Transfertoprepaid landleasepayments (1,257) – – – – – (1,257)Reclassification(Note22) (740) (15,753) – – – – (16,493)

At30June2006 – 2,713 24,594 5,440 3,341 349 36,437

Accumulatedimpairment losses

At1July2005 120 – – – – – 120Reclassification(Note22) (120) – – – – – (120)

At30June2006 – – – – – – –

Netbookvalue

At30June2006 – 22,448 8,758 485 634 10 32,335

Group 2007 2006 RM’000 RM’000

Aggregatecostsofpurchaseofproperty,plantandequipment 688 19,782Acquisitionbymeansofhirepurchase – (75)

688 19,707

Netbookvalueofproperty,plantand equipmentheldunderhirepurchaseagreement 78 176

71

12. PREPAIDLANDLEASEPAYMENTS

Group 2007 2006 RM’000 RM’000

LongtermleaseholdlandAt1July 7,717 7,885Amortisationfortheyear (115) (168)

At30June 7,602 7,717Transfertodisposalgroupheldforsale(Note8) (7,602) –

– 7,717

13. INVESTMENTSINSUBSIDIARIES

Company 2007 2006 RM’000 RM’000

Unquotedshares,atcost 38,686 38,686Less:Impairmentlossrecognisedduringtheyear (38,686) –

– 38,686

Detailsofthesubsidiariesareasfollows:

Group’seffective equityinterest

Countryof 2007 2006Name Principalactivities incorporation % %

BrightSteelSdnBhd# Manufacturing,saleand Malaysia 100.0 100.0 distributionofsteeland ironproducts

EastCrestInternational Investmentholding BritishVirgin 100.0 – Limited* Islands

Subsidiariesof BrightSteelSdnBhd

BrightSteelService Processingandsellingof Malaysia 57.1 57.1 CentreSdnBhd# steelcoilsandsheets

BrightEnterprise Tradinginsteelandiron Malaysia 51.0 51.0 (Sdn)Berhad# products

B.A.P.Industries Manufacturing,marketingand Malaysia 77.5 77.5 SdnBhd# distributionofpre-paintedsteel sheetsandrelatedproducts

OmaliCorporation Investmentholding Malaysia 100.0 100.0 SdnBhd#

72

13. INVESTMENTSINSUBSIDIARIES(continued)


Countryof 2007 2006Name Principalactivities incorporation % %

Subsidiariesof BrightSteelSdnBhd

CenturyContainer Propertyinvestment,letting Malaysia 100.0 100.0 IndustriesSdnBhd# ofbuildingspaceandplant andmachineryfacilities

* NotauditedbyErnst&Young,Malaysia.# Classifiedasdiscontinuedoperationsduringthecurrentfinancialyear(Note8).

TheacquisitionofEastCrestInternationalLimitedhasnomaterialeffectonthefinancialresultsoftheGroup.

Theentireissuedandpaid-upsharecapitalinasubsidiary,BrightSteelSdnBhd,amountingtoRM32.1millionwaspreviouslypledgedassecurityfortheCompany’stermloanasdisclosedinNote26tothefinancialstatements.Duringthecurrentfinancialyear,thepledgehasbeenupliftedastheCompanyhasfullyrepaidthetermloan.

14. INVESTMENTINASSOCIATE

Group 2007 2006 RM’000 RM’000

QuotedsharesoutsideMalaysia,atcost 111,623 111,623Shareofpost-acquisitionreservesandprofit(lesslosses) (581) (15,629)

111,042 95,994Less:Accumulatedimpairmentlosses (12,162) (5,000)

98,880 90,994Transfertodisposalgroupheldforsale(Note8) (98,880) –

– 90,994

Representedby:Group’sshareofnetassets 98,880 83,832Goodwill At1July 7,162 13,181 Amortisationduringtheyear – (744) Disposalofequityinterests – (275) Impairmentlossesrecognisedduringtheyear (7,162) (5,000)

At30June – 7,162

98,880 90,994Transfertodisposalgroupheldforsale(Note8) (98,880) –

– 90,994

73

14. INVESTMENTINASSOCIATE(continued)

Group 2007 2006 RM’000 RM’000

MarketvalueofsharesquotedoutsideMalaysia 84,839 49,074Transfertodisposalgroupheldforsale (84,839) – – 49,074

Thedetailsoftheassociateareasfollows:


Countryof 2007 2006Name Principalactivity incorporation % %

AssociateofOmali CorporationSdnBhd

LionAsiapacLimited* Investmentholding Republicof 29.98 29.98 Singapore

* NotauditedbyErnst&Young,Malaysia.

ThefinancialyearendofLionAsiapacLimitedfallson30June.

Asubsidiary’sentirestakeintheassociatewaspreviouslypledgedassecurityfortheCompany’stermloansasdisclosedinNote26tothefinancialstatements.Duringthecurrentfinancialyear,thepledgehasbeenupliftedastheCompanyhasfullyrepaidthetermloan.

Thesummarisedfinancialinformationoftheassociateisasfollows:

2007 2006 RM’000 RM’000

AssetsandliabilitiesCurrentassets 219,655 277,499Non-currentassets 383,243 184,237

Totalassets 602,898 461,736

Currentliabilities 63,284 137,513Non-currentliabilities 24,517 8,704

Totalliabilities 87,801 146,217

Results Revenue 210,638 161,321Profitfortheyear 48,887 18,521

74

15. OTHERINVESTMENTS


Quotedshares,atcost 906 906 – –Less:Accumulatedimpairmentlosses (48) (48) – –Transfertodisposalgroupheld forsale(Note8) (858) – – –

– 858 – –

Unquotedshares,atcost 430 430 135 135Less:Accumulatedimpairmentlosses (297) (292) (107) (107)Transfertodisposalgroupheld forsale(Note8) (105) – – –

28 138 28 28

28 996 28 28

Marketvalueofquotedshares inMalaysia 1,562 858 – –Transfertodisposalgroupheld forsale (1,562) – – –

– 858 – –

16. GOODWILL

Group 2007 2006 RM’000 RM’000

CostAt1July 4 4EffectsofadoptingFRS3(Note2.3(a)(i)) (1) –Less:Writtenoff (3) –

– 4

AccumulatedamortisationAt1July 1 1Amortisation* – –EffectsofadoptingFRS3(Note2.3(a)(i)) (1) –

– 1

– 3

* AmortisationislessthanRM1,000inprioryear.

75

17. AMOUNTSDUEFROMSUBSIDIARIES

Company 2007 2006 RM’000 RM’000

Amountsduefromsubsidiaries 69,156 95,300Less:Allowancefordoubtfuldebts (18,126) (18,126)

51,030 77,174

Theamountsduefromsubsidiariesareunsecured,notrepayablewithintwelvemonthsfromthebalancesheetdateandbearinterestatratesrangingfrom1%to8%(2006:1%to8%)perannum.IncludedinthisamountisNil(2006:RM73.5million)pledgedassecurityfortheCompany’stermloanasdisclosedinNote26tothefinancialstatements.Duringthecurrentfinancialyear,thepledgehasbeenupliftedastheCompanyhasfullyrepaidthetermloan.

18. INVENTORIES

Group 2007 2006 RM’000 RM’000

Atcosts: Rawmaterials 69,503 67,967Finishedgoods 50,670 29,822Storesandconsumables 462 130Goods-in-transit 3,691 7,086

124,326 105,005Atnetrealisablevalue:Finishedgoods – 19 124,326 105,024Transfertodisposalgroupheldforsale(Note8) (124,326) –

– 105,024

IncludedinrawmaterialsisanamountofRM5.3million(2006:Nil)underproductfinancingliabilitiesoftheGroupasdisclosedinNote27.

76

19. TRADEANDOTHERRECEIVABLES


Tradereceivables 79,088 47,700 – –Less:Allowancefordoubtfuldebts (2,459) (2,490) – –Transfertodisposalgroupheld forsale(Note8) (76,629) – – –

– 45,210 – –

Amountsduefromrelatedparties 2,032 5,584 – –Less:Allowancefordoubtfuldebts – (505) – –Transfertodisposalgroupheld forsale(Note8) (2,032) – – –

– 5,079 – –

Deposits 461 173 3 3Prepayments 646 724 – –Otherreceivables 78 151 22 14Transfertodisposalgroupheld forsale(Note8) (1,160) – – –

25 1,048 25 17

25 51,337 25 17

TheGrouphasnoconcentrationofcreditriskthatmayarisefromexposuretoasingledebtorortogroupsofdebtors.

Credittermsoftradereceivablesrangefrompaymentinadvanceto90days(2006:paymentinadvanceto90days).

Theamountsduefromrelatedpartiesareunsecured,interestfreeandhavenofixedtermsofrepayment.

OtherinformationonfinancialrisksoftradeandotherreceivablesaredisclosedinNote33.

20. AMOUNTSDUEFROM/TORELATEDCOMPANIES

RelatedcompaniesarecompanieswithintheLionCorporationBerhadGroup.Theamountsduefrom/torelatedcompaniesareunsecuredandhavenofixedtermsofrepayment.

Certainbalancesoftheamountsduetorelatedcompaniesaretradeinnatureandbearinterestchargeableattherateof15.6%(2006:15.6%)perannum.

77

21. CASHANDCASHEQUIVALENTS

Cashandcashequivalentscomprisethefollowings:


Cashandbankbalances 64 2,405 64 19Bankoverdrafts(Notes26) – (4,800) – –Classifiedasdisposalgroup heldforsale: -Cashandbankbalances(Note8) 3,392 – – – -Bankoverdrafts(Note26) (10,771) – – –Cashandcashequivalents (7,315) (2,395) 64 19

Bankbalancesaredepositsheldatcallwithlicensedbanks,whicharenon-interestbearing.ThecashandbankbalancesaredenominatedinRinggitMalaysia.

22. ASSETSHELDFORSALE

Group 2007 2006 RM’000 RM’000

Leaseholdlandandbuilding-Asreclassifiedfromproperty,plantandequipment(Note11) – 13,812

On10August2006,CenturyContainerIndustriesSdnBhd(“CCI”),awholly-ownedsubsidiaryofBrightSteelSdnBhd,whichwasinturnawholly-ownedsubsidiaryoftheCompanythen,enteredintoaSaleandPurchaseAgreementtodisposeofapieceofleaseholdindustriallandtogetherwiththebuildingstructureserectedthereonforacashconsiderationofRM23million(“Disposal”).Thelandwaspreviouslychargedtofinancialinstitutionsas security for term loangranted to theCompany.TheDisposalwascompletedon12April2007.With thecompletionoftheDisposal,thetermloanhasbeenfullyrepaidandthechargehasbeenuplifted.CCIceasedtobeasubsidiaryoftheCompanyon19September2007pursuanttotheProposedDisposalasdisclosedintheSignificantEventsintheDirectors’Report.

23. SHARECAPITAL

Numberofordinary shareofRM1.00each Group/Company 2007 2006 2007 2006 ’000 ’000 RM’000 RM’000

AuthorisedAt1July/30June 100,000 100,000 100,000 100,000

Issuedandfullypaid-upAt1July/30June 74,711 74,711 74,711 74,711

78

24. OTHERRESERVES

Otherreservescomprisenegativegoodwill,exchangefluctuationreserveandcapitalreserves.Themovementofotherreservesareasfollows:

Group 2007 2006 RM’000 RM’000

NegativegoodwillAt1July 3,116 3,116Less:DerecognitionunderFRS3(Note2.3(a)(ii)) (3,116) –

At30June – 3,116

ExchangefluctuationreserveAt1July 5,032 5,415Currencytranslationdifferences (2,063) 3,439Transferredtocapitalreserves – (3,757)Disposalofequityinterestintheassociate – (65)Transfertodisposalgroupheldforsale (2,969) –

At30June – 5,032

CapitalreservesCapitalredemptionreserve 46 46Enterprisedevelopmentandgeneralreserves 3,105 9,132Gainonrestructuringofmotorcyclebusiness – 9,263Accretionarisingfromadditionalsharesissuedto minorityinterests 579 579Reserveonconsolidation 1,524 1,524Exchangefluctuationreserve (2,275) (4,069)

At1July 2,979 16,475Shareofassociate’stransfertoincomestatement – (995)Shareofassociate’sreservesmovement – (15,340)Shareofassociate’scurrencytranslationdifferences 672 (462)Transferredfromexchangefluctuationreserve – 3,757Disposalofequityinterestintheassociate – (456)

At30June 3,651 2,979

Transfertodisposalgroupheldforsale (3,651) –

– 2,979

Totalotherreserves – 11,127

CapitalreservespertaintotheGroup’sshareoftheassociate’sreserves.

Thecapitalredemptionreservepertainstoredemptionofredeemablepreferencesharesbyasubsidiaryoftheassociateandisnotavailableforthepaymentofcashdividends.

ThetransferfromincomestatementtocapitalreservesaremaintainedbytheGroup’sassociateinaccordancewiththeaccountingregulationsinthePeople’sRepublicofChinaandarenotavailableforthepaymentofcashdividends.

79

25. POST-EMPLOYMENTBENEFITOBLIGATIONS

Definedbenefitplan-unfunded

AsubsidiaryoftheGroupoperatesanunfundeddefinedbenefitplanforalleligibleemployees.Thelatestactuarialvaluationoftheplanwascarriedouton23June2006byanindependentqualifiedactuary.

The movements during the financial year in the amounts recognised in the Group’s balance sheet are asfollows:

Group 2007 2006 RM’000 RM’000

Non-currentAt1July 1,846 1,527Chargedtoincomestatement 150 341Benefitpaid – (22)Transfertodisposalgroupheldforsale(Note8) (1,996) –

At30June – 1,846

Theamountrecognisedintheconsolidatedbalancesheet isanalysedasfollows: Presentvalueofunfundeddefinedbenefitobligations 1,996 1,846 Transfertodisposalgroupheldforsale(Note8) (1,996) –

Netliability – 1,846

Theexpensesrecognisedintheconsolidatedincomestatement areanalysedasfollows: Currentservicecost 85 176 Interestcost 91 165 Actuarialgain (26) –

Totalincludedinstaffcosts(Note4) 150 341

The principal actuarial assumptions used in respect of the Group’s unfunded defined benefit plan are asfollows:

Group 2007 2006 % %

Discountrate 7 7Expectedrateofsalaryincrease 5 5

80

26. BORROWINGS


CurrentUnsecured: Bankoverdrafts 10,771 4,800 – – Lettersofcredit 5,886 4,997 – – Bankers’acceptances 59,862 43,210 – – Revolvingcredits 10,200 10,452 – – Trustreceipts 582 12,655 – – Termloans 2,832 2,360 – –

90,133 78,474 – –Secured: Termloans – 25,610 – 25,610

90,133 104,084 – 25,610Transfertodisposalgroupheld forsale(Note8) (90,133) – – –

– 104,084 – 25,610

Non-currentUnsecured: Termloan 3,299 6,131 – –Transfertodisposalgroupheld forsale(Note8) (3,299) – – – – 6,131 – – – 110,215 – 25,610

Total Bankoverdrafts(Note21) 10,771 4,800 – – Lettersofcredit 5,886 4,997 – – Bankers’acceptances 59,862 43,210 – – Revolvingcredits 10,200 10,452 – – Trustreceipts 582 12,655 – – Termloans 6,131 34,101 – 25,610

93,432 110,215 – 25,610Transfertodisposalgroupheld forsale(Note8) (93,432) – – –

– 110,215 – 25,610

81

26. BORROWINGS(continued)

(a) (i)Contractualtermsofborrowingsareasfollows:

Group Company 2007 2006 2007 2006 % % % %

Unsecured: Bankoverdrafts 6.8-7.8 6.8-7.8 – – Lettersofcredit 1.2 1.2 – – Bankers’acceptances 3.6-5.5 3.6-5.5 – – Revolvingcredits 5.3-10.5 5.3-10.5 – – Trustreceipts 6.5-8.3 6.5-8.3 – – Termloans 8.0 8.0 – –

Secured: Termloans – 8.6 – 8.6

(ii)Thematurityprofileofborrowingsareasfollows:


Notlaterthan1year Bankoverdrafts 10,771 4,800 – – Lettersofcredit 5,886 4,997 – – Bankers’acceptances 59,862 43,210 – – Revolvingcredits 10,200 10,452 – – Trustreceipts 582 12,655 – – Termloans 2,832 27,970 – 25,610

90,133 104,084 – 25,610 Transfertodisposalgroup heldforsale(Note8) (90,133) – – –

– 104,084 – 25,610

Laterthan1year andnotlaterthan5years Termloans 3,299 6,131 – – Transfertodisposalgroup heldforsale(Note8) (3,299) – – –

– 6,131 – –

– 110,215 – 25,610

82

26. BORROWINGS(continued)

(b) Exposuretointerestraterisk

ThenetexposureofborrowingsoftheGroupandoftheCompanytointerestratechargesareasfollows:

Theweightedaverageeffectiveinterestratesasat30Juneareasfollows:

Group Company 2007 2006 2007 2006 % % % %

Bankoverdrafts 8.3 7.0 – –Lettersofcredit 1.2 1.2 – –Bankers’acceptances 4.9 4.5 – –Revolvingcredits 5.5 6.3 – –Trustreceipts 8.3 7.1 – –Termloans 8.3 8.7 8.6 8.6

TheGroup’sandtheCompany’sborrowingsaredenominatedinRinggitMalaysia.

ThetermloanoftheCompanyissecuredbywayofapledgeoftheentireissuedandpaid-upsharecapitalinasubsidiary,athirdpartychargecreatedontheGroup’sentirestakeinapubliclistedassociate,achargeonthelongtermleaseholdlandofasubsidiaryandachargeoveramountsduefromsubsidiaries.Duringthecurrentfinancialyear,thepledgehavebeenupliftedastheCompanyhasfullyrepaidthetermloan. Fairvalues

Fairvaluesofborrowingsapproximatetheircarryingvaluesatbalancesheetdate.

27. PRODUCTFINANCINGLIABILITIES

Group 2007 2006 RM’000 RM’000

Current 5,296 –Transfertodisposalgroupheldforsale(Note8) (5,296) –

– –

Productfinancingarose fromtradefinancingagreementwitha thirdpartywhere the titlesof the inventoriespertainingtothearrangementislegallywiththethirdparty,andofwhichtheGrouphastheobligationtopurchase.Theobligationtopurchaserangewithin90days,withinterestrateof6.85%perannum.TheinventoriesundersucharrangementsaredisclosedinNote18.

83

28. HIREPURCHASELIABILITIES

Group 2007 2006 RM’000 RM’000

Minimumleasepayments:Notlaterthan1year 18 46Laterthan1yearandnotlaterthan2years 53 46Laterthan2yearsandnotlaterthan5years – 64

71 156Less:Futurefinancecharges (11) (24)

Presentvalueoffinanceleaseliabilities 60 132Transfertodisposalgroupheldforsale(Note8) (60) –

– 132

Presentvalueoffinanceleaseliabilities:Notlaterthan1year 15 39Laterthan1yearandnotlaterthan2years 45 39Laterthan2yearsandnotlaterthan5years – 54

60 132Transfertodisposalgroupheldforsale(Note8) (60) –

– 132

Representing:Current – 39Non-current – 93 – 132

Hirepurchaseliabilitiesareeffectivelysecuredastherightstothehiredassetsreverttothehirersintheeventofdefault.

Thecontractual interest ratesandweightedaverageeffective interest rateasat30 Juneof theGroupareasfollows:

Group 2007 2006 % %

Contractualinterestrates 5.0-6.6 5.0-6.6Weightedaverageeffectiveinterestrate 7.0 6.6

FairvalueoftheGroup’shirepurchaseliabilities’non-currentportionisestimatedatRM0.1million(2006:RM0.1million)whichisdeterminedbydiscountingfuturecontractedcashflowsatcurrentmarketinterestratesavailableforsimilarfinancialinstruments.

84

29. DEFERREDTAXATION

Group 2007 2006 RM’000 RM’000

At1July (1,192) 155Recognisedintheincomestatement 1,113 (1,347)

(79) (1,192)Transfertodisposalgroupheldforsale(Note8) 79 –

At30June – (1,192)

Presentedafterappropriateoffsettingasfollows:Deferredtaxassets (256) (1,383)Deferredtaxliabilities 177 191 (79) (1,192)Transfertodisposalgroupheldforsale(Note8) 79 – – (1,192)

Thecomponentsandmovementsofdeferredtaxliabilitiesandassetsduringthefinancialyearpriortooffsettingareasfollows:

DeferredtaxliabilitiesoftheGroup: Property, plantand equipment Total RM’000 RM’000

At1July2006 191 191Recognisedintheincomestatement (14) (14)

177 177Transfertodisposalgroupheldforsale(Note8) (177) (177)

At30June2007 – –

At1July2005 359 359Recognisedintheincomestatement (168) (168)

At30June2006 191 191

85

29. DEFERREDTAXATION(continued)

DeferredtaxassetsoftheGroup:

Allowance Writedown Provisions for ofslow fordefined doubtful moving benefitplan debts inventories andothers Total RM’000 RM’000 RM’000 RM’000

At1July2006 (764) (602) (17) (1,383)Recognisedintheincomestatement 569 602 (44) 1,127

(195) – (61) (256)Transfertodisposalgroupheld forsale(Note8) 195 – 61 256

At30June2007 – – – –

At1July2005 (204) – – (204)Recognisedintheincomestatement (560) (602) (17) (1,179)

At30June2006 (764) (602) (17) (1,383)

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:

Group 2007 2006 RM’000 RM’000

Unusedtaxlosses 49,319 48,584Unabsorbedcapitalallowances 36,326 42,054Otherdeductibletemporarydifferences 3,779 8,417

Theavailabilityoftheunusedtaxlossesandunabsorbedcapitalallowancesforoffsettingagainstfuturetaxable

profitsoftheCompanyaresubjecttonosubstantialchangesinshareholdingsoftheCompanyunderSection44(5A)&(5B)ofIncomeTaxAct,1967.

30. TRADEANDOTHERPAYABLES Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Tradepayables 8,341 884 50 50Amountsduetorelatedparties 43,850 48,520 – –Accruals 3,331 4,332 329 192Otherpayables 4,213 3,079 674 108Transfertodisposalgroupheld forsale(Note8) (58,676) – – –

1,059 56,815 1,053 350

86

30. TRADEANDOTHERPAYABLES(continued)

CredittermsoftradepayablesgrantedtotheGroupvaryfromcashtermsto90days(2006:cashtermsto90days).

IncludedintheamountsduetorelatedpartiesoftheGroupisanamountowingtoanassociateoftheholdingcompanyofRM19.3million(2006:RM19.3million).

OtherinformationonfinancialrisksoftradeandotherpayablesaredisclosedinNote33.

31. SIGNIFICANTRELATEDPARTYDISCLOSURES

TheDirectorsregardLCBastheultimateholdingcompanyduringthefinancialyear.

ConsequentupontheacquisitionbyExcelStep,awholly-ownedsubsidiaryofLDHB,of42,318,772shares,representing56.64%ofthethenissuedandpaid-upcapitalintheCompanyfromLCBandLimpahjayaSdnBhdon14September2007andtheissuanceof3,799.73millionnewordinarysharesofRM1.00eachintheCompanyatanissuepriceofRM1.00pershareandRM500millionnominalvalueof3-year3.5%couponredeemableconvertiblesecuredloanstockstoExcelStepon19September2007asconsiderationfortheacquisitionoftheRetailAssetsbyEastCrestInternationalLimited,awholly-ownedsubsidiaryoftheCompanyfromLDHB,theDirectorsregardExcelStepastheimmediateholdingcompanyandLDHBastheultimateholdingcompany.

BelowaretherelatedpartyrelationshipswiththeCompanyduringandattheendofthefinancialyear:

Relatedparties Relationship

AmsteelCorporation AcompanyinwhichaDirectorandcertainsubstantial Berhad(“Amsteel”) shareholdersoftheCompanyhaveinterests SilverstoneCorporationBerhad AcompanyinwhichaDirectorandcertainsubstantial shareholdersoftheCompanyhaveinterests LionMetalIndustriesSdnBhd AsubsidiaryofAmsteel LionToolingSdnBhd AsubsidiaryofAmsteel LionSteelworksSdnBhd Arelatedcompany MegasteelSdnBhd Arelatedcompany AmsteelMillsSdnBhd(“AMSB”) AsubstantialshareholderoftheCompany AmsteelMillsMarketingSdnBhd AsubsidiaryofAMSB SecomexManufacturing(M)SdnBhd Arelatedcompany PosimPetroleumMarketingSdnBhd AcompanyinwhichaDirectorandcertainsubstantial shareholdersoftheCompanyhaveinterests Mitsui&Co.,Ltd Asubstantialshareholderofasubsidiary ISOMetalIndustrialSdnBhd Asubstantialshareholderofasubsidiary OrientalSteelIndustriesSdnBhd Asubstantialshareholderofasubsidiary NewMaterial(Malaysia)SdnBhd Asubstantialshareholderofasubsidiary OtomotifMalaysiaSendirianBerhad AcompanyinwhichaDirectorandcertainsubstantial shareholdersoftheCompanyhaveinterests LDHB AsubstantialshareholderoftheCompany

LikomCaseworksSdnBhd AsubsidiaryofLDHB

87

31. SIGNIFICANTRELATEDPARTYDISCLOSURES(continued)

Thesignificantrelatedpartytransactionsareasfollows:

Group 2007 2006 RM’000 RM’000

(a) Salesofgoodsandservicesto: -MegasteelSdnBhd 3,364 4,060 -NewMaterial(Malaysia)SdnBhd – 18,888 -AmsteelMillsSdnBhd 965 1,318 -OtomotifMalaysiaSendirianBerhad – 33 -LionSteelworksSdnBhd 145 350 -LionToolingSdnBhd 282 67 -LikomCaseworksSdnBhd 2,383 148 -SecomexManufacturing(M)SdnBhd 273 – -Mitsui&Co.,Ltd 11,718 – -LDHB – 5,334

(b) Purchasesofgoodsandservicesfrom: -MegasteelSdnBhd 253,418 120,585 -Mitsui&Co.,Ltd 46,538 42,466 -AmsteelMillsMarketingSdnBhd 11,891 8,746 -PosimPetroleumMarketingSdnBhd 412 389 -OrientalSteelIndustriesSdnBhd 2,183 3,536 -LionToolingSdnBhd 609 234 -ISOMetalIndustrialSdnBhd 980 1,145

(c) Rentalandutilitiespayableto: -LionMetalIndustriesSdnBhd 708 680 -AmsteelMillsSdnBhd 514 474

(d) Interestchargedby: -AmsteelCorporationBerhad – 1,723 -SilverstoneCorporationBerhad 386 394

TherewerenotransactionscarriedoutbetweenrelatedpartiesandtheCompanyduringthefinancialyear.

TheDirectorsoftheCompanyareoftheopinionthattheabovetransactionshavebeenenteredintothenormalcourseofbusinessandhavebeenestablishedundertermsthatarenomorefavourabletotherelatedpartiesthanthosearrangedwithindependentthirdparties.

32. CONTINGENTLIABILITIES(UNSECURED)

ContingentliabilitiesoftheCompanyareinrespectofguaranteesgiventofinancialinstitutionsforcreditfacilitiesgrantedtoasubsidiaryamountingtoRM0.1million(2006:RM1.5million).

88

33. FINANCIALINSTRUMENTS

(a) Financialriskmanagementobjectivesandpolicies TheGroup’sfinancialriskmanagementpolicyseekstoensurethatadequatefinancialresourcesareavailable

forthedevelopmentoftheGroup’sbusinesseswhilstmanagingitsinterestrate,foreignexchange,liquidityandcreditrisks.TheGroupoperateswithinclearlydefinedguidelinesthatareapprovedbytheBoardandtheGroup’spolicyisnottoengageinspeculativetransactions.

(b) Interestraterisk TheGroup’sprimaryinterestrateriskrelatestointerest-bearingborrowingsastheGrouphadnosubstantial

long-terminterestbearingassetsasat30June2007.

(c) Foreignexchangerisk

TheGroup’sexposuretocurrencyrisksisveryminimal,andaremainlyforeigncurrencytransactionsinUSDollarandSingaporeDollar,limitedtotradereceivablesandpayableswhichareshortterminnature.

ThenetunhedgedfinancialassetsandfinancialliabilitiesoftheGroupthatarenotdenominatedintheirfunctionalcurrenciesareasfollows: Singapore Dollar USDollar Others Total RM’000 RM’000 RM’000 RM’000

Asat30June2007Tradeandotherpayables – – 6 6

Asat30June2006Investmentinassociate 90,994 – – 90,994Tradeandotherreceivables 801 3,437 – 4,238Tradeandotherpayables – 970 – 970

(d) Liquidityrisk

TheGroupactivelymanagesitsdebtmaturityprofileandoperatingcashflowstoensurethatitsfundingneedsaremet.Wherenecessary,theGroupseekstodivestcertainidlenon-currentassetstomeetitslongterm repaymentobligations.Aspartof itsoverallprudent liquiditymanagement, theGroupmaintainssufficientlevelsofcashorcashconvertibleinvestmentsandadequatebankingfacilitiestomeetitsworkingcapitalrequirements.

(e) Creditrisks

Creditrisks,ortheriskofcounterpartiesdefaulting,iscontrolledbytheapplicationofcreditapprovals,limitsandmonitoringprocedures.CreditrisksareminimisedandmonitoredviastrictlylimitingtheGroup’sassociationstobusinesspartnerswithhighcreditworthiness.TradereceivablesaremonitoredonanongoingbasisviaGroupmanagementreportingprocedures.

TheGroupdoesnothaveanysignificantexposuretoanyindividualcustomerorcounterpartynordoesithaveanymajorconcentrationofcreditrisk.

89

33. FINANCIALINSTRUMENTS(continued)

(f) Fairvalues

ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyatthebalancesheetdateapproximatetheirfairvaluesexceptforthefollowings:

(i) Non-currentunquotedinvestments

ItisnotpracticabletoestimatethefairvalueoftheGroup’snon-currentunquotedsharesbecauseofthelackofquotedmarketpricesandtheinabilitytoestimatefairvaluewithoutincurringexcessivecosts.

(ii) Amountsduefrom/tosubsidiariesandrelatedcompanies

Itisnotpracticaltodeterminethefairvaluesoftheamountsduefrom/tosubsidiariesandrelatedcompaniesinviewoftheuncertaintyastothetimingoffuturecashflows.

(iii) Contingentliabilities

Itisnotpracticabletoestimatethefairvalueofcontingentliabilitiesreliablyduetotheuncertaintiesoftiming,costsandeventualoutcome.

34. SIGNIFICANTEVENTS SignificanteventsaredisclosedintheDirectors’Report.

35. EVENTSSUBSEQUENTTOBALANCESHEETDATE EventssubsequenttobalancesheetdatearedisclosedintheDirectors’Report.

36. SEGMENTALINFORMATION

TheGroupcomprisesthefollowingmainbusinesssegments:

- Steelservices-manufacturing,salesanddistributionofsteelandironproducts.- Internationaltradinganddistribution(electroniccomponents)-designanddistributionofsemi-conductors

andrelatedcomponents.- Automotive-manufactureofmotorcyclecomponents,assemblyandsaleofmotorcycles,andthemanufacture

andsaleofautomotivechassis,gearboxcomponentsandmotorvehicles.- Investmentholding.

Otheroperationsof theGroup includeautomotivecomponent trading, limestoneprocessingand investmentholding.

Steel services, international trading and distribution, automotive and other segments (excluding investmentholding)werediscontinueduponthecompletionof thedisposalof theBrightSteelGroupon19September2007.Concurrently,theCompanyacquirednewsubsidiarieswhoseprincipalactivitiesaremainlyinretail,theacquisitionsofwhichisdisclosedintheSignificantEventsintheDirectors’Report.

Secondaryreportingformat-geographicalsegments

TheGroupoperatesin3maingeographicalareas:

Malaysia - themainactivitiesaresteelservicesandinvestmentholding.

People’sRepublic - themainactivitiesarethemanufactureandsaleofmotorcycles, ofChina motorvehicles,motorcyclecomponents,automotivechassisand gearboxcomponentsandinvestmentholding.

Republicof - themainactivitiesareelectroniccomponentdistribution,automotive Singapore componenttrading,limestoneprocessingandinvestmentholding.

90

36. SEGMENTALINFORMATION(continued)

Businesssegments

Continuing operations Discontinuedoperations International tradingand distribution Investment Steel (electronic Total holding services components) Automotive Others Total operations RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

30June2007

RevenueSalestoexternal customers – 343,876 – – – 343,876 343,876

ResultsSegmentresults (1,808) 12,809 – – 2,314 15,123 13,315Financecosts (1,717) (5,689) (7,406)Shareofresultof theassociate – – 391 – 14,260 14,651 14,651Lossrecognisedonthe remeasurementof assetsofdisposalgroup – (25,044) (25,044)

Lossbeforetax (3,525) (959) (4,484)Taxation (73) (1,752) (1,825)

Lossfortheyear (3,598) (2,711) (6,309)

AssetsSegmentassets 254 251,722 – – 422 252,144 252,398Investmentinassociate – – 7,456 – 91,424 98,880 98,880Allocationof remeasurement – (25,044) (25,044)

Totalassets 254 325,980 326,234

LiabilitiesSegmentliabilities 1,059 166,043 – – 141 166,184 167,243Unallocatedliabilities – 93,946 93,946

Totalliabilities 1,059 260,130 261,189

Othersegment informationCapitalexpenditure – 688 – – – 688 688Depreciation – 2,553 – – – 2,553 2,553Amortisation – 115 – – – 115 115Impairmentofinvestments – 5 – – 7,162 7,167 7,167Othernon-cashitems – – – – 3 3 3

91


Businesssegments(continued)

Continuing operations Discontinuedoperations International tradingand distribution Investment Steel (electronic Total holding services components) Automotive Others Total operations RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

30June2006

RevenueSalestoexternal customers – 239,482 – – – 239,482 239,482

ResultsSegmentresults (847) (8,542) – – (7,175) (15,717) (16,564)Financecosts (3,039) (6,583) (9,622)Shareofresultofthe associate – – 640 5,193 1,607 7,440 7,440

Lossbeforetax (3,886) (14,860) (18,746)Taxation – 1,366 1,366

Lossfortheyear (3,886) (13,494) (17,380)

AssetsSegmentassets 268 219,851 – – 19 219,870 220,138Investmentinassociate – – 6,674 75,606 8,714 90,994 90,994

Totalassets 268 310,864 311,132

LiabilitiesSegmentliabilities 350 128,828 – – 4 128,832 129,182Unallocatedliabilities 25,610 84,799 110,409

Totalliabilities 25,960 213,631 239,591

Othersegment informationCapitalexpenditure – 19,782 – – – 19,782 19,782Depreciation – 3,195 – – – 3,195 3,195Amortisation – 168 – – 744 912 912Impairmentof investments – – – – 5,000 5,000 5,000Othernon-cashitems – 390 – – 1,425 1,815 1,815

92


GeographicalSegments

ThefollowingtableprovidesananalysisoftheGroup’srevenuebygeographicalsegment:

Revenuebygeographicalsegments Continuingoperations Discontinuedoperations Total 2007 2006 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Malaysia – – 343,876 239,482 343,876 239,482

Thefollowingisananalysisofthecarryingamountoftotalassetsandcapitalexpenditure,analysedbygeographicalsegment:

Totalassets Capitalexpenditure 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Malaysia 239,917 220,642 688 19,782People’sRepublicofChina 53,291 75,606 – –RepublicofSingapore 33,026 14,884 – –

326,234 311,132 688 19,782

93

ANALYSISOF SHAREHOLDINGS

ShareCapitalasat30September2007 ShareCapitalasat10October2007 (BeforeShareConsolidation) (AfterShareConsolidation)

AuthorisedShareCapital : RM4,500,000,000 RM4,500,000,000IssuedandPaid-upCapital : RM968,610,250 RM968,610,250ClassofShares : OrdinarysharesofRM0.25each OrdinarysharesofRM1.00eachVotingRights : One(1)voteperordinaryshare One(1)voteperordinaryshare

Note:

Share Consolidation - A share consolidation exercise undertaken by the Company on the basis of every four shares of RM0.25 each into one ordinary share of RM1.00 in the Company on 9 October 2007.

DistributionofShareholdingsasat30September2007

No.of %of No.of %ofSizeofShareholdings Shareholders Shareholders Shares Shares

Lessthan100 39 1.42 883 0.00100-1,000 1,098 40.04 1,061,321 0.031,001-10,000 1,279 46.64 5,434,300 0.1410,001-100,000 285 10.39 8,439,100 0.22100,001tolessthan5%ofissuedshares 40 1.46 17,456,624 0.455%andaboveofissuedshares 1 0.05 3,842,048,772 99.16

2,742 100.00 3,874,441,000 100.00

SubstantialShareholdersasat30September2007

DirectInterest IndirectInterest No.of %of No.of %of NominalValueSubstantialShareholders Shares Shares Shares Shares ofRCSLS#(RM)

1. TanSriWilliamH.J.Cheng – – 3,842,048,772 99.16 500,000,000a

2. DatukChengYongKim – – 3,842,048,772 99.16 500,000,000a

3. LionRealtyPteLtd – – 3,842,048,772 99.16 500,000,000a

4. ExcelStepInvestmentsLimited 3,842,048,772 99.16 – – 500,000,000b

5. LionCorporationBerhad – – 3,842,048,772 99.16 500,000,000a

6. LionIndustriesCorporationBerhad – – 3,842,048,772 99.16 500,000,000a

7. LLBSteelIndustriesSdnBhd – – 3,842,048,772 99.16 500,000,000a

8. SteelcorpSdnBhd – – 3,842,048,772 99.16 500,000,000a

9. AmsteelMillsSdnBhd – – 3,842,048,772 99.16 500,000,000a

10. LionDiversifiedHoldingsBerhad – – 3,842,048,772 99.16 500,000,000a

11. LDH(S)PteLtd – – 3,842,048,772 99.16 500,000,000a

12. LionDevelopment(Penang)SdnBhd – – 3,842,048,772 99.16 500,000,000a

13. HorizonTowersSdnBhd – – 3,842,048,772 99.16 500,000,000a

14. NarajayaSdnBhd – – 3,842,048,772 99.16 500,000,000a

Notes:

# 3-year 3.5% coupon redeemable convertible secured loan stocks (“RCSLS”) issued by the Company with a right to convert into new ordinary shares in the Company (“Parkson Shares”) at a conversion price of RM1.00 nominal amount of the RCSLS for every one new Parkson Share (“Conversion Price”) which Conversion Price shall be adjusted to RM4.00 nominal amount of the RCSLS for every one new Parkson Share upon the share consolidation exercise undertaken by the Company on the basis of every four shares of RM0.25 each into one ordinary share of RM1.00 in the Company

a Indirect interestb Direct interest

94

ThirtyLargestRegisteredShareholdersasat30September2007

RegisteredShareholders No.ofShares %ofShares

1. ExcelStepInvestmentsLimited 3,842,048,772 99.162. CartabanNominees(Asing)SdnBhd 2,050,000 0.05 StateStreetAustraliaFundUAJBforUnifund(HTSGasTrustee)3. SJSECNominees(Tempatan)SdnBhd 1,204,300 0.03 PledgedSecuritiesAccountforLoiHsienYin(SMT)4. HSBCNominees(Asing)SdnBhd 1,200,000 0.03 BBHandCoBostonforFidelityAdvisorSeriesVIII(FIDADEMGAsia)5. UniversalTrustee(Malaysia)Berhad 1,054,500 0.03 SBBEmergingCompaniesGrowthFund6. AmanahRayaNominees(Tempatan)SdnBhd 1,032,000 0.03 PublicIslamicOpportunitiesFund7. ChanHing 830,000 0.028. UOBMNominees(Tempatan)SdnBhd 775,000 0.02 GoldenTouchAssetManagementSdn.Bhd.forHoLongSun(TrustAC/Client)9. LeawHockSeng 733,624 0.0210. MaybanNominees(Tempatan)SdnBhd 689,200 0.02 MaybanTrusteesBerhadforHiddenTreasuresFund(240218)11. UniversalTrustee(Malaysia)Berhad 604,100 0.02 SBBDanaAl-Azam12. SJSECNominees(Tempatan)SdnBhd 558,000 0.01 PledgedSecuritiesAccountforYapKimSan(SMT)13. HSBCNominees(Asing)SdnBhd 526,000 0.01 ExemptANforCreditSuisse(SGBR-TST-Asing)14. SinKetHin 515,000 0.0115. HSBCNominees(Asing)SdnBhd 510,000 0.01 ExemptANforMorganStanley&Co.InternationalPlc16. AIBBNominees(Tempatan)SdnBhd 500,000 0.01 PledgedSecuritiesAccountforTanHanChong17. HLGNominee(Tempatan)SdnBhd 425,000 0.01 ExemptANforUOBKayHianPteLtd(A/CClients)18. CitigroupNominees(Asing)SdnBhd 313,900 0.01 CitigroupGlobalMarketsLimited19. LeawHockSeng 300,000 0.0120. CartabanNominees(Tempatan)SdnBhd 278,000 0.01 ExemptANforKAMNominees(Tempatan)SdnBhd21. RentakBerkatSdnBhd 250,000 0.0122. SouthernInvestmentBankBerhad 241,000 0.01 KumpulanWangSimpananPekerjaforLeongKokWahEddy(EP0005)23. SJSECNominees(Tempatan)SdnBhd 237,900 0.01 PledgedSecuritiesAccountforWazLianEnterpriseSdnBhd(SMT)24. HDMNominees(Tempatan)SdnBhd 205,000 0.01 PledgedSecuritiesAccountforGohSengGuan(M08)25. TanAhMoi 202,000 0.0126. Inter-PacificEquityNominees(Tempatan)SdnBhd 195,900 0.01 PledgedSecuritiesAccountforYapKonHing(AY0036)27. TCLNominees(Tempatan)Sdn.Bhd. 194,800 0.01 PledgedSecuritiesAccountforKuaJingKea@KuaNeeNee28. ChinKianFong 168,900 *29. WongYoonTet 162,000 *30. LimYukWai@LamYukWai 155,000 *

Note:

* Negligible

95

Directors’InterestsinSharesintheCompanyanditsRelatedCompaniesasat30September2007

TheDirectors’interestsinsharesintheCompanyanditsrelatedcompaniesasat30September2007areasfollows:

NominalValue DirectInterest IndirectInterest PerOrdinary No.of %of No.of %of Share Shares Shares Shares Shares

TheCompany

TanSriWilliamH.J.Cheng# RM0.25 – – 3,842,048,772 99.16

RelatedCompanies

TanSriWilliamH.J.Cheng

Aktif-SunwaySdnBhd RM1.00 – – 8,000,000 80.00ExcelStepInvestmentsLimited USD1.00 – – 1 100.00HambaResearch &DevelopmentCoLtd NT$10.00 – – 980,00 98.00LDHInvestmentPteLtd * – – 4,500,000 100.00LikomCMSSdnBhd RM1.00 – – 10,000 100.00LionDiversifiedHoldingsBerhad RM0.50 121,356,607 16.46 321,313,788 43.58LionMahkotaParadeSdnBhd RM1.00 – – 1,000,000 100.00ParksonRetailGroupLimited HK$0.10 – – 306,360,000 55.11

NominalValue DirectInterest IndirectInterest PerPreference No.of %of No.of %of Share Shares Shares Shares Shares

LionMahkotaParadeSdnBhd RM0.01 – – 400,000 100.00

96

Directors’InterestsinSharesintheCompanyanditsRelatedCompaniesasat30September2007(continued)

RelatedCompanies(continued)

InvestmentsinthePeople’s IndirectInterest RepublicofChina Rmb %Holdings

ChongqingWanyouParksonPlazaCoLtd 21,000,000 70.00DalianTianheParksonShoppingCentreCoLtd 60,000,000 60.00GuizhouShenqiParksonRetailDevelopmentCoLtd 6,000,000 60.00MianyangFulinParksonPlazaCoLtd 30,000,000 100.00NanningBrilliantParksonCommercialCoLtd 14,000,000 70.00QingdaoNo.1ParksonCoLtd 124,501,580 52.60WuxiSanyangParksonPlazaCoLtd 48,000,000 60.00Xi’anChang’anParksonStoreCoLtd 5,100,000 51.00Xi’anLuckyKingParksonCoLtd 29,580,000 91.00Xi’anShidaiParksonStoreCoLtd 7,650,000 51.00XinjiangYouhaoParksonDevelopmentCoLtd 10,200,000 51.00YangzhouParksonCoLtd 35,553,700 55.00

Notes:

# Also deem interested in RM500 million 3-year 3.5% coupon redeemable convertible secured loan stocks (“RCSLS”) issued by the Company with a right to convert into new ordinary shares in the Company (“Parkson Shares”) at a conversion price of RM1.00 nominal amount of the RCSLS for every one new Parkson Share (“Conversion Price”) which Conversion Price shall be adjusted to RM4.00 nominal amount of the RCSLS for every one new Parkson Share upon the share consolidation exercise undertaken by the Company on the basis of every four shares of RM0.25 each into one ordinary share of RM1.00 in the Company.

* Shares in companies incorporated in Singapore do not have a par value.

Otherthanasdisclosedabove,theDirectorsoftheCompanydonothaveanyotherinterestinsharesintheCompanyoritsrelatedcompanies.

97

MATERIALCONTRACTSINVOLVINGDIRECTORS’ANDMAJORSHAREHOLDERS’ INTERESTS

1. MasterSaleAgreementdated27September2006andSupplementalAgreementdated21June2007enteredintobetween(i)theCompany;(ii)EastCrestInternationalLimited(“EastCrest”),awholly-ownedsubsidiaryoftheCompany;(iii)LionDiversifiedHoldingsBerhad(“LDHB”),amajorshareholderoftheCompanyandacompanywhereinaDirectorandcertainmajorshareholdersoftheCompanyhaveinterests;and(iv)ExcelStepInvestmentsLimited(“ExcelStep”),awholly-ownedsubsidiaryofLDHB,fortheacquisitionbyEastCrestofthefollowingfromLDHB:

i) 100%oftheequityinterestinPRGCorporationLimitedof1ordinaryshareofHKD0.10whichowns55.5%equityinterestinParksonRetailGroupLimited;

ii) 100%oftheequityinterestinParksonCorporationSdnBhdcomprising50,000,002ordinarysharesofRM1.00each;

iii) 100%oftheequityinterestinParksonVenturePteLtdcomprising14,800,000ordinaryshares;

iv) 100%oftheequityinterestinSerbadagangHoldingsSdnBhdcomprising2ordinarysharesofRM1.00each;and

v) 100%oftheequityinterestinSeaCoralLimitedof1ordinaryshareofHKD1.00;

foratotalconsiderationofRM4,299,730,000tobesatisfiedbytheissuanceof3,799,730,000newordinarysharesofRM1.00eachintheCompanyatanissuepriceofRM1.00pershareandtheissuanceofRM500,000,000nominalvalue3-year3.5%couponredeemableconvertiblesecuredloanstocksatnominalvalueofRM1.00eachtoExcelStep.

2. BSSBShareSaleAgreementdated27September2006between(i)theCompany;(ii)LionCorporationBerhad(“LCB”),amajorshareholderoftheCompanyandacompanywhereinaDirectorandcertainmajorshareholdersoftheCompanyhaveinterests;and(iii)TotalTriumphInvestmentsLimited(“TotalTriumph”),awholly-ownedsubsidiaryofLCB,forthedisposalbytheCompanytoTotalTriumphof32,143,500ordinarysharesofRM1.00eachrepresentingtheentireissuedandpaid-upsharecapitalofBrightSteelSdnBhdforacashconsiderationofRM53,470,000.

LISTOFGROUP PROPERTIESASAT 30 JUNE2007

Tenure/ ExistingUse/ Net Dateof Address ExpiryDatefor Area Description AgeofBuilding BookValue Acquisition/ Leasehold (Year) (RMmillion) LastRevaluation

Lot177,JalanUtas15/7, Leasehold 42,131 Industrialland Factory& 17.3 7April1995Section15, 10.07.2074 sqmetres andbuildings office 40000ShahAlam, (15) Selangor

Lot2323(A), –* 43,578 Industrial Factory& 12.3 January2006KawasanPerindustrian sqmetres building office OlakLempit, (2) Banting,Selangor

Note:

* The factory and office were built on a freehold land owned by a related company

98

OTHER INFORMATION

(I) NON-AUDITFEES

Theamountofnon-audit feespaidorpayabletoexternalauditorsforthefinancialyearwasRM1,742,000(2006:RM2,000).

(II) RECURRENTRELATEDPARTYTRANSACTIONS

Theaggregatevalueoftransactionsconductedduringthefinancialyearended30June2007wereasfollows:

AmountNatureofRecurrentTransactions RelatedParties RM’000

Steelrelated(i) Thesaleofsteelcoils,steelsheets,wirerods, Mitsui(b) 11,718 hotrolledcoilsandotherrelatedproducts LCBGroup(a) 3,782 LDHBGroup(a) 2,383 LICBGroup(a) 965 AmsteelGroup(a) 282 19,130

(ii) Thepurchaseofsteelcoils,steelsheets, LCBGroup(a) 253,418 wirerods,hotrolledcoilsand Mitsui(b) 46,538 otherrelatedproducts LICBGroup(a) 11,891 OrientalSteel(b) 2,183 ISOMetal(b) 980

315,010

(iii) Thepurchaseofspareparts,toolsanddies AmsteelGroup(a) 609 andotherrelatedproductsandservices

(iv) Thepurchaseoflubricatingoiland LFIBGroup(a) 412 otherpetroleumproducts

(v) Therentalofstoragespaceandpremises AmsteelGroup(a) 708 LICBGroup(a) 514

1,222

Notes:

Amsteel Corporation Berhad Group (“Amsteel Group”)Lion Corporation Berhad Group (“LCB Group”)Lion Diversified Holdings Berhad Group (“LDHB Group”)Lion Forest Industries Berhad Group (“LFIB Group”)Lion Industries Corporation Berhad Group (“LICB Group”)ISO Metal Industrial Sdn Bhd (“ISO Metal”)Mitsui & Co., Ltd (“Mitsui”)Oriental Steel Industries Sdn Bhd (“Oriental Steel”)

“Group” includes subsidiary and associated companies(a) companies in which a Director and certain major shareholders of the Company have interests(b) a major shareholder of a subsidiary of the Company

I/We.............................................................................................................................................................................I.C.No./CompanyNo..................................................................................................................................................of................................................................................................................................................................................beingamember/membersofPARKSONHOLDINGSBERHAD,herebyappoint...............................................................................................................................................................................................................................................

I.C.No.........................................................................................................................................................................of................................................................................................................................................................................orfailingwhom,...........................................................................................................................................................I.C.No.........................................................................................................................................................................of................................................................................................................................................................................as my/our proxy to vote for me/us and on my/our behalf at theTwenty-FourthAnnual General Meeting of theCompanytobeheldat theMeetingHall,Level48,MenaraCitibank,165JalanAmpang,50450KualaLumpuron30November2007at9.00amandatanyadjournmentthereof.

RESOLUTIONS FOR AGAINST

1. ToreceiveandadopttheDirectors’ReportandAuditedFinancialStatements

2. ToapproveDirectors’fees

3. Tore-electasDirector,Y.Bhg.TanSriWilliamH.J.Cheng

4. Tore-electasDirector,MrFolkJeeYoong

5. Tore-electasDirector,MrChengSinYeng

6. Tore-appointasDirector,Y.Bhg.TanSriDato’JaffarbinAbdul

7. Tore-appointAuditors

8. AuthoritytoDirectorstoissueshares

9. ProposedShareholders’MandateforRecurrentRelatedPartyTransactions

10. ProposedShareBuy-Back

11. ProposedExecutiveShareOptionScheme

12. ProposedGrantofOptionstoMsShumYuenMing,Rita

13. ProposedGrantofOptionstoMsChengHuiYen,Natalie

Please indicatewith an “X”howyouwishyour vote tobecast. If no specificdirectionas to voting is given, theproxywillvoteorabstainathisdiscretion.

Aswitnessmy/ourhandthis.................. dayof.................................................... 2007

Signed:...............................................

No.ofshares:.......................................... Inthepresenceof:...............................................

RepresentationatMeeting:

l AmemberentitledtoattendandvoteattheAnnualGeneralMeetingisentitledtoappointaproxytoattendandvoteinsteadofhim.AproxyneednotbeamemberoftheCompany.Theinstrumentappointingaproxymustbeinwritingunderthehandoftheappointororhisattorneydulyauthorisedinwritingor,iftheappointorisacorporation,eitherundersealorthehandofanofficerorattorneydulyauthorised.

l AninstrumentappointingaproxyexecutedinMalaysianeednotbewitnessed.ThesignaturetoaninstrumentappointingaproxyexecutedoutsideMalaysiashallbeattestedbyasolicitor,notarypublic,consulormagistrate.

l TheinstrumentofproxyshallbedepositedattheRegisteredOfficeoftheCompany,Level46,MenaraCitibank,165JalanAmpang,50450KualaLumpurnotlessthanforty-eight(48)hoursbeforethetimeforholdingtheMeeting.

l FormofProxysentthroughfacsimiletransmissionshallnotbeaccepted.

FORMOFPROXY CDSACCOUNTNUMBER

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