pulai springs berhad · dato’ dr. hj shahir bin nasir independent non-executive director...

Pulai Springs Berhad (Incorporated in M

alaysia) Com

pany No. 514941-K

REPORTANNUAL

Pulai Springs Berhad

PULAI SPRINGS BERHAD (Incorporated in Malaysia)Company No. 514941-K

20km, Jalan Pontian Lama,81110 Pulai, Johor, Malaysia.Tel: 607-521 1212 Fax: 607-521 3333

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Contents

Notice of the Ninth Annual General Meeting 2

Statement Accompanying the Notice of AGM 4

Corporate Information 5

Profile of Directors 7

Chairman’s Statement 10

Statement on Corporate Governance 12

Statement on Internal Control 19

Audit Committee Report 21

Statement on Directors’ Responsibility 24

Coporate Social Responsibility 25

Financial Statements 26

List of Properties Held 74

Analysis of Shareholdings 77

Proxy Form

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2

Notice of the Ninth Annual General Meeting

AGENDA

As Ordinary Business

1. To lay the Audited Financial Statements for the financial year ended 31 December 2008 together with the Reports of the Directors and Auditors thereon.

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

2.1 Prof. Emeritus Dato’ Dr Lian Chin Boon 2.2 Leong Chew Meng

3. To approve the Directors’ Fees of RM195,000 for the financial year ended 31 December 2008.

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

As Special Business

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

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

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

By Order of the Board

CHAN YOKE YIN (MAICSA 7043743)LAI MEI MEI (MAICSA 7052158)Company Secretaries

Ipoh, Perak26 May 2009

For the Financial Year Ended 31 December 2008

NOTICE IS HEREBY GIVEN that the Ninth Annual General Meeting of PULAI SPRINGS BERHAD will be held at Cengal Suite, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim on Thursday, 18 June 2009 at 11.00 a.m. for the following purposes:

(Ordinary Resolution 1)(Ordinary Resolution 2)

(Ordinary Resolution 3)



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Notice of the Ninth Annual General Meeting (Cont’d)


Notes :

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

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

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

4. The instrument appointing a proxy must be deposited with the Company Secretaries at 55 Medan Ipoh 1A, Medan Ipoh Bistari, 31400 Ipoh, Perak not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof.

Explanatory Note on the Special Business

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

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

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4

Statement Accompanying the Notice of AGM

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

(a) Prof. Emeritus Dato’ Dr Lian Chin Boon; and (b) Leong Chew Meng.

2. Details of Attendance of Directors at Board Meetings

The details are set out on page 13 of this Annual Report.

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

The Ninth Annual General Meeting of the Company will be held on Thursday, 18 June 2009 at 11.00 a.m. at Cengal Suite, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim.

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

The details of the Directors who are standing for re-election at the Ninth Annual General Meeting are set out on page 8 to page 9 of this Annual Report. No individual other than the retiring Directors is seeking election as a Director at the Ninth Annual General Meeting of the Company.

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

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

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Corporate Information

BOARD OF DIRECTORS

Datuk Azzat bin Kamaludin Independent Non-Executive Chairman

Mr. Mah Siew Chean Executive Director

Mr. Leong Chew Meng Independent Non-Executive Director

Dato’ Dr. Hj Shahir bin Nasir Independent Non-Executive Director

Prof. Emeritus Dato’ Dr. Lian Chin Boon Non-Independent Non-Executive Director

Cik Ruthlene binti Abu Sahid Non-Independent Non-Executive Director

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

AUDIT COMMITTEE

Mr. Leong Chew Meng Independent Non-Executive Director (Chairman)


Cik Ruthlene binti Abu Sahid Non-Independent Non-Executive Director

REMUNERATION COMMITTEE


Mr. Mah Siew Chean Executive Director


NOMINATION COMMITTEE


Mr. Leong Chew Meng Independent Non-Executive Director


COMPANY SECRETARIES

Chan Yoke Yin (MAICSA 7043743) Lai Mei Mei (MAICSA 7052158)

REGISTERED OFFICE

18th Floor, MCB PlazaChangkat Raja Chulan 50200 Kuala Lumpur Tel. (603) 2078 8727 Fax. (603) 2078 7727

AUDITORS

Horwath (AF 1018) Chartered Accountants Level 16, Tower C Megan Avenue II No. 12, Jalan Yap Kwan Seng 50450 Kuala Lumpur

MANAGEMENT / OPERATIONS OFFICE

20km, Jalan Pontian Lama 81110 Pulai Johor Darul Takzim Tel. (607) 521 2121 Fax. (607) 521 1818 E-mail : [email protected] Website : www.pulaisprings.com

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Corporate Information (Cont’d)

OPERATIONS OFFICE

18th Floor, MCB Plaza Changkat Raja Chulan 50200 Kuala Lumpur Tel. (603) 2078 8727 Fax. (603) 2078 7727 Email : [email protected]

Sime Darby Centre 896 Dunearn Road #03-01F Singapore 589472 Tel. (65) 6762 5655 Fax. (65) 6762 5609 Email : [email protected]

SHARE REGISTRAR

Symphony Share Registrars Sdn Bhd Level 26, Menara Multi Purpose Capital Square No. 8, Jalan Munshi Abdullah 50100 Kuala Lumpur Tel. (603) 2721 2222 Fax. (603) 2721 2530

PRINCIPAL BANKERS

OSK Investment Bank Bhd (14152 – V) 20th Floor, Plaza OSK Jalan Ampang 50450 Kuala Lumpur

RHB Bank Berhad (6171 – M) 3, 3-01, 5, 5-01 Jalan Pembangunan Desa Rahmat 81200 Johor Bahru Johor Darul Takzim

Public Bank Berhad (6463 – H) 1st & 12th Floor, Public Bank Tower No. 19, Jalan Wong Ah Fook 80000 Johor Bahru Johor Darul Takzim

Alliance Bank Malaysia Berhad (88103 – W) Menara Multi Purpose Capital Square No. 8, Jalan Munshi Abdullah 50100 Kuala Lumpur

STOCK EXCHANGE LISTING

Bursa Malaysia Securities Berhad Main Board (Trading / Services) Stock Name : PSPRING Stock Code : 5059

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Profile of Directors

Datuk Azzat Bin Kamaludin

Mr Mah Siew Chean

Prof. Emeritus Dato’ Dr. Lian Chin Boon

Dato’ Dr Hj Shahir bin Nasir

Mr Leong Chew MengTan Sri Datuk Seri Abu Sahid Bin Mohamed

Cik Ruthlene Binti Abu Sahid

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Profile of Directors (Cont’d)


Malaysian aged 64, was appointed to the Board of Directors of Pulai Springs Berhad as a Non-Independent Non-Executive Chairman on 24 September 2002 and later re-designated to an Independent Non-Executive Chairman on 27 November 2007. He is also the Chairman of the Remuneration and Nomination Committees.

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

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

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

Dato’ Dr Hj. Shahir bin Nasir

Malaysian aged 63, was appointed to the Board of Directors of Pulai Springs Berhad as an Independent Non-Executive Director on 24 September 2002. He is also a member of Audit, Remuneration and Nomination Commitees.

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

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

Mr Mah Siew Chean

Malaysian, aged 33, was appointed an Executive Director of Pulai Springs Berhad on 12 January 2007.

He graduated with a Bachelor of Arts Degree from University of Sydney in 1999. From there, he joined the Hydro Majestic Hotel Blue Mountains as a Duty Manager. In 2000, he joined Commonwealth Securities as a non-advisory stock broker. From 2001 to 2002, Mr Mah was appointed as General Manager of a 120 bedroom hotel in Sydney, Australia. From 2002 to 2003, he relocated to Shanghai, China to expand his company’s portfolio. In 2004, he relocated to Kunming China where he was appointed as managing director of a hotel. Currently, Mr Mah is the executive director of his family’s group of companies which include the Mercure Majestic Hotel in Kunming and The Hydro Hotel in Penang.

Mr Leong Chew Meng

Malaysian aged 54, was appointed to the Board of Directors of Pulai Springs Berhad as an Independent Non-Executive Director on 8 December 2006. He is also Chairman of the Audit Committee and Member of Nomination Committee.

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

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

Prof. Emeritus Dato’ Dr Lian Chin Boon

Malaysian aged 62, was appointed to the Board of Directors of Pulai Springs Berhad as an Independent Non-Executive Director on 6 December 2006. He was later redesignated as a Non-Independent Non-Executive Director on 9 February 2007.

He graduated with Bachelor of Dental Surgery (BDS) from Gujerat University in 1971. He obtained his post-graduate Fellowship in Dental Surgery from the Royal College of Physicians & Surgeon of Glasgow, Scotland (FDSRCPS) in 1979. Dato’ Lian was formerly a Professor of Oral & Maxillofacial Surgery in University Malaya, a position he held from 1991 until his retirement in 2004.

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He was conferred the Darjah Dato’ Padila Mahkota Perak (DPMP) in 1997 and Professor Emeritus in year 2008. He has also been conferred many fellowships and holds positions in numerous associations and organisations. During his career, he has delivered numerous lectures at local and international conferences as well as published many articles in local and international academic and professional journals and undertaken projects and research. Presently, Prof. Emeritus Dato’ Lian is a Director of Tokio Marine Insurans (Malaysia) Berhad.

Cik Ruthlene binti Abu Sahid

Malaysian aged 33, was appointed to the Board of Directors of Pulai Springs Berhad as a Non-Independent Non-Executive Director on 26 September 2003. She is also a member of the Audit Committee. She graduated with a Bachelor of Business Administration in Finance (Honours) and a Bachelor in Business Administrations in International Business (Honours) from George Washington University, United States of America.

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

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

Tan Sri Datuk Seri Abu Sahid Bin Mohamed

Malaysian, aged 57 was appointed as an Alternate Director to Cik Ruthlene Binti Abu Sahid, a Non-Independent Non-Executive Director of the Company on 12 January 2007. He is a major shareholder of the Company.

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

Profile of Directors (Cont’d)

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

Tan Sri Datuk Seri Abu Sahid is the managing director of Maju Expressway Sdn Bhd, which has been given the Concession for the new highway directly linking Kuala Lumpur to Putrajaya and subsequently onwards to the Kuala Lumpur International Airport.

Tan Sri Datuk Seri Abu Sahid is the Executive Chairman of Perwaja Holdings Berhad, Ipmuda Berhad and Bright Focus Berhad, Chairman of Kinsteel Bhd and a director of MTH Power Berhad. Tan Sri Datuk Seri Abu Sahid is a major shareholder of Kinsteel Bhd, Perwaja Holdings Berhad and Ipmuda Berhad. Tan Sri Datuk Seri Abu Sahid is also a director of various other private limited companies in Malaysia.

Notes to Directors’ profile

1. Family Relationship

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

2. Conflict of Interest

None of the Directors have any conflict of interest with the Company.

3. Conviction of Offences.

None of the Directors have any conviction offences other than traffic offences if any within the past ten years.

4. Attendances at Board Meeting

The details of the Directors’ attendance at Board Meetings are set out on page 13 of this Annual Report.

5. Shareholdings

The details of the Directors’ interest in the securities of the Company are set out on page 80 of the Annual Report.

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Chairman’s Statement

Dear Valued Shareholders,On behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements of Pulai Springs Berhad for the year ended 31 December 2008.

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Chairman’s Statement (Cont’d)

Group Overview

In 2008, the Malaysian hospitality industry witnessed growth in both room occupancy and average room rate. The concerted efforts by the government to promote domestic tourism and the Iskandar Development has benefited the group’s hotel and resorts in Johor.

The Group’s resort and hotel sector continues to be the main revenue generator. Overall, the financial year 2008 ended with the Group producing a total revenue of RM 85.8 million and a gross profit of RM 38.8 million, as compared to the previous year’s revenue of RM 73.4 million and gross profit of RM33.4 million. However, despite the improvements in both revenue and gross profit, the Group still reported a loss of RM8.1 million after tax, as compared to RM6.5 million loss in 2007. This is mainly attributed to an increase in finance costs by one of its subsidiaries.

Pulai Springs Resort Berhad (“PSRB” )

Pulai Springs Resort Berhad generated a total revenue of RM36.8 million as compared to RM37.5 million in 2007. Gross profit in 2008 was RM15.8 million as compared to RM16.3 million in 2007. The Golf and Hotel Operations generated RM30.7 million as compared to RM28.8 million in the previous year. Despite the improvements in the Resort’s Golf and Hotel operations, PSRB’s lower revenue was mainly attributed to slower sales in its Cinta Ayu Service Apartment.

Weaker demand lead to Cinta Ayu Property Sales achieving sales revenue of RM6.1 million as compared to RM12.7 million in 2007. Operating loss after finance and development costs also increased to RM4.2 million as compared to an operating profit of RM2.6 million in 2007.

Overall for 2008, PSRB generated a RM4.5 million loss before taxation as compared to a loss of RM2.2 million in 2007.

City Centre Hotel Sdn Bhd (for-merly known as Hydro Hotels Sdn Bhd) (“CCH”)

The Novotel Kuala Lumpur City Centre had a significant increase in business and contributed RM26.1 million to the Group as compared to RM20.7 million in 2007. Gross profit also increased from RM12.3 million in 2007 to RM17.4 million in 2008. However, due to an increase in finance cost from RM4.2 million in 2007 to RM10.3 million in 2008 as part of its debt obligation, CCH ultimately ended up with a loss of RM4.3 million as compared to a profit of RM0.6 million in 2007

Bina Resorts Corporation Sdn Bhd

The Pulai Desaru Beach (“TPDB”) generated a revenue of RM11.4 million for the Group, as compared to RM15.4 million in 2007. However, despite the downturn in revenue, the management of TPDB had managed to produce a gross profit of RM4.6 million as compared to RM4.1 million in 2007. Further improvements and costs cutting measures by the management team produced a profit before tax of RM1.04 million as compared to a loss of RM0.23 million in 2007.

Citro Murni Sdn Bhd

Maharani Ayu, the Group’s residential development in Muar witnessed a slight increase in sales revenue, from RM5.2 million in 2007 toRM7.7 million in 2008. However, due to increase in development costs and expenses, the operating profit after finance costs is RM0.3 million as compared to RM0.6 million in 2007.

The project also managed to complete and obtain the Certificate For Occupation (“CFO”) for 92 units of Cluster houses. Total overall sales have since achieved 83% of the total staged development, and we are anticipating the sale of the remaining units by the end of 2009.

Future Prospects

The Group’s revenue has increased year-on-year and the Group will continue to devote substantial efforts in continuing to generate more revenue from its hotel and resort operations and improve its efficiencies so that the profit margins improve.

Moving forward, in light of the uncertainties in the global economic environment in the last quarter of 2008 and in 2009, the Group is more cautious on its expansion plans. It has taken precautionary steps to reduce unnecessary spending in the operations, but will continue to aggressively promote its hotel and resorts through advertisement and tactical campaigns.

On the 23 April 2009, the Company had entered into a Sales and Purchase Agreement to dispose its wholly owned subsidiary company, City Centre Hotel Sdn Bhd to an unrelated party, for a sale consideration of RM47.3 million. The proposed disposal will impact positively on the Group’s net assets.

Acknowledgments

Our achievements for the year would not be possible without the collective efforts of a team of highly dedicated and commitment Board members, Management team and staff.

On behalf of the Board of Directors, we would like to express our gratitude and appreciation to the efforts of the management and staff who has shown commitment, loyalty and contribution to the Group.

Lastly, we would also like to convey our deepest appreciation to our shareholders for their confidence in us, and to our bankers, loyal members and guests and business partners, for their continuous support and understanding.

Datuk Azzat bin KamaludinIndependent Non Executive Chairman

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Statement on Corporate Governance

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

THE BOARD OF DIRECTORS

(a) Composition and Balance

The Company is led by an effective and experienced Board, encompassing of six (6) members, made up of three (3) Independent Non-Executive Directors, two (2) Non-Independent Non-Executive Directors and one (1) Executive Director. This composition satisfies the Bursa Malaysia Securities Berhad Listing Requirements that requires at least 2 Directors or 1/3 of the Board whichever is higher, who are Independent Directors. The profiles of the members of the Board are set out on page 8 to page 9 of this Annual Report.

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

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

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

(b) Duties and Responsibilities

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

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

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Statement on Corporate Governance (Cont’d)

THE BOARD OF DIRECTORS (CONT’D)

(c) Board Meetings

The Board meets quarterly with additional meetings being convened when necessary. In the meetings, the Board will deliberate on and considered matters relating to the Group’s financial performance, significant investments, corporate development, strategic issues and business plan. For the financial year ended 31 December 2008, the Board met 5 times. The meeting attendance records of the Directors who held office are set out below:

Name of Director (Designation) No. of meetings attended

Datuk Azzat bin Kamaludin (Independent Non-Executive Chairman) 5/5

Mr Mah Siew Chean (Executive Director) 5/5

Dato’ Dr Hj Shahir bin Nasir (Independent Non-Executive Director) 4/5

Cik Ruthlene binti Abu Sahid (Non-Independent Non-Executive Director) 4/5

Prof. Emeritus Dato’ Dr. Lian Chin Boon (Non-Independent Non-Executive Director) 5/5

Mr Leong Chew Meng (Independent Non-Executive Director) 5/5

Mr Victor Chua Chee Wey (Non-Independent Non-Executive Director)(Resignation on 2 July 2008) 2/3

Tan Sri Datuk Seri Abu Sahid bin Mohamed 0/5(Alternate Director to Cik Ruthlene binti Abu Sahid)

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

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

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

(d) Appointment and Re-election of Directors

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

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

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THE BOARD OF DIRECTORS (CONT’D)

(e) Directors’ Training

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

1) The Forensic Accounting organised by Malaysian Institute of Accountants on 24 September 2008.

2) The National Accountants Conference 2008 organised by Malaysian Institute of accountants on 25 & 26 November 2008; and

3) The Effective Budgeting Techniques & Strategies Workshop organised by Bridge Knowledge Events on 22 & 23 December 2008.

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

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

BOARD COMMITTEES

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

(a) Nomination Committee

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

i) Chairman

Datuk Azzat bin Kamaludin – Independent Non-Executive Chairman

ii) Members

Dato’ Dr Hj Shahir bin Nasir – Independent Non-Executive Chairman Mr Leong Chew Meng – Independent Non-Executive Director

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

The Nomination Committee did not meet during the year ended 31 December 2008.

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BOARD COMMITTEES (CONT’D)

(b) Remuneration Committee

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

a) Chairman

Datuk Azzat bin Kamaludin – Independent Non-Executive Chairman

b) Members

Dato’ Dr Hj Shahir bin Nasir – Independent Non-Executive Director

Mr Mah Siew Chean – Executive Director

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

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

The Remuneration Committee did not meet during the year ended 31 december 2008.

(c) Audit Committee

The report of the Audit Committee is set out on page 21 to page 24.

DIRECTORS’ REMUNERATION

The details of the remuneration of each Director during the financial year ended 31 December 2008 are as follows:

(a) Total Remuneration

Executive Director Non-Executive Director Total RM RM RM

Basic Salary 300,000 0 300,000Bonuses 0 0 0Fees 30,000 165,000 195,000Attendance fee 3,600 17,400 21,000Others 0 0 0

Total 333,600 182,400 516,000

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(b) Directors’ Remuneration by Bands

The number of Directors whose total remuneration falls within the following bands during the financial year ended 31 December 2008 is as follows:

Directors’ Remuneration Executive Director Non-Executive Director Total

Below RM50,000 - 5 5RM50,001 to RM100,000 - - -RM100,001 to RM150,000 - - - RM150,001 to RM200,000 - - -RM200,001 to RM250,000 - - -RM250,001 to RM300,000 1 - 1RM300,001 to RM350,000 - - -

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

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

SHAREHOLDERS

(a) Shareholders and Investors Relations

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

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

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

(b) Annual General Meeting

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

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ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

In presenting the annual financial statements and quarterly announcements to shareholders, the Directors aim to ensure that the financial statements and quarterly announcements are prepared in accordance with the Companies Act, 1965 and applicable approved accounting standards so as to offer a balanced and comprehensive assessment of the Group’s financial position and prospects. A Responsibility Statement by the Directors is set out on page 24 of this Annual Report.

(b) Internal Control

The Group’s Statement on Internal Control is set out on page 19 to page 20 of the Annual Report to provide an overview on the state of internal control throughout the year. In relation to the internal audit function, having considered the Group’s operational requirements, the Board is of the view that the Group should still continue to outsource its internal audit function to external consultants. Nevertheless, this outsourcing arrangement shall be reviewed annually to ensure that it continues to meet the Group’s requirements. The outsourced internal auditors assist the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal control systems. They report directly to the Audit Committee.

(c) Relationship with Auditors

The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report set out on page 21 to page 24 of the Annual Report. During the financial year ended 31 December 2008, the Audit Committee has met the external auditors two times without Executive Director and management’s present.

OTHER INFORMATION

(a) Shares Buy-Backs

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

(b) Options, Warrants or Convertible Securities

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

(c) Material Contracts involving Directors’ Interests

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

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(d) Related Party Transactions

The details of the transactions with related parties undertaken by the Company during the financial year are disclosed in note 37 on page 67 of the notes to the financial statements.

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

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

(f) Imposition of Sanctions/Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the authorities during the financial year.

(g) Profit Guarantees

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

(h) Utilisation of Proceeds

The Company did not implement any fund raising exercise during the financial year.

(i) Contracts Relating to Loans

There was no contract relating to loans by the Company.

(j) Revaluation of Landed Properties

The Group does not have any revaluation policy on landed properties.

(k) Variation in Results

There was no material variance between the audited results for the financial year ended 31 December 2008 and unaudited results previously released for the financial quarter ended 31 December 2008.

(l) Non-Audit Fees

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


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Statement on Internal Control

INTRODUCTION

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

RESPONSIBILITY

The Board acknowledges its responsibility and re-affirms its commitment in maintaining a sound system of internal control to safeguard shareholders’ investments and the Group’s assets as well as reviewing the adequacy and integrity of the system of internal control. However, as there are inherent limitations in any system of internal control, such systems put into effect by Management can only reduce but cannot eliminate all risks that may impede the achievement of the Group’s business objectives. Therefore, the internal control system can only provide reasonable and not absolute assurance against material misstatement or loss.

KEY FEATURES OF THE GROUP’S INTERNAL CONTROL SYSTEM

1. Control Environment

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

• Periodical and/or Annual Budget: Budgetary control for every operations of the Group, where actual performance is closely monitored against budgets to identify and to address significant variances.

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

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

2. Risk Management Framework

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

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


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Statement on Internal Control (Cont’d)

3. Internal Audit Function

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

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

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

4. Information And Communication

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

5. Monitoring And Review

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

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

• Business Planning and Budgeting Review: The Board plays an active role in discussing and reviewing the business plans, strategies, performance and risks faced by the Group.

6. Conclusion

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

This statement was approved by the Board of Directors on 20 May 2009.

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Audit Committee Report

The Board of Directors of Pulai Springs Berhad (“PSB”) is pleased to present the report of the Audit Committee for the financial year ended 31 December 2008.

COMPOSITION AND MEETINGS

The members of the Audit Committee and details of their attendance at meetings during the financial year ended 31 December 2008 are as follows:

Number of meetings Attendance of meetings

Chairman: Leong Chew Meng (Independent Non-Executive Director) 5 5

Members: Dato’ Dr Hj Shahir bin Nasir (Independent Non-Executive Director) 5 5

Ruthlene binti Abu Sahid (Non-Independent Non-Executive Director) (appointed on 19 February 2008) 5 5

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

TERMS OF REFERENCE OF AUDIT COMMITTEE

The terms of reference of the Committee are as follows:

1. Composition

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

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

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

2. Chairman

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

3. Secretary

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

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

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Audit Committee Report (Cont’d)

4. Meetings

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

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

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

5. Rights

The Audit Committee shall:

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

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

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

Directors resulting in a breach of the listing requirements;(h) the Chairman shall call for a meeting upon the request of the internal auditors and external auditors; and(i) have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall

have the casting vote should a tie arise.

6. Duties

(a) To review with the external auditors on:

• the audit plan, its scope and nature;• the audit report;• the results of their evaluation of the accounting policies and systems of internal accounting controls

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

disputes with Management encountered during the audit.

(b) To do the following, in relation to internal audit function:

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

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

• review any appraisal or assessment of the performance of members of the internal audit function;• approve any appointment or termination of senior staff members of the internal audit function; and• take cognisance of resignations of internal audit staff members and provide the resigning staff member

an opportunity to submit his reasons for resigning.

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

(d) To review with management:

• audit reports and management letter issued by the external auditors and the implementation of audit recommendations;

• interim financial information; and• the assistance given by the officers of the Company to external auditors.

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

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

• changes in or implementation of major accounting policy and practices;• significant and/or unusual issues arising from the audit;• the going concern assumption;• compliance with accounting standards and other legal requirements; and• major judgemental areas.

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

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

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were undertaken by the Audit Committee during the financial year ended 31 December 2008:

(a) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 December 2007, 31 March 2008, 30 June 2008 and 30 September 2008.

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

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

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

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

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INTERNAL AUDIT FUNCTION

The internal Audit function was outsourced to an external consultant, Audex Governance Sdn Bhd, the total cost incurred for the internal audit function in respect of the year ended 31 December was RM 104,500.

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

(a) develop the internal audit plan for year 2008, 2009 and 2010;

(b) execution of the approved internal audit plan;

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

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

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

The Directors acknowledge their responsibility for ensuring that the financial statements of the Group are drawn up in accordance with applicable approved accounting standards in Malaysia and the provision of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2008 and of the results and cash flows of the Company and the Group for the financial year ended on that date.

In preparing the financial statements of the Company and the Group for the year ended 31 December 2008, the Directors have:

• Ensured that relevant and appropriate accounting policies are consistently applied and that these policies are in accordance with applicable approved accounting standards.

• Made judgments and estimates that are reasonable and prudent; and

• Used the going concern basis for the preparation of the financial statements.

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

Statement on Directors’ ResponsibilityIn Respect of the Preparation of the Financial Statements

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Corporate Social Responsibility

Pulai Springs Berhad continue to be committed to serve the community and the disadvantaged. The contributions for 2008 from the Group include:

• Ramadan Charity Buffet Dinner for the 45 patients at the Hospital Permai on the 5 September 2008. Hari Raya Packets of RM10 each were presented to each patient, together with a goodies bag each which includes a water tumbler and kurma dates.

• 30 children from Pusat Kebajikan Kalvari Johor celebrated their Christmas in Pulai Springs Resort on 21 December 2008 with the Management staffs of the Resort during the Christmas Charity Night. The Donations and contributions in cash or in kind were collected for the centre and the needy children from the employees, members, hotel guests and patrons during the event.

• A 3 week donation drive from the Novotel Kuala Lumpur City Centre on 14 February 2008, for the Johor Flood Donation with the proceeds going to help the flood victims of Johor.

• A joint organization between Kuala Lumpur City Centre and Pullman Putrajaya for a buka puasa treat for 17 underprivileged children and staff from Kompleks Kebajikan Rukaiyah Amal Bangi on the 10 September 2008.

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Financial Statements

Directors’ Report 27

Statement by Directors 31

Statutory Declaration 31

Auditors’ Report 32

Balance Sheets 34

Income Statements 36

Statements of Changes in Equity 37

Cash Flow Statements 38

Notes to the Financial Statements 40

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The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2008.

PRINCIPAL ACTIVITY

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

RESULTS

THE GROUP THE COMPANY RM RM

Loss for the financial year (8,102,652) (497,825)

DIVIDENDS

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

RESERVES AND PROVISIONS

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

ISSUES OF SHARES AND DEBENTURES

During the financial year,

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

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

OPTIONS GRANTED OVER UNISSUED SHARES

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

BAD AND DOUBTFUL DEBTS

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

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

Directors’ Report

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CURRENT ASSETS

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

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

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities of the Group and of the Company are disclosed in Note 38 to the financial statements. At the date of this report, there does not exist:-

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

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

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

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

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

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

Directors’ Report (Cont’d)

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DIRECTORS

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

PROF. EMERITUS DATO’ DR LIAN CHIN BOON

DATO’ DR. HJ. SHAHIR BIN NASIR

RUTHLENE BINTI ABU SAHID

LEONG CHEW MENG

DATUK AZZAT BIN KAMALUDIN

MAH SIEW CHEAN

TAN SRI ABU SAHID BIN MOHAMED (ALTERNATE TO RUTHLENE BINTI ABU SAHID)

VICTOR CHUA CHEE WEY (RESIGNED ON 2 JULY 2008)

DIRECTORS’ INTERESTS

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

NUMBER OF ORDINARY SHARES OF RM1 EACH AT AT 1.1.2008 BOUGHT SOLD 31.12.2008

DIRECT INTERESTS

DATUK AZZAT BIN KAMALUDIN 767,338 - (17,000) 750,338

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

TAN SRI ABU SAHID BIN MOHAMED 18,951,000 74,200 - 19,025,200

INDIRECT INTERESTS

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

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

(I) Indirect interest through Sepenah Emas (M) Sdn. Bhd. by virture of Section 6A of the Companies Act 1965 in Malaysia.

(II) Indirect interest by virtue of family relationship.

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

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


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DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Group and of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with a shareholder as disclosed in Note 37 to the financial statements.

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

SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

The significant event subsequent to the balance sheet date is disclosed in Note 43 to the financial statements.

AUDITORS

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 29 APRIL 2009

Mah Siew Chean



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We, Mah Siew Chean and Datuk Azzat Bin Kamaludin, being two of the directors of Pulai Springs Berhad, state that, in the opinion of the directors, the financial statements set out on pages 34 to 73 are drawn up in accordance with Financial Reporting Standards and the provisions of the Companies Act 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and the Company at 31 December 2008 and of their results and cash flows for the financial year ended on that date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 29 APRIL 2009

Mah Siew Chean Datuk Azzat Bin Kamaludin

Statement By Directors

I, Charlie Lim, I/C No. 600703-04-5301, being the officer primarily responsible for the financial management of Pulai Springs Berhad, do solemnly and sincerely declare that the financial statements set out on pages 34 to 73 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 byCharlie Lim, I/C No. 600703-04-5301,at Kuala Lumpur in the Federal Territoryon this 29 April 2009

Charlie Lim

Before me

Datin Hajah Raihela WanchikNo. W-275, Commissioner for OathsB-16-15, Block B, Tingkat 16, Unit-5,Megan Avenue II,12, Jalan Yap Kwan Seng,50450 Kuala Lumpur.

Statutory Declaration

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REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Pulai Springs Berhad, which comprise the balance sheets as at 31 December 2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 34 to 73.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2008 and of their financial performance and cash flows for the financial year then ended.

Independent Auditors’ Report To the Members of Pulai Springs Berhad

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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of the subsidiaries of which we have not acted as auditors, which are indicated in Note 6 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

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

Kuala Lumpur29 April 2009

Independent Auditors’ Report (Cont’d)

To the Members of Pulai Springs Berhad

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34

THE GROUP THE COMPANY

2008 2007 2008 2007 NOTE RM RM RM RM

ASSETS

NON-CURRENT ASSETS

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

Property, plant and equipment 7 298,352,062 298,546,136 - -

Prepaid land lease payments 8 1,705,125 1,759,327 - -

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

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

303,861,106 304,109,382 148,264,940 148,264,940

CURRENT ASSETS

Inventories 11 36,594,127 36,457,072 - -

Property development costs 12 10,314,588 19,125,378 - -

Trade receivables 13 10,651,357 6,456,295 - -

Other receivables, deposits and prepayments 14 2,673,521 3,472,717 1,524 -

Amount owing by subsidiaries 9 - - 9,415,757 9,415,757

Amount owing by maintenance account 15 186,575 - - -

Tax recoverable 18,000 496 - -

Fixed deposits with licensed banks 16 750,021 2,438,397 - -

Cash and bank balances 6,875,351 5,632,634 117 24,364

68,063,540 73,582,989 9,417,398 9,440,121

TOTAL ASSETS 371,924,646 377,692,371 157,682,338 157,705,061

Balance SheetsAs at 31 December 2008

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2008 2007 2008 2007 NOTE RM RM RM RM

EQUITY AND LIABILITIES

EQUITY

Share capital 17 105,000,000 105,000,000 105,000,000 105,000,000

Share premium 18 23,222,612 23,222,612 23,222,612 23,222,612

Reserve 19 (2,943,399) 5,159,253 15,801,426 16,299,251

SHAREHOLDERS’ EQUITY 125,279,213 133,381,865 144,024,038 144,521,863

NON-CURRENT LIABILITIES

Long-term borrowings 20 59,368,426 53,937,468 - -

Deferred taxation 23 632,906 632,906 - -

60,001,332 54,570,374 - -

CURRENT LIABILITIES

Trade payables 24 3,013,478 5,607,082 - -

Other payables and accruals 25 87,161,925 87,808,799 234,089 75,798

Amount owing to directors 26 353,000 312,000 353,000 312,000

Amount owing to subsidiaries 9 - - 13,069,611 12,793,800

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

Short-term borrowings 27 76,236,513 78,532,932 - -

Bank overdrafts 28 3,482,184 929,318 - -

186,644,101 189,740,132 13,658,300 13,183,198

TOTAL LIABILITIES 246,645,433 244,310,506 13,658,300 13,183,198

TOTAL EQUITY AND LIABILITIES 371,924,646 377,692,371 157,682,338 157,705,061

NET ASSETS PER SHARE (SEN) 29 119 127

Balance Sheets (Cont’d)

As at 31 December 2008

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2008 2007 2008 2007 NOTE RM RM RM RM

REVENUE 30 85,815,166 73,476,200 - -

COST OF SALES (46,989,410) (39,995,185) - -

GROSS PROFIT 38,825,756 33,481,015 - -

OTHER INCOME 1,704,637 854,452 - 4,597

40,530,393 34,335,467 - 4,597

EXPENSES:-

ADMINISTRATIVE EXPENSES (17,901,890) (17,541,849) (497,825) (589,860)

FINANCE COSTS (17,244,986) (10,483,205) - -

HOUSEKEEPING EXPENSES (483,616) (445,500) - -

MAINTENANCE EXPENSES (973,149) (1,334,938) - -

MARKETING EXPENSES (3,651,840) (3,348,100) - -

OTHER EXPENSES (7,170,313) (6,759,545) - -

PERSONNEL EXPENSES (1,068,967) (803,090) - -

(48,494,761) (40,716,227) (497,825) (589,860)

LOSS BEFORE TAXATION 31 (7,964,368) (6,380,760) (497,825) (585,263)

INCOME TAX EXPENSE 32 (138,284) (153,000) - -

LOSS AFTER TAXATION (8,102,652) (6,533,760) (497,825) (585,263)

ATTRIBUTABLE TO:

Equity holders of the Company (8,102,652) (6,533,760) (497,825) (585,263)

LOSS PER SHARE (SEN):

- Basic 33 (7.72) (6.22)

- Diluted N/A N/A

Income StatementsFor the Financial Year Ended 31 December 2008

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ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY RETAINED EXCHANGE PROFITS/ SHARE SHARE TRANSLATION ACCUMULATED CAPITAL PREMIUM RESERVE LOSS TOTAL RM RM RM RM RMTHE GROUP

Balance at 1.1.2007 105,000,000 23,222,612 7,792 11,685,221 139,915,625

Loss after taxation - - - (6,533,760) (6,533,760)

Balance at 31.12.2007/ 1.1.2008 105,000,000 23,222,612 7,792 5,151,461 133,381,865

Loss after taxation - - - (8,102,652) (8,102,652)

Balance at 31.12.2008 105,000,000 23,222,612 7,792 (2,951,191) 125,279,213

ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY SHARE SHARE CAPITAL ACCUMULATED CAPITAL PREMIUM RESERVE LOSSES TOTAL RM RM RM RM RM

THE COMPANY

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

Loss for the financial year - - - (585,263) (585,263)

Balance at 31.12.2007/1.1.2008 105,000,000 23,222,612 18,069,098 (1,769,847) 144,521,863

Loss for the financial year - - - (497,825) (497,825)

Balance at 31.12.2008 105,000,000 23,222,612 18,069,098 (2,267,672) 144,024,038

Statements of Changes in EquityFor the Financial Year Ended 31 December 2008

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2008 2007 2008 2007 NOTE RM RM RM RM

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

Loss before taxation (7,964,368) (6,380,760) (497,825) (585,263)

Adjustments for:-

Allowance for doubtful debts 347,310 475,034 - -

Amortisation of prepaid land lease payments 54,202 54,204 -

Depreciation of property, plant and equipment 7,362,183 7,013,305 - -

Equipment written off 15,242 106,620 - -

Interest expense 16,919,862 10,191,798 - -

Provision for liquidated ascertained damages 552,719 - - -

Interest income (46,549) (309,845) - -

Gain on disposal of plant and equipment (123,138) (99,868) - -

Unrealised gain on foreign exchange (14,812) (9,868) - -

Writeback of allowance for doubtful debts (94,694) (214,799) - -

Operating profit/(loss) before working capital changes 17,007,957 10,825,821 (497,825) (585,263)

Increase in inventories (137,055) (35,287,798) - -

Decrease/(Increase) in property development costs 8,810,790 (5,061,475) - -

(Increase)/Decrease in trade

and other receivables (3,778,656) (3,389,614) (1,524) -

Increase in maintenance account (186,575) - - -

(Decrease)/Increase in trade and other payables (3,785,405) 22,922,045 158,291 60,798

CASH FROM/(FOR) OPERATIONS 17,931,056 (9,991,021) (341,058) (524,465)

Interest paid (16,919,862) (10,191,798) - -

Tax paid (171,594) 86,976 - -

NET CASH FROM/(FOR) OPERATING ACTIVITIES CARRIED FORWARD 839,600 (20,095,843) (341,058) (524,465)

Cash Flow StatementsFor the Financial Year Ended 31 December 2008

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2008 2007 2008 2007 NOTE RM RM RM RM

NET CASH FROM/(FOR) OPERATING ACTIVITIES BROUGHT FORWARD 839,600 (20,095,843) (341,058) (524,465)

CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES

Advances from subsidiaries - - - 15,413,584

Interest received 46,549 309,845 - -

Purchase of property, plant and equipment 34 (4,706,611) (6,304,242) - -

Proceeds from disposal of plant and equipment 139,125 355,211 - -

NET CASH (FOR)/FROM INVESTING ACTIVITIES (4,520,937) (5,639,186) - 15,413,584

CASH FLOWS FROM/(FOR) FINANCING ACTIVITIES

Advances from subsidiaries - - 275,811 -

Advances from/(Repayment to) directors 41,000 (39,000) 41,000 (39,000)

Repayment of term loans (2,571,260) (50,789,981) - (15,008,000)

Net repayment of hire purchase obligations (2,786,928) (734,742) - -

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

NET CASH FROM/(FOR) FINANCING ACTIVITIES 682,812 24,936,277 316,811 (15,047,000)

NET DECREASE IN CASH AND CASH EQUIVALENTS (2,998,525) (798,752) (24,247) (157,881)

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

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 35 4,143,188 7,141,713 117 24,364

Cash Flow Statements (Cont’d)


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1. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Malaysian Companies Act 1965. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:-

Registered office : Level 18, MCB Plaza, Changkat Raja Chulan, 50200 Kuala Lumpur.

Principal place of business : 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of directors dated 29 April 2009.

2. PRINCIPAL ACTIVITY

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

3. FINANCIAL RISK MANAGEMENT POLICIES

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

(a) Market Risk

(i) Foreign Currency Risk

The foreign currency risk of the Company arises from subsidiaries operating in a foreign country, as well as local operations, which generate revenue and incur costs denominated in foreign currencies.

It manages its foreign exchange exposure by a policy of matching as far as possible receipts and payments in each individual currency.

(ii) Interest Rate Risk

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

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

(iii) Price Risk

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

Notes to the Financial StatementsFor the Financial Year Ended 31 December 2008

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3. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(b) Credit Risk

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

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

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

(c) Liquidity and Cash Flow Risk

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

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

4. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases or valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial Reporting Standards (“FRS”) and the Companies Act 1965 in Malaysia.

(a) During the current financial year, the Group has adopted the following:

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

FRS 107 Cash Flow Statements

FRS 111 Construction Contracts

FRS 112 Income Taxes

FRS 118 Revenue

FRS 120 Accounting for Government Grants and Disclosure of Government Assistance

FRS 134 Interim Financial Reporting

FRS 137 Provisions, Contingent Liabilities and Contingent Assets

FRS 111 and FRS 120 are not relevant to the Group’s operations. The adoption of the other standards did not have material impact on the form and content of disclosures presented in the financial statements.

(ii) Amendment to FRS 121 - The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign Operation has been issued and is effective for financial periods beginning on or after 1 July 2007.

The adoption of the standard did not have any material impact on the form and content of disclosures presented in the financial statements.

Notes to the Financial Statements (Cont’d)


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4. BASIS OF PREPARATION (CONT’D)

(iii) IC Interpretations issued and effective for financial periods beginning on or after 1 July 2007:

IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments

IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

IC Interpretation 6 Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment

IC Interpretation 7 Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economies

IC Interpretation 8 Scope of FRS 2

The above IC Interpretations are not relevant to the Group’s operations.

(b) The Group has not adopted the following FRSs and IC Interpretations that have been issued as at the date of authorisation of these financial statements but are not yet effective for the Group:

(i) FRS issued and effective for financial periods beginning on or after 1 July 2009:

FRS 8 Operating Segments

FRS 8 replaces FRS 1142004 Segment Reporting and requires a “management approach”, under which segment information is presented on the same basis as that used for internal reporting purposes. The adoption of this standard only impacts the form and content of disclosures presented in the financial statements of the Group. This FRS is expected to have no material impact on the financial statements of the Group upon its initial application.

(ii) FRSs issued and effective for financial periods beginning on or after 1 January 2010:

FRS 4 Insurance Contracts

FRS 7 Financial Instruments: Disclosures

FRS 139 Financial Instruments: Recognition and Measurement

The Group considers financial guarantee contracts entered to be insurance arrangements and accounts for them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability until such a time as it becomes probable that the Group will be required to make a payment under the guarantee. The adoption of FRS 4 is expected to have no material impact on the financial statements of the Group.

The possible impacts of FRS 7 and FRS 139 on the financial statements upon their initial applications are not disclosed by virtue of the exemptions given in these standards.

(iii) IC Interpretations issued and effective for financial periods beginning on or after 1 January 2010:

IC Interpretation 9 Reassessment of Embedded Derivatives

IC Interpretation 10 Interim Financial Reporting and Impairment

IC Interpretation 9 is not relevant to the Group’s operations. IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill and investments in equity instruments and in financial assets carried at cost to be reversed at a subsequent balance sheet date. This interpretation is expected to have no material impact on the financial statements of the Group upon its initial application.



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5. SIGNIFICANT ACCOUNTING POLICIES

(a) Critical Accounting Estimates And Judgements

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

(i) Depreciation of Property, Plant and Equipment

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

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

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

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimates. The Company recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

(iii) Impairment of Assets

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

(iv) Property Development

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

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



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5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

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

(v) Allowance for Doubtful Debts of Receivables

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

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

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

(vii) Allowance for Inventories

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

(viii) Revaluation of Properties

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

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

(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 December 2008.

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

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



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(b) Basis of Consolidation (Cont’d)

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

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

(c) Financial Instruments

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

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

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

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

(d) Functional and Foreign Currency

(i) Functional and Presentation Currency

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

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

(ii) Transactions and Balances

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



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

(iii) Foreign Operations

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

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

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

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

(e) Goodwill on Consolidation

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

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

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

(f) Investments in Subsidiaries

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

(g) Property, Plant and Equipment

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

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

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



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

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

Buildings and hostel 2%

Equipment 10%

Furniture and fittings 10%

Machinery 20%

Motor vehicles 20%

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

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

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

Fully depreciated plant and equipment with a total cost of RM24,046,335 (2007 - RM20,261,556) are retained in the balance sheet of the Group until they are no longer in use.

(h) Impairment of Assets

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

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

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



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(i) Prepaid Land Lease Payments

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

(j) Assets under Hire Purchase

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

(k) Property Development Costs

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

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

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

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

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

(l) Revaluation Reserve

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

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



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(m) Inventories

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

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

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

(n) Receivables

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

(o) Payables

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

(p) Income Taxes

Income taxes for the year comprise current and deferred tax.

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

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

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

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the balance sheet date.

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



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(q) Interest-bearing Borrowings

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

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

(r) Equity Instruments

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

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

(s) Segmental Information

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

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

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

(t) Cash and Cash Equivalents

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

(u) Employee Benefits

(i) Short-term Benefits

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

(ii) Defined Contribution Plans

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



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(v) Related Parties

A party is considered to be related to an entity if:-

(i) directly, or indirectly through one or more intermediaries, the party:-• controls, is controlled by, or is under common control with, the entity (this includes parents,

subsidiaries and fellow subsidiaries);• has an interest in the entity that gives it significant influence over the entity; or• has joint control over the entity;

(ii) the party is an associate of the entity;(iii) the party is a joint venture in which the entity is a venturer;(iv) the party is a member of the key management personnel of the entity or its parent;(v) the party is a close member of the family of any individual referred to in (i) or (iv);(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which

significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

(w) Revenue Recognition

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

Licence Fee

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

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

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

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

Subscription Fee

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

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



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(w) Revenue Recognition (Cont’d)

Property Development

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

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

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

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

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

Others

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

(x) Contingent Liabilities

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

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

(y) Progress Billings/Accrued Billings

In respect of progress billings:-

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

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



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6. INVESTMENTS IN SUBSIDIARIES

THE COMPANY

2008 2007 RM RM

Unquoted shares, at cost 130,195,842 130,195,842

The details of the subsidiaries are as follows:-

Country Of Effective EquityName of Company Incorporation Interest Principal Activities 2008 2007

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

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

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

Pulai Springs Management Malaysia 100% 100% Provision of property Services Sdn. Bhd. management service.

PSB Resorts Pte. Ltd. * The Republic 100% 100% Sales and marketing agent. of Singapore

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

Pulai Springs Property Services Malaysia 100% 100% Provision of Sdn. Bhd. # management services.

City Centre Hotel Sdn.Bhd. Malaysia 100% 100% Proprietor and operator of a hotel. (Formerly known as Hydro Hotels Sdn. Bhd.)

* audited by another firm of auditors.# subsidiary of Pulai Springs Resort Berhad.



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7.

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Bui

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155,

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

AT AT ACCUMULATED NET BOOK COST VALUATION DEPRECIATION VALUEAT 31.12.2008 RM RM RM RM

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

Buildings 188,480,720 - (34,588,813) 153,891,907

Golf course and development expenditure 51,133,143 - - 51,133,143

Others * 62,551,551 - (36,498,771) 26,052,780

349,868,977 19,570,669 (71,087,584) 298,352,062

AT 31.12.2007

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

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

Golf course and development expenditure 50,591,225 - - 50,591,225

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

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

As at 31 December 2008, had the revalued freehold land been carried at cost, the carrying amount of freehold land would be RM 31,924,763 (2007 – RM31,924,763).

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

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

As at the balance sheet date, the following assets were acquired under hire purchase terms:-

THE GROUP

2008 2007 RM RM

Carrying amount:-

Golf course machinery and equipment 252,463 151,848

Buggies 3,067,357 1,090,534

Motor vehicles 406,073 223,495

Equipments 158,129 -

3,884,022 1,465,877

Property, plant and equipment of the Group with aggregate carrying amount of RM196,224,023 (2007 - RM286,703,446) have been charged as security for banking facilities (Note 22 and Note 28).



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8. PREPAID LAND LEASE PAYMENTS

THE GROUP

2008 2007 RM RM

At 1.1.2008/2007 1,759,327 1,813,531

Amortisation for the financial year (54,202) (54,204)

At 31.12.2008/2007 1,705,125 1,759,327

The prepaid land lease payments relate to a piece of leasehold land which has been charged to financial institutions as security for banking facilities granted to the Group (Note 22 and Note 28).

9. AMOUNT OWING BY/(TO) SUBSIDIARIES

THE COMPANY

2008 2007 RM RM

Amount owing by:-

Non-trade balances 27,484,855 27,484,855

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

Portion repayable within twelve months 9,415,757 9,415,757

Amount owing to:-

Non-trade payables 13,069,611 12,793,800

The amounts owing are non-trade in nature, unsecured, interest-free and repayable.

10. GOODWILL ON CONSOLIDATION

Goodwill on consolidation arose from the acquisition of City Centre Hotel Sdn. Bhd. (formerly known as Hydro Hotels Sdn. Bhd.) during 2007.

Goodwill is stated at cost and reviewed for impairment annually.

During the financial year, the Group assessed the recoverable amount of goodwill based on the fair value of City Centre Hotel Sdn. Bhd., less cost to sell, and determined that goodwill is not impaired.



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11. INVENTORIES

THE GROUP

2008 2007 RM RM

At Cost:-

Cinta Ayu Resort Apartments (Note 22) 32,535,136 35,390,837

Fertilisers and chemicals 106,669 73,176

Food and beverages 622,541 540,444

Maharani Ayu – cluster houses (Note 12) 2,778,540 -

Others 360,896 288,088

Pro-shop 38,750 32,344

Room supplies 101,695 90,053

Trading stocks 49,900 42,130

36,594,127 36,457,072

None of the inventories are carried at net realisable value.

12. PROPERTY DEVELOPMENT COSTS

THE GROUP

2008 2007 RM RM

At 1.1.2008/2007

- freehold land, at cost 6,818,570 6,818,570

- development costs 21,471,842 11,167,842

28,290,412 17,986,412

Costs incurred during the financial year:

- development costs 2,263,177 10,304,000

At 31.12.2008/2007 30,553,589 28,290,412

Costs recognised as an expense in the income statement:

- brought forward (8,853,743) (4,643,068)

- current year (6,885,898) (4,210,657)

(15,739,641) (8,853,745)

Cumulative revenue recognised in the income statement 18,601,714 10,808,635

Cumulative billings to purchasers (20,322,534) (11,119,924)

Progress billings (1,720,820) (311,289)

Less: Transfer to:

- inventories (Note 11) (2,778,540) -

10,314,588 19,125,378



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13. TRADE RECEIVABLES

THE GROUP

2008 2007 RM RM

Trade receivables 11,619,677 7,171,999

Allowance for doubtful debts:-

At 1.1.2008/2007 (715,704) (455,469)

Addition (347,310) (475,034)

Writeback 94,694 214,799

At 31.12.2008/2007 (968,320) (715,704)

10,651,357 6,456,295

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

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

2008 2007 RM RM

Singapore Dollar 409,680 156,071

14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Included in other receivables, deposits and prepayments of the Group is an amount of RM68,702 (2007 – RM554,589) which is held in a sinking fund account pursuant to the trust deed entered into between a subsidiary and the members of Pulai Springs Country Club (“PSCC”) . Under the provisions of the trust deed, the sinking fund is set up for the purpose of covering the costs of periodic major repairs or replacements of the facilities of PSCC operated by the subsidiary.

15. AMOUNT OWING BY MAINTENANCE ACCOUNT

Amount owing by maintenance account represents periodic maintenance charges receivables from the owners of Cinta Ayu Resort Apartment which are required to be maintained under the Building and Common Property (Maintenance and Management) Act 2007.

16. FIXED DEPOSITS WITH LICENSED BANKS

As at balance sheet date,

(i) the weighted average effective interest rate of the fixed deposits at the balance sheet date was 3.43% (2007 - 3.43%) per annum;

(ii) the average maturity period is 30 days (2007 - 30 days); and

(iii) certain fixed deposits totalling to RM750,021 (2007 – RM720,142) were pledged to the bank for banking facilities granted to the Group (Note 28).



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17. SHARE CAPITAL

THE GROUP/ THE COMPANY THE GROUP/ THE COMPANY

2008 2007 2008 2007 RM RM RM RM NUMBER OF SHARES

ORDINARY SHARES OFRM1 Each:-

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

ISSUED AND FULLYPAID-UP 105,000,000 105,000,000 105,000,000 105,000,000

18. SHARE PREMIUM

The share premium is not distributable by way of dividends.

19. RESERVE

THE GROUP/ THE COMPANY THE GROUP/ THE COMPANY

2008 2007 2008 2007 RM RM RM RM

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

Exhange translation reserve 7,792 7,792 - -

(Accumulated losses)/retained profits (2,951,191) 5,151,461 (2,267,672) (1,769,847)

(2,943,399) 5,159,253 15,801,426 16,299,251

The capital reserve is not distributable as cash dividends.

The exchange translation reserve arose from the translation of the financial statements of the foreign subsidiary and is not distributable by way of dividends.

20. LONG-TERM BORROWINGS

THE GROUP

2008 2007 RM RM

Hire purchase payables (Note 21) 2,318,426 1,037,468

Term loan (Note 22) 57,050,000 52,900,000

59,368,426 53,937,468



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21. HIRE PURCHASE PAYABLES

THE GROUP

2008 2007 RM RM

Minimum hire purchase payments:

- not later than one year 1,446,568 611,526

- later than one year but not later than five years 2,325,394 1,129,779

3,771,962 1,741,305

Less: Future finance charges (381,910) (199,914)

Present value of hire purchase payables 3,390,052 1,541,391

The net hire purchase payables are repayable as follows:-

Non-current (Note 20):

- later than one year but not later than five years 2,318,426 1,037,468

Current (Note 27):

- not later than one year 1,071,626 503,923

3,390,052 1,541,391

The effective interest rates for hire purchase payables of the Group range from 4.3% to 11.0% (2007 - 4.3% to 9.1%) per annum.

22. TERM LOANS

THE GROUP

2008 2007 RM RM

Non-current (Note 20):

- repayable between two to five years 57,050,000 12,200,000

- repayable after five years - 40,700,000

57,050,000 52,900,000

Current (Note 27):

- repayable within one year 75,164,887 78,029,009

132,214,887 130,929,009



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22. TERM LOANS (CONT’D)

At the balance sheet date, the weighted average effective interest rate of the term loans was 8.2% (2007 - 7.9%) per annum. The term loans are secured by way of:-

(a) a fixed charge on the property, plant and equipment of the Group (Note7);

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

(c) all unsold units of Cinta Ayu Resort Apartments (Note 11);

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

(e) a corporate guarantee of the Company.

23. DEFERRED TAXATION

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

24. TRADE PAYABLES

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

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

2008 2007 RM RM

US Dollar 266,784 247,516

Singapore Dollar 6,346 4,109

25. OTHER PAYABLES AND ACCRUALS

Included in other payables and accruals at the balance sheet date are the following:-

(i) RM55,935,309 (2007 – RM55,398,121) owing to a company in which a director has substantial financial interests.

The Group entered into an agreement with the aforementioned creditor on 17 September 2008 to repay the creditor the principal amount due together with the interest of 6% per annum, not later than 4 November 2008. The parties involved have subsequently agreed to defer the repayment by another year.

The details are disclosed in Note 37o the financial statements

(ii) Provision of liquidated ascertain damages of RM552,719.

26. AMOUNT OWING TO DIRECTORS

The amount owing is unsecured, interest-free and repayable on demand.



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27. SHORT-TERM BORROWINGS THE GROUP

2008 2007 RM RM

Hire purchase payables (Note 21) 1,071,626 503,923

Term loan (Note 22) 75,164,887 78,029,009

76,236,513 78,532,932

28. BANK OVERDRAFTS

At the balance sheet date, the bank overdrafts bore an weighted average effective interest rate of 8.50% (2007 - 8.25%) per annum. The bank overdrafts are secured by way of :-

(i) an “all monies” facilities agreement stamped to the amount of facilities advanced;

(ii) a legal charge over the freehold land of the Group (Note 7);

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

(iv) a corporate guarantee from the Company.

29. NET ASSETS PER SHARE

The net assets per share is calculated based on the net assets value of RM125,279,213 (2007 - RM133,381,865) divided by the total ordinary shares of RM1 each in issue at the balance sheet date of 105,000,000 (2007 - 105,000,000).

30. REVENUE THE GROUP

2008 2007 RM RM

HOSPITALITY:

- annual license fee 154,322 48,003

- entrance fee - 48,800

- food and beverages 20,938,320 18,052,197

- gift shop 233,965 214,034

- golfing 3,953,189 3,208,784

- membership income 135,894 92,247

- others 5,642,757 1,007,100

- room income 32,129,247 21,866,180

- service charge 90,977 1,838,384

- sports and recreation 1,111,299 1,092,194

- subscription fee 6,911,783 7,622,384

- transportation 663,011 493,785

71,964,764 55,584,092

PROPERTY DEVELOPMENT 13,850,402 17,892,108

85,815,166 73,476,200



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31. LOSS BEFORE TAXATION


2008 2007 2008 2007 RM RM RM RM

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

Allowance for doubtful debts:

- for the financial year 347,310 475,034 - -

- writeback (94,694) (214,799) - -

Amortisation of prepaid land lease payments 54,202 54,204 - -

Audit fee

- for the financial year 86,000 99,200 17,000 15,000

- underprovision in the previous financial year (2,748) - - -

Depreciation of property, plant and equipment 7,362,183 7,013,305 - -

Directors’ fee 233,000 314,000 233,000 312,000

Directors’ non-fee emoluments 470,400 400,772 - -

Interest expense 16,919,862 10,191,798 - -

Lease of apartments 285,465 643,093 - -

Plant and equipment written off 15,242 106,620 - -

Provision of liquidated ascertain damages 552,719 - - -

Rental of:

- equipment 142,184 58,600 - -

- machinery 87,404 5,850 - -

- premises 148,058 141,140 - -

Staff costs 19,291,369 14,789,775 - -

Foreign exchange:

- realised gain (109,341) (115,584) - -

- unrealised gain (14,812) (9,868) - -

Gain on disposal of plant and equipment (123,138) (99,868) - -

Interest income (46,549) (309,845) - -



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32. INCOME TAX EXPENSE

THE GROUP

2008 2007 RM RM

Current tax:

- for the current financial year 80,000 153,000

- underprovision in the previous financial years 58,284 -

138,284 153,000

During the current financial year, the statutory tax rate was reduced from 27% to 26%, as announced in the Malaysian Budget 2007.

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


2008 2007 2008 2007 RM RM RM RM

Loss before taxation (7,964,368) (6,380,760) (497,825) (585,263)

Tax at the applicable corporate tax rate of 26% (2007 - 27%) (2,070,736) (1,722,805) (129,434) (158,021)

Tax effects of:

Non-deductible expenses 1,836,488 2,081,686 129,434 158,021

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

Deferred tax assets not recognised during the year 1,047,704 541,515 - -

Utilisation of previously unrecognised deferred tax assets (713,456) (377,839) - -

Underprovision in the previous financial years 58,284 - - -

Differential in tax rates (20,000) (51,396) - -

138,284 153,000 - -

33. LOSS PER SHARE

Loss per share is arrived at by dividing the Group’s loss attributable to shareholders of RM8,102,652 (2007 - RM6,533,760) by the number of ordinary shares in issue of 105,000,000 (2007 - 105,000,000).

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



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34. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

THE GROUP

2008 2007 RM RM

Cost of property, plant and equipment purchased 7,199,338 10,196,826

Amount financed through hire purchase (2,492,727) (3,892,584)

Cash paid for purchase of property, plant and equipment 4,706,611 6,304,242

35. CASH AND CASH EQUIVALENTS

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


2008 2007 2008 2007 RM RM RM RM

Fixed deposits with

licensed banks 750,021 2,438,397 - -

Cash and bank balances 6,875,351 5,632,634 117 24,364

Bank overdraft (3,482,184) (929,318) - -

4,143,188 7,141,713 117 24,364

Included in the cash and bank balances of the Group is RM448,138 (2007 - RM493,210) maintained under the Housing Development Accounts pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966.

36. DIRECTORS’ REMUNERATION

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

DIRECTORS’ NO. OF DIRECTORS’ NO. OF NON-FEE DIRECTORS FEE DIRECTORS EMOLUMENTS RM RM

GROUP

2008

Below RM50,000 6 233,000 - -

RM100,001 – RM150,000 - - 1 134,400

RM300,001 – RM350,000 - - 1 336,000

2007

Below RM50,000 9 314,000 - -

RM100,001 – RM150,000 - - 1 109,643

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



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36. DIRECTORS’ REMUNERATION (CONT’D)

DIRECTORS’ NO. OF DIRECTORS’ NO. OF NON-FEE DIRECTORS FEE DIRECTORS EMOLUMENTS RM RM

COMPANY

2008

Below RM50,000 6 233,000 - -

2007

Below RM50,000 9 312,000 - -

37. SIGNIFICANT RELATED PARTY DISCLOSURES

The balances with related parties are disclosed in Note 9, Note 25 and Note 26 to the financial statements.

In addition to the balances detailed elsewhere in the financial statements, the Group carried out the following transactions with the related parties during the financial year:-

THE GROUP

2008 2007 RM RM

Advances from an entity in which a director has a substantial financial interest: -

At 1.1.2008/1.7.2007 (55,398,121) (55,003,317)

Advances - (394,804)

Repayments 5,808,576 -

Interest charged (6,345,764) -

At 31.12.2008/2007 (Note 25) (55,935,309) (55,398,121)

Key management personnel compensation:-

Salaries and other short-term employee benefits 2,799,556 2,612,518

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



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38. CONTINGENT LIABILITIES


2008 2007 2008 2007 RM RM RM RM

Potential tax liabilities

- Note (i) 6,500,000 6,500,000 - -

Claims for work done

- Note (ii) 13,430,000 13,430,000 - -

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

94,930,000 94,930,000 75,000,000 75,000,000

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

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

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

The additional tax provision and the resulting late payment penalties have not been effected in the financial statements as at 31 December 2008 as the appeal process is ongoing and the next hearing scheduled for May 2008 had been postponed to February 2008 and subsequently to May 2009. The solicitors are of the view that the outcome of the appeal is likely to be favourable.

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

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

Pending the arbitration proceedings, the Court of Appeal had allowed an appeal with costs against the decision of the High Court for refusing the Group interlocutory application for security of costs and the plaintiffs was ordered to deposit a sum of RM250,000 as security for cost of the arbitration.

The plaintiffs have closed their case and the Group is now calling their witnesses. The arbitration proceedings are continuing and the next hearing scheduled for May 2008 had been postponed. The plaintiff has submitted their evidence in November 2008 and the Group will submit their evidence by April/May 2009.

The claim by the third party has not been effected in the financial statements as the directors of the Group are of the opinion that the arbitration proceedings by the third party will not be successful.



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38. CONTINGENT LIABILITIES (CONT’D)

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

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

The High Court has dismissed the claims of both parties and both parties have made an appeal to Court of Appeal.

(c) A third party has initiated arbitration proceedings against a subsidiary claiming a sum of approximately RM1.1 million in respect of work purportedly done for the Group. The Group is disputing the claim and has counterclaimed for approximately RM1.9 million, inter alia, for defective work and costs to complete the third party’s unfinished work and other related damages in respect of the work.

Before the hearing of the arbitration commenced, the Group filed an application for security of costs in the Kuala Lumpur High Court. The Group’s application was dismissed with costs. Thereafter, the Group appealed to the Court of Appeal but which was dismissed with costs in September 2007. The Group has decided not to appeal the Court of Appeal’s decision.

The arbitration proceedings are presently on-going.

The claim by the third party has not been effected in the financial statements as the directors of the Group are of the opinion that the Group is likely to succeed in the arbitration proceedings.

The management has yet to reach an out-of-count settlement with the Claimant.

39. COMMITMENTS

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

(i) Non-cancellable operating lease

THE GROUP

2008 2007 RM RM

Not later than one year 127,802 64,608

Later than one year and not later than five years 120,384 184,992

248,186 249,600



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39. COMMITMENTS (CONT’D)

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

40. FOREIGN EXCHANGE RATE

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

THE GROUP

2008 2007 RM RM

US Dollar 3.34 3.33

Singapore Dollar 2.22 2.29



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41. SEGMENTAL REPORTING

(i) By business segment:-

PROPERTY DEVELOPMENT AND INVESTMENT HOSPITALITY INVESTMENT HOLDING ELIMINATION TOTAL RM RM RM RM RM

THE GROUP

2008

REVENUE

External revenue 71,964,764 13,850,402 - - 85,815,166

RESULTS

Segment results 13,466,891 (4,060,121) (497,825) - 8,908,945

Interest expense (16,919,862)

Interest income 46,549

Loss before taxation (7,964,368)

Taxation (138,284)

Loss after taxation (8,102,652)

OTHER INFORMATION

Segment assets 269,112,651 102,792,353 1,642 - 371,906,646

Total assets# 371,906,646

Segment liabilities 120,233,082 108,795,355 587,089 - 229,615,526

Total liabilities* 229,615,526

Capital expenditure 7,199,338 - - - 7,199,338

Depreciation 7,354,694 7,489 - - 7,362,183

Amortisation of prepaid land lease payments 54,202 - - - 54,202

Provision for liquidated ascertained damages 552,719 - - - 552,719



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41. SEGMENTAL REPORTING (CONT’D)

(i) By business segment:- (Cont’d)

PROPERTY DEVELOPMENT AND INVESTMENT HOSPITALITY INVESTMENT HOLDING ELIMINATION TOTAL RM RM RM RM RM

THE GROUP

2007

REVENUE

External revenue 55,584,092 17,892,108 - - 73,476,200

RESULTS

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

Interest expense (10,191,798)

Interest income 309,845

Loss before taxation (6,380,760)

Taxation (153,000)

Loss after taxation (6,533,760)

OTHER INFORMATION

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

Unallocated assets 476

Total assets# 377,692,371

377,692,371

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

Unallocated liabilities 17,182,907

Total liabilities* 244,310,506

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

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

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

# - Segment assets comprise total current and non-current assets, excluding tax assets.

* - Segment liabilities comprise total current and non-current liabilities, excluding income tax liabilities.



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41. SEGMENTAL REPORTING (CONT’D)

(ii) By geographical market:-

SEGMENT REVENUE SEGMENT ASSETS

2008 2007 2008 2007 RM RM RM RM

Malaysia 85,815,166 73,476,200 371,816,754 377,414,083

Singapore - - 107,892 278,288

85,815,166 73,476,200 371,924,646 377,692,371

42. FAIR VALUES OF FINANCIAL INSTRUMENTS

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

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

(a) Long-Term Bank Loans

The carrying amount approximated the fair value of this instrument. The fair value of the long-term bank loan is determined by discounting the relevant cash flows using current interest rates for similar instruments at the balances sheet date.

(b) Hire Purchase Payables

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

(c) Cash and Cash Equivalents and Other Liquid and Short-Term Receivables/Payables

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



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

(d) Contingent Liabilities

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

THE COMPANY

Nominal Net Amount Fair Value Note RM RM

At 31 December 2008/2007

Potential tax liabilities 38 6,500,000 #

Litigation claim for work done 38 13,430,000 #

Corporate guarantees 38 75,000,000 *

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

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

43. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

The Group had on 23 April 2009 entered into a Sale and Purchase Agreement of Shares for the disposal of 10,000,000 ordinary shares of RM1.00 each, representing the entire issued and paid up share capital in its wholly owned subsidiary, City Centre Hotel Sdn. Bhd. to an unrelated third party, namely, for a total consideration of RM47,300,000.

The disposal of the above is subject to the approval of shareholders of the Company at an extraordinary general meeting to be convened at a later date.



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List of PropertiesAs at 31 December 2008

PTD 63408 HSD 248327PTD 63409 HSD 248328PTD 130053 HSD359875PTD 63417 HSD 248336PTD 63430 HSD 248347Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

PTD 130052 HSD359874Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

PTD 130055 HSD359876PTD 63414 HSD 248333Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

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

Freehold

Freehold

Freehold

Freehold

4,807,054

884,645

169,609

689,538

N/A

11

N/A

N/A

18 hole golf course “Melana Course” (within Pulai Springs Resort, 20 km Jalan Pontian Lama, 81110 Pulai, Johor (PSR))

Pulai Springs Resort Clubhouse Hotel within PSR

Vacant Land approved for workers’ quarters development within PSR

Vacant Land approved for condominium development within PSR

Pulai Springs Resort Berhad (“PSRB”)

PSRB

PSRB

PSRB

17,576,016

Land 3,234,522Building

59,105,323

620,140

2,521,153

26/5/00

26/5/00

26/5/00

9/11/07

Location Tenure Land Area in sq. ft.

Age of Building

Year

Description Registered Owner

NBV as at31/12/2008

Date of Acquisition/

Last Valuation

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List of Properties (Cont’d)


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

PTD 130047 HSD359870PTD 130048 HSD359871PTD 130049 HSD359872Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

PTD 11857 HSD 76690PTD 11858 HSD 76691PTD 11859 HSD 76692Mukim of Pulai, District of Johor Bahru, Johor Darul Takzim

Freehold

Freehold

Freehold

67,238

4,985,498

4,620

N/A

N/A

14

Vacant Land approved for bungalow lot development with PSR

18 hole golf course, “Pulai Course”, within PSR

Double storey terrace house for PSRB staff accommodation at 7,9 and 11, Jalan Meranti 11, Taman Sri Pulai81110 Pulai, Johor Darul Takzim

PSRB

PSRB

PSRB

245,840

18,228,460

282,288

26/5/00

26/5/00

26/5/00


Age of Building

Year


NBV as at31/12/2008


Last Valuation

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PTD 1672 HSD 13065

PTD 1673 HSD 13066

PTD 1674 HSD 13067

PTD 1675 HSD 13068

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

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

99 years leasehold expiring on 6/11/2088

60 years leasehold expiring on 19/12/2055 with possible extension for 35 years

99 years leasehold expiring on 6/11/2088

60 years leasehold expiring on 19/12/2055 with possible extension for 35 years

Freehold

311,631

436,906

276,649

113,308

21,506

N/A

N/A

11

N/A

31 months

Vacant Land

Vacant Land

210 rooms resort hotel

Vacant Land

28 storey hotel building with 5 levels of basement car park

Bina Resort Corporation Sdn Bhd

Lembaga Kemajuan Johor Tenggara (KEJORA)

Bina Resort Corporation Sdn Bhd

Lembaga Kemajuan Johor Tenggara (KEJORA)

City Centre Hotel Sdn Bhd (formerly known as Hydro Hotels Sdn Bhd)

Land1,759,328Building

22,921,727

Land 24,848,100

Building75,327,350

N/A


Age of Building

Year


NBV as at31/12/2008


Last Valuation

List of Properties (Cont’d)


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Statement on ShareholdingsAs at 5 May 2009

Authorised Capital : RM250,000,000.00

Issued and Fully Paid-up Capital : RM105,000,000.00

Class of Shares : Ordinary shares of RM1.00 each

Voting Rights : Every member of the Company, present in person or by proxy, shall have on a show of hands, one (1) vote or on a poll, one (1) vote for each share he holds.

DISTRIBUTION OF SHAREHOLDINGS

No. of % of No. of % ofRange of Shareholdings Holders Holders RM1.00 Shares Issued Capital

1 - 99 49 4.64 178 0.00

100 - 1,000 841 79.72 221,105 0.21

1,001 - 10,000 110 10.43 430,268 0.41

10,001 - 100,000 30 2.84 842,900 0.80

100,001 - 5,249,999 (*) 21 1.99 41,819,572 39.83

5,250,000 and above (**) 4 0.38 61,685,977 58.75

TOTAL 1,055 100.00 105,000,000 100.00

Note: * - Less than 5% of issued holdings

** - 5% and above of issued holdings

THIRTY LARGEST REGISTERED HOLDERS AS AT 5 MAY 2009

% of Issued Name of Holder Holdings Capital

1. OSK Nominees (Tempatan) Sdn Berhad

(Pledged Securities Account for Sepenah Emas (M) Sdn Bhd) 33,600,000 32.00

2. Abu Sahid bin Mohamed 14,674,200 13.98

3. PSC Resort Pte Ltd 8,151,118 7.76

4. HDM Nominees (Asing) Sdn Bhd

(UOB Kay Hian Pte Ltd for PSC Resort Pte Ltd) 5,260,659 5.01


(Pledged Securities Account for Rega Emas (M) Sdn Bhd) 5,205,900 4.96

6. Alliancegroup Nominees (Asing) Sdn Bhd

(Alliance Merchant Nominees (Asing) Sdn Bhd for PSC Resort Pte Ltd) 5,095,000 4.85


(Pledged Securities Account for Cash Deluxe (M) Sdn Bhd) 5,065,400 4.82

8. JF Apex Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Little Equity (M) Sdn Bhd) 5,051,300 4.81

9. Chua Jui Leng 4,510,234 4.30

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Analysis of Shareholdings (Cont’d)

As at 5 May 2009

THIRTY LARGEST REGISTERED HOLDERS AS AT 5 MAY 2009 (CONT’D)

% of Issued Name of Holder Holdings Capital

10. M.I.T Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Abu Sahid bin Mohamed) 4,351,000 4.14

11. JF Apex Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Inrich Nominees (M) Sdn Bhd) 4,200,200 4.00

12. Liew Chiew Hoye 1,500,000 1.43

13. Nescaya Wangi Sdn Bhd 1,211,700 1.15

14. Ruthlene binti Abu Sahid 1,000,000 0.95

15. Azzat bin Kamaludin 750,338 0.71

16. Kenanga Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Nescaya Wangi Sdn Bhd) 635,800 0.61

17. Amsec Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Doreen Chua Mei Yen) 500,000 0.48

18. Amsec Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Jesselyn Chua Mei Yong) 500,000 0.48

19. Tay Moi Huat 497,100 0.47

20. Maharani Consolidated Holdings Sdn Bhd 480,000 0.46

21. MKW Jaya Sdn Bhd 470,000 0.45

22. Liew Chiew Hoye 390,900 0.37

23. Citigroup Nominees (Asing) Sdn Bhd

(CBNY for DFA Emerging Markets Fund) 159,800 0.15

24. T.S.L. Corporation Sdn Bhd 139,900 0.13

25. Bong May Lee 105,000 0.10

26. Lim Khing Seng 91,000 0.09

27. Ching Tong Joy 66,800 0.06

28. Leow Pek Fong @ Liew Pek Fong 60,000 0.06

29. Hoe Woon Keong 50,300 0.05

30. Hoo Kok Yong @ Ho Kok Yong 50,000 0.05

TOTAL 103,823,649 98.88

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Analysis of Shareholdings (Cont’d)

As at 5 May 2009

SUBSTANTIAL SHAREHOLDERS AS AT 5 MAY 2009

According to the Register of Substantial Shareholders required to be kept under Section 69L of the Companies Act, 1965, the following are the substantial shareholders of the Company:

Name of Direct DeemedSubstantial Shareholder Interest % Interest %

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

Mah Siew Chean - - 33,600,0001 32.00

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

Tan Sri Datuk Seri Abu Sahid bin Mohamed 19,025,200 18.12 - -

PSC Corporation Limited - - 13,411,7772 12.77

Rich Life Holdings Pte Ltd - - 13,411,7773 12.77

Hanny Magnetics (B.V.I.) Limited - - 13,411,7774 12.77

Hanny Holdings Limited - - 13,411,7775 12.77

Notes

(1) Deemed interest by virtue of his interest in Sepenah Emas (M) Sdn Bhd.(2) Deemed interest by virtue of its interest in PSC Resort Pte Ltd.(3) Deemed interest by virtue of its interest in PSC Corporation Limited.(4) Deemed interest by virtue of its interest in Rich Life Holdings Pte Ltd.(5) Deemed interest by virtue of its interest in Hanny Magnetics (B.V.I.) Limited.

DIRECTORS’ INTEREST AS AT 5 MAY 2009

According to the Register of Directors’ Shareholdings required to be kept under Section 134 of the Companies Act, 1965 the Directors’ interests in the ordinary share capital of RM1.00 each of the Company are as follows:

Direct DeemedName of Director Interest % Interest %

Datuk Azzat bin Kamaludin 750,338 0.71 - -

Prof. Emeritus Dato’ Dr. Lian Chin Boon - - 20,0001 0.02

Dato’ Dr. Hj. Shahir bin Nasir - - - -

Leong Chew Meng - - - -

Mah Siew Chean - - 33,600,0002 32.00

Ruthlene binti Abu Sahid 1,000,000 0.95 - -

Tan Sri Datuk Seri Abu Sahid bin Mohamed 19,025,200 18.12 - -

(Alternate Director to Ruthlene binti Abu Sahid)

Notes

(1) Deemed Interested by virtue of family relationship.(2) Deemed interest by virtue of his interest in Sepenah Emas (M) Sdn Bhd.

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Proxy Form

*I/We NRIC No. / Company No. (FULL NAME IN BLOCK CAPITALS)

of (FULL ADDRESS)

being a member / members of PULAI SPRINGS BERHAD (514941-K), hereby appoint

NRIC No.(FULL NAME IN BLOCK CAPITALS)

of (FULL ADDRESS)

or failing *him / her, NRIC No. (FULL NAME IN BLOCK CAPITALS)

of (FULL ADDRESS)

or failing *him / her, *the Chairman of the Meeting as *my / our proxy to attend and vote on my / our behalf at the Ninth Annual General Meeting of the Company to be held at Cengal Suite, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim on Thursday, 18 June 2009 at 11.00 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated in the space above, the proxy will vote as he / she thinks fit.)

No. of Shares held

CDS Account No. (i)

PULAI SPRINGS BERHAD(Company No. 514941-K)

(Incorporated in Malaysia)

Signed this _______ day of _______________ 2009

_________________________________________Signature/Common Seal of Member

For appointment of two proxies, percentage if shareholdings to be represented by the proxies:

No. of shares Percentage

Proxy 1

Proxy 2

Total 100%

Notes :

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

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

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

4. The instrument appointing a proxy must be deposited with the Company Secretaries at 55 Medan Ipoh 1A, Medan Ipoh Bistari, 31400 Ipoh, Perak not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof.

* Delete where applicable* (i) Applicable to shares held through a nominee account.

Resolutions FOR AGAINST

Ordinary Resolution 1 - Re-election of Prof. Emeritus Dato’ Dr Lian Chin Boon

Ordinary Resolution 2 - Re-election of Leong Chew Meng

Ordinary Resolution 3 - Approval of Directors’ Fees

Ordinary Resolution 4 - Re-appointment of Messrs Horwath

Ordinary Resolution 5 - Authority to Allot Shares

Fold here for sealing

Fold along this line (1)

Fold along this line (2)

Postage

The Company Secretaries

Pulai Springs Berhad (514941-K)

55 Medan Ipoh 1A,Medan Ipoh Bistari,31400 Ipoh, Perak.

Pulai Springs Berhad (Incorporated in M

alaysia) Com

pany No. 514941-K

REPORTANNUAL

Pulai Springs Berhad

PULAI SPRINGS BERHAD (Incorporated in Malaysia)Company No. 514941-K

20km, Jalan Pontian Lama,81110 Pulai, Johor, Malaysia.Tel: 607-521 1212 Fax: 607-521 3333

pulai springs berhad · dato’ dr. hj shahir bin nasir independent non-executive director...

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