lbs bina group berhad - malaysiastock.biz fileiving it up (518482-h) lbs bina group berhad...

iving It Up

(518482-H)

www.lbs.com.my

LBS Bina Group Berhad (518482-H)

Plaza Seri Setia Level 1-4 No. 1 Jalan SS 9/2 47300 Petaling Jaya Selangor Darul Ehsan Malaysia

2007 Annua l

Repor t

L

LBS

Bina G

roup Berhad

(518482-H)

Annual R

eport 2007

Corporate Structure 03

Corporate Information 04 - 05

Group Financial Highlights 06 - 07

Board of Directors 08 - 09

Profile of Directors 10 - 15

Management Team 16 - 17

Calendar Events 2007/2008 18 - 19

Chairman’s Statement 20 - 22

Managing Director’s Review of Operations 24 - 31

Corporate Governance Statement 33 - 40

Corporate Social Responsibility 41 - 42

Recurrent Related Party Transactions 43 - 45

Audit Committe Report 46 - 49

Statement of Internal Control 50

Financial Statements 51 - 142

List of Properties 143 - 144

Analysis of Shareholdings 145 - 153

Notice of Annual General Meeting 154 - 163

Statement Accompanying Notice of Annual General Meeting 164

Proxy Form •

CONTENTS

d e l i v e r i n g a l i f e s t y l e

Corporate MissionTo constantly strive to uphold our ability in…

CorporateVisionTo gain recognition as a responsible and reputable property developer

building affordable and quality homes(to our purchasers)

enhancing shareholder’s value(to our shareholders)

providing a good career path and at the same time, being a caring employer (to our employees)

fulfilling our social responsibilities as a mindful and good corporate citizen (to our community)

LBS BINA GROuP BERHAD 518482-HANNuAL REPORT 2007

P.(2) LBS BINA GROuP BERHADANNuAL REPORT 2007

Better comforts, greater fulfillment

P.(3)LBS BINA GROuP BERHADANNuAL REPORT 2007

100%Linkway Property

Co., Ltd

100%LBS Bina Holdings Sdn Bhd

100%LBS Landscape

Sdn Bhd

100%Maju Kepunyaan

Sdn Bhd

60%SPJ Construction

Sdn Bhd

100% Adil Restu Sdn Bhd100% Angsana Abadi Sdn Bhd (formerly known as Supreme Avenue (MM2H) Sdn Bhd)100% Cergas Asal (M) Sdn Bhd100% Equal Alliance Sdn Bhd100% Equal Sign Sdn Bhd100% Focal Remedy Sdn Bhd100% Generasi Nostalgia Sdn Bhd100% Inderaloka Impian Sdn Bhd100% Intellview Sdn Bhd 100% Kalimah Jaya Sdn Bhd 51% utuh Sejagat Sdn Bhd100% Kilatlima Sdn Bhd100% LBS Capital Sdn Bhd100% LBS Maju Sdn Bhd100% LBS Properties Sdn Bhd100% Maju Kamabisa Sdn Bhd100% Misi Aktif Sdn Bhd100% MITC Sdn Bhd 51% MITC Engineering Sdn Bhd (formerly known as Neraca Tuah Sdn Bhd)100% Pelangi Homes Sdn Bhd100% Prima Kasturi Sdn Bhd100% Saga Megah Sdn Bhd100% Seribu Baiduri Sdn Bhd100% Sinaran Restu Sdn Bhd 100% Dolomite Sungai Siput Sdn Bhd 100% Juaraplex Sdn Bhd 100% Kenderong Sdn Bhd 100% Keranji Bina Sdn Bhd 100% Lingkaran Semangat Sdn Bhd 100% Silibin Jaya Sdn Bhd 85% Pascific Grant Sdn Bhd 55% Nilam Mewah Sdn Bhd

100% Tepukan Senja Sdn Bhd90% Galeri Cekap Sdn Bhd80% Prima utuh Sdn Bhd71% Generasi Simbolik Sdn Bhd70% Alunan Prestasi Sdn Bhd70% Fokus Awana Sdn Bhd70% Intelstyle Sdn Bhd70% Jauhari unggul Sdn Bhd70% Johan Anggun Sdn Bhd70% Pristine Sunrise (M) Sdn Bhd55% Sepadan Maju Sdn Bhd51% Azam Perspektif Sdn Bhd51% Bayu Cergas Sdn Bhd51% Jatidiri Gigih Sdn Bhd51% Mayang Jelatek Sdn Bhd51% Pembangunan Primer Sdn Bhd51% Puncak Gama Sdn Bhd51% utuh Aspirasi Sdn Bhd51% Wirama Era Baru Sdn Bhd35% usaha Semarak Sdn Bhd30% Casa Inspirasi Sdn Bhd30% Dataran Enigma Sdn Bhd30% Sambungan Aktif Sdn Bhd30% Seloka Kualiti Sdn Bhd

LBS BINA GROUP BERHAD

BVI - The British Virgin Islands HK - Hong Kong PRC - The People’s Republic of China

Direct holdings Indirect holdings

100%Intellplace Holdings

Limited

100%Saga Serata

Sdn BhdBVI

BVI

60%Healthguard

Medicare Sdn Bhd

corporate structure

HK

100%Dragon HillCorporation

Limited

HKHK

100%Lamdeal

Golf & Country Club

Limited

PRC

100%Lamdeal

ConsolidatedDevelopment

Limited

60%Zhuhai

International Circuit

ConsolidatedDevelopment

Limited

60%Zhuhai

InternationalCircuit Golf &Country Club

Limited

100%Zhuhai

International Circuit

ConsolidatedDevelopment (HK) Limited

HK

100%Lakewood

Golf & Country Club

(HK) Limited

PRC PRC

HK

as at 9 May 2008


BOARD OF DIRECTORS

Dato’ Seri Lim Bock SengSSSA, DPMS, AMN (Chairman)

Dato’ Kamaruddin bin Abdul GhaniDIMP, SMP, AMN(Vice Chairman and Senior Independent Non-Executive Director)

Dato’ Lim Hock SanDSSA, JP (Managing Director)

Datuk Lim Hock GuanDMSM, PJK, JP(Executive Director)

Dato’ Lim Hock SingDIMP, JP (Executive Director)

Datuk Lim Hock Seong DMSM(Executive Director)

Chia Lok Yuen(Executive Director)

Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji OmarPSM, SPMS, SMT, PIS, FCILT, FMIP (Independent Non-Executive Director)

Maj Jen (B) Dato’ Mohamed Isa bin Che KakJSD, KMN, PPT, SMP, DSDK, JMN, DPTS, PSAT(Independent Non-Executive Director)

Dato’ Wong Woon YowDSSA (Independent Non-Executive Director)

Mohd Fazil bin Shafie (Independent Non-Executive Director)

Kong Sau Kian(Independent Non-Executive Director)

AUDIT COMMITTEE

Dato’ Kamaruddin bin Abdul Ghani (Chairman)

Maj Jen (B) Dato’ Mohamed Isa bin Che Kak

Dato’ Wong Woon Yow

Kong Sau Kian

NOMINATION AND REMUNERATION COMMITTEE

Kong Sau Kian (Chairman)

Dato’ Kamaruddin bin Abdul Ghani

Dato’ Lim Hock San

Datuk Lim Hock Guan

Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar


ESOS COMMITTEE

Maj Jen (B) Dato’ Mohamed Isa bin Che Kak (Chairman)

Datuk Lim Hock Guan

Chia Lok Yuen

Mohd Fazil bin Shafie

Kong Sau Kian

RISK MANAGEMENT COMMITTEE

Dato’ Lim Hock San (Chairman)

Datuk Lim Hock Guan

Chia Lok Yuen

Chang Yee Khim

Chew Wee Seong

COMPANY SECRETARIES

Lee Ching Ching

Phang Ai Tee

corporate information


REGISTERED OFFICE

Plaza Seri Setia Level 1-4, No. 1 Jalan SS9/2

47300 Petaling Jaya, Selangor Darul Ehsan

Tel : 603 7877 7333 Fax : 603 7877 7111

BUSINESS ADDRESSES

HEAD OFFICE

Plaza Seri Setia Level 1-4, No. 1 Jalan SS9/2

47300 Petaling Jaya, Selangor Darul Ehsan, Malaysia

Tel : 603 7877 7333 Fax : 603 7877 7111

IPOH

No. 17 Medan Ipoh 1A, Medan Ipoh Bistari

31400 Ipoh, Perak Darul Ridzuan, Malaysia

Tel : 605 255 8820 Fax : 605 254 4225

TAIPING

No. 63 Jalan Pasar, 34000 Taiping

Perak Darul Ridzuan, Malaysia

Tel : 605 804 1811 Fax : 605 806 1811

CAMERON HIGHLANDS

No. 63-A Persiaran Camellia 3, Bandar Baru

39000 Tanah Rata Cameron Highlands

Pahang Darul Makmur, Malaysia

Tel : 605 491 5018 Fax : 605 491 5020

BATU PAHAT

No. 22 Jalan Kundang, Taman Bukit Pasir

83000 Batu Pahat, Johor Darul Takzim, Malaysia

Tel : 607 438 8688 Fax : 607 438 8233

HEALTHGUARD MEDICARE SDN BHD

Suite C14 1st Floor, Podium Block C

Plaza Pekeliling, 2 Jalan Tun Razak

50400 Kuala Lumpur, Malaysia

Tel : 603 4045 6000 Fax : 603 4045 5888

REGISTRAR

Epsilon Registration Services Sdn Bhd (629261-T)

G-01, Ground Floor

Plaza Permata, Jalan Kampar

Off Jalan Tun Razak

50400 Kuala Lumpur, Malaysia

Tel : 603 4047 3999 Fax : 603 4042 6352

SOLICITORS

Cheah Poh Gek & Associates

Manjit Singh Sachdev, Mohammad Radzi & Partners

Rashid Asari & Co.

Steven Tai, Wong & Partners

AUDITORS

Anuarul, Azizan, Chew & Co.

PRINCIPAL BANKERS

Affin Bank Berhad

AmBank (M) Berhad

Bank Kerjasama Rakyat Malaysia Bhd

CIMB Bank Berhad

HSBC Bank Malaysia Bhd

Public Bank Berhad

STOCK EXCHANGE LISTING

Main Board, Bursa Malaysia Securities Berhad

WEBSITE

www.lbs.com.my

EMAIL

[email protected]

corporate information(cont’d)


2002RM’000

2003RM’000

2004RM’000

2005RM’000

2006RM’000

2007RM’000

Results

Revenue 272,820 344,962 398,314 456,412 328,712 281,298

Profit Before Taxation 47,089 50,855 67,627 69,690 16,025 13,780

Profit After Minority Interest 27,005 33,199 46,009 36,983 4,622 5,603

Balance Sheet

Paid-up capital 280,634 310,909 373,696 378,110 384,239 385,192

Shareholders’ Fund 186,223 245,595 351,103 378,734 381,912 394,231

Net Tangible Assets 182,643 233,475 309,670 331,019 332,187 300,426

Per Ordinary Share (Sen)

Net Tangible Assets 65.1 75.1 82.9 87.5 86.5 78.0

Earning Per Share 9.6 11.6 12.8 9.8 1.22 1.46

Gross dividend 5.00 5.50 5.50 3.25 - -

financial calendar

Financial Year Ended

Announcement of Quarterly Results: -

First Quarter ended 31 March 2007Second Quarter ended 30 June 2007Third Quarter ended 30 September 2007Fourth Quarter ended 31 December 2007

Publishing of Annual Report and Audited Financial Statement

Issuance Date

Annual General Meeting

31 December 2007

28 May 200729 August 2007

26 November 200729 February 2008

4 June 2008

30 June 2008

group financial highlights


group financial highlights(cont’d)


board of directors

standing from left to right:

1. Dato’ Lim Hock Sing (Executive Director);2. Datuk Lim Hock Seong (Executive Director);3. Datuk Lim Hock Guan (Executive Director); and4. Dato’ Lim Hock San (Managing Director)

sitting from left to right:

1. Dato’ Kamaruddin bin Abdul Ghani (Vice Chairman & Senior Independent Non-Executive Director); and2. Dato’ Seri Lim Bock Seng (Chairman)


board of directors(cont’d)

standing from left to right:

1. Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar (Independent Non-Executive Director); 2. Chia Lok Yuen (Executive Director);3. Kong Sau Kian (Independent Non-Executive Director);4. Maj Jen (B) Dato’ Mohamed Isa Bin Che Kak (Independent Non-Executive Director);5. Dato’ Wong Woon Yow (Independent Non-Executive Director); and6. Mohd Fazil bin Shafie (Independent Non-Executive Director)


Dato’ Kamaruddin bin Abdul Ghani, age 63, joined the Board of Directors of LBGB on 6 December 2001. Dato’ Kamaruddin is a consultant in equestrian. He is very active in the equestrian sport, representing Malaysia in equestrian and polo competitions and won numerous prizes, including being gold medallist in the Kuala Lumpur SEA Game 2001 and World Endurance Champion for 2001. He is a founder member and past president of the Malaysian Equestrian Association; founder member of the Malaysian Endurance Riding Society and also held committee positions in various equestrian and polo clubs. As a consultant, Dato’ Kamaruddin has designed and built the Bukit Kiara Resort Bhd and the Putrajaya Equestrian Park. He is also the Organising Committee of the World Equestrian Endurance Championship 2008.

Besides sitting on the Board of several private limited companies, he is the Chairman of Audit Committee and member of Nomination and Remuneration Committee in LBGB.

profile of directors

Dato’ Seri Lim Bock Seng, age 77, Chairman of LBGB and the founder of LBS Bina Holdings Sdn Bhd (“LBS”), was appointed as the Chairman of LBS Bina Group Berhad (“LBGB” or “Company”) on 6 December 2001. He has more than 30 years of experience in the construction and property development sectors. He was initially involved in the supply and transportation of sand, aggregates, earth and ball clay for construction of infrastructure works such as earthworks, sewerage works, roads and drainage. Subsequently he ventured into construction of houses, shops and factory buildings.

Dato’ Seri Lim is active in community activities, particularly in the Seri Setia area in Petaling Jaya, Selangor. He sits on the boards and committees of several non-profit-making organisations. He is the Chairman of the Management Board and Building Committee of SJK (C) Sungai Way, Chairman of Persatuan Hokkien Sungai Way, Deputy

Chairman of Seri Setia Old Folks Home, Adviser to Khuan Loke Club, Seri Setia, Adviser to General Traders Association, Sungai Way – Subang, Permanent Honorary Chairman of the Old Boys Association of SJK (C) Sungai Way, Adviser for Youth Club Sungai Way, Chairman of Selangor and Kuala Lumpur Lim Clansmen Association, Vice Chairman of the Ann Khoe Association, Selangor & Wilayah Persekutuan, Honorary President of the Federation of Hokkien Association, Malaysia and Permanent Honorary Adviser to Loong Thien Kong, Kajang. Dato’ Seri Lim also sits on the Board of several private companies.

He is the father of Dato’ Lim Hock San (Managing Director), Datuk Lim Hock Guan (Executive Director), Dato’ Lim Hock Sing (Executive Director) and Datuk Lim Hock Seong (Executive Director). Dato’ Seri Lim has no conflict of interests with the Company and he has no convictions for any offences within the past 10 years.

He does not have any family relationship with any Director and/or Major Shareholder of the Company. He has no conflict of interests with the Company and he has no convictions for any offences within the past 10 years.

LBS BINA GROuP BERHADANNuAL REPORT 2007

P.(11)

Dato’ Lim Hock San, age 50, joined LBS in 1982 and became the Managing Director of LBS in 1992. On 6 December 2001, Dato’ Lim was appointed the Managing Director of LBGB. Graduated with First Class Honours in Civil Engineering from the university of Wales, united Kingdom in 1982, Dato’ Lim won the second prize in the British Steel Corporation Competition for Design in Hollow Steel Section in the same year.

Dato’ Lim’s excellent business foresights, technical expertise and 26 years of management experience have well positioned him as the Key Leader. under his leadership, LBGB and its subsidiaries (“Group”) have grown and developed as one of the major players in property development.

Dato’ Lim is also very active in community works of various charitable organisations. Presently, Dato’ Lim is the Chairman of the Old Boys Association of SJK (C) Sungai Way, Chairman of the Board of Governors of SMJK Katholik, Director of Management Board of SJK (C) Sungai Way and Treasurer of Persatuan Hokkien Seri Setia.

profile of directors(cont’d)

Besides sitting on the Board of several private companies, Dato’ Lim is the Chairman of Risk Management Committee and member of Nomination and Remuneration Committee in LBGB.

The eldest son of Dato’ Seri Lim Bock Seng (Chairman) and brother of Datuk Lim Hock Guan (Executive Director), Dato’ Lim Hock Sing (Executive Director) and Datuk Lim Hock Seong (Executive Director), Dato’ Lim has no conflict of interests with the Company and he has no convictions for any offences within the past 10 years.

Datuk Lim Hock Guan, age 46, was appointed as Executive Director of LBGB on 6 December 2001. He is a Civil Engineer by profession. He holds a B.Sc. Civil Engineering from the Tennessee Technology university, uSA.

Datuk Lim Hock Guan has more than 19 years of extensive experience in the field of property development and construction. He is in charge of the Group’s projects in Klang Valley and he is one of the major driving forces behind the LBS Group’s successful implementation of the projects in the Klang Valley.

Datuk Lim Hock Guan also sits on the Board of several private companies. He is also active in community works and has involved in several non-profit-making organisations. He is also a qualified sharpshooter from National Riffle Association, Washington D.C.

He is member of Risk Management Committee, Nomination and Remuneration Committee and ESOS Committee in LBGB.

He is the son of Dato’ Seri Lim Bock Seng (Chairman) and brother of Dato’ Lim Hock San (Managing Director), Dato’ Lim Hock Sing (Executive Director) and Datuk Lim Hock Seong (Executive Director). Datuk Lim Hock Guan has no conflict of interests with the Company and he has no convictions for any offences within the past 10 years.


Datuk Lim Hock Seong, age 42, graduated from Kolej Damansara utama with a Diploma in Telecommunication and Computer Engineering in 1990, and was appointed Executive Director of LBGB on 6 December 2001. He is also the Executive Director of LBS since 1991.

As a Director in charge of Ipoh-based property development projects, he monitors the initialisation, planning, management and overseeing day-to-day operations of the projects.

He is a member of the Yayasan Ang Koai Selangor, the Malaysian Chinese Association, the Persatuan Hokkien Seri Setia as well as other charitable and non-profit-making organisations. Datuk Lim Hock Seong is also actively involved in community works. He also sits on the Board of several subsidiary companies of LBS Group.

upon playing an active role in the social development and well-being of the community, Datuk Lim Hock Seong has been conferred the Diraja Mulia Seri Melaka (D.M.S.M) by His Royal Highness Yang di-Pertua Negeri Melaka in 2007. He is the son of Dato’ Seri Lim Bock Seng (Chairman) and brother of Dato’ Lim Hock San (Managing Director), Datuk Lim Hock Guan (Executive Director) and Dato’ Lim Hock Sing (Executive Director). Datuk Lim Hock Seong has no conflict of interests with the company and he has no convictions for any offences within the past 10 years.


Dato’ Lim Hock Sing, age 44, was appointed Executive Director of LBGB on 6 December 2001. He is also a Director of LBS since 1992 and is in charge of the LBS Group’s projects in Cameron Highlands. He graduated in 1989 with a Bachelor of Arts Degree in Accountancy from Eastern Washington university, uSA. Prior to joining LBS, he was with Khoo & Co., a public accounting firm, as an audit supervisor.

Dato’ Lim Hock Sing has more than 14 years experience in the property development sector and has been invaluable in providing expertise in the areas of marketing, property valuation and finance. He also sits on the Board of several private companies.

Dato’ Lim Hock Sing is also actively involved in community works. He is an Executive Committee Member of the Young Entrepreneurs’ Association of Malaysia (PuMM) since year 2002 and a member of the

Hokkien Association of Sungai Way Selangor. Moreover, he has been elected as a leader in Youth Group of Kuala Lumpur Lim Clansmen Association and actively involved himself in the Sungai Way Old Boys Association as a member.

He is the son of Dato’ Seri Lim Bock Seng (Chairman) and brother of Dato’ Lim Hock San (Managing Director), Datuk Lim Hock Guan (Executive Director) and Datuk Lim Hock Seong (Executive Director). Dato’ Lim Hock Sing has no conflict of interests with the Company and he has no convictions for any offences within the past 10 years.


P.(13)


Chia Lok Yuen, age 49, was appointed as a Director of LBGB on 6 December 2001 and was promoted to Executive Director on 1 July 2005. He is an Associate member of the Institute of Chartered Secretaries and Administrator, uK (ACIS) and an Associate member of the Institute of Bankers Malaysia (AIBM). He is also a MBA graduate from the prestigious Heriott-Watt university in Edinburgh, united Kingdom.

Chia Lok Yuen was previously a banker by profession under the employment of a well known domestic bank for more than 16 years. He has gained vast experience and exposure in local and international corporate business dealings.

He joined LBS as the Senior General Manager in 1996 in charge of the overall management and business operations of the Group. He has contributed significantly towards the growth of the LBGB Group and its subsequent listing in the Bursa Malaysia Securities Berhad.

He is responsible for the LBS Group’s overall operations.

Chia Lok Yuen also sits on the Board of several subsidiary companies of the Group. He is also a member of the Risk Management Committee and ESOS Committee in LBGB.


Maj Jen (B) Dato’ Mohamed Isa bin Che Kak, age 72, joined the Board of Directors of LBGB on 6 December 2001. He is currently a Director of Affin Holdings Berhad and C.I. Holdings Berhad. After graduating from the Royal Military College, he was commissioned into the Royal Malay Regiment in 1958. In his course of military career, he attended various military training courses such as The Joint Services Command and Staff College in Willington, India, where he qualified with Pass Staff College (psc), The Senior Officers Management Course in Naval Staff College in Monteray, California, united States of America.

In his more than 32 years of service in the Malaysian Army, he had served in various capacities both Regimental and Staff. Among his early appointments was the Regimental Intelligence Officer serving with the united Nation Forces in Congo. He was also appointed as the Aide De Camp (ADC) to His Majesty Yang Di-Pertuan Agong of Malaysia

from 1971 to 1975. In recognition of his services, he was awarded with the military honour of Pingat Setia Angkatan Tentera.

He is the Chairman of ESOS Committee, a member of Audit Committee and Nomination and Remuneration Committee in LBGB.



Dato’ Wong Woon Yow, age 69, joined the Board of Directors of LBGB on 20 August 2004. He is a Diploma holder in Banking and Credit Management and the Executive Diploma in Marketing and Selling Bank Services from International Management Centre, united Kingdom. He served Malayan Banking Berhad for more than 33 years. During this period he gained much exposure and experience in managing various branches as well as managing head office departments. He is also well known and respected in the local business community.

After leaving Malayan Banking Berhad in 1993 he ventured into property development.

He is a member of the Audit Committee of LBGB.


Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar, age 67, joined the Board of Directors of LBGB on 20 August 2004, has about 41 years of experience in the civil and public services. He holds an Honours Degree in Geography as well as a Masters Degree in Regional Development from the university of Hull, united Kingdom. In 1985, he was awarded the Honorary Doctorate of Science Degree from the same university. He has held various administrative and political positions. Amongst the civil service posts he held were District Officer, Hulu Langat; Principal Assistant Secretary, Economic Planning unit, Prime Minister’s Department and Deputy State Secretary, Selangor. He was the Minister of Welfare Services from 1984 to 1986, the Minister of Federal Territory from 1986 to 1987, the Minister of Foreign Affairs from 1987 to 1991, the Minister of Domestic Trade and Consumer Affairs from 1991 to 1997 and the Menteri Besar of Selangor from 1997 to 2000. He was Member of Parliament (Kuala Selangor) from 1978 to

1997 and Selangor State Assemblyman (Permatang) from 1997 to 2004. He is now a member of the Selangor Royal Council (Dewan DiRaja Selangor) and Pro-Chancellor of universiti Industri Selangor (uNISEL) and President of Majlis Bekas Wakil Rakyat (MuBARAK) Selangor.

Tan Sri Dato’ Seri (Dr) Haji Abu Hassan is currently Chairman, Advisor and Director of several public and private limited companies. Amongst them is as Chairman of OILFAB Sdn. Bhd. He is also Patron, Chairman and President of a number of Non-Governmental Organisations. Amongst them are Patron, university of Hull Alumni; Chairman, Board of Trustees, Mental Health Foundation Malaysia; Patron, Rumah Tunas Harapan Tengku Ampuan Rahimah, Kuala Selangor; Patron Persatuan Bekas Murid-Murid, Sekolah Tinggi Klang, Selangor, Advisor of Royal Klang Club and Chairman of Derma Alam Shah Committee. In Kota Kemuning, Shah Alam where he resides, he is Patron of the Kota Kemuning Residents’ Association, PTA of Sek. Rend. Keb. Kota Kemuning 2 and Patron of all the five suraus there, ie. Al-Hijrah, An-Najihin, As-Solehin, Al-Firdaus and Al-Randa.

He is a member of the Nomination and Remuneration Committee in LBGB.




P.(15)


Mohd Fazil bin Shafie, age 39, joined the Board of Directors of LBGB on 6 December 2001. He is a civil engineer by profession, graduating with B.Eng (Hons) Civil from universiti Teknologi Mara in 1995. He is currently the Managing Director of a private project management consultant company. Prior to this, he was with Perangsang International Sdn Bhd, and has gained extensive experience first as a project engineer and then as a project manager with the company.

He is a member of ESOS Committee in LBGB. He does not have any family relationship with any Director and/or Major Shareholder of the Company. He has no conflict of interests with the Company and he has no convictions for any offences within the past 10 years.

Kong Sau Kian, age 43, joined the Board of Directors of LBGB on 6 December 2001. He is a member of the Malaysian Institute of Accountants. He graduated with a Bachelor of Accounting (Honours) degree from university of Malaya in 1988. Subsequently, he joined KPMG Peat Marwick, an international public accounting firm until 1992 where he gained exposure in areas include audit of wide range of industries, corporate restructuring, acquisition audit and other special assignment. Presently, he is Executive Director of LBI Capital Berhad, an investment holdings company. He also sits on the Board of LBI Capital Berhad.

He is the Chairman of Nomination and Remuneration Committee, member of Audit Committee and ESOS Committee in LBGB.



from left to right

1. Lee Cheong San (Senior Manager, Project) 2. Gan Poh Chin (Senior Manager, Contract)3. Nazeri bin Saad (Assistant General Manager, Project)4. Ir. Hwang Peng Weng (General Manager, Project)5. Lim Yuek Kong @ Lin Yuek Kong (Assistant General Manager, Project)6. Loh Yin Hui (Senior Manager, Maintenance)7. Lim Lit Chek (Senior General Manager, Construction)8. Wong Tack Leong (Assistant General Manager, Construction)

management team


from left to right

1. Foo Say Ong (Senior Manager, Compliance)2. Lim Moi Soan (Senior Manager, Purchasing)3. Chew Wee Seong (Assistant General Manager, Credit & Marketing) 4. Lee Ching Ching (General Manager, Secretarial & Corporate Affairs)5. Chang Yee Khim (General Manager, Corporate Finance)6. Wong Kah Yeen (Senior Manager, Credit & Marketing)7. Datin Karen Lim (General Manager, Administration & IT)8. Lau Sau Kheng (Senior Manager, Credit & Marketing)9. Hin Tze Siong (Senior Manager, Internal Audit)

management team(cont’d)


MAY 20071. Bowling competition at Pyramid Bowl, Sunway Pyramid Shopping

Center organised by LBS Sports & Social Club.

JUNE 20072. 7th AGM of LBGB at Kelab Golf Sultan Abdul Aziz Shah, Shah Alam.

3. Golf Tournament for Directors and invited guests at Tropicana Golf Club.

AUGUST 20074. LBGB staff as volunteers in the Kiwanis Fun Fair.

5. Official launching for 242 units of double storey terrace house in Block 18 of Bandar Putera Indah, Batu Pahat.

SEPTEMBER 2007

6. The Mayor of Zhuhai City, Zhong Shijian, accompanied by his Deputy Mayor, Secretary General and a delegate of 30 entrepreneurs visited LBGB.

OCTOBER 20077. Seminar for directors and management staff on “updates to Bursa

Listing Requirements Issues and Challenges”.

NOVEMBER 20078. Bumiputera Property Exhibition held at Mid Valley Exhibition Centre.

6

7

1

2

3

4

5

8

calendar events 2007/2008


calendar events 2007/2008(cont’d)

DECEMBER 2007

10. Christmas Party organised by LBS Sports & Social Club.11. Monthly Birthday Party organised by LBS Sports & Social Club. 12. Official launching for new phases of cluster link house, double storey

terrace and double storey shop office in Taman Tasik Puchong.

FEBRUARY 200813. EGM of LBGB at Kelab Golf Sultan Abdul Aziz Shah, Shah Alam.

MARCH 2008

14. LBGB Annual Dinner 2008 at Convention Hall, SJK (C) Sg. Way.15. Special Employee Award 2008. 16. Participating staff in the Best Flower Dress Contest at LBGB’s Annual

Dinner 2008.

APRIL 200817. LBGB as one of the main sponsors to the 25th Kiwanis Treasure Hunt

organised by Kiwanis Down Syndrome Foundation.

10

15

14

11

12

13

16

17

9

NOVEMBER 2007 (cont’d)9. Safety talk on “Home safe Home” by Malaysian Volunteer Fire & Rescue

Association (MVFRA).


Dato’ Seri Lim Bock SengSSSA, DPMS, AMNChairman

The year 2007 was a year where the Company and its group of

companies (“Group”) planned for its future growth. During the

year, the Group embarked on a fund raising exercise to raise

capital and also proceeded with several joint ventures for future

developments. These new developments together with the

existing projects will place the Group in good position to sustain

its growth and profitability.

chairman’s statement


FINANCIAL PERFORMANCE

In spite of the challenging economic circumstances, the Group has improved its profitability by 34% over the previous year’s figure from RM4.6 million to RM6.2 million. However, the sales revenue has declined by 12.3% from RM328.7 million to RM281.3 million as compared to the preceding year. The decline in revenue was a result of the weak consumer sentiment in the property sector while the improved profit after tax was due to lower administrative costs and minority interests.

DIVIDEND

Given the current state of affairs, the Board of Directors does not recommend any dividend payment for the financial year 2007. This is to ensure the sustainability of the business and to provide a cushion for any unexpected future costs escalation and to provide funds for future growth of the Group.

CORPORATE DEVELOPMENTS

Business Expansion through joint ventures

During the financial year, the Group has entered into joint ventures to carry out the following property development projects:-

i) Residential and commercial properties project on freehold land of about 16.62 acres in total located in Batu Pahat, Johor.

ii) High-end residential project on a piece of 100-acre land in Dengkil, Sepang, Selangor.

iii) Residential and industrial properties project on a piece of 150-acre land in Bukit Cherakah, Selangor.

chairman’s statement(cont’d)

iv) Project to develop factory units on two pieces of land of about 39 acres in total situated next to LBS’ flagship project, Bandar Saujana Putra.

Acquisition of Land

In April 2007, the Company, through its subsidiary, LBS Bina Holdings Sdn Bhd acquired 100% equity interest in Focal Remedy Sdn Bhd for a total cash consideration of RM15 million where this transaction has brought to the Group freehold land located in Batu Pahat, Johor measuring approximately 886 acres in total. These land have been approved for mix development into residential and commercial properties.

Focal Remedy Sdn Bhd later has disposed of 5 parcels of vacant land with total area of about 370 acres which formed part of the 886-acre land acquired in April 2007, for a total consideration of RM41 million. This disposal, which brought into the Group RM6.5 million earnings, has unlocked value of land that we have no immediate plan to develop and the proceeds would be used to reduce our bank borrowings and finance cost.


CORPORATE DEVELOPMENTS (CONT’D)

Proposed Rights Issue of Warrants

In December 2007, the Company proposed to implement a renounceable rights issue of up to 175,037,156 Warrants on the basis of two (2) Warrants for every five (5) existing ordinary shares held on the entitlement date to be determined and announced later, at an issue price to be fixed on the Pricing-Fixing Date.

Relevant approvals from Securities Commission, Bank Negara Malaysia, Bursa Malaysia and shareholders of the Company have been duly obtained in year 2008. Abridged Prospectus would be issued in due course and the proceeds raised would be used for working capital and/or repaying borrowings and also to defray expenses in relation to this exercise. Barring any unforeseen circumstances, the Warrants are expected to list on the Main Board of Bursa Malaysia in June 2008.

PROSPECT FOR YEAR 2008

Despite the challenging external conditions marked by the economy downturn in the united States, Malaysia’s economy is expected to remain resilient backed by its strong fundamentals, diversified export base and low exposure of local financial institutions to the US sub-prime market.

The prospects for the local property market are expected to remain positive. Stimulation have been given to the property sector under the Budget 2008 which include 50% exemption on stamp duty for those buying a house not exceeding RM250,000; EPF contributors can make monthly deductions from their EPF account to buy a house, etc. Coupled with the forecast GDP growth of 6.5%, we believe that the taking up for residential units will remain strong.

Going forward, we shall continue to monitor closely the market trends as well as rising costs of construction before we embark on any new developments.

ACKNOWLEDGMENT

On behalf of the Board of Directors, I would like to express my appreciation to our shareholders, customers and business partners for their continued support. I wish to take this opportunity to extend my sincere thanks to the management and employees for their commitment and hard work over the past year.

ChairmanDato’ Seri Lim Bock Seng22 April 2008

chairman’s statement

At home, at ease


Dato’ Lim Hock SanDSSA, JPManaging Director

managing director’s review of operations

During the financial year

2007, LBS remained focus

on property development,

management and investment

which were mainly undertaken

by its wholly owned subsidiary

LBS Bina Holdings Sdn Bhd.

In the year 2007, we have

completed and handed over

to purchasers more than

1,500 units of houses worth

more than RM200 million.


managing director’s review of operations(cont’d)

PROPERTY DEVELOPMENT

The followings are the main projects undertaken by the Group in the year 2007:-

Bandar Saujana Putra

Bandar Saujana Putra, one of the Group’s flagship projects, is a joint venture project with Permodalan Negeri Selangor Berhad (PNSB). This integrated township has more than 8,000 residential and commercial units and residential and industrial lots spreading over an area of more than 800 acres. Its strategic location along the ELITE highway and the approved South Klang Valley Expressway, coupled with the newly completed interchange which was opened to traffic in March 2008, make this area an invaluable piece of investment.


Since its first launch in year 2003, more than 4,000 units of properties have been handed over to the purchasers. There is about 500 acres undeveloped land under this township which has a further lifespan of 6 to 8 years.

upcoming launches will include the new phases with improved design for the popular models for link hours such as Crystal, Topaz and Lavender. Launches for double storey and triple storey shop offices, industrial lots, townhouse and new designed double storey terrace houses known as Min Garden are in the pipeline.

Taman Tasik Puchong

This is another joint venture project by the Group with PNSB. It is strategically located in the fast growing and prosperity hub of Puchong. The project is overlooking scenic lake view and lush greeneries giving it a moderating effect on




the local temperature. The initial launch of the double storey link houses Venezia, shop office and single storey cluster link houses have received good response from the public. The project will soon see further launches of the popular updated double storey link house and single storey cluster link houses with guarded and gated facilities.

Taman Perindustrian Tasik Perdana

This project is located between the Elite Highway and the Puchong growth area. It is surrounded by lakes and provides a great opportunity for entrepreneurs to set up their industrial and manufacturing plants in the area. The project offers industrial lots, 1½-storey semi-detached and 1½-storey terrace factories for the keen industrialist.

Taman Bercham Tropicana

This is one of the Group’s prime projects in Perak. Located at Bercham, a place where Ipoh’s first theme park, Sunway Lagoon is located. This project with its distance of 5 km from the bustling city of Ipoh and close to Berham, the biggest Chinese village in Ipoh, offers 365 units of mixed development of residential and commercial buildings. It is a prestigious development project consisting of modern residential homes and commercial centre surrounded by serene landscape along a scenic meandering river. Since its first launch in 2005, this project has received very encouraging response from the public.

Taman Royal Lily

This a resort-like project situated on the cooling altitude of Tanah Rata town in Cameron Highlands. Its proximity to the vegetables and tea farms of Ringlet and strawberry farms, flower nurseries and other exotic farms in Brinchang and Blue Valley makes it a strategic location for many holiday vacationers. The 30-acre plot comprises 592 units of mixed development with shop apartments, 5-storey apartments, double storey link houses and bungalow lots received overwhelming response from the start of the launch. The project will be launching some up market double storey terrace houses in the near future.


Property Development Project in Zhuhai

As the property market in China continues to boom and spread rapidly across many urban areas, Zhuhai is of no exception when it comes to property overwhelming demand and rising prices. LBS’ property development project in Zhuhai is rightfully situated in the booming hi-tech zone of Jingding town, Zhuhai.

The 197-acre development land is located within and around the popular 36-hole golf course in Lakewood Golf Club. This development is surrounded by natural landscape and ponds with a wonderful mountain range to add to its scenic landscape.

The property development will involve the construction of mixed development buildings comprising high end residential units, commercial complexes and hotels. Its proximity to Macau and Hong Kong serves to attract many potential buyers from the special administrative zones.



Zhuhai’s reputation as the cleanest city in China due to its “green industries” has contributed in making the city more acceptable to tourists and investors alike. Its infrastructure will soon be comparable to many developed nations with the completion of its light rail transit connecting between Guangzhou and Zhuhai and the soon to be launched Hong Kong-Zhuhai-Macau Bridge. Confidently, the response for the properties in Zhuhai would be overwhelming.

MANAGEMENT & CONSULTANCY

LBS has been the appointed management company for the operations of Zhuhai International Circuit Ltd and Lakewood Golf & Country Club Ltd since April 2004. ZIC owns and runs an international standard racing circuit while Lakewood Golf & Country Club runs and operates a 36-hole golf course.



ZIC Racing Circuit

In year 2007, ZIC was awarded by Asian Festival of Speed (AFOS) the Best Organizer for racing events organized in year 2006. The circuit holds more than 10 racing events annually. Among its popular events held last year were the FIA GT Championships, Pan Delta Super Racing Festival, A1 GP Championships and the China Superbike Championships.

Lakewood Golf Club

Lakewood Golf Club has built a good reputation in the industry and has won many awards since its operation. In year 2007, it was considered by °∞World Executive Weekly°± as the Top 10 Most Influential Golf Clubs in China It was also awarded “Zhuhai Landmark Golf Club” and “China Best Landscaping Golf Club” in year 2007. The 36-hole course is divided into 18-hole mountain course and 18-hole lake course giving the golfing enthusiasts an interesting array of challenging hazards and terrain to inspire both the novice and professional.

Its marvelous brand new 6,900 square feet clubhouse with well equipped modern business convention centre, ball room, restaurant and recreational area gives members a spacious and harmonious atmosphere of service. The club’s membership has been steadily increasing and the profit achieved in the year 2007 was inspiring.



APPRECIATION

I would like to express my profound appreciation to the shareholders, customers, business associates, bankers, government authorities, regulatory bodies and mass media for their support, patience and trust on our management during the year.

To the management and staff, I wish to extend my sincere gratitude for their loyalty, dedication and commitment to the Group.

Last but not least, I would like to thank my fellow directors for their undying support and valuable advice to the Group throughout the year.

DATO’ LIM HOCK SANManaging Director22 April 2008



Live freely, Healthily

P.(33)LBS Bina Group BerhadannuaL report 2007

corporate governance statement

the Board of directors (“Board”) of LBS Bina Group Berhad (“LBGB” or “the Company”) remains committed in upholding and maintaining the principles and standard of best practices as set out in the Malaysian Code on Corporate Governance (Revised 2007) (“the Code“) throughout the Company and its subsidiaries for the financial year ended 31 December 2007 (“FY 2007“).

(A) BOARD OF DIRECTORS

Composition of the Board

the Board of LBGB has twelve members comprising Chairman (non-independent non-executive director), Vice Chairman (Independent Non-Executive Director), five Executive Directors and five Non-Executive Directors.

the Board is led by the Chairman who is responsible for the conduct and effectiveness of the Board in ensuring that the policies and systems are effectively monitor and properly in place. the Managing director whose primarily responsibilities are overseeing business operations and finance of the Group, leading the management team and implementing the policies and decisions of the Board. thus, the responsibilities between the roles of the Chairman and the Managing Director are clearly defined so as to ensure balance of power and authority.

the Board members are from diverse professional background and have brought with them expertise and

experience, skill and knowledge in fields such as business, financial, banking, technical, corporate and management. this balance enables the Board to provide clear and effective leadership to the Group and bring informed and independent judgements to many aspects of the Group’s strategy and performance. The profile of each Director is set out under the section of Profile of Directors contained in this Annual Report.

the Board has also delegated certain responsibilities to the Board Committees, namely audit Committee, nomination and remuneration Committee, employee Share option Scheme (“eSoS”) Committee and risk Management Committee, all of which operate within their respective defined Terms of Reference. Reports of proceedings and outcome of these committees are submitted to the Board.

Board Meeting

The Board met five times during the FY 2007. The attendance of each Director at the Board Meeting held during the FY 2007 is as follows :-

Directors Attendance dato’ Seri Lim Bock Seng 5/5 dato’ Kamaruddin bin abdul Ghani 5/5 dato’ Lim hock San 5/5 datuk Lim hock Guan 4/5 dato’ Lim hock Sing 5/5 datuk Lim hock Seong 5/5 Chia Lok Yuen 5/5 tan Sri dato’ Seri (dr) haji abu hassan bin haji omar 5/5 dato’ Wong Woon Yow 5/5 Maj Jen (B) dato’ Mohamed isa bin Che Kak 5/5 Mohd Fazil bin Shafie 5/5 Kong Sau Kian 5/5

P.(34) LBS Bina Group BerhadannuaL report 2007

(A) BOARD OF DIRECTORS (COnT’D)

Supply of Information

all directors are provided with an agenda and a set of Board papers for their review prior to each Board Meeting. apart from the notice of Meeting, the Board papers comprises relevant information on the business of the Meeting, including among others performance of the Group, operational matters, industry outlook and acquisition and disposal proposals. the Board also has the full and unrestricted access to information relating to the business and affairs of the Company in the discharge of their duties. Senior Management staff is also invited to attend Board Meetings when necessary to provide the Board with further explanation and clarification on matters being tabled at the Board’s Meeting.

Further, the Board has unhindered access to the advice and services of the Company Secretaries, internal auditors and external auditors. in addition, the Board is free to seek any independent professional advice at the expense of the Company if required in furtherance of their board duties.

Where a potential conflict of interest may arise, it is mandatory practice for the Director concerned to declare his interest and abstain from the decision making process.

Board Committee

there were no changes to the composition of the Board Committees for the year under review except for the audit Committee and risk Management Committee. dato’ Lim hock San, the Managing director had resigned from the audit Committee following a revision to the Code where audit Committee should only consist of non-executive directors whereas Mr. Gan Chin Keh who has resigned from the Company also resigned as member of risk Management Committee. accordingly, Mr. Chew Wee Seong, assistant General Manager of Credit & Marketing Department has been appointed to fill up the vacancy.

a) Audit Committee (“AC”)

please refer to the audit Committee report which forms part of this annual report for further details.

b) ESOS Committee

the eSoS Committee is entrusted with the tasks of administer and implement the eSoS in accordance with the Bye-Laws of eSoS and exercise of any discretion under the Bye-Laws with regards to the eligibility of employees to participate in the eSoS, share offers and share allocations and to attend to such other matters as may be required in carrying out the eSoS.

c) Nomination and Remuneration Committee (“NRC”)

the nrC consists of a majority of independent non-executive directors. the Board through this Committee reviews its required mix of skills and experience and other qualities required at Board level annually to ensure effectiveness of the Board.

The Committee also reviews remuneration package comprising salaries, bonuses, benefits-in-kind and allowances of executive directors and Senior Management staff annually to ensure that the remuneration packages are fair and reasonable. the determination of the remuneration of the non-executive directors is a matter for the Board as a whole.



corporate governance statement(cont’d)


Board Committee (cont’d)

d) Risk Management Committee (“RMC”)

the rMC was established to oversee the implementation of the risk management system and to ensure that the risk management process is in place and functioning effectively.

Appointment and Re-election of Directors

appointments to the Board are made based on the recommendation of the nrC.

In accordance with the Company’s Articles of Association, one third (1/3) of the Board, including the Managing Director, shall retire from office at least once in every three (3) years. These retiring directors shall be eligible for re-election. the articles of association also provide that a director appointed by the Board during the year shall also be subjected to re-election at the forthcoming annual General Meeting subsequent to his appointment. details of the Directors seeking for re-election are disclosed in the Profile of Directors.

Directors’ Remuneration

The NRC reviews the remuneration package and other benefits-in-kind applicable to all Executive Directors and Senior Management staff with individual directors abstaining from decisions in respect of their individual remuneration. The NRC is responsible for ensuring that the level of remuneration is sufficient to attract and retain its executive directors and Senior Management staff needed to manage the Company and continuously build for the future.

the remuneration of the directors for the FY 2007 is set out below :-

the aggregate directors’ remuneration received/receivable from the Company and subsidiary companies i) during FY 2007 are as follow:-

Category FeesRM

SalariesRM

BonusesRM

AllowancesRM

Meeting Allowances

Benefit-In-KindRM

TotalRM

executive directors

150,600 3,119,455 688,950 24,800 - 313,360 4,297,165

non-executive directors

216,000 - - 443,000 45,100.00 - 704,100




Directors’ Remuneration

the number of directors whose remuneration falls in each successive band of rM50,000 is as follows :-ii)

Range of Remuneration no. of Directors

RM Executive non-Executive

Less than 50,00050,000 – 100,000350,000 – 400,000400,000 – 450,000750,000 – 800,000800,000 – 850,0001,000,000 – 1,150,0001,150,000 – 1,200,000

---11111

5

331-----

7

Directors Training

all directors are encouraged to attend talks, training programmes and seminars organized by various bodies or organization to update themselves on new developments in the business environment. the directors have during the year attended training seminars on topics entitled “Finance for non-Finance director” and “updates to Bursa Securities Listing requirements”, both organized by rating agency Malaysia Berhad (raM).

the Board recognizes the demands of their role as directors of the Company and will continue to equip themselves with the relevant professional advancement particularly in the corporate regulatory developments.

(B) SHAREHOLDERS’ RELATIOn

Dialogue with Shareholders and Investors

the Company recognizes the importance of maintaining accountability and transparency channel of communication with its shareholders, institutional investors and the investing public at large through regular and timely dissemination of information of the Company via annual report and financial statements, circulars to shareholders, quarterly financial reports, press releases and various announcements made during the year to provide its shareholders and investing public with an overview of the Group’s performance and operations.

the Group’s website at www.lbs.com.my has been re-designed with a new look and wider range of structure to provide easy access and more comprehensive information on corporate, financial and non-financial.

The Managing Director and Executive Directors maintain on-going communication via periodic briefing and interview with press media, fund managers and investment analysts. presentation are made, as appropriate, to explain the Group’s strategy, operations, performance and major developments.



(B) SHAREHOLDERS’ RELATIOn (COnT’D)

Dialogue with Shareholders and Investors (cont’d)

dato’ Kamaruddin bin abdul Ghani, the Vice Chairman of the Group has been assigned as the Senior independent non-executive director to whom the shareholders may convey their concerns.

Annual General Meeting (“AGM”) the Board welcomes queries and questions from the shareholders during the aGM which remains the principal

avenue for dialogue with individual shareholders. at the Company’s aGM, shareholders have direct access to the Board and are given the opportunity to ask questions during the aGM. the shareholders are encouraged to ask questions both about the resolutions being proposed or about the Company’s operations in general.

in addition, a press conference normally will be held immediately after the aGM to provide an opportunity for the media for latest corporate information or development of the Group and for the Board to respond to questions raised by them. the members of the Board also maintained an informal interaction with the shareholders during the refreshment break after the aGM.

(C) ACCOUnTABILITY AnD AUDIT

Financial Reporting

the Board is mindful of its responsibility to present a balanced, clear and understandable assessment of the Group’s financial position and prospects to all shareholders, fund managers, investors and the regulatory bodies, primarily through the annual report and quarterly financial statements.

The Directors are also responsible for ensuring that the financial results released to Bursa Malaysia Securities Berhad within the stipulated time frame and the financial statements comply with the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.

Statement of Directors’ Responsibility in Respect of the Financial Statements

The Directors are required under the Companies Act, 1965 to prepare financial statements which are in accordance with applicable approved accounting standards that give a true and fair view of the state of affairs, the results and cash flow of the Group and the Company at the end of the financial year.

In preparing the financial statements, the Directors have ensured compliance with the applicable approved accounting standards and applied consistently and made judgements and estimates that are reasonable and prudent. the Directors have also confirmed that the financial statements have been prepared on a going concern basis.

the directors are responsible in ensuring the Group and the Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Group and the Company to enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965 and the applicable approved accounting standards. it is the Board’s general responsibility for taking such step to safeguard the assets of the Group and to detect and prevent of fraud and other irregularities.


(C) ACCOUnTABILITY AnD AUDIT (COnT’D)

Internal Control

the Board has overall responsibility for maintaining a sound system of internal control to provide reasonable assurance of the effectiveness of the Group’s business operations and risk management.

The in-house Internal Audit Department reports directly to the AC and mainly performs regular financial, operational and compliance audit. in addition, the internal auditors may conduct investigation and any special review requested by the aC or the Management. the internal auditors endeavors are to be conducted in compliance with the Group objectives and policies, Code of ethics and Standards promulgated from time to time by the professional bodies such as institute of internal auditors Malaysia, Malaysia institute of accountants etc.

the information on the Group’s internal control is presented in the Statement on internal Control forming part of this annual report.

Relationship with the Auditors

the Company has always maintained a formal and transparent relationship with its external auditors in seeking their professional advice and ensuring compliance with approved accounting standards.

(D) ADDITIOnAL COMPLIAnCE InFORMATIOn

in compliance with the BMSB Listing requirements, the following information is provided:-

Share Buy Backs

During the financial year, there were no Share Buy Backs from the Company.

Option, Warrant and Convertible Securities

During the financial year, a total of RM768,999 nominal value of 2002/2007 Irredeemable Convertible Unsecured Loan Stocks (“ICULS B”) have been converted by the holders into fully paid ordinary shares of RM1.00 each in LBGB. The remaining unconverted ICULS B of RM684,001 nominal value have been converted into ordinary shares on the maturity date 31 December 2007. Such converted ordinary shares have been deposited into the respective holders’ Central Depository System account pursuant to the Trust Deed dated 13 December 2001.

As at 31 December 2007, a total of RM454,235 nominal value of 2003/2008 Irredeemable Convertible Unsecured Loan Stocks and RM62,000 nominal value of 2004/2009 Irredeemable Convertible Unsecured Loan Stocks have been converted by the holders into ordinary shares of RM1.00 each.

Please refer to Note 29 of the Financial Statements on page 109 of this Annual Report for salient features of the above loan stocks.



(D) ADDITIOnAL COMPLIAnCE InFORMATIOn (COnT’D)

Option, Warrant and Convertible Securities (cont’d)

options granted to and exercised by non-executive directors pursuant to the eSoS of LBGB during the FY 2007 are as follows:-

no. name of directorAmount of options

grantedAmount of options

exercised

1. tan Sri dato’ Seri (dr) haji abu hassan bin haji omar 200,000

-

2. dato’ Wong Woon Yow 200,000 -

no employee of the Group has exercised the option shares during the FY 2007. Main features of the eSoS are

stated in the Report of Directors on page 121 to 124.

The Company is undertaking a Renounceable Rights Issue of up to 175,037,156 new Warrants in the Company on the basis of two (2) Warrants for every five (5) existing LBGB shares held on 5.00 p.m., 15 May 2008 at an issue price of RM0.10 per Warrant (“Rights Issue of Warrants”). Relevant approvals from Bank Negara Malaysia, Securities Commission, BMSB, shareholders of the Company have been duly obtained. abridge prospectus and subscription forms have been despatched to shareholders on 21 May 2008.

The last date and time for acceptance, excess warrants applications and payment is 4 June 2008 at 5.00 p.m. Warrants are expected to be listed on the Main Board of BMSB in the middle of June 2008.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme

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

Imposition of Sanctions / Penalties

a total of rM2.0 million penalties have been imposed on the Company’s and its subsidiaries by the inland revenue Board.

non-Audit Fees

During the financial year, an amount of RM126,600 was paid to Messrs. Anuarul, Azizan, Chew & Co being fees for the professional services rendered in connection with the corporate exercises on the rights issue of Warrants, issuance of up to RM100.0 million Commercial Papers Programme, review of Statement of Internal Control, review of quarterly results and auditing of Maintenance accounts and housing developer accounts.



(D) ADDITIOnAL COMPLIAnCE InFORMATIOn (COnT’D)

ProfitEstimate,ForecastandProjection

There is no material variance between the results of the financial year and the unaudited results previously announced.

ProfitGuarantee

No profit guarantee was given during the financial year.

Material Contracts

there was no material contract (not being contracts entered into the ordinary course of business) entered into by the Company or its subsidiary companies involving directors’ or major shareholders’ interests, either subsisting at the end of the financial year ended 31 December 2007 or entered into since the end of the previous financial year.

Revaluation of Landed Properties

Certain development projects which were acquired by the Group, when LBGB acquired LBS Bina holdings Sdn Bhd on 6 December 2001, have been revalued by Messrs. Colliers, Jordan Lee & Jaafar Sdn Bhd, and open market value as approved by the Securities Commissions has been taken into account at Group level.

Save and except for the above, the Group’s assets are stated at historical cost. the Group does not have a revaluation policy on landed properties.



corporate social responsibility

as a corporate citizen, the Group has always support and committed towards good corporate social responsibility practices particularly in the areas of community, workplace, marketplace and environment which are in line with its philosophy of giving back to the society.

THE COMMUnITY

the Group demonstrated the spirit of caring by contributing funds to various charitable organisations. the recipients include Maternity hospital and Medical Centre negeri Sembilan, persatuan Warga Cinta negara Malaysia, Kelab Sukan dan Kebudyaan MppJ, Flood Victim in Batu pahat, Sungei Way old Folks home, piBG SMK Sultan Salahuddin abdul aziz Shah and other charitable organisations.

LBGB has been one of the main sponsors for Kiwanis Treasure Hunt for years 2007 and 2008 consecutively. This charity event was in aid of the Kiwanis down Syndrome Foundation – national Centre, the Community Centre for the deaf, ti-ratana house of hope, rumah Wawasan, Sitiawan, Joy Workshop, Melaka and Kiwanis orphanage, Batu pahat organized by the Kiwanis Club of Kuala Lumpur (KCKL). the Group has encouraged employee volunteerism and several staff have participated in the fund raising activity of the Kiwanis Fun Fair Carnival at Kiwanis Centre, petaling Jaya.

in view of the Group’s involvement in property development, the Group had taken initiatives of building low-cost apartments that are affordable home units for purchasers from lower income groups at many of its mixed development projects such as in Bandar Saujana putra, Kota perdana, taman Balakong Jaya, taman perindustrian Bukit Serdang, etc.

The Group has also voluntarily assisted 160 house owners under Phase I of Bandar Putera Indah project in Batu Pahat to repair their houses which have been abundant for 8 years by the previous developer. Without imposing any charges to these house owners, LBS has helped them to obtain Certificate of Fitness for them to move into their units in year 2007.

ThEWorKPlacE

the Group recognizes the importance of human capital is an important asset to the organization. it takes good care of the welfare of its employee by providing the hospitalization insurance and opportunity to have a direct ownership of the Company through employee Share option Scheme.

as part of our human capital development, the Group arranged training programmes, either on-the-job, organized in-house or external professional bodies, focusing on topics that are job related with aims to equip the employees with the required skills and knowledge to stay ahead in their working capacity.

the Group recognizes the importance of non-work related activities amongst colleagues thus LBS Sports and Social Club was established. activities were carried out by the Sports Club to foster a good working relationship and to build-up strong team spirit among the employees whilst instilling a sense of belonging among staff. in the year 2007, activities that had been carried out include LBGB annual dinner, Christmas party and monthly staff birthday celebration. informative articles on health, safety, lifestyle, inspiration, etc. were placed on the notice board of the Sports Club to inculcate positive thinking of staff.

To instill fire safety awareness and knowledge of injury prevention measures, the Group organized a “Home Safe Home” training program conducted by Malaysian Volunteer Fire & rescue association (MVFra). employees gained valuable knowledge on preventive action and risk mitigation measures from this training.


ThEMarKETPlacE

the Group recognizes the importance of building and maintaining positive relationships with its customers, suppliers and contractors.

to our customers, the Group maintained an open communication with its purchasers via Customer Care Center or by email at [email protected] immediate reply and/or action would be taken for enquiries or complaints received so as to ensure customers satisfaction.

to our suppliers, the Group has set out standards and ethics by which the business is conducted. it ensures that there is no bias and all suppliers will be treated fairly without prejudice. the Group values and derives considerable and competitive advantage from active cooperation with its established suppliers in terms of innovation and product development.

to our contractors, tenders procedures have been made clear to them so as the award of contracts are done in a fair and just atmosphere.

For better understanding of the Group’s strategy, performance and growth, the interested parties may access to information through the Group’s website at www.lbs.com.my or news released from time to time.

THE EnvIROnMEnT

the Group is committed to achieving good standards of environmental performance, preventing pollution and minimizing the impact of its operations. the Group’s aim is that no lasting environmental damage occurs as a result of its activities and policies are being implemented to ensure that all its operations meet or exceed the requirements of legislation and applicable best practice.

the Group continues to raise environmental awareness within the Group through the development and training of its employees, and communicate and consult with suppliers and contractors. policy set to use recycled papers and sale of recycled materials collected from office and site are two examples.

corporate social responsibility


recurrent related party transactions

the Company is seeking shareholders’ mandate for the proposed renewal of General Mandate pursuant to Chapter 10.09 of the Listing Requirements and Paragraph 4.1.4 of Practice Note 12/2001 of the Listing Requirements at the forthcoming Eighth Annual General Meeting to be held on 30 June 2008.

Recurrent Related Party Transactions of A Trading or Revenue Nature of the Group for the financial year ended 31 december 2007 are as follows:-

Related Party

nature of Recurrent Transactions with LBGB Group

value of Transactions (RM’000)

nature of relationship betweenLBGB Group and the Related Party

1. Sun engineering & Construction Sdn Bhd(“SeC”)

i) provision of civil and structural construction works for property development projects

ii) purchasing of construction materials

- SeC is owned by Lim Mok Chau, Jp •(33% equity interest), Lim Mok Lai (33% equity interest), Tan Ek Bee (17% equity interest) and Tey Cham Lee (17% equity interest).Both Lim Mok Chau, Jp and Lim •Mok Lai are brothers to dato’ Seri Lim Bock Seng and uncles to the Lim Brothers. tan ek Bee is the wife to Lim Mok Chau, Jp and tey Cham Lee is the wife to Lim Mok Lai.

2. Syarikat Jati pemborong am Sdn Bhd (“SJpa”)

i) provision of civil and structural construction works for property development projects


245 SJpa is owned by Lim Bock Kooi •(40% equity interest) and Lim Thiam Chye (60% equity interest).Lim Bock Kooi is the brother of dato’ •Seri Lim Bock Seng and uncle to Lim Brothers.Lim thiam Chye is the son of Lim •Bock Kooi and nephew to dato’ Seri Lim Bock Seng.

3. power automation engineering Sdn Bhd (“pae”)

i) electrical wiring and installation contractor


2,694 pae is owned by Lee Chak Seng •(35% equity interest) and Kok Chee Khung (35% equity interest).Lee Chak Seng is deemed an •interested party as he is a shareholder and director of utuh Sejagat Sdn Bhd (a 51% owned subsidiary of LBGB).Kok Chee Khung is deemed an •interested party as he is a shareholder and director of Jatidiri Gigih Sdn Bhd (a 51% owned subsidiary of LBGB).


Related Party



nature of relationship betweenLBGB Group and the Related Party

4. a) dato’ Seri Lim Bock Sengb) dato’ Lim hock Sanc) datuk Lim hock Guand) dato’ Lim hock Singe) datuk Lim hock Seongf) Chia Lok Yuen

purchase of properties ------

dato’ Seri Lim Bock Seng is Chairman •and non-independent non-executive director of the Company.Lim Brothers and Chia Lok Yuen are •executive directors of the Company.

5. Steven tai, Wong & partners (“StWp”)

provision of services as advocates and solicitors

311 Stephen Wong Yee onn is one of •the partners of StWp and son of dato’ Wong Woon Yow who is an independent non-executive director of the Company.dato’ Wong Woon Yow is deemed an •interested party as he is the father of Stephen Wong Yee onn.

6. intelrich Sdn Bhd(“intelrich”)

purchase of properties - intelrich is owned by dato’ Lim hock •San (50% equity interest), Datuk Lim Hock Guan (20% equity interest), Dato’ Lim Hock Sing (15% equity interest) and datuk Lim hock Seong (15% equity interest).

intelrich is a substantial shareholder •of LBGB which holds 45.13% equity interest in LBGB. therefore, Lim Brothers are also deemed interested by virtue of their interests in intelrich.

dato’ Seri Lim Bock Seng who is the •director of intelrich and Chairman of LBGB, is also the father of Lim Brothers.

datin Seri Liew Boon who is the •director of intelrich is also the mother of Lim Brothers.

recurrent related party transactions


recurrent related party transactions(cont’d)

Related Party



nature of relationship between LBGB Group and the Related Party

7. a) amir arif Bin Kamarudin

b) Md Ariffin Bin Mahmud

purchase of properties 3,053

3,747

amir arif Bin Kamarudin and Md •Ariffin Bin Mahmud are sons-in-law of tan Sri dato’ Seri (dr) haji abu hassan Bin haji omar, who is an independent non-executive director of the Company.

tan Sri dato’ Seri (dr) haji abu •hassan Bin haji omar is deemed an interested party as he is the father-in-law to amir arif Bin Kamarudin and Md Ariffin Bin Mahmud respectively.

8. Magma destar (M) Sdn Bhd (“MdSB”)

purchase of properties; joint venture in property development and sand mining activities

30,759 • MDSB is owned by Amir Arif Bin Kamarudin (51% equity interest) and Md Ariffin Bin Mahmud (49% equity interest).

• Amir Arif Bin Kamarudin and Md Ariffin Bin Mahmud are deemed interested parties as both of them are the sons-in-law of tan Sri dato’ Seri (dr) haji abu hassan Bin haji omar, who is an independent non-executive director of the Company.

• Tan Sri Dato’ Seri (Dr) Haji Abu hassan Bin haji omar is deemed an interested party as he is the father-in-law to amir arif Bin Kamarudin and Md Ariffin Bin Mahmud respectively.

9. dato’ Kamaruddin Bin abdul Ghani

purchase of properties - dato’ Kamaruddin bin abdul Ghani is •the Vice Chairman and independent non-executive director of the Company.


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

Memberships

the Committee consists of the following members:-

Dato’KamaruddinbinabdulGhaniChairman, independent non-executive director

Dato’ Lim Hock San (Resigned on 1 October 2007)Member/Managing director

MajJen(B)Dato’MohamedIsabincheKakMember/independent non-executive director

KongSauKian*Member/independent non-executive director

Dato’ Wong Woon YowMember/independent non-executive director

* Member of Malaysian institute of accountants

dato’ Lim hock San has resigned in compliance with the Malaysian Code of Corporate Governance (revised 2007) which took effect on 1 October 2007.

Attendance of Meeting

During the financial year ended 31 December 2007, the Committee held a total of 6 meetings. The details of the attendance are as follows:-

name of Committee Member Attendance

dato’ Kamaruddin bin abdul Ghani 6/6

dato’ Lim hock San 4/5

Maj Jen (B) dato’ Mohamed isa bin Che Kak 6/6

Kong Sau Kian * 6/6

dato’ Wong Woon Yow 5/6

Terms of Reference

objective

The main objective of the Committee is to assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting, system of internal controls, management and financial reporting practices of the Group.

audit committee report


Terms of Reference (cont’d)

Members

The Committee shall be appointed by the Board from amongst its number and shall consist of not less than three (3) members. all the members must be non-executive, with a majority of them being independent directors. independent Director shall be one who fulfils the requirement as provided in the Listing Requirements of the Bursa Malaysia Securities Berhad (“BMSB”).

Pursuant to paragraph 15.10(c) of the Listing Requirements of BMSB, at least one member of the Committee:-

must be a member of the Malaysian institute of accountants (“Mia”) or i)

if he is not a member of MIA, he must have at least three (3) years working experience and :-ii)

passed the examinations specified in Part I of the 1a) st Schedule of the Accountants Act 1967; or

must be a member of one of the associations of accountants specified in Part II of the 1b) st Schedule of the Accountants Act 1967; or

fulfils such other requirements as prescribed or approved by BMSB.iii)

Members of the Committee shall elect a Chairman from amongst their number who shall be an independent director. no alternate director can be appointed as a member of the Committee.

Quorum

the quorum for meeting of the Committee shall be two (2) in which the majority present in respect of such meeting must be Independent Directors. A valid quorum shall consist of at least one (1) member who is qualified under paragraph 15.10(c) of the Listing Requirements of BMSB.

Frequency of Meeting

Meetings shall be held not less than four (4) times a year. additionally the Chairman shall convene meeting of the Committee if requested by its members, the management, the internal auditor or external auditor to consider any matters within the scope and responsibilities of the Committee.

the Company Secretary shall be the Secretary of the Committee. Minutes of each meeting shall be duly entered in the minutes books and safekept by the Secretary. the Secretary shall circulate the minutes of meetings of the Committee to all members of the Committee and the Board.

Authority

the Committee shall within its terms of reference:-

have the resources which are required to perform its duties;1. have full access to any information as required to perform its duties;2. have the authority to investigate any activity within its terms of reference;3. have the authority to form sub-committee(s) if deemed necessary and fit;4. have the authority to delegate any of its responsibilities to any person or committee(s) that is deemed fit; and5. be able to obtain independent professional or other advice.6.

audit committee report(cont’d)



Duties and Functions

the duties and functions of the Committee shall be:-

Internal Audit1.

• To oversee the functions of the Internal Audit Department and ensure compliance with relevant regulatory;

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

• To review the internal audit programme, consider the major findings of internal audits and Management’s response, and ensure coordination between the internal and external auditors; and

• To appoint, set compensation, evaluate performance and decide on the transfer and dismissal of the Head of internal audit.

2. Internal Control

• To review the effectiveness of internal controls and risk management process.

3. External Audit

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

• To review the external auditors’ audit scope and plan, including any changes to the planned scope of the audit plan;

• To review the external auditors’ Management Letter and Management’s response;

• To review, with the external auditor, the audit reports, the auditor’s evaluation of the system of internal control, audit plan and the assistance given by the employees to the external auditor;

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

• To review whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment.

4. Financial Reporting

To review with the management the quarterly and year-end financial statements of the Company prior to the approval by the Board, focusing particularly on:-

• Any changes in accounting policies and practices;• Significant adjustments arising from the audit;• Major judgement areas;• Significant and unusual events;• The going concern assumption; and• Compliance with accounting standards and other legal requirements.

audit committee report



Duties and Functions (cont’d)

5. related party transactions

• To review any related party transactions and conflict of interest situation that may arise in the Company including any transactions, procedures or course of conduct that raise questions of management integrity.

6. Other Matters

• To direct and where appropriate supervise any special project or investigation considered necessary;

• To report to the Board summarising the work performed in fulfilling the Committee’s primary responsibilities; and

• To consider other topics as defined by the Board.

SUMMARY OF ACTIvITIES

during the year under review, the following were the activities carried out:

• Reviewed the progress on the Risk Register of the Group.• Reviewed the Internal Audit Plan and the revised Audit Charter of Internal Audit Department.• Reviewed the internal audit report on the internal control system of payment function for the Group. The Committee

has directed actions to be taken by management to rectify and improve the system and procedures.• Reviewed the unaudited quarterly financial results of the Group for the financial year 2007 and the audited financial

statements of the Group for the financial year ended 31 December 2006 prior to the Board approval and subsequent announcement.

• Reviewed the terms of the proposed renewal of general mandate and proposed new general mandate for recurrent related party transactions of a revenue or trading nature and the procedures for these proposed transactions.

• Reviewed the verification on allocation of options to employees under the Employees Share Option Scheme (“eSoS”) of the Company carried out by the external auditors.

• Reviewed the Statement of Internal Control of the Group for the purpose of inclusion in the Annual Report 2006.• Reviewed the External Auditors’ scope of work and audit plan for the Group for financial year ended 2007.• Reviewed the reports prepared by the External Auditors without the presence of any of the Executive Board

Members.

STATEMEnT BY COMMITTEE On THE COMPAnY’S ESOS

The Committee, with the assistance of verification work performed by the External Auditors, is satisfied that the allocation of options pursuant to the Company’s ESOS during the financial year ended 2007, has complied with the criteria set out in the eSoS Bye-Laws.

InTERnAL AUDIT FUnCTIOn

the internal audit department (“iad”) which was established since year 2005 was an independent party from the Management of the Company with it’s primarily responsibility of reviewing the internal control system within the Group on a regular and systematic basis. the iad adopts a risk-based auditing approach taking into account global best practices and industry standards. to ensure the internal control system of the Company is achieving its satisfactory results, the iad works closely with the external auditors and risk Management Committee on matters concerning key risks and changes in the business and external environment and the approach to address these changes. Service of professional firm was also engaged to perform audit on specific areas.

audit committee report(cont’d)


This Statement on Internal Control is made pursuant to Paragraph 15.27 (b) of the Bursa Malaysia Securities Berhad’s Listing requirements. the Board of directors (“Board”) of LBS Bina Group Berhad hereby provides 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 acknowledges its overall responsibilities in maintaining a sound system of internal control and to review its effectiveness throughout the Group. the Board also recognizes that such a system of internal control has its limitations as it is designed to manage risk rather than eliminate the risk that may hinder the achievement of the Group’s business objectives. in pursuing these objectives, internal control can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal control incorporates inter alia, risk management, financial, operational and compliance controls as well as the governance process.

InTERnAL AUDIT FUnCTIOn

the Board with the audit Committee endorsed and approved the scope of the internal audit function through review of its audit plan. the Board places full emphasis on the independence and integrity of the internal audit function and ensures that the internal audit function has adequate resources to effectively report to the Board on the internal control system of the Group. the internal audit function submits regular audit reports to the audit Committee for its review and deliberation and conducts follow-up action as required by the audit Committee. the internal audit function reports independently to the Chairman of the Audit Committee who ensures its impartiality, proficiency and professionalism.

oThErKEYElEMENTSaNDProcESSESoFINTErNalcoNTrolS

other key elements and processes of the Group’s system of internal control 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. internal audit visits were carried out to review the adequacy of the internal control systems, compliance with policies and procedures. the work of the internal auditors is in accordance with an annual audit plan approved by the audit Committee and revised as and when deemed appropriate.

• 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.

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

• The operational guidelines are regularly reviewed and updated to ensure effective management of the Group’s operations.

• The Audit Committee holds regular meetings to deliberate on findings and recommendations for improvement by the internal auditors on the state of the internal control system, and reports back to the Board; and

• The Audit Committee and the Board monitor and review the Group performance and financial results at their quarterly meetings.

the above control elements provide reasonable assurance to the Board that the structure of controls is appropriate to the Group’s operations and that risks are at an acceptable level throughout the Group’s business. the Board will endeavour to continue improving and enhancing the existing system of internal control to ensure their continued relevance in the changing business environment.

statement of internal control

DIRECTORS’ REPORT 52 - 58STATEMENT BY DIRECTORS 59 STATUTORY DECLARATION 59REPORT OF THE AUDITORS 60BALANCE SHEETS 61 - 62INCOME STATEMENTS 63STATEMENT OF CHANGES IN EQUITY 64 - 67CONSOLIDATED CASH FLOW STATEMENTS 68 - 69COMPANY CASH FLOW STATEMENTS 70 - 71NOTES TO THE FINANCIAL STATEMENTS 72 - 142

Annual report 2007

Financial Statements

P.(52) LBS BINA GROUP BERHADANNUAL REPORT 2007

The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2007.

PRINCIPAL ACTIVITIES

The principal activities of the Company are management and investment holding. The principal activities of the subsidiary companies and associated companies are disclosed in Note 53 and Note 54 to the financial statements.

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

FINANCIAL RESULTS

Group Company

RM RM

Profit before taxation 13,779,647 1,739,339

Taxation (4,390,412) (1,398,740)

Profit for the financial year 9,389,235 340,599

Attributable to:

Equity holders of the parent 5,603,204 340,599

Minority shareholders’ interests 3,786,031 -

9,389,235 340,599 In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature, except for the effects arising from the changes in accounting policies due to the adoption of the revised Financial Reporting Standards (“FRSs”) as disclosed in Note 47 to the financial statements.

DIVIDENDS

No dividend has been paid or declared by the Company since the end of previous financial year.

The Board of Directors does not recommend any dividend in respect of the financial year under review.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year under review, except for the Employee Share Option Scheme.

directors’ report

P.(53)LBS BINA GROUP BERHADANNUAL REPORT 2007

RESERVES AND PROVISIONS

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

ISSUE OF SHARES AND DEBENTURES

During the financial year, the issued and paid-up share capital of the Company was increased from RM384,239,291 to RM385,191,792 by issuance of:

(a) 783,401 new ordinary shares of RM1.00 each pursuant to the conversion of Irredeemable Convertible Unsecured Loan Stocks 2002/2007 (“ICULS B”) at the conversion price of RM1.00 each;

(b) 107,100 new ordinary shares of RM1.00 each pursuant to the conversion of Irredeemable Convertible Unsecured Loan Stocks 2003/2008 (“ICULS C”) at the conversion price of RM1.00 each; and

(c) 62,000 new ordinary shares of RM1.00 each pursuant to the conversion of Irredeemable Convertible Unsecured Loan Stocks 2004/2009 (“ICULS D”) at the conversion price of RM1.00 each.

All new shares issued rank pari passu with the existing issued shares of the Company.

There were no issues of debentures during the financial year under review.

EMPLOYEE SHARE OPTION SCHEME

The LBS Bina Group Berhad Employee Share Option Scheme (“ESOS”) was approved by shareholders at the Extraordinary General Meeting (“EGM”) on 24 June 2002 and became effective on 16 September 2002 for a period of 5 years, and shall lapse on 15 September 2007. Pursuant to the Board’s approval on 28 May 2007, the tenure of the ESOS has been extended for a further 5 years, expiring on 15 September 2012.

The ESOS Bye-Laws were amended and approved by the shareholders at the EGM on 29 June 2005 to include the participation of Non-Executive Directors of the Company and to increase the maximum number of new ordinary shares available under the ESOS from ten per cent (10%) to fifteen per cent (15%) of the total issued and paid-up capital of the Company.

The salient features and other terms of the ESOS are disclosed in Note 41 to the financial statements.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of option holders, other than Directors, who have been granted options to subscribe for less than 500,000 ordinary shares of RM1.00 each. No employees were granted options to subscribe for 500,000 or more ordinary shares of RM1.00 each during the financial year.

Details of the options granted to Directors are disclosed in the section on Directors’ interests in this report.

directors’ report(cont’d)


DIRECTORS

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

Dato’ Seri Lim Bock Seng, S.S.S.A., D.P.M.S., A.M.N.

Dato’ Kamaruddin bin Abdul Ghani, D.I.M.P., S.M.P., A.M.N.

Dato’ Lim Hock San, D.S.S.A., J.P.

Datuk Lim Hock Guan, D.M.S.M., P.J.K., J.P.

Dato’ Lim Hock Sing, D.I.M.P., J.P.

Datuk Lim Hock Seong, D.M.S.M.

Chia Lok Yuen

Tan Sri Dato’ Seri (DR) Haji Abu Hassan bin Haji Omar, P.S.M., S.P.M.S., S.M.T., P.I.S., F.C.I.L.T., F.M.I.P.

Maj. Jen. (B) Dato’ Mohamed Isa bin Che Kak, J.S.D., K.M.N., P.P.T., S.M.P., D.S.D.K., J.M.N., D.P.T.S, P.S.A.T.

Dato’ Wong Woon Yow, D.S.S.A.

Mohd Fazil bin Shafie

Kong Sau Kian

DIRECTORS’ INTERESTS

Details of holdings and deemed interests in the share capital, options over the shares and debentures of the Company or its related corporations by the Directors in office at the end of the financial year, according to the register required to be kept under Section 134 of the Companies Act, 1965, were as follows:

No. of ordinary shares of RM1.00 eachAt At

1.1.2007 Acquired Disposed 31.12.2007LBS Bina Group Berhad

Direct interest

Dato’ Seri Lim Bock Seng 350,000 - - 350,000

Maj. Jen. (B) Dato’ Mohamed Isa bin Che Kak 4,084 - - 4,084

Dato’ Wong Woon Yow 280,000 - 230,000 50,000

Chia Lok Yuen 105,000 - - 105,000

Mohd Fazil bin Shafie 2,000,000 - - 2,000,000

directors’ report


DIRECTORS’ INTERESTS (CONT’D)

No. of ordinary shares of RM1.00 eachAt At

1.1.2007 Acquired Disposed 31.12.2007LBS Bina Group Berhad

Indirect interest

Dato’ Seri Lim Bock Seng ¹ - 1,967,400 15,000 1,952,400

Dato’ Lim Hock San 2 170,577,210 3,059,250 - 173,636,460

Datuk Lim Hock Guan 3 170,577,210 2,969,250 - 173,546,460

Dato’ Lim Hock Sing 2 170,577,210 3,106,250 - 173,683,460

Datuk Lim Hock Seong 2 170,577,210 3,151,250 - 173,728,460

Tan Sri Dato’ Seri (DR) Haji Abu Hassan bin Haji Omar ¹ - 673,000 - 673,000

No. of options over ordinary shares of RM1.00 each (“ESOS”)

At At1.1.2007 Granted Exercised 31.12.2007

LBS Bina Group Berhad

Dato’ Seri Lim Bock Seng 1,000,000 - - 1,000,000

Dato’ Kamaruddin bin Abdul Ghani 1,000,000 - - 1,000,000

Dato’ Lim Hock San 2,000,000 - - 2,000,000

Datuk Lim Hock Guan 1,800,000 - - 1,800,000

Dato’ Lim Hock Sing 1,800,000 - - 1,800,000

Datuk Lim Hock Seong 1,800,000 - - 1,800,000

Chia Lok Yuen 900,000 - - 900,000

Tan Sri Dato’ Seri (DR) Haji Abu Hassanbin Haji Omar 300,000 200,000 - 500,000

Maj. Jen. (B) Dato’ Mohamed Isa bin Che Kak 1,000,000 - - 1,000,000

Dato’ Wong Woon Yow 300,000 200,000 - 500,000

Mohd Fazil bin Shafie 1,000,000 - - 1,000,000

Kong Sau Kian 1,000,000 - - 1,000,000



DIRECTORS’ INTERESTS (CONT’D)

No. of RM1.00 nominal value of 4% Irredeemable Convertible Unsecured Loan Stocks 2002/2007

(“ICULS B”)At

1.1.2007 Acquired ConvertedAt

31.12.2007LBS Bina Group BerhadIndirect interest Dato’ Lim Hock San 3

Datuk Lim Hock Guan 3

Dato’ Lim Hock Sing 3

Datuk Lim Hock Seong 3

208,000208,000208,000208,000

----

208,000208,000208,000208,000

----


(“ICULS C”)At


31.12.2007LBS Bina Group BerhadIndirect interest Dato’ Lim Hock San 3

Datuk Lim Hock Guan 3

Dato’ Lim Hock Sing 3

Datuk Lim Hock Seong 3

217,000217,000217,000217,000

----

----

217,000217,000217,000217,000


(“ICULS D”)At


31.12.2007LBS Bina Group BerhadIndirect interest Dato’ Seri Lim Bock Seng ¹ - 10,000 - 10,000

Note:

1 Deemed interests pursuant to Section 134(12)(c) of the Companies Act, 1965 in compliance with the Companies (Amendment) Act, 2007 by virtue of their spouse and/or child direct interests in the Company.

2 Deemed interests pursuant to Section 134(12)(c) of the Companies Act, 1965 in compliance with the Companies (Amendment) Act, 2007 by virtue of their spouse and/or child direct interests in the Company and Section 6A of the Companies Act, 1965 by virtue of their direct interests in Intelrich Sdn. Bhd.

3 Deemed interests pursuant to Section 6A of the Companies Act, 1965 by virtue of their direct interests in Intelrich Sdn. Bhd.

By virtue of their interests in the shares of the Company, Dato’ Lim Hock San, Datuk Lim Hock Guan, Dato’ Lim Hock Sing and Datuk Lim Hock Seong are also deemed to have interests in the shares of all the subsidiary companies to the extent the Company has an interest.

directors’ report


DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) 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.

Neither during nor at the end of the financial year, was the Company a party to any arrangement the object of which is to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options granted under the LBS Bina Group Berhad ESOS.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps:

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

(ii) to ensure that any current assets which were unlikely to realise their value in the ordinary course of business were written down to an amount which they might be expected so to realise.

(b) At the date of this report, the Directors are not aware of any circumstances which would render:

(i) the amount written-off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent;

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading;

(iii) any amount stated in the financial statements of the Group and of the Company misleading; and

(iv) adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(c) In the opinion of the Directors:

(i) No contingent or other liabilities have become enforceable, or are 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 affect the ability of the Company or its subsidiary companies to meet their obligations as and when they fall due; and

(ii) 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 current financial year.

(d) At the date of this report, there does not exist:

(i) any charge on the assets of the Company and its subsidiary companies which have arisen since the end of the financial year to secure the liabilities of any other person; and



OTHER STATUTORY INFORMATION (CONT’D)

(d) At the date of this report, there does not exist: (cont’d)

(ii) any contingent liability in respect of the Company and its subsidiary companies which have arisen since the end of the financial year.

SIGNIFICANT EVENTS

The significant events are disclosed in Note 49 to the financial statements.

SUBSEQUENT EVENTS

The subsequent events are disclosed in Note 50 to the financial statements.

AUDITORS

The auditors, Anuarul Azizan Chew & Co., have expressed their willingness to accept re-appointment.

Signed in accordance with a resolution of the Directors.

DATO’ LIM HOCK SAN DATO’ LIM HOCK SINGD.S.S.A, J.P. D.I.M.P., J.P.

KUALA LUMPUR22 April 2008

directors’ report


We, DATO’ LIM HOCK SAN, D.S.S.A, J.P. and DATO’ LIM HOCK SING, D.I.M.P., J.P., being two of the Directors of LBS BINA GROUP BERHAD, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 57 to 138 are drawn up in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2007 and of their results and the cash flows of the Group and of the Company for the financial year ended on that date.

Signed in accordance with a resolution of the Directors.

DATO’ LIM HOCK SAN DATO’ LIM HOCK SINGD.S.S.A, J.P. D.I.M.P., J.P.


I, DATO’ LIM HOCK SING, D.I.M.P., J.P., being the Director primarily responsible for the financial management of LBS BINA GROUP BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 57 to 138 are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed DATO’ LIM HOCK SING, D.I.M.P., J.P. at KUALA LUMPUR in the Federal Territory this 22 April 2008

))))

DATO’ LIM HOCK SING D.I.M.P., J.P.

Before me,

No. W 181 MAISHARAH BINTI ABU HASSAN Commissioner for Oaths

statement by directorspursuant to section 169(15) of the companies act, 1965

statutory declarationpursuant to section 169(16) of the companies act, 1965


We have audited the financial statements set out on pages 57 to 138 of LBS Bina Group Berhad.

The financial statements are the responsibility of the Company’s Directors.

It is our responsibility to form an independent opinion, based on our audit, on those 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 content of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain reasonable assurance 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 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 applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company as at 31 December 2007 and of their 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 Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company.

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

The names of the subsidiary companies of which we have not acted as auditors are indicated in Note 53 to the financial statements. We have considered the financial statements of these subsidiary companies and the auditors’ reports thereon.

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

The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did not include any comments made under subsection (3) of Section 174 of the Act.

ANUARUL AZIZAN CHEW & CO.Firm Number: AF 0791Chartered Accountants

TEE GUAN PIANApproved Number: 1886/05/08 (J/PH) Partner of Firm


report of the auditorsto the members of lbs bina group berhad


Group Company2007 2006 2007 2006

Note RM RM RM RMNon-Current Assets

Property, plant and equipment 3 9,867,768 10,386,449 - -

Land and property development costs 4 463,983,819 444,700,241 - -

Investment properties 5 11,943,465 5,115,554 - -

Prepaid lease payments 6 543,200 548,800 - -

Investment in subsidiary companies 7 - - 198,218,586 198,218,586

Investment in associated companies 8 2,465,609 9,375,918 - -

Other receivables 9 36,430,680 38,987,520 - -

Other investments 10 1,253,500 2,671,300 - -

Goodwill on consolidation 11 91,543,985 47,464,037 - -618,032,026 559,249,819 198,218,586 198,218,586

Current Assets

Land and property development costs 4 216,589,373 139,011,233 - -

Properties held for sale 12 1,091,593 1,091,593 - -

Inventories 13 31,731,574 18,419,795 - -

Trade receivables 14 211,667,049 169,441,870 - -

Other receivables 9 88,168,621 104,486,310 473,096 417,855

Tax recoverable 8,145,103 5,685,411 6,260,205 5,066,945

Amount owing by subsidiary companies 16 - - 188,491,670 223,946,222

Amount owing by associated companies 17 905,314 3,662,343 - -

Fixed deposits with licensed banks 18 57,000,221 60,290,867 2,891,402 3,609,487

Cash held under Housing Development Accounts 19 28,358,849 30,632,550 - -

Debt Service Reserve Accounts 20 229,684 158,241 229,684 158,241

Cash and bank balances 21 22,771,841 12,215,876 57,886 526,418666,659,222 545,096,089 198,403,943 233,725,168

Non-current asset held for sale 22 4,117,800 - - -670,777,022 545,096,089 198,403,943 233,725,168

balance sheetsas at 31 December 2007

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


Group Company2007 2006 2007 2006

Note RM RM RM RMCurrent Liabilities

Trade payables 23 154,545,226 178,781,297 - -Other payables 24 155,945,396 117,180,537 1,917,882 2,390,287Bank overdrafts 25 30,952,540 32,182,075 12,753,832 12,829,907Hire purchase payables 26 538,350 441,818 - -Redeemable Convertible Bonds - 8,349,720 - 8,349,720Secured Serial Bonds 27 - 15,000,000 - 15,000,000Commercial Papers 28 57,000,000 56,000,000 57,000,000 56,000,0004% Irredeemable Convertible Unsecured Loan Stocks 29 37,082 783,401 37,082 783,401Bank borrowings 30 66,459,456 48,096,633 - -Amount owing to subsidiary companies 16 - - 1,403,013 14,150,302Amount owing to associated companies - 487,923 - -Tax payable 48,080,384 37,871,935 - -

513,558,434 495,175,339 73,111,809 109,503,617Net current assets 157,218,588 49,920,750 125,292,134 124,221,551

775,250,614 609,170,569 323,510,720 322,440,137Financed By:

Share capital 31 385,191,792 384,239,291 385,191,792 384,239,291Share premium 32 16,945,016 16,945,016 16,945,016 16,945,0164% Irredeemable Convertible Unsecured Loan Stocks 29 1,300,010 1,411,548 1,300,010 1,411,548Other reserves 33 10,556,527 4,643,852 111,915 76,250Accumulated losses (19,762,594) (25,327,345) (130,061,686) (130,350,285)Equity attributable to equity holders of the parent 394,230,751 381,912,362 273,487,047 272,321,820Minority shareholders’ interests 34,168,956 22,571,698 - -Total equity 428,399,707 404,484,060 273,487,047 272,321,820

Non-Current Liabilities

4% Irredeemable Convertible Unsecured Loan Stocks 29 23,673 118,317 23,673 118,317Secured Serial Bonds 27 50,000,000 50,000,000 50,000,000 50,000,000Bank borrowings 30 127,330,908 87,585,414 - -Trade payable 23 20,420,000 - - -Other payable 24 84,868,945 - - -Hire purchase payables 26 1,415,113 1,290,822 - -Deferred tax liabilities 34 62,792,268 65,691,956 - -

346,850,907 204,686,509 50,023,673 50,118,317775,250,614 609,170,569 323,510,720 322,440,137

balance sheetsas at 31 December 2007



Group Company2007 2006 2007 2006

Note RM RM RM RM

Revenue 35 281,298,408 328,712,155 9,720,000 7,620,000

Cost of sales (238,232,190) (271,390,528) - -

Gross profit 43,066,218 57,321,627 9,720,000 7,620,000

Other operating income 19,578,055 6,703,489 5,490,431 7,866,919

Operating expenses (36,027,375) (36,305,682) (6,057,049) (7,124,581)

Finance costs 36 (12,921,222) (11,865,243) (7,414,043) (7,923,958)

Share of profits in associated companies 83,971 170,557 - -

Profit before taxation 37 13,779,647 16,024,748 1,739,339 438,380

Taxation 38 (4,390,412) (5,143,479) (1,398,740) (302,048)

Profit for the financial year 9,389,235 10,881,269 340,599 136,332

Attributable to:

Equity holders of the parent 5,603,204 4,621,809 340,599 136,332

Minority shareholders’ interests 3,786,031 6,259,460 - -9,389,235 10,881,269 340,599 136,332

Earnings per share attributable to the equity holders of the parent (sen)

Basic 39(a) 1.46 1.22

Fully diluted 39(b) 1.46 1.19

income statementsfor the financial year ended 31 December 2007



Attributable to Equity Holders of the Parent

Minority Shareholders’

InterestsTotal

Equity

Non-distributable

Share Capital

Share Premium

ICULS - Equity

ComponentOther

ReservesAccumulated

Losses Total

Group Note RM RM RM RM RM RM RM RM

At 1 January 2006

- as previously stated 378,110,321 16,945,016 1,679,277 13,009,573 (31,010,516) 378,733,671 15,419,876 394,153,547

- effect of adopting FRS 2 - - - 20,170 (20,170) - - -

At 1 January 2006, restated 378,110,321 16,945,016 1,679,277 13,029,743 (31,030,686) 378,733,671 15,419,876 394,153,547

Effect of adopting FRS 3 - - - (9,406,616) 9,406,616 - - -

Issue of shares pursuant to ICULS 6,128,970 - - - - 6,128,970 - 6,128,970

Reclassification of ICULS - equity component - - (267,729) - - (267,729) - (267,729)

Foreign exchange differences, representing net gains not recognised in income statement - - - 1,560,055 - 1,560,055 53,186 1,613,241

Dividend 40 - - - - (8,864,032) (8,864,032) - (8,864,032)

Realisation of associated company’s reserve - - - (595,410) 595,410 - - -

Distribution to holders of:

- ICULS C - - - - (41,946) (41,946) - (41,946)

- ICULS D - - - - (14,516) (14,516) - (14,516)

Share-based payment - - - 56,080 - 56,080 - 56,080

Acquisition of subsidiary companies - - - - - - 676,339 676,339

Additional investment in subsidiary companies - - - - - - 162,837 162,837

Profit for the financial year - - - - 4,621,809 4,621,809 6,259,460 10,881,269

At 31 December 2006 384,239,291 16,945,016 1,411,548 4,643,852 (25,327,345) 381,912,362 22,571,698 404,484,060

statement of changes in equityfor the financial year ended 31 December 2007



Attributable to Equity Holders of the Parent

Minority Shareholders’

InterestsTotal

Equity

Non-distributable

Share Capital

Share Premium

ICULS - Equity

ComponentOther

ReservesAccumulated

Losses Total

Group RM RM RM RM RM RM RM RM

At 1 January 2007 384,239,291 16,945,016 1,411,548 4,643,852 (25,327,345) 381,912,362 22,571,698 404,484,060

Issue of shares pursuant to ICULS 952,501 - (169,100) - - 783,401 - 783,401

Reclassification of ICULS - equity component - - 57,562 - - 57,562 - 57,562

Foreign exchange differences, representing net gains not recognised in income statement - - - 5,890,557 - 5,890,557 - 5,890,557

Realisation of associated company’s reserve - - - (13,547) 13,547 - - -

Distribution to holders of:

- ICULS C - - - - (39,307) (39,307) - (39,307)

- ICULS D - - - - (12,693) (12,693) - (12,693)

Share-based payment - - - 35,665 - 35,665 - 35,665

Acquisition of subsidiary companies - - - - - - 7,320,927 7,320,927

Additional investment in subsidiary companies - - - - - - 490,300 490,300

Profit for the financial year - - - - 5,603,204 5,603,204 3,786,031 9,389,235

At 31 December 2007 385,191,792 16,945,016 1,300,010 10,556,527 (19,762,594) 394,230,751 34,168,956 428,399,707


statement of changes in equity(cont’d)


Non-distributable

ShareCapital

SharePremium

ICULS -Equity

ComponentESOS

ReserveAccumulated

Losses TotalCompany Note RM RM RM RM RM RM

At 1 January 2006

- as previously stated 378,110,321 16,945,016 1,679,277 - (121,545,953) 275,188,661

- effect of adopting FRS 2

- - - 20,170 (20,170) -

At 1 January 2006, restated 378,110,321 16,945,016 1,679,277 20,170 (121,566,123) 275,188,661

Issue of shares pursuant to ICULS 6,128,970 - - - - 6,128,970

Reclassification of ICULS - equity component - - (267,729) - - (267,729)

Dividend 40 - - - - (8,864,032) (8,864,032)

Distribution to holders of :

- ICULS C - - - - (41,946) (41,946)

- ICULS D - - - - (14,516) (14,516)

Share-based payment - - - 56,080 - 56,080

Profit for the financial year - - - - 136,332 136,332

At 31 December 2006 384,239,291 16,945,016 1,411,548 76,250 (130,350,285) 272,321,820

statement of changes in equityfor the financial year ended 31 December 2007


Non-distributable

ShareCapital

SharePremium

ICULS -Equity

ComponentESOS

ReserveAccumulated

Losses TotalCompany RM RM RM RM RM RM

At 1 January 2007 384,239,291 16,945,016 1,411,548 76,250 (130,350,285) 272,321,820

Issue of shares pursuant to ICULS 952,501 - (169,100) - - 783,401

Reclassification of ICULS - equity component - - 57,562 - - 57,562

Distribution to holders of :

- ICULS C - - - - (39,307) (39,307)

- ICULS D - - - - (12,693) (12,693)

Share-based payment - - - 35,665 - 35,665

Profit for the financial year - - - - 340,599 340,599

At 31 December 2007 385,191,792 16,945,016 1,300,010 111,915 (130,061,686) 273,487,047


statement of changes in equity(cont’d)


2007RM

2006RM

Cash Flows From Operating Activities


Adjustment for:

Allowance for doubtful debts 1,902,128 1,823,874

Allowance for foreseeable loss 1,781,390 828,320

Depreciation of investment properties 248,437 250,712

Depreciation of property, plant and equipment 1,478,477 1,322,247

Gain on disposal of investment properties (165,148) (406,398)

Gain on disposal of property, plant and equipment (55,523) (102,056)

Interest expense 12,921,222 11,865,243

Interest income (3,837,311) (2,469,204)

Property, plant and equipment written-off 317,033 88,490

Share-based payment 35,665 56,080

Share of profit in associated companies (83,971) (170,557)

Unrealised loss on foreign exchange 4,962,097 343,101

Deposit written-off 29,000 500,000

Impairment of goodwill arising on consolidation 886,880 1,451,505

Property development costs written-off 117,816 942,972

Negative goodwill on consolidation recognised in income statement (1,090,471) (703,757)

Waiver of debts by other payables (6,777,722) (631,549)

Amortisation of prepaid lease payments 5,600 -

Impairment loss on investment properties 7,300 -

Impairment loss on property development costs - 2,536,616

Operating profit before working capital changes 26,462,546 33,550,387

(Increase)/Decrease in working capital

Inventories (7,063,747) 5,500,477

Land and property development costs (53,464,676) 44,878,646

Trade receivables (27,138,251) 34,809,047

Other receivables 25,193,579 (8,877,389)

Trade payables (33,772,469) (15,769,375)

Other payables 109,583,756 (45,761,868)

Amount owing by associated companies 2,269,106 4,229,631

Foreign exchange reserve 1,023,495 1,412,76216,630,793 20,421,931

Cash generated from operations 43,093,339 53,972,318

Interest received 3,837,311 2,469,204

Interest paid (24,365,172) (22,770,614)

Tax paid (6,408,865) (5,789,174)(26,936,726) (26,090,584)

Net cash from operating activities 16,156,613 27,881,734

consolidated cash flow statementsfor the financial year ended 31 December 2007


Note

2007RM

2006RM

Cash Flows From Investing Activities

Acquisition of subsidiary companies 7(b) (37,646,184) (918,814)

Additional investment in subsidiary companies (1,500,000) (2,545,528)

Proceeds from disposal of investment properties 465,000 1,310,235

Proceeds from disposal of property, plant and equipment 153,230 225,839

Purchase of property, plant and equipment 3(c) (683,933) (338,117)

Purchase of investment properties (7,383,500) -

Prepaid lease payments made - (68,800)

Net cash used in investing activities (46,595,387) (2,335,185)

Cash Flows From Financing Activities

Decrease/(Increase) in fixed deposit pledged 19,046,736 (25,154,582)

Increase in cash and bank balances pledged (5,786,678) (1,996,591)

Distribution to holders of ICULS C (39,307) (41,946)

Distribution to holders of ICULS D (12,693) (14,516)

Drawdown of bank borrowings 117,823,628 47,120,873

Repayment of bank borrowings (57,440,451) (152,259,873)

Repayment of hire purchase payables (472,077) (391,521)

Proceeds from issue of Commercial Papers 120,000,000 68,000,000

Redemption of Commercial Papers (119,000,000) (12,000,000)

Proceeds from issue of shares to minority shareholders 490,300 -

Redemption of Secured Serial Bonds (15,000,000) -

Dividend paid - (8,864,032)

Proceeds from issue of Secured Serial Bonds - 65,000,000

Redemption of Redeemable Convertibles Bonds (8,356,679) (7,891,313)

Net cash from/(used in) financing activities 51,252,779 (28,493,501)

Net increase/(decrease) in cash and cash equivalents 20,814,005 (2,946,952)Effect of exchange rate changes (1,814,367) (2,305,338)Cash and cash equivalents at beginning of the financial year 36,331,481 41,739,554Transfer to Debt Service Reserve Accounts (71,443) (155,783)Cash and cash equivalents at end of the financial year 55,259,676 36,331,481

Cash and cash equivalents at end of the financial year comprise:

Fixed deposits with licensed banks 57,000,221 60,290,867

Cash held under Housing Development Accounts 28,358,849 30,632,550

Cash and bank balances 22,771,841 12,215,876

Bank overdrafts (30,952,540) (32,182,075)77,178,371 70,957,218

Less: Fixed deposits pledged with licensed banks (14,135,426) (32,629,146)

Sinking fund account and cash collateral account pledged (7,783,269) (1,996,591)55,259,676 36,331,481

consolidated cash flow statements(cont’d)



2007RM

2006RM

Cash Flows From Operating Activities

Profit before taxation 1,739,339 438,380

Adjustment for:

Interest expense 7,414,043 7,923,958

Share-based payment 35,665 56,080

Interest income (5,490,340) (6,519,324)

Unrealised loss on foreign exchange 4,351,491 3,984,583

Dividend income (9,600,000) (7,500,000)

Operating loss before working capital changes (1,549,802) (1,616,323)

(Increase)/Decrease in working capital

Other receivables (55,241) 447,248

Other payables (472,405) 1,096,320

Amount owing to/by subsidiary companies 25,363,772 (35,565,083)24,836,126 (34,021,515)

Cash generated from/(used in) operations 23,286,324 (35,637,838)

Interest received 5,490,340 6,519,324

Interest paid (7,407,084) (7,460,970)(1,916,744) (941,646)

Net cash from/(used in) operating activities 21,369,580 (36,579,484)

Cash Flows From Investing Activity

Investment in subsidiary company - (187)

Net cash used in investing activity - (187)

Cash Flows From Financing Activities

Distribution to holders of ICULS C (39,307) (41,946)

Distribution to holders of ICULS D (12,693) (14,516)

Proceeds from issue of Commercial Papers 120,000,000 68,000,000

Decrease/(Increase) in fixed deposit pledged 718,085 (3,609,487)

Redemption of Commercial Papers (119,000,000) (12,000,000)

Redemption of Redeemable Convertible Bonds (8,356,679) (7,891,313)

Redemption of Secured Serial Bonds (15,000,000) -

Proceeds from issue of Secured Serial Bonds - 65,000,000

Dividend paid - (8,864,032)

Repayment of term loan - (58,400,016)

Net cash (used in)/from financing activities (21,690,594) 42,178,690

company cash flow statementsfor the financial year ended 31 December 2007


2007 2006RM RM

Net (decrease)/increase in cash and cash equivalents (321,014) 5,599,019Cash and cash equivalents at beginning of the financial year (12,303,489) (17,746,725)

Transfer to Debt Service Reserve Accounts (71,443) (155,783) Cash and cash equivalents at end of the financial year (12,695,946) (12,303,489)

Cash and cash equivalents at end of the financial year comprise:

Fixed deposits with licensed banks 2,891,402 3,609,487

Cash and bank balances 57,886 526,418

Bank overdrafts (12,753,832) (12,829,907)

(9,804,544) (8,694,002)

Less: Fixed deposits pledged with licensed banks (2,891,402) (3,609,487)(12,695,946) (12,303,489)

company cash flow statements(cont’d)



1. Corporate Information

The principal activities of the Company are management and investment holding. The principal activities of the subsidiary companies and associated companies are disclosed in Note 53 and Note 54 to the financial statements.

The Company is a public limited liability company, incorporated under the Companies Act, 1965 and domiciled in Malaysia, and is listed on the Main Board of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Plaza Seri Setia, Level 1 - 4, No. 1, Jalan SS9/2, 47300 Petaling Jaya, Selangor Darul Ehsan.

The financial statements of the Group and of the Company for the financial year ended 31 December 2007 were authorised for issue in accordance with a resolution of the Board of Directors dated 22 April 2008.

2. Basis of Preparation and Significant Accounting Policies

(a) Basis of accounting

The financial statements of the Group and of the Company has been prepared on the historical cost basis except as disclosed in the notes to the financial statements and in compliance with the provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.

During the financial year, the Group and the Company have adopted the following applicable Financial Reporting Standards (“FRSs”) issued by the Malaysian Accounting Standards Board that are mandatory for the current financial year:

FRS 117 Leases

FRS 124 Related Party Disclosures

The Directors of the Group and of the Company anticipate that the application of the above FRSs does not have any significant impact on the financial statements of the Group and of the Company, except as disclosed in Note 47 to the financial statements.

The Directors of the Group and of the Company anticipate that the application of the following amendment to FRS and revised FRSs which are mandatory and will be effective for financial periods beginning on or after I July 2007 will have no material impact on the financial statements of the Group and of the Company:

Amendment to FRS 121

The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation

FRS 107 Cash Flow Statements

FRS 111 Construction Contracts

FRS 112 Income Taxes

FRS 118 Revenue

FRS 119 Employee Benefits

FRS 120 Accounting for Government Grants and Disclosure of Government Assistance

FRS 126 Accounting and Reporting by Retirement Benefit Plans

FRS 129 Financial Reporting in Hyperinflationary Economies

FRS 134 Interim Financial Reporting

FRS 137 Provision, Contingent Liabilities and Contingent Assets

notes to the financial statements


2. Basis of Preparation and Significant Accounting Policies (Cont’d)

(b) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.

(c) Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on historical experience and other relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key sources of estimation or uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below:

(i) Depreciation of property, plant and equipment

The costs of property, plant and equipment of the Group are depreciated on a straight-line basis over the useful lives of the assets. Management estimates the useful lives of the property, plant and equipment to be within 5 to 50 years as stated in Note 2(e)(iv). These are common life expectancies applied in the industry. Changes in the expected level of usage and technological developments could have impact on the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s property, plant and equipment as at 31 December 2007 is stated in Note 3 to the financial statements.

(ii) Depreciation of investment properties

The costs of investment properties of the Group are depreciated on a straight-line basis over the useful lives of the assets. Management estimates the useful lives of the investment properties as stated in Note 2(g). These are common life expectancies applied in the industry. Changes in the expected level of usage and technological developments could have impact on the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s investment properties as at 31 December 2007 is stated in Note 5 to the financial statements.

(iii) Property development costs

The Group recognises property development revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs. 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 work of specialists. The carrying amount of the Group’s property development costs as at 31 December 2007 is stated in Note 4 to the financial statements.

notes to the financial statements(cont’d)



(c) Significant accounting estimates and judgements (Cont’d)

(iv) Impairment of goodwill on consolidation

The Group determines whether goodwill is impaired at least on an annual basis, in accordance with the accounting policy stated in Note 2(s).This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill on consolidation as at 31 December 2007 is stated in Note 11 to the financial statements.

(v) Construction costs

The Group recognises construction revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that construction costs incurred for work performed to date bear to the estimated total construction costs. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total construction revenue and costs, as well as the recoverability of the construction projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists. The carrying amount of the Group’s construction costs as at 31 December 2007 is stated in Note 15 to the financial statements.

(vi) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. Significant judgement is involved especially in determining tax base allowances and deductibility of certain expenses in determining the Group-wide provision for income taxes. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will have impact on the income tax and deferred tax provisions in the period in which such determination is made.

(vii) Estimation of fair value of properties

In the absence of current prices in an active market for similar properties, the Group considers information from a variety of sources, including:

(1) current prices in an active market for properties of a different nature, condition or location, adjusted to reflect those differences; or

(2) recent prices of similar properties based on less active market, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices.

(viii) Impairment of investment in associated company

The carrying values of investments in associated company and the related goodwill are reviewed for impairment in accordance with FRS 128, Investments in Associates.

In the determination of the value in use of the investment, the Group is required to estimate the expected cash flows to be generated by the associated company and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s investment in associated companies as at 31 December 2007 is stated in Note 8 to the financial statements.




(d) Basis of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiary companies and its associated companies from the date that control effectively commences until the date that control effectively ceases through equity accounting which are made up to the end of the financial year.

(i) Subsidiary companies

Subsidiary companies are those companies in which the Group has long term equity interest and has the power, directly or indirectly, to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanying a shareholding of more than one half of the voting rights.

The purchase method of accounting is used to account for the acquisition of subsidiary companies. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the date of acquisition, irrespective of the extent of any minority interest. The difference between the acquisition cost and the fair values of the subsidiary companies’ net assets is reflected as goodwill or reserve on consolidation as appropriate. The accounting policy on goodwill on acquisition of subsidiary companies is set out in Note 2(j). Reserve on consolidation is recognised immediately in income statement.

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets together with any unimpaired balance of goodwill which were not previously recognised in the consolidated income statement.

Minority interest is measured at the minorities’ share of the fair value of identifiable assets and liabilities at the date of acquisition by the Group and the minorities’ share of changes in equity since the date of acquisition, except when the losses applicable to the minority in a subsidiary exceed the minority interest in the equity of that subsidiary. In such cases, the excess and further losses applicable to the minority are attributed to the equity holders of the Company.

(ii) Associated companies

Associated companies are entities over which the Group has significant influence, but not control, generally accompanying a shareholding of between and including 20% and 50% of the voting rights. Investments in associated companies are accounted for using the equity method of accounting. Investments in associated companies include goodwill identified on acquisition, net of any accumulated impairment loss in accordance with Note 2(s).

Equity accounting involves recording investments in associated companies initially at cost, and recognising the Group’s share of its associated companies’ post-acquisition results and its share of post-acquisition movements in reserves against the carrying amount of the investments. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company.




(d) Basis of consolidation (cont’d)

(iii) Changes in Group composition

Where a subsidiary issues new equity shares to minority interests for cash consideration and the issue price has been established at fair value, the reduction in the Group’s interests in the subsidiary is accounted for as a disposal of equity interest with the corresponding gain or loss recognised in the income statement.

When a group purchases a subsidiary’s equity shares from minority interests for cash consideration and the purchase price has been established at fair value, the accretion of the Group’s interests in the subsidiary is accounted for as a purchase of equity interest for which the acquisition accounting method of accounting is applied.

The Group treats all other changes in group composition as equity transactions between the Group and its minority shareholders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

(e) Property, plant and equipment

(i) Recognition and measurement

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(s).

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

(ii) Reclassification to investment property

Property that is being constructed for future use as investment property is accounted for as property, plant and equipment until construction or development is complete, at which time it is reclassified as investment property and accounted for in accordance with Note 2(g).

When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property and accounted for in accordance with Note 2(g).

(iii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.




(e) Property, plant and equipment

(iv) Depreciation

Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

2007 2006

BuildingsMotor vehiclesOffice equipment, furniture and fittings RenovationsPlant, machinery and equipment

50 years5 to 7 years

5 to 10 years10 years

5 to 10 years

50 years5 to 7 years

10 years10 years10 years

The depreciable amount is determined after deducting the residual value.

Depreciation methods, useful lives and residual values are reassessed at each financial year end.

Upon disposal of an asset, the difference between the net disposal proceeds and the carrying amount of the assets is charged or credited to the income statement. On disposal of a revalued asset, the attributable revaluation surplus remaining in the revaluation reserve is transferred to distribution reserve.

(f) Land and property development costs

(i) Land held for property development

Land held for property development consists of land held for future development activities where no significant development has been undertaken or where development activities are not expected to be completed within normal operating cycle. Such land is classified as non-current asset and is stated at cost less any accumulated impairment losses. The policy of recognition and measurement of impairment losses is in accordance with Note 2(s).

Land held for property development is reclassified as current asset when the development activities have been commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

(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.

Property development costs shall be classified as non-current asset where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle.




(f) Land and property development costs (Cont’d)

(ii) Property development costs(Cont’d)

Property development costs shall be reclassified to current asset when the development activities have been commenced and expected to be completed within the normal operating cycle.

When the financial outcome of development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion. 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.

When 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 units 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 shall be recognised as an expense immediately.

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

When the revenue recognised in the income statement exceed billings to purchasers, the balance is shown as accrued billings under current assets. When the billings to purchasers exceed the revenue recognised in the income statement, the balance is shown as progress billings under current liabilities.

(g) Investment properties

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both. Properties that are occupied by the Group are accounted for as owner-occupied rather than as investment properties. Investment properties are stated at cost less accumulated depreciation and impairment losses, consistent with the accounting policy for property, plant and equipment as stated in accounting policy note 2(e).

Depreciation is charged to the income statement on a straight-line basis over the estimated useful life of 50 years for buildings. Freehold land is not depreciated.

(h) Prepaid lease payments

Leasehold land that normally has an indefinite economic life and its title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted as prepaid lease payments that is amortised over the lease term except for leasehold land classified as investment property. The land and building elements of a lease of land and buildings are considered separately for the purposes of lease classification.

(i) Investment in subsidiary companies and associated companies

Investment in subsidiary companies and associated companies are stated at cost less accumulated impairment losses. The policy of the recognition and measurement of impairment losses is in accordance with Note 2(s).

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




(j) Goodwill arising on consolidation

Goodwill acquired in a business combination is initially measured at cost, represents the excess of the purchase price over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

Goodwill is measured at cost less impairment losses and is reviewed for impairment annually or more frequent when there is objective evidence that the carrying value may be impaired, in accordance with Note 2(s).

(k) Other investments

Other investments are stated at cost less accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(s). On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is charged or credited to the income statement.

(l) Properties held for sale

Properties held for sale is determined on a specific identification basis and is stated at the lower of cost or carrying amount and net realisable value. Net realisable value is the estimate of the selling price in the ordinary course of business, less the selling expenses.

(m) Inventories

Inventories represent cost of unsold completed development units/properties which is determined on a specific identification basis. The inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimate of the selling price in the ordinary course of business, less the selling expenses.

(n) Trade and other receivables

Trade and other receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

(o) Construction costs

Construction contracts are stated at cost plus attributable profits less applicable progress billings and allowances for foreseeable losses, if any.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract cost are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activities at the balance sheet date. The stage of completion is determined by the proportion that contract costs incurred for the work performed to date to the estimated contract costs.

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

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




(o) Construction costs (Cont’d)

The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings up to the period end. Where costs incurred and recognised profits (less recognised losses) exceed progress billings, the balance is shown as amount owing by customers on contracts. Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amount owing to customers on contracts.

(p) Trade and other payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(q) Hire purchase

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to ownership. All other leases are treated as operating leases.

Assets acquired by way of hire purchase are stated at an amount equal to the lower of their fair values and the present value of the minimum hire purchase payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as liabilities. In calculating the present value of the minimum hire purchase payments, the discount factor used is the interest rate implicit in the lease, when it is practical to determine; otherwise, the Company’s incremental borrowing rate is used.

Hire purchase payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total hire purchase commitments and the fair value of the assets acquired, are recognised as an expense in the income statement over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

The depreciation policy for assets acquired under hire purchase is consistent with that for depreciable property, plant and equipment which are owned.

Lease rental under operating lease is charged to the income statement on a straight line basis over the term of the relevant lease.

(r) Non-current asset held for sale

Non-current asset is classified as held for sale if their carrying amount will be recovered principally 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 subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of the non-current assets is brought up-to-date in accordance with applicable FRSs. Then, on initial classification as held for sale, non-current asset is measured in accordance with FRS 5, Non-current Assets held for Sale and Discontinued Operations, which is at the lower of carrying amount and fair value less costs to sell. Any differences are included in profit or loss.

A component of the Group is classified as a discontinued operation when the criteria to be classified as held for sale have been met or is a subsidiary or associated company acquired exclusively with a view to resale.




(s) Impairment of assets

The carrying amounts of assets are reviewed at each reporting date to determine whether there is any indication of impairment.

If any such indication exists then the asset’s recoverable amount is estimated. For goodwill that have indefinite useful lives, recoverable amount is estimated at each reporting date or more frequently when indications of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement in the period in which it arises. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

(t) Borrowing costs

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.

When the borrowings are made specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs 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.

When the borrowings are made generally, and used for the purpose of obtaining a qualifying asset, the borrowing costs eligible for capitalisation are determined by applying a capitalisation rate which is the weighted average of the borrowing costs applicable to the borrowings that are outstanding during the financial year.

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




(u) Foreign currencies

(i) Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using historical rate as of the date of acquisition and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined.

(ii) Foreign operations

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

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

(2) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

(3) all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings, are taken to shareholders’ equity. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(v) Revenue recognition

(i) Property development

Revenue derived from property development activities is recognised based on the percentage of completion method. The stage of completion is determined based on the total actual costs incurred to date over the estimated total contract costs.

(ii) Construction contracts

Revenue from work done on construction contracts is recognised based on the percentage of completion method. The stage of completion is determined based on the total actual costs incurred to date over the estimated total contract costs. Allowance for foreseeable losses is made in the financial statements when such losses can be determined.




(v) Revenue recognition (Cont’d)

(iii) Goods sold and services rendered

Revenue from sales of goods and services measured at the fair value of the consideration receivable and is recognised when significant risk and rewards have been transferred to the buyer, if any, or upon performance of services, net of sales taxes and discounts.

(iv) Dividend income

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

(v) Rental income and interest income

Rental income and interest income are recognised as it accrues unless ability to collect is in doubt.

(w) Income taxes

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

Deferred tax is recognised on the liability method for all temporary differences between the carrying amount of an assets or liabilities in the balance sheet and its tax base at the balance sheet date. 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 negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax asset and liability is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted by the balance sheet date. The carrying amount of a deferred tax asset is reviewed at each balance sheet date and is reduced to the extent that it becomes probable that sufficient future taxable profit will be available.

Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

(x) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short term highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. For the purpose of the cash flow statements, cash and cash equivalents are presented net of bank overdrafts and exclude fixed deposits, sinking funds account and cash collateral account pledged to secure banking facilities, if any.




(y) Financial instruments

Financial instruments carried on the balance sheet include cash and bank balances, deposits, marketable securities, other investments, receivables, payables and borrowings. Financial instruments are recognised in the balance sheet when the Group and the Company has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and 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 and the Company has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

The particular recognition method adopted for financial instruments recognised on the balance sheet is disclosed in the individual accounting policy statements associated with each item.

(z) Employee benefits

(i) Short term employee 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, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

The expected cost of accumulating compensated absences is measured as additional amount expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet date.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in the income statement in the period to which they relate.

(iii) Share-based compensation

The LBS Bina Group Berhad Employee Share Option Scheme (“ESOS”), an equity-settled, share-based compensation plan, allows the Company and its subsidiary companies’ employees to acquire ordinary shares of the Company. The total fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the options will vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date.




(z) Employee benefits (Cont’d)

(iii) Share-based compensation (Cont’d)

At each balance sheet date, the Group revises its estimates of the number of options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in the profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium, or until the option expires, upon which it will be transferred directly to retained earnings.

The proceeds received net of any directly attributable transaction costs are credited to equity when the options are exercised.

3. Property, Plant and Equipment

Long term leasehold buildings

Motor vehicles

Office equipment,

furniture and fittings Renovations

Plant, machinery

and equipment Total

Group RM RM RM RM RM RMCost

At 1.1.2007

- as previously stated 5,039,950 5,429,175 4,862,318 3,745,486 65,922 19,142,851

- effect of adopting FRS 117 (548,800) - - - - (548,800)

At 1.1.2007, restated 4,491,150 5,429,175 4,862,318 3,745,486 65,922 18,594,051

Acquisition of subsidiary companies

- - 32,708 - 54,150 86,858

Additions - 811,580 316,616 59,084 189,553 1,376,833

Disposals - (606,827) (89,526) - - (696,353)

Written-off - - (1,333,603) (241,534) - (1,575,137)

Exchange differences - (76) - - (76)

At 31.12.2007 4,491,150 5,633,928 3,788,437 3,563,036 309,625 17,786,176

Accumulated depreciation

At 1.1.2007 356,833 3,185,914 3,186,827 1,444,371 33,657 8,207,602

Acquisition of subsidiary companies

- - 19,322 - 48,596 67,918

Charge for the financial year 89,823 560,491 468,082 362,691 18,626 1,499,713

Disposals - (524,176) (74,470) - - (598,646)

Written-off - - (1,130,580) (127,524) - (1,258,104)

Exchange differences - - (75) - - (75)

At 31.12.2007 446,656 3,222,229 2,469,106 1,679,538 100,879 7,918,408

Carrying amount

At 31.12.2007 4,044,494 2,411,699 1,319,331 1,883,498 208,746 9,867,768



3. Property, Plant and Equipment (Cont’d)


Motor vehicles

Office equipment,


Plant, machinery

and equipment Total

Group RM RM RM RM RM RMCost

At 1.1.2006


- effect of adopting FRS 140 (6,550,257) - - - - (6,550,257)

At 1.1.2006, restated 4,341,150 4,781,480 4,910,376 3,828,955 47,022 17,908,983

Additions

- as previously stated 698,800 1,282,454 115,696 92,067 18,900 2,207,917


- as restated 150,000 1,282,454 115,696 92,067 18,900 1,659,117

Disposals - (634,759) (111,949) (4,335) - (751,043)

Written-off - - (48,984) (171,201) - (220,185)

Exchange differences - - (2,821) - - (2,821)

At 31.12.2006 4,491,150 5,429,175 4,862,318 3,745,486 65,922 18,594,051


At 1.1.2006

- as previously stated 430,278 3,531,134 2,755,910 1,157,668 27,445 7,902,435


At 1.1.2006, restated 150,124 3,531,134 2,755,910 1,157,668 27,445 7,622,281

Charge for the financial year 206,709 202,557 550,521 380,873 6,212 1,346,872

Disposals - (547,777) (78,183) (1,300) - (627,260)

Written-off - - (38,825) (92,870) - (131,695)

Exchange differences - - (2,596) - - (2,596)

At 31.12.2006 356,833 3,185,914 3,186,827 1,444,371 33,657 8,207,602



3. Property, Plant and Equipment (Cont’d)


Motor vehicles

Office equipment,


Plant, machinery

and equipment Total

Group RM RM RM RM RM RMCarrying amount

At 31.12.2006



At 31.12.2006, restated 4,134,317 2,243,261 1,675,491 2,301,115 32,265 10,386,449

(a) The long term leasehold buildings of the Group with carrying amount of RM4,044,494 (2006 : RM4,134,317) have been pledged to licensed banks as security for credit facilities granted to the Company and certain subsidiary companies.

The remaining period of the long term leasehold buildings ranges from 87 to 88 (2006: 88 to 89) years.

(b) Included in the property, plant and equipment of the Group are motor vehicles under hire purchase with carrying amount of RM2,255,957 (2006 : RM2,222,569).

(c) The aggregate additional cost for the property, plant and equipment of the Group during the financial year under hire purchase, term loan and cash payment are as follows:

Group2007 2006RM RM

Aggregate costs 1,376,833 1,659,117

Less: Hire purchase financing (692,900) (1,171,000)

Less: Term loan financing - (150,000)

Cash payment 683,933 338,117



4. Land and Property Development Costs

Non-Current

Group2007 2006RM RM

Freehold land, at cost

At 1 January 20,000,000 20,000,000

Addition during the financial year 63,956,266 -

Transferred to income statement (30,142,471) -

Transferred to current portion (20,000,000) -

At 31 December 33,813,795 20,000,000

Long term leasehold land, at cost

At 1 January 38,167,728 29,183,782

Addition during the financial year 5,992,785 10,165,000

Acquisition of subsidiary companies 4,455,000 -

Transferred to income statement (2,089,143) (758,475)

Transferred to current portion (6,159,734) (422,579)

At 31 December 40,366,636 38,167,728

Property development costs

At 1 January 393,784,770 398,431,194



Movement during the financial year (2,673,562) -

Transferred to current portion (58,800,807) (12,085,509)

Transferred to income statement (49,866,521) (36,277,755)

Development costs written-off (117,816) (156,016)

Exchange differences (331,128) (355,210)

At 31 December 394,209,772 393,784,770



4. Land and Property Development Costs (Cont’d)

Group

Note2007RM

2006RM

Less: Accumulated impairment losses

At 1 January 7,252,257 5,059,144

Addition during the financial year 4(f) - 2,536,616

Transferred to income statement (2,536,616) -


At 31 December 4,406,384 7,252,257463,983,819 444,700,241

Current

Freehold land, at cost

At 1 January - -

Transferred from non-current portion 20,000,000 -

At 31 December 20,000,000 -

Long term leasehold land, at cost

At 1 January 1,485,578 2,388,580


Transferred from non-current portion 6,159,734 422,579

Transferred to income statement (358,150) (1,309,740)

Transferred to inventories - (15,841)

At 31 December 15,025,466 1,485,578

Property development costs

At 1 January 609,737,564 519,941,814



Transferred from non-current portion 58,800,807 12,085,509

Transferred to inventories (4,505,692) (2,278,396)

Transferred to income statement (360,847,460) (75,545,540)

Development costs written-off - (786,956)

At 31 December 460,781,886 609,737,564

Less: Costs recognised in the income statement

At 1 January 472,211,909 343,369,473


Recognised during the financial year 155,060,488 205,697,716640,423,589 549,067,189

Less: Portion related to completed projects (361,205,610) (76,855,280)279,217,979 472,211,909216,589,373 139,011,233




(a) Certain parcels of land are pledged to licensed banks as security for credit facilities granted to certain subsidiary companies as disclosed in Notes 25, 27 and 30 to the financial statements.

(b) Certain subsidiary companies entered into several agreements with third parties (the landowners) to develop their lands, solely at the cost of the subsidiary companies and based on the agreements, the landowners are entitled to the following:

(i) certain percentage of the respective development profit;

(ii) certain percentage of the respective sales proceeds from the development;

(iii) agreed contract sum as specified in the agreement; or

(iv) certain units of completed properties erected thereon free from all encumbrances as the case may be.

(c) Certain subsidiary companies entered into several joint venture agreements with its subsidiary companies (the landowners) to develop several lands, solely at the cost of that subsidiary companies and based on the agreements, the landowners are entitled to the following:

(i) certain units of completed properties erected thereon free from all encumbrances or certain percentage of the gross sales value received from the development; or

(ii) certain percentage of the respective development profit.

(d) Certain subsidiary companies entered into several agreements with third parties and a related party (the developers) to develop several lands, solely at the cost of the developers and based on the agreements, the subsidiary companies are entitled to the following:

(i) agreed contract sum as specified in the agreement; or

(ii) certain units of completed properties erected thereon free from all encumbrances as the case may be.




(e) Included in the property development costs for the financial year are the following expenses:

Group

Note2007RM

2006RM

Finance costs 36 11,450,909 11,368,359

Depreciation of property, plant and equipment 3 21,236 24,625

Company’s Directors

- salaries and other emoluments 766,207 653,400

- EPF 116,480 98,088

Other Directors

- fee 72,000 72,000

- salaries and other emoluments 202,187 174,656

- EPF 29,954 24,624

Rental of premises 43,800 54,050

Staff costs 42 2,106,395 2,318,888

Hire of motor vehicles 14,256 -

(f) The Group recognised an impairment loss RM2,536,616 in previous financial year in respect of the property development costs which arose from the property development cash generating unit in Malaysia segment following a decision to dispose a development project. The impairment loss is included in “Cost of Sales” as disclosed in Note 37 to the financial statements.

5. Investment Properties

Group2007 2006RM RM

Cost

At 1 January

- as previously stated 5,536,722 -

- effect of adopting FRS 140 - 6,550,257

At 1 January, as restated 5,536,722 6,550,257

Addition during the financial year 7,383,500 -

Disposals (369,759) (1,013,535)

At 31 December 12,550,463 5,536,722



5. Investment Properties (Cont’d)

Group

2007 2006

RM RM


At 1 January

- as previously stated 421,168 -

- effect of adopting FRS 140 - 280,154

At 1 January, as restated 421,168 280,154

Charge for the financial year 248,437 250,712

Impairment loss 7,300 -

Disposals (69,907) (109,698)

At 31 December 599,698 421,168

Accumulated impairment loss

At 1 January - -

Addition during the financial year 7,300 -

At 31 December 7,300 -

Carrying amount 11,943,465 5,115,554

Fair value 14,350,500 7,521,000

Investment properties with carrying amount of RM10,302,681 (2006: RM5,115,554) have been pledged to licensed banks as security for credit facilities granted to the subsidiary companies as disclosed in Note 25 and Note 30 to the financial statements.

The remaining lease period of the investment properties ranges from 84 to 92 (2006: 87 to 89) years.

6. Prepaid Lease Payments

Group2007 2006RM RM

Cost

At 1 January

- as previously stated - -

- effect of adopting FRS 117 548,800 -

- as restated 548,800 -

Addition during the financial year - 548,800

At 31 December 548,800 548,800



6. Prepaid Lease Payments (Cont’d)

Group2007RM

2006RM

Accumulated amortisation

At 1 January - -

Amortisation during the financial year 5,600 -

At 31 December 5,600 -

Carrying amount 543,200 548,000

The above have been pledged to licensed banks as security for credit facilities granted to a subsidiary company as disclosed in Note 30 to the financial statements.

The remaining period of the lease term is 88 years (2006: 89 years).

7. Investment in Subsidiary Companies

(a) Investment in subsidiary companies

Company2007RM

2006RM

Unquoted shares, at cost

In Malaysia 198,218,395 198,218,395

Outside Malaysia 191 191198,218,586 198,218,586

Details of the subsidiary companies are set out in Note 53 to the financial statements.

(b) Acquisition of subsidiary companies

The effect of the acquisition on the financial results of the Group during the financial year is as follows:

Group2007RM

2006RM

Revenue 93,865,235 -

Cost of sales (71,576,674) -

Gross profit 22,288,561 -

Other operating income 2,174,701 23,611

Administration expenses (102,016) (56,846)

Finance costs (181,039) -

Profit/(Loss) before taxation 24,180,207 (33,235)

Taxation (8,063,741) -

Profit/(Loss) for the financial year 16,116,466 (33,235)



7. Investment in Subsidiary Companies (Cont’d)

(b) Acquisition of subsidiary companies (Cont’d)

If the acquisition had occurred on 1 January 2007, the contribution to the Group’s revenue and profit for the financial year would have been RM97,602,517 (2006: Nil) and RM15,134,844 (2006: RM1,355,841) respectively.

The assets and liabilities arising from the acquisition are as follows:

Group2007RM

2006RM

Property, plant and equipment 18,940 -

Land and property development costs 33,845,975 -

Inventories 6,248,032 -

Trade and other receivables 27,918,626 1,471,093

Cash and bank balances 8,231,316 1,373

Fixed deposits with licensed banks 553,016 -76,815,905 1,472,466

Non-current asset held for sale 2,700,000 -79,515,905 1,472,466

Trade and other payables (55,293,449) (95,527)

Tax payable (1,273,151) -

Deferred tax liabilities (5,286,402) -(61,853,002) (95,527)

Net assets 17,662,903 1,376,939

Less: Minority shareholders’ interests (7,283,842) (676,339)

Group’s share of net assets 10,379,061 700,600

Goodwill on consolidation 43,583,190 219,587

Negative goodwill on consolidation (1,090,471) -

Total cost of acquisition, discharged by cash 52,871,780 920,187

The cash outflow arising from the acquisition is as follows:

Group2007RM

2006RM

Purchase consideration satisfied by cash 52,871,780 920,187

Less: Cash and cash equivalents of subsidiary companies acquired (8,231,316) (1,373)

Investment in associated companies (6,994,280) -

Net cash outflow of the Group 37,646,184 918,814



7. Investment in Subsidiary Companies (Cont’d)

(c) Acquisition subsequent to the financial year end

The assets and liabilities arising from the acquisition are as follows:

Group2007RM

2006RM

Property, plant and equipment - 17,213

Land and property development costs - 4,383,465

Inventories - 4,747,446

Trade and other receivables - 21,984,041

Fixed deposit with licensed bank - 455,449

Cash and bank balances - 2,207,056- 33,794,670

Trade and other payables - (28,693,508)

Tax payable - (861,432)- (29,554,940)

Net assets - 4,239,730

Less: Minority shareholders’ interests - (1,358,825)

Group’s share of net assets - 2,880,905

Goodwill on consolidation - 14,523,955

Negative goodwill on consolidation - (884,860)

Total cost of acquisition, to be discharged by cash - 16,520,000

The cash outflow arising from the acquisition is as follows:

Group2007RM

2006RM

Purchase consideration to be satisfied by cash - 16,520,000

Less: Cash and cash equivalents of subsidiary companies acquired - (2,662,505)

Investment in associated companies - (983,097)

Net cash outflow of the Group - 12,874,398



8. Investment in Associated Companies

Group2007RM

2006RM

Unquoted shares in Malaysia, at cost 3,360,030 3,945,030

Share of post acquisition reserves (894,421) 5,430,8882,465,609 9,375,918

Details of the associated companies are set out in Note 54 to the financial statements.

The summarised financial information of the associated companies is as follows:

Group2007RM

2006RM

Assets and liabilities

Non-current assets 88,240 9,301,985

Current assets 780,496 49,097,568

Total assets 868,736 58,399,553

Non-current liabilities - 5,997,479

Current liabilities 311,591 35,694,135

Total liabilities 311,591 41,691,614557,145 16,707,939

Results

Revenue - 18,453,479

Net (loss)/profit for the financial year (55,176) 475,684

The unrecognised share of losses of the associated companies is as follows:

Group2007RM

2006RM

At 1 January 16,632 -

Addition during the financial year 15,303 16,632

At 31 December 31,935 16,632



8. Investment in Associated Companies (Cont’d)

The goodwill included within the Group’s carrying amount of investment in associated companies is as follows:

Group2007RM

2006RM

Cost

At 1 January 2,261,151 3,118,803

Effect of adopting FRS 3 - (857,652)

At 31 December 2,261,151 2,261,151


At 1 January - 857,652

Effect of adopting FRS 3 - (857,652)

At 31 December - -2,261,151 2,261,151

9. Other Receivables

Group Company

Note2007RM

2006RM

2007RM

2006RM

Non-current

Other receivables 36,430,680 38,987,520 - -

Current

Other receivables

- Third parties 120,496,620 148,223,511 5,752 5,752

- Related parties 43 1,236,794 195,272 - -

Less: Allowance for doubtful debts

- Third parties (49,353,898) (50,907,976) - -72,379,516 97,510,807 5,752 5,752

Deposits 15,092,117 6,372,523 4,500 4,500

Prepayments 696,988 602,980 462,844 407,60388,168,621 104,486,310 473,096 417,855

The non-current other receivables represents unsecured interest free advances to former subsidiary companies of a subsidiary company and is repayable by 2009. The subsidiary company has an option exercisable before 2046 to purchase back such former subsidiary companies for a nominal consideration.

Included in allowance for doubtful debts is an amount of RM46,688,776 (2006: RM48,242,854) provided for advances given to former subsidiary companies.

Included in current other receivables of the Group is an amount of RM5,131,745 (2006 : RM5,290,958) provided for settlement with the purchasers of a development project of a subsidiary company in accordance with the Workout Proposals of Instangreen Corporation Sdn. Bhd. (“ICSB”).



10. Other Investments

Group2007RM

2006RM

Cost

Unquoted shares in Malaysia 23,000 1,440,800

Transferable corporate club membership 1,230,500 1,230,5001,253,500 2,671,300

11. Goodwill on Consolidation

Group2007RM

2006RM

Cost

At 1 January 47,464,037 54,273,915

Effect of adopting FRS 3 - (8,819,642)



Impairment loss recognised in income statement (886,880) (1,451,505)

At 31 December 91,543,985 47,464,037


At 1 January - (8,819,642)

Effect of adopting FRS 3 - 8,819,642

At 31 December - -91,543,985 47,464,037

(a) Impairment test for goodwill on consolidation

Goodwill on consolidation has been allocated to Group’s cash-generating units (“CGUs”) identified according to country of operations and business segments as follows:

MalaysiaPeople’s Republic

of China TotalGroup RM RM RM

2007

Property development 75,281,928 16,262,057 91,543,985

2006

Property development 31,048,533 16,415,504 47,464,037



11. Goodwill on Consolidation (Cont’d)

(b) Key assumptions used to determine the recoverable amount

The recoverable amount of a CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by the Directors covering a five-year period. The key assumptions used for value-in-use calculations are:

Property development

%

Malaysia

Gross margin 33

Growth rate N/A

Pre-tax discount rate 10

People’s Republic of China

Gross margin 30

Growth rate N/A

Pre-tax discount rate 15

The key assumptions that the Directors have used in the cash flow projections to undertake impairment testing are as follows:

(i) Gross margin - Budgeted value based on the average margins achieved in the year immediately before the budgeted year, increased for expected efficiency improvements and market development.

(ii) Growth rate - Not applicable as the cash flow projections made is for a period of 5 years, in accordance with the expected lifecycle of the CGU.

(iii) Pre-tax discount rate - Rate that reflect specific risks relating to the relevant CGU.

(c) Impairment loss recognised during the financial year

The Group recognised an impairment loss of RM886,880 (2006: RM1,451,505) during the financial year in respect of the goodwill arising on consolidation. The goodwill relates to certain subsidiary companies which mainly undertake development projects which are expected to be completed within the next 5 years. As no further development activities or other significant revenue generating activities is expected from the subsidiary companies, the related goodwill has been impaired accordingly. The recoverable amount was based on value-in-use and was determined at the CGU which is the Group’s development project. In determining value-in-use for the CGU, the cash flows were discounted at a rate of 10% on a pre-tax basis. The impairment loss is included in “Operating Expenses” as disclosed in Note 37 to the financial statements.

12. Properties Held for Sale

Group2007RM

2006RM

At cost 1,091,593 1,091,593

The titles of the above properties are in the process of being registered in the name of the subsidiary company.



13. Inventories

Group2007RM

2006RM

Unsold units of completed properties 31,731,574 18,419,795

Unsold units of completed properties with a carrying amount of RM15,702,014 (2006: RM11,537,918) have been pledged to licensed banks as security for credit facilities granted to subsidiary companies as disclosed in Note 25 and Note 30 to the financial statements.

14. Trade Receivables

Group

Note2007RM

2006RM

Trade receivables

- Third parties 189,947,082 149,972,355

- Related parties 43 5,464,827 2,527,005195,411,909 152,499,360

Less : Allowance for doubtful debts - Third parties (2,134,210) (1,373,632)

193,277,699 151,125,728

Accrued billings in respect of property development costs

16,052,398 18,316,142

Amount owing by customers on contracts 15 2,336,952 -211,667,049 169,441,870

The Group’s normal trade credit terms ranges from 14 to 90 days (2006 : 14 to 90 days). Other credit terms are assessed and approved on a case by case basis.



15. Amount Owing by/(to) Customers on Contracts

Group

Note2007RM

2006RM

Aggregate cost incurred to date 4,713,377 534,612

Add: Attributable profits 33,855 62,8184,747,232 597,430

Less : Progress billings (2,510,392) (604,472)2,236,840 (7,042)

Represented by:

Amount owing by customers on contracts 14 2,336,952 -

Amount owing to customers on contracts 23 (100,112) (7,042)2,236,840 (7,042)

Retention sum included in the progress billings - 5,476

16. Amount Owing by/(to) Subsidiary Companies

(a) Amount owing by subsidiary companies

This represents unsecured advances with no fixed term of repayment which bears interest at rates ranging from 4.00% to 7.22% (2006: 3.22% to 6.68%) per annum.

(b) Amount owing to subsidiary companies

This represents unsecured interest free advances with no fixed term of repayment.

17. Amount Owing by Associated Companies

This represents trade transactions with no fixed term of repayment.

18. Fixed Deposits with Licensed Banks

Included in the fixed deposits of the Group and of the Company is an amount of RM14,135,426 and RM2,891,402 (2006: RM32,629,146 and RM3,609,487) respectively pledged to licensed banks as security for banking facilities granted to the Company and certain subsidiary companies. The interest rates and maturities of deposits range from 2.2% to 3.7% per annum and 1 to 365 days (2006 : 2.3% to 3.7% and 28 to 365 days) respectively.



19. Cash Held under Housing Development Accounts

Cash held under the Housing Development Accounts represents monies received from purchasers of residential properties less payments or withdrawals in accordance with the Housing Development (Controls and Licensing) Act, 1966.

20. Debts Service Reserve Accounts

Under the Trust Deed dated 28 December 2005 and 27 February 2006 in respect of the issuance of the RM65 million Secured Serial Bonds (“Bonds”) and up to RM100 million Commercial Papers (“CPs”) respectively, an amount sufficient to pay the coupon payment on the principal amount of the Bonds and outstanding CPs due in the next coupon payment date is required to be placed in Debt Service Reserve Accounts (DSRA). Amount in DSRA is only permitted to be utilised for the following purposes:

(a) payment of coupon/interest due under the Bonds and CPs. Any amount withdrawn for the purpose of coupon/interest payment shall be topped-up by the Company within seven (7) days from the date of the withdrawal; and

(b) investment in fixed deposits with licensed banks and/or approved licensed banks. The maturity profile of any investment of this nature shall not exceed the maturity profile of the coupon due under the Bonds and CPs and may be liquidated for the purpose of item (a) above.

21. Cash and Bank Balances

Included in cash and bank balances of the Group are Sinking Fund Account and Cash Collateral Account amounting to RM7,783,269 (2006: RM1,996,591) opened in accordance with the terms and conditions set out in Trust Deed dated 28 December 2005 and 27 February 2006 as disclosed in Note 27 and Note 28 respectively to meet the redemption of maturing Secured Serial Bonds and Commercial Papers.

22. Non-current Asset held for Sale

On 19 March 2008, the Board of Directors has approved the decision to dispose of its investment in Jasa Vista Sdn. Bhd. (“JVSB”). The disposal is consistent with the Group’s long term strategy to maximise growth and profitability and to dispose of the investment which has been under performing.

The disposal of the said investment is due to be completed by 31 December 2008 and as at 31 December 2007, final negotiations for the sale were in progress. The carrying amount of the investment has also been presented as a non-current asset held for sale on the Group’s balance sheet as at 31 December 2007.



23. Trade Payables

Group

Note2007RM

2006RM

Current

Trade payables

- Third parties 93,480,825 108,896,847

- Related parties 43 12,560,660 22,138,737106,041,485 131,035,584

Progress billings in respect of property development costs 48,403,629 47,738,671

Amount owing to customers on contracts 15 100,112 7,042154,545,226 178,781,297

Non-current

Trade payable

- Third party 20,420,000 -

The non-current trade payable represents consideration payable to landowner for the development project and is repayable by 15 December 2015.

The normal trade credit term granted to the Group ranges from 30 to 90 days (2006 : 30 to 90 days).

24. Other Payables

Group Company

Note2007RM

2006RM

2007RM

2006RM

Current

Other payables

- Third parties 75,211,037 58,668,373 6,052 1,227

- Related parties 43 5,483,643 8,285,027 167,392 167,39280,694,680 66,953,400 173,444 168,619

Amount payable for acquisition of :

- subsidiary companies 37,678,557 23,577,661 - -

- associated companies 150,000 150,000 - -

Amount payable to landowners 6,962,293 10,845,195 - -

Accruals 6,746,607 5,706,602 1,744,438 2,221,668

Deposits 23,713,259 9,947,679 - -155,945,396 117,180,537 1,917,882 2,390,287



24. Other Payables (Cont’d)

Group Company2007RM

2006RM

2007RM

2006RM

Non-current

Other payables

- Third parties 68,140,500 - - -

Amount payable for acquisition of subsidiary companies 16,728,445 - - -

84,868,945 - - -

The non-current other payables represents the remaining consideration for the purchase of freehold land by a subsidiary company and is repayable by 26 July 2010. Under the terms of purchase, RM34,078,000 is secured by a banker’s guarantee granted from a licensed bank.

25. Bank Overdrafts

Group Company2007RM

2006RM

2007RM

2006RM

Secured

Repayable within twelve months 30,952,540 32,182,075 12,753,832 12,829,907

The bank overdrafts obtained from licensed banks are secured on the following:

(a) fixed charge on certain subsidiary companies’ long term leasehold buildings; (b) fixed charge on certain subsidiary companies’ investment properties;

(c) fixed charge on certain subsidiary companies’ land banks included in land and property development costs;

(d) third party first legal charge over certain individual titles under development;

(e) assignment of sales proceeds and balances in a Housing Development Accounts of a third party;

(f) fixed charge on certain subsidiary companies’ inventories; and

(g) joint and several guarantee of certain Directors of the Company and certain subsidiary companies.

Interest is charged at rates ranging from 7.00% to 10.25% (2006: 7.00% to 10.25%) per annum.



26. Hire Purchase Payables

Group2007RM

2006RM

(a) Future minimum payments

Payable within one year 617,646 515,134

Payable between one and five years 1,421,713 1,387,517

Payable after five years 110,634 -2,149,993 1,902,651

Less : Future finance charges (196,530) (170,011)1,953,463 1,732,640

(b) Present value of hire purchase liabilities

Repayable within one year 538,350 441,818

Repayable between one and five years 1,311,887 1,290,822

Repayable after five years 103,226 -1,953,463 1,732,640

Analysed as:

Repayable within twelve months 538,350 441,818

Repayable after twelve months 1,415,113 1,290,8221,953,463 1,732,640

Interest is charged at rates ranging from 2.37% to 5.00% (2006: 2.37% to 6.50%) per annum.



27. Secured Serial Bonds

Group/Company 2007RM

2006RM

Secured

Nominal value

5.30% Secured Serial Bonds 2006/2007 - 15,000,000

6.75% Secured Serial Bonds 2006/2009 10,000,000 10,000,000

7.15% Secured Serial Bonds 2006/2010 20,000,000 20,000,000

7.50% Secured Serial Bonds 2006/2011 20,000,000 20,000,00050,000,000 65,000,000

Analysed as:

Repayable within twelve months - 15,000,000

Repayable after twelve months 50,000,000 50,000,00050,000,000 65,000,000

The Company, under a Trust Deed dated 28 December 2005, issued the above Secured Serial Bonds (Bonds) and the main features of the Bonds are as follows:

(a) The Bonds are in multiples of RM1,000,000;

(b) The four (4) series of bonds bear coupon rate as follows:

2006/2007 Bonds (Tranche 1) - 5.30% per annum




Coupon payment of the Bonds shall be payable semi-annually. The first interest payment falls on a date which is six (6) months from the Issue Date and subsequent coupon payment date falling every consecutive six (6) months thereafter. The last coupon payment shall coincide with the maturity date or due date for the repayment of each series issued;

(c) The Bonds shall, unless previously redeemed, purchased or cancelled, be redeemed at their principal amount upon maturity date of each series issued; and

(d) The tenure of the Bonds is for a period of 1 to 5 years from the date of issue.

The Bonds are secured against the following:

(a) First legal charge on certain subsidiary companies’ land banks included in land and property development costs; and

(b) Assignment over the Cash Collateral Account (“CCA”) and the Bonds DSRA.



28. Commercial Papers


2006RM

Secured

Nominal value

4.50% Commercial Papers 3,000,000 -










4.50% Commercial Papers - 28,000,000



5.30% Commercial Papers - 12,000,00057,000,000 56,000,000

Analysed as:

Repayable within twelve months 57,000,000 56,000,000

During the financial year, the Company, under a Trust Deed dated 27 February 2006, issued RM120,000,000 nominal value of Commercial Papers (“CPs”), the proceeds of which were utilised to part finance the development and construction cost in relation to the projects undertaken or constructed by its subsidiary companies. The main features of the CPs are as follows:

(a) The CPs are in multiples of RM1,000,000;

(b) The CPs will be issued via tender and/or private placement;

(c) The CPs shall be issued under Tranche A and Tranche B with the following Availability Period:

Tranche A - Five (5) years from the date of first issuance of the CP

Tranche B - Eighteen (18) months following the expiry of Tranche A issuance period

The CPs issued under Tranche A were utilised to part finance the development and construction cost in relation to the projects undertaken or constructed by its subsidiary companies. CPs issued under Tranche B were utilised to refinance Tranche A CPs that have rolled over past the Tranche A Availability Period. As such, no new issues save and except for the refinancing of Tranche A CPs will be permitted under Tranche B.

Upon maturity of such Tranche B CPs, the Company may issue new CPs to refinance such CPs provided always that the maturity of such new CPs to be issued shall not extend after the last day of the eighty-fourth (84th) month from the date of first issuance of the Tranche A CPs.



28. Commercial Papers (Cont’d)

(d) The period to maturity of the each CP to be issued by the Company which shall be ranges from one (1) month to twelve (12) months.

The CPs are secured against the following:

(a) Legal assignment of Sinking Funds Account (“SFA”) and CPs DSRA; and (b) Assignment of the full stakeholders sum and partial stakeholder sum.

29. 4% Irredeemable Convertible Unsecured Loan Stocks


2006RM

Quoted debentures

Equity instrument

Nominal value

4% Irredeemable Convertible Unsecured Loan Stocks (Class C) 2003/2008 (Note b) 982,683 1,048,636

4% Irredeemable Convertible Unsecured Loan Stocks (Class D) 2004/2009 (Note b) 317,327 362,912

1,300,010 1,411,548Liability instrument

Nominal value

4% Irredeemable Convertible Unsecured Loan Stocks (Class B) 2002/2007 (Note b) - 783,401

4% Irredeemable Convertible Unsecured Loan Stocks (Class C) 2003/2008 (Note b) 37,082 78,229

4% Irredeemable Convertible Unsecured Loan Stocks (Class D) 2004/2009 (Note b) 23,673 40,088

60,755 901,718

Analysed as:

Repayable within twelve months 37,082 783,401

Repayable after twelve months 23,673 118,31760,755 901,718



29. 4% Irredeemable Convertible Unsecured Loan Stocks (Cont’d)

(a) The Company, under a Trust Deed dated 13 December 2001, issued RM38,154,000 nominal value of 4% Irredeemable Convertible Unsecured Loan Stocks (Class A) 2001/2006 (“ICULS A”) for the settlement of debts owing by Instangreen Corporation Sdn. Bhd. (“ICSB”), a former subsidiary company, to scheme creditors pursuant to the Workout Proposals of ICSB.

(b) The Company, under a Trust Deed dated 13 December 2001, issued RM1,453,000 nominal value of 4% Irredeemable Convertible Unsecured Loan Stocks (Class B) 2002/2007 (“ICULS B”), RM1,474,000 nominal value of 4% Irredeemable Convertible Unsecured Loan Stocks (Class C) 2003/2008 (“ICULS C”) and RM403,000 nominal value of 4% Irredeemable Convertible Unsecured Loan Stocks (Class D) 2004/2009 (“ICULS D”), being the interest payment of ICULS A in accordance with the terms stipulated in the following Note (c)(ii) below.

(c) The salient features of the ICULS A, ICULS B, ICULS C and ICULS D are as follows:-

(i) The ICULS A, ICULS B, ICULS C and ICULS D are in multiples of RM1,000;

(ii) The ICULS A, ICULS B, ICULS C and ICULS D bear interest at 4% per annum payable in arrears on each anniversary date of issuance of ICULS A, ICULS B, ICULS C and ICULS D. The interest of ICULS A will be paid in the form of ICULS for the first 3 years and in the form of cash for the rest of the tenure;

(iii) The ICULS A, ICULS B, ICULS C and ICULS D are convertible into new ordinary shares on the basis of one new ordinary share of RM1 each for every RM1 nominal value of ICULS A, ICULS B, ICULS C and ICULS D held from the first day of the 25th month from and including the date of issue to the maturity date;

(iv) All new ordinary shares issued upon conversion of the ICULS A, ICULS B, ICULS C and ICULS D will rank pari passu with the then existing ordinary shares of the Company in all respects except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which precede the relevant conversion date of ICULS A, ICULS B, ICULS C and ICULS D; and

(v) The tenure of ICULS A, ICULS B, ICULS C and ICULS D is for a period of 5 years from the date of issue.

The equity component of ICULS C and ICULS D was classified as part of equity in accordance with the provisions of FRS 132, Financial Instruments: Disclosure and Presentation. Accordingly, the distribution to the holders of the ICULS C and ICULS D is disclosed as a distribution of equity.

30. Bank Borrowings

Group

Secured2007RM

2006RM

Floating rates:

Bridging loans 4,469,648 6,888,165

Flexi loans 7,576,881 9,900,214

Term loans 170,723,048 101,469,736

Revolving credits 1,349,160 1,340,463

Fixed rates:

Al Tarkhis 4,782,535 11,574,505

Al Bai Bithaman Ajil 4,889,092 4,508,964

Total borrowings 193,790,364 135,682,047



30. Bank Borrowings (Cont’d)

Group2007RM

2006RM

Analysed as:Repayable within twelve months

Floating rates:

Bridging loans 3,943,449 4,484,377

Flexi loans 4,540,223 4,900,901

Term loans 47,629,997 29,456,190

Revolving credits 674,160 665,463

Fixed rates:

Al Tarkhis 4,782,535 6,614,003

Al Bai Bithaman Ajil 4,889,092 1,975,69966,459,456 48,096,633

Repayable after twelve months

Floating rates:

Bridging loans 526,199 2,403,788

Flexi loans 3,036,658 4,999,313

Term loans 123,093,051 72,013,546

Revolving credits 675,000 675,000

Fixed rates:

Al Tarkhis - 4,960,502

Al Bai Bithaman Ajil - 2,533,265127,330,908 87,585,414193,790,364 135,682,047

The above credit facilities obtained from licensed banks are secured on the following:

(a) fixed charge on certain subsidiary companies’ land banks included in land held for property development and property development costs;

(b) fixed charge on certain parcel of land belonging to third parties;

(c) fixed charge on a subsidiary company’s investment properties;

(d) fixed charge on certain subsidiary companies’ long term leasehold land and buildings;

(e) fixed charge on certain subsidiary companies’ inventories;

(f) first charge over certain quoted shares of a company in which certain Directors of the Company has substantial financial interest;



30. Bank Borrowings (Cont’d)

(g) assignment of a subsidiary company’s sales proceeds and balances in a Housing Development Accounts;

(h) fixed and floating charge over certain subsidiary companies’ present and future assets of;

(i) joint and several guarantee of certain Directors of the Company and certain subsidiary companies; and

(j) a pledge of certain subsidiary companies’ fixed deposits.

Maturity of borrowings is as follows:

Group2007RM

2006RM

Within one year 66,459,456 48,096,633

Between one and two years 52,244,879 47,883,055

Between two and five years 68,462,269 39,702,359

After five years 6,623,760 -193,790,364 135,682,047

Range of interest rates during the financial year is as follows:

Group2007

%2006

%

Bridging loans 8.2 - 8.5 7.7 - 8.7

Flexi loans 8.7 8.7

Term loans 5.7 - 8.8 5.0 - 8.7

Revolving credit 8.2 - 8.7 8.2 - 8.7

Al Tarkhis 8.7 8.7

Al Bai Bithaman Ajil 5.97 - 6.0 5.97 - 6.0



31. Share Capital

Group/Company2007RM

2006RM

Ordinary shares of RM1.00 eachAuthorised 500,000,000 500,000,000

Issued and fully paid

At 1 January 384,239,291 378,110,321

Issued during the financial year 952,501 6,128,970

At 31 December 385,191,792 384,239,291 During the financial year, the issued and paid-up share capital of the Company was increased from RM384,239,291 to RM385,191,792 by issuance of:

(i) 783,401 new ordinary shares of RM1.00 each pursuant to the conversion of Irredeemable Convertible Unsecured Loan Stocks 2002/2007 (“ICULS B”) at the conversion price of RM1.00 each;

(ii) 107,100 new ordinary shares of RM1.00 each pursuant to the conversion of Irredeemable Convertible Unsecured Loan Stocks 2003/2008 (“ICULS C”) at the conversion price of RM1.00 each; and

(iii) 62,000 new ordinary shares of RM1.00 each pursuant to the conversion of Irredeemable Convertible Unsecured Loan Stocks 2004/2009 (“ICULS D”) at the conversion price of RM1.00 each.

All new shares issued rank pari passu with the existing issued shares of the Company.

32. Share Premium

Group/Company2007RM

2006RM

At 1 January/31 December 16,945,016 16,945,016



33. Other Reserves

Non-distributable

Revaluation reserve

Foreign exchange reserve

ESOS reserve

Reserve on consolidation Total

RM RM RM RM RMGroup

At 1 January 2007 1,744,647 2,822,955 76,250 - 4,643,852

Share-based payment - - 35,665 - 35,665

Foreign currency translation - 5,890,557 - - 5,890,557

Realisation of associated company’s reserve (13,547) - - - (13,547)

At 31 December 2007 1,731,100 8,713,512 111,915 - 10,556,527

At 1 January 2006

- as previously stated 2,340,057 1,262,900 - 9,406,616 13,009,573

- effect of adopting FRS 2 - - 20,170 - 20,170

At 1 January 2006, restated 2,340,057 1,262,900 20,170 9,406,616 13,029,743

Effect of adopting FRS 3 - - - (9,406,616) (9,406,616)


Foreign currency translation - 1,560,055 - - 1,560,055

Realisation of associated company’s reserve (595,410) - - - (595,410)

At 31 December 2006 1,744,647 2,822,955 76,250 - 4,643,852

Company

At 1 January 2007 - - 76,250 - 76,250


At 31 December 2007 - - 111,915 - 111,915

At 1 January 2006

- as previously stated - - - - -

- effect of adopting FRS 2 - - 20,170 - 20,170

At 1 January 2006, restated - - 20,170 - 20,170


At 31 December 2006 - - 76,250 - 76,250



34. Deferred Tax Liabilities

Group2007RM

2006RM

At 1 January 65,691,956 72,512,730

Recognised in income statement (4,914,147) (3,464,440)

Reduction in tax rate (3,112,305) (3,356,334)

Over provision in prior year (159,638) -

Acquisition of a subsidiary company 5,286,402 -

At 31 December 62,792,268 65,691,956

The components and movements of deferred tax liabilities of the Group prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Accelerated capital

allowances

Revaluation of land under development

Fair value adjustment Total

RM RM RM RM

At 1 January 2007 59,054 5,157,000 60,475,902 65,691,956

Recognised in income statement 100,584 - (5,014,731) (4,914,147)

Over provision in prior year (159,638) - - (159,638)

Reduction in tax rate - (386,793) (2,725,512) (3,112,305)

Acquisition of a subsidiary company - 5,286,402 - 5,286,402

At 31 December 2007 - 10,056,609 52,735,659 62,792,268

At 1 January 2006 26,723 5,348,000 67,138,007 72,512,730

Recognised in income statement 31,064 - (3,495,504) (3,464,440)

Reduction in tax rate 1,267 (191,000) (3,166,601) (3,356,334)

At 31 December 2006 59,054 5,157,000 60,475,902 65,691,956



34. Deferred Tax Liabilities (Cont’d)

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

Group2007RM

2006RM

Unused tax losses 10,623,000 13,025,000

Unabsorbed capital allowances 2,219,000 1,139,000

Deductible temporary differences 7,950,000 6,676,000

Accelerated capital allowances (1,374,000) (1,264,000)19,418,000 19,576,000

The unused tax losses and unabsorbed capital allowance are available indefinitely for offset against future taxable profits of the companies in which those items arose.

35. Revenue

Group Company2007RM

2006RM

2007RM

2006RM

Property development 272,514,719 307,983,481 - -

Construction contracts 4,747,232 242,558 - -

Trading and others 3,817,169 19,374,820 - -

Dividend from subsidiary company - - 9,600,000 7,500,000

Management fee from: - subsidiary company - - 120,000 120,000

- others 219,288 1,111,296 - -281,298,408 328,712,155 9,720,000 7,620,000



36. Finance Costs

Group Company

Note2007RM

2006RM

2007RM

2006RM

Finance costs on:

Al Bai Bithaman Ajil 1,490,053 1,970,580 - -

Al Tarkhis 698,191 85,122 - -

Term loans 10,976,380 9,803,259 - 358,570

Bank overdrafts 2,747,196 2,357,543 1,026,119 1,000,229

Bridging loans 1,058,588 1,372,027 - -

Revolving credits 755,692 1,014,650 - -

Hire purchase 93,895 65,262 - -

Secured Serial Bonds 3,610,219 4,207,123 3,610,219 4,207,123

Commercial Papers 2,673,539 1,202,324 2,673,539 1,202,324

RCB 74,385 902,263 74,385 902,263

ICULS 29,781 253,449 29,781 253,449

Others 164,212 - - -24,372,131 23,233,602 7,414,043 7,923,958

Less: Interest capitalised in property development costs 4 (11,450,909) (11,368,359) - -

12,921,222 11,865,243 7,414,043 7,923,958



37. Profit before Taxation

Profit before taxation is derived after charging/(crediting):

Group Company2007RM

2006RM

2007RM

2006RM

Auditors’ remuneration

- statutory 195,423 165,178 33,000 30,000

- others 21,400 36,553 17,000 20,000

- under/(over) provision in prior year 5,000 (200) 3,000 3,000

Company’s Directors

- fee 539,971 326,400 216,000 216,000

- salaries and other emoluments 3,058,301 3,156,044 429,100 422,300

- EPF 383,756 397,677 - -

- benefit-in-kind 236,114 299,470 - -

Other Directors

- fee 180,000 156,000 - -

- salaries and other emoluments 236,323 212,564 - -

- EPF 15,005 13,356 - -

Allowance for doubtful debts 1,902,128 1,823,874 - -

Allowance for foreseeable loss 1,781,390 828,320 - -

Depreciation of :- property, plant and equipment 1,478,477 1,322,247 - -

- investment properties 248,437 250,712 - -

Property, plant and equipment written-off 317,033 88,490 - -

Rental of premises 117,360 157,212 - -

Property development costs written off 117,816 942,972 - -

Impairment of goodwill arising on consolidation 886,880 1,451,505 - -

Unrealised loss on foreign exchange 4,962,097 343,101 4,351,491 3,984,583

Amortisation of prepaid lease payments 5,600 - - -

Impairment loss on investment property 7,300 - - -

Rental of office equipment 15,120 15,120 - -

Deposit written-off 29,000 500,000 - -

Impairment loss on property development costs - 2,536,616 - -

Interest income (3,837,311) (2,469,204) (100,321) (25,810)

Gain on disposal of property, plant and equipment (55,523) (102,056) - -



37. Profit before Taxation (Cont’d)

Group Company2007RM

2006RM

2007RM

2006RM

Rental income from:

- investment properties (657,366) (700,766) - -

- others (429,120) (128,275) - -

Gain on disposal of investment properties (165,148) (406,398) - -

Negative goodwill on consolidation (1,090,471) (703,757) - -

Waived of debts by other payables (6,777,722) (631,549) - -

Allowance for doubtful debts written-back - (126,547) - -

Interest income on advance to subsidiary companies - - (5,390,019) (6,493,514)

38. Taxation

Group Company2007RM

2006RM

2007RM

2006RM

Tax expense for the financial year:

Current tax provision 13,735,216 14,145,862 1,870,000 1,617,000

Over provision in prior years (1,158,714) (2,181,609) (471,260) (1,314,952)12,576,502 11,964,253 1,398,740 302,048

Deferred tax:

Relating to origination and reversal of temporary differences (4,914,147) (3,464,440) - -

Relating to the change in tax rate (3,112,305) (3,356,334) - -

Over provision in prior year (159,638) - - -(8,186,090) (6,820,774) - -4,390,412 5,143,479 1,398,740 302,048

Current domestic income tax is calculated at the statutory tax rate of 27% (2006: 28%) of the estimated assessable profit for the year. The domestic statutory tax rate will be reduced to 26% from the current year’s rate of 27%, effective year of assessment 2008. The computation of deferred tax as at 31 December 2007 has reflected these changes. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.



38. Taxation (Cont’d)

A reconciliation of income tax expense applicable to profit 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:

Group2007RM

2006RM


Taxation at statutory tax rate of 27% (2006: 28%) 3,720,505 4,486,929

Tax incentive for small and medium scale companies at 20% tax rate (318,920) (310,227)

Effect on different tax rates in other countries 442,366 415,877

Subsidiary company domiciled in tax haven country (1,230) (408,288)

Income not subject to tax (1,238,050) (117,794)

Expenses not deductible for tax purposes 6,891,081 5,763,103

Deferred tax assets not recognised 1,333,212 1,223,444

Deferred tax liabilities not recognised (130) (1,267)

Utilisation of previous unrecognised tax losses and capital allowances (1,354,148) (66,813)

Reversal of deferred tax liabilities not recognised 515 480

Reversal of deferred tax assets not recognised (653,776) (303,881)

Over provision of taxation in respect of prior years (1,158,714) (2,181,609)

Reduction in tax rate used for deferred tax (3,112,305) (3,356,334)

Over provision of deferred taxation in respect of prior years (159,638) -

Others (356) (141)

Tax expense for the financial year 4,390,412 5,143,479

Company2007RM

2006RM

Profit before taxation 1,739,339 438,380

Taxation at statutory tax rate of 27% (2006: 28%) 469,622 122,746

Expenses not deductible for tax purposes 1,400,378 1,494,254

Overprovision of taxation in respect of prior year (471,260) (1,314,952)

Tax expense for the financial year 1,398,740 302,048



39. Earnings per Share

(a) Basic earnings per share

The earnings per share has been calculated based on the consolidated profit for the financial year attributable to the equity holders of the parent of RM5,603,204 (2006 : RM4,621,809) and the weighted average number of ordinary shares in issue during the financial year of 384,418,409 (2006 : 378,676,040).

(b) Fully diluted earnings per share

Fully diluted earnings per share has been calculated based on the adjusted consolidated profit for the financial year attributable to the equity holders of the parent of RM5,624,944 (2006 :RM4,647,779) and the adjusted weighted average number of ordinary shares issued and issuable of 385,779,174 (2006 : 389,335,306) shares.

Group

2007RM

2006RM

Profit for the financial year attributable to the equity holders of the parent 5,603,204 4,621,809

Adjusted for :

Interest savings on ICULS 21,740 25,9705,624,944 4,647,779

Weighted number of ordinary shares in issue 384,418,409 378,676,040

Adjusted for :

Assumed conversion of ICULS 1,360,765 2,313,266

Assumed conversion of RCB - 8,346,000

Assumed exercise of ESOS at no consideration * *385,779,174 389,335,306

* The number of shares under ESOS was not taken into account in the computation of diluted earnings per share because the effect on the basic earnings per share is antidilutive.

40. Dividend

Group/Company2007RM

2006RM

Final dividend of Nil (2006: 5.5%) less taxation on Nil(2006: 378,804,778) ordinary shares in respect of financial year ended 31.12.2006 (2006: 31.12.2005) - 8,864,032



41. Employee Share Option Scheme (“ESOS”)

The LBS Bina Group Berhad Employee Share Option Scheme (“ESOS”) was approved by shareholders at the Extraordinary General Meeting (“EGM”) on 24 June 2002 and became effective on 16 September 2002 for a period of 5 years, and shall lapse on 15 September 2007. Pursuant to the Board’s approval on 28 May 2007, the tenure of the ESOS has been extended for a further 5 years, expiring on 15 September 2012.

The ESOS Bye-Laws were amended and approved by the shareholders at the EGM on 29 June 2005 to include the participation of Non-Executive Directors of the Company and to increase the maximum number of new ordinary shares available under the ESOS from ten per cent (10%) to fifteen per cent (15%) of the total issued and paid-up capital of the Company.

The salient features of the ESOS are as follows:

(a) Eligible employees include Directors of the Company and confirmed full time employees of the Company and its eligible subsidiary companies, whom have served for at least one year of full continuous service in the Group.

(b) The maximum number of new ordinary shares which may be available under the ESOS shall not exceed 15% of the total issued and paid-up share capital of the Company at the point in time during the tenure of the ESOS.

(c) The ESOS shall be in force for a period of ten years.

(d) The option is personal to the grantee and is non-assignable.

(e) The option price shall be determined at a discount of not more than 10% from the weighted average market price of the Company’s ordinary shares of RM1.00 each for five (5) market days preceding the date of offer, or the par value of the shares, whichever is higher.

(f) The options granted may be exercised in full or in lesser number of ordinary shares provided that the number shall be in multiples of 100 shares.

(g) The options granted may be exercised, subject to the maximum limit of options exercisable in each particular year, at any time within a period of five years from the date of offer of the option or such period as may be specifically stated in the offer upon giving notice in writing.

(h) The persons to whom the options have been granted shall not participate in more than one employee share option scheme implemented by any company within the Group.



41. Employee Share Option Scheme (“ESOS”) (Cont’d)

Movements in the number of share options outstanding and their related weighted average exercise prices (“WAEP”) are as follows:

Number of share options At

1 January Granted Forfeited ExercisedAt

31 DecemberExercisable at31 December

2007

First Grant 11,095,000 - (111,000) - 10,984,000 10,984,000

Second Grant 73,500 - - - 73,500 73,500

Third Grant 835,500 - (139,500) - 696,000 696,000

Fourth Grant 422,000 - (77,000) - 345,000 345,000

Fifth Grant 1,103,500 - (140,500) - 963,000 963,000

Sixth Grant 1,943,500 - (193,500) - 1,750,000 1,750,000

Special Grant 3,536,500 - (55,500) - 3,481,000 3,481,000

Seventh Grant 563,000 - (187,000) - 376,000 376,000

Eighth Grant 2,806,500 - (114,000) - 2,692,500 2,692,500

Ninth Grant 3,913,500 - (198,000) - 3,715,500 3,715,500

Tenth Grant - 1,219,000 (408,500) - 810,500 810,500

Eleventh Grant - 1,458,500 (195,000) - 1,263,500 1,263,500

Total 26,292,500 2,677,500 (1,819,500) - 27,150,500 27,150,500

WAEP 1.01 1.00 1.03 - 1.01 1.01

2006

First Grant 11,236,000 - (141,000) - 11,095,000 11,095,000

Second Grant 73,500 - - - 73,500 73,500

Third Grant 1,039,500 - (204,000) - 835,500 835,500

Fourth Grant 686,000 - (264,000) - 422,000 422,000

Fifth Grant 1,177,000 - (73,500) - 1,103,500 1,103,500

Sixth Grant 2,456,000 - (512,500) - 1,943,500 1,943,500

Special Grant 3,639,500 - (103,000) - 3,536,500 3,536,500

Seventh Grant 617,500 - (54,500) - 563,000 563,000

Eighth Grant - 2,979,500 (173,000) - 2,806,500 2,806,500

Ninth Grant - 4,526,000 (612,500) - 3,913,500 3,913,500

Total 20,925,000 7,505,500 (2,138,000) - 26,292,500 26,292,500

WAEP 1.02 1.00 1.06 - 1.01 1.01




Details of share options outstanding at end of the financial year are as follows:

Share Options

Exercise prices

RMExercise periods

2007

First Grant 1.00 10.6.2003 - 15.9.2012

Second Grant 1.00 30.6.2003 - 15.9.2012

Third Grant 1.23 31.12.2003 - 15.9.2012

Fourth Grant 1.29 30.6.2004 - 15.9.2012

Fifth Grant 1.06 31.12.2004 - 15.9.2012

Sixth Grant 1.00 30.6.2005 - 15.9.2012

Special Grant 1.00 1.8.2005 - 15.9.2012

Seventh Grant 1.00 31.12.2005 - 15.9.2012

Eighth Grant 1.00 30.6.2006 - 15.9.2012

Ninth Grant 1.00 31.12.2006 - 15.9.2012

Tenth Grant 1.00 30.6.2007 - 15.9.2012

Eleventh Grant 1.00 31.12.2007 - 15.9.2012

2006

First Grant 1.00 10.6.2003 - 15.9.2007

Second Grant 1.00 30.6.2003 - 15.9.2007

Third Grant 1.23 31.12.2003 - 15.9.2007

Fourth Grant 1.29 30.6.2004 - 15.9.2007

Fifth Grant 1.06 31.12.2004 - 15.9.2007

Sixth Grant 1.00 30.6.2005 - 15.9.2007

Special Grant 1.00 1.8.2005 - 15.9.2007

Seventh Grant 1.00 31.12.2005 - 15.9.2007

Eighth Grant 1.00 30.6.2006 - 15.9.2007

Ninth Grant 1.00 31.12.2006 - 15.9.2007

Fair value of share options granted during the financial year




The fair value of share options granted during the year was estimated by the management using Black-Scholes-Merton model, taking into account the terms and conditions upon which the options were granted. The fair value of share options measured at grant date and the assumptions are as follows:

2007 2006

Fair value of share options at the following grant dates (RM)

30 June 2005 0.122 0.081

1 August 2005 0.118 0.075

31 December 2005 0.026 0.003

30 June 2006 0.059 0.011

31 December 2006 0.043 0.001

30 June 2007 0.134 -

31 December 2007 0.049 -

2007 2006

Weighted average share price (RM) 0.64 0.56

Weighted average exercise price (RM) 1.01 1.01

Expected volatility (%) 38.00 38.00

Expected option life (years) 6.13 0.71

Risk-free interest rate, p.a. (%) 3.36 3.36

Expected dividend yield (%) 6.50 6.50

The expected life of the share options is based on historical data and is not necessarily indicative of exercise patterns that may occur in the future. The expected volatility is based on the historical volatility, adjusted for unusual or extraordinary volatility arising from certain economic or business occurrences which is not reflective of its long term average level. While the expected volatility is assumed to be indicative of future trends, it may not necessarily be the actual outcome. No other features of the option grant were incorporated into the measurement of fair value.

Executive Directors of the Group and of the Company and other members of key management have been granted the following number of options under the ESOS:

Group2007RM

2006RM

At 1 January 12,125,000 10,625,000

Granted and accepted 200,000 1,500,000

At 31 December 12,325,000 12,125,000

The share options were granted on the same terms and conditions as those offered to other employees of the Group.



42. Staff Costs

Group

Note2007RM

2006RM

Staff costs (excluding Directors) comprise:

- charged to income statement 7,374,338 8,311,881

- capitalised in property development costs 4 2,106,395 2,318,888

Total staff costs for the financial year 9,480,733 10,630,769

Included in the total staff costs above are contributions made to the Employees Provident Fund under a defined contribution plan for the Group and the Company amounting to RM803,652 and Nil (2006 : RM933,483 and Nil) respectively.

43. Related Party Disclosures

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

2007 2006Note RM RM

Group

Other related parties:

Sale of construction materials (i) 83,719 3,565,618

Contractor fee paid/payable (i) 3,807,922 23,963,183

Rental received/receivable (i) - 6,000

Rental paid/payable (ii) 52,700 49,200

Provision of services as advocates and solicitors (iii) 697,750 364,248

Development costs paid/payable (iv) 30,000,000 -

Company

Subsidiary companies:

Management fee received/receivable 120,000 120,000

Dividend income received/receivable 9,600,000 7,500,000

Settlement of liabilities on behalf of subsidiary companies 4,125,107 2,731,424

These 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 those obtainable in transactions with unrelated parties.



43. Related Party Disclosures (Cont’d)

The nature and relationship between the Group and the related parties are as follows:

(i) Companies in which the brothers of a Director of the Company have financial interest. (ii) Persons connected to certain Directors of the Company.

(iii) Firms in which a son of a Director is one of the partners of the firm and a Director of a subsidiary company is the partner of the firm.

(iv) Company in which sons-in-law of an independent Non-Executive Director of the Company have substantial financial interest.

(b) Information regarding outstanding balances arising from related party transactions as at 31 December 2007 is disclosed in Notes 9, 14, 16, 17, 23 and 24 to the financial statements.

(c) Information regarding compensation of key management personnel is as follows:

Group Company2007RM

2006RM

2007RM

2006RM

Short-term employee benefits 5,611,071 5,441,529 - -

Share based payments 14,606 17,700 14,606 17,700

Key management personnel include personnel having authority and responsibility for planning, directing and controlling the activities of the entity, including any Director of the Company.

44. Segment Information

Segment information is primarily presented in respect of the Group’s business segment which is based on the Group’s management and internal reporting structure.

Segment revenue, results, assets and liabilities include items directly attributable to a segment and those where a reasonable basis of allocation exists. Unallocated items mainly comprise interest-earning assets and revenue, interest-bearing borrowings and expenses, and corporate assets and expenses.

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

The accounting policies of the segments are consistent with the accounting policies of the Group.

(a) Business segments

The main business segments of the Group comprise the following:

Property Development Development of residential and commercial properties.

Management and Investment Investment holding and provision of management services.

Trading Trading in building material.

Other business segments include construction, selling of membership cards covering personal insurance and insurance agent, none of which are of a sufficient size to be reported separately.



44. Segment Information (Cont’d)

(a) Business segments (Cont’d)

2007

PropertyDevelopment

RM

Management and Investment

RMTrading

RMOthers

RMTotalRM

Revenue

Sales 272,514,719 28,239,288 3,499,307 9,383,047 313,636,361

Less : Inter-segment sales - (28,020,000) - (4,317,953) (32,337,953)

272,514,719 219,288 3,499,307 5,065,094 281,298,408Results

Segment results 34,872,200 (6,476,857) 132,269 (5,748,025) 22,779,587

Unallocated income 3,837,311

Finance costs (12,921,222)

Share of profit in associated companies 83,971 83,971

Profit before taxation 13,779,647

Taxation (4,390,412)

Profit for the financial year 9,389,235

Assets

Segment assets 1,119,610,620 80,314,113 2,161,228 11,514,263 1,213,600,224

Associated companies 2,465,609 2,465,609

Unallocated assets 72,743,215

Total assets 1,288,809,048

Liabilities

Segment liabilities 391,131,814 13,142,355 461,268 9,744,120 414,479,557

Unallocated liabilities 445,929,784

Total liabilities 860,409,341

Other information

Capital expenditure 8,062,494 8,786 - 689,053 8,760,333

Depreciation and amortisation 1,460,427 10,845 - 255,642 1,726,914

Impairment of goodwill arising on consolidation 886,880 - - - 886,880

Significant non-cash expenses other than depreciation and amortisation 2,483,539 5,854,202 - 814,688 9,152,429




(a) Business segments (Cont’d)

2006

PropertyDevelopment

RM

Management and Investment

RMTrading

RMOthers

RMTotalRM

Revenue

Sales 307,983,481 28,231,296 13,774,441 8,099,625 358,088,843

Less : Inter-segment sales - (27,120,000) - (2,256,688) (29,376,688)

307,983,481 1,111,296 13,774,441 5,842,937 328,712,155Results

Segment results 27,528,121 (7,781,555) 1,143,380 4,360,284 25,250,230

Unallocated income 2,469,204

Finance costs (11,865,243)

Share of profit in associated companies 170,557 170,557

Profit before taxation 16,024,748

Taxation (5,143,479)

Profit for the financial year 10,881,269

Assets

Segment assets 932,962,029 73,034,203 6,312,880 9,101,123 1,021,410,235

Associated companies 9,375,918 9,375,918

Unallocated assets 73,559,755

Total assets 1,104,345,908

Liabilities

Segment liabilities 266,449,005 18,881,059 2,266,121 8,365,649 295,961,834

Unallocated liabilities 403,900,014

Total liabilities 699,861,848

Other information

Capital expenditure 1,549,526 12,876 - 645,515 2,207,917

Depreciation 1,483,824 33,471 - 55,664 1,572,959

Impairment of goodwill arising on consolidation 1,334,282 - - 117,223 1,451,505

Impairment on property development costs 2,536,616 - - - 2,536,616

Significant non-cash expenses other than depreciation 2,359,782 1,462,477 - 760,578 4,582,837

All the inter-segment transactions were carried out on normal commercial basis and in the ordinary course of business.




(b) Geographical segments

In determining the geographical segments of the Group, segment revenue is based on the geographical location of customers. Segment assets and segment capital expenditure are based on geographical location of assets.

(i) Revenue by geographical market

2007RM

2006RM

Malaysia 281,127,120 327,648,859

Hong Kong 171,288 1,063,296281,298,408 328,712,155

(ii) Segment assets and additions to capital expenditure by geographical location of assets

Segment assetsAdditions to

capital expenditure

2007RM

2006RM

2007RM

2006RM

Malaysia 1,134,644,072 950,105,823 8,838,405 2,195,041

Hong Kong 67,076,931 62,200,096 - 12,876

China 10,846,214 8,024,767 8,786 -

Others 1,033,007 1,079,549 - -1,213,600,224 1,021,410,235 8,847,191 2,207,917



45. Contingent Liabilities

Group Company

2007RM

2006RM

2007RM

2006RM

Corporate guarantees given to licensed banks for credit facilities granted to subsidiary companies

- Limit of guarantees - - 481,067,000 351,175,000

- Amount utilised - - 191,281,000 177,019,000

Corporate guarantees given to the suppliers of goods for credit terms granted to subsidiary companies 4,700,000 - 4,700,000 -

Banker’s guarantees in favour of the local authorities for the purpose of development projects

- Secured 17,729,103 17,550,865 - -

- Unsecured - 120,000 - -

46. Commitments

Group

2007RM

2006RM

Authorised and contracted for:

Land held for property development - 100,000

Contractual commitments for development projects 76,703,411 67,371,384



47. Effects on Adoption of Revised FRSs

The effects on adoption of the following revised FRSs in financial year 2007 are set out below:

(a) FRS 117: Leases

This FRS requires that leases of land and buildings to be classified as operating or finance leases in the same way as leases of other assets. The land and building elements of a lease of land and buildings are considered separately for the purposes of lease classification. Leasehold land held for own use is now classified as operating lease.

Prior to 1 January 2007, leasehold land and building held for own use was classified as property, plant and equipment. Following the adoption of FRS 117, the Group reclassified upfront payments of leasehold land as prepaid lease payments. These payments are amortised on a straight line basis over the lease period.

The Group has applied the change in accounting policy in respect of the leasehold land in accordance with the transitional provisions of FRS 117. At 1 January 2007, the unamortised carrying amount of leasehold land is classified as prepaid lease payments. The reclassification of leasehold land as prepaid lease payments has been accounted for retrospectively. Certain comparative figures of the balance sheets of the Group have been restated. There was no impact on the income statement of the Group for the financial year ended 31 December 2006.

(b) FRS 124: Related Party Disclosures

FRS 124 has no material financial impact on the Group’s and the Company’s accounting policies. This standard affects the identification of related parties and has resulted in additional related party disclosures presented in the financial statements.

48. Financial Instruments

(a) Financial risk management objectives and policies The Group and the Company’s financial risk management policy is to ensure that adequate financial resources are available for the development of the Group and of the Company’s operations whilst managing its financial risks, including foreign currency exchange risk, interest rate risk, market risk, credit risk, liquidity risk and cash flow risk. The Group and the Company operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

(b) Foreign currency exchange risk

The Group and the Company is exposed to foreign currency risk on borrowings that are denominated in a currency other than Ringgit Malaysia. The currencies giving rise to this risk are primarily US dollars, Hong Kong dollars and Chinese Renminbi.



48. Financial Instruments (Cont’d)

(b) Foreign currency exchange risk (Cont’d)

The net unhedged financial assets and financial liabilities of the Group and the Company that are not denominated in their functional currencies are as follows:

Financial Assets/(Liabilities) Held inNon-Functional Currency

Functional Currency

United StatesDollar

RM

Hong KongDollar

RMTotalRM

Group2007Other receivables

Ringgit Malaysia 3,324 633,916 637,240Hong Kong Dollar 36,437,500 - 36,437,500

Cash and bank balances

Ringgit Malaysia 367 - 367Chinese Renminbi 42,038,388 - 42,038,388Hong Kong Dollar 9,431 - 9,431

Bank borrowings

Hong Kong Dollar 46,102,030 - 46,102,030

Financial Assets/(Liabilities) Held inNon-Functional Currency

Functional Currency

United StatesDollar

RM

Hong KongDollar

RMTotalRM

2006Other receivables

Ringgit Malaysia 184,691 731,117 915,808

Other payables

Hong Kong Dollar 158,972 - 158,972

Bank borrowings

Hong Kong Dollar 34,655,573 - 34,655,573

Company2007Amount owing by subsidiary company

Ringgit Malaysia 69,875,890 985,107 70,860,997

2006Amount owing by subsidiary company

Ringgit Malaysia 59,371,857 1,036,275 60,408,132




(c) Interest rate risk

The Group and the Company’s income and operating cash flows are substantially independent of changes in market interest rates. Interest rate exposure arises from the Group and the Company’s borrowings and deposits. The Group and the Company does not hedge the interest rate risk.

(d) Credit risk

The Group and the Company’s exposure to credit risk arises mainly from receivables. Receivables are monitored on an ongoing basis via Group management reporting procedure and action will be taken for long outstanding debts.

At balance sheet date, there were no significant concentration of credit risk. The maximum exposure to credit risk associated with recognised financial assets is the carrying amount shown in the balance sheet.

(e) Liquidity and cash flow risk

The Group and the Company seeks to achieve a flexible and cost effective borrowing structure to ensure that the projected net borrowing needs are covered by available committed facilities. Debt maturities are structured in such a way to ensure that the amount of debt maturing in any one year is within the Group’s ability to repay and refinance.

The Group and the Company also maintains a certain level of cash and cash convertible investments to meet its working capital requirements.

(f) Fair values

(i) The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables and short term borrowings approximate fair value due to the relatively short term nature of these financial instruments.

(ii) The aggregate fair values of the other financial assets and liabilities carried on the balance sheet are as follows:

2007 2006

GROUPCarrying amount

RMFair value

RMCarrying amount

RMFair value

RMFinancial assetsUnquoted investments 1,253,500 * 2,671,300 *

Financial liabilitiesHire purchase payablesBank borrowingsICULS BICULS CICULS DSecured Serial Bonds

1,415,113127,330,908

-1,019,765

341,00050,000,000

1,143,15999,710,695

-576,167252,340

40,008,845

1,290,82287,585,414

783,4011,126,865

403,00050,000,000

1,189,98568,308,542

360,364518,358209,560

40,280,657

COMPANYFinancial liabilitiesICULS BICULS CICULS DSecured Serial Bonds

-1,019,765

341,00050,000,000

-576,167252,340

40,008,845

783,4011,126,865

403,00050,000,000

360,364518,358209,560

40,280,657




(f) Fair values (Cont’d)

* It is not practical to estimate the fair value of the non-current unquoted investments because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.

The fair value of quoted financial instruments are determined by reference to the stock exchange quoted market bid prices at the close of the business on the balance sheet date. The long term borrowings are estimated by discounting the expected future cash flows using the current interest rates for the liabilities with similar risk profiles.

49. Significant Events

During the financial year, the following significant events took place for the Company and its subsidiary companies:

(a) LBS Bina Group Berhad (“the Company”)

(i) On 17 January 2007, the Company has redeemed the first series of Secured Serial Bonds, 5.30% Secured Serial Bonds 2006/2007 at RM15,000,000.

(ii) On 30 January 2007, the Company has redeemed the remaining 30% of the nominal value of the 4% RCB A 2001/2006 at the accredited value of RM8,356,679.

(iii) On 21 December 2007, the Company submitted an application to the Securities Commission (SC) to seek approval for the proposed renounceable rights issue of up to 175,037,156 new warrants in the Company on the basis of two warrants for every five existing ordinary shares held in the Company (“Proposed Rights Issue of Warrants”). On 17 January 2008, the Company obtained approval from SC for the Proposed Rights Issue of Warrants.

The Company obtained approval from its shareholders at the Extraordinary General Meeting held on 19 March 2008 to implement the abovementioned Proposed Rights Issue of Warrants. To facilitate the issuance of new ordinary shares pursuant to the Proposed Rights Issue of Warrants, the Company’s authorised share capital was increased from RM500,000,000 to RM1,000,000,000, by the creation of an additional 500,000,000 shares.

(b) LBS Bina Holdings Sdn. Bhd. (“LBS”)

(i) On 18 January 2007, LBS acquired an additional 5,000 ordinary shares of RM1.00 each in Generasi Simbolik Sdn. Bhd. (“GSSB”), a company incorporated in Malaysia, for a cash consideration of RM1,500,000. Consequently, LBS’s shareholding in GSSB has increased from 51% to 71%.

On 7 February 2007, GSSB increased its authorised share capital from RM100,000 to RM500,000 by creation of 400,000 new ordinary shares of RM1.00 each. In addition, the issued and paid-up share capital of GSSB was increased from RM25,000 to RM250,000 by the issue of 225,000 ordinary shares of RM1.00 each at par for cash. LBS has subscribed for 159,750 ordinary shares of RM1.00 each in GSSB by way of capitalising amount owing by GSSB.

(ii) On 27 February 2007, LBS subscribed an additional 2,000,000 ordinary shares of RM1.00 each in Seribu Baiduri Sdn. Bhd., a company incorporated in Malaysia, for a cash consideration of RM2,000,000.



49. Significant Events (Cont’d)

(b) LBS Bina Holdings Sdn. Bhd. (“LBS”) (Cont’d)

(iii) On 6 March 2007, LBS acquired an additional 2,500 ordinary shares of RM1.00 each in Kilatlima Sdn. Bhd. (“KSB”), a company incorporated in Malaysia, for a cash consideration of RM20,000. Consequently, LBS’s shareholding in KSB has increased from 50% to 51%.

On 18 June 2007, LBS acquired an additional 122,500 ordinary shares of RM1.00 each in KSB for a cash consideration of RM2,180,000. Consequently, LBS’s shareholding in KSB has increased from 51% to 100%.

(iv) On 19 March 2007, LBS acquired an additional 52,500 ordinary shares of RM1.00 each in Azam Perspektif Sdn. Bhd. (“APSB”), a company incorporated in Malaysia, for a cash consideration of RM1,500,000. Consequently, LBS’s shareholding in APSB has increased from 30% to 51%.

On 21 March 2007, APSB increased its issued and paid-up share capital from RM250,000 to RM500,000 by the issue of 250,000 ordinary shares of RM1.00 each at par by way of cash of RM122,500 and by way of capitalisation of the amount owing to LBS of RM127,500.

(v) On 2 April 2007, LBS acquired 1,000,000 ordinary shares of RM1.00 each, representing 100% equity interest in Focal Remedy Sdn. Bhd., a company incorporated in Malaysia, for a cash consideration of RM15,000,000.

(vi) On 22 June 2007, LBS acquired an additional 50,000 ordinary shares of RM1.00 each in Mayang Jelatek Sdn. Bhd. (“MJSB”), a company incorporated in Malaysia, for a cash consideration of RM50,000. Consequently, LBS’s shareholding in MJSB has increased from 49% to 51%.

(vii) On 17 October 2007, LBS acquired 2 ordinary shares of RM1.00 each, representing 100% equity interest in Misi Aktif Sdn. Bhd., a company incorporated in Malaysia, for a cash consideration of RM7,000,000.

(viii) On 13 September 2007, LBS acquired 70 ordinary shares of RM1.00 each, representing 70% equity interest in Fokus Awana Sdn. Bhd., a company incorporated in Malaysia, for a cash consideration of RM16,000,000.

(ix) On 26 September 2007, Intellview Sdn. Bhd. (ISB), increased its issued and paid-up share capital from RM250,000 to RM500,000 by the issue of 250,000 ordinary shares of RM1.00 each at par for cash. LBS has subscribed for its share of the issued and paid-up share capital of ISB by way of capitalising amount owing by ISB.

(x) On 30 November 2007, LBS acquired 70,000 ordinary shares of RM1.00 each, representing 70% equity interest in Intelstyle Sdn. Bhd., a company incorporated in Malaysia, for a cash consideration of RM3,800,000.

(c) Intellplace Holdings Limited (“IHL”)

Zhuhai International Circuit Consolidated Development Limited, an indirect subsidiary company of IHL acquired 10 ordinary shares of HKD1.00 each, representing 100% equity interest in Zhuhai International Circuit Consolidated Development (HK) Limited, a company incorporated Hong Kong, for a cash consideration of HKD10.

(d) Saga Serata Sdn. Bhd. (“SSSB”)

On 16 March 2007, SSSB subscribed an additional 90,000 ordinary shares of RM1.00 each in HealthGuard Medicare Sdn. Bhd. (“HMSB”) for RM90,000 by way of capitalising amount owing by HMSB.



49. Significant Events (Cont’d)

(e) Sinaran Restu Sdn. Bhd. (“SRSB”)

On 12 September 2007, SRSB acquired 4 ordinary shares of RM1.00 each representing 100% equity interest in Dolomite Sungai Siput Sdn. Bhd., a company incorporated in Malaysia, for a purchase consideration of RM200,000.

(f) MITC Sdn. Bhd. (“MITC”)

On 6 September 2007, MITC acquired 2,550 ordinary shares of RM1.00 each representing 51% equity interest in MITC Engineering Sdn. Bhd. (formerly known as Neraca Tuah Sdn. Bhd.) from LBS, for a purchase consideration of RM2,550.

On 21 September 2007, MITC Engineering Sdn. Bhd.(“MITC Eng”) increased its authorised share capital from RM100,000 to RM1,000,000 by creation of 900,000 new ordinary shares of RM1.00 each. In addition, the issued and paid-up share capital of MITC Eng was increased from RM5,000 to RM750,000 by the issue of 745,000 ordinary shares of RM1.00 each at par for cash. MITC has subscribed for its share of the issued and paid-up share capital of MITC Eng.

(g) Angsana Abadi Sdn. Bhd. (formerly known as Supreme Avenue (MM2H) Sdn. Bhd.)

On 22 August 2007, a wholly-owned subsidiary company of the LBS, Supreme Avenue (MM2H) Sdn. Bhd. changed its name to Angsana Abadi Sdn. Bhd.

(h) MITC Engineering Sdn. Bhd. (formerly known as Neraca Tuah Sdn. Bhd.)

On 12 September 2007, a subsidiary company of the MITC, Neraca Tuah Sdn. Bhd. changed its name to MITC Engineering Sdn. Bhd.

50. Subsequent Events

Subsequent to the financial year end, the following events took place for the Company:

(a) The Company issued RM26,000,000 nominal value of Commercial Paper (CP). The proceeds from CP was utilised to part finance the development and construction cost in relation to the projects undertaken or constructed by its subsidiary companies in accordance to the specific terms and conditions as stipulated in Commercial Paper (CP) Programme Agreement dated 27 February 2006.

(b) The Company acquired an additional 49 ordinary shares in Linkway Property Co., Ltd (LPCL) for a cash consideration of USD49. Consequently, the Company’s shareholding in LPCL has increased from 51% to 100%.

51. Material Litigation

Claim filed by Hamzah bin Abdul Majid (“Plantiff”) on 9 December 1998 against few parties and Equal Alliance Sdn Bhd, LBS and one of the Directors being the Third Defendant, Fourth Defendant and Fifth Defendant respectively, in relation to a cause of action in fraud and conspiracy. The solicitors are of the opinion that the Third and Fourth Defendants have an even chance of defending this action.



52. Comparative Information

The audited financial statements for the financial year ended 31 December 2007 was prepared in accordance with the then effective applicable approved accounting standards in Malaysia. With the adoption of the revised FRS 117 as disclosed in Note 47 to the financial statements, certain comparative figures as at 31 December 2006 have been restated as follows:

As previouslystated

Effect of adopting FRS

117 RestatedGroup RM RM RM

Balance sheet

Non-Current Assets

Property, plant and equipment 10,935,249 (548,800) 10,386,449

Prepaid lease payments - 548,800 548,800

Consolidated cash flow statement

Cash flows from investing activities

Purchase of property, plant and equipment (406,917) 68,800 (338,117)

Prepaid lease payments made - (68,800) (68,800)



53. List of Subsidiary Companies

Effectiveinterest

Name of companyCountry of

incorporation2007

%2006

% Principal activityDirect holding

Intellplace Holdings Limited British Virgin Islands

100 100 Investment holding

LBS Landscape Sdn. Bhd. Malaysia 100 100 Turfing and landscape contracting

LBS Bina Holdings Sdn. Bhd. Malaysia 100 100 Property development and investment holding

Maju Kepunyaan Sdn. Bhd. Malaysia 100 100 Property development

Saga Serata Sdn. Bhd. Malaysia 100 100 Insurance agent

SPJ Construction Sdn. Bhd. Malaysia 60 60 Temporary cessation of business operations

Linkway Property Co., Ltd British Virgin Islands

51 51 Investment holding and property development

Indirect holding

Subsidiary companies of LBS Bina Holdings Sdn. Bhd. :

Adil Restu Sdn. Bhd. Malaysia 100 100 Property development

Alunan Prestasi Sdn. Bhd. Malaysia 70 70 Property development

Azam Perspektif Sdn. Bhd. Malaysia 51 - Property development

Angsana Abadi Sdn. Bhd. (formerly known as Supreme Avenue (MM2H) Sdn. Bhd.)

Malaysia 100 100 Property development

Bayu Cergas Sdn. Bhd. Malaysia 51 51 Dormant

Cergas Asal (M) Sdn. Bhd. Malaysia 100 100 Property development

Equal Alliance Sdn. Bhd. Malaysia 100 100 Property development

Equal Sign Sdn. Bhd. Malaysia 100 100 Property development

Focal Remedy Sdn. Bhd. Malaysia 100 - Property development and investment holding

Fokus Awana Sdn. Bhd. Malaysia 70 - Property development

Galeri Cekap Sdn. Bhd. Malaysia 90 90 Property development

Generasi Nostalgia Sdn. Bhd. Malaysia 100 100 Property development

Generasi Simbolik Sdn. Bhd. Malaysia 71 51 Property development



53. List of Subsidiary Companies (Cont’d)

Effectiveinterest


incorporation2007

%2006

% Principal activity

Inderaloka Impian Sdn. Bhd. Malaysia 100 100 Property development

Intellview Sdn. Bhd. Malaysia 100 100 Property development and implementation contractor

Intelstyle Sdn. Bhd. Malaysia 70 - Property development

Jatidiri Gigih Sdn. Bhd. Malaysia 51 51 Property development

Jauhari Unggul Sdn. Bhd. Malaysia 70 70 Property development

Johan Anggun Sdn. Bhd. Malaysia 70 70 Property development

Kalimah Jaya Sdn. Bhd. Malaysia 100 100 Investment holding

Kilatlima Sdn. Bhd. Malaysia 100 - Property development

LBS Capital Sdn. Bhd. Malaysia 100 100 Cessation of business operations

LBS Maju Sdn. Bhd. Malaysia 100 100 Property development

LBS Properties Sdn. Bhd. Malaysia 100 100 Property management and investment holding

Maju Kamabisa Sdn. Bhd. Malaysia 100 100 Property development

Mayang Jelatek Sdn. Bhd. Malaysia 51 - Property development

MITC Sdn. Bhd. Malaysia 100 100 Building, project planning cum implementation contractor and property development

Misi Aktif Sdn. Bhd. Malaysia 100 - Property development

MITC Engineering Sdn. Bhd. (formerly known as Neraca Tuah Sdn. Bhd.)

Malaysia - 51 Civil engineering

Pelangi Homes Sdn. Bhd. Malaysia 100 100 Property development and provision of project consultancy services

Pembangunan Primer Sdn. Bhd. Malaysia 51 51 Dormant

Prima Utuh Sdn. Bhd. Malaysia 80 80 Property development

Prisma Kasturi Sdn. Bhd. Malaysia 100 100 Dormant

Pristine Sunrise (M) Sdn. Bhd. Malaysia 70 70 Dormant

Puncak Gama Sdn. Bhd. Malaysia 51 51 Property development

Saga Megah Sdn. Bhd. Malaysia 100 100 Trading in building materials and general construction




Effectiveinterest


incorporation2007

%2006


Sepadan Maju Sdn. Bhd. Malaysia 55 55 Property development

Seribu Baiduri Sdn. Bhd. Malaysia 100 100 Property development

Sinaran Restu Sdn. Bhd. Malaysia 100 100 Property development and investment holding

Tepukan Senja Sdn Bhd Malaysia 100 100 Property development

Utuh Aspirasi Sdn. Bhd. Malaysia 51 51 Property development

Wirama Era Baru Sdn. Bhd. Malaysia 51 51 Dormant

Subsidiary companies of Sinaran Restu Sdn. Bhd. :

Dolomite Sungai Siput Sdn. Bhd. Malaysia 100 - Dormant

Kenderong Sdn. Bhd. Malaysia 100 100 Property development

Keranji Bina Sdn. Bhd. Malaysia 100 100 Property development

Lingkaran Semangat Sdn. Bhd. Malaysia 100 100 Dormant

Nilam Mewah Sdn. Bhd. Malaysia 55 55 Dormant

Pacific Grant Sdn. Bhd. Malaysia 85 85 Property development

Silibin Jaya Sdn. Bhd. Malaysia 100 100 Property development

Juaraplex Sdn. Bhd. Malaysia 100 100 Dormant

Subsidiary company of MITC Sdn. Bhd. :

MITC Engineering Sdn. Bhd. (formerly known as Neraca Tuah Sdn. Bhd.)

Malaysia 51 - Civil engineering

Subsidiary company of Intellplace Holdings Limited :

* Dragon Hill Corporation Limited

Hong Kong 100 100 Investment holding

Subsidiary company of Dragon Hill Corporation Limited :

* Lamdeal Consolidated Development Limited

Hong Kong 100 100 Project investment through a subsidiary company in The People’s Republic of China (“PRC”)




Effectiveinterest


incorporation2007

%2006


Subsidiary company of Lamdeal Consolidated Development Limited:

* Zhuhai International Circuit Consolidated Development Limited

The People’s Republic of

China

@ @ Property development

Subsidiary of Zhuhai International Circuit Consolidated Development Limited:

* Zhuhai International Circuit Consolidated Development (HK) Limited

Hong Kong @ - Dormant

Subsidiary company of Saga Serata Sdn. Bhd. :

HealthGuard Medicare Sdn. Bhd. Malaysia 60 60 Selling of membership cards covering personal insurance

Subsidiary company of Kalimah Jaya Sdn. Bhd. :

Utuh Sejagat Sdn. Bhd. Malaysia 51 51 Property development

* Subsidiary companies not audited by Anuarul Azizan Chew & Co.

@ A subsidiary company of the Company, Lamdeal Consolidated Development Limited (“LCDL”), entered into a joint venture agreement on 28 September 1992 with a partner in the PRC to establish a co-operative joint venture, Zhuhai International Circuit Consolidated Development Limited (“Zhuhai Development”), for the development of properties. Zhuhai Development was established on 8 June 1994, for a duration of 50 years and has a registered capital of US$11.6 million. The subsidiary company is entitled to a 60% profit share in Zhuhai Development.

LCDL is required to contribute the registered capital of the above joint ventures while the PRC joint venture partner is required to provide the land use rights to the joint ventures. Upon termination or expiry of these joint ventures, all property, plant and equipment of the joint ventures will belong to the PRC joint venture partners while the net current assets will be shared between the joint venture partners in accordance with their profit sharing ratio.



54. List of Associated Companies

Effectiveinterest


incorporation2007

%2006


Azam Perspektif Sdn. Bhd. Malaysia - 30 Property development

Casa Inspirasi Sdn. Bhd. Malaysia 30 30 Dormant

Dataran Enigma Sdn Bhd Malaysia 30 30 Property development

Kilatlima Sdn. Bhd. Malaysia - 50 Property development

Mayang Jelatek Sdn. Bhd. Malaysia - 49 Property development

Seloka Kualiti Sdn. Bhd. Malaysia 30 30 Property development

Sambungan Aktif Sdn. Bhd. Malaysia 30 30 Dormant

* Usaha Semarak Sdn. Bhd. Malaysia 35 35 Property development

* Associated company not audited by Anuarul Azizan Chew & Co.



list of propertiesas at 31 December 2007

Registered/ Beneficial Owner Location

Description Property/ *Existing orProposed Usage

Tenure /Expiry Date of Lease

Net Book Value/ Cost

RM’000

Remaining Land Area/ Built-up AreaSq Ft/ acres

Last Valuation/ Date of

Acquisition

Investment Properties

LBS Bina Holdings Sdn Bhd (LBS)

Plaza Seri Setia, Petaling Jaya, Selangor.

2 units of office blocks at Plaza Seri Setia, Sg Way, Selangor

*2 units rented out

Leasehold 99 years expiring on 03.05.2091

1,167 Ranging from 2,903 Sq Ftto 3,654 Sq Ft

16.04.2008

Plaza Seri Setia, Petaling Jaya, Selangor.

8 units of office lots at Plaza Seri Setia, Petaling Jaya, Selangor

*6 units rented out, 2 units for rent


2,315 Ranging from 1,163 Sq Ft to1,442 Sq Ft

18.06.2004

Taman Bukit Serdang,Selangor.

56 units of Vista Impiana Apartment at Taman Bukit Serdang

*56 units rented out


3,980 Ranging from 465 Sq Ft to830 Sq Ft

29.12.2006

Taman Bukit Serdang, Selangor.

39 units of Vista Impiana Apartment at Taman Bukit Serdang

*39 units rented out


3,079 Ranging from 465 Sq Ft to830 Sq Ft

17.01.2007

LBS Properties Sdn Bhd

Taman Pinggiran Putra,Seri Kembangan, Selangor.

Jelapang Maju Industrial Park,Ipoh.

2 units of shop lots at Putra Ria Shop Apartment, Taman Pinggiran Putra

* For rental 1 unit of 1 ½ storey Semi-

Detached factory at Jelapang Maju Industrial Park.

Lot No.329

* For rental



277

135

1,073 Sq Ft1,017 Sq Ft

4,000 Sq Ft

28.04.200328.04.2003

12.07.2000

MITC Sdn Bhd Plaza Seri Setia, Petaling Jaya, Selangor.

2 unis of shop lots at Plaza Seri Setia, Petaling Jaya, Selangor

* Rented out


819 1,162.5 Sq Ft1,162.5 Sq Ft

12.07.2000

Equal Sign Sdn Bhd

M-912, Phase 5, Block MN, 115 Apartment, Batu 5, Jalan Pantai, Port Dickson, Negeri Sembilan.

1 units of Apartment at Port Dickson

* For rental

Freehold 170 836 Sq Ft 04.02.2007

Land for Development

Cergas AsalSdn Bhd

Portion of Lot 353, Mukim of Tanah Rata, District of Cameron Highlands, Pahang Darul Makmur.

Development land – future development.

* Proposed mixed development (Taman Golden Hill)

Leasehold60 years expiring on 14.12.2052

21,400 36.80 acres 19.09.2004

Maju Kepunyaan Sdn Bhd

Lot 16, Section 47Town of Kuala Lumpur, District and State of Wilayah Persekutuan.

Development land – future development

* Proposed commercial development (Golden Avenue Project)

Freehold 20,000 1.26 acres 06.12.2001


Registered/ Beneficial Owner Location

Description Property/ *Existing orProposed Usage

Tenure /Expiry Date of Lease

Net Book Value/ Cost

RM’000

Remaining Land Area/ Built-up AreaSq Ft/ acres

Last Valuation/ Date of

Acquisition

Sinaran Restu Sdn Bhd

Silibin Jaya Sdn BhdKeranji Bina Sdn Bhd Kenderong Sdn Bhd

Pacific Grant Sdn BhdNilam Mewah Sdn Bhd

Portion of Lot 65524 & 47965, Mukim of Hulu Kinta, District of Kinta, Perak Darul Ridzuan.

Portion of Lot 65524, 47965, 79126 and 30029, Mukim of Hulu Kinta, District of Kinta, Perak Darul Ridzuan.

Portion of Lot 47966 & 66102, Mukim of Hulu Kinta, District of Kinta, Perak Darul Ridzuan.

Portion of Lot 28733Mukim of Hulu Kinta, District of Kinta, Perak Darul Ridzuan.


* Proposed industrial development (Jelapang Maju Light Industrial Park)

Development land – current development.

*Mixed development (Puncak Jelapang Maju – Package B)

Development land – current

development. Project being joint developed by Sinaran Restu Sdn Bhd.

*Mixed development (Puncak Jelapang Maju-Package A)

Development land – current development. Project being joint developed by Sinaran Restu Sdn Bhd.

* Mixed development (Puncak Jelapang Maju-Package C or known as Puncak Jelapang Indah)

Leasehold99 years expiring ranging from 29.03.2092 to18.08.2094

Leasehold99 years expiring ranging from 04.03.2101 to 20.04.2102



1,163

641

2,430

72

6.57 acres

49.18 acres

34.94 acres

7.60 acres

12.07.2000

10.05.2003

30.05.2002

27.07.2002

Sepadan Maju Sdn Bhd

PT 1053 – 1099 , HS(D) 2535 – 2581Mukim of Tanah Rata, District of Cameron Highlands, Pahang Darul Makmur .

Development land – current development. Project being developed by LBS.

* Mixed development (Carnation Park)

Leasehold99 yearsexpiring on31.08.2097

256 3.29 acres 29.11.2002

LBS Bina Holdings Sdn Bhd

No. Hakmilik 11211, Lot 20407, Mukim Tanjong Dua BelasBandar Saujana Putra.

Mukim Linau,Daerah Batu Pahat,Negeri Johor.


(Bandar Saujana Putra – Plot G) - Parcel 1H & 1F


(Bandar Putera Indah – Block 3)


Freehold

4,2254,455

6,277

8.45 acres19.01 acres

73.46 acres

29.12.200626.11.2007

10.08.2005

Focal Remedy Sdn Bhd

Mukim Linau, Daerah Batu Pahat,Negeri Johor.


(Bandar Putera Indah)

Freehold 33,814 384.07 acres 20.09.2003

Generasi Nostalgia Sdn Bhd

Mukim Batu Tiga, Shah Alam.


(Taman Pinggiran USJ)


357 2.56 acres 19.07.2004

Johan Anggun Sdn Bhd

Geran 26614, Lot 3978 and EMR 2846, Lot 814, Kuala Langat.


(Taman Saujana Jenjarom)

Freehold 3,581 28.65 acres 19.07.2004

list of propertiesas at 31 December 2007


analysis of shareholdings/ irredeemable convertible unsecured loan stockholdings

as at 15 May 2008

SHARE CAPITAL

Types of Shares : Ordinary of RM1.00 each

Authorised Capital : RM1,000,000,000.00

Issued and fully paid-up capital : RM385,191,792.00

No. of Shareholders : 8,782

Voting Rights : One vote per shareholder on show of handsOne vote per ordinary share on a poll

DISTRIBUTION OF SHAREHOLDINGS

Size of ShareholdingsNo. of

Shareholders

Percentage (%) of

ShareholdersNo. of

Shares Held

Percentage (%) of

Issued Shares

1 - 99 96 1.09 3,826 0.00

100 - 1,000 2,542 28.95 1,029,223 0.27

1,001 - 10,000 3,978 45.30 21,217,316 5.51

10,001 - 100,000 1,891 21.53 61,964,896 16.09

100,001 - Less than 5% of Issued Shares 273 3.11 229,822,509 59.66

5% and above of Issued Shares 2 0.02 71,154,022 18.47

8,782 100 385,191,792 100.00

LIST OF THE THIRTY (30) LARGEST SHAREHOLDERS (WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAME PERSON)

HOLDER NAME SHARES HELD PERCENTAGE (%)

1. AMSEC NOMINEES (TEMPATAN) SDN BHD QUALIFIER:AMBANK (M) BERHAD FOR INTELRICH SDN. BHD.

38,200,000 9.92

2. INTELRICH SDN BHD 32,134,022 8.34

3. MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHD QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (MGN-ISB0002M)

19,013,253 4.94

4 CITIGROUP NOMINEES (ASING) SDN BHDQUALIFIER: BEAR STEARNS SECURITIES CORP FOR THIRD AVENUE REAL ESTATE OPPORTUNITIES FUND LP

19,000,000 4.93

5. MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (REM 622-MARGIN)

16,396,400 4.26



6. EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (SST)

15,250,000 3.96

7. ABB NOMINEE (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (SEA PARK)

12,500,000 3.25

8. MAYBAN NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (51401138105A)

9,730,000 2.53

9. KENANGA NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD

9,082,785 2.36

10. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (49519 SFIN)

5,800,000 1.51

11. AMTRUSTEE BERHAD 4,818,121 1.25

12. MAYBAN NOMINEES (TEMPATAN) SDN BHDQUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (51401138104A)

4,170,000 1.08


4,170,000 1.08

14. PUBLIC NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (SSA)

3,800,000 0.99

15. RHB NOMINEES (TEMPATAN) SDN BHDQUALIFIER: PLEDGED SECURITIES ACCOUNT FOR LEE KWONG JOO

3,718,400 0.97

16. AMTRUSTEE BERHAD 3,101,750 0.81


2,780,000 0.72

18 CITIGROUP NOMINEES (TEMPATAN) SDN BHD QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR BEH HANG KONG (474099)

2,562,400 0.67

analysis of shareholdings/ irredeemable convertible unsecured loan stockholdingsas at 15 May 2008



as at 15 May 2008 (cont’d)


19. AMSEC NOMINEES (TEMPATAN) SDN BHD QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR BEH HANG KONG

2,361,300 0.61

20. CIMSEC NOMINEES (TEMPATAN) SDN BHDQUALIFIER: DANAHARTA MANAGERS SDN BHD

2,008,500 0.52

21. MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHDQUALIFIER: PLEDGED SECURITIES ACCOUNTFOR MOHD FAZIL BIN SHAFIE (REM 444)

2,000,000 0.52

22. AMANAH RAYA NOMINEES (TEMPATAN) SDN BHDQUALIFIER: DANA JOHOR

1,970,000 0.51

23. CIMSEC NOMINEES (TEMPATAN) SDN BHDQUALIFIER: PENGURUSAN DANAHARTA NASIONAL BERHAD

1,729,000 0.45

24. EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR ONG YANG TENG (SFC)

1,654,000 0.43

25. BANK KERJASAMA RAKYAT MALAYSIA BERHADQUALIFIER: AS BENEFICIAL OWNER

1,620,000 0.42

26. LIM THIAM CHYE 1,616,000 0.42

27. CITIGROUP NOMINEES (ASING) SDN BHDQUALIFIER: CBNY FOR DFA EMERGING MARKETS FUND

1,607,000 0.42

28. MAYBAN NOMINEES (TEMPATAN) SDN BHDQUALIFIER:PLEDGED SECURITIES ACCOUNT FOR BEH HANG KONG

1,511,500 0.39

29. HSBC NOMINEES (TEMPATAN) SDN BHD QUALIFIER: HSBC (MALAYSIA) TRUSTEE BERHAD FOR AMANAH SAHAM SARAWAK

1,500,000 0.39

30. RHB NOMINEES (TEMPATAN) SDN BHD QUALIFIER : PLEDGED SECURITIES ACCOUNT FOR TAN HONG LAI

1,459,600 0.38

227,264,031 59.00


SUBSTANTIAL SHAREHOLDERS AS AT 15 MAY 2008

Name of ShareholdersDirect

No. of shares %Indirect

No. of Shares %

Intelrich Sdn Bhd 173,846,460 45.13 - -

Dato’ Lim Hock San - - 173,936,460# 45.16

Datuk Lim Hock Guan - - 173,846,460* 45.13

Dato’ Lim Hock Sing - - 173,983,460# 45.17

Datuk Lim Hock Seong - - 174,088,460# 45.20

DIRECTORS’ INTEREST IN SHARES

In the Company

DirectorsDirect

No. of shares %Indirect

No. of Shares %

Dato’ Seri Lim Bock Seng 350,000 0.09 2,262,400** 0.59

Dato’ Kamaruddin bin Abdul Ghani - - - -

Dato’ Lim Hock San - - 173,936,460# 45.16

Datuk Lim Hock Guan - - 173,846,460* 45.13

Dato’ Lim Hock Sing - - 173,983,460# 45.17

Datuk Lim Hock Seong - - 174,088,460# 45.20

Chia Lok Yuen 105,000 0.03 - -

Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar - - 673,000** 0.17

Maj Jen (B) Dato’ Mohamed Isa bin Che Kak 4,084 ^ - -

Dato’ Wong Woon Yow 50,000 ^ - -

Kong Sau Kian - - - -

Mohd Fazil bin Shafie 2,000,000 0.52 - -



IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS

ICULS C

Type of Securities : 5 year 4% Irredeemable Convertible Unsecured Loan Stocks 2003/2008 (“ICULS C”)

No. of ICULS Issued : RM1,019,765 nominal value

No. of ICULS Holders : 211

Voting Rights : One vote for every ICULS C Holders on a show of hands, one vote for every RM1.00 nominal value of ICULS C on a poll, in the meeting of ICULS C Holders.

DISTRIBUTION OF ICULS C HOLDINGS

Size of ICULS Holdings

No. of ICULS C Holders

Percentage (%) of ICULS C

Holders

Nominal Value of ICULS C Held

(RM)

Percentage (%)of IssuedICULS C

1 - 99 43 20.38 2,042 0.20

100 - 1,000 117 55.45 63,881 6.26

1,001 - 10,000 35 16.59 132,157 12.96

10,001 - Less than 5% of Issued ICULS C

13 6.16 286,000 28.05

5% and above of Issued ICULS C 3 1.42 535,685 52.53

211 100.00 1,019,765 100.00

LIST OF THE THIRTY (30) LARGEST ICULS C HOLDERS (WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAME PERSON)

HOLDER NAME ICULS HELD PERCENTAGE (%)

1. KASINATHAN A/L TULASI

152,820 14.99

2. INTELRICH SDN BHD

132,000 12.94

3. AMTRUSTEE BERHAD 127,463 12.50

4. TEOH BOON HAN @ TEONG BOON HONG 52,300 5.13

5. INTELRICH SDN BHD 52,000 5.10


7. MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR INTELRICH SDN BHD (MGN-ISB0002M)

32,000 3.14

8. CHOONG YAT CHIN @ CHONG YAT CHIN 31,000 3.04

9. TARA SINGH GILL 24,000 2.35





10. MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR TAN WEI KIAN (REM 444)

23,300 2.28

11. KOH LEE HUAT 21,200 2.08


13. MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR CHONG WOON KEONG (REM 444-MARGIN)

15,400 1.51

14. HLG NOMINEE (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR CHUA ENG KIAT (CCTS)

15,200 1.49

15. LIEW AH KAU @ LIEW KONG YONG 15,000 1.47

16. ABDUL HALIM LIM BIN ABDULLAH 15,000 1.47

17. NG HONG CHAI 14,000 1.37

18. SIM CHIN THIAM 11,200 1.10

19. NG PENG KIM 11,000 1.08

20. JAGDEES SINGH A/L JASWANT SINGH 10,000 0.98

21. DALBIR SINGH A/L DAULAT SINGH 10,000 0.98

22. INDAR KAUR A/P DAN SINGH 9,600 0.94

23. TAN YU WEI 7,600 0.75

24. SARVANANTHAN A/L KANAPATHIPILLAY 6,000 0.59

25. LAM KENG WOK @ LAM KENG KOK 6,000 0.59

26. KOH LEE HUAT 5,400 0.53

27. TIRATH SINGH A/L BHAN SINGH PANNU 5,000 0.49

28. TEOH SIEW SUAN 5,000 0.49

29. LIM LIP MENG 5,000 0.49

30. GOH ENG TECK 5,000 0.49

885,871 86.87



DIRECTORS’ INTEREST IN ICULS C

Nominal Value of ICULS C (RM)Directors Direct % Indirect %

Dato’ Seri Lim Bock Seng - - - -


Dato’ Lim Hock San - - 217,000* 21.30

Datuk Lim Hock Guan - - 217,000* 21.30

Dato’ Lim Hock Sing - - 217,000* 21.30

Datuk Lim Hock Seong - - 217,000* 21.30

Chia Lok Yuen - - - -

Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar - - - -

Maj Jen (B) Dato’ Mohamed Isa bin Che Kak - - - -

Dato’ Wong Woon Yow - - - -

Mohd Fazil bin Shafie - - - -


ICULS D

Type of Securities : 5 year 4% Irredeemable Convertible Unsecured Loan Stocks 2004/2009 (“ICULS D”)

No. of ICULS Issued : RM341,000 nominal value

No. of ICULS Holders : 98

Voting Rights : One vote for every ICULS D Holders on a show of hands, one vote for every RM1.00 nominal value of ICULS D on a poll, in the meeting of ICULS D Holders.

DISTRIBUTION OF ICULS D HOLDINGS

Size of ICULS Holdings

No. of ICULS D Holders

Percentage (%) of ICULS D

Holders

Nominal Value of ICULS D Held

(RM)

Percentage (%) of Issued

ICULS D

1 - 99 1 1.02 76 0.02

100 - 1,000 79 80.61 75,355 22.10

1,001 - 10,000 14 14.29 69,685 20.44

10,001 - Less than 5% of Issued ICULS D

3 3.06 58,000 17.01

5% and above of Issued ICULS D 1 1.02 137,884 40.44

98 100.00 341,000 100.00




LIST OF THE THIRTY (30) LARGEST ICULS D HOLDERS (WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAME PERSON)




3. HLG NOMINEE (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR CHUA ENG KIAT (CCTS)

27,000 7.92

4. LIM LIP MENG 20,000 5.87


6. KASINATHAN A/L TULASI 11,000 3.23

7. SIM CHIN THIAM 10,000 2.93

8. AMSEC NOMINEES (TEMPATAN) SDN BHD QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR BEH HANG KONG

10,000 2.93

9. INDAR KAUR A/P DAN SINGH 9,000 2.64

10. KOK CHEE KHUNG 8,000 2.35


12. NG PENG KIM 7,000 2.05

13. LIM THIAM CHYE 6,000 1.76

14. LIEW BOON 5,000 1.47

15. LEE CHING CHING 3,000 0.88

16. WOO SOW YIN 2,000 0.59

17. WONG MEE NGAN 2,000 0.59

18. PERDANA INDUSTRI HOLDINGS BERHAD 2,000 0.59

19. LIM MOOI KUI 2,000 0.59

20. KHOO CHOON YEONG 2,000 0.59

21. TCB COMMERCIAL SDN BHD 1,685 0.49






22. ZAINUDIN B SUUT 1,000 0.29

23. YONG SAN 1,000 0.29

24. YEOW CHOO YEANG 1,000 0.29

25. YAW CHIN WAI 1,000 0.29

26. YAP PEI FOON 1,000 0.29

27. WONG WENG FOO 1,000 0.29

28. WONG POH LEAN 1,000 0.29

29. WONG KAH YEEN 1,000 0.29

30. WONG HORNG WOEI 1,000 0.29

274,569 80.52

DIRECTORS’ INTEREST IN ICULS D

Nominal Value of ICULS D (RM)Directors Direct % Indirect %

Dato’ Seri Lim Bock Seng - - 10,000** 2.93


Dato’ Lim Hock San - - - -

Datuk Lim Hock Guan - - - -

Dato’ Lim Hock Sing - - 1,000** 0.29

Datuk Lim Hock Seong - - 1,000** 0.29

Chia Lok Yuen - - - -

Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar


-

-

-

-

-

-

-

-

Dato’ Wong Woon Yow - - - -

Mohd Fazil bin Shafie - - - -


Note:

^ Less than 0.01%.* Deemed interests pursuant to Section 6A of the Companies Act, 1965 (“Act”) by virtue of his/their interests in

Intelrich Sdn Bhd. ** Shares and/or ICULS held by virtue of Section 134(12)(c) of the Act.# Shares held through Intelrich Sdn Bhd and by virtue of Section 134(12)(c) of the Act.


NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will be held at Ballroom I (Level I), Main Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor on Monday, 30 June 2008 at 3.00 p.m. for the following purposes :-

AGENDA

1. To receive and adopt the Audited Accounts for the financial year ended 31 December 2007 together with the Reports of the Directors and Auditors thereon. Resolution 1

2. To approve the payment of Directors’ Fees of RM216,000.00 for the financial year ended 31 December 2007. Resolution 2

3. To re-elect the following directors who retire pursuant to Section 129(6) of the Companies Act, 1965:

i) Dato’ Seri Lim Bock Sengii) Maj Jen (B) Dato’ Mohamed Isa bin Che Kak

Resolution 3Resolution 4

4. To re-elect the following directors who retire in accordance with Article 100 of the Company’s Articles of Association :

i) Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar ii) Datuk Lim Hock Seong iii) Chia Lok Yuen

Resolution 5Resolution 6Resolution 7

5. To appoint Auditors and to authorise the Directors to fix their remuneration.

Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965, a copy of which is annexed to Part C of the Circular to Shareholders dated 4 June 2008, has been received by the Company for the nominationof Messrs. UHY Diong who have given their consent to act.

The Company hereby proposes the following ordinary resolution:-

“That Messrs. UHY Diong, having consented to act, be and are hereby appointed as Auditors of the Company in place of the retiring Auditors, Messrs. Anuarul, Azizan, Chew & Co. to hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the Directors.” Resolution 8

6. As Special Business :To consider and, if thought fit, to pass with or without any modifications, the following eleven ordinary resolutions and a special resolution:

notice of eighth annual general meeting


notice of eighth annual general meeting(cont’d)

(a) AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT, subject always to the Companies Act, 1965 and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever as the Directors may deem fit provided that the aggregate number of shares issued in any one financial year of the Company pursuant to this Resolution does not exceed 10% of the issued share capital of the Company for the time being and THAT the Directors be also empowered to obtain the approval for the listing and quotation of the additional shares so issued on the Bursa Malaysia Securities Berhad (“Bursa Securities”) and THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 9

(b) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB AND ITS SUBSIDIARIES (“GROUP”) AND :-

(I) SUN ENGINEERING & CONSTRUCTION SDN BHD; AND(II) SYARIKAT JATI PEMBORONG AM SDN BHD

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category A stated in Section 2.2.1 of the Circular to Shareholders dated 4 June 2008 (the “Circular”) which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;

AND THAT the approval given in the aforesaid paragraph, unless revoked or varied by the shareholders of the Company in its general meeting, shall continue to be in force until the conclusion of the next Annual General Meeting of the Company, following this general meeting at which this mandate is passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed or the expiration of the period within which the next Annual General Meeting after 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), whichever is earlier;

AND THAT the aggregate value of the transactions conducted pursuant to this shareholders’ mandate during the financial year of the Company be disclosed in the annual report by providing a breakdown of the aggregate value of the transaction, amongst others, based on the following information:-

(a) the type of transactions made; and(b) the names of the related parties involved in each type of transactions made and

their relationship with the Company and its subsidiaries


AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required or approved or permitted by the relevant authorities) as they may consider expedient or necessary or in the interests of the Company to give effect to the Proposed Renewal Of General Mandate described in the Circular and/or this Resolution.” Resolution 10

(c) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND POWER AUTOMATION ENGINEERING SDN BHD

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category B stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;

AND THAT the approval given in the aforesaid paragraph, unless revoked or varied by the shareholders of the Company in its general meeting, shall continue to be in force until the conclusion of the next Annual General Meeting of the Company, following this general meeting at which this mandate is passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed or the expiration of the period within which the next Annual General Meeting after the date it is required to be held pursuant to Section 143 (1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143 (2) of the Act), whichever is earlier;







(d) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND DATO’ SERI LIM BOCK SENG AND LIM BROTHERS

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category C stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;






(e) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND CHIA LOK YUEN

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category D stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;





(a) the type of transactions made; and(b) the names of the related parties involved in each type of transactions made and their

relationship with the Company and its subsidiaries


(f) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND DATO’ KAMARUDDIN BIN ABDUL GHANI

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category E as stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;








(g) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND STEVEN TAI, WONG & PARTNERS

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category F stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;








(h) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND INTELRICH SDN BHD

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category G as stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;






(i) PROPOSED RENEWAL OF GENERAL MANDATE FOR RECURRENT PROPOSED NEW GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND: -

(I) (A) AMIR ARIF BIN KAMARUDIN (B) MD ARIFFIN BIN MAHMUD; AND(II) MAGMA DESTAR (M) SDN BHD

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category H as stated in Section 2.2.1 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;








(j) PROPOSED NEW GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND:-

(I) AYT PILING & CONSTRUCTION SDN BHD; AND(II) ECONTECHNIC SDN BHD

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category A as stated in Section 2.2.2 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;




AND THAT the aggregate value of the transactions conducted pursuant to this General Mandate during the financial year of the Company be disclosed in the annual report by providing a breakdown of the aggregate value of the transaction, amongst others, based on the following information:-



AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required or approved or permitted by the relevant authorities) as they may consider expedient or necessary or in the interests of the Company to give effect to the Proposed New General Mandate described in the Circular and/or this Resolution.” Resolution 18

(k) PROPOSED NEW GENERAL MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING LBGB GROUP AND:-

(I) DATO’ WONG WOON YOW(II) STEPHEN WONG YEE ONN; AND(III) PAUL WONG YEE KEONG

“THAT approval be and is hereby given pursuant to Chapter 10.09 of the Listing Requirements of Bursa Securities for the Company, its subsidiaries or any one of them to enter into the specified recurrent transactions of a revenue or trading nature with the related parties specified as Category B as stated in Section 2.2.2 of the Circular which is necessary for its day-to-day operations, in its ordinary course of business, made on an arm’s length basis and on normal commercial terms of the Group and on such terms which are no more favourable to the related party than those generally available to the public and which are not detrimental to the minority shareholders of the Company;


AND THAT the aggregate value of the transactions conducted pursuant to this General Mandate during the financial year of the Company be disclosed in the annual report by providing a breakdown of the aggregate value of the transaction, amongst others, based on the following information:-



AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required or approved or permitted by the relevant authorities) as they may consider expedient or necessary or in the interests of the Company to give effect to the Proposed New General Mandate described in the Circular and/or this Resolution.”

Resolution 19



(l) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF LBS BINA GROUP BERHAD

“THAT deletions, alterations, modifications and/or additions to the Articles of Association of the Company as set out in Appendix I of the Circular to Shareholders dated 4 June 2008 be and are hereby approved.

AND THAT the Directors and the Secretaries of the Company be and are hereby authorised to carry out all the necessary formalities in effecting the Proposed Amendments to the Articles of Association.”

SpecialResolution

7. To consider any other business of which due notice shall have been given.

By Order of the Board,

LEE CHING CHING PHANG AI TEE Company Secretaries

Petaling Jaya4 June 2008

Notes:

(1) A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but 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) In the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of a duly authorised officer or attorney.

(3) Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

(4) Any alteration to the instrument appointing a proxy must be initialled. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Plaza Seri Setia, Level 1-4, No. 1, Jalan SS9/2, 47300 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time fixed for the meeting.

Explanatory Notes on Special Business

(5) Ordinary Resolution 9

The Ordinary Resolution proposed under Resolution 9 above, if passed, will enable the Directors to issue up to 10% of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority unless revoked or varied at a General Meeting will expire at the next Annual General Meeting.

(6) Ordinary Resolutions 10, 11, 12, 13, 14, 15, 16, 17,18 and 19

Ordinary Resolutions 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19 if passed, will allow the Group to enter into the recurrent related party transactions in the ordinary course of business and the necessity to convene separate general meetings from time to time to seek shareholders’ approval as and when such recurrent related party transactions occur would not arise. This would reduce substantial administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. The Shareholders’ mandate is subject to renewal on an annual basis.

(7) Special Resolution

The Special Resolution if passed will allow the Company to amend its Articles of Association to be in line with the Listing Requirements of Bursa Malaysia Securities Berhad.



statement accompanying noticeof annual general meeting of the company

Pursuant to Paragraph 8.28(2) of the Bursa Securities Listing Requirements appended hereunder are:

DIRECTORS STANDING FOR RE-ELECTION

The following Directors are standing for re-election at the Annual General Meeting for the year 2008 of the Company which will be held at Ballroom I (Level I), Main Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor on Monday, 30 June 2008 at 3.00 p.m.:-

Name of Director Details of Attendancefor Board Meeting

Details of Individual Director

Directors retiring pursuantto Section 129(6) of theCompanies Act, 1965:-

1. Dato’ Seri Lim Bock Seng Please refer to Corporate GovernanceStatement contained in this Annual Report

Please refer to Profile of Directors contained in this Annual Report

2. Maj Jen (B) Dato’ Mohamed Isa bin Che Kak

Please refer to Corporate GovernanceStatement contained in this Annual Report


Directors retiring pursuantto Article 100 of the Company’sArticles of Association:-

1. Tan Sri Dato’ Seri (Dr) Haji Abu Hassan bin Haji Omar

Please refer to Corporate GovernanceStatement contained in this Annual Report


2. Datuk Lim Hock Seong Please refer to Corporate GovernanceStatement contained in this Annual Report


3. Chia Lok Yuen Please refer to Corporate GovernanceStatement contained in this Annual Report


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FORM OF PROXYI/We………………………………………………………………………………………………………………………….…………..

of………………………………………………………………………………………………………………………………………....

being a member/ members of LBS BINA GROUP BERHAD, hereby appoint…………………………………………...........

……………………………………………………………………………………………………………………………….……..........

of…………………………………………………………………………………………………………………………………………

or failing him/her………………………………………………………………………………………………………….……………

of…………………………………………………………………………………………………………………………………………

or failing him/her, the Chairman of the Meeting, as my/our proxy to vote for me/us and on my/our behalf at the Eighth Annual General Meeting of the Company to be held at Ballroom I (Level I), Main Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor on Monday, 30 June 2008 at 3.00 p.m. or at any adjournment thereof.

RESOLUTIONS For AgainstOrdinary Resolution 1

Ordinary Resolution 2


















Special Resolution

Please indicate with (X) how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his/her discretion.

No. of Shares Held

CDS Account No.

_______________________________________Signature/ Common Seal of Shareholder(s)

Dated this………..day of ………………2008

Notes:-

(1) A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but 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) In the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of a duly authorised officer or attorney.

(3) Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

(4) Any alteration to the instrument appointing a proxy must be initialled. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Plaza Seri Setia, Level 1-4, No.1, Jalan SS9/2, 47300 Petaling Jaya , Selangor Darul Ehsan not less than 48 hours before the time fixed for meeting.

* Delete where not applicable

The Company SecretaryLBS BINA GROUP BERHAD (518482-H)Plaza Seri Setia Level 1-4No. 1 Jalan SS9/247300 Petaling JayaSelangor Darul EhsanMalaysia

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