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2 Corporate Structure

4 Corporate Information

5 Financial Highlights

6 Profile of Board of Directors

10 Chairman’s Statement

12 Review of Operations

16 Statement on Corporate Governance

21 Additional Compliance Information

24 Statement on Internal Control

25 Audit Committee Report

29 Financial Statements

112 List of Properties

119 Statement on Directors’ Interests

120 Analysis of Ordinary Shareholdings

123 Analysis of IrredeemableConvertible Preference Shareholdings

125 Notice of 83rd Annual General Meeting

130 Statement AccompanyingNotice of Annual General Meeting

• Form of Proxy

COntentS

L a p o r a n T a h u n a n 2 0 0 8 A n n u a l R e p o r t

TALAM CORPORATION BERHAD (1120-H)2

corporate structure

ANNUAL REPORT 2008 3

corporate structure


BOARD OF DIRECTORS

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoonexecutive Chairman

Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj Deputy ChairmanIndependent Non Executive Director

Datuk Ab Rauf Bin YusohNon Independent Executive Director

Chua Kim LanNon Independent Executive Director

Dato’ Kamaruddin Bin Mat DesaIndependent Non Executive Director

Tsen Keng YamIndependent Non Executive Director

Loy Boon ChenNon Independent Non Executive Director

Lee Swee SengNon Independent Non Executive Director

AUDIT COMMITTEE

Tsen Keng YamChairman

Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-HajMember

Dato’ Kamaruddin Bin Mat DesaMember

NOMINATION & REMUNERATION COMMITTEE

Tsen Keng YamChairman

Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-HajMember

Lee Swee SengMember

COMPANY SECRETARY

Ting Kok Keong (MAICSA 7058942)

PRINCIPAL BANKERS

RHB Investment Bank BerhadEON Bank Berhad

REGISTERED OFFICE

Suite 2.05, Level 2 Menara MaxisegarJalan Pandan Indah 4/2Pandan Indah55100 Kuala LumpurTel no.: 03-42962000Fax no.: 03-42977220Website: www.talam.com.my

Customer Service Action Centre

Tel no.: 03-42943388Fax no.: 03-42805035

SHARE REGISTRAR

Securities Services (Holdings) Sdn BhdLevel 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel no.: 03-20849000Fax no.: 03-20949940/03-20950292

AUDITORS

Deloitte KassimChan

STOCK EXCHANGE LISTING

Listed on Main Board ofBursa Malaysia Securities Berhad

corporate information


2008RM’000

Restated2007

RM’000

Restated2006

RM’0002005

RM’0002004

RM’000

GROUP

Property, plant and equipmentShareholders’ fundRevenueProfit/(Loss) before taxationEarnings/(Loss) per share (sen)

191,177 344,460 248,349

5,821 0.53

196,458 346,516 216,723

(6,936)1.43

204,109 338,540 599,814 (772,644)

(124.50)

252,852 1,081,574 1,006,032

130,746 15.83

275,225 1,006,018

911,985 71,099

18.29

COMPANY

Property, plant and equipmentShareholders’ fundRevenueProfit/(Loss) before taxation

1,699 320,195

3,496 (23,142)

1,971 343,081

1,646 5,744

2,392 333,407

2,199 (466,782)

2,937 798,104

12,626 12,033

2,733 805,857

66,384 35,609

Earnings/(Loss)Per Share (sen) Revenue (RM’000)

Financial highlights

Profit/(Loss) before Taxation (RM’000)Property, Plant and Equipment (RM’000)


Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoonexecutive Chairman

Malaysian, aged 62, Executive Chairman since 27 March 2002 joined the Board of Talam Corporation Berhad (“Talam”) on 6 November 1990. He is also currently an Executive Director (President/Chief Executive) of Kumpulan Europlus Berhad.

He graduated with a Bachelors Degree in Civil Engineering from the University of Malaya in 1970 and is a member of the Institution of Engineers, Malaysia since 1974 and was subsequently made a Fellow in 1984. He has over 37 years of experience in the property and construction industry since he started his career with Messrs Binnie & Partners (M) Sdn Bhd and later joined Perbadanan Kemajuan Negeri Selangor in 1971 as a Project Manager handling project designs, management and property development. Tan Sri was awarded the prestigious “Property Man of the Year 1998” by Federation Internationale Des Professions Immobilieres (“FIABCI”) in recognition of his achievements in property development. Tan Sri was conferred the Honorary Doctorate of Science (Engineering) by the University Malaya on 11 August 2003.

Tan Sri is the spouse of Puan Sri Datin Thong Nyok Choo, a major shareholder of Talam. He has direct and deemed interest in Kumpulan Europlus Berhad, a major shareholder of Talam. There is no conflict of interest with the Company except for those transactions disclosed in item 2, page 21 of the Additional Compliance Information and Note 46 to the Financial Statements of this Annual Report. Within the last 10 years, he has no convictions for offences.

He has attended all the ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.

Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-HajDeputy Chairman

Malaysian, aged 58, Independent Non Executive Director joined the Board of Talam as Deputy Chairman on 22 December 2000. He is a member of the Audit Committee and was redesignated as a member of the Nomination & Remuneration Committee on 1 October 2007. He is currently a director of Cosway Corporation Berhad and Baneng Holdings Berhad.

Since 1970, Y.A.M. Tengku Sulaiman Shah became actively involved in business particularly in building construction and housing development. Y.A.M. Tengku Sulaiman Shah with his other partners formed Syarikat Pembinaan Setia Sdn Bhd (now known as SP Setia Berhad) and in 1997, he relinquished his position and sold off all his shares in SP Setia Berhad. In 1970 Y.A.M. Tengku Sulaiman Shah was appointed as the State Palace’s Officer which carries the title “Tengku Panglima Besar of Selangor” by His Royal Highness, the Sultan of Selangor Sultan Salahuddin Abdul Aziz Shah. In 1978 Y.A.M. Tengku Sulaiman Shah was then promoted as the Chief of Ceremony for the State of Selangor which carries the title “Tengku Panglima DiRaja Selangor” until today. Y.A.M. Tengku Sulaiman Shah is also a member of The Council of Royal Court of Selangor (Ahli Dewan DiRaja Selangor).

He has no family relationship with any other directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has no convictions for offences.

He has attended six (6) out of ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.

profile of board of directors


Datuk Ab Rauf Bin YusohNon Independent Executive Director

Malaysian, aged 46, Non Independent Executive Director, joined the Board of Talam on 28 February 2002 as a Non Independent Non Executive Director and was redesignated as an Executive Director on 1 October 2007.

He was formerly a Director of Europlus Berhad (“Europlus”) from October 1998 until 28 February 2002 and Senior Vice President of Europlus until 1 January 2004. He was appointed as a Senior Vice President of Kumpulan Europlus Berhad on 1 January 2004. He was a founder Director of Asia Lab Sdn Bhd.


He has attended nine (9) out of ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.

Dato’ Kamaruddin Bin Mat DesaIndependent Non Executive Director

Malaysian, aged 57, Independent Non Executive Director, joined the Board of Talam on 1 October 2007. He is also a member of the Audit Committee.

He holds a Bachelor of Laws (Hons) from International Islamic University, Petaling Jaya, Selangor (1993) and currently an Advocate and Solicitor, High Court of Malaya.

Dato’ Kamaruddin had extensive experience in the Royal Malaysian Police Force. During his distinguished career, he held positions such as General Duty/Traffic, Platoon Commander, Police Field Force, Office in-charge of Police Sub-District, Area Inspector, State Traffic Chief Selangor, Deputy OCPD, Staff Officer (Prosecution) Session Court (Selangor), Staff Officer (Admin) CID Selangor, Police Secretary/Special Officer to IGP, Officer in-charge Criminal Investigation Department, Deputy Chief Police Officer and Deputy Director, Commercial Crime Investigation Department.

He is currently a Partner in a law firm, Faridzah & Co.


He has attended all the three (3) Board of Directors’ meetings held during his tenure in office for the financial year ended 31 January 2008.



Tsen Keng Yam Independent Non Executive Director

Malaysian, aged 58, Independent Non Executive Director, joined the Board of Talam on 30 April 2004. He was redesignated as the Chairman of the Audit Committee and appointed as the Chairman of the Nomination & Remuneration Committee on 1 October 2007. He is also currently a Director of Riverview Rubber Estates Berhad and Narlborough Plantations Plc.

He is a Fellow of the Institute of Chartered Accountants (England and Wales) and a member of Malaysian Institute of Accountants and Malaysian Institute of Certified Public Accountants.

In 1978, he joined Hanafiah Raslan & Mohamed as a consultant and was subsequently promoted to Senior Consultant in 1980. He was a principal of Hanafiah Raslan & Mohamed from 1984 to 1987 and was a partner of Arthur Andersen & Co. for more than 14 years from 1988 to 2003.


He has attended seven (7) out of ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.

Loy Boon ChenNon Independent Non Executive Director

Malaysian, aged 56, Non Independent Non Executive Director, joined the Board of Talam on 1 October 2007.

Mr Loy Boon Chen holds a Master Degree in Business Administration from Golden Gate University, San Francisco, USA and is a Certified Public Accountant, Malaysia.

Mr Loy served an international accounting firm for seven (7) years prior to joining Chong Kok Lin & Sons Berhad in 1980 as Accountant cum Secretary for a year. In 1981, he joined Mudajaya Construction Sdn Bhd as Chief Accountant before being appointed Group Financial Controller of IJM Corporation Berhad in 1994. Mr Loy was appointed the Financial Director of IJM Corporation Berhad from 1998, and was the Head of the Finance & Accounts Department and Chairman of IJM Group Risk Management Committee up till the end of 2006. Thereafter, he was assigned to be in charge of special projects. Mr Loy was a member of the Accounting Standards Sub-Committee of the Federation of Public Listed Companies Berhad (1998-2006).

He is presently an Independent and Non Executive Director of Guandong Provincial Expressway Development Co. Limited, a Company listed on the Shenzhen Stock Exchange, China.





Lee Swee SengNon Independent Non Executive Director

Malaysian, aged 47, Non Independent Non Executive Director, joined the Board of Talam on 1 October 2007. He is also a member of the Nomination & Remuneration Committee.

Mr Lee Swee Seng holds a Bachelor of Laws (Hons) from University of Malaya, Master of Laws from University of Malaya and Master of Business Administration from Southern Cross University, Australia.

Mr Lee was called to the Malaysian Bar in 1985 and has been in active law practice since then. He is currently the Managing Partner of Lee Swee Seng & Co. He is also a Certified National Trainer of Junior Chamber International and a Past National President of Junior Chamber Malaysia in 1999.

Mr Lee is a Member of the Malaysian Institute of Arbitrators and an associate member of the Malaysian Institute of Management (“MIM”) as well as the President of the MIM KL Toastmasters Club 2005/2006 and Distinguished Toastmaster of Toastmasters International. He was a Division Governor for Toastmasters International 2006/2007. He is

a Certified Mediator of the Malaysian Mediation Centre. He is also a Trade Marks and Industrial Designs Agent as well as Patent Agent. He is a member of the Malaysian Institute of Corporate Governance as well as a Chartered Audit Committee Director. He is also a Notary Public.

Mr Lee believes in continuing education and is often invited to speak to directors of public listed companies in their Continuing Education Programme and also by other professional bodies like MAICSA and Lexis-Nexis in their professional development programmes.

He is presently an Independent Non Executive Director of OpenSys (M) Berhad and also a Director of TCM Development Berhad and MAP Partners Berhad.



Chua Kim LanNon Independent Executive Director,

Malaysian, aged 44, Non Independent Executive Director, joined the Board of Talam on 1 October 2007.

Ms Chua Kim Lan graduated from College Tunku Abdul Rahman in Building Technology in 1984 and holds a Master of Business Administration from Honolulu University, Hawaii in 2000. She was previously attached to Brisdale (M) Sdn Bhd for 5 years from 1984 to 1989 and Talam for 1 year prior to joining Europlus Berhad as a Quantity Surveyor in 1991. She was transferred back to Talam subsequent to the merger exercise in 2003 and was formerly the Deputy President of Talam.

She has no family relationship with any other directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, she has no convictions for offences.

She has attended all the three (3) Board of Directors’ meetings held during her tenure in office for the financial year ended 31 January 2008.



On behalf of the Board of directors of Talam Corporation

Berhad (“Talam”), I hereby present the Annual Report and

Financial Statements of the Group and the Company for

the financial year ended 31 January 2008.

FINANCIAL HIGHLIGHTS

For the financial year ended 31 January 2008, the Group achieved a revenue of RM248.35 million compared with the previous financial year of RM216.72 million, mainly due to the revival of certain development projects. The Group, despite a lower gross profit, was able to record a pretax profit of RM5.82 million against a pretax loss of RM6.94 million of the previous financial year. This was achieved mainly through gains arising from disposal of investment properties and subsidiaries, and reversal of provisions no longer required of certain doubtful receivables and liquidated ascertained damages.

TALAM PROPOSED REGULARISATION PLAN

On 1 September 2006, the Board announced that based on the audited consolidated financial statements of Talam for the financial year ended 31 January 2006, the auditors were unable to express their opinion on Talam’s audited consolidated financial statements and the Group had defaulted on payments pursuant to Practice Note No. 1/2001 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”). As such, Talam announced that it was an affected listed issuer pursuant to Practice Note No. 17/2005 (“PN17”) of the Listing Requirements.

Pursuant to the provisions of PN17, Talam was required to submit its regularisation plan to the relevant authorities within

8 months of the first announcement, i.e. by 30 April 2007. In this respect, RHB Investment Bank Berhad was appointed by the Board as the Financial Adviser for its Proposed Regularisation Plan (“PRP”) and to procure the necessary approvals to implement the PRP.

Talam submitted its PRP to the Securities Commission (“SC”) on 30 April 2007, which involved, inter alia, the restructuring of the Group’s defaulted debts amounting to approximately RM833.0 million into redeemable and convertible instruments and/or Al- Bai Bithaman Ajil Islamic Debt Securities to be issued by Talam.

Subsequent to SC’s rejection on 25 September 2007, Talam, on 25 October 2007, re-submitted its revised PRP of the Group to the SC. The Board is glad to report that approval has since been obtained from the SC vide SC’s letter dated 29 April 2008, subject to certain terms and conditions imposed by SC.

MAjOR CORPORATE DEvELOPMENTS

On March 2007, a subsidiary, Mutual Prosperous Sdn Bhd (“MPSB”), entered into a Joint Venture/Shareholders’ Agreement with IJM Properties Sdn Bhd (“IJMP”) for IJMP and MPSB to use Cekap Tropikal Sdn Bhd (“CTSB”) as the 50:50 joint venture company to takeover the development of 204 acres of land located in Mukim Batu, Daerah Gombak,

chairman’s statement


Selangor (“Land”) known as Sierra Selayang. The Land for development was previously owned and/or beneficially owned by three subsidiaries, namely Zhinmun Sdn Bhd, Untung Utama Sdn Bhd and Seaview Plantations Sdn Bhd. The development has an estimated gross development value of RM1.0 billion and comprises mainly bungalows and semi-detached houses and will be developed over 6 years.

On 28 June 2007, Larut Overseas Ventures Sdn Bhd entered into a Share Sale Agreement with IJMP to dispose of 1,515,000 ordinary shares of HK$1 each representing 50% equity interest in Larut Leisure Enterprise (Hong Kong) Limited (“LLE”) for HK$1 and IJMP will also assume a loan of RM25.63 million from the Talam Group to LLE. The entry of IJMP would enable LLE to complete the proposed 35-storey commercial complex in the central business district of Changchun, capital of Jilin Province, People’s Republic of China. The development has an estimated gross development value of RM450 million and will take 3 years to be completed.

Besides the above, during the financial year, the Group continues to improve its financial position by disposing of its non-core assets such as the leasehold land and building known as Hospital Pantai Indah for RM63.50 million, and a 25-acre freehold industrial land in Bukit Beruntung for RM18.60 million.

For the financial year, IJM Construction Sdn Bhd (“IJMC”) commenced work as the principal contractor for the construction work in relation to the various property development projects, namely Taman Puncak Jalil, Ukay Perdana, Kinrara Section 3, Bukit Beruntung and Putra Perdana for a total contract sum of approximately RM700 million. The appointment of IJMC has helped to improve the billings of the Group and would ensure early completion of the said projects. With the resumption of construction works, Talam would be able to sell the remaining unsold units of the re-launched phases on a build-and-sell basis.

Towards the end of financial year ending 31 January 2009, upon the implementation and completion of the revised PRP as approved by the SC, the Group will be able to significantly improved its capital structure and gearing position.

PROSPECT

The Group will also continue to find buyers or joint venture partners for its land and properties. Non-core assets will be disposed of at the right price so as to further strengthen its financial position.

The Board of Directors is of the opinion that considering the recent developments in the Group, there will be a better prospect for the future years, despite present bearish market sentiment.

APPRECIATION

On behalf of the Board of Directors, I wish to thank our valued customers, shareholders, creditors and lenders for their continued support. I would also like to express my heartfelt appreciation to the management team and dedicated employees of the Group for their unrelenting commitment and hard work during the financial year.

I wish to express on behalf of the Board, my sincere appreciation to Mr. Lai Moo Chan and Encik Sulaiman Hew Bin Abdullah, who have both resigned from the Board, for their immense contribution and valuable counsel to the Group during their tenure as Independent Non-Executive Directors with the Company. My deepest gratitude and appreciation also goes to Puan Sri Datin Thong Nyok Choo, our President/Chief Executive who has retired from the Company on 1 October 2007.

On another note, I wish to warmly welcome on Board, IJM Corporation Berhad (“IJM”)’s nominees, Mr. Loy Boon Chen, former IJM Group Finance Director and Mr. Lee Swee Seng as Non-Independent Non-Executive Directors, Ms Chua Kim Lan as Executive Director and Dato’ Kamaruddin Bin Mat Desa as Independent Non-Executive Director.

The Board of Directors would also like to record its deepest appreciation and gratitude to all our business partners, in particular IJM, and all regulatory authorities for their cooperation and assistance rendered throughout the year.

TAN SRI DATO’ (DR) IR. CHAN AH CHYE @ CHAN CHONG YOONexecutive Chairman

chairman’s statement


PROPERTY DEvELOPMENT Property development is the core business of Talam Corporation Berhad (“Talam”) which has contributed 92.5% of its turnover. Talam and its subsidiaries have a total balance land bank of approximately 5,792 acres comprising a mixed portfolio of commercial, residential and industrial properties at various strategic locations in Ampang, Sepang, Puchong, Bukit Jalil and Rawang.

Information of the housing development projects currently being undertaken and to be undertaken by the Talam Group of Companies are detailed as follows:-

(1) Existing Projects

a. Taman Puncak Jalil

Taman Puncak Jalil, a 801 acres leasehold land, is located next to Technology Park along Sungai Besi, Puchong road. Adjacent developments are Lestari Perdana on the southest, Taman Equine on the south, Bandar Kinrara on the northwest and Bukit Jalil Sports Complex on the north. The development, which is undertaken by Maxisegar Sdn Bhd, a wholly-owned subsidiary of Talam, is an integrated and self-contained township comprising 8,102 units of residential and commercial properties. This strategically located project has attracted strong interest from the public. The Gross Development Value of Taman Puncak Jalil estimated to be about RM2.13 billion with an expected development period of twelve (12) years. The project was first launched in June 2001 and as at 31 January 2008, the project has recorded sales of 7,358 units valued at RM1.59 billion.

b. Ukay Perdana

Ukay Perdana is a mixed development project located at 7th mile off Jalan Ulu Klang in the vicinity of Bukit Antarabangsa and Taman Ukay which is undertaken by Ukay Land Sdn Bhd. It is approximately 14.4 km north-east of Kuala Lumpur City Centre, which is about 15 minutes drive north-east of Kuala Lumpur City Centre via elevated highway. The project is situated on 345 acres of converted leasehold land which is being developed by Ukay Land Sdn Bhd, a 99.999%-owned subsidiary of Talam.

The development consists of 6,200 units of residential and commercial properties with an expected Gross Development Value of RM870.90 million. As at 31 January 2008, a total of 6,053 units of properties valued at RM823.17 million were sold.

c. Lestari Puchong

Lestari Puchong is a project undertaken by Lestari Puchong Sdn Bhd, a 99.999%-owned subsidiary of Talam. The proposed site is located off Jalan Akademi Putra, approximately 1.2 kilometers from Persimpangan Serdang Exit No. 1123, in the vicinity of Seri Kembangan, Selangor. The site is easily accessible from Kuala Lumpur-Seremban Highway via Jalan Sungai Besi and strategically located to the north of University Putra Malaysia research centre.

Lestari Puchong is a mixed development comprising 8,256 units of residential properties, and 327 units of commercial properties. With an estimated Gross Development Value of RM1.10 billion, Lestari Puchong is expected to span over a development period of twelve (12) years. Launched in March 2001, Lestari Puchong has achieved sales of 4,793 units valued at RM733.13 million as at 31 January 2008.

d. Kinrara Section 3

Kinrara Section 3 is a project undertaken by Sentosa Restu (M) Sdn Bhd, a 99.999%-owned subsidiary of Talam. The project is located on 43 acres of land in the Daerah of Petaling, opposite of the Kinrara Army Camp. The proposed development, consists of 3,296 units of residential and commercial properties. It was first launched in 1999 with an estimated Gross Development Value of RM426.55million. As at 31 January 2008, Kinrara Section 3 has achieved sales of RM 418.5 million representing 3,213 units sold.

e. Jalil Heights

Jalil Heights is located on a 31.4 acres leasehold land in Mukim of Petaling, Petaling District within the development known as Lestari Perdana. It is earmarked for the development of 284 units of semi-detached houses undertaken by Abra

review of operations


Development Sdn Bhd, a wholly-owned subsidiary of Talam. The project will generate a Gross Development Value of RM101.0 million. Since its first launch in September 2001, Jalil Heights has recorded sales of RM96.3 million (representing 268 units sold) as at 31 January 2008.

f. Saujana Puchong

Saujana Puchong is a development undertaken by Expand Factor Sdn Bhd, a wholly-owned subsidiary of Talam, on approximately 423 acres of 99 years leasehold land in the Petaling District. The project site is located in the growth area of Puchong and is easily accessible via Lebuhraya Damansara Puchong and the Kuala Lumpur-Seremban Highway through the Serdang-Puchong dual carriageway that links Jalan Puchong to Serdang.

The entire development comprises 4,933 units of terrace houses, apartments and shop lots, which upon completion, are expected to generate a Gross Development Value of RM634.37 million. As at 31 January 2008, the project has recorded sales of 4, 546 units valued at RM606.68 million.

g. Danau Putra

Danau Putra is a mixed development undertaken by Cekap Mesra Development Sdn Bhd, a subsidiary of Talam, on approximately 417.34 acres of 99 years leasehold land in the Mukim of Dengkil, District of Sepang, within the Multimedia Super Corridor.

Danau Putra is planned for mixed development of medium low cost apartment, cluster bungalows and shop/apartments with a Gross Development Value of RM630.0 million. Launched in August 1998, Danau Putra has achieved sales 3,878 units at RM361.0 million as at 31 January 2008.

h. Putra Perdana

Putra Perdana is a project undertaken by Kenshine Corporation Sdn Bhd, a 99.999%-owned subsidiary of Talam, situated on 600 acres of converted leasehold land, the project is located on the southern side of Puchong-Kajang trunk road, 5 km from Batu 14 Puchong, within

Cyberjaya and adjacent to the Multimedia Super Corridor, 5 km west of Putrajaya and 13 km north of the Kuala Lumpur International Airport.

With an expected Gross Development Value of RM1.92 billion, Putra Perdana will consist of residential houses, apartments, shop offices, commercial complex, exhibition center, theme garden, hotel and service apartments. As at 31 January 2008, the project has recorded sales of 7,816 units valued at RM834.76 million.

i. Saujana Putra

Saujana Putra is a project undertaken by Galian Juta Sdn Bhd, a wholly-owned subsidiary of Talam measuring about 200 acres in size, is located opposite Putra Heights in Mukim Tanjung Duabelas, Kuala Langat District. With a proposed development comprising low to medium cost apartments and medium cost terrace house, it will generate a Gross Development Value of RM336.75 million over a development life span of eleven (11) years. Launched in March 2003, Saujana Putra has achieved sales of 527 units valued at RM74.6 million as at 31 January 2008.

j. Lestari Permai

Lestari Permai is situated on approximately 76.01 acres of 99 years leasehold land and located opposite the Putrajaya Gate 2 entrance which is undertaken by Europlus Construction Sdn Bhd, a 99.999%-owned subsidiary of Talam. The project will be accessible via Lebuhraya Damansara Puchong, Puchong-Serdang bypass, and Jalan Puchong. The proposed development comprises 1,004 units of residential houses and 24 units of double storey shop and 7 units of low cost shop.

With Gross Development Value of RM132.07

million, Lestari Permai was launched in March 2003 and has achieved sales of 566 units valued at RM80.37 million as at 31 January 2008.



k. Bukit Sentosa

Bukit Sentosa I & III form an integrated township covering approximately 1,898 acres of freehold land in the Mukim of Serendah, approximately 47 km north of Kuala Lumpur. It is easily accessible through the North-South Expressway and exit at Bukit Beruntung Interchange. The comprehensive new township comprises a mixed development of residential, commercial and industrial properties.

Bukit Sentosa I, which is being developed by Talam Industries Sdn Bhd, is planned for mixed development comprising 9,573 units of terrace house, apartments and shoplots. Launched in September 1999, the project has generated total sales of RM712.6 million as at 31 January 2008.

Bukit Sentosa III, covering 1,010 acres of freehold

land, is developed by Maxisegar Sdn Bhd. It is planned for a mixed development of 14,790 units of terrace houses, apartments and shoplots, with a Gross Development Value of RM1.3 billion. Launched in March 1997, Bukit Sentosa III has achieved a total sales of RM577.8 million (or 7,191 units sold) as at 31 January 2008.

l. Bandar Bukit Beruntung

Bandar Bukit Beruntung, a converted 5,500 acres of freehold land is located north-west of Rawang, approximately 40 km from Kuala Lumpur. It is undertaken by Europlus Corporation Sdn Bhd, a 99.999%-owned subsidiary of Talam. The mega township which is marketed as the “2nd Petaling Jaya” has a golf resort, country homes, campus, industrial, commercial and housing units with an expected Gross Development Value of RM3.36 billion. The development of the entire township is expected to span another 12 years to the year 2020.

Launched in late 1991, this project has achieved a total sales value of RM1.52 billion representing 13,353 units as at 31 January 2008.

m. Prima Beruntung

Prima Beruntung is a converted 250 acres of freehold land planned for with mixed development. A project launched by Europlus Berhad since 1996, Prima Beruntung is seen as an extension of the Bandar Bukit Beruntung project due to its proximity to Bandar Bukit Beruntung. With an estimated Gross Development Value of RM257.8 million, Prima Beruntung has achieved a total sales value of RM182.7 million (representing 1,896 units sold) as at 31 January 2008.

(2) Future Projects

Shah Alam 2 (Berjuntai Bistari Land)

The proposed Shah Alam 2 covering 1,284 acres is located adjacent to the Universiti Industri Selangor (“UNISEL”) campus about 44 km from the towns of Batang Kali and Kuala Selangor, 30 km from Rawang and 20 km from Bukit Beruntung. While the current access to the site is by the coastal road passing by Kuala Selangor or the trunk road from Rawang, Shah Alam 2 will eventually be reached by a 10 km proposed road from the Bukit Beruntung Interchange off the North-South Highway, to be constructed by Maxisegar Sdn Bhd.

Berjuntai Bistari is to be developed over 15 years and will comprise approximately 15,500 units of residential and commercial properties with an estimated Gross Development Value of RM1.5 billion.

(3) joint-venture Project

a. 252 Units 2½ Storey Terrace House at Ukay Perdana

This parcel of development is a 50 : 50 joint-venture undertaken by Good Debut Sdn Bhd. The development is part of Ukay Perdana project and is located at 7th mile off Jalan Ulu Klang in the vicinity of Bukit Antarabangsa. The Gross Sales Value is estimated to be RM96.55 million. As at 31 January 2008, a total of 150 units of sales value of RM 57.50 million were achieved.



b. Sierra Ukay

Sierra Ukay is a 50 : 50 joint-venture project undertaken by Sierra Ukay Sdn Bhd. The project measures 90 acres and is located in Mukim Ulu Kelang adjacent to the existing Ukay Perdana. The Gross Development Value of Sierra Ukay is estimated to be RM403 million and is expected to implement over a period of 5 years. Launched in October 2007, the project has achieved sales of 108 units valued at RM31.28 million as at 31 January 2008.

c. Sierra Selayang

Sierra Selayang is a 50 : 50 joint-venture project undertaken by Cekap Tropikal Sdn Bhd. The project measures 204 acres and is located at Ulu Gombak Forest Reserve, Mukim of Batu, District of Gombak, State of Selangor. The Gross Development Value of Sierra Selayang is estimated to be RM1 billion and is expected to implement over a period of 8 years.

d. Yin Hai Complex in Changchun, Jilin Province, People’s Republic of China

Yin Hai Complex is a project undertaken by Jilin Dingtai Enterprise Development Company Limited, a wholly-owned subsidiary of Larut Leisure Enterprise (Hong Kong) Limited, a 50 : 50 equity interest company held by Larut Overseas Ventures Sdn Bhd, a 99.999%-owned subsidiary of Talam and IJM Properties Sdn Bhd. The proposed Yin Hai Complex is a 35-storey building comprising 28 office-cum-residential levels, 7 shopping podium levels and 2 basement levels. The Gross Sales Value of Yin Hai Complex is estimated to be RM450 million.

OTHER BUSINESSES

The Group’s other businesses in complexes and hotel contributed approximately 7.5% of its turnover in financial year 2008.



INTRODUCTION

The Board of Directors (“Board”) of Talam Corporation Berhad (“Talam” or “the Company”) recognizes the importance of achieving best practices in its standards of business integrity and corporate accountability and is committed to subscribing to the recommendations of the Malaysian Code on Corporate Governance (“Code”).

The Board has considered the manner in which it has applied the Principles of the Code and to the best of its ability complied with the Best Practices of the Code as required under the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). It also enhances shareholders’ participation and value as well as safeguards the interest of other stakeholders.

THE BOARD OF DIRECTORS

Talam is led by a Board comprising members with extensive experience in the property, construction and various business sectors supported by a wide range of other professionals in the legal and financial sectors. This wide spectrum of skills and experience provides the strength that is needed to lead the Company in meeting its objectives and enables the Company to rest in the firm control of an accountable and competent Board of Directors.

Board Composition

The Board of Talam currently has eight (8) members comprising an Executive Chairman, two (2) Executive Directors and five (5) Non-Executive Directors, of whom three (3) are independent and two (2) are non independent. The Company considers that its complement of Non-Executive Directors provides an effective Board with a mix of industry-specific knowledge and broad business and commercial experience. They ensure that all proposals by management are fully deliberated and examined, taking into account the interest of shareholders and stakeholders. The role of the Independent Non-Executive Directors is particularly important as they provide unbiased and independent views, advice and judgment to the Board to safeguard the interest of minority shareholders. The profiles of the Directors are set out on pages 6 to 9 of this Annual Report.

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon is the Executive Chairman of the Board while Datuk Ab Rauf Bin Yusoh and Ms Chua Kim Lan are the Executive Directors. The roles of the Chairman and the Executive Directors are segregated to ensure that there is a balance of power and authority. The Chairman is responsible for the orderly conduct and working of the Board and ensures that all Directors receive sufficient relevant information on financial and non-financial matters to enable them to participate actively in Board decisions whilst the Executive Directors are responsible for the day-to-day management of the business and implementation of Board decisions.

The Board has identified Mr Tsen Keng Yam, the Chairman of Audit and Nomination & Remuneration Committee as Senior Independent Non-Executive Director to whom concerns may be conveyed, and to deal with issues regarding the Company where it would be inappropriate for these to be dealt with by the Executive Chairman or Executive Directors.

Board Meetings

The Board meets quarterly to review its quarterly performances and discuss new policies and strategies. Additional meetings will be called as and when necessary. During the financial year ended 31 January 2008, ten (10) Board Meetings were held and the attendance of the Board members are as follows:-

DirectorsNumber of meetings

attended by Directors

Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon 10 out of 10Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj 6 out of 10Datuk Ab Rauf Bin Yusoh 9 out of 10Chua Kim Lan (appointed on 1 October 2007) 3 out of 3Dato’ Kamaruddin Bin Mat Desa (appointed on 1 October 2007) 3 out of 3Tsen Keng Yam 7 out of 10Loy Boon Chen (appointed on 1 October 2007) 3 out of 3Lee Swee Seng (appointed on 1 October 2007) 3 out of 3Lai Moo Chan (resigned on 1 October 2007) 6 out of 7Sulaiman Hew Bin Abdullah (resigned on 1 October 2007) 4 out of 7

statement on corporate governance


THE BOARD OF DIRECTORS (CONT’D)

Appointment to the Board

The Nomination & Remuneration Committee recommends to the Board, suitable candidates for appointment as Director and to fill vacant seats on committees of the Board after which the Company Secretary ensures that all appointments are properly made and all legal and regulatory compliance are met. However, the main decision lies with the Board after taking into consideration the nomination by the Committee. The Nomination & Remuneration Committee also assesses the effectiveness of the Board and Board Committees.

The Board, through the Nomination & Remuneration Committee, reviews annually the required mix of skills, expertise, attributes and core competencies of its Directors as well as the Board structure, size and composition.

Supply of Information to the Board

All the Directors are notified about the Board meetings scheduled by the Company Secretary before the meetings. The Board papers together with the agenda are circulated to all the Directors prior to the scheduled meetings to enable the Directors to review and consider the agenda items to be discussed at the meeting and where necessary, to obtain further explanations so they can be fully briefed before the meeting. The Board is kept updated on the Company’s financial activities and operations on a regular basis.

In exercising their duties, the Directors have access to all information within the Company and to the advice and services of the Company Secretary. If necessary, the Directors are entitled to seek independent professional advice from external consultants. Any such request is presented to the Board for approval.

Senior management staff as well as advisers and professionals are appointed to advise on corporate proposals, may be invited to attend Board meetings to provide the Board with their views and explanations on certain agenda items tabled to the Board, and to state their clarification on issues that may be raised by the Directors.

Directors’ Training

All the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors have also attended various training programmes pursuant to the requirements of Bursa Securities to keep abreast with developments in the market place and relevant new regulatory requirements on a continuous basis.

Re-election of Directors

In accordance with the Articles of Association of the Company (“Articles”), all Directors shall retire from office at least once in three years but shall be eligible for re-election. The Articles also provide that one-third of the Board shall retire from office and be eligible for re-election at every Annual General Meeting. The Directors who are appointed by the Board are subject to re-election by shareholders at the next Annual General Meeting following their appointment.

The Directors standing for re-election at the 83rd Annual General Meeting of the Company to be held are Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon, Dato’ Kamaruddin Bin Mat Desa, Ms Chua Kim Lan, Mr Loy Boon Chen and Mr Lee Swee Seng.

BOARD COMMITTEES

The Board has delegated certain responsibilities to several Board Committees which operate within clearly defined terms of reference. The Chairman of the various Committees will report to the Board the outcome of the Committee meetings and such reports are incorporated in the minutes of the Board meetings. The various Committees are:-



BOARD COMMITTEES (CONT’D)

A. Executive Committee

The Executive Committee was established on 27 September 2007 and its membership consists of the Directors and senior management personnel of the Group. The Executive Committee meets monthly to review the performance of the Group’s operating decisions. The members are as follows:-

Member Designation

Chua Kim Lan (Chairwoman)Chew Kok HingTan Bak HaiLeow Chi LihLoy Boon Chen

Executive DirectorConsultantSenior Vice President ISenior Vice President IBy Invitation

The main Terms of Reference of the Executive Committee include the following:-

1. approving and reviewing the budget and cashflow projections prepared by the Group’s strategic business units;

2. reviewing the performance of the Group’s strategic business units;

3. deciding on all transactions and matters relating to the Group’s core business/investments within the restricted limits of authority determined by the Board;

4. deciding on all matters relating to banking facilities as may be required for the conduct of the Group’s operations;

5. reviewing and recommending new investments/land bank acquisitions before tabling to the internal audit committee and recommending to the Board for approval;

6. assisting the Board in ensuring the effectiveness of the Group’s core businesses in accordance to the corporate objective, strategies, policies and business direction approved by the Board; and

7. formulating strategies on an on-going basis and addressing issues arising from changes in both external business environment and internal operating conditions of the strategic business units.

During the financial year, three (3) Executive Committee meetings were held.

B. Audit Committee

The Audit Committee was established on 24 February 1994 and is currently chaired by Mr Tsen Keng Yam. Other members of the Audit Committee are Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj and Dato’ Kamaruddin Bin Mat Desa.

The Terms of Reference and activities of the Audit Committee during the financial year of the Audit Committee are set out under the Audit Committee Report on pages 25 to 28 of this Annual Report.

C. Nomination & Remuneration Committee

The Nomination Committee and Remuneration Committee were established on 27 September 2001 and 22 December 2000 respectively and were renamed Nomination & Remuneration Committee on 27 September 2007. The Nomination & Remuneration Committee currently comprises three members as follows:-

Member Designation

Tsen Keng Yam (Chairman)Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-HajLee Swee Seng

Independent Non-Executive DirectorIndependent Non-Executive Director

Non-Independent Non-Executive Director



BOARD COMMITTEES (CONT’D)

C. Nomination & Remuneration Committee (Cont’d)

The Terms of Reference of the Nomination & Remuneration Committee include the following :-

(i) to make recommendations on the candidate for directorships directly to the Board or recommendations to the Board as proposed by the Chairman.

(ii) to make recommendations to the Board on candidates for Board Committees which includes the Audit Committee.

(iii) to review the mix of skills, experience and competence of the Board on an annual basis.

(iv) to make recommendations to the Board on the remuneration framework for all Executive Directors and determining the remuneration arrangements for the Executive Directors.

(v) to ensure that the remuneration framework recommended is applicable to the Group and reflective of the performance of the Group both in the short and long term.

Before the Nomination Committee and Remuneration Committee were combined, the Remuneration Committee had a meeting during the financial year, while, the Nomination Committee had three (3) meetings during the financial year.

DIRECTORS’ REMUNERATION

The Executive Chairman’s remuneration comprises director’s fees and allowance while the remuneration of the Executive Directors comprises salary. Other customary benefits are made available as appropriate. Any salary review will take into account market rates and the performance of the individual and the Group.

The determination of remuneration of Non-Executive Directors is a matter for the Board as a whole. The Non-Executive Directors will abstain from discussion on their respective remuneration.

The details of the remuneration of Directors during the financial year for the Company is disclosed in Note 10 to the Financial Statements of this Annual Report.

RELATIONSHIP WITH SHAREHOLDERS AND INvESTORS

The Group recognises the need to inform shareholders of all major developments concerning the Group on a timely basis. In accordance with the Listing Requirements of Bursa Securities, various announcements were made during the year such as quarterly reports, related party transactions and corporate proposals, if any, which provide shareholders and the investing public with an overview of the Group’s performance and operations.

In addition, the Company has been using the Annual General Meetings (“AGM”) and Extraordinary General Meetings (“EGM”) to communicate with shareholders and opportunities are given to them to raise questions or seek clarifications pertaining to the operation and financial performance of the Group. The external auditors are also present to provide their professional and independent clarification on issues and concerns raised by shareholders. Status of all resolutions proposed at the AGM or EGM are submitted to Bursa Securities at the end of the meeting day.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for ensuring that the quarterly and annual financial statements of the Group present a fair and balanced view and assessment of the Group’s financial position, performance and prospects. Such financial statements are announced quarterly whilst the final annual audited financial statements are submitted to Bursa Securities after they are approved by the Board and will be received by shareholders at the Company’s Annual General Meeting. The Audit Committee assists the Board in reviewing and scrutinizing the information for disclosure to ensure accuracy and completeness with particular emphasis on the application of accounting standards and policies and the making of reasonable and prudent estimates and assumptions.



ACCOUNTABILITY AND AUDIT (CONT’D)

Statement of Directors’ Responsibility in relation to the Financial Statements

The Board is required by the Companies Act, 1965 (“the Act”) to prepare the financial statements for each financial year, which give a true and fair view of the state of affairs of the Company and the Group as at the end of each financial year and of their results for the financial year.

As required by the Act and the Listing Requirements of Bursa Securities, the financial statements have been prepared in accordance with the approved accounting standards in Malaysia and comply with the provisions of the Act.

In preparing the financial statements for the financial year ended 31 January 2008, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates.

The Directors have responsibility for ensuring that the Company and the Group maintain accounting records, which disclose, with reasonable accuracy, the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Act. The Directors have general responsibilities for taking such steps as are reasonably available to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Internal Control

The Board acknowledges that it is responsible for maintaining a system of internal controls which provides reasonable assessment of effective and efficient operations, internal financial controls, and compliance with laws and regulations as well as with internal procedures and guidelines. The internal control system also aims at identifying and managing any risks that the Company may encounter in pursuit of its business objectives. The Group’s Statement on Internal Control is set out on page 24 of this Annual Report.

Relationship with the External Auditors

The external auditors, Messrs Deloitte KassimChan has continued to report to members of the Company on its findings which are included as part of the Company’s statutory financial statements. The Company has thus established a transparent arrangement with the auditors to meet the auditors’ professional requirements. From time to time, the auditors will highlight to the Audit Committee and Board of Directors matters that require the Board’s attention through the issuance of management letters.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a responsible corporate citizen, the Group will continuously ensure that all pertinent activities relating to corporate social responsibility are considered and supported in its operations for the well being of stakeholders, community and environment.

Our employees are the heart of the Group and the key to the competitive success in the marketplace. As a policy, we do not discriminate against any race, gender, age and minorities. The employees are also provided adequate medical benefits as well as hospitalisation and personal accident insurance coverage. We believe that employees’ involvement is vital to the success of the Group.

As part of efforts towards the preservation of environment, the Group would ensure there are sufficient measures at all construction sites to prevent any adverse impact on the environment.

Apart from the above, Talam, on 27 Feb 2008 had donated 3.34 acres of land at Taman Puncak Jalil for the construction of the SMJK Confucian to be relocated from Jalan Hang Jebat.

This Statement is made in accordance with the resolution approved by the Board of Directors on 27 May 2008.



Utilisation of Proceeds 1.

The Company did not raise funds through any corporate proposal during the financial year ended 31 January 2008.

2. Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”)

Details of the recurrent related party transactions made during the financial year ended 31 January 2008 pursuant to the shareholders’ mandate obtained by the Company at the Annual General Meeting held on 25 July 2007 are as follows:-

Name of Related Party

Name ofCompany/GroupInvolved

value ofTransactions(RM)

Class ofRelated Party

A) Construction Contract

KEB Builders Sdn Bhd(“KEB Builders”)

Expand Factor Sdn Bhd 877,931.46 TSDCAC, PSDTNC & KEURO (Notes 1 and 3)

KEB Builders Galian Juta Sdn Bhd 60,217.51 TSDCAC, PSDTNC & KEURO (Notes 1 and 3)

B) Rental of Office Premises at Menara Maxisegar, jalan Pandan Indah 4/2,Pandan Indah, 55100 Kuala Lumpur

Agrocon (M) Sdn Bhd(“Agrocon”)

Abra Development Sdn Bhd (“Abra”)

64,101.24 TSDCAC & PSDTNC(Notes 1 and 2)

KEB Builders Abra 936,207.10 TSDCAC, PSDTNC & KEURO (Notes 1 and 3)

Konsortium LPB Sdn Bhd Abra 549,696.00 TSDCAC, PSDTNC & KEURO (Notes 1 and 3)

additional compliance informationAS AT 31 JANUARY 2008


Name of Related Party

Name ofCompany/GroupInvolved

value ofTransactions(RM)

Class ofRelated Party

C) Provision of Leasing Facilities by KEURO Leasing Sdn Bhd (“KEURO Leasing”)

KeURO Leasing TCB Resources Sdn Bhd 32,492.55 TSDCAC, PSDTNC & KEURO (Notes 1 and 3)

KeURO Leasing Talam Corporation Berhad 1,044,080.64 TSDCAC, PSDTNC & KEURO (Notes 1 and 3)

NOTES:

1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”) is a Director of Talam. TSDCAC and Puan Sri Datin Thong Nyok Choo (“PSDTNC”), the spouse of TSDCAC are the Major Shareholders of Talam. As at 31 January 2008, TSDCAC and PSDTNC have direct and deemed equity interest 52.71% in Talam. TSDCAC and PSDTNC are deemed interested in the shares of all subsidiary companies of Talam to the extent Talam has an interest.

2. TSDCAC is the brother of Chan Keat Wan, a Major Shareholder and Director of Agrocon.

3. TSDCAC and PSDTNC are Directors and Major Shareholders of Kumpulan Europlus Berhad (“KEURO”) which owns 42.94% equity interest in Talam as at 31 January 2008.

3. Shares Buy-Back

There were no shares buy-back by the Company during the financial year.

4. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programmes

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



5. Imposition of Sanctions and/or Penalties

There were no other sanctions and/or penalties imposed by any regulatory bodies on the Company or its subsidiaries, or management of the Company and its subsidiaries except that on 1 April 2008, one of the subsidiaries managed by the Company was found to be not in compliance with Section 139 of the Securities Commission Act, 1993. The non-compliance had since been regularised and rectified at the Extraordinary General Meeting of the Company held on 15 November 2007. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon, as the Executive Chairman of the Company was fined a sum of RM500,000.00. The Board of Directors had been informed that the compound and the matters have been fully settled on 14 April 2008.

6. Non-Audit Fees

During the financial year end, the Company paid non-audit fee of RM50,000.00 to Deloitte KassimChan for the Proposed Revised Regularisation Plan.

7. variation in Results

There were no material variances between the audited results for the financial year ended 31 January 2008 and the unaudited results for the quarter ended 31 January 2008 of the Group.

8. Material Contracts

There were no material contracts entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests of the Company which were still subsisting as at the end of the financial year.

9. Contracts Relating To Loans

There were no material contracts relating to loans entered into by the Company involving Directors and major shareholders.

10. Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities exercised during the financial year ended 31 January 2008.



The Board of Directors hereby provide the following statement which outlines the key elements and processes of the internal control system within the Group for the current financial year.

RESPONSIBILITY

The Board of Director’s recognises its responsibility for the Group’s system of internal controls and for reviewing its adequacy and integrity. The system of internal controls is designed to manage, rather than eliminate, the risk of failure to achieve the business objectives of the Group. In pursuing these objectives, internal controls can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal controls incorporates, inter alia, risk management, financial, operational and compliance controls as well as the governance process.

RISK MANAGEMENT FRAMEWORK

During the current financial year, the Audit Committee and management continued to review and update the risk profile of various departments audited by the Internal Audit Department. The review was conducted to further update and identify the significant risks and corresponding controls, and develop the enterprise-wide risk profile. In assessing priority for the risks identified, the process takes into account, the possibility of the risk occurring and its impact to the Group in the event the risk takes place. The risk profile is being reviewed regularly by the management and serves as an on-going process used to identify, evaluate and manage significant risks.

INTERNAL AUDIT FUNCTION

The Group’s Internal Audit Department reports independently to the Audit Committee. The Audit Committee reviews and approves the internal audit plan, which was developed and based on the finalised key risk profile of the Group, on an annual basis. The Internal Audit Department provided reports on key findings and progress of areas audited to the Audit Committee on a quarterly basis.

Based on the review of the internal auditors to-date, there is no major weaknesses noted in the areas audited. All recommendations proposed in improving the internal controls were considered and appropriate corrective measures have been implemented by the management to rectify the shortcomings and prevent further recurrence of issues and findings highlighted. All the internal controls instituted were applicable and intact.

OTHER KEY ELEMENTS OF INTERNAL CONTROLS

Other key elements of the Group’s system of internal controls are:

• the Group’s Internal Audit Department, which reports to the Audit Committee, performed regular reviews of business processes to assess the effectiveness of internal controls.

• operational structure with defined lines of responsibilities and delegation of authority. A process of hierarchical reporting has been established, which provides for a documented and auditable trail of accountability.

• management reports, which are presented by the respective division heads to the Board each quarter, providing financial information including performance indicators and information of significant changes in accounting standards and reporting.

• defined lines of responsibilities for approving authority of various transactions. The internal control function acts as a check and balance.

• the Standing Instructions and Standard Operating Procedures of all departments are regularly reviewed and up-dated to ensure effective management of the Group’s operations.

• Monitoring of financial results by the Audit Committee every quarter.

The Board and the management continued to take measures to strengthen the internal control environment to safeguard shareholders’ investment and the Group’s assets.

This statement is made in accordance with the resolution approved by the Board of Directors on 27 May 2008.

statement oninternal control


COMPOSITION

Members of the Committee Designation

1. Tsen Keng Yam (Chairman)

2. Y.A.M Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj

3. Dato’ Kamaruddin Bin Mat Desa (appointed on 1 October 2007)

Independent Non-Executive Director(Member of the Malaysian Institute of Accountants)

Independent Non-Executive Director

Independent Non-Executive Director

TERMS OF REFERENCE

The following terms of reference of the Audit Committee have been adopted.

Constitution

The Audit Committee was established by the Board of Directors on 24 February, 1994.

Membership

The Committee shall be appointed by the Board of Directors from amongst their numbers and shall consist of not less than 3 members, of whom a majority shall be independent directors. The members of the Audit Committee are elected in accordance to the Listing Requirements of Bursa Malaysia Securities Berhad.

At least one member of the Audit Committee must be either a member of the Malaysian Institute of Accountants or if he is not a member of the Malaysian Institute of Accountants he must have:-

at least 3 years’ working experience and passed the examinations specified in Part 1 of the 1st Schedule of the Accountants i) Act 1967; or

at least 3 years’ working experience and is a member of one of the associations of accounts specified in Part 11 of the 1ii) st Schedule of the Accountants Act 1967; or

a degree/masters/doctorate in accounting or finance and at least 3 years’ post qualification experience in accounting or iii) finance; or

at least 7 years’ experience being a chief financial officer of a corporation, or having the function of being primarily iv) responsible for the management of the financial affairs of a corporation.

The members of the Audit Committee shall elect a Chairman from amongst their number, who shall be an independent director. If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below 3, the Board of Directors shall, within 3 months of that event, appoint such number of new members as may be required to make up the minimum number of 3 members.

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

Authority

The Audit Committee is granted the authority to investigate any activity of its Company and its subsidiaries within its terms of reference. In particular, the Audit Committee has the authority to:-

have resources, which are required to perform its duties;i)

have full and unrestricted access to any information, including any information it requires from any employee, and all ii) employees are directed to co-operate with any request made by the Audit Committee;

be able to obtain independent professional or other advice; and iii)

have direct communication channels with the external and internal auditors.iv)

audit committee report


TERMS OF REFERENCE (CONT’D)

Meetings and Reporting Procedures

The Audit Committee will meet at least four (4) times a year. A quorum for a meeting shall be two members, both being independent directors. At least twice a year, the Audit Committee shall meet with the external auditors without any executive directors being present. The external auditor may request for a meeting, if they consider necessary.

The directors and employees will attend any particular Audit Committee meeting only at the Audit Committee’s invitation, specific to the relevant meeting.

The Company Secretary shall be the secretary of the Audit Committee. Minutes of the meeting shall be duly entered in the books provided therefore. The minutes will be circulated to all members of the Board of Directors and shall be presented at the Board of Directors’ meeting.

Duties and Functions

The duties and functions of the Audit Committee shall be:-

To consider the appointment of the external auditor, the audit fee and any questions of the resignation or dismissal of the i) external auditor before making a recommendation to the Board of Directors;

To discuss with external auditors before the audit commences, the audit plan, the nature and scope of the audit and ensure ii) co-ordination where more than one audit firm is involved;

To review the quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly iii) on :

Any changes in the accounting policies and practices;a)

Significant and unusual events;b)

The going concern assumption;c)

Compliance with accounting standards, stock exchange and legal requirements;d)

To review any related party transaction and conflict of interest situation that may arise in the Company, including any iv) transaction, procedure or course of conduct that raises question of management integrity;

To discuss problems and reservations arising from the interim and final audits, and matters the auditor may wish to discuss v) (in the absence of management where necessary);

vi) In relation to internal audit function:-

a) to review the adequacy of the scope, functions, competency and resources of the internal audit function that it has the necessary authority to carry out its work;

b) to review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

c) to review any appraisal or assessment of the performance of members of the internal audit function;

d) to approve any appointment or termination of senior staff members of the internal audit function;

e) to take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning;



TERMS OF REFERENCE (CONT’D)

Duties and Functions (Cont’d)

vii) To keep under review, the effectiveness of the internal control system and in particular review the external auditor’s management letter and management’s response;

viii) To review the audit reports;

ix) To prepare periodic reports to the Board of Directors, summarising the work performed in fulfilling the Audit Committee’s primary responsibilities; and

x) To consider other topics, as defined by the Board of Directors.

ATTENDANCE AT AUDIT COMMITTEE MEETINGS

During the financial year ended 31 January 2008, there were seven (7) Audit Committee meetings held and the number of meetings attended by each Audit Committee member are as follows:

Audit Committee Member Number of Meetings attended by Audit Committee Member

1. Tsen Keng Yam (appointed as Chairman on 1 October 2007)

2. Y.A.M Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj

3. Dato’ Kamaruddin Bin Mat Desa (appointed on 1 October 2007)

4. Lai Moo Chan (resigned as Chairman on 1 October 2007)

6 out of 7

6 out of 7

2 out of 2

5 out of 5

The Senior Vice President 1 of Finance and the Head of Internal Audit would normally attend all Audit Committee meetings at the invitation of the Audit Committee.

SUMMARY OF AUDIT COMMITTEE ACTIvITIES

During the year, the Audit Committee carried out its duties as set out in the terms of reference and made various recommendations to the Board of Directors.

INTERNAL AUDIT FUNCTION

The Audit Committee is supported in its duties by the internal audit function. The Committee is aware of the fact that the internal audit function is essential to assist in obtaining the assurance and consulting services it requires, regarding the effectiveness of the system of internal controls in the Group.

The primary objective of the internal audit function is to review the effectiveness of the system of internal controls and this is performed with impartiality, proficiency and due professional care. The Internal Audit Department assisted the Audit Committee in the discharge of its duties by undertaking independent regular and systematic reviews of the system of internal controls, so as to provide reasonable assurance that such system continue to operate satisfactorily and effectively.

However, due to the continued downturn of the industry and the consequent reduction of overall staff position, the internal audit activities were also scaled down accordingly.



INTERNAL AUDIT FUNCTION (CONT’D)

In attaining the above objective, the following activities were carried out by the Internal Audit Department on the adequacy of risk management, operational controls, compliance controls and statutory requirements:-

Conducted internal audits in accordance with the risk based / driven internal audit plan. A total of 3 routine audits and 2 i) follow up audits were carried out during the year;

Compliance reviews of the internal control procedures as stipulated in the Group’s Standing Instructions and Standard ii) of Operating Procedures. During the same period, Standing Instructions and Standard of Operating Procedures of the departments were being jointly reviewed and updated and practical internal controls were incorporated;

Carried out 2 investigations cum special reviews as requested by management and / or Audit Committee;iii)

With the involvement of Internal Audit Department, carried out a review on the risk management process within the Group iv) based on Internal Audit findings and ensured continuous monitoring, assessment and mitigation of risks. The Internal Audit Department highlighted all the audit risks by departments during the Routine and Follow-up Audits and this has been correspondingly updated into the Risk Profiling of Departments. Meetings were also held with all Head of Departments on their risks and actions taken to mitigate the risks. This was then executed by way of Management Response on Audit Findings;

Reviewed the Recurrent Related Party Transactions (RRPT) quarterly and made the necessary recommendations; v)

The register at the Secretarial Department was also reviewed to ensure that all Recurrent Related Party Transactions have been duly updated in the register;

Reviewed the Human Resource, Administration and Purchasing Department’s operations, process and governance and vi) made recommendations thereof;

Reviewed the Information Technology (“IT”) Department operations, process, governance and the Group’s IT infrastructure vii) and made recommendation thereof;

Reviewed Standing Instruction and Standard Operating Procedures of Human Resources, Administration and Purchasing viii) Department and Information Technology Department and made recommendation thereof; and

All Internal Audit Department’s reports, which were deliberated by the Audit Committee and recommendations made to the ix) Board and / or the Management, were acted upon.


FinancialStatementsDirectors’ Report 30 - 34

Report of the Auditors 35 - 36

Income Statements 37

Balance Sheets 38 - 39

Statements of Changes in Equity 40 - 41

Cash Flow Statements 42 - 44

Notes to the Financial Statements 45 - 110

Statement by Directors 111Declaration by the Officer Primarily Responsible for the Financial Management of the Company 111

Talam COrPOraTiOn BerhaD 1120-h

annUal rePOrT 2008

30 Talam COrPOraTiOn BerhaD (1120-h)

DIRECTORS’ REPORT

The directors of TALAM CORPORATION BERHAD hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 January 2008.

PRINCIPAL ACTIVITIES

The principal activities of the Company are provision of management services, investment holding and property development.

The principal activities of the subsidiaries are described in note 44 to the Financial Statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

RESULTS OF OPERATIONS

GroupRM’000

CompanyRM’000

Profit/(loss) before tax 5,821 (23,142)income tax expense (2,273) (336)

Profit/(loss) for the year 3,548 (23,478)

Attributable to:Equity holders of the Company 3,420 (23,478)Minority interest 128 -

3,548 (23,478)

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

DIVIDENDS

no dividends have been paid or declared by the Company since the end of the previous financial year. The directors also do not recommend any dividend payment in respect of the current financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from the reserves or provisions during the financial year other than those disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS

no options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

no shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. as at the end of the financial year, there were no unissued shares of the Company under options.

31annUal rePOrT 2008

DIRECTORS’ REPORT

OTHER FINANCIAL INFORMATION

Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps:

a) to ascertain that proper action had been taken in relation to the writing off of bad receivables and the making of allowance for doubtful receivables and had satisfied themselves that all known bad receivables had been written off and that adequate allowance had been made for doubtful receivables; and

b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business have been written down to their estimated realisable values.

as at 31 January 2008, the Group and the Company have net current liabilities of rm995,109,000 and rm35,519,000 respectively. however, the financial statements of the Group and the Company have been prepared on a going concern basis. This going concern basis presumes that the Group and the Company will be able to successfully implement the regularisation Plan that has been approved by the Securities Commission subsequent to the year-end, within the anticipated timeframe to enable the Group and the Company to operate profitably in the foreseeable future and consequently, the realisation of assets and settlement of liabilities in the ordinary course of business. accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Group and the Company be unable to continue on a going concern. in this connection, the directors are confident that the regularisation Plan, as more fully explained in note 43 to the Financial Statements, would be implemented successfully without any material modifications and within the anticipated time frame.

Other than as stated above, at the date of this report, the directors are not aware of any circumstances:

a) which would render the amount written off as bad receivables or the amount of the allowance for doubtful receivables in the financial statements of the Group and of the Company inadequate to any substantial extent; or

b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

c) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

as at the date of this report, there does not exist:

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

b) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

Subject to the successful completion of the regularisation Plan mentioned in note 43 to the Financial Statements, no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group or of the Company to meet their obligations as and when they fall due.

Save as disclosed in Note 43 to the Financial Statements, in the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the succeeding financial year.


DIRECTORS

The following directors served on the Board of the Company since the date of the last report:

Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon Yam Tengku Sulaiman Shah al-haj ibni al-marhum Sultan Salahuddin abdul aziz Shah al-hajDatuk ab rauf bin Yusoh Tsen Keng YamDato‘ Kamaruddin bin mat Desa (appointed on 1st October 2007)Chua Kim lan (appointed on 1st October 2007)loy Boon Chen (appointed on 1st October 2007)lee Swee Seng (appointed on 1st October 2007)lai moo Chan (resigned on 1st October 2007)Sulaiman hew bin abdullah (resigned on 1st October 2007) in accordance to article 97 of the Company‘s articles of association, Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon, retires by rotation and, being eligible, offers himself for re-election at the forthcoming annual General meeting.

In accordance to Article 81 of the Company’s Articles of Association, Dato’ Kamaruddin bin Mat Desa, Chua Kim Lan, Loy Boon Chen and Lee Swee Seng, retire by rotation and, being eligible, offer themselves for re-election at the forthcoming Annual General meeting.

DIRECTORS’ INTERESTS

The shareholdings in the Company and its related companies of those who were directors at the end of the financial year as recorded in the register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies act, 1965, are as follows:

Number of ordinary shares of RM1.00 eachBalance asof 1.2.2007/

Appointment date BoughtSold /

ConvertedBalance as

of 31.1.2008Shares in the Company

Registered in the name of directors

Direct interest

Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon 41,366,739 1,000,000 - 42,366,739Yam Tengku Sulaiman Shah al-haj Ibni Al-Marhum Sultan Salahuddin abdul aziz Shah al-haj 500 - - 500 Chua Kim Lan 74,006 - - 74,006 Loy Boon Chen 803,300 - - 803,300

Indirect interest

Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon 290,837,177 -

(2,000,000) 288,837,177 *

Chua Kim Lan 7,500 - - 7,500^

DIRECTORS’ REPORT


DIRECTORS’ REPORT

DIRECTORS’ INTERESTS (CONT’D)

Number of 5% Irredeemable ConvertiblePreference Shares (“ICPS”) of RM0.10 each

Balance asof 1.2.2007/

Appointment date BoughtSold/

ConvertedBalance as

of 31.1.2008The Company

Direct interest

Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon 12,231,250 - - 12,231,250 Chua Kim Lan 65 - - 65Loy Boon Chen 10,000 - - 10,000

Indirect interest

Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon 37 - - 37#Chua Kim Lan 18,750 - - 18,750^

* Deemed interest by virtue of the shares held by his family members, Puan Sri Datin Thong nyok Choo and Chan Siu Wei. also deemed interest by virtue of his direct and indirect interest in Kumpulan europlus Berhad, Pengurusan Projek Bersistem Sdn. Bhd., Sze Choon holdings Sdn. Bhd. and Prosperous inn Sdn. Bhd. pursuant to Section 6a of the Companies act, 1965.

# Deemed interest by virtue of his interest in Sze Choon holdings Sdn. Bhd. pursuant to Section 6a of the Companies act, 1965.

^ Deemed interest through her spouse, Chin Chee meng.

Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon, by virtue of his interest in shares of the Company, is also deemed interested in the shares of all the Company’s subsidiaries to the extent the Company has an interest.

none of the other directors in office at the end of the financial year held any shares or had beneficial interest in the shares of the Company or of its related companies during and at the end of the financial year.


DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive benefit (other than the benefit included in the aggregate of emoluments received or due and receivable by directors as disclosed in the financial statements or being fixed salary of a full-time employees of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, other than any benefits which may deemed to have arisen by virtue of those transactions entered between the Company and the companies in which certain directors of the Company have substantial financial interest, as disclosed in note 46 to the Financial Statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

AUDITORS

The auditors, messrs. Deloitte KassimChan, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

________________________________________ CHUA KIM LAN

________________________________________ DATUK AB RAUF BIN YUSOH

Kuala Lumpur27 May 2008

DIRECTORS’ REPORT


REPORT OF THE AUDITORS TO The memBerS OF Talam COrPOraTiOn BerhaD (inCOrPOraTeD in malaYSia) anD iTS SUBSiDiarieS

We have audited the accompanying balance sheets as of 31 January 2008 and the related statements of income, cash flows and changes in equity for the financial year then ended. These financial statements are the responsibility of the Company’s directors. it is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies act, 1965 and for no other purpose. We do not assume responsibility towards any other person for the contents of this report.

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

In our opinion:

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies act, 1965 and the applicable Malaysian Accounting Standards Board approved accounting standards in Malaysia so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company as of 31 January 2008 and of the results and the cash flows of the Group and of the Company for the financial year ended on that date; and

(ii) the matters required by Section 169 of the act to be dealt with in the financial statements and consolidated financial statements; and

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

We have considered the financial statements of subsidiaries and the auditors’ reports thereon of the subsidiaries of which we have not acted as auditors, as indicated in note 44 to the Financial Statements, being financial statements that have been included in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanation as required by us for these purposes.

The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under Sub-section (3) of Section 174 of the act other than those disclosed in note 44 to the Financial Statements.


REPORT OF THE AUDITORS TO The memBerS OF Talam COrPOraTiOn BerhaD (inCOrPOraTeD in malaYSia) anD iTS SUBSiDiarieS

Without qualifying our opinion, we draw attention to note 2 to the Financial Statements. as disclosed in note 2 to the Financial Statements, the Group and the Company have net current liabilities of RM995,109,000 and RM35,519,000 respectively as at 31 January 2008. however, the financial statements of the Group and the Company have been prepared on a going concern basis. This going concern basis presumes that the Group and the Company will be able to successfully implement the Regularisation Plan that has been approved by the Securities Commission subsequent to the year-end, within the anticipated timeframe to enable the Group and the Company to operate profitably in the foreseeable future and consequently, the realisation of assets and settlement of liabilities in the ordinary course of business. accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Group and the Company be unable to continue on a going concern. in this connection, the directors are confident that the regularisation Plan, as more fully explained in note 43 to the Financial Statements, would be implemented successfully without any material modifications and within the anticipated time frame.

DELOITTE KASSIMCHANAF 0080Chartered Accountants

TAN BUN POO 1304/05/08 (J/Ph) Partner

27 May 2008


INCOME STATEMENTSFOr The Year enDeD 31 JanUarY 2008

Group CompanyNote 2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Revenue 5 248,349 216,723 3,496 1,646

Cost of sales 6 (224,796) (72,969) (597) -

Gross profit 23,553 143,754 2,899 1,646

Other income 130,893 60,556 1,316 20,182Administrative and other expenses (100,263) (156,509) (14,295) (3,930)Gain on disposal of subsidiaries 18 18,474 3,321 - 10Finance costs 7 (67,085) (57,398) (13,062) (12,164)Share of results of jointly controlled entities 20 249 (660) - -

Profit/(Loss) before tax 8 5,821 (6,936) (23,142) 5,744income tax (expense)/credit 11 (2,273) 7,918 (336) 3,907

Profit/(loss) for the year 3,548 982 (23,478) 9,651

Attributable to: Equity holders of the Company 3,420 8,957 (23,478) 9,651 Minority interest 128 (7,975) - -

3,548 982 (23,478) 9,651

Earnings per share attributable to equity holders of the Company: Basic (sen) 12 0.53 1.43 Diluted (sen) 12 0.53 1.39

The accompanying notes form an integral part of the Financial Statements.


BALANCE SHEETSaS aT 31 JanUarY 2008


RM’0002007

RM’0002008

RM’0002007

RM’000

ASSETS

Non-current assetsProperty, plant and equipment 14 191,177 196,458 1,699 1,971 Land held for property development 15 1,129,501 1,155,469 18,126 18,126 Investment properties 16 84,516 84,622 - -Prepaid lease payments 17 11,126 11,821 - -Investment in subsidiaries 18 - - 344,801 344,801 Investment in associates 19 - - - -interest in jointly controlled entities 20 10,077 9,328 - -Other investment 21 76,332 76,332 - -Amount owing by subsidiaries 18 - - 268,951 316,989 Amount owing by associates 19 26,042 6 57 6 amount owing by jointly controlled entities 20 5,874 6,231 5,874 5,874 Sinking funds held by trustees 22 9,801 6,810 - -

Total non-current assets 1,544,446 1,547,077 639,508 687,767

Current assetsProperty development costs 15 1,181,547 1,164,217 95,617 49,913 Inventories 23 74,723 71,291 5,687 5,687Trade receivables 24 88,668 100,635 - -Other receivables, deposits and prepaid expenses 25 194,832 321,844 25,516 24,364Cash and bank balances 26 22,281 15,282 433 514asset classified as held for sale 27 - 40,049 - -

Total current assets 1,562,051 1,713,318 127,253 80,478

TOTAL ASSETS 3,106,497 3,260,395 766,761 768,245


BALANCE SHEETSaS aT 31 JanUarY 2008


RM’0002007

RM’0002008

RM’0002007

RM’000

EQUITY AND LIABILITIES

Capital and ReservesShare capital 28 643,015 642,423 643,015 642,423 Treasury shares 30 (844) (844) (844) (844)Reserves 31 (297,711) (295,063) (321,976) (298,498)

Equity attributable to equity holders of the Company 344,460 346,516 320,195 343,081 Minority interest 1,783 14,750 - -

Total equity 346,243 361,266 320,195 343,081

Non-current liabilitiesBorrowings 33 87,630 144,776 565 1,157Other long term payables 36 75,541 76,620 - -Amount owing to subsidiaries 18 - - 283,229 309,334 amount owing to jointly controlled entities 20 35,964 6,879 - -Deferred tax liabilities 37 3,959 4,116 - -

Total non-current liabilities 203,094 232,391 283,794 310,491

Current liabilitiesProvision for liabilities 38 97,014 130,172 - -Borrowings 33 729,831 694,250 88,248 58,351 Trade payables 39 241,287 278,435 2,590 2,848Other payables 40 861,812 937,851 71,934 53,474Deferred progress billings 35 444,920 444,920 - -Current tax liabilities 182,296 181,110 - -

Total current liabilities 2,557,160 2,666,738 162,772 114,673

Total liabilities 2,760,254 2,899,129 446,566 425,164

TOTAL EQUITY AND LIABILITIES 3,106,497 3,260,395 766,761 768,245



STATEMENTS OF CHANGES IN EQUITYFOr The Year enDeD 31 JanUarY 2008

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641,

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357,

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6,51

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361,

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642,

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STATEMENTS OF CHANGES IN EQUITY

FOr The Year enDeD 31 JanUarY 2008

Company

Non-Distributable Reserves Distributable

ShareCapitalRM’000

TreasurySharesRM’000

SharePremium

RM’000

EquityComponent

of ICULSRM’000

Reserves -Accumulated

LossesRM’000

Total Equity

RM’000(Note 28) (Note 30) (Note 32)

At 1 February 2006 641,028 (844) 124,551 652 (431,980) 333,407Profit for the year, representing total recognised income and expense for the year - - - - 9,651 9,651Dividends (note 13) - - - - (720) (720)Conversion of 7% iCUlS 2003/2006 685 - - (685) - -Equity component of 7% ICULS 2003/2006 - - - 33 - 33Decrease in liability component of iCPS 710 - - - - 710

At 31 January 2007 642,423 (844) 124,551 - (423,049) 343,081

At 1 February 2007 642,423 (844) 124,551 - (423,049) 343,081Loss for the year, representing total recognised income and expense for the year - - - - (23,478) (23,478)Decrease in liability component of iCPS 592 - - - - 592

At 31 January 2008 643,015 (844) 124,551 - (446,527) 320,195



cash flow statementsFOr The Year enDeD 31 JanUarY 2008

Group 2008RM’000

2007RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the year 3,548 982adjustments for: interest expenses 67,085 57,398 Allowance for doubtful receivables 14,083 22,982 Land and development costs written off 9,588 - Provision for liabilities 8,912 - Depreciation of property, plant and equipment 7,586 7,709 Allowance for writedown in inventories 7,030 1,369 Bad receivables written off 2,704 14,162 income tax expense/(credit) recognised in income statements 2,273 (7,918) Amortisation of prepaid lease payments 695 698 loss/(gain) on disposal of property, plant and equipment 124 (114) Depreciation of investment properties 106 - Property, plant and equipment written off 77 83 Reversal of provision for liquidated ascertained damages (38,247) (2,515) Reversal of allowance for doubtful receivables (36,437) (17,437) Gain on disposal of investment properties (23,451) - Gain on disposal of subsidiaries (18,474) (3,321) Waiver of debts (3,700) - Waiver of interest (2,300) - Interest income (2,005) (3,799) Reversal of allowance for writedown in inventories (603) (1,330) Share of results of jointly controlled entities (249) 660 Amortisation of discount on deferred progress billing - 26,133

Operating (loss)/profit before working capital changes (1,655) 95,742(increase)/decrease in property development costs (21,532) 85,488 (increase)/decrease in inventories (18,336) 2,487Decrease/(increase) in receivables 158,133 (24,502)Decrease in payables (105,978) (35,221)

Cash generated from operations 10,632 123,994 Interest received 2,005 3,799 income taxes refund 1,431 1,146Interest paid (14,930) (24,022)Payment for liquidated ascertained damages (1,342) (154)

net Cash (Used in)/Generated From Operating activities (2,204) 104,763



Group 2008RM’000

2007RM’000

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from disposal of investment property 63,500 -advances from jointly controlled entities 29,442 6,879Proceeds from disposal of property, plant and equipment 131 305Additions to land held for property development (36,253) (60,355)Amount paid to land vendors (11,572) (4)Purchase of property, plant and equipment (2,729) (325)net cash outflow arising from deconsolidation and disposal of subsidiaries (1,312) -investment in jointly controlled entities (500) -net cash inflow arising from acquisition of subsidiaries - 889repayment of advances from jointly controlled entities - 652net cash outflow arising on disposal, representing cash and cash equivalents of subsidiaries disposed - (541)

net Cash Generated From/(Used in) investing activities 40,707 (52,500)

CASH FLOWS FROM FINANCING ACTIVITIESNet drawdown of term loans and bridging loans 65,865 3,370Net repayment of Islamic debt securities (59,228) (8,500)Net repayment of short term borrowings (31,382) (44,342)net (placement)/withdrawal from sinking funds held by trustees (2,991) 9,488 Dividends paid - (720)net repayment of hire purchase and lease financing (503) (1,038)Repayment of deferred progress billings - (68,323)Withdrawal with an escrow account - 58,617

Net Cash Used In Financing Activities (28,239) (51,448)

NET INCREASE IN CASH AND CASH EQUIVALENTS 10,264 815

EFFECTS OF EXCHANGE DIFFERENCES 407 2,563 CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 4,098 720

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 26) 14,769 4,098


Company 2008RM’000

2007RM’000

CASH FLOWS FROM OPERATING ACTIVITIES(loss)/Profit for the year (23,478) 9,651adjustments for: interest expenses 13,062 12,164 Allowance for doubtful receivables - Intercompany balances 2,753 - - Others 6,059 2 income tax expense/(credit) recognised in income statement 336 (3,907) Depreciation of property, plant and equipment 272 421 Waiver of interest (914) - Bad receivables written off 97 45 Reversal of allowance for doubtful receivables - Intercompany balances (28) (19,623) - Others (45) - Gain on disposal of investment in subsidiaries - (10)

Operating loss before working capital changes (1,886) (1,257)Increase in property development costs (45,704) (4,328)Increase in inventories - (5,414)Increase in receivables (7,622) (14,109)Net changes in related companies balances 19,180 13,170Increase in payables 11,871 20,693

Cash (used in)/generated from operations (24,161) 8,755Interest paid (5,720) (7,540)

net Cash (Used in)/Generated From Operating activities (29,881) 1,215

CASH FLOWS FROM FINANCING ACTIVITIESNet drawdown of short term borrowings 33,301 890Dividends paid - (720)Net repayment of hire purchase and lease payables - (71)

Net Cash Generated From Financing Activities 33,301 99

NET INCREASE IN CASH AND CASH EQUIVALENTS 3,420 1,314

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR (8,701) (10,015)

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 26) (5,281) (8,701)



45

notes to the financial statements

annUal rePOrT 2008


1. GENERAL INFORMATION

The principal activities of the Company are provision of management services, investment holding and property development.

The principal activities of the subsidiaries are described in note 44.

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

The principal place of business and the registered office of the Company is located at Suite 2.05, level 2, menara maxisegar, Jalan Pandan indah 4/2, Pandan indah, 55100 Kuala lumpur.

The financial statements of the Group and of the Company for the year ended 31 January 2008 were approved by the Board of Directors and were authorised for issuance on 27 may 2008.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies act, 1965 and the applicable malaysian accounting Standards Board (“maSB”) approved accounting standards in malaysia.

On 1 February 2007, the Group and the Company adopted all the new and revised Financial reporting Standards (“FrS”) and amendments to FrS issued by maSB that are relevant to its operations and effective for financial periods beginning on or after 1 January 2007 as follows:

FRS 124 related Party DisclosuresAmendments to FRS 1192004 employee Benefits - actuarial Gains and losses, Group Plans and Disclosures

The adoption of these new/revised FrSs and amendments to FrS did not have significant financial impact on the financial statements of the Group and the Company.

Accounting Standards, Amendments to FRSs and IC Interpretations Issued But Not Yet Effective at the date of authorisation of the financial statements, the following new and revised FrSs, amendments to FrSs and iC

Interpretations were in issue but not yet effective until future periods:

FRS 107 Cash Flow StatementsFRS 111 Construction ContractsFRS 112 income TaxesFRS 118 RevenueFRS 119 employee BenefitsFRS 120 Accounting for Government Grants and Disclosure of Government AssistanceFRS 126 accounting and reporting by retirement Benefits PlansFRS 129 Financial reporting in hyperinflationary economiesFRS 134 Interim Financial ReportingFRS 137 Provision, Contingent liabilities and Contingent assetsFRS 139 Financial Instruments: Recognition and MeasurementAmendment to FRS 121 The effects of Changes in Foreign exchange rates - net investment in a Foreign OperationIC Interpretation 1 Changes in existing Decommissioning, restoration and Similar liabilitiesIC Interpretation 2 Members’ Shares in Co-operative Entities and Similar InstrumentsIC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental

Rehabilitation FundsIC Interpretation 6 liabilities arising from Participating in a Specific market - Waste electrical and electronic

EquipmentIC Interpretation 7 applying the restatement approach under FrS 129 Financial reporting in hyperinflationary

EconomiesIC Interpretation 8 Scope of FRS 2

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Talam COrPOraTiOn BerhaD (1120-h)

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (CONT’D)

Accounting Standards, Amendments to FRSs and IC Interpretations Issued But Not Yet Effective (Cont’d)

The above FrSs, amendment to FrSs and iC interpretations shall apply to annual periods beginning on or after 1 July 2007 except for the following renamed FrSs which have the same effective dates as their original Standards, i.e., annual periods beginning on or after 1 January 2003:

FrS 119 employee Benefits, which supersedes FrS 119(a) 2004 employee Benefits and amendment to FrS1192004

employee Benefits - actuarial Gains and losses, Group Plans and Disclosures;

FrS 126 accounting and reporting by retirement Benefit Plans, which supersedes FrS 126(b) 2004 Accounting and reporting by retirement Benefit Plans; and

(c) FrS 129 Financial reporting in hyperinflationary economies, which supersedes FrS 1292004 Financial Reporting in hyperinflationary economies.

The effective adoption date in respect of FrS 139 has yet to be determined by maSB. This new standard establishes

principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items.

Save for FRS 139, the directors anticipate that the adoption of these FRSs, amendments to FRSs and IC Interpretations in

future periods will have no material financial effect on the financial statements of the Group and the Company in the period of initial application. By virtue of the exemption in paragraph 103aB of FrS 139, the impact of applying FrS 139 on the financial statements upon first adoption of this standard as required by paragraph 30(b) of FrS 108, accounting Policies, Changes in accounting estimates and errors, is not disclosed.

Going Concern Basis

as at 31 January 2008, the Group and the Company have net current liabilities of rm995,109,000 and rm35,519,000 respectively. however, the financial statements of the Group and the Company have been prepared on a going concern basis. This going concern basis presumes that the Group and the Company will be able to successfully implement the regularisation Plan that has been approved by the Securities Commission subsequent to the year-end, within the anticipated timeframe to enable the Group and the Company to operate profitably in the foreseeable future and consequently, the realisation of assets and settlement of liabilities in the ordinary course of business. accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Group and the Company be unable to continue on a going concern. in this connection, the directors are confident that the regularisation Plan, as more fully explained in note 43, would be implemented successfully without any material modifications and within the anticipated time frame.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise stated in the accounting policies below.

Basis of Consolidation

(i) Subsidiaries

The consolidated financial statements include the financial statements of the Company and all its subsidiaries. Subsidiaries are those entities in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities.


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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Basis of Consolidation (Cont’d)

(i) Subsidiaries (Cont’d)

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the financial year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal as appropriate. The assets and liabilities of the subsidiaries are measured at their fair values at the date of acquisition. The difference between the cost of an acquisition and the fair value of the Group’s share of the net assets of the acquired subsidiary at the date of acquisition is included in the consolidated balance sheet as goodwill. if the cost of acquisition is less than the fair value of the net assets of the subsidiaries acquired, the difference is recognised directly in the income statement.

Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered.

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

minority interests in the consolidated balance sheet consist of the minorities’ share of the fair value of the identifiable assets and liabilities of the acquiree as at acquisition date and the minorities’ share of movements in the acquiree’s equity since then.

(ii) Associates associates are those entities in which the Group exercises significant influence but not control, through participation

in the financial and operating policy decisions of the entities.

investments in associates are accounted for in the consolidated financial statements by the equity method of accounting based on the audited or management financial statements of the associates. Under the equity method of accounting, the Group’s share of profits less losses of associates during the financial year is included in the consolidated income statement. The Group’s interest in the associates is carried in the consolidated balance sheet at cost. The carrying amount of such investments is reduced to recognise any decline, other than a temporary decline, in the value of investment. losses of an associate in excess of the Group’s interest in that associate are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and the associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are eliminated unless cost cannot be recovered.

(iii) Jointly Controlled Entities

a jointly controlled entity is an entity in which the Group has joint control over its economic activity established under a contractual arrangement.

investments in jointly controlled entities are accounted for in the consolidated financial statements by the equity method of accounting based on the audited or management financial statements of the jointly controlled entities. Under the equity method of accounting, the Group’s share of profits less losses of jointly controlled entities during the financial year is included in the consolidated income statement. The Group’s interest in jointly controlled entities is carried in the consolidated balance sheet at cost. The carrying amount of such investments is reduced to recognise any decline, other than a temporary decline, in the value of investment.

Unrealised gains on transactions between the Group and its jointly controlled entities are eliminated to the extent of the Group’s interest in the jointly controlled entities. Unrealised losses are eliminated unless cost cannot be recovered.

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Goodwill on Consolidation

Goodwill (if any) is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. if the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. an impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Impairment of Assets Excluding Goodwill

At each balance sheet date, the Group and the Company review the carrying amounts of their non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. if any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimate the recoverable amount of the cash-generating unit to which the asset belongs.

recoverable amount is the higher of fair value less costs to sell and value in use. in assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

if the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. an impairment loss is recognised immediately in the income statements.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. a reversal of an impairment loss is recognised immediately in the income statements.

Revenue Recognition

revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably.

(i) Property development revenue

revenue from properties development projects is accounted for by the stage of completion method, which is determined by the proportion that the property development costs incurred for work performed to date bear to the estimated total property development costs and is recognised net of discount.

(ii) Rental income

rental income are recognised on accrual basis.

(iii) Revenue from hotel operations

Revenue from rental of hotel rooms, sale of food and beverage and other related income are recognised on accrual basis.


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annUal rePOrT 2008



Revenue Recognition (Cont’d)

(iv) Management fees and charges

management fees net of service taxes and charges are recognised on accrual basis.

(v) Sale of goods revenue relating to sale of goods is recognised net of sales taxes and discounts upon the transfer of risks and

rewards.

(vi) Dividend income

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

(vii) Interest income

interest income is recognised on a time proportion basis that reflects the effective yield on the asset.

Income Tax

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

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

The carrying amount of deferred tax assets, if any, is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

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Employee Benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans

as required by law, companies in malaysia make contributions to the employees Provident Fund (“ePF”). Some of the Group’s foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. Such contributions are recognised as an expense in the income statements as incurred. Once the contributions have been made, there are no further payment obligations.

Foreign Currencies

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are presented using the currency of the primary economic environment in which the entities operate (its functional currency). The consolidated financial statements of the Group are presented in ringgit malaysia, which is also the functional currency of the Group.

(ii) Foreign currency transactions

in preparing the financial statements of the Group and of the Company, transactions in currencies other than the Group’s and the Company’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. at each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. non-monetary items that are denominated in foreign currencies which are carried at historical cost are translated using the historical rate as of the date of acquisition.

exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in the income statement for the period. exchange differences arising on the translation of non-monetary items carried at fair value are included in the income statements for the period except for differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

(iii) Foreign operations

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in ringgit malaysia using exchange rate prevailing on the balance sheet date. income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. exchange differences arising, if any, are classified as equity and transferred to the Group’s foreign exchange reserve. Such translation differences are recognised in income statements in the period in which the foreign operation is disposed.


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annUal rePOrT 2008


Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (if any).

Subsequent costs are included in the assets’ carrying amount or recognised as separate assets as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably. all other repairs and maintenance are charged to the income statement during the financial period which they were incurred.

hotel building is depreciated over its revised estimated residual economic life of 50 years with effect from 1 February 2006.

Depreciation of other property, plant and equipment is computed on the straight line method at the following rates based on the estimated useful lives of the depreciable assets.

Buildings 1% - 2%Renovation 10%Plant and machinery, tools and equipment, crockery and kitchenware 10% - 33.33%Office equipment, furniture and fittings 10% - 50%Motor vehicles 20% - 25%

The residual value, depreciation method and estimated useful life of an asset are reviewed at each financial year-end, and if expectation differs from previous estimates, the changes will be accounted for as a change in an accounting estimate.

Gain or loss arising from disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset, and is recognised in the income statements.

Property, Plant and Equipment Acquired Under Hire-Purchase Arrangements

Property, plant and equipment acquired under hire-purchase arrangements are capitalised in the financial statements and the corresponding obligations treated as liabilities. Finance costs are allocated to the income statement to give a constant periodic rate of interest on the remaining hire-purchase liabilities.

Leased Assets

assets acquired under leases which transfer substantially all of the risks and rewards incident to ownership of the assets are capitalised under property, plant and equipment. The assets and the corresponding lease obligations are recorded at their fair value or, if lower, at the present value of the minimum lease payments of the leased assets at the inception of the respective leases.

Finance costs, which represent the difference between the total lease commitments and the fair values of the assets acquired, are charged to the income statements over the term of the relevant lease periods so as to give a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

all other leases which do not meet such criteria are classified as operating leases. lease payments under operating leases, including prepaid lease payments, are recognised as an expense in the income statements on a straight-line basis over the terms of the relevant lease.


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Prepaid Lease Payment

leasehold land that has an indefinite economic life and title that is not expected to pass to the Group by the end of the lease period is classified as operating lease. The up front payments for right to use the leasehold land over a predetermined period are accounted for as prepaid lease payments and are stated as cost less amount amortised.

Where the leasehold land had been previously revalued, the Group retained the unamortised revalued amount as the surrogate carrying amount of prepaid lease payments as allowed under the transitional provisions of FrS 117.

leasehold land recognised as prepaid lease payments are amortised in equal installments over a period of 25 years.

Investment Properties

investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses which include cost of land, all direct building costs and other related construction costs including borrowing costs incurred during the period of construction.

Freehold land is not depreciated. Depreciation on buildings is computed so as to write off the cost of the assets on the straight line method over the expected useful lives. The annual depreciation rate for buildings is 2.5%.

Upon the disposal of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in the income statements.

Non-Current Assets Held for Sale

non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification. non-current assets classified as held for sale are measured at the lower of the asset’s previous carrying amount and fair value less costs to sell.

Investments

The investments in subsidiaries, associates, jointly controlled entities and unquoted loan stocks are stated at cost less impairment losses.

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in the income statements.

Land Held for Property Development and Property Development Costs

(i) Land held for property development

Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses.

land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.


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Land Held for Property Development and Property Development Costs (Cont’d)

(ii) Property development costs

Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

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

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

Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value.

Inventories

inventories are stated at the lower of cost and net realisable value. net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. Cost of inventories are determined as follows:

Finished goods and consumables - weighted average basis Properties held for sale - specific identification basis

The cost of consumables consists of the cost of purchase plus the cost of bringing the inventories to their present location. The cost of finished goods includes cost of raw materials used, direct labour, other direct costs and appropriate production overheads. The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common costs.

Provisions for Liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Provision for liquidated ascertained damages is recognised on estimated claims by reference to the agreements entered into with the principals.

Contingent Liabilities

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

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


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Cash Flow Statements

The Group and the Company adopt the indirect method in the preparation of the cash flow statements.

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at banks and deposits at call, (excluding sinking funds held by trustees for the redemption of financing facilities) net of outstanding bank overdrafts.

Segment Reporting

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. a business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those or other business segments. a geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those components operating in other economic environment.

Segment revenue, expenses, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment revenue, expenses, assets and liabilities are determined before intra-group balances and intra-group transactions are eliminated as part of the consolidation process, except to the extent that such intra-group balances and transactions are between group enterprises within the same segment. inter-segment pricing is based on similar terms as those available to other external parties.

Financial Instruments

Financial assets and financial liabilities are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance and intention of the contractual arrangement. interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Other non-current investments

non-current investments other than investments in subsidiaries, associates, jointly controlled entities, unquoted loan stocks and investment properties are stated at cost less impairment losses. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statements.

(ii) Receivables

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

(iii) Payables

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

(iv) Interest-bearing borrowings

interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transaction costs.


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Financial Instruments (Cont’d)

(iv) Interest-bearing borrowings (Cont’d)

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate which is the weighted average of the borrowing costs applicable to the Group’s borrowings that are outstanding during the financial year, other than borrowings made specifically for the purpose of acquiring another qualifying asset. For borrowings made specifically for the purpose of acquiring a qualifying asset, the amount of borrowing costs (if any) eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of funds drawndown from that borrowing facility.

all other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred.

(v) Deferred progress billings

Deferred progress billings are stated at cost, which is the fair value of the consideration to be paid in the future for the contractual obligations entered into under the islamic assets Backed Securitisation arrangement.

(vi) Ordinary shares

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

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

The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company that have not been cancelled, are classified as treasury shares and presented as a deduction from equity. Shares repurchased are held as treasury shares and are accounted for using the treasury stock method. Under the treasury stock method, the shares repurchased are not cancelled but are held as treasury shares. The treasury shares are carried at cost.

Where treasury shares are distributed as share dividends, the cost of the treasury shares will be applied in the reduction of the share premium account or the distributable reserves, or both, where appropriate.

Where treasury shares are reissued by re-sale in the open market, the difference between the sales consideration and the carrying amount of the treasury shares will be shown as a movement in equity.

(vii) Warrants

Warrants issued pursuant to the issuance of Bonds in financial year ended 31 January 2000 are not recognised on the date of issue. The issue of ordinary shares upon exercise of the warrants are treated as new subscription of ordinary shares for the consideration equivalent to the exercise price of the warrants.

(viii) Convertible instruments

Convertible instruments are regarded as compound instruments, consisting of a liability component and an equity component. at the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. The difference between the proceeds of issue of the convertible instruments and the fair value assigned to the liability component, representing the conversion option is included in shareholders’ equity. The liability component is subsequently stated at amortised cost using the effective interest rate method until extinguished on conversion or redemption whilst the value of the equity component is not adjusted in subsequent periods. attributable transaction costs are apportioned and deducted directly from the liability and equity component based on their carrying amounts at the date of issue.

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Financial Instruments (Cont’d)

(viii) Convertible instruments (Cont’d)

Under the effective interest rate method, the interest expense on the liability component is calculated by applying the prevailing market interest rate for a similar non-convertible instrument. The difference between this amount and the interest paid is added to the carrying value of the convertible instrument.

4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

estimates and judgements are continually evaluated by the directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Critical judgements in applying the Group’s accounting policies

In the process of applying the Group’s and the Company’s accounting policies, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements except for matters discussed below:

Contingent liabilities

as described in note 3, a contingent liability is not recognised but is disclosed in the notes to the financial statements and when a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision. as at the end of the financial year, the Company has provided guarantees to financial and non-financial institutions for facilities granted to its subsidiaries (note 41a) and in the event that the regularisation Plan (rP) (as mentioned in note 43) is not successfully implemented, a contingent liability of approximately rm479.5 million may become enforceable on the Company. The directors are confident that the Group will successfully implement the rP and no provision for liabilities has been made in the financial statements of the Company as the quantum of the shortfall of which the Company is liable to make good cannot be presently determined.

Capitalisation of borrowing costs

As described in Note 3, it is the Group’s policy to capitalise borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, as part of the cost of those assets, until such time as the assets are substantially ready for intended use or sale. Borrowing costs have been capitalised in the Group’s property development costs, as mentioned in notes 7 and 15 amounting to rm9,609,000 (2007: rm19,068,000). The directors are satisfied that the capitalisation of borrowing costs on property development projects relate mainly to projects whose activities are currently in progress to prepare the project for its intended sale. all other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred.

Provision for liquidated ascertained Damages

Provision for liquidated ascertained damages (“laD”) is in respect of projects undertaken by certain subsidiaries and is recognised for expected laD claims based on the terms of the applicable sale and purchase agreements. Significant judgement is required in determining the amount of provision for laD to be made. The Group evaluates the amount of provision required based on past experience and the industry norm. as at 31 January 2008, the amount of provisions made for laD is disclosed in note 38.


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4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT’D)

(b) Key sources of estimation uncertainty

management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year except as discussed below:

Property development projects

The Group recognises property development revenue and costs in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs of work performed. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. in making the judgement, the Group evaluates based on past experience and by relying on the appointment of the iJm Corporation Berhad’s Group of companies as their principal contractor to construct and complete all their stalled projects and to be the lead driver of the Group’s sales and project implementation. as at 31 January 2008, the carrying amount of property development projects are disclosed in note 15(b).

Other investments

as disclosed in notes 21 and 25, investment in irredeemable Convertible Unsecured loan Stocks and an amount owing by Venue Venture Sdn. Bhd. (“VVSB”) is carried at cost of rm76,332,000 and rm50,087,000 respectively (collectively referred to as “total investments in VVSB”). management has represented that the total investments in VVSB are supported by the assets held by VVSB and thus are recoverable.

Subsequent to the year end, VVSB, through its subsidiary, entered into a joint venture agreement with the Selangor State Government to develop a piece of land. The directors are of the opinion that the development of this land will enhance VVSB’s net assets.

Impairment of non-current assets

The Group reviews the carrying amount of their non-current assets, which include land held for property development, property, plant and equipment and investment properties, to determine whether there is an indication that those assets have suffered an impairment loss. however, the Group has not conducted any independent professional valuations to determine the carrying amount of these assets as the directors are confident that the regularisation Plan, which is currently being implemented, would be concluded successfully without any material modification and within the anticipated time frame and accordingly, no adjustments would need to be made to reduce the values of assets to their recoverable amounts and classification of non-current assets to current. as at 31 January 2008, the carrying amounts of land held for development, property, plant and equipment and investment properties are disclosed in notes 15(a), 14 and 16 respectively.

Allowances for doubtful receivables

The Group makes allowances for doubtful receivables based on an assessment of the recoverability of trade and other receivables. allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of doubtful receivables requires use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful receivables expenses in the period in which such estimate has been changed. as at 31 January 2008, allowances for doubtful receivables for trade and sundry receivables have been disclosed in notes 24 and 25 respectively.

58



5. REVENUE

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Property development revenue 206,621 178,604 - -Rental income 18,836 17,687 - -Revenue from hotel operations 18,678 16,091 - -Management fees and charges from third parties 3,612 2,812 1,946 1,646Sales of goods 602 1,529 1,550 -

248,349 216,723 3,496 1,646

6. COST OF SALES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Property development costs 208,562 56,911 - -Cost of rental 8,740 8,333 - -Cost of sales for hotel operations 7,269 6,342 - -Cost of inventories sold 225 1,383 597 -

224,796 72,969 597 -

7. FINANCE COSTS

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

interest expenses on:- term loans 28,629 30,453 2,174 2,867- Islamic debt securities 29,546 29,643 - -- bank overdraft 982 1,069 851 987- hire purchase 36 81 - -- other borrowings 17,501 15,220 10,037 8,310

76,694 76,466 13,062 12,164Less: Interest capitalised in property development costs (note 15) (9,609) (19,068) - -

67,085 57,398 13,062 12,164


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7. FINANCE COSTS (CONT’D)

included in interest expense of the Group and the Company is amount paid or payable to the following related parties:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Pengurusan Projek Bersistem Sdn. Bhd. (note 46) 2,050 1,951 - -KeB Group (note 46) 1,076 79 1,043 -

The nature of the relationship with the above related parties are disclosed in note 46.

8. PROFIT/(LOSS) BEFORE TAX

Profit/(loss) before tax is stated after charging/(crediting) the following:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Staff costs (note 9) 14,303 16,505 - -Allowance for doubtful receivables: - third parties 14,083 22,982 6,059 2 - subsidiary companies - - 2,753 -Land and development costs written off 9,588 - - -Provision for liabilities - Liquidated ascertained damages 8,912 - - -Depreciation of property, plant and equipment 7,586 7,709 272 421 Allowance for writedown in inventories 7,030 1,369 - -Direct operating expenses of investment properties: - revenue generating during the year 4,269 3,969 - - - non-revenue generating during the year 1,184 1,749 - -Bad receivables written off: - third parties 2,704 14,162 97 5 - subsidiary companies - - - 40Amortisation of prepaid lease payment 695 698 - -Auditors’ remuneration: - current year provision 353 380 70 70 - (over)/ under provision in prior years (33) 89 18 8 - others 135 - 135 -loss/(gain) on disposal of property, plant and equipment 124 (114) - *Depreciation of investment properties 106 - - -Property, plant and equipment written off 77 83 - -rental of complex 25 19 - -

60



8. PROFIT/(LOSS) BEFORE TAX (CONT’D)

Profit/(loss) before tax is stated after charging/(crediting) the following: (Cont’d)

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Reversal of provision for liquidated ascertained damages no longer required (38,247) (2,515) - -Reversal of allowance no longer required for doubtful receivables: - Third parties (36,437) (17,437) (45) - - Intercompany balances - - (28) (19,623)Gain on disposal of investment properties (23,451) - - -Gain on disposal of subsidiaries (18,474) (3,321) - (10)Waiver of debts - Third parties (3,700) - - -Waiver of interest (2,300) - (914) -Interest income (2,005) (3,799) - -Rental income (1,489) (1,158) - -Reversal of allowance for writedown in inventories (603) (1,330) - -Provision for diminution in investments - ** - -Amortisation of discount on deferred progress billings - 26,133 - -

* Represents RM4 ** Represents RM2

9. STAFF COSTS

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Wages and salaries 11,771 14,409 - -Social security 103 119 - -Defined contribution 1,051 1,244 - -Other staff related expenses 1,378 733 - -

14,303 16,505 - -

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Included in the staff costs:Key management Personnel Other Than

Directors:Salary and other remuneration 121 - - -Defined contribution 16 - - -Benefit-in-kind 9 - - -

146 - - -

executive Directors as disclosed in note 10:Total remuneration 1,654 1,466 540 325


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10. DIRECTORS’ REMUNERATION

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Executive directors:

Company: Fees - 25 - 25 Salaries 588 - 178 - Defined contribution 70 - 21 - Other emoluments 341 300 341 300

999 325 540 325Subsidiaries: Fees 552 926 - - Defined contribution 56 103 - - Other emoluments 47 112 - -

655 1,141 - -

1,654 1,466 540 325

Non-executive directors: Fees - 125 - 125 Salaries - 258 - - Defined contribution - 31 - - Benefit-in-kind - 8 - - Other emoluments 164 120 164 120

164 542 164 245

Total 1,818 2,008 704 570

The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from the

Group amounted to rm41,000 (2007: rm18,000).

The number of directors of the Company whose total remuneration during the financial year fall within the following bands is as follows:

2008RM’000

2007RM’000

executive directors: RM300,001 - RM350,000 2 1 RM350,001 – RM400,000 1 -non-executive directors: Below RM50,000 5 5

8 6

62



11. TAXATION

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Tax expense for the year 1,709 1,101 334 -Under/(over) provision in prior years 721 (1,278) 2 (3,628)Deferred tax: Overprovision in prior year (note 37) (157) (7,741) - (279)

income tax expense/(credit) 2,273 (7,918) 336 (3,907)

income tax is calculated at the malaysian statutory tax rate of 26% (2007: 27%) of the estimated assessable profit for the

year. Taxation for small and medium scale subsidiaries with paid-up capital of rm2,500,000 and below are calculated at the rate of 20% on chargeable income of up to rm500,000. For chargeable income in excess of rm500,000, the statutory tax rate of 26% (2007: 27%) is applicable.

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

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Profit/(loss) before taxation 5,821 (6,936) (23,142) 5,744

Taxation at malaysian statutory tax rate of 26% (2007: 27%) 1,513 (1,873) (6,017) 1,608effect of different tax rate for small and medium scale subsidiaries of 20% for the first chargeable income of rm500,000 (30) (116) - -income not subject to tax (30,496) (16,170) (342) (5,298)expenses not deductible for tax purposes 29,923 18,309 6,700 3,592Deferred tax assets not recognised: Utilisation of previously unused tax losses and unabsorbed capital allowances brought forward (12,736) (2,774) (7) - Current year deferred tax assets not recognised 13,535 10,356 - 100 effects of changes in tax rate - (6,631) - (2)

799 951 (7) 98Overprovision of deferred tax in prior years (157) (7,741) - (279)Under/(over) provision of income tax expense in prior years 721 (1,278) 2 (3,628)

Tax expense/(credit) for the year 2,273 (7,918) 336 (3,907)


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12. EARNINGS PER SHARE

(a) Basic

Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares in issue during the financial year, excluding treasury shares held by the Company.

2008 2007

net profit for the year (rm’000) 3,420 8,957Weighted average number of shares (’000) 642,701 628,158 Basic earnings per share (sen) 0.53 1.43

(b) Diluted

For the purpose of calculating diluted earnings per share, the net profit for the year and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the effects of dilutive potential ordinary shares from conversion of 5% iCPS. The adjusted weighted average number of ordinary shares is the weighted average number of ordinary shares which would be issued on the conversion of the outstanding iCPS into ordinary shares. The iCPS are deemed to have been converted into ordinary shares at the date of issuance.

The effects of dilutive potential ordinary shares from assumed conversion of warrants is anti-dilutive and as such have been excluded from the computation of diluted earnings per share.

Group2008 2007

net profit for the year (rm’000) 3,420 8,957

Weighted average number of ordinary shares in issue (’000) 628,304 628,158 adjustment for assumed conversion of iCPS (’000) 14,397 14,397

adjusted weighted average number of ordinary shares in issue and issuable (’000) 642,701 642,555

Diluted earnings per share (sen) 0.53 1.39

13. DIVIDENDS

Amount Dividend per share 2008

RM’0002007

RM’0002008Sen

2007Sen

Year 2007/2006 iCPS dividend of 5% (net of taxation) - 720 - 5.0

64



14. PROPERTY, PLANT AND EQUIPMENT

Group

LeaseholdLand andBuildings

RM’000

Plant andMachinery,

Tools andEquipment,

Crockery andKitchenware

RM’000

OfficeEquipment,

Furnitureand Fittings

RM’000

MotorVehiclesRM’000

TotalRM’000

CostAt 1 February 2006 199,845 32,520 19,110 10,444 261,919Additions 114 180 26 5 325 Acquisition of subsidiaries - 11 - 12 23Write-offs (261) (93) (24) - (378)Disposals - (25) (15) (1,437) (1,477)Disposal of subsidiaries - (4) (1) - (5)reclassification (766) 745 - 21 -

at 31 January 2007 198,932 33,334 19,096 9,045 260,407Additions 1,568 691 276 194 2,729Write-offs (213) - (1,965) - (2,178)Disposals (22) (2,861) (110) (502) (3,495)Disposal of subsidiaries (166) (2) - (208) (376)

at 31 January 2008 200,099 31,162 17,297 8,529 257,087

Accumulated DepreciationAt 1 February 2006 12,516 19,190 15,687 10,417 57,810Charge for the year 3,749 2,758 1,108 94 7,709 Acquisition of subsidiaries - 1 - 2 3Write-offs (215) (63) (17) - (295)Disposals - (11) - (1,265) (1,276)Disposal of subsidiaries - (2) - - (2)reclassification - 1,074 (553) (521) -

at 31 January 2007 16,050 22,947 16,225 8,727 63,949 Charge for the year 3,763 2,826 738 259 7,586Write-offs (213) - (1,888) - (2,101)Disposals (22) (2,646) (70) (502) (3,240)Disposal of subsidiaries (76) - - (208) (284)reclassification - 76 (76) - -

at 31 January 2008 19,502 23,203 14,929 8,276 65,910

Net Book Valueat 31 January 2007 182,882 10,387 2,871 318 196,458

at 31 January 2008 180,597 7,959 2,368 253 191,177


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

Company

LeaseholdLand andBuildings

RM’000

OfficeEquipment,

Furnitureand Fittings

RM’000Renovation

RM’000

MotorVehiclesRM’000

TotalRM’000

CostAt 1 February 2006 1,107 411 4,850 646 7,014Disposals - - - (646) (646)

at 31 January 2007 / 31 January 2008 1,107 411 4,850 - 6,368

Accumulated DepreciationAt 1 February 2006 392 328 3,256 646 4,622Charge for the year 27 83 311 - 421Disposals - - - (646) (646)

at 31 January 2007 419 411 3,567 - 4,397Charge for the year 28 - 244 - 272

at 31 January 2008 447 411 3,811 - 4,669

Net Book Valueat 31 January 2007 688 - 1,283 - 1,971

at 31 January 2008 660 - 1,039 - 1,699


66



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

a) leasehold land and buildings consist of the following:

Group

Hotel and Other Land

And BuildingsRM’000

Renovation RM’000

TotalRM’000

CostAt 1 February 2006 192,537 7,308 199,845Additions - 114 114Write-offs - (261) (261)reclassification (766) - (766)

at 31 January 2007 191,771 7,161 198,932Additions - 1,568 1,568Write-offs - (213) (213)Disposals - (22) (22)Disposal of subsidiaries (166) - (166)

at 31 January 2008 191,605 8,494 200,099

Accumulated DepreciationAt 1 February 2006 8,424 4,092 12,516Charge for the year 3,242 507 3,749Write-offs - (215) (215)

at 31 January 2007 11,666 4,384 16,050Charge for the year 3,237 526 3,763Write-offs - (213) (213)Disposals - (22) (22)Disposal of subsidiaries (76) - (76)reclassification (1) 1 -

at 31 January 2008 14,826 4,676 19,502

Net Book Valueat 31 January 2007 180,105 2,777 182,882

at 31 January 2008 176,779 3,818 180,597

b) net book values of property, plant and equipment held under hire purchase and finance lease arrangements are as follows:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Motor vehicles - 161 - -

c) The net book values of property, plant and equipment charged to financial institutions for borrowings as disclosed in Note 33 are as follows:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Leasehold land and buildings 176,357 182,089 660 688


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15. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS

(a) Land Held for Property Development

Freehold Land

RM’000

Leasehold Land

RM’000

Development Costs

RM’000Total

RM’000

Group

At 31 January 2007

CostAt 1 February 2006 361,537 101,875 624,098 1,087,510 reclassification (207,040) 198,908 8,132 -Additions 327 - 21,307 21,634Acquisition of subsidiaries during the year - - 7,604 7,604Transfer (to)/from property development costs (11,366) 24 50,063 38,721

at 31 January 2007 143,458 300,807 711,204 1,155,469

At 31 January 2008

CostAt 1 February 2007 143,458 300,807 711,204 1,155,469 Additions - 2 36,251 36,253Disposal of subsidiaries during the year - - (55,807) (55,807)Write-offs - (7,035) (2,553) (9,588)Transfer (to)/from property development costs - 1,248 1,926 3,174

at 31 January 2008 143,458 295,022 691,021 1,129,501

Company

At 31 January 2008/2007

Costat 31 January 2008/2007 17,987 - 139 18,126


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15. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)

(b) Property Development Costs

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

at 1 February 2007/2006: - Freehold land 358,775 344,978 87,172 82,844 - Leasehold land 489,116 599,790 - - - Development costs 4,085,860 4,735,309 35,250 35,250

4,933,751 5,680,077 122,422 118,094

Acquisition of subsidiaries during the year: - Development costs - 75,020 - -

- 75,020 - -

Disposal of subsidiaries during the year: - Freehold land (9,029) - - - - Development costs (33,204) (92,002) - -

(42,233) (92,002) - -Reversal in development costs of completed projects during the year: - Freehold land (72,156) - - - - Leasehold land (5,500) (114,747) - - - Development costs (20,787) (751,966) - -

(98,443) (866,713) - -Costs incurred during the year: - Freehold land - 2,347 - 4,328 - Leasehold land - 4,158 - - - Development costs 253,166 174,855 46,300 -

253,166 181,360 46,300 4,328Disposal during the year: - Freehold land (596) - (596) -

(596) - (596) -

Write-off during the year: - Development costs - (21) - -

- (21) - -Transfers: - To land held for property development (3,174) (38,721) - - - To inventories (10,671) (5,249) - -

(13,845) (43,970) - -

5,031,800 4,933,751 168,126 122,422


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(b) Property Development Costs (Cont’d)

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000Costs recognised in income statements: - at 1 February 2007/2006 (3,713,300) (4,538,822) (72,509) (72,509) - Disposal of subsidiaries during the year 35,608 81,451 - - - adjustments to completed projects during the year 98,443 866,713 - - - Recognised during the year (213,466) (122,642) - -

- at 31 January (3,792,715) (3,713,300) (72,509) (72,509)

Foreseeable losses: - at 1 February 2007/2006 (56,234) (15,801) - - - Recognised during the year (1,304) (40,433) - -

- at 31 January (57,538) (56,234) - -

at 31 January 1,181,547 1,164,217 95,617 49,913

(c) The following are charged as security for borrowings of the Group as disclosed in note 33.

2008RM’000

2007RM’000

Freehold land 391,192 463,945Leasehold land 725,103 737,636 Development expenditure 1,131,264 1,095,947

2,247,559 2,297,528

(d) Certain proceeds from sales of development properties of a subsidiary of the Group has been sold to a third party under the islamic assets Backed Securitisation (“aBS”) arrangement as disclosed in note 35.

(e) Certain proceeds from sales of development properties of a subsidiary has been assigned to a third party under the Bai Bithaman ajil islamic Debt Securities (“BaiDS”) as disclosed in note 33.

(f) Certain title deeds in respect of the land are not registered under the subsidiaries’ names as these title deeds will be transferred directly to house buyers upon sale of the properties.

(g) Certain land held for development of two subsidiaries are charged as securities for banking facilities granted to a corporate shareholder, Kumpulan europlus Berhad.


70




(h) included in the development costs for the year are:

(i) construction costs charged by the following related parties:

Group2008

RM’0002007

RM’000

agrocon (m) Sdn. Bhd. - 31,798 Kumpulan europlus Bhd (“KeB”) and its subsidiaries (“KeB Group”) 938 24,428

The nature of the relationship with the related parties are disclosed in note 46.

(ii) interest capitalised during the financial year for the Group amounting to approximately rm9,609,000 (2007: rm19,068,000) (note 7).

16. INVESTMENT PROPERTIES

Group 2008

RM’0002007

RM’000

At cost:

Freehold land 4,900 4,900 Leasehold land - 1,449 Buildings 96,895 135,495

101,795 141,844 reclassified as held for sale (note 27) - (40,049)Accumulated depreciation (279) (173)Accumulated impairment losses (17,000) (17,000)

84,516 84,622

investment properties have been charged for borrowings as disclosed in note 33. The directors did not conduct any valuation on the investment properties and as such, the directors are unable to determine

the fair value of the investment properties.

17. PREPAID LEASE PAYMENTS

Group 2008

RM’0002007

RM’000

Transfer from property, plant and equipment 16,458 16,458Less amortisation: At beginning of year 4,637 3,939 Charge for the year 695 698

At end of year (5,332) (4,637)

Net 11,126 11,821

Prepaid lease payments have been charged for borrowings as disclosed in note 33.

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18. INVESTMENT IN SUBSIDIARIES

Company 2008

RM’0002007

RM’000

Unquoted shares, at cost 502,011 502,011 Accumulated impairment losses (157,210) (157,210)

Net 344,801 344,801

Details of the subsidiaries are disclosed in note 44.

(a) amount owing by subsidiaries

Company2008

RM’0002007

RM’000

Amount owing by subsidiaries 561,532 606,845 Less: Allowance for doubtful receivables (292,581) (289,856)

Net 268,951 316,989

amount owing by/(to) subsidiaries, which arose from non-trade transactions, are unsecured and have no fixed terms

of repayment.

(b) Disposal and deconsolidation of subsidiaries in current year

On 28 February 2007, a subsidiary, noble rights Sdn Bhd, has been wound-up. as such, it has been deconsolidated from the Group’s financial statements.

On 28 June 2007, a subsidiary, larut Overseas Ventures Sdn Bhd disposed 1,515,000 ordinary shares of hK$1 each, representing 50% equity interest, in larut leisure enterprise (hong Kong) limited (“lle”) for hK$1. lle will ceased to be a subsidiary of the Group and became a 49.99% owned associate company of the Group when the transfer of shares was effected on 21 December 2007.

The effect of the disposal and deconsolidation on the financial results of the Group for the financial period up to the date of disposal and deconsolidation are as follows:

RM’000

Interest income *Other operating expenses (17)Finance costs 5

loss before tax (12)income tax expense **

(12)

Minority interests 11

Increase in Group loss attributable to shareholders (1)

* Represents RM52** Represents RM14

72



18. INVESTMENT IN SUBSIDIARIES (CONT’D)

(b) Disposal and deconsolidation of subsidiaries in current year (Cont’d)

The effect of the disposal and deconsolidation on the financial position of the Group as at 31 January 2008 are as follows:

At disposal dateRM’000

land held for property development (note 15) 55,807Property, plant and equipment (note 14) 92Property development costs 6,625Inventories 8,838Trade receivables 214Other receivables, deposits and prepaid expenses 1,614Tax recoverable 113Fixed deposits 1,129Cash and bank balances 183Trade payables (8,495)Other payables (30,817)Amount due to related companies (26,483)Provision for future costs to complete (5,242)Provision for liabilities (2,481)Minority interests (13,196)Transfer from foreign exchange reserve (6,375)

Fair value of total net liabilities (18,474)Gain on disposal to the Group 18,474

Proceeds from disposal ***

Less: Cash and cash equivalents of subsidiaries disposed and deconsolidated (1,312)

net cash outflow arising on disposal and deconsolidation, representing cash and cash equivalents of subsidiaries disposed and deconsolidated (1,312)

*** represents rm0.43

(c) acquisition of subsidiaries in the previous year

In the previous year,

a subsidiary, europlus Corporation Sdn Bhd, acquired 2 ordinary shares of rm1.00 each representing 100% (i) of the issued and paid-up share capital of mutual Prosperous Sdn Bhd (“mPSB”) for a cash consideration of rm2.00. mPSB has two wholly-owned subsidiaries, Zhinmun Sdn Bhd and Untung Utama Sdn Bhd.

mPSB acquired 2 ordinary shares of rm1.00 each representing 100% of the issued and paid-up share capital (ii) of envy Vista Sdn Bhd for a cash consideration of rm2.00.

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(c) acquisition of subsidiaries in the previous year (Cont’d)

The effect of the above mentioned acquisitions on the financial results of the Group from date of acquisition to 31 January 2007 were as follows:

RM’000

Interest income 12Other operating expenses (1,036)

loss before tax (1,024)income tax expense -

(1,024)Minority interest -

Increase in Group loss attributable to shareholders (1,024)

The effect of these acquisitions on the financial position of the Group as at 31 January 2007 were as follows:

2007RM’000

Property, plant and equipment 3Land held for property development 82,989 Current tax assets 15Sundry receivables 10,225 Cash and bank balances 388 Trade payables (487)Sundry payables (50,932)Borrowings (42,479)

Net liabilities assumed (278)

The fair value of the assets acquired and liabilities assumed from the acquisition of the subsidiaries were as

follows:

At acquisition date

RM’000

Net assets acquired: Property, plant and equipment 20 Land held for property development 7,604 Property development cost 75,020 Current tax assets 15 Trade receivables 152 Other receivables, deposits and prepaid expenses 9,598 Cash and bank balances 889 Trade payables (10,079) Other payables (40,815) Borrowings (42,404)

Total consideration *

net cash outflow from acquisition: Cash consideration of subsidiaries acquired * Less: Cash and cash equivalents of subsidiaries acquired (889)

(889)

* Represents RM4

74




(d) Disposal of subsidiaries in the previous year

In the previous year,

the Company disposed of 51% equity interest in master Waves Sdn. Bhd. (“master Waves”). master Waves (i) had a wholly-owned subsidiary, mudi angkasa Development Sdn Bhd. With the said disposal, master Waves and its subsidiary ceased to be subsidiaries of the Group.

Larut Overseas Ventures Sdn Bhd, a subsidiary disposed of 100% equity interest in Birchwood Enterprises (ii) limited (“Birchwood”).

larut Consolidated (hK) limited and Talam Corporation (hK) limited, wholly-owned subsidiaries of the (iii) Company, disposed of 22% and 78% equity interest respectively in hPC Development (hK) limited (“hPC”).

The effect of these disposals on the financial results of the Group for the financial period up to the date of disposal were as follows:

RM’000

Revenue (36)Other operating expenses (9)

loss before tax (45)income tax expense -

(45)Minority interests -

Increase in Group loss attributable to shareholders (45)

The effect of these disposals on the financial position of the Group as at 31 January 2007 were as follows:

At disposal dateRM’000

Property, plant and equipment (note 14) 3Property development costs 10,551Trade receivables 566Other receivables, deposits and prepaid expenses 8,916Cash and bank balances 551 Trade payables (7,268)Other payables (8,588)Borrowings (3,114)Provision for liabilities (3,226)Current tax liabilities (1,194)Deferred tax liabilities (508)

Fair value of total net assets (3,311)Gain on disposal to the Group 3,321

Proceeds from disposal 10 Less: Cash and cash equivalents of subsidiaries disposed (551)

net cash outflow arising on disposal, representing cash and cash equivalents of subsidiaries disposed (541)

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19. INVESTMENT IN ASSOCIATES

Group2008

RM’0002007

RM’000

Unquoted shares, at cost 7,695 7,219Share of post-acquisition reserves (7,695) (7,219)

- -

(a) Details of associates are as follows:

Financial Year End

Effective Interest Principal Activities2008 2007

% %

Name of Company

Incorporated in Malaysia

Beruntung Transport City Sdn. Bhd. 31 January 30.60 30.60 Dormant

Incorporated in Hong Kong

* larut leisure enterprise (hong Kong) limited 31 January 49.99 - Investment holding

Incorporated in The People’s Republic of China

* Jilin Dingtai enterprise Development Co. limited 31 December 29.99 - Property development

Incorporated in Cambodia

* # Cambodia Resources import-export Company limited

31 January 49 49 Dormant

* # Parkgrove (Cambodia) Pte. ltd. 31 January 49 49 Dormant

* # noble house investment (Cambodia) Pte. ltd. 31 January 49 49 Dormant

* audited by a firm of auditors other than Deloitte KassimChan The financial statements of the associates marked # are not available. The said investments have been fully written

down in prior years. in view of this, the effect of not equity accounting for investment in the associates is not material to the Group.

(b) The amount owing by associates, which arose from non-trade transactions, are unsecured and have no fixed terms of repayment.

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20. INTEREST IN JOINTLY CONTROLLED ENTITIES

Group2008

RM’0002007

RM’000

Unquoted shares, at cost 10,500 10,000Share of post-acquisition reserves (423) (672)

10,077 9,328

(a) Details of jointly controlled entities, which are incorporated in malaysia, are as follows:

Financial Year End

Effective Interest Principal Activities2008 2007

% %Name of Company

* astaka Tegas Sdn. Bhd. 31 March 50 50 Property development

* Sierra Ukay Sdn. Bhd. 31 March 49.9995 49.9995 Property development

* Good Debut Sdn. Bhd. 31 March 50 50 Property development

* Cekap Tropikal Sdn. Bhd. 31 March 49.9995 - Property development

* audited by a firm of auditors other than Deloitte KassimChan

(b) The amount owing by/(to) jointly controlled entities, which arose from non-trade transactions, are unsecured and have no fixed terms of repayment.

(c) The Group’s aggregate share of the current assets, non-current assets, current liabilities, non-current liabilities, income and expenses of the jointly controlled entities is as follows:

2008RM’000

2007RM’000

Assets and liabilities

Non-current assets 493 54Current assets 72,306 61,853

Total assets 72,799 61,907

Non-current liabilities (30,000) (30,000)Current liabilities (32,722) (22,579)

Total liabilities (62,722) (52,579)

Results

expenses, including finance costs 249 (660)

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21. OTHER INVESTMENT

Group2008

RM’0002007

RM’000 At cost: 1% irredeemable Convertible Unsecured loan Stock (“iCUlS”) 76,332 76,332

The iCUlS nominal value at rm1.00 each, are constituted by a Trust Deed dated 8 november 2003 between Venue Venture

Sdn. Bhd. (“VVSB”) and the trustee for the holders of iCUlS.

The main features of the ICULS are as follows:

(a) The iCUlS shall be for a period of five years from the date of issue.

(b) The iCUlS shall not be redeemable for cash. all outstanding iCUlS shall be converted into new VVSB Shares on the maturity date.

(c) The iCUlS may, at the holder’s option, be converted into new VVSB Shares at the Conversion Price during the tenure of iCUlS. Upon maturity, any iCUlS not converted shall be converted automatically into new VVSB Shares at the conversion price.

(d) The new VVSB Shares to be issued pursuant to the conversion of the iCUlS shall, upon allotment and issue, rank pari passu in all respects with the existing VVSB Shares except that they shall not be entitled to any dividends, rights, allotments and/or other distributions the entitlement date of which precedes the date of allotment of the new VVSB Shares.

22. SINKING FUNDS HELD BY TRUSTEES

The sinking funds are held by trustees for the redemption and/or servicing of the following financing facilities:

Group 2008

RM’0002007

RM’000

murabahah notes issuance Facility (“mUniF”) (note 33(e)) 22 22Sukuk al-ijarah (note 33(h)) 9,779 6,788

9,801 6,810

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23. INVENTORIES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

At cost: Completed properties held for sale 96,215 94,192 5,831 5,831 Finished goods and consumables 1,296 1,026 - -

97,511 95,218 5,831 5,831Less: Allowance for inventories writedown (22,788) (23,927) (144) (144)

Net 74,723 71,291 5,687 5,687

24. TRADE RECEIVABLES

Group 2008

RM’0002007

RM’000

Trade receivables 97,424 109,325Less: Allowance for doubtful receivables (8,756) (8,690)

Net 88,668 100,635

(a) included in trade receivables are amounts due from related parties as follows:

2008RM’000

2007RM’000

agrocon (m) Sdn. Bhd. 5,306 7,247KEB Group 546 1,315

The nature of the relationships with the above related parties are disclosed in note 46.

The Group’s normal trade credit term ranges from 14 days to 60 days. Other credit terms are assessed and approved (b) on a case-by-case basis.

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors.

(c) included in trade receivables of the Group are amounts of rm37,223,000 (2007: rm29,623,000) due from certain contractors of the Group. The management is of the opinion that these receivables are fully recoverable.

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25. OTHER RECEIVABLES, DEPOSITS AND PREPAID EXPENSES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Sundry receivables 281,095 418,909 31,023 23,521Less: Allowance for doubtful receivables (112,451) (124,869) (7,658) (1,644)

168,644 294,040 23,365 21,877Refundable deposits 23,650 22,856 69 69Prepaid expenses 195 220 - -Tax recoverable 2,343 4,728 2,082 2,418

194,832 321,844 25,516 24,364

Included in sundry receivables of the Group are:

(a) an amount of rm42,071,200 (2007: rm42,071,200), representing deposit and instalment paid to a third party (“land vendor”) for a proposed purchase of land by maxisegar Sdn. Bhd. (“mSSB”), a wholly-owned subsidiary. mSSB has filed a legal suit against the said land vendor to recover the amount as mSSB could not obtain a loan to complete the Sale and Purchase agreement due to frustrating events intervening.

Judgement was delivered in favour of the third party together with interest and cost. mSSB appealed to the Court of appeal against the said judgement and on 5 may 2005, the Court of appeal has dismissed the appeal.

On 24 may 2005, mSSB has instructed its solicitors to file the motion for leave to appeal to the Federal Court as their solicitors have advised that the Company has a strong case in its appeal to the Federal Court. in the meantime, mSSB has also filed an application for a stay of execution at the Court of appeal. On 8 august 2005, the Court of appeal has granted the Order for stay of execution and the application for leave to appeal in the Federal Court was fixed for hearing on 3 October 2005. The application for leave to appeal in the Federal Court has been dismissed by the Federal Court on 1 march 2006. Pursuant to the Federal Court’s decision, mSSB has provided for the amount in full in the previous financial year and a further provision for judgment sum of rm38,324,788 representing interest and cost as disclosed in note 38. interest will be charged at the rate of 8% per annum on the judgment sum until the date of full settlement.

(b) amount owing by VVSB of rm50,087,000 (2007: rm46,359,000). The management is of the view that the amount due from VVSB is supported by assets held by VVSB and is fully recoverable.

(c) amount owing by a third party of rm28,369,000 (2007: rm27,818,000) pursuant to the issuance of Sukuk al-ijarah which is secured by the said third party’s property.

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26. CASH AND CASH EQUIVALENTS

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

housing development accounts 10,301 4,921 - -Cash on hand and bank balances 11,541 9,223 83 514Deposits with: licensed banks 439 1,138 350 -

Cash and bank balances 22,281 15,282 433 514less: Bank overdrafts (note 33) (7,512) (11,184) (5,714) (9,215)

Cash and cash equivalents 14,769 4,098 (5,281) (8,701)

(a) The housing development accounts of the Group are maintained pursuant to Section 7a of the housing Development (Control and licensing) act, 1966. These accounts, which consist of monies received from purchasers, are for the payment of property development expenditure incurred and are restricted from use in other operations. The surplus monies, if any, will be released to the respective subsidiaries upon the completion of the property development projects and after all property development expenditure have been fully settled. housing development accounts of the Group amounting to approximately rm8,887,000 (2007: rm2,619,000) have been pledged for financing facilities as disclosed in note 33.

(b) The following are pledged to financial institutions for financing facilities granted to the Group as disclosed in note 33:

Group2008

RM’0002007

RM’000

Bank balances 3,618 389Deposits 10 1,138

27. NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE

Group2008

RM’0002007

RM’000

investment property (note 16) - 40,049

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28. SHARE CAPITAL

Group and CompanyNumber of Shares Amount

2008’000

2007’000

2008RM’000

2007RM’000

AuthorisedOrdinary shares of rm1.00 each 939,000 939,000 939,000 939,000Redeemable convertible preference shares (“rCPS”) of rm0.01 each 100,000 100,000 1,000 1,0005% Irredeemable convertible preference shares (“iCPS”) of rm0.10 each 600,000 600,000 60,000 60,000

Total 1,639,000 1,639,000 1,000,000 1,000,000

Issued and fully paidOrdinary shares of rm1.00 each: At beginning of year 629,183 628,498 629,183 628,498 Conversion of iCUlS 2003/2006 - 685 - 685

At end of year 629,183 629,183 629,183 629,183

5% Irredeemable convertible preference shares (“iCPS”) of rm0.10 each:

At beginning and end of year 143,963 143,963 14,397 14,397

Total 773,146 773,146 643,580 643,580Less: Liability component of iCPS (note 33) (565) (1,157)

Total 643,015 642,423

(a) in the previous year, the Company increased its issued and paid-up share capital from rm642,894,813 to rm643,579,453 by way of issuance of 684,640 ordinary shares of rm1.00 each amounting to rm684,640 pursuant to the conversion of 7% iCUlS 2003/2006 as disclosed in note 32;

The new ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company except that they are not entitled to any dividends, allotments and/or other distributions unless the allotment of the new ordinary shares is made on or prior to the entitlement date of such dividends, right, allotments and/or other distributions.

(b) The iCPS have been split between the liability component and the equity component, representing the fair value of the conversion component. The main features of the iCPS are disclosed in note 29.

29. 5-YEAR 5% IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES

The main features of the 5-Year 5% irredeemable Convertible Preference Shares of rm0.10 (“iCPS”) each are as follows:

(a) The iCPS shall mature upon the expiry of the five year period from the date of issue.

(b) The iCPS will not be redeemable for cash. all outstanding iCPS will be converted into new ordinary shares on the maturity Date.

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29. 5-YEAR 5% IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES (CONT’D)

(c) The iCPS may be converted into new ordinary shares, at the holder’s option, at the Conversion Price during the tenure of the iCPS. Upon maturity, any iCPS not converted shall automatically be converted into new ordinary shares at the Conversion Price of rm1.00 per share of the Company.

(d) Dividends payable to holder of iCPS shall rank in priority to all dividends payable to holders of rCPS and shareholders. in the event of the winding up or liquidation of the Company, the iCPS shall rank ahead of ordinary shares but shall rank pari passu in all respects with the rCPS.

(e) The new ordinary shares to be issued pursuant to the conversion of the iCPS shall, upon allotment and issue, rank pari passu in all respects with the ordinary shares then in issue except that they shall not be entitled to any dividends, rights, allotments and/or other distributions the entitlement date of which precedes the date of allotment of the new ordinary shares.

30. TREASURY SHARES

Group and CompanyNumber of

Ordinary Shares of RM1.00 each

’000Amount RM’000

Balance as of 1 February 2006/31 January 2007/31 January 2008 879 844

31. RESERVES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Capital Reserve: Capitalisation of retained profits for bonus

issue of ordinary shares by subsidiaries 6,392 6,392 - - Redemption of preference shares to ordinary shares 4,809 4,809 - -

11,201 11,201 - -Share Premium 124,551 124,551 124,551 124,551Foreign exchange reserve 26,346 32,414 - -Accumulated losses (459,809) (463,229) (446,527) (423,049)

(297,711) (295,063) (321,976) (298,498)

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32. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”)

Group and Company2008

RM’0002007

RM’000

7% iCUlS 2003/2006At beginning of year - 685Less: Converted during the year - (685)

At end of year - -

TOTAL - -Less : Equity component of ICULS - -

liability component as at 31 January - -

rm690,640 7% irredeemable Convertible Unsecured loan Stock 2003/2006 (“7% iCUlS 2003/2006”) issued at nominal

value for the acquisition of the europlus Berhad’s (“europlus”) rm690,640 7% irredeemable Convertible Unsecured loan Stock 2001/2006.

The salient features of 7% iCUlS 2003/2006 issued are as follows:

(a) The principal amount of the iCUlS 2003/2006 which consist of unsecured notes of the Company in registered form in multiples of rm1.00 each issued pursuant to acquisition of europlus iCUlS 2001/2006, bearing a coupon rate of 7% per annum on the principal amount. The loan Stock is designated as “7% iCUlS 2003/2006”.

(b) The 7% iCUlS 2003/2006 are constituted by a Trust Deed executed by the Company and a Trustee on 3 november 2003.

(c) The 7% iCUlS 2003/2006 will be irredeemable and shall be convertible into new ordinary shares, at the holder’s option, at the conversion price during the tenure of the iCUlS. all outstanding 7% iCUlS 2003/2006 shall be automatically converted into new ordinary shares of rm1.00 each on the maturity date, 19 april 2006.

(d) The new ordinary shares of rm1.00 each to be issued pursuant to the conversion of the 7% 2003/2006 iCUlS shall, upon allotment and issue, rank pari passu in all respect with existing shares in issue at the conversion date, except that they will not be entitled to any dividends, rights, allotments and/or other distributions the entitlement date of which precedes the date of allotment of the new ordinary shares.

(e) On its maturity date on 19 april 2006, all remaining outstanding 7% 2003/2006 iCUlS of rm684,640 have been converted into fully paid ordinary shares of rm1.00 each of the Company on the basis of rm1.00 nominal value of iCUlS 2003/2006 for every one (1) new ordinary share in accordance with the terms of the Trust Deed.

The ICULS have been split between the liability component and the equity component, representing the fair value of the conversion option.

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33. BORROWINGS

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

(a) Current

(i) Secured: Revolving credits - related party (note 46) 30,285 19,023 - - - Financial institutions 86,778 92,149 46,871 36,400

117,063 111,172 46,871 36,400 Unsecured: Bank overdrafts (note 26) 7,512 11,184 5,714 9,215 Revolving credits - related party (note 46) 21,151 - 21,151 - - Financial institutions - 10,350 - 8,161

145,726 132,706 73,736 53,776

(ii) non-current due within 12 months

Secured: BaIDS 130,000 130,000 - - MuNIF 190,000 190,000 - - Term and bridging loans 262,882 237,144 14,512 4,575 Sukuk al-ijarah 1,207 4,000 - -

584,089 561,144 14,512 4,575

(iii) hire purchase payables (note 34) 16 400 - -

Total 729,831 694,250 88,248 58,351

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33. BORROWINGS (CONT’D)

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

(b) Non-current

Secured: BaIDS 130,000 130,000 - - Due within 12 months (130,000) (130,000) - -

- - - -

MuNIF 190,000 190,000 - - Due within 12 months (190,000) (190,000) - -

- - - -

Term and bridging loans 262,882 237,144 14,512 4,575 Due within 12 months (262,882) (237,144) (14,512) (4,575)

- - - -

Sukuk al-ijarah 88,272 147,500 - - Due within 12 months (1,207) (4,000) - -

87,065 143,500 - -

Unsecured: liability component of iCPS (note 28) 565 1,157 565 1,157

hire purchase payables (note 34) - 119 - -

Total 87,630 144,776 565 1,157

(c) The range of effective interest rates or purchase yield during the financial year for borrowings are as follows:

Group Company2008

%2007

%2008

%2007

%

Revolving credits 7.95 - 9.75 6.60 - 13.50 9.00 - 9.75 6.60 - 8.50 Bank overdrafts 8.70 - 9.00 7.75 - 9.00 9.00 7.75 - 8.00 BaIDS 7.00 - 7.50 7.00 - 7.50 - - MuNIF 5.00 5.75 - - Term and bridging loans 7.25 - 12.00 8.00 - 16.00 7.25 - 9.00 8.00 Sukuk al-ijarah 5.84 - 9.00 5.20 - 9.30 - -

(d) The Company has provided corporate guarantees for unsecured bank overdrafts and revolving credits of the subsidiaries.

The secured revolving credits of the Group and of the Company are secured by fixed and floating charges over certain assets of the Group and of the Company as disclosed in notes 14 and 15.

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(e) The muniF of the Group was originally repayable during the previous financial year. Pursuant to the approval from the authorities on 29 December 2004, the facility tenure of the muniF has been extended to 3 October 2006.

The MuNIF of the Group is secured by the following:

(i) memorandum of Charge over the operating accounts (including housing Development accounts) of certain subsidiaries;

(ii) assignment of proceeds from sale of the development properties of certain subsidiaries;

(iii) Debentures creating a fixed and floating charge over assets of certain subsidiaries; and

(iv) Third party first legal charge on certain subsidiaries’ operating accounts (including housing Development accounts) as referred to in note 26.

On 11 October 2006, a subsidiary, europlus Corporation Sdn. Bhd. (“eCSB”) received a written notice from aBB Trustee Berhad (“Trustee”) informing that the noteholders of eCSB’s murabahah notes issuance Facility (“muniF”) had approved and passed a resolution in writing on 25 September 2006 on the Company’s restructuring proposal of the muniF. eCSB has undertaken an issuance of the above muniF of rm350.0 million constituted by a Trust Deed dated 19 September 2000 (as supplemented and amended by a Supplemental Trust Deed dated 3 July 2003).

as at the date of approval, rm196.0 million under the muniF remain outstanding. eCSB and the Company had requested the Trustee and Abrar Discounts Berhad to agree to a settlement of ECSB’s obligations to the Trustee of the remaining outstanding MuNIF in the following manner:

(a) the settlement of rm6.0 million in cash by applying the monies available in the Sinking Fund account.

(b) the settlement of the balance of rm190.0 million by the issuance of redeemable Convertible Secured loan Stocks (“rCSlS”) by the Company. The rCSlS will be secured against properties with a total forced sale value of not less than rm190.0 million.

On 15 February 2007, the Securities Commission had approved the proposed variation to the revised Principal Terms and Conditions of the muniF. The restructuring proposal of the muniF is part and parcel of the regularisation Plan (note 43).

an amount of rm22,000 (2007: rm22,000) has been maintained in the sinking fund held by trustees in accordance with the muniF granted to a subsidiary as disclosed in note 22. The amount is deposited to meet the redemption of maturing notes.

(f) The term and bridging loans are secured by the following:

(i) First and third legal charge over the freehold land, leasehold land and buildings of certain subsidiaries as disclosed in Notes 14 and 15;

(ii) Subordination deed executed by a subsidiary;

(iii) Fixed and floating charge over all the assets, revenue, rights and benefits on the property development properties of certain subsidiaries; and

(iv) Corporate guarantee by the Company.

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(g) in the financial year ended 31 January 2005, a subsidiary, maxisegar Sdn. Bhd. (“mSSB”) issued rm140,000,000 nominal value of BaiDS.

The BaIDS is secured inter-alia by the following:

(i) Charges over all the operating accounts phases involved of mSSB (including housing Development accounts);

(ii) assignments of sale proceeds from certain development phases of mSSB;

(iii) a charge over certain development properties of mSSB;

(iv) Specific debenture covering fixed and floating charge on all assets of mSSB related to the project; and

(v) a corporate guarantee from the Company.

On 15 November 2006, the Company had submitted a restructuring proposal to the sole MSSB BaIDS holder, abrar Discounts Berhad (“aDB”), for the full and final settlement of the outstanding rm130 million nominal value of mSSB BaiDS and waiver of all existing and future profits. Subsequently, on 9 January 2007, aDB gave its approval for the redemption of the MSSB BaIDS through the issuance of up to RM130 million nominal value of Redeemable Convertible Secured loan Stocks by the Company and waiver of all existing and future profits.

On 25 may 2007, the Securities Commission had approved the proposed variation to the revised Principal Terms and Conditions of the mSSB BaiDS. The restructuring proposal of the mSSB BaiDS is part and parcel of the regularisation Plan (note 43).

(h) in the financial year ended 31 January 2005, a subsidiary, ample Zone Berhad (“ample Zone”) issued rm150,000,000 nominal value of Sukuk al-ijarah (“Sukuk”).

The Sukuk is secured inter-alia by the following:

(i) Debenture over the fixed and floating charge over all assets and properties and undertakings both present and future of ample Zone; and

(ii) Principal charge on various designated accounts.

On 18 January 2008, the Facility agent for the Sukuk has utilised partial sale proceeds from the disposal of investment property to redeem rm58,020,800 face value of Primary Sukuk.

an amount of rm9,779,000 (2007: rm6,788,000) has been maintained in the bank account held by trustees in accordance with the requirement of Sukuk granted to ample Zone as disclosed in note 22. The amount is deposited for the profit servicing requirement.

The Sukuk shall be payable upon maturity as follows:

Group2008

RM’0002007

RM’000Financial year ending 31 January2008 - 4,0002009 1,207 4,5002010 1,207 4,5002011 1,207 4,5002012 84,651 130,000

88,272 147,500

88




(i) The Group and the Company have not met their obligation in certain loan repayments and interest payments and have breached their borrowing facilities agreements. accordingly, the said outstanding borrowings of the Group and the Company were classified as current liabilities.

The Group and the Company with their financial advisors have formulated a regularisation Plan (“rP”), which salient points are as disclosed in Note 43, and have completed negotiations and discussions with its lenders for the adoption and implementation of the rP. The rP has been submitted to the relevant authorities on 30 april 2007 and the Securities Commission vide its letter dated 29 april 2008, has approved the rP (note 43). The directors are confident that the Group will be able to successfully implement the rP.

34. HIRE-PURCHASE PAYABLES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000 Total outstanding 16 555 - -Less: Interest-in-suspense - (36) - -

Principal outstanding 16 519 - -

less: Portion due within the next 12 months shown under current liabilities (note 33) (16) (400) - -

non-current portion (note 33) - 119 - -

The non-current portion is repayable as follows:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Within 1 to 2 years - 119 - -

The hire-purchase payables of the Group bear interest at 3.8% (2007: 7.07% to 12.18%) per annum.

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35. DEFERRED PROGRESS BILLINGS

Group2008

RM’0002007

RM’000

Deferred progress billings 1,091,692 1,091,692Less : Billed (620,640) (620,640)

471,052 471,052

Discount on deferred progress billings 172,461 172,461Less: Discount capitalised in property development costs (15,686) (15,686) Amortisation charged to income statement (130,643) (130,643)

(26,132) (26,132)

Deferred progress billings, net of discount 444,920 444,920

Represented by:amount due in next 12 months 444,920 444,920

(a) Deferred progress billings relates to an islamic assets Backed Securitisation (“aBS”) arranged by a subsidiary. The aBS arrangement encompasses the sale of the subsidiary’s right to bill under certain Sale and Purchase agreements of certain phases of two development projects to a special purpose vehicle for a net cash purchase consideration of approximately rm919,231,000.

(b) The timing of the anticipated cash flows from the property development activities of the Group do not match the cash flows required to meet the obligations under aBS in accordance with existing terms of repayment. The Securities Commission had on 30 September 2005 approved the Group’s proposal to restructure and extend the remaining tenure of the islamic aBS by another year. Thus, the Group’s repayment obligations under aBS has similarly been granted a deferment of 12 months.

(c) On 28 July 2006, the Group has defaulted on its repayment obligations under aBS due on that date. Pursuant to the said default, the obligation under aBS became immediately due and payable on that date.

On 5 October 2006, a subsidiary, maxisegar Sdn. Bhd. (“mSSB”), and the Company entered into a settlement agreement with ambang Sentosa Sdn. Bhd. (“aSSB”) and PB Trustee Services Berhad (“Trustee”). aSSB had purchased assets from mSSB under an asset Sale agreement and has undertaken an issuance of al-Bai Bithaman ajil islamic Debt Securities of rm986.0 million (“BaiDs”) constituted by a Trust Deed both dated 26 June 2003 (as supplemented and amended by an amendment and restatement agreement dated 28 July 2005) (“aSSB BaiDs Trust Deed”).

as at 28 July 2006, rm498.0 million of Primary notes and rm30.9 million of Secondary notes in respect of the BaiDs remain outstanding. aSSB, mSSB and the Company had requested the Trustee to agree to a settlement of aSSB’s and mSSB’s respective obligations to the Trustee of the remaining outstanding BaiDs.

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35. DEFERRED PROGRESS BILLINGS (CONT’D)

The settlement agreement encompasses the acceptance of rm503.8 million as full and final settlement towards the remaining outstanding BaIDs with the following salient terms:

(i) cash portion of rm67.8 million and all profits accruing thereon in the escrow accounts and the BaiDs redemption account as at the Cash Portion Payment Date;

(ii) secured al-Bai Bithaman ajil islamic Debt Securities of up to an aggregate value of rml50 million Settlement BaiDs to be issued in one series by the Company with a tenure of 8 years and at the issuer’s option to extend another 2 years;

(iii) rm286 million of redeemable Convertible Preference Shares (“rCPS”) of par value rm0.20 per rCPS with a maturity period of 5 years;

On 22 December 2006, the Securities Commision had approved the proposed variation to the revised Principal Terms and Conditions of the BaiDs.

The settlement agreement forms part of the regularisation Plan (“rP”) as disclosed in note 43.

36. OTHER LONG TERM PAYABLES

Group2008

RM’0002007

RM’000

amount payable for acquisition of land (note (a)) 52,352 53,400loan from a minority shareholder of a subsidiary (note (b)) 10,105 10,118amount payable for acquisition of building (note (c)) 13,009 13,027Preference shareholders of a subsidiary 75 75

75,541 76,620

(a) The amount payable for acquisition of land is payable in accordance with the terms and conditions of the Sale and Purchase agreements. The amounts are not repayable within 12 months from the end of the financial year.

(b) loan from a minority shareholder of a subsidiary company is interest free, unsecured and has no fixed terms of repayment.

(c) The amount payable for acquisition of building is in relation to an agreement entered into with a third party in the year 1999 for sale of four floors of a building owned by a subsidiary. The agreement provides an option for the subsidiary to re-acquire those floors within ten years from the date of agreement at the market value on the date of exercise of the option. The directors have the intention to exercise the option and therefore the transaction was not recognised as a disposal.

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37. DEFERRED TAX LIABILITIES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

at 1 February 2007/2006 4,116 12,365 - 279Recognised in the income statement (note 11) (157) (7,741) - (279)Reversal on disposal of subsidiaries - (508) - -

at 31 January 3,959 4,116 - -

The deferred tax liabilities are in respect of the following:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Tax effects of: Temporary differences arising from: Property, plant and equipment 5,871 8,887 - - Others 11,029 11,404 - -Tax losses (8,737) (10,047) - -Unabsorbed capital allowances (4,204) (6,128) - -

3,959 4,116 - -

Deferred tax assets have not been recognised in respect of the following items:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Unused tax losses 152,784 172,811 - -Unabsorbed capital allowances 3,766 7,542 - -Other deductible temporary differences 30,875 6,273 21 20

187,425 186,626 21 20

The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits

of the subsidiaries in which those items arose are subject to no substantial changes in shareholdings of the subsidiaries under Section 44(5a) & (5B) of the income Tax act, 1967. Deferred tax assets have not been recognised in respect of these items as they may not be used to offset future taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that does not have a recent history of profits.

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38. PROVISION FOR LIABILITIES

Group2008

RM’0002007

RM’000

at 1 February 2007/2006 130,172 136,067Provision during the year 8,912 -Arising from disposal of subsidiaries (2,481) (3,226)Reversal of provision during the year (38,247) (2,515)Utilisation of provision during the year (1,342) (154)

at 31 January 97,014 130,172

Provision for liabilities comprise:

Provision for liquidated ascertained damages 58,689 91,847Provision for compensation arising from a litigation 38,325 38,325

97,014 130,172

(a) liquidated ascertained damages

Provision for liquidated ascertained damages is in respect of projects undertaken by certain subsidiaries. The provision is recognised for expected liquidated damages claims based on the terms of the applicable sale and purchase agreements.

(b) Compensation arising from a litigation

The details of provision for compensation arising from a litigation is further disclosed in note 25(a).

39. TRADE PAYABLES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Trade payables 158,324 82,766 2,590 2,848Progress billings in respect of property development costs 46,042

136,111 - -

Retention sum 36,921 59,558 - -

241,287 278,435 2,590 2,848

(a) included in trade payables and retention sum are amounts due to related parties as follows:

Group2008

RM’0002007

RM’000

KEB Group - Trade payables 2,710 7,461 - Retention sums 595 2,155

The nature of the relationship with the above related parties are disclosed in note 46.

(b) The normal trade credit terms granted to the Group ranges from 30 days to 90 days.

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40. OTHER PAYABLES

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000

Amount payable for acquisition of land 60,648 60,648 - -Obligation arising from acquisition of land (note (a)) 136,735

147,259 - -

Accruals 310,862 307,271 13,901 9,331Sundry payables 353,567 422,673 58,033 44,143

861,812 937,851 71,934 53,474

(a) The obligation arising from acquisition of land is in respect of obligations arising from the Universiti industri Selangor (“UniSel”) project, whereby the Selangor State Government had alienated three parcels of land to the Group in consideration for the development of UniSel.

in 2001, maxisegar Sdn. Bhd. (“mSSB”), a wholly owned subsidiary, entered into an agreement with the State Government of Selangor for the financing and construction of the main campus of UniSel on 572.16 acres of land at Berjuntai Bestari, Selangor Darul ehsan for a total value of rm750 million. in return, the State Government of Selangor had alienated three parcels of leasehold land to MSSB as follows:

Acres RM’000

Batang Berjuntai 3,000 345,000Taman Puncak Jalil 801 337,500Saujana Damansara 110 67,500

3,911 750,000

mSSB was unable to meet its financial obligation to bear the development and maintenance costs due of

approximately rm134,000,000 (“obligation due”) of UniSel and as such, in the previous financial year, the long term portion of mSSB’s obligation under the said agreement has been reclassified to current liabilities and it has entered into an agreement with Kumpulan Darul ehsan Berhad (“KDeB”) and Pendidikan industri YS Sdn Bhd (“PiYS”) (both of which acted as nominees of State Government of Selangor) whereby mSSB agreed to settle obligation due by transferring 1,715.9 acres of Batang Berjuntai land which the parties have agreed shall be valued for the purpose of settlement at rm80,000 per acre to KDeB and/or PiYS. The settlement agreement is pending fulfilment of certain conditions precedent.

(b) included in accruals of the Group and of the Company are:

(i) accrued interest of rm118,642,000 (2007: rm92,301,000) and rm13,893,000 (2007: rm7,585,000) respectively;

(ii) amount payable to authorities and utility companies in relation to development projects of rm82,561,000 (2007: rm94,581,000) and rm30,000 (2007: rm148,000) respectively; and

(iii) Progress billings billed in advance of rm78,102,000 (2007: rm104,239,000).

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40. OTHER PAYABLES (CONT’D)

(c) included in sundry payables of the Group are:

(i) refundable deposits of rm13,742,000 (2007: rm12,515,000) received from purchasers of properties and tenants of complexes;

(ii) advances from minority shareholders of subsidiaries amounting to rm991,000 (2007: rm992,000), bearing interest at the rate of 8% per annum. The advances are unsecured and have no fixed terms of repayment;

(iii) renovation costs payable for a hotel building of approximately rm1,608,000 (2007: rm1,785,000); and

(iv) amount owing to a corporate shareholder, Kumpulan europlus Berhad and its subsidiaries, of approximately rm47,550,000 (2007: rm34,091,000) which arose from payments made on behalf and is interest-free with no fixed terms of repayment.

41. CONTINGENT LIABILITIES/LOSSES (UNSECURED)

Company2008

RM’0002007

RM’000

(a) Guarantees

Guarantees given to financial institutions for facilities granted to subsidiaries 159,577 159,481

Guarantees given to non-financial institutions for: - facilities granted to subsidiaries 320,000 320,000 - purchase of land by subsidiaries 201,634 213,206

The Group and the Company with their financial advisors have formulated a regularisation Plan (“rP”), which salient

points are disclosed in Note 43, and have completed negotiations and discussions with its lenders for the adoption and implementation of the rP. The rP had been submitted to the relevant authorities on 30 april 2007 and the Securities Commission vide its letter dated 29 april 2008 has approved the rP (note 43). The directors are confident that the Group will successfully implement the rP. in the event that the rP is not successfully implemented, a contingent liability of rm479,481,000 may become enforceable on the Company. no provision for liabilities in respect of the corporate guarantees has been made in the Company’s financial statements as the quantum of the shortfall of which the Company is liable to make good cannot be presently determined.

(b) On 14 July 2003, a third party, Perspektif Perkasa Sdn. Bhd. (“PPSB”) obtained islamic financing in the form of a murabahah notes issuance Facility for a total amount of rm188 million (“PPSB muniF”). The PPSB muniF was arranged by abrar Discount Berhad (“aDB”), who also acted as the security agent. in connection with this matter, the Company entered into an option agreement with ADB whereby the Company irrevocably and unconditionally grants to ADB a right to require the Company at any time during the option period to acquire the entire issued and paid-up share capital of PPSB at an option price equivalent to the total outstanding PPSB muniF. as at 31 January 2008, the total outstanding PPSB muniF was approximately rm163 million (2007: rm163 million) and on 6 February 2008, PPSB has settled its full obligations and liabilities under the PPSB muniF. Therefore, the option granted by the Company shall automatically lapse and be of no further force. The management of the Group is of the opinion that it is unlikely that there would be any liability arising from this matter.

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42. COMMITMENTS

ample Zone Berhad, a subsidiary of the Company, has entered into, inter-alia, an assets purchase agreement and a trust deed under the issuance of SUKUK of rm150 million. it is a condition of the said trust deed that the Company grants an option in favour of the security trustee for the benefit of the SUKUK holders. Pursuant to the option agreement, the Company irrevocably and unconditionally grants to the security trustee a right to require the Company at any time during the option period to purchase the assets at the exercise price upon or after the occurrence of a trigger event or an event of default or upon or after failure of the sellers to honour their sale undertakings or purchase undertakings.

43. REGULARISATION PLAN

The Company had on 1 September 2006 announced that it is an affected listed issuer pursuant to Practice note no. 17/2005 of the listing requirements of Bursa malaysia Securities Berhad.

in this regard, the Company’s advisor, rhB investment Bank Berhad (formerly known as rhB Sakura merchant Bankers Berhad) had on 30 april 2007 on behalf of the Company’s Board of Directors submitted to the Securities Commission the following proposals to regularise its financial condition:

(a) proposed reduction in the share capital of the Company by the cancellation of rm0.30 of the par value of each existing ordinary share of rm1.00 each in the Company (“Proposed Capital reduction”);

(b) proposed reduction of rm124,551,076.73 in the share premium account of the Company and the credit arising therefrom to be set-off against the accumulated losses of the Company;

(c) proposed share split involving the subdivision of every 1 existing ordinary share of rm0.70 each in the Company after the Proposed Capital reduction into 3.5 new ordinary shares of rm0.20 each;

(d) proposed restructuring and settlement of debts due and owing to the lenders of the Group, which involves, inter-alia, the:

(i) proposed issuance of rm286,002,000 nominal value of 5-year redeemable convertible preference shares (“rCPS”) at rm0.20 each (“Proposed rCPS issue”);

(ii) proposed issuance of up to a total of rm397,344,413 nominal value of 4 classes of zero coupon 5-year redeemable convertible secured loan stocks (“rCSlS”) i.e. rCSlS-a, rCSlS-B, rCSlS-C and rCSlS-D, at 100% of their nominal values (“Proposed rCSlS issue”);

(iii) proposed issuance of up to rm150,000,000 nominal value of 10-year al-Bai Bithaman ajil islamic Debt Securities (“Settlement BaiDS”) at 100% of its nominal value (“Proposed Settlement BaiDS issue”); and

(iv) disposal of certain assets pursuant to the Proposed Divestment Programme (as defined in (e) below)

(e) divestment programme of the Group’s assets, the proceeds of which shall be utilised to pare down the Group’s borrowings and to raise funds for working capital purposes;

(f) proposed assumption by the Company of the indebtedness from ambang Sentosa Sdn Bhd (“aSSB”) in respect of the outstanding rm498.0 million nominal value of asset-Backed al-Bai Bithaman ajil islamic Debt Securities;

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43. REGULARISATION PLAN (CONT’D)

(g) strategic alliance between the Company and iJm Corporation Berhad (“iJm”) vide:

(i) the appointment of iJm Construction Sdn Bhd (“iJmC”), a wholly-owned subsidiary of iJm, as the principal contractor to construct and complete a majority of the Group’s stalled property development projects; and

(ii) the joint-venture with iJm Properties Sdn Bhd (“iJmP”), a wholly-owned subsidiary of iJm, in respect of certain property development projects whereby iJmP will be the lead driver in terms of sales and project implementation.

(h) proposed appointment of Tan Sri Dato’ hj lamin Bin hj mohd Yunus, mr. loy Boon Chen, mr. lee Swee Seng and Puan Sri Datin Thong nyok Choo to the Board of Directors.

The proposed rCPS and Settlement BaiDS issuance would be used to settle the obligations to aSSB (note 35(c)).

The proposed rCSlS issuance would be used to settle the obligations to muniF noteholders (note 33(e)), maxisegar Sdn. Bhd. BaiDs holders and certain financial institutions.

The Securities Commission (“SC”), vide its letter dated 25 September 2007, did not approve the regularisation Plan based on the following factors:

(i) The Company will not immediately turnaround post-restructuring based on the financial forecast and projections submitted;

(ii) substantial accumulated losses of rm156 million remain post restructuring;

(iii) the proposals appear to benefit the creditors more than the minority shareholders of the Company as the shareholders will be undergoing a capital reduction exercise whilst none of the creditors will be taking a ‘hair-cut’ on the amount owing to them by the Company;

(iv) upon completion of the restructuring scheme, abrar Discounts Berhad (“aDB”) will hold 36.3% equity interest in the Company. There is uncertainty over the possible emergence of a new substantial shareholder which would have an impact on the direction of the Company moving forward. at this juncture, it is not known if aDB will dispose its interest in the Company or the identity of the potential buyer of the block of shares held by aDB; and

(v) there is no clear indication that iJm is acting as a “white-knight” to the Company’s restructuring scheme given that, inter-alia,:

• iJm would not be a substantial shareholder in the Company pursuant to the restructuring scheme. iJm’s effective interest in the Company, via its shareholding in Kumpulan Europlus Berhad, is minimal; and

• iJm is involved only in selected stalled projects of the Company.

The Board of Directors of the Company appealed on the SC’s decision based on an improved plan addressing the above issues. On 25 October 2007, the Company had submitted an appeal against the SC’s rejection of the regularisation Plan.

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On 21 November 2007, the Company had announced its proposal to the SC to address SC’s concerns of the above factors as follows:-

(i) revision to the Group’s financial forecast and projections to include certain events that occurred subsequent to the application made to the SC in april 2007, such as an additional commercial, office cum residential development project in China to be jointly developed with iJmP and project management fees in respect of the Canal City Project as well as the lower interest expense to be charged pursuant to Financial reporting Standard 132 as a result of the lower number of debt securities to be issued pursuant to the regularisation Plan. all these are expected to contribute positively to the future financial position of the Group and will enable the Group to immediately turnaround post restructuring;

(ii) an additional 10% capital reduction resulting in a total capital reduction of 40% and a 10% debt waiver on the amount owing to the creditors who will be receiving debt securities pursuant to the regularisation Plan, which will substantially reduce the Group’s accumulated losses. all approvals from the creditors for the 10% debt waiver have been obtained in the period of 23 October 2007 to 21 November 2007;

(iii) Kumpulan europlus Berhad has undertaken to retain its controlling interest in the Company; and

(iv) iJmC has been appointed as the principal contractor for the remaining stalled projects of the Group as per the letter of award dated 23 november 2007.

Subsequent to the year-end, the Securities Commission (“SC”), vide its letter dated 29 april 2008, approved the revised regularisation Plan based on the following terms:

proposed reduction in the share capital of the Company pursuant to Section 64(1)(b) of the Companies act 1965 (i) (“act”) involving the cancellation of rm0.40 of the par value of each existing ordinary share of rm1.00 each (“Proposed Capital reduction”);

proposed reduction of Company’s entire share premium account pursuant to Sections 60(2) and 64(1)(b) of the act (ii) amounting to rm124,551,076.73 (based on the unaudited balance sheet of the Company as at 31 January 2007) and the credit arising therefrom to be set-off against the accumulated losses of the Company;

(iii) proposed share split involving the subdivision of every 1 existing ordinary share of rm0.60 each in the Company after the Proposed Capital reduction into 3 ordinary shares of rm0.20 each;

(iv) proposed restructuring and settlement of debts due and owing to the lenders of the Group, which involves, inter-alia, the following:

proposed issuance of rm257,402,000 nominal value of zero dividend 5-year redeemable convertible preference (a) shares (“rCPS”) comprising 1,287,010,000 units of rCPS at rm0.20 each;

proposed issuance of up to a total of rm356,250,581 nominal value of 4 classes of zero coupon 5-year (b) redeemable convertible secured loan stocks (“rCSlS”) i.e. rCSlS-a, rCSlS-B, rCSlS-C and rCSlS-D, at 100% of their nominal values. an additional rm2,000 nominal value of rCSlS will be issued for each of RCSLS-B, RCSLS-C and RCSLS-D to selected investors to facilitate the listing of RCSLS-B, RCSLS-C and RCSLS-D on the Main Board of Bursa Malaysia Securities Berhad; and

proposed issuance of up to rm134,213,337 nominal value of 10-year al-Bai Bithaman ajil islamic Debt (c) Securities (“Settlement BaiDS”) at 100% of its nominal value; and

(v) proposed assumption by the Company of the indebtedness from ambang Sentosa Sdn Bhd in respect of the outstanding asset-Backed al-Bai Bithaman ajil islamic Debt Securities;

98




subject to, inter-alia, the following conditions:

(i) nominees of iJm Corporation Berhad on the Board of Directors (“Board”) of the Company to be appointed as executive Directors of the Company;

(ii) further equity condition may be imposed on the Company after reviewing its equity structure 3 years from the date of implementation of the proposed restructuring scheme. in this respect, rhB investment Bank/the Company is required to submit the effective equity structure of the Company 3 years after the date of completion of the proposed restructuring scheme, together with the latest audited financial accounts of the Company;

(iii) applications for approval or notification, where applicable, be made under the Foreign investment Committee (“FiC”) Guidelines on the “acquisition of Properties by local and Foreign interests” for the transactions under the proposed divestment programme of the Group’s assets to the FIC Secretariat;

(iv) rhB investment Bank and the Company to obtain the SC’s prior approval should there be any changes to the terms and conditions of the RCSLS and Settlement BaIDS;

(v) in relation to the non-investment grade rating assigned to the rCSlS and Settlement BaiDS, rhB investment Bank and the Company are to ensure that the extent of credit risk be disclosed to the investors and/or potential investors and their advisers for the purpose of evaluating the risks relating to the rCSlS and Settlement BaiDS;

(vi) rhB investment Bank to fully disclose to all prospective investors and relevant parties the following conflict and potential conflict of interest:

(a) arising from the role undertaken by rhB investment Bank in the regularisation Plan; and

(b) all other conflict and potential conflict of interest arising from the regularisation Plan;

together with relevant mitigating measures. rhB investment Bank to also inform all prospective investors that the Board of the Company is fully informed of and aware of the conflict and potential conflict of interest situations and is agreeable to proceed with the present arrangement;

(vii) rhB investment Bank to ensure that the selling restriction imposed on the rCSlS-a and Settlement BaiDS are fully disclosed to all prospective investors and relevant parties, including making such information available on the Fully automated System for issuing/Tendering (FaST);

(viii) Company shall obtain all necessary approvals from all relevant parties in relation to the proposed rCSlS and Settlement BaiDS issues and rhB investment Bank is to submit a written confirmation on the same to the SC prior to the issue date of the RCSLS and Settlement BaIDS;

(ix) rhB investment Bank and the Company to disclose in writing to potential investors that each rCSlS and Settlement BaiDS issue will carry different risks and all potential investors are strongly encouraged to evaluate each rCSlS and Settlement BaIDS issue on its own merit;

(x) rhB investment Bank is required to remind all relevant parties including the Company of the need to observe and fully comply with all statutory requirements, in particular, those set out in Division 4 of Part Vi of the Capital markets & Services act 2007;

(xi) rhB investment Bank and the Company must fully comply with the relevant requirements relating to the implementation of the proposals as stipulated in the Policies and Guidelines on issue/Offer of Securities; and

(xii) rhB investment Bank and the Company to inform the SC upon completion of the regularisation Plan.

The SC had also vide the above said letter approved the regularisation Plan under the Guidelines on the acquisition of interests, mergers and Take-Overs by local and Foreign interests issued by the FiC.

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44. SUBSIDIARY COMPANIES

(a) Details of the subsidiaries are as follows:

Effective InterestName of Company 2008 2007 Principal Activities

% %


abra Development Sdn. Bhd.+ 100 100 Property development and investment holding

alam Johan Sdn. Bhd. ^ 99.99 99.99 Property development and investment holding

ample Zone Berhad 99.99 99.99 Investment holding and provision of asset management services

Beautiful Peninsular Sdn. Bhd. ^ 69.99 69.99 Property development

Biltradex Sdn. Bhd. 99.99 99.99 Property development and investment

Bukit Beruntung nurseries Sdn. Bhd. ^ 99.99 99.99 horticulturists, agriculturists and landscaping designers and contractors and agricultural development

Capital advance Corporation Sdn. Bhd. 99.99 99.99 Investment holding

Cekap mesra Development Sdn. Bhd. 50.01 50.01 Property development

Classic Fortune Sdn. Bhd. ^ 99.99 99.99 Property development and investment holding

Daya Kreatif Sdn. Bhd. ^ 99.99 99.99 Property development and investment holding

envy Vista Sdn. Bhd. *^ 99.99 99.99 Dormant

era-Casa Sdn. Bhd. ^ 100 100 Investment holding

europlus Berhad + 99.99 99.99 Property development and investment holding

europlus Construction Sdn. Bhd. 99.99 99.99 housing contractors and property development

europlus Corporation Sdn. Bhd. + 99.99 99.99 Property development, investment holding and construction activities

expand Factor Sdn. Bhd. 100 100 Property development and investment holding

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44. SUBSIDIARY COMPANIES (CONT’D)

(a) Details of the subsidiaries are as follows: (Cont’d)


% %


Galian Juta Sdn. Bhd. ^ 100 100 Property development and investment

Gemapantas Sdn. Bhd. ^ 51 51 Investment holding

G.l. Development Sdn. Bhd. 100 100 Property investment and development

ideal Synergy Sdn. Bhd. ^ 100 100 Property investment, management and property development

inti Johan Sdn. Bhd. ^ 100 100 Property investment

izin Saga Sdn. Bhd. ^ 99.99 99.99 Dormant

Juara Tiasa Sdn. Bhd. ^ 100 100 Property investment

Kenshine Corporation Sdn. Bhd. ^ 99.99 99.99 Property development

Kolej aman Bhd. ^ 58.46 58.46 Dormant

lambang Wira Sdn. Bhd. ^ 99.99 99.99 Investment holding

larut leisure enterprise Sdn. Bhd.^ 99.99 99.99 Investment holding

larut management Services Sdn. Bhd. 99.99 99.99 Investment holding

larut Overseas Ventures Sdn. Bhd.^ 99.99 99.99 Investment holding

l.C.B. management Sdn. Bhd. ^ 100 100 Provision of management services

lestari Puchong Sdn. Bhd. 99.99 99.99 Property development

layatama Sdn. Bhd. ^ 100 100 Investment holding

maxdale (m) Sdn. Bhd. 100 100 Investment holding

maxisegar Construction Sdn. Bhd. ^ 100 100 Property investment and development

maxisegar education Sdn. Bhd. ^ 60 60 Investment holding

maxisegar realty Sdn. Bhd. + 100 100 Dormant

maxisegar Sdn. Bhd. + 100 100 Property development and investment holding

mutual Prosperous Sdn. Bhd. *^ 99.99 99.99 Investment holding

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% %


new Court Properties Sdn. Bhd. ^ 98.04 98.04 Dormant

noblepace (m) Sdn. Bhd. ^ 100 100 Investment holding

noble rights Sdn. Bhd. - 60 Property investment and development

Pandan indah medical management Sdn. Bhd.

100

100 Property development and investment holding

Peninsular Properties (m) Sdn. Bhd. 99.99 99.99 Property development

Peninsular Properties management Sdn. Bhd.^ 99.99 99.99 Provision of property management services

Perwira indra Sakti management Services Sdn. Bhd. 99.99 99.99 Property management

P.i.S. Properties management Services Sdn. Bhd.^ 99.99 99.99 Property management

regobase Sdn. Bhd.^ 100 100 Investment holding

Seaview Plantations Sdn. Bhd. ^ 99.99 99.99 Dormant

Sentosa restu (m) Sdn. Bhd. + 99.99 99.99 Property development

Star Base Sdn. Bhd. ^ 90 90 Property investment

Talam Beverage Sdn. Bhd. 99.77 99.77 Investment holding

Talam General Foods Sdn. Bhd. ^ 100 100 Dormant

Talam industries Sdn. Bhd. 100 100 Property development and investment holding

Talam leisure Development Sdn. Bhd. ^ 100 100 Property development and investment holding

Talam management Services Sdn. Bhd. 100 100 Dormant

Talam manufacturing Sdn. Bhd.^ 100 100 Investment holding and provision of management services

Talam medical Centre Sdn. Bhd. 100 100 Dormant

Talam Plantations Sdn. Bhd.^ 100 100 Investment holding

Talam Properties Sdn. Bhd. ^ 100 100 Property development

Talam refrigeration Sdn. Bhd. ^ 99.77 99.77 Investment holding

Talam Premium Development Sdn. Bhd.^

100 100 Provision of secretarial and other management services

102






% %


Talam Tractors Sdn. Bhd.^ 100 100 Dormant

TCB resources Sdn. Bhd. ^ 100 100 Investment holdings, provision of management, consultancy services and general trading

Terang Tanah Sdn. Bhd.^ 99.99 99.99 Property development

Trans liberty Sdn. Bhd.^ 99.99 99.99 Property development and investment holding

Ukay land Sdn. Bhd. ^ 99.99 99.99 Property development

Ulu Yam Golf and Country Club Sdn. Bhd. 60 60 Dormant

United axis Sdn. Bhd. 99.99 99.99 Property development and investment

Untung Utama Sdn. Bhd. * 99.99 99.99 Property development

Winax engineering Sdn. Bhd. ^ 100 100 Investment holding

Zhinmun Sdn. Bhd. *^ 99.99 99.99 Property development

Zillion Development Sdn. Bhd. ^ 100 100 Property investment and development

Incorporated in Hong Kong

agriresources international (hK) limited * 64.99 64.99 Dormant

larut Consolidated (hK) limited #*^ 99.99 99.99 Investment holding

larut leisure enterprise (hong Kong) limited #*^ - 99.99 Investment holding

Larut Talam International Management Services Limited *

99.88 99.88 Dormant

malim enterprise (hK) limited * 100 100 Investment holding

noble house investments limited *^ 100 100 Investment holding

Parkgrove limited *^ 100 100 Investment holding

PPB investment (hK) limited * 99.99 99.99 Dormant

Talam Corporation (hK) limited *^ 100 100 Investment holding

Talam resources (hK) limited * 100 100 Investment holding

Incorporated in Singapore

Crystal ace Pte. ltd. *^ 100 100 Dormant

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% %

Incorporated in The People’s Republic of China

Jilin Province maxcourt hotel limited * 85 85 Operating and managing a hotel

Jilin Dingtai enterprise Development Co. limited * - 59.99 Property development

* audited by a firm of auditors other than Deloitte KassimChan

# Certain shares of the companies are held in trust by certain directors for larut Overseas Ventures Sdn. Bhd.

(b) Details of qualification in the auditors’ report of the subsidiary companies are as follows:

(i) Audit emphasis of matters

(i) The audit reports of subsidiaries marked “^”contain an audit emphasis of matter relating to the appropriateness of going concern basis of accounting used in the preparation of their financial statements which presumes continued financial support to be given by the ultimate holding company, Talam Corporation Berhad.

(ii) ample Zone Berhad (“aZB”)

The ability of aZB to meet its obligation under the Sukuk al-ijarah is dependent upon the timely rental payments of its related companies and a third party.

(iii) The audit reports of subsidiaries marked “+” contain an audit emphasis of matter relating to the appropriateness of going concern basis of accounting used in the preparation of their financial statements which presumes the successful implementation of the regularisation Plan of the Group as explained in note 43 within the anticipated time frame and accordingly, do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Group be unable to continue on a going concern.

(ii) audit qualifications

(i) The auditors of expand Factor Sdn. Bhd. (“expand”) and lestari Puchong Sdn. Bhd. (“lPSB”) have qualified their report on the appropriateness of preparing the financial statements on a going concern basis in view of the significant capital deficiency positions.

(ii) The auditors of Parkgrove limited and noble house investments limited reported a qualified opinion in respect of the inavailability of the financial information on the investment in associate and there were no other satisfactory audit procedures to satisfy themselves as to whether impairment losses on the investment in and amount due from an associate made in the financial statements as at 31 January 2008 are appropriate.

(iii) The auditors of malim enterprise (hK) limited reported a qualified opinion in respect of the recoverability of the amount due from a subsidiary of rm22,075,100 as of 31 January 2008 and whether any impairment for the investment in the subsidiary of rm24,317,089 as at 31 January 2008 should be made in the financial statements. any adjustments to these figures might have a consequential effect on the results for the year and net liabilites as at 31 January 2008.

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45. SIGNIFICANT EVENTS

Significant events during the financial year are as follows:

(a) On 5 march 2007, a subsidiary, mutual Prosperous Sdn Bhd (“mPSB”), entered into a Joint Venture/Shareholders’ agreement with iJm Properties Sdn Bhd (“iJmP”) and Cekap Tropikal Sdn Bhd (“CTSB”) for iJmP and mPSB to use CTSB as the 50:50 joint venture company to takeover the development of 204 acres of land located in mukim Batu, Daerah Gombak, Selangor Darul ehsan known as Sierra Selayang. The proposed share capital of CTSB will be rm520,000 comprising 500,000 ordinary shares of rml each, 10,000 Class a redeemable preference shares (“rPS”) of rm1 each and 10,000 Class B rPS of rm1 each. mPSB will subscribe to 50% of the ordinary shares of rm1 each at par and 100% of Class B rPS at a premium of rm999. iJmP’s subscription to 100% of Class a rPS gives iJmP the priority in the distribution of dividend by CTSB at an agreed formula.

(b) On 30 april 2007, the Company had submitted its application for the regularisation Plan of the Group (“Group rP”) to the Securities Commission. Details of the Group rP and subsequent revision to the plan are more fully explained in note 43.

(c) On 24 may 2007, the Kuala lumpur high Court granted a further extension to the restraining Order pursuant to Section 176 of the Companies act, 1965 granted to a subsidiary, maxisegar on 28 march 2006 (“the maxisegar rO”), for a period of 180 days effective from 27 June 2007 to 26 December 2007.

On 12 December 2007, the Kuala lumpur high Court granted a further extension to the maxisegar rO for a period of 180 days effective from 26 December 2007 to 26 June 2008.

(d) On 4 October 2007, the Company announced that it had on 1 October 2007 received a letter from the SC pertaining to

the directive issued under regulation 5 of the Securities industry (Compliance With approved accounting Standards) regulations 1999 (“the regulations”) and directed the Company to re-issue its 2006 and 2007 financial statements by 31 October 2007 for failure to comply with Regulation 4 of the Regulations which requires every listed corporation to ensure that the consolidated financial statements are to be made out in accordance with approved accounting standards. The Company had re-issued its 2006 and 2007 financial statements on 31 October 2007 as directed.

(e) On 23 October 2007, a subsidiary, larut leisure enterprise (hong Kong) limited (“llehK”) had entered into a Share Sale agreement with Jilin hua Tian Property Group Co. ltd. (“Jilin hua Tian”) to acquire 40% equity interest in Jilin Dingtai enterprise Development Company limited (“Jilin Dingtai”) (“the Proposed acquisition”) at a total consideration of rmB45,000,000. Currently llehK owns a 60% equity interest in Jilin Dingtai. after the Proposed acquisition, Jilin Dingtai will be a wholly owned subsidiary of llehK. Jilin Dingtai is the beneficial and registered owner of a piece of land measuring approximately 6,665 sq meter together with a proposed development known as Yin hai Complex, comprises of an incomplete structure of a proposed 35 storey commercial, office and residential building together with 2 level basement car park located at no. 19, Xian road, Changchun, Jilin Province, People’s republic of China. The transfer of shares was effected on 15 may 2008.

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annUal rePOrT 2008

46. SIGNIFICANT RELATED PARTY TRANSACTIONS

During the financial year, significant related party transactions are as follows:

Group Company2008

RM’0002007

RM’0002008

RM’0002007

RM’000Construction costs incurred with the following companies: - agrocon (m) Sdn. Bhd. - 31,798 - - - KEB Group 938 24,428 - -

Financing facilities obtained from the following companies (note 33): - Pengurusan Projek Bersistem Sdn. Bhd. 18,685 19,023 - - - KEB Group 28,666 - 28,666 -

Rental income received and receivable from the following companies: - agrocon (m) Sdn. Bhd. 64 64 - - - KEB Group 1,486 304 - -

interest expense paid and payable to the following companies: - Pengurusan Projek Bersistem Sdn. Bhd. 2,050 1,951 - - - KEB Group 1,076 79 1,043 -

The nature of the relationship with the related parties is as follows:

Related Parties Nature of Relationship

Pengurusan Projek Bersistem Corporate shareholder Sdn. Bhd. (“PPBSB”) Tan Sri Dato’ (Dr.) ir. Chan ah Chye @ Chan Chong Yoon (“TSDCaC”), a

director and substantial shareholder of the Company, has substantial financial interest in PPBSB.

agrocon (m) Sdn. Bhd. (“amSB”)

The sister of TSDCAC, a director and substantial shareholder of AMSB, has substantial financial interest in amSB.

Kumpulan Europlus Berhad and its subsidiaries (“KeB Group”)

Kumpulan europlus Berhad is a corporate shareholder.

TSDCAC, a director and substantial shareholder of the Company has substantial financial interest in KeB Group.

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been determined on a basis negotiated between the parties.

106



47. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

The operations of the Group and of the Company are subject to a variety of financial risks, including foreign currency risk, interest rate risk, credit risk, liquidity risk and cash flow risk. The Group and the Company have formulated a financial risk management framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group and of the Company.

(b) Foreign currency risk

The Group operates internationally and is exposed to foreign currency transactions in Chinese renminbi and hong Kong Dollars. The Group’s policy is to minimise the exposure of overseas operating subsidiaries to transaction risk by matching local currency income with local currency costs.

The net unhedged financial liabilities of the Group that are not denominated in their functional currencies are as follows:

2008 RM’000

2007RM’000

Short term borrowings 5,660 9,177

(c) Interest Rate Risk

The Group’s policy is to borrow principally on a floating rate basis but retain a proportion of fixed rate debt. The objectives for the mix between fixed and floating rate borrowings are set to reduce the impact of an upward change in interest rates while enabling benefits to be enjoyed if interest rates fall.

(d) Credit Risk

Credit risks are minimised and monitored via strictly limiting the Group’s associations to business partners with high creditworthiness. Trade receivables mainly arises from development properties projects and are supported by end-financiers.

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors other than those disclosed in note 25.

(e) Liquidity Risk

Since the financial year ended 31 January 2006, the Group and the Company have not met their obligations in certain loan repayments and interest payments and have breached the borrowing facilities agreements as disclosed in Note 33. The Group and the Company are undertaking a debt restructuring exercise as disclosed in note 43 to mitigate the liquidity risk.

(f) Cash flow risk

The Group and the Company review its cash flow position regularly to manage its exposure to fluctuations in future cash flow associated with its monetary financial instruments.

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annUal rePOrT 2008

47. FINANCIAL INSTRUMENTS (CONT’D)

(g) Fair Values

The carrying amounts of the financial assets and financial liabilities approximate their fair values due to the relatively short term maturities except for the following:

Group Company

Note

Carrying AmountRM’000

Fair Value

RM’000

Carrying AmountRM’000

Fair Value

RM’000At 31 January 2008

Financial AssetsOther investment 21 76,332 * - -

Financial Liabilitieshire-purchase payables 34 16 16∆ - -Other non-current payables: 36 Amount payable for acquisition of land 52,352 *** - - Amount payable for acquisition of building 13,009 *** - - Loan from a minority shareholder of a subsidiary 10,105 ** - -

At 31 January 2007

Financial AssetsOther investment 21 76,332 * - -

Financial Liabilitieshire-purchase payables 34 519 530∆ - -Other non-current payables: 36 Amount payable for acquisition of land 53,400 *** - - Amount payable for acquisition of building 13,027 *** - - Loan from a minority shareholder of a subsidiary 10,118 ** - -

* it is not practical to estimate the fair values of the unquoted other investment because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.

** It is not practical to estimate the fair values of loan from a minority shareholder of a subsidiary due principally to a lack of fixed repayment term entered into by the parties involved and without incurring excessive costs.

*** It is not practical to estimate the fair values of amount payable for acquisition of land and building due principally to a lack of fixed payment terms (as terms of payment is subject to the timing of fulfilment of certain conditions precedent) entered into by the parties involved and without incurring excessive costs.

∆ The fair value of hire-purchase is estimated by discounting the expected future cash flows using the current interest rates for liabilities with similar risk profiles.

108



48. SEGMENTAL INFORMATION

(a) Analysis by business segments

At 31 January 2008

Propertyinvestment

and holdingRM’000

EducationRM’000

Hotel & recreation

RM’000

Totalbefore

eliminationRM’000

EliminationRM’000

ConsolidatedRM’000

Revenueexternal sales 229,671 - 18,678 248,349 - 248,349

Total revenue 229,671 - 18,678 248,349 - 248,349

ResultSegment results 14,552 (1,456) (7,524) 5,572 - 5,572Share of results of jointly controlled entities 249 - - 249 - 249

Profit before tax 5,821income tax expense (2,273)

3,548

Other informationSegment assets 2,948,747 78 145,286 3,094,111 (34) 3,094,077investments in jointly controlled entities 10,077 - - 10,077 - 10,077Unallocated assets 2,343

Total assets 3,106,497

Segment liabilities 2,498,263 1,505 126,143 2,625,911 (51,912) 2,573,999Unallocated liabilities 186,255

Total liabilities 2,760,254

Capital expenditure 191 - 2,538 2,729 - 2,729Depreciation of property, plant and equipment 1,872 - 5,714 7,586 - 7,586Amortisation of prepaid lease payment - - 695 695 - 695non-cash expenses other than depreciation and amortisation 41,929 360 229 42,518 - 42,518

109


annUal rePOrT 2008

48. SEGMENTAL INFORMATION (CONT’D)

(a) Analysis by business segments (Cont’d)

At 31 January 2007

Propertyinvestment

and holdingRM’000

EducationRM’000

Hotel & recreation

RM’000

Totalbefore

eliminationRM’000

EliminationRM’000

ConsolidatedRM’000

Revenueexternal sales 200,632 - 16,091 216,723 - 216,723Inter-segment sales - - - - - -

Total revenue 200,632 - 16,091 216,723 - 216,723

ResultSegment results 1,587 - (7,863) (6,276) - (6,276)Share of results of jointly controlled entities (660) - - (660) - (660)

loss before tax (6,936)income tax credit 7,918

982

Other informationSegment assets 3,096,754 237 149,612 3,246,603 (265) 3,246,338investments in jointly controlled entities 9,328 - - 9,328 - 9,328Unallocated assets 4,729

Total assets 3,260,395

Segment liabilities 2,614,057 191 142,441 2,756,689 (42,785) 2,713,904Unallocated liabilities 185,225

Total liabilities 2,899,129

Capital expenditure 21 - 304 325 - 325Depreciation of property, plant and equipment 2,072 - 5,637 7,709 - 7,709Amortisation of prepaid lease payment - - 698 698 - 698non-cash expenses other than depreciation and amortisation 39,964 - 48 40,012 - 40,012

110



48. SEGMENTAL INFORMATION (CONT’D)

(b) Analysis by geographical segments

MalaysiaRM’000

The People’s Republic of ChinaRM’000

TotalRM’000

Sales Revenueat 31 January 2008 229,671 18,678 248,349

at 31 January 2007 200,632 16,091 216,723

Carrying Amount of Segment Assetsat 31 January 2008 2,961,211 145,286 3,106,497

at 31 January 2007 3,110,783 149,612 3,260,395

additions to Property, Plant and equipmentat 31 January 2008 191 2,538 2,729

at 31 January 2007 21 304 325

The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of

business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.


statement by directorsPUrSUanT TO SeCTiOn 169 (15) OF The COmPanieS aCT, 1965

The directors of TALAM CORPORATION BERHAD state that, in their opinion, the accompanying balance sheets and the related statements of income, cash flows and changes in equity, are drawn up in accordance with the provisions of the Companies act, 1965 and the applicable Malaysian Accounting Standards Board approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as of 31 January 2008 and of the results and the cash flows of the Group and of the Company for the year ended on that date.

Signed in accordance with a resolution of the directors,

__________________________ ____________________________CHUA KIM LAN DATUK AB RAUF BIN YUSOH Kuala Lumpur,27 May 2008

I, LEOW CHI LIH, the officer primarily responsible for the financial management of TALAM CORPORATION BERHAD, do solemnly and sincerely declare that the accompanying balance sheets and the related statements of income, changes in equity and cash flows, are, in my opinion, correct and i make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations act, 1960.

_____________________________________LEOW CHI LIH

Subscribed and solemnly declared by the abovenamed LEOW CHI LIH at KUALA LUMPUR this 27th day of may, 2008.

Before me,

_____________________________________ZAINAL ABIDIN BIN NAN (W316)COmmiSSiOner FOr OaThS

declarationBY The OFFiCer PrimarilY reSPOnSiBle FOr The FinanCial manaGemenT OF The COmPanY

PUrSUanT TO SeCTiOn 169 (16) OF The COmPanieS aCT, 1965


LIST OF PROPERTIES@ 31 January 2008

No.

@ Joint Venture+ Registered# Beneficial Owner

Land/Built up area

Remainingacreage Title No.

Description/proposeddevelopment

Date ofAcquisition / Joint Venture/Completion Tenure Expiry

Approximateage of thebuilding(Years)

Net book value as at 31/01/2008 RM’000

1 Europlus CorporationSdn Bhd

+ 2,711.24 acres

2,404.13 G 45083 Lot 15071hS(D) 18257 PT 771hS(D) 27150 to hS(D) 27200, hS(D) 27301 to hS(D) 27428, PT 7335 to PT 7513hS(D) 26268 to hS(D) 26325, PT 6353 to PT 6410hS(D) 26328 to hS(D) 26464, PT 6413 to PT 6549hS(D) 26001 to hS(D) 26075, PT 6086 to PT 6160hS(D) 26077 to hS(D) 26230, PT 6162 to PT 6315hS(D) 26232 to hS(D) 26267, PT 6317 to PT 6352hS(D) 26231 PT 6316Part of G 45084 lot 15070hS(D) 27430 PT 7515hS(D) 27431 PT 7516hS(D) 27433 PT 7518hS(D) 9203 PT 8356hS(D) 27479 PT 7564hS(D) 8246 to hS(D) 8249, PT 7168 to PT 7171hS(D) 8235 PT 7157hS(D) 8544 PT 7697hS(D) 9330 PT 8484hS(D) 9329 PT 8483hS(D) 9396 PT 8550hS(D) 10570 PT 7230hS(D) 10574 PT 7234hS(D) 10690 PT 7350hS(D) 9419 to hS(D) 9436, PT 8573 to PT 8590hS(D) 9437 PT 8591hS(D) 9763 PT 8917hS(D) 10155 PT 9309hS(D) 9762 PT 8916hS(D) 10154 PT 9308hS(D) 35776 to hS(D) 35831, PT 12640 to PT 12695hS(D) 35744 to hS(D) 35775, PT 12608 to PT 12639hS(D) 35832 to hS(D) 35878, PT 12696 to PT 12742hS(D) 35689 to hS(D) 35739, PT 12553 to PT 12603hS(D) 35670 to hS(D) 35681, PT 12534 to PT 12545hS(D) 35683 to hS(D) 35688, PT 12547 to PT 12552hS(D) 36197 PT 13061hS(D) 37008 to hS(D) 37037, PT 11045 to PT 11074

BukitBeruntungTown ship development

18/12/1991 Freehold n/a n/a 656,545



No.


Land/Built up area






hS(D) 37748 to hS(D) 37785, PT 11784 to PT 11821hS(D) 37712 to hS(D) 37747, PT 11748 to PT 11783hS(D) 37040 to hS(D) 37060, PT 11077 to PT 11097hS(D) 38474 to hS(D) 38478, PT 12510 to PT 12514hS(D) 37378 to hS(D) 37469, PT 11415 to PT 11506hS(D) 37000 PT 11037hS(D) 36999 PT 11036hS(D) 37788 PT 11824hS(D) 37038 PT 11075G 54345 Lot 15753G 54348 Lot 15590G 54349 Lot 15206hS(D) 30973 to hS(D) 31005, PT 4527 to PT 4559hS(D) 30803 to hS(D) 30852, PT 4357 to PT 4406hS(D) 7629 PT 2548hS(D) 7831 PT 2750hS(D) 7503 PT 2421hS(D) 7405 PT 2322hS(D) 7650 PT 2569hS(D) 7969 PT 2888hS(D) 31090 PT 5148 to hS(D) 31098 PT 5156hS(D) 31100 PT 5158 to hS(D) 31113 PT 5171hS(D) 31125 PT 5183, hS(D) 31138 PT 5196hS(D) 31140 PT 5198 to hS(D) 31143 PT 5201hS(D) 31160 PT 5218hS(D) 31163 PT 5221 to hS(D) 31165 PT 5223hS(D) 31169 PT 5227, hS(D) 31170 PT 5228hS(D) 31175 PT 5233, hS(D) 31205 PT 5263hS(D) 31207 PT 5265, hS(D) 31209 PT 5267hS(D) 31211 PT 5269, hS(D) 31213 PT 5271hS(D) 31215 PT 5273, hS(D) 31217 PT 5275hS(D) 31219 PT 5277, hS(D) 31226 PT 5279hS(D) 31228 PT 5281, hS(D) 31230 PT 5283hS(D) 31232 PT 5285 to hS(D) 31264 PT 5317


No.


Land/Built up area






hS(D) 31266 PT 5319 to hS(D) 31269 PT 5322hS(D) 31271 PT 5324 to hS(D) 31274 PT 5327hS(D) 31275 PT 6080, hS(D) 31277 PT 6082hS(D) 31281 PT 6050, hS(D) 31282 PT 6051hS(D) 31287 PT 6056, hS(D) 31307 PT 61hS(D) 31308 PT 62hS(D) 31315 PT 69 to hS(D) 31317 PT 71hS(D) 31331 PT 5124 to hS(D) 31343 PT 5136hS(D) 31355 PT 5676 to hS(D) 31419 PT 5740hS(D) 31421 PT 5742 to hS(D) 31495 PT 5816hS(D) 31499 PT 5331 to hS(D) 31501 PT 5333hS(D) 31506 PT 5338, hS(D) 31511 PT 5343hS(D) 31517 PT 5349, hS(D) 31518 PT 5350hS(D) 31531 PT 5363, hS(D) 31534 PT 5366hS(D) 31536 PT 5368, hS(D) 31542 PT 5374hS(D) 31545 PT 5377, hS(D) 31548 PT 5380hS(D) 31555 PT 5387, hS(D) 31561 PT 5393hS(D) 31585 PT 5398 to hS(D) 31640 PT 5453hS(D) 31642 PT 5486 to hS(D) 31646 PT 5490hS(D) 31648 PT 5492, hS(D) 31674 PT 5158hS(D) 31650 PT 5494 to hS(D) 31673 PT 5517hS(D) 31675 PT 5519 to hS(D) 31682 PT 5526hS(D) 31686 PT 5530 to hS(D) 31690 PT 5534hS(D) 31693 PT 5555 to hS(D) 31695 PT 5557hS(D) 31696 PT 5535 to hS(D) 31705 PT 5544hS(D) 31711 PT 5550 to hS(D) 31713 PT 5552hS(D) 31714 PT 5558 to hS(D) 31727 PT 5571hS(D) 31728 PT 5913 to hS(D) 31773 PT 5958



No.


Land/Built up area






hS(D) 31774 PT 5961 to hS(D) 31777 PT 5964hS(D) 31778 PT 5959 to hS(D) 31779 PT 5960hS(D) 31780 PT 5965 to hS(D) 31801 PT 5986hS(D) 33749 PT 6003 to hS(D) 33751 PT 6005hS(D) 33752 PT 6047 to hS(D) 33754 PT 6049Lot 16532 Geran 56577Lot 16531 Geran 56575Lot 15754 Geran 54346Lot 15207 Geran 54344hS(D) 27434 PT 7519hS(D) 27445 PT 7530hS(D) 27477 PT 7562hS(D) 27435 to 27444 & hS(D) 27446 to 27475PT 7520 to 7529 & PT 7531 to 7560CT 11502 Lot 1995Geran 12274 Lot 2018Geran 40124 lot 2066 & 2073Pn 5282 lot 2067hS(D) 8160 lot 3243

2 Talam CorporationBerhad

+ 993.99 acres

472.87 hS(D) 11254 PT 8557hS(D) 13223 PT 12171hS(D) 13455 PT 12403hS(D) 13457 PT 12405hS(D) 13792 PT 12740hS(D) 14509 PT 13457hS(D) 14810 PT 13758hS(D) 29281 to hS(D) 29302, PT 14914 to PT 14935hS(D) 29818 PT 15451hS(D) 28844 PT 14573hS(D) 28845 PT 14574hS(D) 29307 PT 14940hS(D) 30174 PT 15791hS(D) 30175 PT 15792hS(D) 30355 PT 15972hS(D) 30356 PT 15973hS(D) 30358 PT 15975hS(D) 30170 PT 15787hS(D) 30171 PT 15788hS(D) 30353 PT 15970hS(D) 30354 PT 15971hS(D) 30173 PT 15790hS(D) 30066 to hS(D) 30169, PT 15683 to PT 15786hS(D) 34724 to hS(D) 34734, PT 16948 to PT 16958

Bukit Sentosa IIIIndustrial,residential and commercialdevelopment

29/10/1994 Freehold n/a N/A 269,369



No.


Land/Built up area






hS(D) 34758 to hS(D) 34842, PT 16986 to PT 17070hS(D) 34735 to hS(D) 34757, hS(D) 35619 to hS(D) 35622, PT 16959 to PT 16985hS(D) 34843 to hS(D) 35328, PT 17071 to PT 17556hS(D) 35343 to hS(D) 35589, PT 17571 to PT 17817hS(D) 35590 to hS(D) 35602, PT 17818 to PT 17830hS(D) 34039 to hS(D) 34378, PT 16263 to PT 16602hS(D) 35330 PT 17558

3 Europlus Berhad +

+

50.71 acres

717 acres

35.00

511.02

hS(D) 33034 PT 4912hS(D) 33035 to hS(D) 33038, PT 4913 to PT 4916hS(D) 33041 to hS(D) 33088, PT 4920 to PT 4967hS(D) 33124 to hS(D) 33177, PT 5005 to PT 5058hS(D) 33231 to hS(D) 33424, PT 5112 to PT 5113 & PT 10034 to PT 10225hS(D) 33427 to hS(D) 33525, PT 10228 to PT 10326hS(D) 33607 to hS(D) 33681, PT 10409 to PT 10483hS(D) 33682 to hS(D) 33707, PT 10484 to PT 10509hS(D) 33526 PT 10327hS(D) 33530 PT 10331hS(D) 33708 PT 10510

hS(D) 21938 to hS(D) 22089, PT 7881 to PT 8032hS(D) 22090 to hS(D) 22119, PT 8033 to PT 8062hS(D) 20331 PT 6274hS(D) 20335 PT 6278hS(D) 20472 PT 6415hS(D) 20467 PT 6410hS(D) 22129 PT 8072hS(D) 21498 PT 7441hS(D) 19594 to hS(D) 19694, PT 5537 to PT 5637hS(D) 19697 to hS(D) 20330, PT 5640 to PT 6273

PrimaBeruntungTown ship development

Bukit Beruntung IIIResidential, industrial and commercial development

14/05/1996

18/12/1991

Freehold

Freehold

n/a

n/a

N/A 208,157



No.


Land/Built up area






hS(D) 21505 to hS(D) 21858, PT 7448 to PT 7801hS(D) 22306 to hS(D) 22309, PT 8249 to PT 8252hS(D) 20942 to hS(D) 21497, PT 6885 to PT 7440hS(D) 21859 to hS(D) 21937, PT 7802 to PT 7880hS(D) 18440 to hS(D) 18442, PT 4383 to PT 4385hS(D) 18443 PT 4386hS(D) 18438 PT 4381hS(D) 18439 PT 4382hS(D) 18284 PT 4227hS(D) 20471 PT 6414hS(D) 22128 PT 8071hS(D) 18285 PT 4228 (Part)

4 KenshineCorporationSdn Bhd

@ 600 acres 184.40 hS(D) 2479 to 2484, PT 6256 to 6261mukim DengkilDaerah Sepang

Putra PerdanaDevelopment of residential andcommercial properties

28/09/1995 99 yearsLeasehold

19/10/2093 n/a 195,651

5 maxisegar Sdn Bhd

+ 3,000 acres 1,284.10 hS(D) 5746 PT 836mukim Ulu TinggiDaerah Kuala Selangor

hS(D) 5704 PT 5616hS(D) 5706 to hS(D) 5707, PT 5618 to PT 5619hS(D) 5709 PT 5621hS(D) 5713 to hS(D) 5718, PT 5625 to PT 5630mukim Batang BerjuntaiDaerah Kuala Selangor

BatangBerjuntai


21/01/2101 n/a 163,701

6 maxisegar Sdn Bhd

+ 801 acres 113.82 hS(D) 213918 to 213921 PT 62056 to 62059hS(D) 213922 to 214182 PT 62358 to 62610, PT 71773 to 71780hS(D) 201972 PT 58673hS(D) 201974 to 201975 PT 58490 to 58491hS(D) 201976 PT 59170hS(D) 201978 to 201979 PT 60227 & 61372hS(D) 201980 to 201981 PT 62420 & 62421hS(D) 201982 PT 62355mukim PetalingDaerah Petaling

Taman Puncak JalilDevelopment of residential andcommercial properties


02/07/2100 n/a 158,345



No.


Land/Built up area






7 lestari PuchongSdn Bhd

+ 496.731 acres

91.31 hS(D) 50603 PT 142202hS(D) 50606 PT 142206, hS(D) 50607 PT 142205hS(D) 186777 to 187184 PT 54005 to 54412hS(D) 243405 to 243477 PT 78128 to 78200hS(D) 243364 PT 78087mukim PetalingDaerah Petaling

Lestari Puchongmix development of residential,commercial and corporate park.


12/06/2091 n/a 146,331

8 Jilin Provincemaxcourt hotelLimited

+ 5,995 sq m41,584 sq m

n/a no. 19, Xian roadChangchun, Jilin ProvincePeople’s republic

A 4 star 24 storey hotel building


29/12/2023 9 118,620

9 Galian JutaSdn Bhd

# &@

200 acres 99.62 Pn 1211 lot 20407 mukim Tanjung 12Daerah Kuala Langat

Saujana PutraDevelopment of residential and commercialbuildings


05/02/2094 n/a 63,930

10 Abra DevelopmentSdn Bhd

+ 0.96 acres/3,901.4 sq M

n/a Pm 3861 lot 261Bandar AmpangDaerah hulu langat

Menara maxisegar24-storey com-mercial complex


03/04/2094 13 57,000



statement on directors’ interestsas at 2 June 2008

ORDINARY SHARESA. (Based on register of Directors’ shareholdings as at 2 June 2008)

No. of Ordinary Shares of RM1.00 eachDirect

Interest %*4DeemedInterest %*4

The Company

1. Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan Chong Yoon

42,366,739 6.74 288,837,177*1 45.97

2. Y.a.m. Tengku Sulaiman Shah al-haj ibni al-marhum Sultan Salahuddin Abdul aziz Shah al-haj

500 *2 - -

3. Chua Kim Lan 74,006 0.012 7,500*3 0.001

4. Loy Boon Chen 803,300 0.13 - -

Notes:

*1 Deemed interest through his spouse, PSDTnC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek Bersistem Sdn Bhd, Prosperous inn Sdn Bhd, Sze Choon holdings Sdn Bhd and Kumpulan europlus Berhad pursuant to Section 6a of the Companies act, 1965.

*2 less than 0.005%.

*3 Deemed interest through her spouse, Chin Chee meng.

*4 % shareholding based on voting share capital as at 2 June 2008 of 628,304,570.

Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan Chong Yoon, by virtue of his interest in the shares of the Company is also deemed interested in the shares of all the Company’s subsidiaries to the extent the Company has an interest.

IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES (“ICPS”)B. (Based on register of Directors’ shareholdings as at 2 June 2008)

No. of ICPS of RM0.10 eachDirect

Interest %*4DeemedInterest %*4

The Company

1. Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan Chong Yoon

12,231,250 8.50 37*1 *2

2. Chua Kim Lan 65 *2 18,750*3 0.013

3. Loy Boon Chen 10,000 - - -

Notes:

*1 Deemed interest by virtue of his interest in Sze Choon holdings Sdn Bhd pursuant to Section 6a of the Companies act, 1965.

*2 less than 0.005%.

*3 Deemed interest through her spouse, Chin Chee meng.

*4 % shareholding based on outstanding iCPS as at 2 June 2008 of 143,962,746.

Save as disclosed above, none of the other Directors of the Company have any interests in the shares of the Company and its related corporations as at 2 June 2008.


analysis of ordinary shareholdingsas at 2 June 2008

SHARE CAPITAL

Authorised share capital : rm1,000,000,000.00 divided into 939,000,000 ordinary shares of rm1.00 each, 100,000,000 redeemable convertible preference shares of rm0.01 each and 600,000,000 irredeemable convertible preference shares of rm0.10 each.

Issued and paid-up capital : rm643,579,453 divided into 629,183,170 ordinary shares of rm1.00 each and 143,962,746 irredeemable convertible preference shares of rm0.10 each.

Voting Rights : There is only one class of ordinary shares with voting rights in the paid-up share capital of the Company. each share entitles the holder to one vote.

Shares Buy Back : The Company had purchased 878,600 ordinary shares and the shares purchased were retained as treasury shares.

DISTRIBUTION OF ORDINARY SHAREHOLDINGS(Based on record of Depositors as at 2 June 2008)

Size of Holdings

No. ofOrdinary

Shareholders

% of Ordinary

Shareholders

No. ofOrdinary

Shares Held

% of Ordinary

Shares Held

1 - 99 1,150 7.83 44,758 0.01100 - 1,000 5,635 38.38 3,582,564 0.571,001 - 10,000 5,537 37.72 23,856,867 3.8010,001 - 100,000 1,955 13.32 69,559,940 11.07100,001 - 31,415,227*1 402 2.74 289,987,341 46.1531,415,228 and above *2 2 0.01 241,273,100 38.40

TOTAL 14,681 100.00 628,304,570 100.00

NOTES:

*1 Less than 5% of the voting share capital*2 5% and above of the voting share capital

THIRTY LARGEST ORDINARY SHAREHOLDERS(Based on record of Depositors as at 2 June 2008)

NameNo. of Ordinary

Shares Held %

1) eB nOmineeS (TemPaTan) SenDirian BerhaDPledged Securities account for Kumpulan europlus Berhad (JTr)

137,000,000 21.80

2) CimSeC nOmineeS (TemPaTan) SDn BhDCimB Bank for Kumpulan europlus Berhad (Banking)

104,273,100 16.60

3) TaSeC nOmineeS (TemPaTan) SDn BhDTA First Credit Sdn Bhd for Kumpulan Europlus Berhad

20,000,000 3.18

4) Chan ah ChYe @ Chan ChOnG YOOn 13,301,562 2.12

5) PenGUrUSan PrOJeK BerSiSTem SDn BhD 8,902,468 1.42

6) Ta nOmineeS (TemPaTan) SDn BhDPledged Securities account for Chan ah Chye @ Chan Chong Yoon

8,655,277 1.38



NameNo. of Ordinary

Shares Held %

7) m & a nOminee (TemPaTan) SDn BhDInsas Credit & Leasing Sdn Bhd for Chan Ah Chye @ Chan Chong Yoon

7,364,821 1.17

8) CiTiGrOUP nOmineeS (aSinG) SDn BhDExempt an for Mellon Bank (Abnamro Mellon)

7,319,900 1.17

9) PUBliC nOmineeS (TemPaTan) SDn BhDPledged Securities Account for Chan Ah Chye @ Chan Chong Yoon (JHL)

7,158,377 1.14

10) CarTaBan nOmineeS (TemPaTan) SDn BhDDBS Vickers (Hong Kong) Limited for Chai Yet Lee

7,010,000 1.12

11) TaSeC nOmineeS (TemPaTan) SDn BhDTA First Credit Sdn Bhd for Pengurusan Projek Bersistem Sdn Bhd

6,800,000 1.08

12) Chai YUne lOOnG 6,000,000 0.95

13) CiTiGrOUP nOmineeS (aSinG) SDn BhD CBNY for DFA Emerging Markets Fund

5,944,350 0.95

14) JF aPeX nOmineeS (TemPaTan) SDn BhDPledged securities account for Tan Meng Khong (Margin)

4,829,100 0.77

15) eB nOmineeS (TemPaTan) SenDirian BerhaDPledged Securities Account for Chan Ah Chye @ Chan Chong Yoon (BB)

4,339,362 0.69

16) MINISTER OF FINANCEAkaun Jaminan Pinjaman Kerajaan Persekutuan

4,300,000 0.68

17) TaSeC nOmineeS (TemPaTan) SDn BhDTA First Credit Sdn Bhd for Kumpulan Europlus Bhd (A/C No. 2)

4,291,389 0.68

18) POS malaYSia BerhaD 3,879,000 0.62

19) CimSeC nOmineeS (TemPaTan) SDn BhDCIMB Bank for Intelbest Corporation Sdn Bhd (Banking)

3,453,471 0.55

20) hDm nOmineeS (TemPaTan) SDn BhDUOB Kay Hian Pte Ltd for Teh Kee Hong

3,300,000 0.53

21) hDm nOmineeS (TemPaTan) SDn BhDUOB Kay Hian Pte Ltd for Michael Koh Kow Tee

3,210,000 0.51

22) Tan SUan hUaT 3,026,100 0.48

23) JUrUTama hOlDinGS SDn BhD 3,025,609 0.48

24) lee Kim POh 3,000,000 0.48

25) m & a nOminee (aSinG) SDn BhDCIMB-GK Securities Pte Ltd for Hi-Way Investments Limited (38/207620)

3,000,000 0.48

26) OliVe lim SWee lian 2,600,000 0.41

27) OSK nOmineeS (aSinG) SDn BerhaDDBS Vickers Secs (S) Pte Ltd

2,223,000 0.35


NameNo. of Ordinary

Shares Held %

28) CiTiGrOUP nOmineeS (aSinG) SDn BhDCNBY for DFA Emerging Markets Small Cap Series

2,096,350 0.33

29) KUmPUlan eUrOPlUS BerhaD 2,066,700 0.33

30) mOhamaD YUnUS Bin mOhameD ShariFF 2,000,000 0.32

394,369,936 62.77

SUBSTANTIAL SHAREHOLDERS(Based on register of Substantial Shareholders as at 2 June 2008)

Direct Interest Deemed Interest

Name of substantial shareholdersNo. of Ordinary

Shares %*3No. of Ordinary

Shares %*3

1. Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan ChongYoon (“TSDCaC”)

2. Puan Sri Datin Thong nyok Choo (“PSDTnC”)

3. Kumpulan europlus Berhad

4. iJm Corporation Berhad

42,366,739

481,315

269,821,689

-

6.74

0.08

42.94

-

288,837,177*1

330,722,601*2

-

269,821,689

45.97

52.63

-

42.94

NOTES:-

*1 Deemed interest through his spouse, PSDTnC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek Bersistem Sdn Bhd, Prosperous inn Sdn Bhd, Sze Choon holdings Sdn Bhd and Kumpulan europlus Berhad pursuant to Section 6a of the Companies act, 1965 (“the act”).

*2 Deemed interest through her spouse, TSDCaC, her daughter, Chan Siu Wei and by virtue of her interest in Pengurusan Projek Bersistem Sdn Bhd, Prosperous inn Sdn Bhd, Sze Choon holdings Sdn Bhd and Kumpulan europlus Berhad pursuant to Section 6a of the act.

*3 % shareholding based on voting share capital as at 2 June 2008 of 628,304,570.



analysis of irredeemable convertible preference shareholdings

as at 2 June 2008

no. of iCPS issued : 591,867,978

no. of iCPS Outstanding : 143,962,746

Conversion Period : 12 January 2004 to 2 January 2009

Conversion Rights : each registered holder of irredeemable Convertible Preference Shares (“iCPS”) shall be entitled to convert the iCPS held into new shares of rm1.00 each in the Company at the iCPS Conversion Price of rm1.00. For the avoidance of any doubt, the iCPS Conversion Price shall be deemed to be satisfied by tendering and surrendering the iCPS with an aggregate par value equivalent to the iCPS Conversion Price and no cash monies shall be payable for the iCPS conversion.

DISTRIBUTION OF ICPS HOLDINGS

Size of HoldingsNo. of ICPS

Holders% of ICPS

HoldersNo. of ICPS

Held% of ICPS

Held

1 - 99 479 8.48 21,245 0.01100 - 1,000 412 7.29 364,312 0.251,001 - 10,000 3,424 60.59 14,498,761 10.0710,001 - 100,000 1,141 20.19 38,259,353 26.58100,001 - 7,198,136*1 194 3.43 78,587,825 54.597,198,137 and above*2 1 0.02 12,231,250 8.50

TOTAL 5,651 100.00 143,962,746 100.00

NOTES:

*1 - less than 5% of outstanding iCPS *2 - 5% and above of outstanding iCPS

THIRTY LARGEST ICPS HOLDERS

Name No. of ICPS %

1) Chan ah ChYe @ Chan ChOnG YOOn 12,231,250 8.50

2) JaSVinDer SinGh a/l GUrBaKheS SinGh 3,700,000 2.57

3) GOOi SeOK ChinG 3,340,000 2.32

4) JeSSiCe SieW ShWU hUeY 2,760,000 1.92

5) CiTiGrOUP nOmineeS (TemPaTan) SDn BhDPledged securities account for Tan Kim Foh @ Tan Kim Fok (470276)

2,382,000 1.65

6) Chan Sam menG 2,160,600 1.50

7) JaSVinDer SinGh a/l GUrBaKheS SinGh 2,000,000 1.39

8) Ta nOmineeS (TemPaTan) SDn BhDPledged securities account for Intelbest Corporation Sdn Bhd

1,980,000 1.38

9) hOr SieW ThYe 1,800,000 1.25


analysis of irredeemable convertible preference shareholdingsas at 2 June 2008

Name No. of ICPS %

10) P.i.S. hOlDinGS SDn BhD 1,553,341 1.08

11) OOi BenG henG 1,500,000 1.04

12) JF aPeX nOmineeS (TemPaTan) SDn BhDPledged securities account for Yap Hon Kong (Margin)

1,500,000 1.04

13) mOhamaD YUnUS Bin mOhameD ShariFF 1,493,000 1.04

14) lim KeW @ lim KOn FOOnG 1,335,022 0.93

15) YaP ChUn FaTT 1,330,500 0.92

16) JOGinDer SinGh a/l GUrBaKheS SinGh 1,200,000 0.83

17) ChOO SOOK mei 1,146,400 0.80

18) lee SOO har 974,800 0.68

19) maYBan nOmineeS (TemPaTan) SDn BhDPledged securities account for Chan Sam Meng

951,900 0.66

20) hlB nOmineeS (TemPaTan) SDn BhDPledged securities account for Chong Kah Fung

925,000 0.64

21) DaTO’ nG TiOnG SenG @ nG Ba 700,000 0.49

22) GOh ChieW ai 678,900 0.47

23) eU Kim PenG 664,400 0.46

24) UnG Kah Chin 660,400 0.46

25) WOnG Sin KieW 648,500 0.45

26) GO SUU KEN 607,400 0.42

27) ChOO Chen hin 603,000 0.42

28) CYnThia haWKinS 600,000 0.42

29) hlG nOminee (TemPaTan) SDn BhDHong Leong Bank Bhd for Tan Ah Heng

600,000 0.42

30) Sai Yee @ Sia SaY Yee 588,000 0.41

52,614,413 36.55


notice of 83rd annual general meeting

NOTICE IS HEREBY GIVEN THAT the 83rd Annual General Meeting of Talam COrPOraTiOn BerhaD will be held at Perdana Ballroom, Pandan lake Club, lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala lumpur on Tuesday, 29 July 2008 at 10.30 a.m. for the following purposes:-

AGENDA

1. To re-table and re-adopt the reissued audited Financial Statements of the Company for the year ended 31 January 2006 and the reports of the Directors and auditors thereon pursuant to the technical issue of the Companies Act, 1965 arising from the directive from the Securities Commission which required the adoption of the same at the extraordinary general meeting held on 15 november 2007.

(Resolution 1)

2. To re-table and re-adopt the reissued audited Financial Statements of the Company for the year ended 31 January 2007 and the reports of the Directors and auditors thereon pursuant to the technical issue of the Companies Act, 1965 arising from the directive from the Securities Commission which required the adoption of the same at the extraordinary general meeting held on 15 november 2007. (Resolution 2)

3. To receive and adopt the audited Financial Statements of the Company for the year ended 31 January 2008 and the reports of the Directors and auditors thereon. (Resolution 3)

4. To approve the payment of Directors’ fees of rm25,000 for each Director for the year ended 31 January 2008. (Resolution 4)

5. To re-elect Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan Chong Yoon who retire in accordance with article 97 of the articles of association of the Company. (Resolution 5)

6. To re-elect the following Directors who retire in accordance with article 81 of the articles of association of the Company:-

6.1 Dato’ Kamaruddin Bin mat Desa6.2 Chua Kim lan6.3 loy Boon Chen6.4 lee Swee Seng

(Resolution 6)(Resolution 7)(Resolution 8)(Resolution 9)

7. To re-appoint messrs Deloitte KassimChan as auditors and to authorise the Directors to fix their remuneration. (Resolution 10)

AS SPECIAL BUSINESSES

8. To consider and if thought fit to pass the following Ordinary resolutions:-

8.1 Ordinary Resolution Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue shares in the Company at any time until the conclusion of the next annual General Meeting and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that the aggregate number of shares to be issued does not exceed 10 percent of the issued share capital of the Company for the time being, subject always to the approval of all the relevant regulatory bodies being obtained for such allotments and issues.”

(Resolution 11)


8.2 Ordinary Resolution Proposed shareholders’ mandate for Talam Corporation Berhad and its subsidiaries (“Talam

Group”) to enter into recurrent transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ Mandate I”)

“THAT, the Talam Group be and is hereby authorised to enter into all arrangements and/or transactions with agrocon (m) Sdn Bhd and Pengurusan Projek Bersistem Sdn Bhd (“related Parties”), the nature of which is set out in Section 2.2 of the Circular to Shareholders dated 7 July 2008 provided that such arrangements and/or transactions are:-

(i) recurrent transactions of a revenue or trading nature;

(ii) necessary for the day-to-day operations;

(iii) carried out in the ordinary course of business on normal commercial terms which are not more favourable to the related Parties than those generally available to the public (where applicable); and

(iv) are not to the detriment of the minority shareholders;

AND THAT such approval shall continue to be in force until:-

(i) the conclusion of the next annual General meeting (“aGm”) of the Company (and will be subject to annual renewal) unless by a resolution passed at an aGm whereby the authority is renewed;

(ii) the expiration of the period within which the next aGm of the Company subsequent to the date it is required to be held pursuant to Section 143(1) of the Companies act, 1965 (“act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the act); or

(iii) revoked or varied by resolution passed by the shareholders in an aGm or extraordinary

general meeting;

whichever is earlier;

AND THAT the breakdown of the aggregate value of the transactions of the Proposed Shareholders’ mandate i conducted during the financial year will be disclosed in the annual report of the Company on the information of the type of the recurrent related party transactions made and the names of the related parties involved in each type of the recurrent related party transactions made and their relationship with the Company for the said financial year;

AND THAT the Directors of the Company be and are hereby authorised to complete and take all such steps and do all acts and things in such manner as the Directors of the Company may deem fit or expedient or necessary to give effect to the Proposed Shareholders’ mandate i.”

(Resolution 12)




Group”) to enter into recurrent transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ Mandate II”)

“THAT, the Talam Group be and is hereby authorised to enter into all arrangements and/or transactions with KEB Builders Sdn Bhd, KEB Management Sdn Bhd, KEURO Leasing Sdn Bhd, KeUrO Trading Sdn Bhd and Konsortium lPB Sdn Bhd (“related Parties”), the nature of which is set out in Section 2.2 of the Circular to Shareholders dated 7 July 2008 provided that such arrangements and/or transactions are:-









general meeting;


AND THAT the breakdown of the aggregate value of the transactions of the Proposed Shareholders’ mandate ii conducted during the financial year will be disclosed in the annual report of the Company on the information of the type of the recurrent related party transactions made and the names of the related parties involved in each type of the recurrent related party transactions made and their relationship with the Company for the said financial year;

AND THAT the Directors of the Company be and are hereby authorised to complete and take all such steps and do all acts and things in such manner as the Directors of the Company may deem fit or expedient or necessary to give effect to the Proposed Shareholders’ mandate ii.”

(Resolution 13)




Group”) to enter into recurrent transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ Mandate III”)

“THAT, the Talam Group be and is hereby authorised to enter into all arrangements and/or transactions with Cekap Tropikal Sdn Bhd, Gr Commerce Sdn Bhd, iJm Construction Sdn Bhd, radiant Pillar Sdn Bhd and Sierra Ukay Sdn Bhd (“related Parties”), the nature of which is set out in Section 2.2 of the Circular to Shareholders dated 7 July 2008 provided that such arrangements and/or transactions are:-









general meeting;


AND THAT the breakdown of the aggregate value of the transactions of the Proposed Shareholders’ mandate iii conducted during the financial year will be disclosed in the annual report of the Company on the information of the type of the recurrent related party transactions made and the names of the related parties involved in each type of the recurrent related party transactions made and their relationship with the Company for the said financial year;

AND THAT the Directors of the Company be and are hereby authorised to complete and take all such steps and do all acts and things in such manner as the Directors of the Company may deem fit or expedient or necessary to give effect to the Proposed Shareholders’ mandate iii.”

(Resolution 14)



8.5 Ordinary Resolution Authority pursuant to Section 132E of the Companies Act, 1965

“THAT pursuant to Section 132E of the Companies Act, 1965, authority be and is hereby given for the Company and each of its subsidiaries to enter into any arrangement or transaction with any Director of the Company or any person connected with such Director to acquire from or dispose to such Director or person connected with such Director any non-cash assets of requisite value that is less than 5% of the total net tangible assets of the Group at the time of such acquisition or disposal.

AND THAT such authority shall continue to be in force until:-

(i) the conclusion of the next annual General meeting of the Company; or

(ii) the expiration of the period within which the next annual General meeting of the Company is required to be tabled pursuant to Section 143(1) of the Companies act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies act, 1965); or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is earlier.”

9. To transact any ordinary business which due notice shall have been given.

(Resolution 15)

BY ORDER OF THE BOARD

TING KOK KEONGSecretary

Kuala Lumpur7 July 2008

NOTES:

1. A member of the Company entitled to attend and vote at the meeting may appoint one (1) proxy to attend and vote instead of him. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation under its common seal or the hand of its attorney.

3. AllformsofproxyshouldbedepositedattheCompany’sRegisteredOfficeat Suite 2.05, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

4. The Reissued Audited Financial Statements for the years ended 31 January 2006 and 31 January 2007 (“Reissued AFS”) have been received and adopted by the shareholders of the Company at the Extraordinary General Meeting held on 15 November 2007 pursuant to the directive from the Securities Commission (“SC”) under Regulation 5 of the Securities Industry (Compliance with Approved Accounting Standards) Regulation 1999 via SC’s letter dated 1 October 2007.The Companies CommissionofMalaysiahasrejectedthefilingoftheReissuedAFSdueto the technical issue pursuant to Section 169(1) of the Companies Act, 1965,whichstatesthattheauditedfinancialstatementsmustbetabledat an Annual General Meeting and the SC have agreed for the Reissued AFS to be re-tabled and re-adopted by the shareholders of the Company at this Annual General Meeting.

EXPLANATORY NOTES TO THE SPECIAL BUSINESSES

5. The Ordinary Resolution no. 11 if passed, will give the Directors of the

Company the authority to issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and costs involved in convening general meeting to specifically approve such an issue of shares. Thisauthority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

6. The detailed information on the Ordinary Resolution nos. 12, 13 and 14 pertaining to the Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature, is set out in the Circular to Shareholders dated 7 July 2008 which is enclosed together with the Company’s Annual Report 2008.

7. Resolution pursuant to Section 132E of the Companies Act, 1965 Section 132E of the Companies Act, 1965 prohibits a company or its

subsidiaries from entering into any arrangement or transaction with its directors or persons connected with such directors in respect of the acquisition from or disposal to such directors or connected persons of any non-cash assets of the requisite value without prior approval of the Company in general meeting. According to the Companies Act, 1965, a non-cash asset is considered to be of the requisite value, if at the time of arrangement or transaction, its value is greater than RM250,000.00 or 10% of the Company’s net assets, whichever is the lesser, subject to a minimum of RM10,000.00.

The proposed Ordinary Resolution no. 15, if passed, will authorise the Company and each of its subsidiaries to enter into any arrangement or transaction with a Director of the Company or with a person connected with such a Director to acquire from or dispose to such a Director or person connected with such a Director any non-cash assets of the requisite value that is less than 5% of the total net tangible assets of the Group at the time of such acquisition or disposal.



STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

Directors standing for re-election at the 83rd Annual General Meeting of the Company

The Director retiring by rotation and standing for re-election pursuant to Article 97 of the Articles of Association of the Company is Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan Chong Yoon.

The Directors retiring by rotation and standing for re-election pursuant to Article 81 of the Articles of Association of the Company are as follows:-

* Dato’ Kamaruddin Bin Mat Desa* Chua Kim Lan* Loy Boon Chen* Lee Swee Seng The profile of each of the above-named Directors is set out in the section entitled “Profile of Board of Directors” on pages 6 to 9 of this annual report.

Their securities holdings in the Company and its related corporations are set out in the section entitled “Statement on Directors’ interests” on pages 119 of this annual report.

nO. OF ShareS helD

i/We ___________________________________________________________________________________ (nriC no. __________________________________)(name in full and in block letter)

of __________________________________________________________________________________________________________________________________ (Full address)

being a member/members of Talam COrPOraTiOn BerhaD (1120-h) hereby appoint __________________________________________________

of _______________________________________________________________________________ (nriC no. _________________________________________)

of __________________________________________________________________________________________________________________________________ (Full address)

or failing him, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the 83rd annual General meeting of the Company to be held at the Perdana Ballroom, Pandan lake Club, lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala lumpur on Tuesday, 29 July 2008 at 10.30 a.m. and at any adjournment thereof, on the following resolutions referred to in the notice of the annual General meeting.

my/Our proxy is to vote as indicated below:

NO. RESOLUTIONS FOR AGAINST

1 To re-table and re-adopt the reissued audited Financial Statements of the Company for the year ended 31 January 2006 and the Reports of the Directors and Auditors thereon pursuant to the technical issue of the Companies Act, 1965 arising from the directive from the Securities Commission which required the adoption of the same at the extraordinary general meeting held on 15 november 2007.

2 To re-table and re-adopt the reissued audited Financial Statements of the Company for the year ended 31 January 2007 and the Reports of the Directors and Auditors thereon pursuant to the technical issue of the Companies Act, 1965 arising from the directive from the Securities Commission which required the adoption of the same at the extraordinary general meeting held on 15 november 2007.

3 To receive and adopt the audited Financial Statements of the Company for the year ended 31 January 2008 and the reports of the Directors and auditors thereon.

4 To approve the payment of Directors’ Fees of rm25,000 for each Director for the year ended 31 January 2008.

5 To re-elect the Director, Tan Sri Dato’ (Dr) ir Chan ah Chye @ Chan Chong Yoon who retire in accordance with article 97 of the articles of association of the Company.

6 To re-elect the Director, Dato’ Kamaruddin Bin Mat Desa who retire in accordance with Article 81 of the Articles of association of the Company.

7 To re-elect the Director, Chua Kim Lan who retire in accordance with Article 81 of the Articles of Association of the Company.

8 To re-elect the Director, Loy Boon Chen who retire in accordance with Article 81 of the Articles of Association of the Company.

9 To re-elect the Director, Lee Swee Seng who retire in accordance with Article 81 of the Articles of Association of the Company.

10 To re-appoint messrs Deloitte KassimChan as auditors and to authorise the Directors to fix their remuneration.

As Special Businesses

11 Ordinary Resolutionauthority to allot and issue shares pursuant to Section 132D of the Companies act, 1965.

12 Ordinary ResolutionProposed shareholders’ mandate for Talam Corporation Berhad and its subsidiaries to enter into recurrent transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ mandate i”).

13 Ordinary ResolutionProposed shareholders’ mandate for Talam Corporation Berhad and its subsidiaries to enter into recurrent transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ mandate ii”).

14 Ordinary ResolutionProposed shareholders’ mandate for Talam Corporation Berhad and its subsidiaries to enter into recurrent transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ mandate iii”).

15 Ordinary Resolutionauthority pursuant to Section 132e of the Companies act, 1965.

(Please indicate with an “X” in the appropriate spaces how you wish your vote to be casted. if you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstains from voting).

Signed this ________________ day of ________________ 2008.

______________________________________ Signature/Common Seal of Shareholder(s)

NOTES:

1. A member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation under its common seal or the hand of its attorney.

3. AllformsofproxymustbedepositedattheRegisteredOfficeoftheCompanysituatedatSuite2.05,Level2MenaraMaxisegar,JalanPandanIndah4/2,PandanIndah,55100 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

FORM OF PROXY

The Company SecretaryTALAM CORPORATION BERHAD (1120-h)

Suite 2.05, level 2, menara maxisegarJalan Pandan indah 4/2

Pandan indah55100 Kuala Lumpur

Please fold here

Please fold here

STAMP

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