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  • Notice of Annual General Meeting ..........................................................2

    Statement Accompanying Notice of Annual General Meeting ..................4

    Corporate Information .............................................................................5

    Chairman’s Statement and Operational Review .......................................6

    5 Years Group Financial Highlights ........................................................10

    Directors’ Profile ...................................................................................11

    Corporate Governance ..........................................................................14

    Corporate Social Responsibility .............................................................19

    Audit Committee Report ........................................................................20

    Statement on Internal Control ................................................................23

    Directors’ Responsibility Statement ........................................................25

    Directors’ Report ...................................................................................26

    Statement by Directors ..........................................................................35

    Statutory Declaration .............................................................................35

    Report of the Auditors to the Members ...................................................36

    Consolidated Balance Sheet ..................................................................37

    Consolidated Income Statement ............................................................39

    Consolidated Statement of Changes in Equity ........................................40

    Consolidated Cash Flow Statement ........................................................43

    Balance Sheet ........................................................................................45

    Income Statement ..................................................................................46

    Statement of Changes in Equity ..............................................................47

    Cash Flow Statement .............................................................................48

    Notes to the Financial Statements ..........................................................50

    List of Properties ..................................................................................132

    Analysis of Shareholdings ....................................................................139

    Directors’ Shareholdings .....................................................................142 Form of Proxy

    Contents

  • Annual Report 2007

    NOTICE IS HEREBY GIVEN THAT the Twenty-Eighth Annual General Meeting of

    Metro Kajang Holdings Berhad will be held at Ballroom, First Floor, Prescott Metro

    Inn, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan on Tuesday, 26 February

    2008 at 10.00 a.m. to transact the following businesses:

    ORDINARY BUSINESS:

    1. To receive the Audited Financial Statements for the financial year ended 30 September 2007 together with the Directors’ and Auditors’ reports thereon.

    2. To approve Directors’ fees amounting to RM80,000-00 for the financial year ended 30 September 2007.

    3. To re-elect the following Directors who retire in accordance with the Company’s Articles of Association and being eligible, have offered themselves for re-election.

    Dato’ Chen Kooi Chiew @ Cheng Ngi Chong Othman Bin Sonoh Mohamed Bin Ismail

    4. To consider and if thought fit, pass the following resolution pursuant to Section 129 of the Companies Act, 1965 :-

    “THAT Tan Sri Dato’ Lee Kim Sai @ Lee Hoo retiring in accordance with Section 129 of the Companies Act, 1965, be and is hereby re-appointed as a Director of the Company to hold office until the next Annual General Meeting.

    5. To re-appoint Messrs Moore Stephens as the Company’s Auditors and to authorise the Directors to fix their remuneration.

    SpECIAl BUSINESS:

    To consider and if thought fit, to pass the following ordinary and special resolutions:

    6. Ordinary Resolution Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965. “THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be

    and are hereby empowered to issue shares of the Company at any time until the conclusion of the next Annual General Meeting of the Company upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10 per centum of the issued share capital of the Company for the time being and that the Directors are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad.”

    Notice of Annual General Meeting

    (Ordinary Resolution 1)

    (Ordinary Resolution 2)

    (Ordinary Resolution 3)(Ordinary Resolution 4)(Ordinary Resolution 5)

    (Ordinary Resolution 6)

    (Ordinary Resolution 7)

    (Ordinary Resolution 8)

  • Annual Report 2007

    7. Special Resolution Proposed Amendments to the Articles of Association

    “THAT the alterations, modifications, variations, deletions and/or additions to the Articles of Association of the Company as set out in Appendix I of the Annual Report 2007 be and are hereby approved and adopted and that the Directors and Secretary of the Company be and are hereby authorized to take all steps and do all acts, things and deeds which may be considered necessary or expedient in effecting the aforesaid amendments.”

    By Order of the Board,

    TAN WAN SAN (MIA 10195)Group Company SecretaryKajang, Selangor Darul Ehsan30 January 2008

    NOTES:

    1. A member entitled to attend and vote at the meeting is entitled to attend and vote in person or by proxy or by attorney or by duly authorised representative. A proxy or attorney or duly authorised representative may but need not be a member of the Company.

    2. The power of attorney or an office copy or a notarially certified copy thereof or the instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its common seal or in the manner authorised by its constitution.

    3. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

    4. The instrument appointing a proxy together with the power of attorney (if any) under which it is signed or an office copy or a notarially certified copy thereof must be deposited at the Registered Office, Suite 1, 5th Floor, Wisma Metro Kajang, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan at least 48 hours before the time appointed for holding the meeting or any adjournment thereof.

    5. Explanatory Statement Pertaining to Special Businesses (a) Ordinary Resolution 8 With the passing of the Ordinary Resolution 8 mentioned above by the shareholders of the Company at the

    forthcoming Annual General Meeting, the Directors would avoid delay and cost of convening further general meetings to approve issue of such shares. The Ordinary Resolution 8 allows the Directors to issue new shares not exceeding ten per centum of the Company’s present issued share capital should the need arise.

    (b) Special Resolution 1 The proposed Special Resolution 1, if passed, will bring the Company’s Articles of Association in line with the

    recent amendments to the Listing Requirements of Bursa Malaysia Securities Berhad.

    6. The Company has on 24 October 2007 paid a First Interim Dividend of 5 sen less 27% Malaysian Income Tax per ordinary share of RM1.00 each for the financial year ended 30 September 2007.

    Notice of Annual General Meeting (cont’d)

    (Special Resolution 1)

  • Annual Report 2007

    1. Directors who are standing for re-election or re-appointment are as follows :-

    (a) Pursuant to the Company’s Articles of Association

    (i) Dato’ Chen Kooi Chiew @ Cheng Ngi Chong

    (ii) Othman Bin Sonoh

    (iii) Mohamed Bin Ismail

    (b) Pursuant to Section 129 of the Companies Act, 1965

    (i) Tan Sri Dato’ Lee Kim Sai @ Lee Hoo

    2. Further Details of Directors standing for re-election or re-appointment:

    The details of the Directors who are standing for re-election or re-appointment are set out in the Directors’

    Profile while their shareholdings are disclosed in the Directors’ Report.

    Statement AccompanyingNotice of Annual General Meeting

  • Annual Report 2007

    Corporate Information

    DIRECTORS

    Y. Bhg. Tan Sri Dato’ Lee Kim Sai @ Lee HooIndependent Non-Executive Chairman

    Y. Bhg. Dato’ Chen Kooi Chiew @ Cheng Ngi ChongExecutive Chairman

    Y. Bhg. Datuk Chen Lok LoiManaging Director

    Chen Fook WahDeputy Managing Director

    Chin Nam OnnExecutive Director

    Chen Ying @ Chin YingExecutive Director

    Othman Bin SonohIndependent Non-Executive Director

    Mohammed Chudi Bin Haji GhazaliIndependent Non-Executive Director

    Mohamed Bin IsmailNon-Independent Non-Executive Director

    CHIEF OpERATING OFFICER

    Mah Swee Buoy

    GROUp COMpANY SECRETARY

    Tan Wan San (MIA 10195)

    EXTERNAl AUDITORS

    Moore Stephens

    8A, Jalan Sri Semantan Satu,

    Damansara Heights,

    50490 Kuala Lumpur.

    Tel No: (603) 2094 1888

    Fax No: (603) 2094 7673

    INTERNAl AUDITORS

    KPMG

    Wisma KPMG, Jalan Dungun,

    Damansara Heights,

    50490 Kuala Lumpur.

    Tel No: (603) 2095 3388

    Fax No: (603) 2095 0971

    pRINCIpAl BANKERS

    EON Bank Berhad

    Malayan Banking Berhad

    OCBC Bank (Malaysia) Berhad

    RHB Bank Berhad

    REGISTRAR

    PFA Registration Services Sdn. Bhd.

    Level 13, Uptown 1,

    1 Jalan SS21/58,

    Damansara Uptown,

    47400 Petaling Jaya,

    Selangor Darul Ehsan.

    Tel No: (603) 7718 6000

    Fax No: (603) 7722 2311

    REGISTERED OFFICE

    Suite 1, 5th Floor,

    Wisma Metro Kajang,

    Jalan Semenyih,

    43000 Kajang,

    Selangor Darul Ehsan.

    Tel No: (603) 8737 8228

    Fax No: (603) 8736 5436

    STOCK EXCHANGE lISTING

    Main Board of Bursa Malaysia Securities Berhad

    WEBSITE

    www.metrokajang.com.my

  • Annual Report 2007

    Chairman’s Statement andOperational Review

    On behalf of the Board of Metro Kajang Holdings Berhad, it gives me great pleasure to present the Annual Report and

    Audited Financial Statements of the Group and of the Company for the financial year ended 30 September 2007.

    OVERVIEW

    Despite the recent turmoil in the US subprime mortgages and high oil prices, the Malaysian economy strengthened

    further with its Gross Domestic Product (“GDP”) growth at 6.7% in the third quarter compared to 5.7% in the second

    quarter of 2007 supported by strong private consumption spending and investment activities. Malaysia, being a

    major palm oil producer and exporter benefited from the high crude palm oil price in the international market.

    The monetary policy by Bank Negara remained supportive of the economic activity with the Overnight Policy Rate

    remained unchanged at 3.5% since May 2006. This provided further stability to the financial sector. Overall, the

    property market in Klang Valley remained active with good take up rate for affordable residential units and exclusive

    high end residential and commercial development at prime locations. The pay increase for civil servants and the

    launch of growth corridors, namely the Iskandar Development Region in South Johor, the Northern Growth Corridor

    and the Eastern Growth Corridor further supported the property sector.

    FINANCIAl REVIEW

    Capping another year of record profit, the Group posted a 21% increase in profit after tax to RM60.82 million for

    the financial year ended 30 September 2007 compared to RM50.40 million in the preceding year mainly due to

    higher profit contribution from the associated company and fair value adjustment gains on investment properties. The

    audited pre-tax profit was RM78.39 million compared to RM74.86 million (restated) in the preceding year. The Group’s

    operating revenue recorded a marginal decrease of 0.6% to RM307.79 million compared to RM309.80 million in the

    preceding year mainly due to lower percentage of recognition upon completion of projects in Damansara and Petaling

    Jaya. The Group’s new projects have locked-in unbilled sales value of RM169.35 million as at 30 September 2007

    from which attributable sales revenue and profits will be recognized progressively as their development percentage

    of completion progresses.

    The Net Tangible Assets per share was RM2.71 for the financial year under review.

    The Group posted an uninterrupted profit track record since commencing business twenty years ago. This

    achievement by the Group can be attributed to the concerted effort by the Board to continuously enhance value for

    its shareholders.

    The property development and construction division remains the major contributor to the Group’s operating revenue

    and profit.

    Moving forward, the Board has identified the oil palm plantation sector as one of the engine of growth for the Group.

    The Group has on 18 January 2008 completed the acquisition of 100% equity interest in SJL Utama Pte. Ltd. which

    in turn owns 94.99% shareholding in PT Khaleda Agroprima Malindo. PT Khaleda Agroprima Malindo has been

    issued “Hak Guna Usaha” land title for approximately 15,942.60 hectares (39,395 acres) of land in East Kalimantan,

    Indonesia for the development of oil palm plantation. Details of the plantation land is further elaborated in the

    Chairman’s Statement under the Prospects section.

  • Annual Report 2007

    Chairman’s Statement and Operational Review (cont’d)

    pROpERTY DEVElOpMENT AND CONSTRUCTION

    For the purpose of segmental reporting, the construction division has been combined with the property development

    division to form a reportable segment as a major part of the construction’s revenue is derived from internal development

    projects. The year 2006 figures have been restated/reclassified as a result of changes in accounting policies and to

    conform with the newly adopted Financial Reporting Standards.

    For the financial year under review, the Group’s property development and construction division posted a lower

    pre-tax profit of RM55.99 million compared to RM62.25 million (restated) in the preceding year. The decrease in

    pre-tax profit was due to lower percentage of profit recognition upon completion of certain projects in Damansara

    and the new on-going projects were still in the preliminary stage of development.

    The Group’s high-end projects comprising mainly of semi-detached and bungalows at Taman Bukit Mewah Phase 10

    in Kajang and Zen Park in Cheras recorded good sales with over 90% take-up rate as at to-date.

    Saville Residence, a serviced apartment project within proximity to the Mid-Valley Mega Mall in Kuala Lumpur

    and Pelangi Sentral, a mixed residential and commercial development project in Damansara, have recorded very

    encouraging take-up rate of 70% and 77% respectively.

    Rimbunan Avenue, a RM62.53 million 3-storey shop office project located in the successful Laman Rimbunan

    development in Kepong, launched in May 2007 experienced very strong demand with all the 51 units sold

    to-date.

    Pelangi Semenyih, another major integrated township project which is set to continue to perform well with over

    90% of the units launched taken. Most residential properties in the development are priced in the affordable range

    of below RM180,000 per unit.

    The Board is confident that its property development and construction division will achieve satisfactory results for

    the financial year ending 30 September 2008.

    HOTEl, ClUB AND pROpERTY INVESTMENT

    The Group’s hotel, club and property investment division comprises of two shopping complexes, a 3 star hotel cum

    office block, a recreational club and a supermarket building, all located in Kajang. The Group has out-sourced

    the management of the hotel since year 2003 to a professional hotel management company to enable the Group’s

    management to focus on its core business.

    The 5 storey shopping complex known as Plaza Metro Kajang is strategically located in the heart of Kajang town

    continues to enjoys very good occupancy rate of over 99% (2006 : 99%).

    This division recorded an increase of 205% in its pre-tax profit to RM18.21 million compared to RM5.98 million

    (restated) in the preceding year. The significant increase in pre-tax profit was mainly due to recognition of net gains

    on changes in fair value of investment properties amounting to RM12.77 million in accordance to the new Financial

    Reporting Standards.

    This division is expected to achieve satisfactory results for the financial year ending 30 September 2008.

  • Annual Report 2007

    Chairman’s Statement and Operational Review (cont’d)

    MANUFACTURING

    For the financial year under review, the furniture manufacturing subsidiary company in China, Vast Furniture Manufacturing (Kunshan) Co. Ltd. (“Vast Kunshan”) recorded a lower pre-tax profit of RM0.84 million compared to RM2.16 million in the preceding year mainly due to higher raw material costs and margin erosion arising from the Chinese Yuan appreciation against the United States dollar as most of the sales were in United States dollar. Appropriate controls have been taken on selection and usage of raw materials and revision of selling prices to mitigate the effect of the appreciation in Chinese Yuan and raw material price increase.

    The furniture manufacturing division is expected to achieve satisfactory results for the financial year ending 30 September 2008.

    TRADING

    The trading division is mainly involved in the trading of building materials and fixtures for the Group’s property development projects. This division recorded a lower pre-tax profit of RM2.29 million compared to RM3.54 million in the preceding year mainly due to lower sales orders of building materials and fixtures following the completion of projects in Damansara. This division will continue to source for new customers.

    This division is expected to achieve satisfactory results for the financial year ending 30 September 2008.

    SERVICES AND OTHERS

    The Group’s services division is involved in the business of investment holding, food processing, livestock farming, oil palm cultivation, money lending and company secretarial services.

    This division has recorded a marginal increase in its pre-tax profit to RM1.06 million compared with RM0.94 million in the preceding year. The increase in pre-tax profit was mainly contributed by the food processing business. This division is expected to achieve satisfactory results for the financial year ending 30 September 2008.

    DIVIDEND

    The Company has on 19 September 2007 declared a First Interim Dividend of 5.0 sen less 27% tax per ordinary share of RM1-00 each for the financial year ending 30 September 2007 which was paid on 24 October 2007. The Board has not recommended any further dividend for the financial year ended 30 September 2007. (2006 : First Interim Dividend of 5.0 sen less 28% tax per ordinary share of RM1-00 each).

    pROSpECTS

    The Government in the 2008 Budget has projected a GDP growth of 6% to 6.5% for year 2008. The overall property outlook is more encouraging with the new policy measures announced by the Government. The 50% stamp duty rebate for houses not exceeding RM250,000-00, the exemption of Real Property Gains Tax, the option for EPF contributors to utilize part of their EPF saving to finance monthly mortgage repayments and the recent pay rise for civil servants is expected to further accelerate the growth of the overall property market. The intensive effort by the Government to promote the Iskandar Development Region in South Johor, the Northern Growth Corridor and the Eastern Growth Corridor is expected to attract substantial investment from both local and overseas investors and this will contribute

    positively towards the economic growth.

  • Annual Report 2007

    Chairman’s Statement and Operational Review (cont’d)

    pROSpECTS (cont’d)

    The Group targets to launch new properties with gross development value of over RM200 million for the financial

    year ending 30 September 2008.

    Moving forward, the Group will continue to focus on strengthening its position as a developer of choice among house

    buyers of its target markets through innovative and modern lifestyle themed development. The Group will continue

    to leverage on the demand for affordable residential units and selected exclusive lifestyle themed residential and

    commercial development at prime locations to ensure growth in sales and earnings. Your Board is confident that

    affordable homes and selected exclusive residential and commercial development at prime locations will continue

    to be in demand in 2008 which augurs well for the Group.

    The Group has recently expanded its business in oil palm plantation via the acquisition of 100% equity interest in SJL

    Utama Pte. Ltd. which in turn owns 94.99% shareholding in PT Khaleda Agroprima Malindo. PT Khaleda Agroprima

    Malindo has been issued “Hak Guna Usaha” land title for approximately 15,942.60 hectares (39,395 acres) of land

    in East Kalimantan, Indonesia for the development of oil palm plantation. The Hak Guna Usaha was issued

    on 13 September 2007 for a period of 35 years with an option to renew for a further period of 25 years. The Land

    which is located about 75 km by road from Kota Samarinda (the capital of East Kalimantan Province) is generally flat

    with very slight undulation and is very suitable for oil palm cultivation. Currently, approximately 80 hectares of oil

    palm nursery has been established and clearing of land for the planting of oil palm trees is in progress. The Group

    currently owns and manages several hundred acres of oil palm plantation in Peninsular Malaysia and has the necessary

    experience in developing and managing oil palm plantation. With the continuous increase in the world’s population

    and the ever increasing demand for biodiesel, the outlook for the oil palm industry is very promising. This oil palm

    division is expected to contribute positively to the Group’s earning in the medium to long term.

    The Board is confident that the Group will achieve satisfactory results for the financial year ending 30 September

    2008.

    ACKNOWlEDGEMENT

    On behalf of the Board of Directors, I would like to extend our sincere appreciation and thanks to our shareholders,

    valued customers, bankers, business associates and relevant authorities for their continued confidence and support in

    us. I would also like to extend our heartfelt thanks to the management team and staff for their unwavering dedication

    and commitment which has made the success of the Group possible.

    Thank you.

    DATO’ CHEN KOOI CHIEW @ CHENG NGI CHONG

    Executive Chairman

  • Annual Report 2007

    10

    � Years Group Financial Highlights

    '05'03 '04Year

    '06 '07

    '050

    150,000

    200,000

    250,000

    300,000

    350,000

    100,000

    50,000

    RM'000

    0

    20,000

    30,000

    40,000

    50,000

    60,000

    10,000

    0

    20,000

    30,000

    40,000

    50,000

    10,000

    RM'000

    '05'03 '04Year

    '06 '07

    286,86

    9

    276,84

    3

    235,99

    4

    '03 '04Year

    '06 '07

    56,625

    60,065

    51,118

    36,916 44

    ,782

    50,400

    RM'000

    RM'000

    '03 '04Year

    0

    200,000

    300,000

    400,000

    500,000

    100,000

    355,10

    4

    396,84

    5

    457,0

    01

    Operating Revenue Profit Before Taxation

    Profit After Taxation And Minority Interest Shareholders’ Equity

    '05 '06 '07

    309,79

    8

    70,000

    80,000 74,862

    37,502

    493,70

    1

    60,000

    307,7

    91

    78,391

    70,000 600,000

    60,820

    539,66

    1

    *2007 ** 2006 ** 2005 ** 2004 ** 2003 RM’000 RM’000 RM’000 RM’000 RM’000INCOME STATEMENT Operating Revenue 307,791 309,798 235,994 276,843 286,869 Profit Before Taxation 78,391 74,862 51,118 60,065 56,625 Profit After Taxation 60,820 50,400 37,501 44,256 36,717 Profit After Taxation and Minority Interest 60,820 50,400 37,502 44,782 36,916 BAlANCE SHEET Issued and Paid up Capital 199,420 195,078 195,078 195,078 144,771 Shareholders’ Equity 539,661 493,701 457,001 396,845 355,104 RATIOS ^ Net Earnings per share (sen) 31.12 25.84 19.22 ***23.03 ***19.12 Dividend per share (sen) 5.00 5.00 5.00 4.00 N/A Tax Exempt Dividend per share (sen) N/A N/A N/A N/A 5.50 Net Tangible Assets per share (RM) 2.71 2.53 2.34 2.03 2.45 Debt/Equity ratio (%) 35 16 10 10 14 Return on Shareholders’ Equity (%) 11 10 8 11 10 * Mandatory adoption of new/revised Financial Reporting Standards (FRS) which become effective for accounting

    periods beginning on or after 1 January 2006 or on 1 October 2006. ** Certain comparative figures have been restated/reclassified to conform with the adoption of new/revised FRS.*** Based on weighted average number of ordinary shares in issued (including adjustment for Bonus Issue).^ Attributable to the equity holders of the Company.

    The above information should be read in conjunction with the Group’s audited financial statements for the financial year ended 30 September 2007.

  • Annual Report 2007

    11

    BOARD OF DIRECTORS

    TAN SRI DATO’ lEE KIM SAI @ lEE HOO

    Independent Non-Executive Chairman

    Tan Sri Dato’ lee Kim Sai @ lee Hoo, aged 70, a Malaysian, was appointed to the Board on 8 June 1995. He is also the

    Chairman for the Company’s Audit Committee and Employees’ Share Option Scheme Committee (“ESOS Committee”).

    He was elected as Selangor State assemblyman in 1974. During his appointment, he was also made State Executive

    Councillor in charge of housing. In 1982, he was elected as a Member of Parliament. He was appointed as Deputy

    Minister in the Prime Minister’s Department in June 1983. Subsequently, in 1985, he was appointed Minister of Labour

    and in 1987, he was appointed Minister of Housing and Local Government. He later served as Minister of Health from

    1988 until he retired from Cabinet in May 1995. He does not have any family relationship with any other Directors

    and/or major shareholders of the Company and has no conflict of interest with the Company. Tan Sri Dato’ Lee Kim

    Sai attended four out of the five Board Meetings held during the financial year ended 30 September 2007.

    DATO’ CHEN KOOI CHIEW @ CHENG NGI CHONG

    Executive Chairman

    Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, aged 64, a Malaysian, was appointed to the Board on 27 September

    1979 and holding the present position as Executive Chairman since 30 October 2006. He is also a member of the

    Executive Committee. He has been involved in business for about 47 years of which 29 years were in property

    development and construction industries, whilst the remaining 18 years were in plantation sector. He is the brother

    of Datuk Chen Lok Loi, Mr. Chen Ying @ Chin Ying and Mr. Chen Fook Wah. He is deemed to have certain conflict

    of interest with the Company by virtue of his interest in certain privately owned companies, which are also involved

    in property development business. However, these privately owned companies are not in direct competition with

    the business of the Company. Dato’ Chen Kooi Chiew attended four out of the five Board Meetings held during the

    financial year ended 30 September 2007.

    DATUK CHEN lOK lOI

    Managing Director

    Datuk Chen lok loi, aged 55, a Malaysian, holds a Bachelor Degree in Marketing from Monash University, Australia.

    He was appointed to the Board on 31 July 1984 and holding the present position as Managing Director since 19

    January 2005. He is also a member of the Executive Committee. He has more that 26 years of experience in property

    development and construction related businesses. He was the President of the Real Estate and Housing Developers’

    Association of Malaysia (REHDA) from 1998 till June 2002. He is currently a member of the Advisory Board of the

    Construction Labour Exchange Berhad and the Immediate Past Chairman of the Building Industry Presidents’ Council.

    He is also an EXCO Member of the Malaysia Crime Prevention Foundation, the President of ASEAN Association for

    Planning and Housing and as well as the Deputy President of Eastern Regional Organization for Planning and Housing

    Malaysia (EAROPH). He is the brother of Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, Mr. Chen Ying @ Chin Ying

    and Mr. Chen Fook Wah. He is deemed to have certain conflict of interest with the Company by virtue of his interest

    in certain privately owned companies, which are also involved in property development business. However, these

    privately owned companies are not in direct competition with the business of the Company. Datuk Chen Lok Loi

    attended all the five Board Meetings held during the financial year ended 30 September 2007.

    Directors’ Profile

  • Annual Report 2007

    1�

    MR. CHEN FOOK WAH

    Deputy Managing Director

    Mr. Chen Fook Wah, aged 51, a Malaysian, was appointed to the Board on 25 November 1999 and holding the

    present position as Deputy Managing Director since 19 January 2005. He is currently a member of the Executive

    Committee, Audit Committee and ESOS Committee. He was admitted to the Board of Valuers and Real Estate Agent

    of Malaysia in 1986. Prior to joining the Group, he was with Guthrie Trading Sdn Bhd from 1973 to 1974 and Hilton

    Realty from 1975 to 1978. He is the brother of Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, Datuk Chen Lok Loi

    and Mr. Chen Ying @ Chin Ying. He is deemed to have certain conflict of interest with the Company by virtue of his

    interest in certain privately owned companies, which are also involved in property development business. However,

    these privately owned companies are not in direct competition with the business of the Company. Mr. Chen Fook

    Wah attended all the five Board Meetings held during the financial year ended 30 September 2007.

    MR. CHIN NAM ONN

    Executive Director

    Mr. Chin Nam Onn, aged 63, a Malaysian, joined the Metro Kajang Holdings Berhad (“MKHB”) Group in April 1997

    as an Executive Director of Metro Kajang Construction Sdn Bhd, a subsidiary of MKHB and was appointed to the

    Board on 22 December 1998. He is currently a member of the Executive Committee and Audit Committee. He is a

    member of The Institute of Chartered Accountants in Australia since 1969, The Malaysian Institute of Certified Public

    Accountants since 1971 and The Malaysian Institute of Accountants since 1971. His past positions include the post

    of Company Secretary and Unit Trust Manager of South East Asia Development Corporation Bhd (a public listed

    company) during the 5 years from 1971 to 1975, the General Manager of The Kuala Lumpur Stock Exchange during

    the 5 years from 1976 to 1980, an Executive Director of Malaysian Resources Corporation Berhad (a public listed

    company) during the 10 years from 1981 to 1990 and an Executive Director of Econstates Berhad (a public listed

    company) during the 4 years from 1991 to 1994. He does not have any family relationship with any other Directors

    and/or major shareholders of the Company and has no conflict of interest with the Company. Mr. Chin Nam Onn

    attended all the five Board Meetings held during the financial year ended 30 September 2007.

    MR CHEN YING @ CHIN YING

    Executive Director

    Mr Chen Ying @ Chin Ying, aged 61, a Malaysian, holds a Bachelor Degree in Engineering (Mechanical) from University

    of Western Australia. He was appointed to the Board on 7 March 2005. He is currently a member of the Executive

    Committee and is managing the Group’s furniture manufacturing subsidiary in China. Prior to joining the Group, he

    was with UMW Holdings Berhad for 5 years as Project Engineer and subsequently promoted to Project Manager. He

    later joined Scotts & English Sdn Bhd for about 6 years as Service/Workshop Manager and Head of Industrial Sales

    and Marketing Division. He is the brother of Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, Datuk Chen Lok Loi and

    Mr. Chen Fook Wah. He is deemed to have certain conflict of interest with the Company by virtue of his interest

    in certain privately owned companies, which are also involved in property development business. However, these

    privately owned companies are not in direct competition with the business of the Company. Mr Chen Ying @ Chin

    Ying attended all the five Board Meetings held during the financial year ended 30 September 2007.

    Directors’ Profile (cont’d)

  • Annual Report 2007

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    HAJI OTHMAN BIN SONOH

    Independent Non-Executive Director

    Haji Othman Bin Sonoh, aged 65, a Malaysian, was appointed to the Board on 24 October 1996. He was appointed

    as a member of the Audit Committee on 12 February 2004. He was a civil servant from 1968 to 1993 in various

    departments including a position in the Ministry of Finance. He is involved in the supply of telecommunication

    equipment since 1996. He does not have any family relationship with any other Directors and/or major shareholders

    of the Company and has no conflict of interest with the Company. Haji Othman Bin Sonoh attended all the five Board

    Meetings held during the financial year ended 30 September 2007.

    ENCIK MOHAMMED CHUDI BIN HAJI GHAZAlI

    Independent Non-Executive Director

    Encik Mohammed Chudi Bin Haji Ghazali, aged 64, a Malaysian, was appointed to the Board on 19 March 2003.

    He is also a member of the Audit Committee. He was attached to Standard Chartered Bank Malaysia Berhad for

    36 years and was a Senior Manager prior to his retirement in 1999. He has attended banking courses conducted at

    National Westminister Bank Staff College, Oxford and Manchester University Business School. He does not have

    any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of

    interest with the Company. Encik Mohammed Chudi attended all the five Board Meetings held during the financial

    year ended 30 September 2007.

    HAJI MOHAMED BIN ISMAIl

    Non-Independent Non-Executive Director

    Haji Mohamed Bin Ismail, aged 67, a Malaysian, was appointed to the Board on 18 March 2004. He was the State

    Director of Lembaga Pertubuhan Peladang from 1978 to 1989. He later became the Director General of Lembaga

    Tembakau Negara (“LTN”) from 1990 to 2000 and was the Chairman of LTN from 2001 to 2002. He does not have

    any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of

    interest with the Company. Haji Mohamed Bin Ismail attended all the five Board Meetings held during the financial

    year ended 30 September 2007.

    Directors’ Profile (cont’d)

  • Annual Report 2007

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    The Board of Metro Kajang Holdings Berhad is pleased to report to stockholders on the manner the Company has

    applied the Principles, and the extent of compliance with the Best Practices of good governance as set out in Part 1

    and Part 2 respectively of the Malaysian Code on Corporate Governance (the Code) pursuant to Paragraph 15.26 of

    the Listing Requirements of Bursa Malaysia Securities Berhad. Any areas where the Company has not complied with

    the Code are explained in this report.

    THE BOARD OF DIRECTORS

    1. Composition, Duties and Responsibilities

    The roles of the Executive Chairman, Non-Executive Chairman and Managing Director are separate to ensure a

    balance of power and authority. The Company is led by an experienced Board under the Executive Chairman,

    Dato’ Chen Kooi Chiew. The Board is composed of 5 Executive Directors, 3 Independent Non-Executive

    Directors and 1 Non-Independent Non-Executive Director and is in compliance with Paragraph 15.02 of the

    Listing Requirements that at least one-third of the Board comprise of Independent Directors. The Board is

    satisfied that its current Board composition fairly reflects the investment in the Company by shareholders apart

    from the largest shareholder. The Board having reviewed its size and composition is satisfied that its current

    size and composition is effective for the proper functioning of the Board. The five Executive Directors take on

    the primary responsibility of managing the Group’s business and resources, led by the Executive Chairman,

    Dato’ Chen Kooi Chiew and the Managing Director, Datuk Chen Lok Loi. As part of its commitment, the Board

    supports the highest standards of corporate governance and the development of best practices for the Company.

    The independent non-executive directors as defined under Paragraph 1.01 of Bursa Malaysia Securities Berhad

    Listing Requirements are independent from management and are free from any business or other relationships

    that could materially interfere with the exercise of their independent judgement. The Independent Directors led

    by the Non-Executive Chairman Tan Sri Dato’ Lee Kim Sai provide a broader view, independent and balanced

    assessment of proposals from the Executive Directors. The Board has identified Tan Sri Dato’ Lee Kim Sai as the

    Senior Independent Non-Executive Director to whom concerns of shareholders, management and others may

    be conveyed. The Board is assisted by a management team relevant to the Group’s business operations.

    The Board takes full responsibility for the overall performance of the Company and the Group. This includes

    the following 6 specific areas : -

    • reviewing and adopting strategic plans for the Group.

    • overseeing the conduct of the Group’s businesses to evaluate whether the businesses are being properly

    managed.

    • identifying principal risks and ensure the implementation of appropriate systems to manage these

    risks.

    • succession planning, including the implementation of appropriate systems for appointing, training, fixing

    the compensation of and where appropriate, replacing senior management.

    • developing and implementing an investor relations programme for the Company, as it is important that

    the Company is able to communicate effectively with its shareholders.

    • reviewing the adequacy and the integrity of the Group’s internal control systems and management systems;

    including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

    Corporate Governance

  • Annual Report 2007

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    2. Board Meeting

    The Board meets at least 4 times a year and has a formal schedule of matters reserved to it. Additional meetings

    are held as and when required. The Board is supplied with full and timely information to enable it to discharge

    its responsibilities. During these meetings, the Board reviews the Group’s financial statements and results are

    deliberated and considered. Management and performance of the Group and any other strategic issues that

    affect or may affect the Group’s businesses are also deliberated.

    During the financial year, the Board met 5 times; whereat it deliberated and considered a variety of matters

    affecting the Company’s operations including the Group’s financial results, business plan and direction of the

    Group.

    Directors have access to all information within the Company and to the advice and services of a competent

    Company Secretary who is qualified under the Companies Act, 1965 and is responsible for ensuring that Board

    Meeting procedures are followed and that applicable rules and regulations are complied with. The Directors

    may seek independent professional advice, at the Company’s expense, if required in furtherance of their duties.

    The Board recognises that the Chairman is entitled to the strong and positive support of the Company Secretary

    in ensuring the effective functioning of the Board.

    3. Re-Appointment, Retirement by Rotation and Re-Election of Directors

    In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board are

    subjected to re-election by the shareholders in the next Annual General Meeting subsequent to their appointment.

    At least one third of the Directors are required to retire from office by rotation annually and subject to re-election

    at each Annual General Meeting. All Directors shall retire from office at least once in three (3) years but shall

    be eligible for re-election.

    Any director aged seventy or over is subject to re-appointment by shareholders on an annual basis pursuant to

    Section 129 (6) of the Companies Act, 1965.

    4. Directors’ Training

    In order to keep abreast with the latest regulatory development, all Directors are required to attend the Mandatory

    Accreditation Programme (“MAP”). All the Directors have successfully completed the MAP conducted by Bursatra

    Sdn Bhd.

    The Board has taken on the responsibility in evaluating and determining the specific and continuous training

    needs of the Directors on a regular basis. The Directors have attended courses/seminars and in house training

    from time to time to enhance their skills and knowledge and to keep abreast with the relevant changes in laws,

    regulations and business environment in order to discharge their duties more effectively. The training programme

    and seminars or conferences attended by the Directors during the financial year included areas of corporate

    governance, up-dates on changes in laws and regulations, risks management, up-date on financial reporting

    standards, business and investment strategies.

    Corporate Governance (cont’d)

  • Annual Report 2007

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    }

    Corporate Governance (cont’d)

    5. Directors’ Remuneration

    The Director’s remuneration is linked to experience, scope of responsibilities, service seniority, performance and published market survey information.

    (i) Aggregate remuneration of Directors categorised into appropriate components: -

    Remuneration (in RM) Executive Non-Executive

    Fees – 80,000 Other emoluments *6,596,450 317,500 Benefits-in-kind 148,043 20,800

    Total 6,744,493 418,300

    * Includes provision for retirement gratuity of RM550,240.00 for eligible Directors.

    (ii) Breakdown of Directors’ remuneration for the year ended 30 September 2007, by category and in each successive band of RM50,000.00 are as follows: -

    No. of Directors Range of Remuneration (RM) Executive Non-Executive

    1 - 50,000 1 50,001 - 100,000 2 100,001 - 150,000 150,001 - 200,000

    200,001 - 250,000 1 650,001 - 700,000 2 700,001 - 750,000 750,001 - 800,000 800,001 - 1,050,000 1,100,001 - 1,150,000 1 1,200,001 - 2,000,000 2,000,001 - 2,050,000 1 2,050,001 - 2,200,000 2,200,001 - 2,250,000 1

    Total 5 4

    OTHER INFORMATION

    RelationshipThere is no family relationship among the Directors and/or major shareholders except the following: -

    Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, Brothers Relationship

    Datuk Chen Lok Loi, Mr. Chen Ying @ Chin Ying and Mr. Chen Fook Wah

    Conflict of Interest

    Except for Dato’ Chen Kooi Chiew, Datuk Chen Lok Loi, Mr. Chen Fook Wah and Mr Chen Ying @ Chin Ying by

    virtue of their interest in certain privately owned companies which are also in property development, none of the

    other Directors have any conflict of interest with the Company. However, these privately owned companies are not

    in direct competition with the business of the Company.

  • Annual Report 2007

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    Conviction for OffencesNone of the Directors has been convicted for any offences other than traffic offences within the past ten (10) years.

    Materials ContractsSave for the acquisition of 100% equity interest in SJL Utama Pte. Ltd. which is mentioned in the Chairman’s Statement, there are no contracts which are or may be material (not being contracts entered into in the ordinary course of business) that have been entered into by the Group within the last 2 years.

    6. Board Committees

    The Board has delegated certain responsibilities to Board committees which operate within clearly defined Terms of Reference. These committees are: -

    6.1 The Executive Committee

    The Executive Committee which meets at least twice a month to examine strategic matters, policies and business risks which may affect the Group such as any new investment proposed to be undertaken by the Group and reviews the performance of each of the Group’s business divisions.

    6.2 The Audit Committee

    The Audit Committee’s composition complies with the Listing Requirement of Bursa Malaysia Securities Berhad. The Terms of Reference of the Audit Committee, its activities during the financial year, details of attendance of each member and the number of meetings held are set out on pages 20 to 22 of this Annual Report.

    6.3 The Employees’ Share Option Scheme (“ESOS”) Committee

    The ESOS Committee, whose members during the year comprised of two (2) members from the Board and one (1) member from the Senior Management are responsible to administer the Company’s ESOS in accordance with the By-Laws of the ESOS.

    6.4 Risk Management Committee

    The Risk Management Committee whose current members comprised of three (3) members from the Senior Management assists the Audit Committee and the Board in discharging its risk management and control responsibilities.

    7. Accountability and Audit

    7.1 Financial Reporting : Statement of Directors’ Responsibilities in respect of the Audited Financial Statements

    The Board aims to provide and present a balanced and meaningful assessment of the Company’s financial performance and prospects at the end of the financial year, primarily through the financial statements; the Chairman’s Statement and Operations review in the Annual Report.

    In preparing the above financial statements the Directors have:

    • adopted suitable accounting policies and then apply them consistently; • made judgements and estimates that are prudent and reasonable; • ensured applicable approved accounting standards have been followed, subject to any material

    departures disclosed and explained in the financial statements; and • prepared the financial statements on the going concern basis.

    Corporate Governance (cont’d)

  • Annual Report 2007

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    7.2 Internal Audit Function

    The Company has appointed the professional accounting firm of KPMG as its Internal Auditors. The Internal Audit function is therefore independent of the activities of the Group and perform its duties with impartiality, objectivity and due professional care.

    The Internal Audit review of the Company’s operations encompasses an independent assessment of the Company’s compliance with its internal controls and makes recommendation for improvements.

    7.3 External Audit

    The Company’s independent External Auditors fill an essential role for the shareholders by enhancing the reliability of the Company’s financial statements and giving assurance of that reliability to users of these financial statements.

    The External Auditors have an obligation to bring any significant defects in the Company’s system of control and compliance to the attention of Management; and if necessary, to the Audit Committee and the Board. This includes the communication of fraud.

    8. Relations with Shareholders and Investors

    The Annual General Meeting (“AGM”) is the principal forum for dialogue with individual stockholders. At the Company’s AGM, stockholders have direct access to the Board and are given the opportunity to ask questions during the AGM. The stockholders are encouraged to ask questions both about the resolutions being proposed or about the Company’s operations in general. The Chairman of the Board also addresses the stockholders on the review of the Company’s operations for the financial year and outline the prospects (of the Company) for the new financial year. Additionally, immediately after the AGM, the Board also meets members of the press. The Company’s website www.metrokajang.com.my provides easy access to the latest corporate information on the Group. In addition, the Company has also appointed an Investor Relations firm to carry out the Group’s Investor Relations programme and met up with the financial analysts on quarterly basis.

    9. Compliance Statement

    The Group has complied throughout the year ended 30 September 2007 with all the best practices of corporate governance set out in Part 1 and Part 2 of the Code other than those set out below. The reasons for such non-compliances are as follows :

    (i) Nomination Committee Establishment of a Nomination Committee has not been effected as its functions are carried out by the

    Board. The Board will be provided with the relevant particulars of the new director candidate beforehand for consideration and deliberation on the suitability of the new candidate taking into account the required mix of skills, expertise and experience.

    (ii) Remuneration Committee

    Establishment of a Remuneration Committee has not been effected as the Directors’ remuneration scheme is linked to experience, scope of responsibilities, service seniority and published market survey information.

    (iii) Audit Committee The Audit Committee’s composition has yet to comply with the revised Code of Corporate Governance which

    took effect from 1 October 2007 requiring that all members of the Audit Committee shall comprised of non-executive directors. The Board is currently making the necessary arrangement to ensure compliance.

    Corporate Governance (cont’d)

  • Annual Report 2007

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    The Group is committed towards good corporate social responsibility practices especially the areas on the workplace,

    the community, the environment and the marketplace to deliver sustainable value to the society at large.

    THE WORKplACE

    We strongly believe that human capital is the most important value to an organization. To ensure a safe and healthy

    working condition for our employees and support workers, the Group has adopted the Malaysian Standard on the

    Occupational Safety and Health Management System. In additional, necessary preventive actions and risk mitigation

    measures such as fire drills and site safety briefing/training have been conducted from time to time. As part of the

    human capital development, the Group has conducted various in-house training programme focusing on quality

    leadership, building effective performance and job related training to equip the employees with the required skills

    and knowledge with high commitment. The Group also provides study loan to its employees for the betterment of

    the staff welfare. In-house sports activities were carried out to foster the working relationship and to build-up strong

    team spirit amongst the employees.

    THE COMMUNITY

    As a caring and responsible corporate citizen, the Group has contributed funds to various under-privileged children,

    old folks, schools and charitable activities during the financial year under review. Over the years, the Group has

    offered internship programmes and graduate placement programmes for the wellness of the communities. Our

    Managing Director, Datuk Chen Lok Loi has been actively involved in community activities. As the Deputy President

    of EAROPH, he presented his speech on promoting a crime free environment during the World Habitat Day 2007

    in November 2007.

    THE ENVIRONMENT

    The Group recognizes the importance of environmental conservation. For example, waste and construction debris

    were disposed at approved dumpsites. We have implemented the recycling of water at the factory belonging to the

    Group’s subsidiary and is currently looking into the construction of a full scale biogas plant to treat waste and to

    produce biogas which will reduce energy consumption.

    THE MARKETplACE

    The Group is committed to continuously enhance value for its shareholders and this can be evidenced through the

    Group’s uninterrupted profit track record since commencing business twenty years ago. It is our aim to provide

    high quality products and services to our customers. During the financial year under review, customer surveys were

    conducted to gauge the level of customers’ satisfaction and also to obtain constructive feedbacks. As part of the

    Group’s commitment in ensuring quality products, the Group has adopted the internationally recognized CONQUAS

    21 quality assessment benchmark for its new projects.

    Corporate Social Responsibility

  • Annual Report 2007

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    1. ROlE OF AUDIT COMMITTEE

    The Audit Committee assists, supports and implements the Board’s responsibility to oversee the Group’s operations in the following manner: -

    • provides a means for review of the Group’s processes for producing financial data, its internal controls and independence of the Group’s External and Internal Auditors.

    • reinforces the independence of the Group’s External Auditors. • reinforces the objectivity of the Group’s Internal Auditors.

    2. TERMS OF REFERENCE

    Composition

    The Audit Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three (3) members of whom the majority shall be Independent Directors. At least one member of the Audit Committee must be a member of the Malaysian Institute of Accountants or possess such other qualifications and/or experiences as approved under Section 15.10(1)(c)(ii) and 15.10 (1)(c)(iii) of Bursa Malaysia Securities Berhad Listing Requirements.

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

    The members of the Audit Committee shall elect a Chairman from among their numbers who shall be an Independent Director.

    Quorum The quorum shall not be less than 2, the majority of whom shall be Independent Non-Executive Directors.

    Attendance and Frequency of Meeting The Audit Committee shall meet as the Chairman deems necessary but not less than 4 times a year. The

    Chairman shall be entitled, where deemed appropriate, to invite any person(s) to attend meetings of the Audit Committee.

    Authority The Committee is authorised by the Board to investigate within its Terms of Reference. It is authorised to seek

    any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.

    The Committee is authorised by the Board to obtain outside legal or other independent professional advice it considers necessary and reasonable for the performance of its duties.

    Duties

    The duties of the Committee shall be:

    (a) to recommend to the Board the appointment of the External Auditors and Internal Auditors and the audit

    fee thereof;

    (b) to make appropriate recommendations to the Board on matters of resignation or dismissal of External

    Auditors or Internal Auditors;

    Audit Committee Report

  • Annual Report 2007

    �1

    (c) to discuss with the External Auditors and Internal Auditors before the audit commences, the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved;

    (d) to review the quarterly and year-end financial statements of the Group and Company before submission to the Board of Directors, focusing particularly on:

    (i) public announcement of results and dividend payment

    (ii) any changes in accounting policies and practice

    (iii) significant adjustments resulting from the audit

    (iv) the going concern assumption

    (v) compliance with accounting standards

    (vi) compliance with stock exchange and legal requirements

    (e) to discuss problems and reservations arising from the interim and final audits, and any matters the External Auditors may wish to discuss (in the absence of Management where necessary);

    (f) to review any External Auditors’ letter to Management (if any) and management’s response;

    (g) to do the following where an Internal Audit function exists:

    • review the adequacy of the scope, functions 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 action is 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 Internal Auditors; • informed itself of resignation of Internal Auditors and provide the Internal Auditors an opportunity

    to submit his reasons for resigning.

    (h) to consider any related party transactions that may arise within the Company or Group;

    (i) to consider the findings of internal audit investigations and management’s response;

    (j) to consider other topics, as defined by the Board.

    Reporting procedures

    The secretary shall circulate the minutes of meetings of the Audit Committee to all members of the Audit

    Committee.

    Detailed audit reports by Internal Auditors and the respective Management response are circulated to members of

    the Committee before each Meeting of the Committee at which the said reports are tabled.

    Audit Committee Report (cont’d)

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    3. MEMBERSHIp AND MEETINGS OF THE COMMITTEE

    The members of the Committee of the Company are : -

    1. Tan Sri Dato’ Lee Kim Sai @ Lee Hoo (Independent Non-Executive Director) – Chairman

    2. Mr. Chen Fook Wah (Deputy Managing Director)

    3. Mr. Chin Nam Onn (Executive Director)

    4. Haji Othman Bin Sonoh (Independent Non-Executive Director)

    5. En. Mohammed Chudi Bin Haji Ghazali (Independent Non-Executive Director)

    During its tenure, the Audit Committee met four times during the financial year, details as follows: -

    Name of Directors Attendance of Meetings

    Tan Sri Dato’ Lee Kim Sai @ Lee Hoo 4/4 Mr Chen Fook Wah 4/4 Mr Chin Nam Onn 4/4 En. Mohammed Chudi Bin Haji Ghazali 4/4 Haji Othman Bin Sonoh 4/4

    ACTIVITIES UNDERTAKEN BY THE AUDIT COMMITTEE

    During the financial year, the activities of the Audit Committee were as follows -

    • Reviewed the audited financial statements and unaudited quarterly financial results and announcements of the results before recommending for the Board of Directors’ approval;

    • Reviewed the scope of the audit plan from the Internal Auditors and External Auditors; • Reviewed the audit reports and recommendation to improve internal control and management’s response

    thereto; and• Reviewed and recommended to the Board the re-appointment of the External Auditors.

    The Audit Committee has verified that no new Employee’s Share Option were granted during the financial year under

    review. The details of shares allotted arising from the exercise of Employee’s Share Option during the financial year

    was disclosed in the Directors’ Report.

    INTERNAl AUDIT FUNCTION

    The Group has outsourced its internal audit function with the appointment of the professional accounting firm, KPMG since 30 April 2001.

    Audit Committee Report (cont’d)

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    The Malaysian Code on Corporate Governance sets out as a principal that the Board of a listed company should

    maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board

    is committed to maintaining a sound system on internal control for the Group and is pleased to provide the following

    statement in accordance with paragraph 15.27 (b) of Bursa Malaysia Securities Berhad (“BMSB”) Listing Requirements

    and as guided by the BMSB’s Statement on Internal Control : Guidance for Directors of Public Listed Companies

    (“the Guidance”).

    BOARD’S RESpONSIBIlITIES

    The Board acknowledges its responsibilities for maintaining sound internal control systems to safeguard shareholders’

    interest and the Group’s assets. The Board’s responsibilities includes:-

    • Identifying principal risks and ensuring the implementation of appropriate internal control systems to manage

    these risks.

    • Reviewing the adequacy and the integrity of the Group’s internal control systems and management information

    systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

    However, due to the limitations inherent in any system of internal control, it should be noted that such system is

    designed to manage rather than to eliminate the risk of failure to achieve the Group’s business objectives. Such system

    can only provide reasonable and not absolute assurance against material misstatement of loss.

    Following the publication of the Guidance, the Board confirms that there is an ongoing process for identifying,

    evaluating and managing significant risks faced by the Group, that has been in place for the financial year and up to

    the date of approval of the Annual Report and that this process is regularly reviewed by the Board and accords with

    the Internal Control Guidance.

    RISK MANAGEMENT

    The Board with the assistance of the Audit Committee, the Risk Management Committee and the Internal Auditors,

    Messrs KPMG, continuously review existing risks and identify new risks that the Group faces and the management

    action plans to manage the risks on an ongoing basis. To further enhance the risk management process within the

    culture of the Group, risk management training for selected management and staff has been conducted and this will

    be an ongoing process. In additions, key management nominated in each business unit have prepared action plans

    and exit plans to address key risks and control issues highlighted by the Internal Auditors. During the financial year

    ended 30 September 2007, the Risk Management Committee has:

    1. Deliberated and adopted the Risk Management Committee action plan for the Group;

    2. Reviewed and commented on the Standard Operating Procedures of the operating units and departments of

    the Group;

    3. Reported quarterly to the Board on all major issues relating to risks and risk management; and

    4. Reviewed the new property development and business investment in the subsidiary and/or associated

    companies.

    Statement on Internal Control

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    INTERNAl AUDIT FUNCTION

    The Internal Auditors, Messrs KPMG, independently reviews the risk identification procedures and control

    processes implemented by the management and reports to the Audit Committee on a quarterly basis or more often

    if required.

    The Internal Auditors undertook regular and systematic review of the existing risk management processes in place

    within the Group and assessing the effectiveness of the internal control. The risk profile and control measures are then

    raised to the Audit Committee. The Risk Management Committee assists the Board and the Audit Committee to identify

    the critical risks that the Group faces and the management action plans to manage the risks on an ongoing basis.

    OTHER RISKS AND CONTROl pROCESS

    Apart from risk management and internal audit, the Board has put in place an organizational structure with formally

    defined lines of responsibility and delegation of authority. A process of hierarchical reporting has been established

    which provides for a documented and auditable trail of accountability.

    The Board is provided with timely monthly financial information which includes key performance and risk indicators.

    This includes, amongst others, the monitoring of results against budget, with major variances being followed up and

    management action taken, where necessary. Where areas of improvement in the system are identified, the Board

    considers the recommendations made by the Audit Committee and the Risk Management Committee.

    The External Auditors have reviewed this Statement on Internal Control and is of the opinion that the Statement

    appropriately reflects the process adopted by the Board in reviewing the adequacy and integrity of the system of

    internal control.

    BOARD’S CONClUSION

    Based on the above, the Board is pleased to disclose that the Group’s internal control system are sufficiently in line

    with the Code and Guidance. No significant control failings or weaknesses that would result in material losses and

    require disclosure in the Group’s Annual Report were identified during the review.

    The Board of Directors is required under Paragraph 15.27(a) of the Bursa Malaysia Securities Berhad Listing Requirements

    to issue a statement explaining their responsibility in the preparation of the annual financial statements.

    The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which give

    a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and the

    Statement on Internal Control (cont’d)

  • Annual Report 2007

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    results of the operations, changes in equity and cash flows of the Group and of the Company for the financial year.

    In preparing those financial statements, the Directors are required to: -

    • use appropriate accounting policies and consistently apply them;

    • make judgements and estimates that are reasonable and prudent; and

    • state whether applicable approved accounting standards have been followed, subject to any material departures

    disclosed and explained in the financial statements.

    The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at

    any time the financial position of the Group and of the Company and to enable them to ensure that the financial

    statements comply with the Companies Act, 1965.

    Directors’ Responsibility Statement

  • Annual Report 2007

    26

    The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the

    Company for the financial year ended 30 September 2007.

    PRINCIPAL ACTIVITIES

    The principal activities of the Company are engaged in investment holding and providing project and building

    management.

    The principal activities of the subsidiary companies and associated companies are stated in Note 7 and Note 8 to

    the financial statements respectively.

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

    RESULTS

    Group Company RM RM

    Profit before taxation 78,390,690 52,311,918

    Taxation (17,570,602) (14,442,094)

    Profit for the year 60,820,088 37,869,824

    Attributable to:

    Equity holders of the Company 60,820,193 37,869,824

    Minority interest (105) –

    60,820,088 37,869,824

    In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year

    were not substantially affected by any item, transaction or event of a material and unusual nature.

    DIVIDENDS

    Since the end of the previous financial year, the Company declared a first interim dividend of 5.0 sen less 27% tax

    per ordinary share of RM1.00 each amounting to RM7,717,362/- in respect of the current financial year which was

    paid on 24 October 2007.

    The Directors do not recommend any final dividend payment for the current financial year.

    RESERVES AND PROVISIONS

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

    financial statements.

    Directors’ Report

  • Annual Report 2007

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    BAD AND DOUBTFUl DEBTS

    Before the income statements and balance sheets 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

    provisions for doubtful debts, and have satisfied themselves that all known bad debts had been written off and that

    adequate provision had been made for doubtful debts.

    At the date of this report, the Directors of the Group and of the Company are not aware of any circumstances which

    would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the financial

    statements of the Group and of the Company inadequate to any substantial extent.

    CURRENT ASSETS

    Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took

    reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of business

    their values 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 method of valuation of assets or liabilities of the Group and of the Company misleading

    or inappropriate.

    CONTINGENT AND OTHER lIABIlITIES

    At the date of this report there does not exist:-

    (i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year

    which secures the liabilities of any other person, or

    (ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial

    year.

    No contingent liability or other liability of the Group or 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 or of the Company to meet their obligations

    as and when they fall due.

    Directors’ Report (cont’d)

  • Annual Report 2007

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    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

    In the opinion of the Directors:-

    (i) the results of the operations of the Group and of the Company for the financial year were not substantially

    affected by any item, transaction or event of a material and unusual nature.

    (ii) 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 to affect substantially the results of the operations

    of the Group and of the Company for the financial year in which this report is made.

    ISSUE OF SHARES

    During the year, the following issues of shares were made by the Company:-

    Class Number Terms of Issue purpose of Issue

    Ordinary shares of RM1/- each 2,653,103 Cash Exercised of Employees’ Share Option SchemeOrdinary shares of RM1/- each 1,688,535 Cash Exercised of Warrants

    WARRANTS

    On 20 November 2002, the Company created 23,750,000 warrants pursuant to the rights issue of 23,750,000 new

    ordinary shares of RM1/- each.

    Each warrant entitles its registered holder to subscribe for 1 new ordinary share in the Company at the Exercise Price

    of RM1.35 per share at any time during the Exercise Period. The Exercise Period commenced on 20 November 2002,

    being the date of issue and will mature on 21 November 2007. The Exercise Price of RM1.35 per share is subject to

    adjustments as provided under the Deed Poll dated 9 October 2002.

    On 27 August 2004, the Company adjusted the exercise price and the number of outstanding warrants as specified in the

    Deed Poll dated 9 October 2002 pursuant to the bonus issue of 48,769,583 new ordinary shares of RM1/- each.

    The details of the adjustments on the exercise price and the number of outstanding warrants are as follows:-

    Before Bonus After Bonus Issue Issue

    Exercise price RM1.35 RM1.01

    Number of outstanding warrants 23,702,250 31,603,000

    Directors’ Report (cont’d)

  • Annual Report 2007

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    WARRANTS (cont’d)

    The additional 7,900,750 warrants were issued on the basis of 1 additional warrant for every 3 existing warrants held.

    The summary of the movements of warrants eligible to subscribe for new ordinary shares of RM1/- each are as follows:-

    Number of Warrants Exercise price per Share At AtRM 1 October Exercised 30 September

    1.01 31,603,000 (1,688,535) 29,914,465

    Subsequent to the financial year end, the Company has further issued 29,454,670 new ordinary shares of RM1/- each pursuant to the warrants. The remaining unexercised warrants of 459,795 had lapsed and became null and void on 21 November 2007.

    EMplOYEES’ SHARE OpTION SCHEME (“ESOS”)

    The Group’s ESOS was approved by the Securities Commission (“SC”) on 13 December 2000, and shall be in force for a period of 5 years commencing from 8 October 2002.

    The ESOS was approved by the shareholders at an Extraordinary General Meeting held on 3 June 2002.

    The main features of the ESOS are:-

    (a) eligible persons are employees and executive directors of the Group who have been confirmed in service and served for at least a continuous period of 12 months and have attained the age of 18 years prior to the Date of Offer. The Date of Offer being the date when an offer in writing is made to eligible employees to participate in ESOS. The eligibility for participation in the ESOS shall be at the discretion of the ESOS Committee appointed by the Board of Directors;

    (b) the maximum amount of shares available under ESOS shall not be more than ten percent of the issued and paid-up ordinary share capital of the Company at any point of time during the existence of the ESOS;

    (c) not more than fifty percent of the shares available under the ESOS shall be allocated in aggregate to executive directors and senior management;

    (d) not more than ten percent of the shares available under the ESOS would be allocated to any individual executive director or eligible employee, who either singly or collectively through his/her associates holds twenty percent or more of the issued and paid-up share capital of the Company;

    (e) no option shall be granted for less than 100 shares or such other board lot as may be permitted by legislation or regulation nor exceed the maximum allowable amount to any eligible employee. The option may be exercised in full or in such lesser number of ordinary shares provided that the number shall be in multiples of 100 or such other board lot as may be permitted by legislation or regulation;

    Directors’ Report (cont’d)

  • Annual Report 2007

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    EMplOYEES’ SHARE OpTION SCHEME (“ESOS”) (cont’d)

    (f) the ESOS subscription price for each ordinary share shall be at a discount of not more than 10% from the weighted average market quotation as shown in the Daily Official List issued by the Bursa Malaysia Securities Berhad for the five market days immediately preceding the Date of Offer or at the par value of the shares of the Company, whichever is higher; and

    (g) the ordinary shares to be allotted upon exercise of the option will, upon allotment and issue, rank pari passu in all respects with the existing issued and paid-up ordinary shares of the Company.

    On 27 August 2004, the Company adjusted the exercise price and the number of unexercised share options pursuant

    to the bonus issue of 48,769,583 new ordinary shares of RM1/- each.

    The details of the adjustments on the exercise price and the number of unexercised share options are as follows:-

    Before Bonus Issue After Bonus Issue Tranche 1 Tranche 2 Tranche 1 Tranche 2

    Exercise price RM1.22 RM1.87 RM1.00 RM1.40

    Number of unexercised ESOS 761,000 2,052,000 1,014,667 2,736,000

    The additional 937,667 share options were issued on the basis of 1 additional share option for every 3 existing share

    options held.

    The summary of the movements of ESOS are as follows:-

    2007 Number of Unissued Ordinary Shares Under ESOS Exercise Date Expiry price At AtTranche Granted Date per Share 1.10.06 Granted Exercised lapsed 30.9.07 RM 1 7.7.03 7.10.07 1.00 993,335 – (937,935) (5,333) 50,067

    2 9.2.04 7.10.07 1.40 2,345,333 – (1,715,168) (27,999) 602,166

    2006

    Exercise Date Expiry price At AtTranche Granted Date per Share 1.10.05 Granted Exercised lapsed 30.9.06 RM 1 7.7.03 7.10.07 1.00 1,014,667 – – (21,332) 993,335

    2 9.2.04 7.10.07 1.40 2,736,000 – – (390,667) 2,345,333

    Subsequent to the financial year end, the Company has further issued 203,499 new ordinary shares of RM1/- each

    pursuant to the ESOS. The remaining unexercised ESOS of 448,734 had lapsed and became null and void on 7

    October 2007.

    Directors’ Report (cont’d)

  • Annual Report 2007

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    DIRECTORS OF THE COMpANY

    The Directors in office since the date of the last report are:-

    TAN SRI DATO’ LEE KIM SAI @ LEE HOO

    DATO’ CHEN KOOI CHIEW @ CHENG NGI CHONG

    DATUK CHEN LOK LOI

    CHEN FOOK WAH

    CHIN NAM ONN

    OTHMAN BIN SONOH

    MOHAMMED CHUDI BIN HAJI GHAZALI

    MOHAMED BIN ISMAIL

    CHEN YING @ CHIN YING

    The Directors in office at year end who have an interest in the ordinary shares, warrants and share options pursuant

    to ESOS of the Company and ordinary shares of the subsidiary company are as stated below:-

    (a) Shareholdings in the Company

    - Metro Kajang Holdings Berhad Number of Ordinary Shares of RM1/- Each Exercised At of Warrants/ At 1.10.06 ESOS Bought Sold 30.9.07 Direct Interest

    Dato’ Chen Kooi Chiew

    @ Cheng Ngi Chong 849,333 266,667 – – 1,116,000

    Datuk Chen Lok Loi 2,264,000 1,240,001 – – 3,504,001

    Chen Fook Wah 50,000 273,333 85,000 (135,000) 273,333

    Chin Nam Onn 112,000 152,000 – – 264,000

    Chen Ying @ Chin Ying – – 3,000 (3,000) –

    Othman Bin Sonoh 14,667 – – – 14,667

    Mohammed Chudi Bin

    Haji Ghazali – – 10,000 – 10,000

    Indirect Interest

    Tan Sri Dato’ Lee Kim Sai

    @ Lee Hoo * 1,025,333 172,000 – – 1,197,333

    Dato’ Chen Kooi Chiew

    @ Cheng Ngi Chong ** 85,418,723 – 3,700,000 – 89,118,723

    Datuk Chen Lok Loi *** 82,478,056 – 3,700,000 – 86,178,056

    Chen Fook Wah *** 82,478,056 – 3,700,000 – 86,178,056

    Chen Ying @ Chin Ying ** 83,070,056 266,666 3,700,000 (183,800) 86,852,922

    Directors’ Report (cont’d)

  • Annual Report 2007

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    DIRECTORS OF THE COMpANY (cont’d)

    (b) Warrants in the Company

    - Metro Kajang Holdings Berhad Number of Warrants At At 1.10.06 Bought Sold Exercised 30.9.07

    Direct Interest

    Dato’ Chen Kooi Chiew

    @ Cheng Ngi Chong 247,001 – (40,000) – 207,001

    Datuk Chen Lok Loi 377,334 596,001 – (973,335) –

    Chen Fook Wah 6,667 – – (6,667) –

    Chin Nam Onn 18,667 – – (18,667) –

    Chen Ying @ Chin Ying 20,667 – – – 20,667

    Indirect Interest

    Tan Sri Dato’ Lee Kim Sai

    @ Lee Hoo * 172,000 – – (172,000) –

    Dato’ Chen Kooi Chiew

    @ Cheng Ngi Chong ** 14,294,711 – – – 14,294,711

    Datuk Chen Lok Loi *** 13,914,044 – – – 13,914,044

    Chen Fook Wah *** 13,914,044 – – – 13,914,044

    Chen Ying @ Chin Ying ** 14,012,711 – – – 14,012,711

    (c) Share Options pursuant to ESOS

    Number of Options over Ordinary Shares of RM1/- Each Exercise price At At Tranche RM 1.10.06 Granted Exercised 30.9.07

    Dato’ Chen Kooi Chiew 1 1.00 133,333 – (133,333) –

    @ Cheng Ngi Chong 2 1.40 133,334 – (133,334) –

    Datuk Chen Lok Loi 1 1.00 133,333 – (133,333) –

    2 1.40 133,333 – (133,333) –

    Chen Fook Wah 1 1.00 133,333 – (133,333) –

    2 1.40 133,333 – (133,333) –

    Chin Nam Onn 1 1.00 133,333 – (133,333) –

    2 1.40 133,333 – – 133,333

    Chen Ying @ Chin Ying 1 1.00 133,333 – (133,333) –

    2 1.40 133,333 – (133,333) –

    Directors’ Report (cont’d)

  • Annual Report 2007

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    DIRECTORS OF THE COMpANY (cont’d)

    (d) Shareholdings in the Subsidiary Company

    - Srijang Kemajuan Sdn. Bhd.

    Number of Ordinary Shares of RM1/- Each At At 1.10.06 Bought Sold 30.9.07 Direct Interest

    Dato’ Chen Kooi Chiew

    @ Cheng Ngi Chong 1 – – 1

    Chen Ying @ Chin Ying 1 – – 1

    * Shares/warrants held through a nominee company

    ** Shares/warrants held through corporations in which directors have substantial financial interest and through

    nominee companies

    *** Shares/warrants held through a corporation in which directors have substantial financial interest

    The Directors in office at year end who have an interest in the shares of the Company as disclosed above are also deemed

    to have an interest in the shares of the subsidiary companies to the extent of the shareholdings of the Company.

    Other than the above, none of the other directors in office at the year end held any interest in the shares of the

    Company or its subsidiary companies.

    SIGNIFICANT EVENTS

    Significant events during the year are disclosed in Note 47 to the financial statements.

    SUBSEQUENT EVENTS

    Significant events subsequent to the financial year are disclosed in Note 48 to the financial statements.

    DIRECTORS’ BENEFITS

    Since the end of the previous financial year, no director of the Company has received or become entitled to receive any

    benefit (other than those shown as directors’ fees, other emoluments and benefits-in-kind in the financial statements)

    by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the

    Director is a member, or with a company in which the Director has a substantial financial interest.

    Neither during nor at the end of the financial year, was the Company a party to any 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 except for the ESOS as mentioned above.

    Directors’ Report (cont’d)

  • Annual Report 2007

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    AUDITORS

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

    On Behalf of the Board

    DATO’ CHEN KOOI CHIEW

    @ CHENG NGI CHONG

    DATUK CHEN lOK lOI

    Kuala Lumpur

    28 December 2007

    Directors’ Report (cont’d)

  • Annual Report 2007

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    We, the undersigned, being two of the Directors of the Company, state that in the opinion of the Directors, the

    financial statements as set out on pages 37 to 131, are drawn up in accordance with the provisions of the Companies

    Act, 1965 and applicable MASB Approved Accounting Standards for Entities Other Than Private Entities in Malaysia

    so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 September 2007

    and of the results of the operations, changes in equity and cash flows of the Group and of the Company for the year

    ended on that date.

    On Behalf of the Board

    DATO’ CHEN KOOI CHIEW

    @ CHENG NGI CHONG

    DATUK CHEN lOK lOI

    Kuala Lumpur

    28 December 2007

    Statutory Declaration

    I, Mah Swee Buoy, being the person primarily responsible for the financial management of the Company, do solemnly

    and sincerely declare that the financial statements as set out on pages 37 to 131 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