HAI-O ENTERPRISE BERHAD We Delivered · 2012. 1. 16. · 7. teluk intan 安顺 tel: 05-6218173 8....

企业有限公司HAI-O ENTERPRISE BERHAD (22544-D)

根据一九六五年公司法令在马来西亚注册成立(Incorporated in Malaysia under the Companies Act, 1965)

We Delivered

ANNUAL REPORT

2008二零零八常年报告书

Room 803, 8th Floor, Sun Kompleks, Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.Tel : 03 - 2142 2611 Fax : 03 - 2142 2840 www.hai-o.com.my [email protected]

ANN

UAL REPORT 2008HAI-O EN

TERPRISE BERHAD (22544-D

)

企业有限公司 HAI-O ENTERPRISE BERHAD (22544-D)


玻璃市Perlis

槟城Penang

吡叻Perak

雪兰莪Selangor

柔佛Johor

北马 North Malaysia

Hai-O Chain Store’s Network 海鸥连锁店网络

Corporate Profi leEstablished in 1975, Hai-O has since become a famous household name offering a wide range of Chinese

medicines, medicated tonic and healthcare products. Providing superior quality healthcare products at a

reasonable price is our business policy.

Hai-O was listed on the Second Board of Bursa Malaysia Securities Berhad in 1996, being the fi rst traditional

healthcare company on the stock exchange. The company had then successfully transferred to the Main

Board of Bursa Malaysia on 8th October 2007.

The principal business of the company involves wholesaling, retailing, multi-level marketing, pharmaceutical

factory and modern Chinese Medicinal Clinics. For the past three decades, Hai-O had honed its expertise by

building extensive and effi cient distribution network and strong marketing strategies in Malaysia.

1. ALOR STAR 亚罗士打 Tel: 04-7775815

2. AYER ITAM 阿依淡 Tel: 04-8288606

3. CHAI LENG PARK 北海才能园 Tel: 04-3990710

4. JALAN BURMAH 车水路 Tel: 04-2265909

5. QUEENSBAY 巴六拜皇后园广场 Tel: 04-6432200

6. IPOH 怡保 Tel: 05-2547733

7. TELUK INTAN 安顺 Tel: 05-6218173

8. KUANTAN 关丹 Tel: 09-5667022

9. KLANG 巴生 Tel: 03-33431167

10. JALAN SULTAN 苏丹街 Tel: 03-20703282

11. SUN COMPLEX 太阳大厦 Tel: 03-21417700

12. TAMAN PERTAMA 第一花园 Tel: 03-92848961

13. SETAPAK 文良港 Tel: 03-40226053

14. JINJANG 增江 Tel: 03-62589081

15. PJ SS2 八打灵 Tel: 03-78778088

16. SERDANG 沙登 Tel: 03-89433536

17. METRO KAJANG 美景广场 Tel: 03-87344001

18. TAMAN MUDA AMPANG 安邦太子园 Tel: 03-42966941

19. USJ SUBANG 梳邦 Tel: 03-56387239

20. KEPONG 甲洞 Tel: 03-62776097

21. ENDAH PARADE 恩达广场 Tel: 03-95430951

22. MCC CITY 马中商城 Tel: 03-92837787

23. DESA AMAN PURI 甲洞逸富园 Tel: 03-62803195

24. PUSAT BANDAR RAWANG 万挠镇 Tel: 03-60927880

25. SUNGAI LONG 加影双溪龙 Tel: 03-90758889

26. PEARL POINT 旧巴生路珍城 Tel: 03-79822946

27. ONE UTAMA 万达 Tel: 03-77241015

28. CARREFOUR MIDVALLEY 谷中城广场 Tel: 03-22872136

29. CARREFOUR SUBANG JAYA 梳邦再也家乐福 Tel: 03-33438889

30. JUCSO BUKIT TINGGI 2 JUSCO武吉丁宜2 Tel: 03-33262408

31. GIANT BANDAR PUTERI PUCHONG 蒲种公主城大人超市 Tel: 03-80600637

32. CARREFOUR JALAN PEEL 蕉赖家乐福 Tel: 03-33438889

33. PANDAMARAN 班达马兰 Tel: 03-33232045

34. JLN IPOH 怡保路 Tel: 03-62502887

35. KAPAR INDAH 加埔7支 Tel: 03-32913651

36. SELAYANG JAYA 士拉央 Tel: 03-61387908

中马 Central Malaysia

南马 South Malaysia

东海岸 East Coast

37. TITI 知知港 Tel: 06-6111768

38. SEREMBAN 芙蓉 Tel: 06-7627903

39. JUSCO SEREMBAN 2 JUSCO芙蓉2 Tel: 06-6015422

40. MELAKA 马六甲 Tel: 06-2836935

41. BATU BERENDAM 马六甲巴株安南 Tel: 06-3178262

42. LUKUT 芦骨 Tel: 06-6515519

43. KLUANG 居銮 Tel: 07-7721773

44. BATU PAHAT 巴株巴辖 Tel: 07-4310451

45. JOHOR BAHRU 新山 Tel: 07-3325377

46. SEGAMAT 昔加末 Tel: 07-9321262

47. MUAR ASTAKA 麻坡 Tel: 06-9532842

48. MUAR LEGENDA 麻坡凯荣 Tel: 06-9510714

49. PLAZA TASEK 皇后广场 Tel: 07-5543925

50. GIANT PLENTONG JB 避兰东大人超市 Tel: 07-3591636

51. CARREFOUR SUTERA MALL, J.B 五福城广场家乐福 Tel: 03-33438889

52. JOHOR JAYA 柔佛再也 Tel: 07-3575332

53. KULAI 古来 Tel: 07-6621398

54. TAMAN PERLING 新山柏龄花园 Tel: 07-2345941

55. TAMAN UNIVERSITY 新山大学城 Tel: 07-5202566

56. TANGKAK 东甲 Tel: 06-9785127

彭亨Pahang

森美兰N. Sembilan

登嘉楼Terengganu

吉兰丹Kelantan

吉打Kedah

马六甲Melaka

www.hai-o.com.my • ANNUAL REPORT 2008 1

Audit Committee Report

2 Notice Of Annual General Meeting

10 Group Corporate Structure

11 Corporate Information

12 Board Of Directors

14 Profi le Of The Board Of Directors

22 Group Financial Highlights

24 Chairman’s Statement

34 Managing Director’s Statement

47 Corporate Social Responsibility

51 Audit Committee Report

56 Statement On Corporate Governance

61 Statement On Internal Control

63 Additional Corporate Disclosure

66 Financial Statements

144 Analysis Of Shareholdings

147 Top 10 Properties

• Form Of Proxy

CONTENTS

HAI-O ENTERPRISE BERHAD (22544-D) • (INCORPORATED IN MALAYSIA)2

ud t Co ttee epo t

NOTICE OF ANNUAL GENERAL MEETING

AGENDA

1. To receive and adopt the audited Financial Statements for the fi nancial year ended 30 April 2008 and the Reports of the Directors and Auditors thereon.

2. To re-elect Mr. Lim Chin Luen who retires by rotation pursuant to Article 102(1) of the Company’s Articles of Association.

3. To pass the following resolutions in accordance with Section 129(6) of the Companies Act, 1965 :-

i) “ That Tan Sri Osman S Cassim, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed Director of the Company to hold offi ce until the next Annual General Meeting.”

ii) “ That Dato’ Abdul Rani Bin Mohd. Razalli, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed Director of the Company to hold offi ce until the next Annual General Meeting.”

iii) “ That Dr. M.K. Rajakumar A/L M.R.K. Nayar, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed Director of the Company to hold offi ce until the next Annual General Meeting.”

iv) “ That Mr. Tan Kai Hee, retiring pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed Director of the Company to hold offi ce until the next Annual General Meeting.”

4. To approve Directors’ fees for the fi nancial year ended 30 April 2008.

5. To declare a fi nal dividend of 32% less 25% tax for the fi nancial year ended 30 April 2008.

6. To re-appoint Messrs BDO Binder as Auditors of the Company and to authorise Directors to fi x their remuneration.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

NOTICE IS HEREBY GIVEN that the 33rd Annual General Meeting of the Company will be held at Banquet Hall, 2nd Floor, The Federal Hotel Kuala Lumpur, No. 35, Jalan Bukit Bintang, 55100 Kuala Lumpur on Wednesday, 29 October 2008 at 11.30 a.m. to transact the following business:-


AS SPECIAL BUSINESS :-

7. To consider and if thought fi t, to pass the following resolutions :-

Ordinary Resolution 1 Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965 “ That the Directors be and are hereby empowered, pursuant to Section 132D of the Companies

Act, 1965, to issue shares in the Company at any time and upon such terms and conditions and for such purpose as the Directors may, in their absolute discretion deem fi t, provided that the aggregate number of the shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company as at the date of this Annual General Meeting and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

Ordinary Resolution 2 Proposed Share Buy-Back by the Company “ That subject to the rules, regulations and orders made pursuant to the Companies Act, 1965

(“the Act”), provisions of the Memorandum and Articles of Association of the Company and the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities, the Board be and is hereby authorised to purchase the Company’s issued and paid-up ordinary shares of RM1.00 each (“Hai-O Shares”) through Bursa Securities (“Proposed Share Buy-Back”) subject to the following:-

i) the maximum number of Hai-O Shares which may be purchased and/or held as treasury shares by the Company at any point of time pursuant to the Proposed Share Buy-Back shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company;

ii) the maximum fund to be allocated by the Company for the purpose of purchasing the Hai-O Shares shall not exceed the aggregate of the retained profi ts and/or the share premium account of the Company;

iii) the authority conferred by this resolution will be effective immediately upon the passing of this Resolution and will expire at the conclusion of the next annual general meeting of the Company, unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in a general meeting or the expiration of the period within which the next annual general meeting after that date is required by the law to be held, whichever occurs fi rst, but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and, in any event, in accordance with the provisions of the Listing Requirements of Bursa Securities or any other relevant authorities; and

iv) upon completion of the purchase(s) of the Hai-O Shares by the Company, the Board be and is hereby authorised to retain the Hai-O Shares so purchased as treasury shares, of which may be distributed as dividends to shareholders and/or re-sold on Bursa Securities and/or subsequently cancelled and in other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the requirements of Bursa Securities and any other relevant authorities for the time being in force.

AND that the Board be and is hereby authorised to take all such steps as are necessary or expedient to implement or to effect the purchase(s) of the Hai-O Shares with full power to assent to any condition, modifi cation, variation and/or amendment as may be imposed by the relevant authorities and to take all such steps as they may deem necessary or expedient in order to implement, fi nalise and give full effect in relation thereto.”

8. To transact any other business for which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

Resolution 10

Resolution 11

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)

Co t d


ud t Co ttee epo t

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that subject to the approval of the shareholders at the 33rd Annual General Meeting to be held on 29 October 2008, a fi nal dividend of 32% less 25% tax per ordinary share of RM1.00 each in respect of the fi nancial year ended 30 April 2008 will be paid on 10 December 2008. The entitlement date for the dividend payment is 1 December 2008.

A Depositor shall qualify for the entitlement to the dividend only in respect of :-

(a) Securities transferred into the Depositor’s Securities Account before 4.00 p.m. on 1 December 2008 in respect of the transfers; and

(b) Securities bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia Securities Berhad.

By Order of the Board

Chen Yut Meng (MACS 01131)

Nancy Ng Ah Pang (LS 01448)

Company Secretaries

Kuala Lumpur6 October 2008

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)

Notes :1. A member entitled to attend and vote at the above meeting is entitled to appoint not more than two (2) proxies to

attend and vote instead of him. A proxy may but need not be a member of the Company.

2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifi es the proportions of his holding(s) to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a corporation, either under its Common Seal or attorney duly authorised in writing.

4. The Form of Proxy must be deposited at the Registered Offi ce of the Company at Room 803, 8th Floor, Sun Kompleks, Jalan Bukit Bintang, 55100 Kuala Lumpur, not less than forty-eight (48) hours before the time appointed for holding the meeting.

Explanatory Notes on Special BusinessResolution 10 (Ordinary Resolution 1)Resolution pursuant to Section 132D of the Companies Act, 1965

In line with the Company’s plan for the expansion, the Company is actively looking into prospective areas so as to broaden the operating base and earning potential of the Company. As the expansion may involve the issue of new shares, the Directors, under present circumstances, would have to call for a general meeting to approve the issue of new shares even though the number involved is less than 10% of the issued capital. In order to avoid any delay and cost involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate that the Directors be now empowered to issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company as at the date of this Annual General Meeting for such purpose as they consider would be in the 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.

Resolution 11 (Ordinary Resolution 2)Resolution pertaining to Proposed Share Buy-Back by the Company

The Ordinary Resolution proposed, if passed, will empower the Company to purchase and/or hold up to ten percent (10%) of the issued and paid-up share capital of the Company. This authority will, unless revoked or varied by the Company at a General Meeting, expire at the next Annual General Meeting. For further information on the Proposed Share Buy-Back, please refer to the Share Buy-Back Statement dated 6 October 2008 accompanying the Annual Report 2008.


ud t Co ttee epo t

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

1) Director who are standing for re-election or re-appointment at the 33rd Annual General Meeting of the Company

i) The Director retiring by rotation pursuant to Article 102(1) of the Company’s Articles of Association and seeking re-election is :

- Lim Chin Luen

ii) The Directors who are over the age of seventy years and seeking re-appointment pursuant to Section 129(6) of the Companies Act, 1965 are :-

- Tan Sri Osman S Cassim - Dato’ Abdul Rani Bin Mohd. Razalli - Dr. M.K. Rajakumar A/L M.R.K. Nayar - Tan Kai Hee

The details of fi ve Directors seeking re-election or re-appointment are set out in the Directors’ profi les which appear from page 14 to page 20 of the Annual Report.

2) Details of attendance of Directors at Board Meetings

Details of attendance of Directors at Board Meetings held during the fi nancial year ended 30 April 2008 are set out on page 64 of the Annual Report.

3) Place, Date and Time of the 33rd Annual General Meeting :-

Place : Banquet Hall, 2nd Floor, The Federal Hotel Kuala Lumpur, No. 35,Jalan Bukit Bintang, 55100 Kuala Lumpur

Date : 29 October 2008 (Wednesday)

Time : 11.30 a.m.

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


ud t Co ttee epo t

1．接纳及讨论本年度至2008年4月30日的核讫帐目，董事及稽查师报告。

2．重新委任遵照公司102（1）条文退任的林钟龙先生为本公司的董事。

3．会议考虑如适当可通过下列普通决案:

i) 重新委任依循1965年公司法令第129（6）条文退任的 Tan Sri Osman S Cassim 为本公司董事，任期至下届股东常年大会。

ii) 重新委任依循1965年公司法令第129（6）条文退任的 Dato’Abdul Rani bin Mohd Razalli 为本公司董事，任期至下届股东常年大会。

iii) 重新委任依循1965年公司法令第129（6）条文退任的 Dr.M.K. Rajakumar A/L M.R.K. Nayar 为本公司董事，任期至下届股东常年大会。

iv) 重新委任依循1965年公司法令第129（6）条文退任的陈凯希先生为本公司董事，任期至下届股东常年大会。

4．核准本年度2008年4月30日董事费。

5．建议分发本年度至2008年4月30日年终股息32%唯须扣除所得税25%。

6．重新委任Messrs. BDO Binder为本公司的稽查师，及授权董事部决定其酬金。

7．会议考虑如适当可通过下列普通议决案：

授权董事遵照1965年公司法令132D节发行股票“ 遵照1965年公司法令第132D节，根据董事会的判断并决定在任何时间内以适当的条件和用途发

行公司股票，以作为某项用途。但根据此议决案发出的股票累积总数，不得超过公司已发出股本的10%。同时董事们也获授权申请批准，以使这一批发出的额外股票在马来西亚股票交易所有限公司上市。同时此授权将继续有效至公司下一届常年大会结束。”

通知书


ud t Co ttee epo t

通知书

建议更新股票购回授权“ 在1965年公司法令（“法令”）本公司章程条文及马来西亚股票交易所有限公司的规定和任何

其他相关当局所制定的准则、条例与规则之下，本公司董事会兹获得授权通过马来西亚股票交易所有限公司购回本公司已发行和缴足普通股（“海鸥股票”），但这需符合下述条件：

i) 本公司所可能购买或持有的海鸥股票的大数量将是不超过或相等于目前本公司已发行和缴足股票资本的10％；

ii) 本公司分配以用作购买海鸥股票的高资金额不超过本公司的累积保留盈利及或股票溢价帐项；

iii) 此决议案所授予的授权在此决议案通过后立即生效，及直到下一次常年股东大会完成而到期，除非公司在股东大会上以决议案加以提早撤回或改变，或在法律规定须召开的日期过后的下一次常年股东大会之期限到期，视何者先发生，但不至于损害到在上述日期到期之前由本公司完成的购买，及无论如何，都必须依照马来西亚股票交易所有限公司的规定和任何其他相关当局所发出的指导方针及条文；

iv) 在本公司完成购买海鸥股票之后，董事会获得授权以保有这些海鸥股票以当作库存股票，可以通过股息方式派发给股东，及/或在马来西亚股票交易所重新出售，及/或之后加以注消，及根据法令规定，和必须根据马来西亚股票交易所规定之准则与此相关之官方规定之条例加以处理。

董事会兹获得授权以采取所有必要的或有用的步骤，全权同意相关当局所实施的任何条件，修改及/或修正，去执行或使海鸥股票的购回实现，及采取所有他们认为是必要的或有用的步骤，以便执行、完成及使之全面生效。”

8. 进行其他议项，唯须根据本公司章程及1965年公司法令的通知程序。

通知书本年度至2008年4月30日年终股息32%唯须扣除所得税25%，如被批准将在2008年12月10日发予已于2008年

12月1日登记在公司股东名册上之股东。

仅在以下情况的存票者方有资格获享股息:-

(a) 以转移方式于2008年12月1日下午4时或之前将股票过户至其证券户口者(b) 依据马来西亚股票交易所有限公司条例，以附属权利方式于马来西亚股票交易所有限公司购置之股票。

受董事会之命曾月明女士黄莲丝女士公司秘书吉隆坡2008年10月6日


ud t Co ttee epo t

1．每一名有权出席及投票的股东均可委任不超过2名代表出席股东常年大会并参与投票。股东代表无须为本公司股东。2．若股东委任2名代表，委任书必须注明各别代表委托的股份，否则其委任书将失效。3．授权委任书必须为书面，并由他的适当书面授权的代理人签名或者如果委托人为一家公司，则必须在公司的印章下

由一名获适当授权的公司代表签名。4．授权委任书必须于召开会议前四十八小时内送达公司注册处位于 Room 803, 8th Floor, Sun Kompleks, Jalan Bukit

Bintang, 55100 Kuala Lumpur.

议决案10（普通议决案1）遵照一九六五年公司法领第一三二D条文议决案。

配合公司的扩充计划，公司在积极探寻具景的业务领域，籍以扩大营业基础和盈利潜力。鉴于扩充计划或涉及新股的发行，董事们在目前情况下须召开一次大会，以商讨批准股票的发行，即使涉及的新股票数目少于已发出股本的10%。为避免任何拖延，以及召开大会以批准这些股票发行所牵涉的费用。因此被认为适当的做法是董事们获授权在符合公司利益的用途下发行公司股票，但发出的股票不超过公司已发出股本的10%。此一授权，除非遭撤回或在大会上另有变动，将在公司的下一届常年大会满期。

议决案11（普通议决案2）

此普通议决案，如获得通过，将授权本公司购买及/或持有高至本公司的十巴仙（10%）已发行或缴足资本。此授权除非在股东大会上被公司撤回或改变，不然会在下一次常年股东大会到期。

请参阅志期2008年10月6日的股票购回声明，以获取进一步的资讯。

附随股东常年大会通知书声明

1）在33届股东常年大会寻求被重新委任的董事

i. 遵照公司章程第102（1）条文退任并寻求被重新委任的董事:- · 林钟龙先生

ii. 以下四位董事年龄超越70岁，依循公司法令第129（6）节退任并寻求被重新委任:- · Tan Sri Osman S. Cassim · Dato’ Abdul Rani Bin Mohd Razalli · Dr. M.K. Rajakumar A/L M.R.K. Nayar · 陈凯希先生

有关以上五位董事的详细资料请参阅常年报告书第12页至20页的董事部简介。

2）董事会议

在本财务年度里，各董事出席董事会议的详情在本常年报告书第64页里披露。

3) 第33届股东常年大会的召开地点，日期和时间：日期: 2008年10月29日（星期三）地点: Banquet Hall, 2nd Floor, The Federal Hotel Kuala Lumpur No. 35, Jalan Bukit Bintang, 55100, Kuala Lumpur 时间：上午11时30分

通知书


ud t Co ttee epo t

We deliver...

We are committed to promoting healthcare

culture and improving human’s well-being.

Mission企业理念

弘扬保健文化，创造幸福生活.

Vision企业使命We aim to become the premier healthcare company

in Malaysia and thereby bringing the greatest value

and pride to our customers, business partners,

employees and shareholders.

我们致力成为马来西亚卓越的保健企业，

为顾客、商业夥伴，员工及股东带来高的价值与荣耀.


DIRECT SELLING

DIVISION

Hai-O Marketing Sdn. Bhd.

Hai-O Medicine Sdn. Bhd. Kinds Resource Sdn. Bhd. Grand Brands (M) Sdn. Bhd. Chop Aik Seng Sdn. Bhd.

RETAIL DIVISION

WHOLESALE

DIVISION

HAI-O ENTERPRISE BERHAD

Hai-O Raya Bhd. Peking Tongrentang (M) Sdn. Bhd. Sanjiu Hai-O TCM (M) Sdn. Bhd. Hai-O Polaris (M) Sdn. Bhd.

MANUFACTURING

DIVISION

SG Global Biotech Sdn. Bhd. QIS Research Laboratory Sdn. Bhd.

OTHERS Seagull Advertising Sdn. Bhd. Hai-O Credit & Leasing Sdn. Bhd.

Sri Pangkor Credit & Leasing Sdn. Bhd. Hai-O Properties Sdn. Bhd. Hai-O Energy (M) Sdn. Bhd.

(formerly known as Ten Plus Three Trade Centre Sdn Bhd)

Subsidiary Company Joint Venture Company

GROUP CORPORATE STRUCTUREOF MAIN OPERATING COMPANIES AS AT 6 OCTOBER 2008


BOARD OF DIRECTORS

Tan Sri Osman S. CassimChairman, Independent & Non-Executive Director

Dr. M.K. Rajakumar A/L M.R.K. NayarVice Chairman, Independent & Non-Executive Director

Tan Kai HeeManaging Director

Dato’ Abdul Rani Bin Mohd RazalliNon-Independent & Non-Executive Director

Tan Keng SongExecutive Director

Lim Chin LuenIndependent & Non-Executive Director

Quek Ah BaIndependent & Non-Executive Director

AUDIT COMMITTEE

Quek Ah BaChairman, (Independent & Non-Executive Director)

Dr. M.K. Rajakumar A/L M.R.K. NayarMember, (Independent & Non-Executive Director)

Lim Chin LuenMember, (Independent & Non-Executive Director)

COMPANY SECRETARIES

Chen Yut Meng (MACS 001131)Nancy Ng Ah Pang (LS 01448)

AUDITORS

BDO Binder (AF 0206)Chartered Accountants

SHARE REGISTRAR

PFA Registration Services Sdn Bhd (19234-W)(A wholly owned subsidiary of Tricor Services (Malaysia) Sdn Bhd)

Level 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala Lumpur, Malaysia.Tel : 03-2264 3883Fax : 03-2282 1886E-mail : [email protected]

PRINCIPAL BANKERS

OCBC Bank (Malaysia) Berhad (295400-W)HSBC Bank Malaysia Berhad (127776-V)Bank of China (Malaysia) Berhad (511251-V)RHB Bank Berhad (6171-M)Public Bank Berhad (6463-H)

REGISTERED OFFICE

Room 803, 8th Floor, Sun KompleksJalan Bukit Bintang, 55100 Kuala Lumpur.Tel : 03-2142 2611 Fax : 03-2142 2840

BUSINESS OFFICE

Wisma Hai-O, Lot 11995,Batu 2, Jalan Kapar, 41400 Klang,Selangor Darul Ehsan, Malaysia.Tel : 03-3342 3322 Fax : 03-3342 8285Website URL : www.hai-o.com.myE-mail : [email protected]

STOCK EXCHANGE LISTING

Main Board of Bursa Malaysia Securities BerhadStock Name / Code: HAIO 7668ISIN : MYL766800006

CORPORATE INFORMATION AS AT 6 OCTOBER 2008


ud t Co ttee epo t

1. Tan Sri Osman S. Cassim

2. Tan Kai Hee

3. Dr. M.K. Rajakumar A/L M.R.K. Nayar

4. Dato’ Abdul Rani Bin Mohd Razalli

5. Lim Chin Luen

6. Quek Ah Ba

7. Tan Keng Song

8. Tan Keng Kang

(resigned on 18 Sept 2008)

52 34

6 7

1

8

BOARD OF DIRECTORS


ud t Co ttee epo t

We care...

Corporate Values

Social Responsibility

取之社会, 用之社会

Excellent Service

至诚服务, 以客为尊

Attitude

诚信进取，精益求精

Growing

持续成长, 共同分享

Unity

群策群力，和衷共济

Loyalty

忠于职守, 敬业乐业

Learning

自强不息，终身学习

企业价值



Y. Bhg. Tan Sri Osman S. Cassim(Aged 78 – Malaysian)Chairman, Independent & Non Executive Director

Y. Bhg. Tan Sri Osman was educated at Anderson School, Ipoh and later graduated with a Bachelor of Arts (Honours) from University of Malaya in Singapore. In 1970 and 1984, he attended the Advanced Management Programmes conducted respectively by the New Zealand Administrative Staff College, Wellington and the Harvard Business School in Boston.

Tan Sri Osman has extensive experience in the public sector having served as a member of the Malaysian Administrative and Diplomatic Service for 30 years. Among the posts he held during this tenure were Secretary-General in the Ministry of Labour, the Ministry of Information, and Ministry of Home Affairs. Tan Sri Osman served as Director-General of the Public Services Department Malaysia from 1980 up to his retirement in 1985. In 1985, he was appointed National Executive for Malaysia and Brunei of the General Electric Technical Services Co. Inc. (USA) and subsequently in 1988 as National Advisor to the General Electric International (USA) until 1993. He is a member of the Court of Fellows of the Malaysia Institute of Management and is currently its Vice President. Tan Sri Osman had served as a board member and chairman of Southern Bank Berhad since October 1990 up to his retirement on 18 February 2005.

He was appointed to the board and as Chairman on 31 January 2005.

He has no family relationship with any other director/ major shareholder of Hai-O.

He has attended 8 Board of Directors’ meetings during the fi nancial year ended 30 April 2008.

In the past ten years, he has not been convicted of any offence.

PROFILE OF THE BOARD OF DIRECTORS



Tan Kai Hee(Aged 71 - Malaysian)Managing Director - Non Independent Director

Mr. Tan is one of the founders, main policy and decision-makers of the Company. Mr. Tan as a well-known businessman has more than 30 years of commercial experience in the trading business. Mr. Tan attended China Market Study Tour Program conducted by Beijing International MBA at Peking University in August 2006.

Apart from managing the Company business, he is also an active social worker involved in charitable community works for the past 33 years, and he is presently holding several positions in the Chinese societies. He is the Advisor of the Advisory Mission for Economy and Social Development of Yunnan Province, China; Council Member of the China Market Advisory Council, Tourism Malaysia; Trading Services Chairman of the Malaysia China Business Council (MCBC); Secretary General of the Malaysia-China Friendship Association (PPMC); Chairman of Commerce Committee of The Associated Chinese Chambers of Commerce & Industry of Malaysia (ACCCIM); Honorary President of the Malaysia-China Chamber of Commerce (MCCC); President of the Malaysia-China Medicine & Health Product Association; Advisor of the Federation of Chinese Physicians and Medicine Dealers Association of Malaysia (FCPMDAM) and Vice President of the Klang Chinese Chamber of Commerce and Industry (KCCCI). He also holds directorship in Hai-O Raya Bhd, and several private limited companies.

Mr. Tan was appointed to the board on 30 August 1975. He is a member of the Remuneration Committee, Investment Committee and Employees’ Share Option Scheme Committee.

Mr. Tan is the father of Ms. Tan Keng Song and Mr. Tan Keng Kang.



PROFILE OF THE BOARD OF DIRECTORS (CONT’D)


ud t Co ttee epo t


Academician Dr. M.K. Rajakumar A/L M.R.K. NayarMBBS (Mal), A.M.F.A. SC., FAFP (Mal), FCFP (S’pore), FHK, CFP, FRACGP, FRCGP (UK), FRCP Edin.

(Aged 76 – Malaysian)Vice Chairman,Independent & Non Executive Director

Dr. M.K. Rajakumar graduated from University of Malaya, Singapore in 1956. He is a past President of the Malayan Medical Association and of the Malaysian Scientifi c Association.

He was appointed to the Board on 6 September 1996. He is also a member of the Audit Committee, Nomination Committee, Remuneration Committee, Employees’ Share Option Scheme Committee and Investment Committee.

He has no family relationship with any other director/major shareholder of Hai-O.

Dr. M.K. Rajakumar has attended 8 Board of Directors’ meetings during the fi nancial year ended 30 April 2008.



ud t Co ttee epo t

Tan Keng Song(Aged 34 - Malaysian)Executive Director - Non Independent Director

Ms. Tan Keng Song graduated from University of Western Australia in 1997 with a Bachelor Degree in Commerce, majoring in Management and Marketing. Prior joining Hai-O, she was a Business Development Executive in one of the leading automobile corporation in Malaysia, UMW Group and in charged of System Development and Training for 3 years. She joined Hai-O Raya Bhd, a retail division of Hai-O Group on 12 June 2000, as MIS Executive in charge of Point of Sales and Management System (POS) for all the retail outlets throughout Malaysia.

On 1 January 2001, she was promoted as Group MIS Executive, in charged of group IT and MIS division. Currently she is assigned as the Group Offi ce Support and Service Manager leading the Business Administration, Human Resource and Management Information System of Hai-O Group.

She was appointed to the Board on 26 December 2001 and is a member of the Employees’ Share Option Scheme Committee and Investment Committee. She also holds directorship in several private limited companies.

Ms. Tan Keng Song is the daughter of Mr. Tan Kai Hee, who is the Managing Director of Hai-O Enterprise Bhd and, sister to Mr. Tan Keng Kang.

She had attended 8 Board of Directors’ meetings during the fi nancial year ended 30 April 2008.

In the past ten years, she has not been convicted of any offence.




Y. Bhg. Dato’ Abdul Rani bin Mohd Razalli(Aged 78 - Malaysian)Non Independent & Non Executive Director

Y. Bhg. Dato’ Abdul Rani obtained his Senior Cambridge Certifi cate in 1952. Subsequently, he joined the Government Service in 1953 and was attached to the Government Royal Custom & Excise, Malaysia for 32 years. He retired from Government Service in 1985 as the Deputy Director General of Customs, Malaysia. After his retirement from the Government Service, he ventured into commercial business in the fi elds of warehousing, freight forwarding, transportation, shipping agency and manufacturing as well as acting as advisor and consultant. He also sits on the board of several other private limited companies.

He was appointed to the Board as Executive Director on 4 January 1995. He was re-designated as Non Executive and Non Independent Director on 16 June 2003. He is a member of the Investment Committee.







Lim Chin Luen(Aged 64 – Singaporean)Independent & Non Executive Director

Mr. Lim was involved in the dealing of Chinese traditional medicine and herbal products business for more than 15 years. Apart from his appointment in Hai-O, he currently operates his own nourishing food and noodles stores in Singapore.

He was appointed to the Board on 16 December 1997. Mr. Lim is also a member of the Remuneration Committee, Audit Committee, Nomination Committee and Employees’ Share Option Scheme Committee.


Mr. Lim has attended 8 Board of Directors’ meetings during the fi nancial year ended 30 April 2008.





Quek Ah Ba(Aged 65 - Malaysian)Independent & Non Executive Director

Mr. Quek Ah Ba has worked as an Accountant and Operational Manager in various organisations in his working career and has been in service in two of the Securities fi rms, Noone & Co Sdn Bhd (1980 - 1983), C.S. Securities Sdn Bhd (1986 - 1989). Mr. Quek became a member of Australia Society of Accountants (A.S.A.) in 1973. He is also an associate member of CPA (Australia).

Mr. Quek was appointed to the board on 26 December 2001. He is also Chairman of the Audit Committee and a member of the Nomination Committee.


Mr. Quek has attended 8 Board of Directors’ meetings during the fi nancial year ended 30 April 2008.





The Ideal Solution to your needs

满足您需求的完美方案



Year ended 30 April 2004@ 2005@ 2006@ 2007@ 2008 (RM’000) (RM’000) (RM’000) (RM’000) (RM’000)

CONSOLIDATED INCOME STATEMENTRevenue 121,014 141,494 146,798 189,346 373,822 Profi t before taxation 6,383 10,309 15,127 30,607 67,716 Taxation (2,224) (4,514) (4,349) (8,494) (18,598)Net Profi t for the year 4,159 5,795 10,778 22,113 49,118

Attributable to:- Equity holders to the Company 3,887 5,507 10,183 21,384 48,535 Minority interest 272 288 595 729 583 Net Profi t for the year 4,159 5,795 10,778 22,113 49,118

CONSOLIDATED BALANCE SHEETAssetsProperty, plant and equipment* 50,373 49,353 46,002 45,370 44,269 Investment in associated companies 190 51 - - - Other Investment 1,832 2,521 5,985 5,534 2,741 Trade receivables-non current 627 501 1,512 1,583 1,373 Deferred tax assets - - 301 1,080 1,684 Goodwill on consolidation 646 365 306 274 85 Net current assets 56,542 65,507 71,587 95,123 153,958 TOTAL ASSETS 110,210 118,298 125,693 148,964 204,110

EQUITY AND LIABILITIESEquity attributable to equity holdersShare capital 65,748 65,773 66,329 68,814 83,088 Share premium 1,384 1,384 - 600 1,826 Reserves & Retained Earnings 15,406 18,612 24,230 38,494 61,949 Treasury shares (1,922) (3,875) (1,165) (2,243) (6,291)Shareholders’ equity 80,616 81,894 89,394 105,665 140,572 Minority interest 4,282 4,619 4,619 5,215 5,500 TOTAL EQUITY 84,898 86,513 94,013 110,880 146,072

LiabilitiesNon-current liabilities 423 523 125 58 64 Current Liabilities 24,889 31,262 31,555 38,026 57,974 TOTAL LIABILITIES 25,312 31,785 31,680 38,084 58,038

TOTAL EQUITY AND LIABILITIES 110,210 118,298 125,693 148,964 204,110

RATIOSReturn on Shareholders’ Fund (%) 4.82% 6.72% 11.39% 20.24% 34.53%Return on Total Assets (%) 3.53% 4.66% 8.10% 14.36% 23.78%Earnings per share (sen) 6.04# 8.72# 16.39# 27.07^ 60.41^Gross dividend per share (sen) 5 6 8 18 40Net assets per share** (sen) 126 132 137 157 176

Note: @ Restated as a result of adopting the new and revised accounting standard. * Including the Investment properties and prepaid lease payment for land. # Calculated based on weighted average number of shares in issue. ^ Calculated based on weighted average number of shares in issue after adjusting for the Bonus Issue in fi nancial year 2008 ** Attributable to ordinary equity holders of the company.

GROUP FINANCIAL HIGHLIGHTS



04 05 06 07 08

80,6

16

81,8

94

89,3

94 105,

665

140,

572

Shareholders’ Equity (RM ‘000)

04 05 06 07 08

6.04 8.72

16.3

9

27.0

7

60.4

1

Earnings Per Share(Sen)

04 05 06 07 08

4.82

%

6.72

% 11.3

9%

20.2

4% 34.5

3%

Return on Shareholders’ Fund(%)

GROUP FINANCIAL HIGHLIGHTS(CONT’D)

04 05 06 07 08

Gross Dividend Per Share(Sen)

04 05 06 07 08

40

18

8

6

56,

383

10,3

09

15,1

27

30,6

07

67,7

16

Profi t Before Taxation(RM ‘000)

04 05 06 07 08

Revenue(RM ‘000)

04 05 06 07 08

126

132 13

7

157 17

6

Net Assets Per Share(Sen)

373,

822

121,

014

141,

494

146,

798

189,

346


ud t Co ttee epo t

On behalf of Hai-O’s Board of Directors, it is with

great pleasure that I present our Annual Report and

commendable fi nancial statements of the Group and

Company for the fi nancial year ended 30 April 2008.

CHAIRMAN’S STATEMENT


ud t Co ttee epo t

INTRODUCTION

For FY2008, I am pleased to report that Hai-O Group registered yet another record-breaking revenue and after tax profi t of RM 373.82 million and RM 48.54 million respectively, against RM 189.35 million and RM 21.38 million respectively for the corresponding period of FY2007. The principal subsidiary, the multi-level marketing (MLM) division had a tremendous growth this year in terms of revenue and profi t, which contributed over 70% of the Group’s profi t. In addition, higher margins had also contributed to the higher profi t for the Group, mainly contributed from the strengthening of the Malaysian Ringgit against the US Dollar which had reduced the import purchase costs, the success of promoting house brand products and higher members’ sales from the retail division.

I am also pleased to announce that Hai-O had offi cially been transferred from the Second Board to the Main Board of Bursa Malaysia Securities Berhad on 8 October 2007. The transfer to the Main Board is expected to better refl ect the current status of the operation of the Group, and enhance the standing and attractiveness of Hai-O Group amongst investors.

SHARE BUY BACK

During the FY2008, the Company had purchased 1,413,700 Hai-O shares from the open market.

As a reward to shareholders, on 26 June 2008, the Company had declared a distribution of one (1) treasury share for every twenty fi ve (25) existing ordinary shares of RM 1.00 each (“Share Dividend”) to the shareholders. A total of 3,225,542 treasury shares were distributed to entitled shareholders in relation to this Share Dividend on 11 August 2008.

As of 16 September 2008, the date prior to the printing of this Annual Report, the treasury shares held by the Company amounted to 486,944 shares. The Company has announced on 3 September 2008 that it is seeking a renewal mandate from shareholders pertaining to share buy back in the forthcoming AGM to be held in October 2008.

EMPLOYEES SHARE OPTION SCHEME (ESOS)

During the FY2008, the Company had further issued 1,969,000 Options pursuant to ESOS to the entitled employees at Option price of RM 2.70 per share. A total of 499,000 Options had been exercised during the year under reviewed.

The ESOS was established and implemented on 21 December 1998 and will expire on 20 December 2008.

CORPORATE DEVELOPMENT

To better refl ect the scale and current operation, the Company had on 22 June 2007 via RHB Investment Bank Berhad announced that the company proposed to undertake the following :

a) A bonus issue on the basis of One (1) new ordinary share for every fi ve (5) existing ordinary shares held (“Proposed Bonus Issue”) and

b) A transfer of the listing and quotation for the entire issued and paid-up capital of Hai-O from the Second Board to the Main Board of Bursa Malaysia Securities Berhad (Bursa Securities) (“Proposed Transfer Listing”).

The Proposed Bonus Issue and Proposed Transfer Listing are not inter-conditional.

CHAIRMAN’S STATEMENT (CONT’D)

Hai-O’s Main Board transfer appreciation dinner. Forbes Asia ‘s “Best Under a Billion” award presentation in year 2007.


ud t Co ttee epo t


The Securities Commission had approved the Proposed Transfer Listing on 17 July 2007. The Company had subsequently obtained the approval from Bursa Securities and Shareholders for the Proposed Bonus Issue on 15 August 2007 and 23 August 2007 respectively. A total of 13.412,342 Hai-O shares had been issued pursuant to the Bonus Issue.

The Company had successfully transferred its listing status from the Second Board to Main Board of Bursa Securities on 8 October 2007.

CHANGES IN THE COMPOSITION OF THE GROUP

As part of the process in streamlining the Group operations and reallocating the resources to more profi table business segment, the Company had disposed off a non-profi table subsidiary company, Teik Seang Wine Merchants Sdn. Bhd. for a total consideration of RM 783,780.00 on 29 August 2007.

During the year under review, the Group had acquired/subscribed the following Companies for new business opportunities :-

i) Acquired Hai-O (Hong Kong) Investment Limited (“Hai-O (HK)”) for a cash consideration of HKD 1,000 on 25 September 2007. The paid-up share capital of Hai-O (HK) was then increased to HKD 2,380,000 @HKD 1.00 per share presently.

ii) Subscribed Mengniu Marketing (M) Sdn Bhd for a total cash consideration of RM 2.00 on 25 September 2007.

iii) Subscribed for additional 999,998 ordinary shares of RM 1.00 in Hai-O Energy (M) Sdn Bhd (“Hai-O Energy”) for a cash consideration of RM 999,998.00 on 17 December 2007. Hai-O Energy has embarked on its business which principally involved in the design, research and manufacture of devices in connection to heat transmission, energy saving technology and related products.

Launching of a book entitled “Hai-O Flying High”. Investment & Trade Forum in Xian, China.

Hai-O Marketing’s 15th anniversary celebration dinner.


ud t Co ttee epo t

New levels of Excellence


DIVIDEND

The Group is adhering to its dividend policy by paying not less than 50% of Profi t After Tax as dividends to shareholders.

For FY2008, in addition to the interim dividend of 8 sen gross per share ( less tax 26%) amounting to RM 4.748 million paid on 28 March 2008, the Board is pleased to recommend a fi nal dividend of 32 sen less tax of 25%, which is subject to the approval of shareholders at the forthcoming Annual General Meeting. This is equivalent to a total of gross, 40 sen cash dividend proposed in respect of the fi nancial year 2008.

AWARDS & RECOGNITION

Hai-O was once again picked as one of the companies in the 2008 edition of “OSK Top Malaysian Small Cap Companies” (The 100 Jewels) handbook. This handbook, released by OSK Holdings Bhd. is a compilation of research reports on its top 100 picks of small-cap (small-capitalized) companies in a publication targeted at fund managers. Its aim was to identify undervalued stocks of small cap companies with sound fundamentals, proven track records and growth potential that could likely be the “stars” of tomorrow. We are proud and honored to be ranked among the “Top 100 Jewels” once more.

Hai-O Enterprise was one of the 9 Malaysian companies that made it to the “Forbes Asia 2007 Best Under A Billion List” with sales under USD 1 billion. We are among 200 companies drawn from over 22,500 listed companies in the Asia-Pacifi c region. According to Forbes, each of the listed companies is screened for consistent profi tability and growth over 3 years, resulting in an honor roll of high-powered outfi ts that far outperform the market.

Hai-O Enterprise emerged as one of the Top 100 winners in the KPMG Shareholder Value Award 2007, the Company was ranked 55th as published in The EDGE Malaysia on 18 August 2008. The KPMG Shareholder Value Award is an annual award where all listed companies in Bursa Securities are evaluated in terms of value creation to their shareholders in the year of review. This award is designed to promote corporate excellence through enhancing levels of disclosure and setting exemplary best practices. Companies were ranked according to economic profi t (EP), a fi nancial indicator which integrates a company’s income statement, balance sheet and market expectations to provide an estimate of true economic earnings after covering the cost of capital.

MLM’s incentive trip to Umrah, Mekah for qualifi ed distributors. MLM’s incentive trip to Korea for qualifi ed distributors.



PROSPECT OF THE COMPANY

The recent rise in fuel and food prices, coupled with higher infl ation rate are expected to continue to affect the domestic market, weakening the purchasing power of consumers. Moreover, the expected increase in import purchase price due to weakening of Ringgit Malaysia against US Dollar, higher transportation and operating costs will further take a toll on our profi t margin. The Group is taking necessary action to refocus its resources on its core business, emphasize more on house brand products and carry out more sales promotion, and to intensify distributors recruitment activities.

Business challenges are inevitable in today’s ever highly competitive and challenging global business arena. However, I am happy to say that our dedicated management team has continuously put in relentless efforts in ensuring the smooth running of our daily operations, continue to improve and working towards betterment by undertaking effective measures to overcome challenges and obstacles. Facing a challenging business environment, the Company will strive to achieve satisfactory performance for the next fi nancial year.

In tandem with the increased business volume, Hai-O had on 21 December 2007 acquired land and 8 main block of buildings measuring 28 acres located at Lot 940, 941, 3202, 3203, 3204, 3205, 3206 & 6274, Mukim Kapar, 3 1/4 mile, Jalan Kapar, Klang for a total cost consideration of RM 45 million. The acquisition was fi nanced by internal generated fund of RM 25 million and bank borrowing of RM 20 milion. The said land & buildings will provide a platform for Hai-O’s future expansion, especially in catering to higher production capacity, warehousing and business volume in the coming years. The acquisition was completed in May 2008.

All the eight main buildings are leased back to the vendor, BATA (Malaysia) Sdn Bhd. for a period of 3 years with an option given to the tenants upon expiration of the tenancy to renew the tenancy for a further 3 years (“the First Renewal Term”) and an option to renew the tenancy for a further term of 3 years (“the Second Renewal Term”) upon the expiration of the First Renewal Term. The tenant was granted with Rent free for 1st year of the term. Thereafter, it will be charged at an annual rental of approximately RM 2.5 million for the remaining two (2) years of the tenancy term.


Bio-Aura Billboard along the highway.

Signing ceremony for the Manufacturing Agreement. Signing ceremony for purchase of Land & Building from BATA.



INVESTORS RELATIONS

Thanks to our effective investor relationship (IR) activities, we saw many positive changes in investors’ perception towards Hai-O. We have numbers of research houses tracking us now and we welcome more institutional investors to become our valued shareholders and their participation in the Hai-O family is duly acknowledged and valued by our Board.

We appreciate discussions with investors and welcome their keen interest in the Group’s performance. The Board also recognizes shareholders’ needs to be informed. In addition to the Annual General Meeting, which is the principal channel of communication with shareholders, the Directors and senior management have also taken the initiative to organize regular press conferences, regular updates on our Website’s Investor Relations section, dialogues and company visits to fund managers, institutional investors and analysts to keep them updated on the Company’s business operations, fi nancial performance, major developments as well as our future growth.

As part of the efforts in continuing to enhance investors relations, the Company had also participated in the Investors Relations Incentive Programme (IRIP) which is fully subsidised by Capital Markets Development Fund (CMDF) and administered by Bursa Malaysia. This programme is designed to assist listed companies set up an IR function and for those who already have an IR function to enhance it and also assist listed companies in embarking on an online IR programme. Via the participation in IRIP, Hai-O is expected to gain more prominence among investors.


APPRECIATION

I would like to take this opportunity to express my sincere appreciation and gratitude to all our existing shareholders for maintaining the trust, support and confi dence in building a good relationship with various parties.

To our customers, business associates, suppliers, bankers, business analyst and fund managers, we would like to thank them for their valued support for making the year 2008 a successful year for all of us. I would also like to thank the management and staff of Hai-O Group of Companies who have played an important role in contributing to the continuous growth of the company.

Thank You.

Tan Sri Osman S. CassimChairman



致词

我很荣幸的向各位报告，海鸥集团在2008财政年的营业额表现又刷新纪录，取得营业额3亿7382万令吉和税后盈利4854万令吉的佳绩，而相比之下2007财政年的表现则分别为1亿8935万令吉和2138万令吉，分别增长97%和127%。集团主要子公司，即多层次行销部门，无论在营业额和盈利均获得巨幅成长，为集团盈利带来70%的贡献。此外，较高的盈利赚幅亦也是推高集团盈利表现的原因之一，尤其是令吉兑美元的强势汇率降低进口成本，自立品牌的成功推广以及零售部门有效推动海鸥之友会员的销售。

同时，我也很欣慰地宣布，海鸥已经迈入了一个发展的新里碑：海鸥于2007年10月8日正式从第二交易板转升至主要交易板。转板后预料将更好的反映出本集团的营业和财务现况，更进一步加强海鸥集团在投资者心中的地位和吸引力。

2008年财政年间，本公司已经在公开市场购回141万3700股普通股。

为回馈股东，本公司在2008年6月26日宣布每25股面值1.00令吉的普通股配送1股库存股予股东作为股息。截至2008年8月11日，总计322万5542股的库存股在这项股息计划下配送予符合资格的股东。

截至2008年9月16日，此年报付梓前，本公司持有的库存股总计为486,944股。公司已经在2008年9月3日宣布将在会2008年10月间举行的常年股东大会上寻求股东授权更新回购公司股票的权力。

2008财政年间，本公司根据雇员认股计划，以每股2.70令吉的价格，进一步发行196万9000股的认股权予合格雇员。在受检讨的本财政年内，已有49万9000股的认购权被行使。

雇员认股计划于1998年12月21日制定及执行，并将于2008年12月20日届满。



致词

为了更好的反映出目前的营业规模，海鸥在2007年6月22日透过兴业投资银行宣布下以下举措：

a) 以每5股送1股为基础发行红股，及b) 从第二交易板转至主要交易板

红股派发和转板计划并非互相制约的。

证卷监督委员会于2007年7月17日批准了公司转板的申请。海鸥接着分别在2007年8月15日和8月23日获得大马股票交易所和股东们通过上述红股派发计划。在这红股计划下，公司共分发了13,412,342红股。

海鸥于2007年10月8日成功实现从第二交易板转至主要交易板。

作为将集团营运合理化及将资源重新分配至更有盈利性业务过程的一部份，公司在2007年8月29日以78万3780令吉，脱售了一个非盈利子公司，德祥酒厂。

在本财务年度内，集团也进行了以下的结构变动:-

i) 2007年9月11日海鸥宣布收购一家设立在香港的投资公司，以开拓中国商机。此项收购于2007年9月25日正式完成。之后，海鸥（香港）投资有限公司的缴足资本增加至238万港元。

ii) 于2007年9月25日以2令吉成立“Mengniu Marketing (M) Sdn Bhd”。

iii) 2007年12月17日，Hai-O Energy (M) Sdn Bhd的缴足资本从2令吉扩大至100万令吉以充开发热管、能源节约技术及有关项目的资金。

本集团仍遵循将不少于50%的税后盈利作为股息分发予股东的股息政策。

2008财政年，除了在2008年3月28日分发每股8仙，总值4748万令吉的中期股息(减税26%)之外，董事部很荣幸的推荐32%终期股息(须减税25%)，这建议有待股东于即将举行的常年股东大会上通过。这等于全年每股40仙的现金股息。


ud t Co ttee epo t

致词

海鸥再一次被OSK投资银行评选为2008年“OSK 佳大马小型资本企业百强手册”(百珠争辉)的公司之一，这本由OSK投资银行发行的投资手册，是一本涵盖首选100家小型资本公司的完善分析报告，并以基金经理为主要读者群的指标性读物，主旨在于发掘出一些有著厚实基础，优良纪录、极具成长潜能，有潜能成为“明日之星”的态势，且价值被低估的小型资本股票。我们再一次为入选“百珠争辉”榜单感到荣誉和骄傲。

令人振奋的是，海鸥企业成功脱颖而出，荣幸获选成为全球著名财经杂志《福布斯》2007亚洲200 佳中小上市企业排行榜《Forbes Asia 2007 Best Under A Billion List》上榜公司之一，成为10亿美元以下销售额的精英企业之一。这排行榜是从亚太地区的2万2500家候选上市企业名单中选出的，其中大马共有9家企业上榜。据《福布斯》透露，每一家上榜公司都经由过去3年来获利能力和成长率的严格评选，符合标准才金榜提名。

海鸥企业亦崛起成为100家赢得2007年毕马威股东价值奖的获得者之一，本公司名列第55，得奖名单已在志期2008年8月18日的THE EDGE商业周刊刊出。

毕马威股东价值奖是一项年度性的大奖活动，主要是供所有在大马股票交易所挂牌的公司的股东在受检讨的一年，评估出为股东创造佳价值的公司的活动。这项活动旨在透过加强公布水平及设立示范性的操作来促进企业的卓越价值。上榜的公司皆根据其经济盈利，即一项综合公司损益表，资产负债表和市场预期的财务指标，以提供一个涵盖资金成本后的真实经济赚利预测。

近，燃油和食品价格双双调涨，并挟持著高通膨率的情势，预料将持续影响国内市场购兴，削弱消费者的购买力。此外，马币汇率下跌及进口采购成本上扬，运输和营运成本走高的趋势，将进一步影响赚幅。本集团将采取必要的步骤专注在核心业务上，扩大力度著重自立品牌产品及举办更多的促销活动，并加强分销商的征募活动。

在全球竞争日愈激烈下，商业挑战是无可避免的。不过，我仍然很高兴的说，在这艰巨的环境下，我们的管理层将更努力和积极采取有效的措施，开源节流，以确保我们的日常营运顺畅，业务持续提升及改善。

在营业额增长的同时，海鸥在2007年12月21日以4,500万令吉，收购了一块位于巴生加甫路三又四分一英里处，面积达28英亩，区号为940、941、3202、3203、3204、3205、3206和6274的土地及建筑物。此项收购以现金2500万及银行贷款2000万方式支付。上述土地及建筑物将为海鸥未来的扩允提供一个平台，尤其是应付未来生产力的提高、和仓库量的需求。这项资产收购程序于2008年5月中完成。

目前所有的8间建筑物租回给原有业主，BATA (M) Sdn Bhd，租约为期3年。租户有权在租约期满后选择另3年期限的租约（首选择期）。在首选择期满后，租户有权再更新另3年的租约（第二选择期）。在租约期内，租户享有1年免租，之后2年的租金约每年250万零吉。


ud t Co ttee epo t

致词

感谢我们有效的投资者关系活动，我们看见投资者对海鸥的看法出现更多正面的转变。现在，我们的表现继续受到数家分析研究机构长期跟监和观察，我们长期以来投诸的努力和辛勤付出没有被埋没。我们欢迎更多的机构投资者成为我们有价值的股东。

我们感谢与投资者的对话及欢迎你们持续关注本集团的表现。董事部亦认知到股东知情权的需求。除了权充与股东之间主要沟通渠道的常年股东大会之外，诸位董事及高级管理层亦主动召开新闻发布会、即时更新我们网页上投资者关系版块的资讯，安排与基金经理、机构投资者和分析员之间对话会及各项参访活动，让他们更掌握本公司的营运、财务表现、主要发展及未来成长等各项活动的新信息。

持续加强投资者关系努力的当中，本公司亦参与了由资金市场发展基金赞助及由大马股票交易所管理的《投资者关系奖励计划》。这项计划专门设计用作协助上市公司建立投资者关系功能与联系，对于已经建立投资者关系者，则进一步加强其运作，协助他们著手参与一项线上投资者关系计划。透过参与上述计划，海鸥预料将受到更多投资者的关注。

我亦藉此机会向各位股东表达我诚挚的谢意和感恩，感谢各位给予我们高度信赖、支持和信心。

我谨此向我们的尊贵的顾客、商业伙伴、供应商、银行伙伴、商业分析员及基金经理们表达由衷谢意，谢谢您们的宝贵支持，使我们2008年创造辉煌业绩。我亦真心感激我们海鸥管理层和雇员们的辛勤付出，您们在公司的持续成长中扮演了重要的角色，让我们一起再展翅高飞，取得更佳的业绩。

谢谢。

丹斯里奥斯曼•卡欣主席



MANAGING DIRECTOR’S STATEMENT

Dear valued shareholders,I am very happy to announce that we had another good year in

FY2008. We again delivered a superb year-on-year growth rate

of almost 100% in revenue and 127% growth in profi t after tax

this fi nancial year, thus, accomplishing our commitment to you,

our shareholders to deliver long term sustainable growth.



MANAGING DIRECTOR’S STATEMENT (CONT’D)

ECONOMIC & BUSINESS ENVIRONMENT

The world economy is facing numerous challenging and uncertainties. The global economy has been affected by sharp increased in the oil price as well as commodity and food price. The subprime mortgage loan crisis in US has affected not only its local economy but globally.

Although economy outlook in Asian, especially India and China remain favorable, infl ationary pressure may affect their domestic demand. This Global development would also affect Malaysia being an open economy and highly export oriented country.

Notwithstanding, the Malaysia economy remains strong, and will continue to record sustainable growth, the strong fundamental, diversifi ed and resources-based economy, coupled with the increased in domestic demand had resulted in the Gross Domestic Product (GDP) achieved a growth of 6.7% for the fi rst half of 2008. The Services sector continued to be the main catalyst to the growth, registering a growth of 7.9% in fi rst quarter and 7.6% in the second quarter of 2008. The growth was driven by strong expansion in the Wholesale and Retail Trade sub-sector which increased by 12.6%.

The recent Budget 2009 proposed various strategies to further strengthen our economic resilience to mitigate the adverse impact of an increasingly challenging of external environment. A number of programmes to

improve the country’s business environment should help ensure economic growth remains robust. Among the broad range of measures, the proposed measures to alleviate consumers’ diminishing purchasing power with lower marginal tax rate, more tax rebate for employees welfare etc, will help to increase the disposable income for “People” which will mitigate the negative impact to the current challenging business environment.

In addition, the prevailing political uncertainties in Malaysia is also a key factor concerned by investors. Holding back some infrastructure spending and mega projects by Government had affected the domestic demand. Hence, a series of downgrade of corporate earnings are expected to be happened.

According to Frost & Sullivan, the Malaysian healthcare sector has been expanding at modest but relatively stable annual growth rates of 8% to 12% over the past few years supported by higher healthcare spending by the government and the private sector. The country’s ageing population and growing personal wealth are main drivers of the steady growth in the Malaysian healthcare sector. Growing awareness among Malaysians of the importance of healthcare and lifestyle changes will further boost healthcare spending in Malaysia. Going forward, both the pharmaceutical and private healthcare segments face common challenges such as growing competition and the risk of a global economy slowdown.

MLM’s incentive trip to Korea for qualifi ed distributors.

MLM’s incentive trip to Umrah, Mekah for qualifi ed distributors.




FINANCIAL OVERVIEW

For the fi nancial year under review, Hai-O Group recorded a thumbs-up fi nancial performance by posting more than 127% growth in profi t after tax of RM 48.54 million (2007: RM 21.38 million), backed by a higher revenue of RM 373.82 million (2007: RM 189.35 million), an increase of 97.4%. The improvement in revenue was attributable to effective marketing strategies that successfully penetrate into the non-traditional market for our MLM division.

The Group’s FY2008 fi nancial position remains intact. As about 70% of the group business is dealing in cash term, thus it had generated total annual net cash from operations about RM 53 million for fi nancial year under review. The Group’s net cash position and short term investment soared further to RM 80 million as of 30 April 2008 (2007: RM 39 million). Shareholders’ fund had also increased to RM 140.6 million with net asset per share of RM 1.76 due to resilient earning growth.

BUSINESS DIVISION OVERVIEW

Multi-Level Marketing

Another wonderful year for the MLM division (Hai-O Marketing), it is the largest contributor to the Group’s sales and profi t. This FYE 30 April 2008, the MLM division had contributed a staggering turnover of RM 281.59 mi l l ion and operat ing prof i t of RM 46.79 mi l l ion respectively, representing an increase of 182% in sales and 237% in profi t as compared to the previous fi nancial

year. Effective training programs are identifi ed as one of the key contributors of the favorable increase in sales, having cultivated a “Sense of Belonging” and the “Hai-O, My Choice for Life” culture among Hai-O MLM distributors. Aggressive member recruitment scheme and A&P sponsorships of 3 episodes of the “Jom Heboh” TV programme on TV3 had created awareness and impact among the MLM industry and had attracted many new members into Hai-O MLM. Currently, we have an average of about 2,000 new members joining Hai-O MLM on a monthly basis, and year-to-date, we have over 70,000 distributors and of which 20% are actively involved in the business. Efforts to put up more corporate billboards along several major highways and advertisements in various lifestyle magazines are also key in creating greater awareness. Continuous launching of new products have contributed additional sales to the MLM division.

Currently, Hai-O Marketing has total of 43 outlets inclusive of 30 stockists and 13 branches to strive for greater customer focus, to bring the image and products of Hai-O closer to customers through an expansion of our existing distribution channel and enhanced service support. Hai-O Marketing plans to open another 5 to 8 new stockists for the coming fi nancial year in Peninsular Malaysia especially Southern Part and East Coast. In order to complement the existing fl agship “Beauty” products, Hai-O Marketing has plan to launch a new skincare series products in the coming fi nancial year. The inclusion of these new products will provide additional opportunities for distributors to market wider range of “Beauty” products.

Some products of MLM division.




Also, Hai-O Marketing has introduced an Online Stockist / Distributor System enabling stockists and distributors to manage their business more effi ciently. With the online system, distributors’ sales and commission tracking information can be made available immediately once a transaction is completed by either the distributor or the distributor’s downline. With such a fi erce competition in the Network Marketing business, it is critical that we have a system that is capable of providing relevant and up-to-date information instantly in order to achieve greater effi ciency and productivity.

We believe Hai-O Marketing will continue to grow due largely to the aggressive and entrepreneurial spirit of the distributor force. And last but not least, we are in the midst of setting up a MLM operation in regional markets such as Indonesia, this will provide a greater opportunity for new and existing distributors to expand their business network.

Wholesale

Our wholesale division is the second largest contributor to the Group for this fi nancial year under review. It contributed 13% to Group sales and 24% to Group operating profi t. 2007 was the year when Pu-er tea prices took a tumble. There was speculative craze in the Pu-er tea market and speculators were not limited to the Chinese in China but also to Hong Kong and Taiwan. Reports by the Chinese media on the ability of Pu-er tea to appreciate in value over time eventually led to excessive hype and heavy speculation. This led to a signifi cant rise in Pu-er prices beyond what it could reasonably sustain. As a result, the price had been adjusted to the fundamental value and it will take some time to recover to meet to the balance of market demand and supply. We remain cautious and will continue to promote the tea especially target on the consumption market.

Other main products such as medicated tonic and health food also registered growth in sales and profi t. Overall, effective marketing strategies and A&P activities such as advertising on 8TV, NTV7 and ASTRO and the sponsorship of “Star Idol” on NTV7 had created brand awareness and product exposures among family and teen viewers.

Retailing

Revenue from our retailing division (Hai-O Raya) increased marginally to RM 39.34 million for FYE 30 April 2008, and operating profi t had increased by 21% to RM 2 million. Profi t margin improved due to new marketing strategy focusing on the sale of house-branded products. There will be more house-branded products launching this year, and will also focus on further developing the house-brand image. The aggressive promotion of the Hai-O Raya Customer Loyalty Program also contributed to the increase in sales. Hai-O Raya Customer Loyalty Program is an in-house “Customer Membership” program whereby members can enjoy exclusive discounts and privileges. We also organize Member’s Privileges Sales event twice a year, and had been receiving very good response from our valued members. Currently, Hai-O Raya has over 70,000 active members who provide constant revenue to it, which accounts for almost 50% of sales to the retailing division.

In order to tap into the younger generation of customers from high traffi c fl ow shopping centres, Hai-O Raya has added 2 new retail outlets in Jusco Seberang Prai City Shopping Centre, Bandar Perda, Bukit Mertajam, Penang and Carrefour Sutera Mall, Taman Sutera Utama, Skudai, Johor. Currently, Hai-O Raya has a total of 56 outlets throughout Malaysia and will continue to look for strategic locations to establish new outlets.

Some products of wholesale and retail division



Joint Venture Companies

Peking Tongrentang (M) Sdn. Bhd.

A joint venture company between Hai-O and Beijing Tongrentang Co. Ltd, which is the largest producer of traditional Chinese medicine in China. It is also one of the oldest and most respected practitioners in traditional Chinese medicine. It is a well known name widely among Chinese and Asians worldwide. Through the joint venture, Hai-O is able to tap into the wealth of experience and knowledge accumulated by Beijing Tongrentang from its more than 330 years of operation, and deliver to our customers in Malaysia the best available clinical and pharmaceutical services in traditional Chinese medicine.

Peking Tongrentang (M) Sdn. Bhd. opened its 3rd outlet in SS2, Petaling Jaya on 1 April 2008. The grand opening ceremony was offi ciated by Transport Minister, Datuk Ong Tee Keat and People’s Republic of China Ambassador to Malaysia, Cheng Yonghua.


Manufacturing

Sales contribution from this division is relatively small in relation to the Group’s turnover. It had recorded external sales of about RM 1.2 million and operating profi t of RM 0.45 million for the year under review. The new set-up, QIS Research Laboratory Sdn. Bhd. has kick started operations in the year under review. It is a full service analytical laboratory, complied with the requirements of the Department of Standards Malaysia (DSM), offering a wide range of testing services in the areas of the microbiology and chemical analysis in traditional medicine and food products.

On 30 January 2008, SG Global Biotech Sdn. Bhd. (“SG Global”) secured an exclusive fi ve-year contract to manufacture a natural sweetener under the brand name, Greenlite, from PureCircle Sdn. Bhd. (“PureCircle”). SG Global will be responsible for manufacturing a zero-calorie natural sweetener using Stevia rebaudiana for PureCircle. PureCircle is the world’s largest producer of natural high-density sweetener from stevia plants. It has been listed on London Stock Exchange’s Alternative Investment Market in December 2007.

One of the Hai-O new retail outlet.




PROSPECT

Our transfer to the Main Board of Bursa Malaysia signifi es a next step forward for us in this new millennium. Hai-O started out with just RM 168,000 way back in 1975, and for the past 33 years has grown steadily to a multi-million Ringgit company it is today. Looking back, the journey was no bed of roses, the Company came face-to-face with many ups and downs over the years, yet we weathered through the tough times and each time bounced back stronger than before. Over the years, we have nurtured a culture of a wholesome lifestyle within and outside the Company, like the seagull that lives in harmony with nature. Hai-O also “lives” in harmony with its community; our promotion of a wholesome lifestyle is best refl ected through our corporate social responsibility and through our range of consumer products.

Hai-O’s fi nancially sound foundation is partly due to its strong earnings and cash fl ow, our comprehensive and ever expanding range of branded health products. This results in our adherence to the policy of paying out 50% dividends to our shareholders.

We encourage more people who work with us both inside and out to be part of the Hai-O family. And with the acquisition of BATA’s 28 acres of land in Jalan Kapar, Klang, this will open up new possibilities for our future business expansion. We hope to increase our MLM distributor base, retail customer base and wholesale customer base. Our MLM division’s stellar performance is showing that it has the capability to do much better in years to come.

A donation to Beijing Foreign Studies University’s Center of Malay

Language Studies.

Hai-O’s team-building exercise cum treasure hunt event.




Human Resources

At Hai-O, we recognize the human capital is our most important asset. Our human resource culture centered on 3 core values: Sense of Belonging, Teamwork and Equal Opportunity. We encourage our staff to excel and value their careers in Hai-O as their own undertaking. In Hai-O, we all work together as a team and strive to inculcate a sense of ownership to our company. We provide equal opportunity to our staff to make contributions and in return to enjoy a rewarding career. With such philosophy in mind, Hai-O is committed to bringing out the best in our staff and to build the success together.

For Board of Directors & Senior Management:As part of the CEP (Continuous Education Program) for our directors, the training department organized a seminar entitled “Risk Management”, conducted by Dr. Malick Sy, a well-known International business consultant and trainer. Topics discussed include the real challenges in implementing enterprise-wide Operational Risk Management and the methods to overcome some of these challenges, an insight to various Good Operational Risk Management Practices, and ways of managing Operational Risk from formally defi ning Operations Processes.

The directors and managers were also given a seminar on, “Due Diligence – Is Your Company Creating Shareholder Value?” with the aim of gaining the insight into the best practices of strategic fi nancial and marketing management that helps to maximize shareholders’ value in a prudent and ethical approach.

Another seminar entitled, “Director’s Responsibility, Code of Ethics & Case Study” was organized with the aim in creating an environment that fosters the development of conscientious ethically-minded people who are committed to integrity and fairness. Areas covered include confi dentiality, confl ict of interest, and insider information.

For Mid-Level Management, Sales Personnel and Others:We conducted numerous product trainings (by our qualifi ed in-house Chinese physicians) for our wholesale and retail sales team, enabling them to gain better product knowledge and its competitive advantage so that they can serve our customer better. We have conducted a “Customer Care” workshop for the wholesale division. The workshop gives staff who are involved in customer service the core skills to build customer relationships, create a positive business image and recognize customers’ demands.

ACKNOWLEDGMENT

On behalf of the Board of Directors, please allow me to express my sincerest gratitude and appreciation to our valued customers, suppliers, shareholders, business associates and bankers for their continued support and trust. A big thank you is also extended to the government and relevant authorities and offi cers for their assistance.

We are very lucky to be supported by an incredible group of men & women who run our operating units on all levels, without them, we wouldn’t have been where we are today. Therefore, from the bottom of my heart, you all have my thanks.

Tan Kai HeeManaging Director

Training held for the directors and management.



致词

世界经济正面临著许多挑战及充斥著不确定性。全球经济已经受到油价、原料及食物价格飙涨的冲击。美国爆发的次级房贷危机不仅重创当地经济，同时更为全球经济发展带来负面影响。

虽然亚洲区域的经济前景，特别是印度和中国仍持续看好，但通货膨涨的压力亦可能会影响其内部需求。马来西亚作为一个开放经济体及高度出口导向的国家，亦难免会受到这股经济发展浪潮所影响。

尽管如此，马来西亚经济势头仍持续强劲，并将继续取得持续性成长，这个以强劲，多元化及天然资源为基础的经济体，加上国内需求的增长，使国内生产总值在2008年上半年取得了6.7%的成长率，这主要是服务业的带动。服务业在第一季和第二季分别取得7.9%和7.6%的增长。这主要来自批发与零售领域所取得的12.6%增长的贡献。

新近发布的2009年财政预算案，倡议数项举措加强我国经济的弹力，以因应及缓和外部环境持续增加的负面影响。在这些举措之中，以针对持续下降的消费者购买力，政府调降个人所得税税幅，增加对雇员福利税务回扣等等，将有助于提高人民的可支配所得，进而对我们的经济带来正面影响。

此外，马来西亚笼罩著政治不确定性亦为投资者所关注，政府暂缓执行一些基建工程和大型发展计划已经冲击到国内需求。因此，一系列调低企业获利率的评估分析将会纷纷出炉。

根据 Frost & Sullivan 公司的市调统计，马来西亚保健领域一路呈现稳健成长，受到政府和私人领域的持续性投入，过去数年年成长率介于8%至12%之间。我国老年人口的增长及个人财富的增长是带动保健领域稳健成长的两股动力。大马人对于保健需求的注重及生活习惯的改变将进一步刺激对保健领域的消费。再者，制药和私人保健业则同样面对竞争加剧和全球经济放缓的风险等负面因素挑战。

在受检讨的本财政年度，海鸥集团营业额创新高纪录达3亿7382万令吉(2007年为1亿8935万令吉)，增长97.4%，而税后盈利增长127%至4854万令吉(2007年为2138万令吉)，取得了本年度优越的财务表现。营业额的增长可归因于多层次行销部成功渗透非传统市场的有效行销策略所致。

本集团2008财政年的财务地位仍然坚固。本集团约70%的业务是以现金交易，因此在受检讨的本财年度，从业务中取得的全年净现金值达到5300万令吉。截至2008年4月30日，本集团的净现金及短期投资进一步攀高至8000万令吉(2007年为3900万令吉)。股东基金亦同时扬升至1亿4060万令吉，每股资产净值为1.76令吉。


ud t Co ttee epo t

致词

对多层次直销部门(海鸥直销)来说，今年又是一个精彩的好年头，造成它成为集团营业额和盈利的大贡献者。截至2008年4月30日财政年，多层次直销部分别为集团带来2亿8159万令吉营业额及4679万令吉的营业利润，相对去年同时，营业额及利润分别取得182% 和237%的增长率。海鸥直销所培养出来的“归宿感”及“海鸥，我生命中的选择”文化所达致的有效的培训计划，已被视为缔造巨大营业额的重要贡献之一。积极的新晋会员引荐计划，以及赞助TV3电视台的著名节目 JOM HEBOH 三期的广宣计划，已经在多层次直销业引起注目和正面影响。目前，平均每月有2000名新会员加入海鸥多层次直销团队，迄今，我们已经有7万名传销商，其中约2万名活跃于商业之中。在南北大道投放多个广告看板及在多份休闲杂志中投放平面广告的努力，也是引起巨大关于的功臣之一。持续性推出新产品的计划也为多层次直销部门的业绩带来了额外的贡献。

目前，海鸥直销拥有43间分行包括30间存货中心和13间分店来服务广大客户的需要，同时透过扩充我们现有的分销渠道及加强终端客户服务支援的努力，把海鸥的产品及形象更近距离地投送予消费者。海鸥直销计划下一个财政年内，在马来半岛南部和东海岸新设5至8间存货中心。为了进一步加强既有的“Beauty”旗舰品牌产品系列，海鸥直销已策划在下一个财政年度推出新的护肤系列产品。这些新产品将给予传销商更大的机会在市场推广“Beauty”产品。

此外，海鸥直销新近推介的线上提货/直销商系统，将使存货商和传销商更方便的管理他们的业务。有了网上系统的便利，无论是直系传销商或其下线，一旦一桩生意成交，传销商的销售额、所属直销事业组织及佣金纪录资讯等等都可以即时查询获得。在网络营销生意竞争激烈的当下，我们拥有一个有能力提供恰当的及即时讯息，以达到更大效率性和生产力的网络商务系统更形重要。

鉴于传销商的积极性及企业家精神，我们相信海鸥直销将持续发展和成长。后，我们正在进行著在诸如印度尼西亚等区域市场设立多层次直销业务的努力，这将为传销商提供一个更大的商机去扩允他们的商业网络。


ud t Co ttee epo t

我们的批发部是本财政年度的第二大贡献者。它为集团营业额贡献13%，并为集团营业利润带来24%的贡献。2007年是普洱茶价格滑跌的一年。普洱茶市场充斥著热络的投机炒作，投机者不仅限于中国人，还有来自香港和台湾的投机客投入阵营。中国媒体针对普洱茶其功能的集中报导及其愈陈愈香，价格越高的属性更进一步激化投机炒作风潮，促使普洱茶价格超越理性的狂飙。终过高的价格无法承接，又回落到基础价值，且将需要一些时间复元到供需平衡的水平。我们对普洱茶市场发展情势保持谨慎，并将持续推广普洱茶业务，将焦点著重於消售市场。

其它的主要产品包括滋补药品及保健食品的销售额及利润亦取得可观成长。总体而言，有效的行销策略及广宣活动，诸如在8TV、NTV7和ASTRO投放的电视广告及赞助NTV7“明星偶像”活动等等，已为在家庭及青少年观众群中创造了极大的品牌关注，对批发部门的销售增长产生正面的作用。

致词

截至2008年4月30日财政年，来自我们零售部门(海鸥中心)的营业额呈现小幅增长至3934万令吉，营业利润则提升21%至200万令吉。利润率增长主要受惠于专注自立品牌产品销售的新市场策略。今年我们将会推出更多新的自立品牌产品，并将更进一步塑造及提升自立品牌形象。海鸥之友客户忠诚系统的积极促销活动也为销售额的提升作出不小的贡献。海鸥中心客户忠诚计划是一个内部“客户会员制”计划，凡会员皆可享受特别优惠及殊营。我们每年均组织两次会员特别优待促销活动，皆得到我们尊贵的客户极其热烈的反应。目前，海鸥中心拥有超过7万名海鸥之友活跃会员，是零售部门的主要消费群，占零售部近50%的营业额份额。海鸥中心也在各高人流率的购物商场设立新零售点吸引年青一代的目光垂注，如在槟城北赖嘉世客购物中心和柔佛古来家乐福新设两个专区以迎合年青消费者的需求。目前，海鸥中心在全国拥有56间分行，并将持续物色新的策略性地点开展新的店面。



致词

海鸥和中国大的传统中药生产商和中药铺百年老字号北京同仁堂联营的北京同仁堂(马)私人有限公司。北京同仁堂誉冠中国及全球，广为华人所熟悉，海鸥透过联营，成功衔接上北京同仁堂300多年来积攒的品牌价格和中医药的知识财富，并为我们的消费者带来优质中医药服务。

北京同仁堂(马)私人有限公司已2008年4月1日在八打灵再也SS2区开设第三间分行，并邀请到我国交通部长拿督翁诗杰和驻马来西亚中国大使程永华阁下联合剪彩开幕。

制造部门对集团总营业额的贡献相对较小。在受检讨的本财政年，该部门取得120万令吉的对外销售及45万令吉的营运利润。新设立的QIS研究化验室私人有限公司也在受检讨的本财政年内开始投入营运，这是一个全方位的分析性化验室，提供全列系的传统药物和食品微生物和化学分析化验服务。该化验室亦奉行品质保证计划及大马标准局的各项规范和章程，以确保分析结果的正确性和准确性。

2008年1月30日，SG Global Biotech Sdn Bhd 从 Pure Circle Sdn Bhd 获得了5年的独家合同，生产GREENLITE 品牌天然甜味剂。SG Global 负责生产以PureCircle提供的甜菊素为原料的低热量天然甜味剂。PureCircle是从甜菊科植物提炼的天然高纯度甜味剂全球大生产商，2007年12月于伦敦股票交易所替代投资市场上市。

我们转升至主要交易板挂牌是我们的新跨越。回溯海鸥在1975年以16万8000令吉创业，在33年一路走来，至今已成长为一个市值过亿令吉的公司。回首来时路并非一路平坦，公司这些年来曾经面对许多波浪起伏，虽然历尽许多艰辛绝境，仍能克服挑战，绝处逢生，迅速回弹。公司这些年已在内内外外历练出促进身心健康，充满生气勃勃的生活信息，如同海鸥与大自然和谐共处，海鸥亦与社区和谐共处，我们极力推崇的这种生活信念，就是我们戮力完善化所肩负的企业社会责任。

海鸥坚实的财务基础得益于其强劲的赚利，良好的流动资金，以及业务多元化、覆盖面广的一系列著名品牌保健产品库的支持。这些优势支持我们秉承支付50%股息予股东的政策。

我们欢迎更多新朋友与我们结伴同行，欢迎您们成为海鸥大家庭的一份子。随著我们成功购并了BATA公司在巴生加埔路的28英亩地段，为我们公司开创了一个拓展的新平台。我们希望未来更扩大现有的多层次直销商、零售和批发客户的基础。我们的多层次直销部门的卓越表现反映出它有更雄厚的能力来年挑战卓越，跨越颠峰。



致词

在海鸥，我们体认到人力资本是我们重要的资产。我们的人力资源文化聚焦于三个核心价值：归宿感、团队精神和机会均等。我们鼓励员工发挥卓越，将海鸥当作自己事业来打并。在海鸥，我们团结合作，创造向心力。我们提供均等的机会予员工，让他们作出贡献，享受回馈。有了这样的职场哲学，海鸥承诺为员工创造更好价值，共同铸造非凡成就。

作为我们董事终身学习计划的一部份，培训部门组织了由国际知名商务顾问及讲师 Malick Sy 博士主讲的“风险管理”课程，讲及在实施企业范围内的业务风险管理和挑战及克服问题的方法，并深入了解各种良好的操作风险管理的做法，以及如何管理操作风险和确定业务进程。

董事们也参加了一项名为“尽忠职守：你的公司是否为股东创造大价值？”的培训，课程著重于策略财务及行销管理实际运用的深刻理解，及如何在审慎的和道德兼具之下，优化战略财务和营销管理以创造更高的股东价值。

另一项名为“董事责任，道德操作及个案研究”的培训，则侧重于如何促进一个良好道德操守发展的环境，其所涵盖的领域包括沟通、保密、利益冲突、礼物和内部消息。

我们为我们的批发和零售的销售团队进行了多次产品培训（由我们内部中医师讲授），使他们能够更好的掌握产品知识和了解产品的竞争优势，使他们能为我们的客户带来更好的服务。我们也为批发部举办了“客户服务”讲习班，讲习班让工作人员了解到如何建立客户关系的客服核心技能，如何创造一个正面的企业形象，以及如何因应顾客的需求。

我谨代表董事部，向我们尊贵的客户，供应商，股东和商业伙伴和银行家给予的持续支持和信任，献上诚挚的感谢和赞赏。并对不吝提供协助支持我们工作的政府部门和有关机构、单位、局署和相关官员，致予万二分谢意。

我们很幸运，能够拥有一群极出色的员工为我们各层级的经营单位努力付出，辛勤奉献，没有他们，我们便不会有今天的成就，因此，我打从心底里衷心的感谢您们。

海鸥集团董事经理





CORPORATE SOCIAL RESPONSIBILITY社会责任

Our commitment to being a deeply responsible company contributing positively to our communities is so important to Hai-O that it’s one of the seven guiding principles of our corporate values. We work together with staffs, suppliers, business partners and others to help build stronger local communities, to create a great workplace, to promote diversity and to be responsive to our customers’ health and wellness needs. Each year, Hai-O’s group-wide corporate philanthropy and sponsorships are channeled to a mix of organizations, educational & cultural causes and the less-fortunate.

Orphanage Visits On 26 May 2007, the Hai-O Sports Club (Kelab Muhibbah), the company’s sports recreation club for its employees paid a visit to the Good Samaritan Home orphanage in Southern Park, Klang. The Sports Club presented a donation of RM 3,000 and sponsored some food items to the orphanage.

2007年5月26日，海鸥亲善会参访巴生 Good Samaritan 孤儿院，捐赠3000令吉及提供食品予院童们。

Our MLM division, Hai-O Marketing also contributed to the needy by organizing visits to several orphanages within the Klang Valley, and donations totaling up to RM 100,000 were given to Rumah Bakti Ulu Kelang, PEYAKIN (Pertubuhan Kebajikan Anak-Anak Yatim/Miskin), Rumah Anak Yatim & Saudara Baru Shifa’ and Rumah Anak Kesayanganku.

我们的多层次直销部门，海鸥直销亦组织数次巴生区孤儿院的参访活动，捐赠了100,000令吉予RUMAH BAKTI ULU KLANG，PEYAKIN、RUMAH ANAK YATIM & SAUDARA BARU SHIFA’ 和RUMAH ANAK KESAYANGANKU等多家孤儿院及贫孤儿童福利团体。

Donations During the Hai-O: Flying High luncheon held on 10 November 2007, Hai-O Enterprise pledged a donation of RM 100,000 to the Beijing Foreign Studies University as a funding to promote its Center of Malay Language Studies.

2007年11月10日海鸥高飞午宴活动中，海鸥企业捐助10万令吉予北京外国语大学，作为其马来语学习中心的推广经费。

On that same occasion, Hai-O Group also pledged a donation of RM 100,000 to The Writers’ Association of Chinese Medium of Malaysia in supporting the latter’s “2008 Revitalization of Malaysian-Chinese Literature, Nurturing the Wisdom of Youths Movement”. Furthermore, Hai-O Group also collaborated with The Writers’ Association of Chinese Medium of Malaysia to establish the “Hai-O Annual Literature Awards” in a move to encourage outstanding Malaysian-Chinese writers, and to continuously improve the standard of Malaysian-Chinese literature.

同一个场合中，海鸥集团再捐赠10万令吉予大马华文作家协会，以支持其2008年马华文学复兴运动，并和作家协会合作创设海鸥年度文学奖，以发掘及奖励杰出的马华作家，更臻提升大马华文文学创作水平。



For Our Emplyees In early 2008, Hai-O’s warehouse staff were each given newly designed company polo shirts and shoe vouchers. The new company polo shirts symbolizes the spirit of uniformity and unity, and the shoe vouchers are to enable our warehouse staff to purchase appropriate safety shoes for their work in the warehouse, encouraging them to observe personal safety while at work.

2008年初，海鸥仓库部员全体员工获得派发新设计的衫衣及鞋子礼券。新设计的衫衣融合了团结一致的精神，鞋子礼券则让仓库部的员工们可以购买较安全舒适的工作鞋以确保工作时不受伤，并贯彻注意工作安全的预防意识。

Health Awareness In our commitment to serve the community in creating greater public awareness on health, Hai-O on a yearly basis actively organizes health talks for the public. On 25 August 2007, Hai-O and China Press organized a health seminar on Rheumatoid at the China Press Assembly Hall in Bangsar, Kuala Lumpur. The speaker of the seminar is Leng Benjia from Gansu Provincial Institute of Tibetan Medicine. As rheumatoid is quite a common disease in Malaysia, this seminar with Mr. Leng has helped the public obtain a better understanding of the said disease and ways to prevent it.

On 22 December 2007, Peking Tongrentang (M) Sdn. Bhd. in collaboration with Sin Chew Daily organized a health seminar featuring Beijing Tongrentang’s Professor Li Guangjun, the seminar was held at the Sin Chew Daily Activity Centre and it’s opened to the public. Professor Li shared many insights on personal healthcare to the participants during the seminar, and also provided useful information on the prevention of stroke.

2007年12月22日，北京同仁堂(马)私人有限公司与星洲日报联办健康讲座，由李广均教授主讲个人保健课题，为听众带来了许多关于预防中风的有用信息。

CORPORATE SOCIAL RESPONSIBILITY (CONT’D)

社会责任




社会责任

Blood Donation On 25 May 2008, Hai-O organized a blood donation campaign at Klang Parade shopping mall in Klang. The 1-day event received warm reception from the public, and it managed to collect an encouraging 151 packets of donors’ blood. We are deeply moved by the kindness of Malaysians.

2008年5月25日，海鸥在巴生广场购物中心举办一场捐向运动。这项一天的活动获得民众热烈响应，总共收集了151袋血浆，使我们深受大马人民的爱心所感动。

China Winter Storms 中国雪灾Year 2008 is a year plagued with numerous natural disasters, one of the more severe ones such as the Chinese winter storms which occurred between 25 January 2008 and 6 February 2008 that affected large portions of southern and central China. The snow storm caused extensive damage, it was estimated that about 223,000 homes were destroyed and 862,000 others were damaged. Hai-O donated RM 200,000 to the China winter storm relief fund.

2008年是一个充满天灾的年头，其中一场较重的灾害乃是发生于2008年1月25日至2月5日的中国雪灾，受灾区涵盖整个华南和华中地区。雪灾造成大面积的财物和人命损失，估计约22万3000栋住房被摧毁，86万2000户受创。海鸥向中国雪灾赈灾基金捐赠了20万令吉善款。

Myanmar Cyclone 缅甸热带气旋纳吉斯Cyclone Nargis (also known as Very Severe Cyclonic Storm Nargis), was a strong tropical cyclone that caused the worst natural disaster in the recorded history of Myanmar. The cyclone made landfall in the country on 2 May 2008, causing catastrophic destruction and at least 130,000 fatalities with thousands more people still missing. The Hai-O Foundation, the Group’s philanthropy arm donated RM 50,000 to the “Myanmar Cyclone Disaster Relief Aid” launched by Sin Chew Daily.

三级热带气旋纳吉斯肆虐缅甸中南部地区，造成缅甸有史以来惨重的自然灾害。纳吉斯于5月2日登陆缅甸，酿成巨灾，导致13万人死亡，数以千人的人口失踪。海鸥基金会，集团的慈善事业臂膀，捐助了5万令吉予星洲日报组建的缅甸风灾救援行动。



Sichuan Earthquake 四川大地震The 2008 Sichuan earthquake, which measured at 7.9 on the Richter scale occurred on 12 May 2008 in Sichuan province of China. The earthquake has severely caused tens of thousands of deaths and left hundreds of thousands homeless. Hai-O Group once again responded to this call for help.

And in 26 June 2008, the Hai-O Group participated in the Sichuan Earthquake Disaster Charity Night entitled “Earthquake is ruthless, but Malaysians have love.” at the Mines International Exhibition & Convention Centre in Seri Kembangan, Selangor. The charity dinner was fi rst mooted by Phoenix Television of Hong Kong. A large group of Hai-O employees were present at the event in helping out with the registration and ushering of thousands of guests. The participants, throughout the night donated and witnessed the donation by local communities and organizations.

The organizers successfully handed over RM 7 million, which was collected on the charity night, to Cheng Yonghua, Chinese ambassador to Malaysia. It was by far the largest single charity donation of Malaysia to the earthquake victims of Sichuan Province. Hai-O Group through Hai-O Foundation donated in excess of RM 1 million that night. We are indeed very proud to be a part of this charity event.

2008年5月12日中国四川省汶县发生黎克特制7.9级大地震，造成数万人死亡，数以千计名灾黎无家可归。海鸥集团再一次发挥“人饥己饥，人溺己溺”精神，数名有爱心及责任感的员工在5月16日发动内部捐款运动，这些善款稍后均移交予驻马来西亚中国大使馆。

2008年6月26日，海鸥集团联合多个华人团体在绿野国际会展中心举行四川地震赈灾晚会，获得香港凤凰卫视现场直播。海鸥集团派出大批员工担任现场的接待工作，除了个人和组织、单位进行现场捐款,还有歌曲、诗朗诵、合唱，每个节目都有力地演绎着“地震无情，大马有爱”的主题，让人深切地感受到大马华人的心灵脉动。

赈灾晚会当晚共筹获700万令吉，并移交予程永华大使，成为大马捐助四灾震灾大一笔款项。海鸥集团透过海鸥基金会损出100万令吉，我们为有幸参与这场慈善活动感到无上光荣。


社会责任



AUDIT COMMITTEE REPORT

The Audit Committee of Hai-O Enterprise Bhd (“Audit Committee”) presently comprises three (3) Directors of the Board. The details of attendance of each member of the committee for the meetings held during the financial year are as follows:

Number of Meetings Number of Meetings Held during the Attended during the financial year ended financial year endedName of Member Designation Directorship 30 April 2008 30 April 2008

Quek Ah Ba Chairman Independent 5 5 Non-Executive Director

Dr. M.K. Rajakumar Member Independent 5 5 A/L M.R.K. Nayar Non-Executive Director

Lim Chin Luen Member Independent 5 5 Non-Executive Director

Tan Keng Song Member Executive Director 1 1(Appointed on 15th June 2007)

(Resigned on 27th September 2007)

TERMS OF REFERENCE

The Audit Committee was formed by the Board on 7 September 1996 and its terms of reference are amended to meet the requirements of the Listing Requirements of Bursa Malaysia Securities Bhd.

COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee shall be made up of at least three (3) Directors who must be non-executive directors, with a majority of them being Independent Directors. No Alternate Director shall be appointed as a member of Audit Committee. At least one member of the Audit Committee: -

1) must be a member of the Malaysian Institute of Accountants; or

2) if he/she is not a member of Malaysian Institute of Accountants, he/she must have at least 3 years’ working experience and: -

(a) he/she must have passed the examinations specifi ed in Part I of the 1st Schedule of the Accountants Act 1967; or

(b) he/she must be a member of one of the association of accountants specifi ed in Part II of the 1st Schedule of the Accountants Act 1967; or

3) fulfi lls such other requirements as prescribed or approved by Bursa Malaysia Securities Bhd.

Note: The Listing Requirements of Bursa Malaysia Securities Bhd prescribed that the following qualifi cations are also acceptable: -

(a) a degree/master/doctorate in accounting or fi nance and at least 3 years’ post qualifi cation experience in accounting or fi nance; or

(b) at least 7 years’ experience being a chief fi nancial offi cer of a corporation or having the function of being primarily responsible for the management of the fi nancial affairs of a corporation.


ud t Co ttee epo t

TERM OF OFFICE

The Board of Directors must review the term of offi ce and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

RETIREMENT AND RESIGNATION

In the event of any vacancy in an Audit Committee resulting in the non-compliance of subparagraphs 15.10(1) of the Listing Requirements of Bursa Malaysia Securities Bhd, the vacancy must be fi lled within three (3) months.

CHAIRMAN OF THE AUDIT COMMITTEE

The members of the Audit Committee shall elect a Chairman from among themselves who shall be an Independent Non-Executive Director.

SECRETARY OF THE AUDIT COMMITTEE

The Company Secretary shall be the Secretary of the Audit Committee. The Secretary shall be responsible, in conjunction with the Chairperson, for drawing up the agenda and circulating it prior to each meeting. The Secretary shall also be responsible for keeping the minutes of the meeting and circulating them to the Audit Committee members.

AUTHORITY OF THE AUDIT COMMITTEE

The Audit Committee is authorized by the Board to:

1) have authority to investigate any matter within its terms of reference;

2) have the resources which are required to perform its duties;

3) have full and unrestricted access to any information pertaining to the company;

4) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;

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

6) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the company, whenever deemed necessary.

AUDIT COMMITTEE REPORT (CONT’D)


ud t Co ttee epo t


FUNCTIONS OF THE AUDIT COMMITTEE

The Audit Committee shall, amongst others, discharge the following functions:-

1) review the following and report the same to the Board of Directors of the company:-

(a) with the external auditors, the audit plan;

(b) with the external auditors, their evaluation of the system of internal controls;

(c) with the external auditors, their audit report;

(d) the external auditors’ management letter and management response;

(e) the assistance given by employees of the company to the external auditors;

(f) the quarterly results and year end fi nancial statements, prior to the approval by the Board of Directors, focusing particularly on:-i) changes in or implementation of major accounting policy changes;ii) signifi cant and unusual events; andiii) compliance with accounting standards and other legal requirements;

(g) any related party transaction and confl ict of interest situation that may arise within the company or group including any transaction, procedure or course of conduct that raises questions of management integrity;

(h) any letter of resignation from the external auditors of the Company;

(i) whether there is reason (supported by grounds) to believe that the company’s external auditors are not suitable for re-appointment;

(j) recommend the nomination of a person or persons as external auditors;

(k) the internal audit functions :-

i) the adequacy of the scopes, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work;

ii) the internal audit programme, processes, the result of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

iii) review any appraisal or assessment of the performance of the head of the internal audit function;iv) approve any appointment or termination of head of the Group Internal Audit; and

(l) consider the major fi ndings of internal investigations and management’s response.

2) to supervise and direct any special projects and investigations.

3) to carry out such other functions as may be agreed to by the Audit Committee and the Board of Directors.



REPORTING OF BREACHES TO THE BURSA MALAYSIA SECURITIES BHD

Where an Audit Committee is of the view that a matter reported by it to the Board of Directors of the company has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Bhd, the Audit Committee shall promptly report such matter to the Bursa Malaysia Securities Bhd.

QUORUM OF AUDIT COMMITTEE

In order to form a quorum in respect of a meeting of the Audit Committee, the majority of members present must be Independent Directors.

FREQUENCY AND ATTENDANCE OF MEETINGS

Meetings shall be held at least 4 times a year. Notice of meeting shall be circulated to the members one week in advance. Additional meetings may be called at any time at the Audit Committee’s discretion.

The Head of Finance, the Group Accountant and the Head of Group Internal Audit, a representative from operations management, and a representative of the external auditors may attend meetings by invitation. Other Directors and employees may attend any particular audit committee meeting only at the Audit Committee’s invitation, specifi c to the relevant meeting.

The external auditors may request a meeting if they consider necessary. Upon request of auditors, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matter the auditors believe should be brought to the attention of the Directors or shareholders.

Minutes of the Committee Meetings were circulated to the Committee members and made available to other members of the Board.

SUMMARY OF ACTIVITIES

During the fi nancial year ended 30 April 2008, the activities of the Audit Committee included:-

1) reviewed the unaudited quarterly fi nancial results announcements before they were approved by the Board;

2) reviewed the audited fi nancial statements for fi nancial year ended 30 April 2008 before they were approved by the Board;

3) reviewed and discussed with the external auditors on their scope of work, the result of their examination, the auditors’ report and management letters in relation to the audit and accounting issues arising from the audit, as well as new developments on accounting standards and regulatory requirements;

4) evaluated the performance of the external auditors and made recommendations to the Board on their appointment and fees;





5) reviewed and approved annual audit plan of the Group for the fi nancial year ended 30 April 2008;

6) reviewed the audit programs, resource requirements, and staffi ng requirements for the year and assessed the performance of the Group Internal Audit Division;

7) reviewed the processes undertaken by the internal auditors to ensure all high and critical risk areas are audited annually;

8) reviewed the internal audit report, audit recommendations made and management response to these recommendations and reviewed the follow-up audits to ensure that appropriate actions are taken and recommendations of internal auditors are implemented.

SUMMARY OF INTERNAL AUDIT ACTIVITIES

The Group Internal Audit Division, which reports directly to the Audit Committee, is established to assist the Audit Committee in the discharge of its duties and responsibilities. Its role is to undertake independent regular and systematic reviews of the operation of the companies to ensure proper systems of internal controls is in place. It also evaluates the processes by which signifi cant risks are identifi ed, assessed and managed to ensure instituted controls are appropriate, effectively applied and achieve acceptable risk exposures consistent with the Company’s risk management policy.

Throughout the financial year, audit assignments were carried out on the Group and its subsidiary companies. These assignments were carried out in accordance with the annual audit plan or as special ad-hoc audit at management’s request.

The resulting reports of the audit undertaken were presented to the Audit Committee and forwarded to the management concerned for action.

During the fi nancial year, there was no material internal control failure that was reported that would have resulted in any signifi cant loss to the Group.

EMPLOYEE SHARE OPTION SCHEME

In compliance with the Listing Requirements of Bursa Malaysia Securities Bhd, Appendix 9C, Paragraph 9.25 in furtherance of the Committee’s obligations under Paragraph 8.21A, which come into effect on 10 February 2004, the Audit Committee, through the Group Internal Audit Division, has verified the allocation of options pursuant to the criteria set out in the Employee Share Option Scheme.



STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors of Hai-O Enterprise Berhad (“The Board”) recognises the importance of the Malaysian Code of Corporate Governance (“The Code”), which sets out the principles and the best practices on corporate governance. In line with this, the Board is committed to ensuring that the principles of Corporate Governance and Best Practices are observed and practiced throughout the Hai-O Group of companies (“The Group”) so that the operations of the Group are conducted with integrity and professionalism to safeguard shareholders’ investment and enhance shareholders’ value.

BOARD OF DIRECTORS

a) Composition of the Board and Board Balance

The Board currently consists of seven (7) members, comprising of two (2) Executive Directors and fi ve (5) Non-Executive Directors, of whom four (4) are Independent Directors. Thus, this complies with Paragraph 15.02 of the Listing Requirements of Bursa Malaysia Securities Bhd (“Bursa Malaysia”) that one-third (1/3) of the Board are Independent Directors. All the Independent Directors are independent of management and majority shareholders and are free from any business or other relationship that could materially interfere with the exercise of their independent judgment.

The functions of Executive and Non-Executive Directors are separate and clearly defi ned. Generally, the Executive Directors are to manage the Group’s daily operations and to implement the operational and corporate decisions. The Non-Executive Directors are to provide the company with unbiased, independent views and decisions, after taking into consideration the interest of the shareholders, employees and business associates. The expertise of the Independent Non-Executive Directors complements the knowledge and experience of the Executive Directors in the formulation of company strategies and policies. Where a potential confl ict of interest may arise, it is a mandatory practice for the director concerned to declare his interest and abstain from the decision making process.

There is also a clear distinction of responsibilities between the Chairman and the Managing Director to maintain a balance of authority and accountability. The Chairman provides overall leadership to the Board, without limiting the principle of collective responsibility for Board’s decisions. The Managing Director, on the other hand, has the principal responsibility to formulate the business strategies and to implement the corporate decisions as well as to manage the overall business operations.

The Board’s composition represents a mix of knowledge, skill and expertise relevant to the activities of the Group. A brief profile of each Director is presented on page 14 to page 20.

b) Responsibilities of the Board

The Board retains full and effective control of the Group. This includes the responsibility for determining the Group’s overall strategic directions as well as development and control of the Group. Key matters, such as approval of annual and quarterly fi nancial results, corporate and fi nancial planning, acquisitions and disposals of major capital expenditures, entry into new business ventures, budgets and long term plans are the prerogative of the Board.



STATEMENT ON CORPORATE GOVERNANCE (CONT’D)

c) Board Meetings & Supply of Information

The Board meets at least once every three (3) months. Additional meetings may be convened to resolve any major and ad hoc matters requiring immediate attention. During the financial year ended 30 April 2008, the Board met eight (8) times. Senior Management staff may be invited to attend board meetings to provide the Board with detailed explanations and clarifications.

Relevant information and documents are provided to the Board members prior to the Board meetings to enable them to duly discharge their duties.

The Board has unrestricted access to all staff for any information pertaining to the Group’s affairs. In addition, the Board has access to the advice and services of the Company Secretary who is responsible for ensuring that the Board meeting procedures are followed and that applicable rules and regulations are being complied with. The Board may also seek independent advice whenever the need arises.

d) Appointment & Re-election of Directors

The Board has delegated the Nomination Committee the responsibility for considering the appointment of directors, identifying and selecting potential new directors and proposing to the Board the appointment of new Directors.

All of the members of the Nomination Committee are Independent, Non-Executive Directors:

• Dr. M.K. Rajakumar A/L M.R.K. Nayar• Lim Chin Luen• Quek Ah Ba

One third (1/3) of the Directors shall retire from office at each Annual General Meeting (“AGM”) and they can offer themselves for re-election. Directors who are appointed by the Board are subject to election by the shareholders at the next AGM held following their appointments.

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.

e) Director’s Training

The Board acknowledges that continuous education is critical for its members to gain insight into the state of economy, technological advances, regulatory updates and management strategies. All the Directors of the company have completed the Mandatory Accreditation Programme (“MAP”) in accordance with the Listing Requirements of the Bursa Malaysia Securities Bhd. The Directors will continue to undergo other relevant training programs and the Continuing Education Program (CEP) to further enhance their acknowledge in the latest statutory and regulatory developments as well as to keep abreast with developments in the business environment to enable them to discharge their responsibilities more effectively.



DIRECTORS’ REMUNERATION

a) Level and Make-up of Remuneration

The Board has set up a Remuneration Committee whose members are majority Non-Executive Directors. Members of the Remuneration Committee are: -

• Dr. M.K. Rajakumar A/L M.R.K. Nayar• Lim Chin Luen• Tan Kai Hee

The level of remuneration is structured to attract, retain and motivate the Directors in order to run the company successfully. The remuneration scheme is linked closely with the performance, service seniority, experience and responsibilities.

b) Procedure

The Remuneration Committee, meets as and when required, has responsibility for determining all aspect of remuneration and terms and conditions of service of the Executive Directors. The Remuneration Committee’s primary responsibility is to ensure that the remuneration package of the Executive Directors are based on the Group’s results and the individual director’s performance.

The determination of the remuneration of Non-Executive Directors is a matter for the Board as a whole.

The Directors’ fees, both Executive and Non-Executive are approved by the shareholders at the Annual General Meeting (“AGM”).

c) Disclosure

The details of the remuneration of Directors for the year ended 30 April 2008 are as follows:

Directors Directors’ Fees Emoluments Benefi t-In-Kinds Total (RM) (RM) (RM) (RM)

Executive Directors 109,967 2,589,505 34,668 2,734,140Non-Executive Directors 80,000 519,209 5,000 604,209

Grand Total 189,967 3,108,714 39,668 3,338,349

The aggregate remuneration of Directors fall within the following bands are as follows: -

Range of Remuneration Executive Directors Non-Executive Directors

RM 50,001 – RM100,000 3RM 150,001 – RM 200,000 2RM 250,001 – RM 300,000 1 RM 300,001 – RM 350,000 1 RM 2,100,001 – RM 2,150,000 1





SHAREHOLDERS AND INVESTORS

The Board recognises the importance of the right of shareholders, stakeholders and general public to be well informed on the activities and performance of the Group and to make their own evaluation and investment decision.

The Group has maintained an active and constructive communication policy that enables the Board and management to communicate effectively with its shareholders.

The key element of the Company’s dialogue with its shareholders is the opportunity to gather views and answer questions on all issues relevant to the Company at the AGM. The notice of the AGM and related papers are sent to shareholders with adequate time notice before the meeting. All shareholders are invited and encouraged to attend the company’s AGM and to participate in the proceedings. At the AGM, the shareholders are encouraged to ask questions about the resolutions being proposed as well as to seek clarifi cation on the Group’s business and performance. Shareholders are also informed and invited to attend any Extraordinary General Meetings through circulars and notice of meeting, if there is any.

The company has also established a website www.hai-o.com.my to which the shareholders can access for corporate information.

ACCOUNTABILITY AND AUDIT

a) Financial Reporting

The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s fi nancial performance and prospects at the end of the fi nancial year, primarily through the annual fi nancial statements, as well as through quarterly and half yearly announcement of results to shareholders. The Board, with the assistance of the Audit Committee, takes due care and reasonable steps to ensure that its quarterly and annual fi nancial statements are presented with accuracy, adequacy and comply with the requirements of approved accounting standards before announcing to shareholders and the general public.

b) Statement of Internal Control

The Board acknowledges that it is responsible for the Group’s system of internal controls covering not only fi nancial controls but also operational and compliance controls as well as risk management. The internal control system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable, and not absolute assurance against material misstatement or loss.

The Statement of Internal Control set out on page 61 of this Annual Report provides an overview of the state of internal controls within the Group.



c) Relationship with the Auditors

Through the Audit Committee, the Board has established transparent and appropriate relationship with the company’s internal and external auditors.

The company’s independent external auditors fi ll an essential role for the shareholders by enhancing the reliability of the company’s fi nancial statements and giving assurance of that reliability to users of these fi nancial statements.

A report of the Audit Committee and its terms of reference are provided on pages 51 to 55.

RESPONSIBILITY STATEMENT BY THE BOARD

The Directors are responsible for ensuring that the annual fi nancial statements of the Group are drawn up in accordance with the requirements of the applicable approved accounting standards in Malaysia, the provisions of the Companies Act, 1965 and the Listing Requirements of Bursa Malaysia Securities Bhd.

They are to ensure that the annual fi nancial statements of the Group give a true and fair view in the state of affairs of the Group at the end of the fi nancial year and the results and cash fl ows for the year then ended.

In preparing the fi nancial statements, the Directors have:

• applied the appropriate and relevant accounting policies on a consistent basis;• made judgments and estimates that are reasonable and prudent;• prepared the fi nancial statements on a going concern basis;• ensured that proper accounting records are kept so as to enable the preparation of the fi nancial statements with

reasonable accuracy; and• adopted approved accounting standards in Malaysia.

The Directors are also making reasonable steps to safeguard the assets of the Group to prevent and detect other irregularities.




STATEMENT ON INTERNAL CONTROLFOR FINANCIAL YEAR ENDED 30 APRIL 2008

INTRODUCTION

In line with the Malaysian Code on Corporate Governance that requires listed companies to maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets, the Board of Directors is pleased to provide this Statement of Internal Control pursuant to the Bursa Malaysia Securities Bhd Listing Requirements.

RESPONSIBILITIES

The Board acknowledges that it is responsible for the Group’s system of internal controls covering not only fi nancial controls but also operational and compliance controls as well as risk management. The internal control system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable, and not absolute assurance against material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

The Group has in place an on-going process for identifying, evaluating, monitoring and managing signifi cant risks that may affect the achievement of business objectives throughout the year under review. This process is reviewed by the Directors via the assistance of the Group’s Internal Audit Division.

In establishing and reviewing the system of internal control, Corporate Risk Scorecard System is adopted. This system takes into consideration of the materiality of relevant risks and the likelihood of a loss being incurred. It also sets out the various key controls and process requirements across all functions. It is updated, whenever needed, taking into consideration the changing risk profi les as dictated by changes in the business environment, strategies and functional activities from time to time.

All business units are required to document the controls and processes for managing the risks in their functional areas and to assess its effectiveness using the system.


STATEMENT ON INTERNAL CONTROL (CONT’D)

KEY ELEMENTS OF INTERNAL CONTROL

Key elements of the Group’s system of internal control include the following: -

1) An on-going process for identifying, evaluating and managing signifi cant risks faced by the Group; which has been in place for the year under review and reviewed by the Directors ;

2) A clear documentation of the risk management principles and procedures, which have been disseminated to all key employees. A risk management process is in place to ensure that all key risks within the Group are being clearly identifi ed within the framework of its line of business and key functional activities ;

3) A regular review of the performance of the Group by the Directors at its meetings to ensure it is in line with the Group’s overall objectives ;

4) A comprehensive annual budget is prepared by each business unit and approved by the Board. Operating results are being closely monitored by management against budget and key performance indicators;

5) The implementation of Code of Conducts for the Group and it is agreed and signed by each employee to indicate that he/she understands and will abide by the code. This Code serves to guide all the staff to conduct in the utmost professional manner in dealing with the company matters;

6) A regular review of the high-risk area of business processes by the Group’s Internal Audit Division, which reports directly to the Audit Committee, to assess the effectiveness of internal controls and to high-light any signifi cant risk that may adversely affect the Group ;

7) Whenever necessary, the Audit Committee reviews and discusses with key management on the actions taken on issues brought up by the Group’s Internal Audit Division and the external auditors.

The Board takes cognizance of the importance of the system of internal control and the Group is aware that its business operations is being conducted in compliance with the Listing Requirements of the Bursa Malaysia Securities Bhd.

REVIEW OF THE STATEMENT BY THE EXTERNAL AUDITORS

The external auditors have reviewed this Statement of Internal Control for the inclusion in this annual report of the company for the fi nancial year ended 30 April 2008 and had reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control.


ud t Co ttee epo t

ADDITIONAL CORPORATE DISCLOSURE

SHARE BUY BACK

During the fi nancial year ended 30 April 2008, the details of the shares purchased by the Company were as follows :-

Shares purchased during the fi nancial year.

Transaction date Units Price (RM) Average Consideration paid Lowest Highest RM RM

May 2007 173,400 2.22 2.34 2.28 395,883Jun 2007 17,400 2.29 2.40 2.35 40,832Aug 2007 144,800 2.69 3.00 2.91 420,659Sep 2007 210,000 2.57 3.24 2.81 590,283Oct 2007 100,200 2.86 3.10 3.02 303,082Nov 2007 120,700 3.04 3.28 3.20 385,787Dec 2007 36,200 2.96 3.14 3.05 110,319Jan 2008 42,000 2.96 3.26 3.08 129,375Feb 2008 116,000 2.91 2.98 2.98 345,740Mar 2008 427,600 2.72 3.14 2.91 1,244,451Apr 2008 25,400 3.18 3.24 3.22 81,698

1,413,700 4,048,109

All the shares so purchased during the fi nancial year were retained as treasury shares. No resale of treasury share during the year. As at 30 April 2008, a total of 3,123,886 ordinary shares were held as treasury shares. There has been no cancellation of the treasury shares by the Company during the fi nancial year ended 30 April 2008.

UTILISATION OF PROCEEDS

During the fi nancial year, there were no proceeds raised by the Company from any corporate proposals.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

No options warrant or convertible securities were granted to any person to any parties during the fi nancial year apart from the issue of options pursuant to the Employees’ Share Option Scheme (ESOS). The details of options issued and exercised during the year are as follows:-

-----------------Options over ordinary shares of RM1.00 each---------------- Option Price No. of Options No. of Options Balance as atDate of offer RM Granted Exercised 30.4.2008

19.12.2007 2.70 1,969,000 (499,000) 1,470,000

AMERICAN DEPOSITORY RECEIPT (ADR) GLOBAL DEPOSITORY RECEIPT (GDR)

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

SANCTIONS AND / OR PENALTIES

There were no sanctions and / or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the fi nancial year.

NON-AUDIT FEES

There is no non-statutory and professional fees paid to the external auditors, BDO Binder by the Company and its subsidiary for the fi nancial year ended 30 April 2008.


ud t Co ttee epo t

REVALUATION POLICY ON LANDED PROPERTIES

The Group does not adopt a policy on regular revaluation of its landed properties. However, a revaluation will be carried out should the directors are of the opinion that there is a material difference between the book value with the realizable value of the subject property.

VARIATION IN RESULTS

There was no material variance between the results for the fi nancial year and the unaudited results previously announced.

PROFIT GUARANTEE

No profi t guarantee was given by the Company in respect of the fi nancial year.

MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS’ INTEREST

There were no material contracts of the Company and its subsidiaries, involving directors’ and major shareholders’ interests, still subsisting at the end of the fi nancial year.

RECURRENT RELATED PARTY TRANSACTIONS

Details of transactions with related parties undertaken by the Group during the fi nancial year are disclosed in Note 34 of the Financial Statements.

DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETING

There were eight (8) Board of Directors Meetings held during the fi nancial year ended 30 April 2008. The detail of attendance of the Board as follows:-

Name of Directors Number of Board Meetings Attended by Directors

Tan Sri Osman S. Cassim 8/8 meetingsTan Kai Hee 8/8 meetingsDato’Abdul Rani bin Mohd Razalli 8/8 meetingsDr. M.K. Rajakumar M.R.K. Nayar 8/8 meetingsLim Chin Luen 8/8 meetingsQuek Ah Ba 8/8 meetingsTan Keng Song 8/8 meetingsTan Keng Kang 6/8 meetings

FAMILY RELATIONSHIP OF DIRECTORS AND /OR MAJOR SHAREHOLDERS

There is no family relationship among the directors and / or major shareholders except that :-- Mr. Tan Kai Hee and Madam Tan Siow Eng are husband and wife ;- Ms. Tan Keng Song and Mr. Tan Keng Kang are the daughter and son of Mr. Tan Kai Hee and Madam Tan Siow Eng.

CONFLICT OF INTEREST WITH THE COMPANY

None of the Directors have any confl ict of interest with the Company.

CONVICTION FOR OFFENCES

None of the Directors have been convicted of any offences within the past 10 years other than traffi c offences, if any.

ADDITIONAL CORPORATE DISCLOSURE (CONT’D)

66 Directors’ Report

74 Statement By Directors

74 Statutory Declaration

75 Independent Auditors Report

77 Balance Sheets

79 Income Statements

80 Statements Of Changes In Equity

82 Cash Flow Statements

84 Notes To The Financial Statements

Financial Statements


DIRECTORS’ REPORT

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

Company for the fi nancial year ended 30 April 2008.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the wholesaling and retailing of herbal medicines and healthcare products and

investment holding. The principal activities of the subsidiaries are set out in Note 11 to the fi nancial statements.

There have been no signifi cant changes in the nature of these activities during the fi nancial year.

RESULTS

Group Company

RM RM

Profi t for the fi nancial year attributable to:

Equity holders of the Company 48,535,332 27,043,214

Minority interest 582,623 -

49,117,955 27,043,214

DIVIDENDS

Dividends paid since the end of the previous fi nancial year were as follows:

(i) fi nal dividend of 13% gross, less tax, amounting to RM7,604,759 in respect of the previous fi nancial year as

approved by the shareholders at the Annual General Meeting held on 30 October 2007, was paid on 12 December

2007.

The amount paid of RM7,604,759 is in excess of the dividend of RM6,530,449 proposed in last year’s directors’

report. The difference of RM1,074,310 was in respect of additional shares issued arising from the bonus issue

and the exercise of the option under the Employees’ Share Option Scheme (“ESOS”) subsequent to the end of

previous fi nancial year, but prior to the closing date of the entitlement to dividend.

(ii) an interim dividend of 8% gross, less tax, amounting to RM4,747,700 in respect of current fi nancial year was

declared on 19 February 2008 and paid on 28 March 2008.

The Directors proposed a fi nal dividend of 32% gross, less tax, amounting to RM18,935,583 in respect of the fi nancial

year ended 30 April 2008, subject to the approval of members at the forthcoming Annual General Meeting. This

dividend, upon approval by the shareholders, will be accounted for as an appropriation of retained earnings in the

fi nancial year in which it is declared.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the fi nancial year other than those as

disclosed in the fi nancial statements.


DIRECTORS’ REPORT

(CONT’D)

ISSUE OF SHARES AND DEBENTURES

During the fi nancial year, the Company increased its issued and paid-up share capital from RM68,814,000 to

RM83,088,342 by way of:

(a) issuance of 862,000 new ordinary shares of RM1.00 each by virtue of the exercise of the ESOS; and

(b) issuance of 13,412,342 new ordinary shares of RM1.00 each by way of bonus issue on the basis of one new

ordinary share of RM1.00 each for every 5 existing ordinary shares of RM1.00 each held, by way of capitalising

RM13,412,342 from retained earnings of the Company on 14 September 2007.

The abovementioned shares rank pari passu in all respects with the then existing shares of the Company. There were

no other issues of shares during the fi nancial year.

There were no issues of debentures during the fi nancial year.

EMPLOYEES’ SHARE OPTION SCHEME

No options were granted to any person to take up unissued shares of the Company during the fi nancial year apart

from the issue of options pursuant to the ESOS.

The ESOS which became effective on 21 December 1998 is made available to eligible employees of the Group.

At an Extraordinary General Meeting held on 28 February 2003, the Company’s shareholders approved the proposed

amendments to the Bye-Laws of its existing ESOS. The main features of the ESOS are as follows:-

(a) The total maximum number of new shares which may be made available under the ESOS (including any shares

already allotted pursuant to the exercise of any options) shall not at any time exceed ten percent (10%) of the

total number of shares comprised in the issued and paid-up share capital of the Company.

(b) Eligible employees are those full time employees (including executive directors) of the Company within the Group

who as at the date of offer are at least eighteen (18) years old; confi rmed and is employed by and on the payroll

of a company/companies within the Group with at least one (1) year of continuous service in the Group; and

any foreign employee who is employed by and on the payroll of a company/companies within the Group and

whose contribution is vital to the Company and have completed at least two (2) years of service or if such foreign

employee is serving under a limited term contract, the contract should be for a duration of at least three (3)

years.

(c) The options holder may, in any year, exercise up to such a maximum number of shares in the Option Certifi cate as

determined by the ESOS Committee and as specifi ed in the Option Certifi cate, options exercisable in a particular

year but not exercised in that year can be carried forward and be exercised in the subsequent years.

(d) The maximum entitlement of an eligible employee under the ESOS shall be determined and subject to the

following:-

(i) not more than fi fty percent (50%) of the shares available under the ESOS should be allocated, in aggregate,

to executive directors and senior management; and

(ii) not more than ten percent (10%) of the shares available under the ESOS should be allocated to any individual

eligible employee who, singly or collectively through his/her associates holds twenty percent (20%) or more

of the issued and paid-up share capital of the Company.


EMPLOYEES’ SHARE OPTION SCHEME (CONTINUED)

(e) The option price shall be determined by the ESOS Committee, based on the weighted average market price of

the Company’s ordinary shares as shown in the Daily Offi cial List issued by the Bursa Malaysia Securities for the

fi ve (5) trading days preceding the respective dates of the offer and may be set at a discount of not more than ten

percent (10%).

(f) The duration of the option was extended to another fi ve years from 21 December 2003 to 20 December 2008. The

option granted may be exercised on any working day before the expiry of the term on 20 December 2008 upon

giving notice in writing to the Company.

(g) The actual number of shares which may be offered to any eligible employee shall be at the discretion of the ESOS

Committee. The number of shares to be offered shall be in multiples of one thousand (1,000) new shares and shall

not exceed the maximum allowable allotment of such eligible employee.

(h) Employees to whom the options have been granted are not eligible to participate in any other employees’ share

option scheme that may be established by the Company or the Group subsequent hereto.

(i) The shares shall on issue and allotment rank pari passu in all respects with the then existing issued shares of the

Company.

The Companies Commission of Malaysia had granted an exemption to the Company from having to disclose the

name of the eligible employees who have been granted with options during the fi nancial year and the number of

options granted to them in accordance with Section 169 (11)(a) of the Companies Act, 1965 except for eligible

employees who have been granted with options to purchase 100,000 and more ordinary shares during the fi nancial

year. This information has been separately fi led with the Companies Commission of Malaysia. Save as disclosed in

the Directors’ interest on page 6, none of the eligible employee had been granted with options to purchase 100,000

and more ordinary shares during the fi nancial year.

The movements in the Company’s unissued shares under ESOS during the fi nancial year are as follows:-

---------------------------- Options over ordinary shares of RM1.00 each ----------------------------

Date of offer

Option Price

/RM

Balance as at

1.5.2007 Granted Forfeited Exercised

Balance as at

30.4.2008

16.12.2003 1.43# 364,000 - (27,000) (337,000) -

09.01.2004 1.00 30,000 - (4,000) (26,000) -

19.12.2007 2.70 - 1,969,000 - (499,000) 1,470,000

# Price adjusted for the effect of the bonus and right issue

SHARE BUY-BACK

At the various general meetings of shareholders held previously, the shareholders of the Company authorised the

directors of the Company to buy back the Company’s own shares based on the following terms:-

(i) The number of shares to be purchased shall not exceed ten percent (10%) of the issued and paid-up share

capital of the Company at any given point in time.

(ii) The share buy-back will be fi nanced through internally generated fund and/or external borrowings. The funds

to be allocated by the Company for the share buy-back will be made wholly out of retained profi ts and/or share

premium account. The amount to be utilised shall not exceed the total audited retained profi ts and share

premium account of the Company.

DIRECTORS’ REPORT

(CONT’D)


SHARE BUY-BACK (CONTINUED)

(iii) The Company may retain the shares so purchased as treasury shares, or to cancel the shares purchased or a

combination of both as defi ned under Section 67A of the Companies Act, 1965. The purchased shares held as

treasury shares may either be distributed as share dividends, resold on Bursa Malaysia Securities in accordance

with the relevant rules of Bursa Malaysia Securities or subsequently cancelled. The distribution of treasury

shares as share dividends may be applied as a reduction of retained profi ts or share premium account of the

Company subject to applicable prevailing laws.

During the fi nancial year, the details of shares purchased were as follows:-

No. of -------------------- Unit cost -------------------- Total

shares Lowest Highest Average consideration

RM RM RM RM

Share purchased

May 2007 173,400 2.22 2.34 2.28 395,883

June 2007 17,400 2.29 2.40 2.35 40,832

August 2007 144,800 2.69 3.00 2.91 420,659

September 2007 210,000 2.57 3.24 2.81 590,283

October 2007 100,200 2.86 3.10 3.02 303,082

November 2007 120,700 3.04 3.28 3.20 385,787

December 2007 36,200 2.96 3.14 3.05 110,319

January 2008 42,000 2.96 3.26 3.08 129,375

February 2008 116,000 2.91 2.98 2.98 345,740

March 2008 427,600 2.72 3.14 2.91 1,244,451

April 2008 25,400 3.18 3.24 3.22 81,698

1,413,700 4,048,109

All the shares so purchased during the fi nancial year were retained as treasury shares as defi ned in the Companies

Act, 1965.

DIRECTORS

The Directors who held offi ce since the date of last report are:-

Tan Sri Osman S Cassim (Chairman)

Dr. M.K. Rajakumar A/L M.R.K. Nayar (Vice Chairman)

Tan Kai Hee (Managing Director)

Tan Keng Song

Tan Keng Kang

Dato’ Abdul Rani Bin Mohd. Razalli

Quek Ah Ba

Lim Chin Luen

DIRECTORS’ REPORT

(CONT’D)


DIRECTORS’ INTERESTS

Except as stated below, no other Directors holding offi ce at the end of the fi nancial year had any benefi cial interests

in the ordinary shares of the Company and its related corporations during the fi nancial year ended 30 April 2008 as

recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act

1965:

------------------ Number of Ordinary Shares of RM1.00 each ------------------

Balance as at Bonus Balance as at

1.5.2007 Bought Sold issue 30.4.2008

Shares in the Company

Direct interests

Tan Kai Hee 6,488,493 - - 1,297,698 7,786,191

Dato’ Abdul Rani Bin Mohd. Razalli 47,812 - - 9,562 57,374

Dr. M.K. Rajakumar A/L M.R.K. Nayar 33,600 - - 6,720 40,320

Lim Chin Luen 662,963 50,000 - 142,592 855,555

Quek Ah Ba 27,565 - - 5,513 33,078

Tan Keng Song 930,105 110,000 - 186,021 1,226,126

Tan Keng Kang 677,900 80,000 - 135,580 893,480

Indirect interests

Tan Kai Hee 10,304,758 190,000 - 2,060,950 12,555,708

Tan Keng Song 15,863,146 80,000 - 3,172,627 19,115,773

Tan Keng Kang 16,115,351 110,000 - 3,223,068 19,448,419

Shares in subsidiaries

Hai-O Raya Bhd.

Direct interests

Tan Kai Hee 34,000 - - - 34,000

Tan Keng Song 7,000 - - - 7,000

Lim Chin Luen 3,000 - - - 3,000

Quek Ah Ba 3,000 - - - 3,000

Tan Keng Kang 6,000 - - - 6,000

Indirect interests

Tan Kai Hee 87,000 - - - 87,000

Tan Keng Song 114,000 - - - 114,000

Tan Keng Kang 115,000 - - - 115,000

Samariatan Sdn. Bhd.

Direct interests

Lim Chin Luen 8,000 - - - 8,000

DIRECTORS’ REPORT

(CONT’D)


DIRECTORS’ INTERESTS (CONTINUED)

----------------- Options over Ordinary Shares of RM1.00 each -----------------

Balance Balance

As at as at

1.5.2007 Granted Exercised Forfeited 30.4.2008

Share options in the Company

Tan Keng Song - 150,000 (110,000) - 40,000

Tan Keng Kang - 150,000 (80,000) - 70,000

By virtue of their interests in the shares of the Company, Tan Kai Hee, Tan Keng Song and Tan Keng Kang are also

deemed to be interested in the shares of the subsidiaries to the extent the Company has an interest.

DIRECTORS’ BENEFITS

Since the end of the previous fi nancial year, none of the Directors have received or become entitled to receive any benefi t

(other than a benefi t included in the aggregate amount of emoluments received or due and receivable by the Directors as

shown in the fi nancial statements) by reason of a contract made by the Company or a related corporation with the Director

or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest

other than any benefi t which may be deemed to have arisen by virtue of the remuneration received and receivable by the

Directors from the subsidiaries in their capacity as directors of those subsidiaries.

There were no arrangements during and at the end of the fi nancial year, to which the Company is a party, which had the

object of enabling Directors to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or

any other body corporate except for the share options granted pursuant to the Company’s ESOS as mentioned in Note 20

to the fi nancial statements.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the

Directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making

of provision for doubtful debts and satisfi ed themselves that all known bad debts had been written off

and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their book values in the ordinary course

of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the

fi nancial year have not been substantially affected by any item, transaction or event of a material and

unusual nature.

DIRECTORS’ REPORT

(CONT’D)


OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (CONTINUED)

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would render the amount written off for bad debts or the amount of the provision for doubtful

debts in the fi nancial statements of the Group and of the Company inadequate to any material extent;

or

(ii) which would render the values attributed to current assets in the fi nancial statements of the Group and

of the Company misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assets or

liabilities of the Group and of the Company misleading or inappropriate.

(d) In the opinion of the Directors:

(i) there has not arisen 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 fi nancial year in

which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the

period of twelve months after the end of the fi nancial year which will or may affect the ability of the

Group or of the Company to meet their obligations as and when they fall due.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the

fi nancial year to secure the liabilities of any other person.

(f) There are no contingent liabilities in respect of the Group and of the Company which have arisen since the

end of the fi nancial year.

(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or fi nancial

statements which would render any amount stated in the fi nancial statements of the Group and of the

Company misleading.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The signifi cant events during the fi nancial year are disclosed in Note 41 to the fi nancial statements.

EVENTS SUBSEQUENT TO BALANCE SHEET DATE

The events subsequent to balance sheet date are disclosed in Note 42 to the fi nancial statements.

DIRECTORS’ REPORT

(CONT’D)


AUDITORS

The auditors, BDO Binder, have expressed their willingness to continue in offi ce.

Signed on behalf of the Board in accordance with a resolution of the Directors.

.................................................................... ....................................................................

Tan Kai Hee Tan Keng Song

Director Director

Kuala Lumpur

25 August 2008

DIRECTORS’ REPORT

(CONT’D)


STATEMENT BY DIRECTORS

In the opinion of the Directors, the fi nancial statements set out on pages 77 to 143 have been drawn up in accordance

with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965

so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 April 2008 and of the

results of the operations of the Group and of the Company and of the cash fl ows of the Group and of the Company

for the fi nancial year then ended.

On behalf of the Board,

.................................................................... ....................................................................

Tan Kai Hee Tan Keng Song

Director Director

Kuala Lumpur

25 August 2008

STATUTORY DECLARATION

I, Tan Kai Hee, being the Director primarily responsible for the fi nancial management of Hai-O Enterprise Berhad,

do solemnly and sincerely declare that the fi nancial statements set out on pages 77 to 143 are, to the best of my

knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and

by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly )

declared by the abovenamed )

at Kuala Lumpur this )

25 August 2008 )

Before me:

S.Ideraju (No.W-451)

Pesuruhjaya Sumpah

Kuala Lumpur, Malaysia


INDEPENDENT AUDITORS REPORTTO THE MEMBERS OF HAI-O ENTERPRISE BERHAD

Report on the Financial Statements

We have audited the fi nancial statements of Hai-O Enterprise Berhad, which comprise the balance sheets as at 30

April 2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash

fl ow statements of the Group and of the Company for the year then ended, and a summary of signifi cant accounting

policies and other explanatory notes, as set out on pages 77 to 143.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these fi nancial statements

in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia. This

responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and

fair presentation of fi nancial 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 fi nancial 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 fi nancial statements are free

from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial

statements. The procedures selected depend on our judgement, including the assessment of risks of material

misstatement of the fi nancial 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 fi nancial 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 fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit

opinion.

Opinion

In our opinion, the fi nancial statements have been properly 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 fi nancial position

of the Group and of the Company as of 30 April 2008 and of their fi nancial performance and cash fl ows for the year

then ended.


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 fi nancial statements and the auditors’ reports of all the subsidiaries of which we have

not acted as auditors, which we indicated in Note 11 to the fi nancial statements.

(c) We are satisfi ed that the fi nancial statements of the subsidiaries that have been consolidated with the Company’s

fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the

fi nancial statements of the Group and we have received satisfactory information and explanations required by us

for those purposes.

(d) The audit reports on the fi nancial statements of the subsidiaries did not contain any qualifi cation 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.

BDO Binder Gan Hock Soon

AF : 0206 2853/07/10 (J)

Chartered Accountants Partner

Kuala Lumpur

25 August 2008

INDEPENDENT AUDITORS REPORT (CONT’D)

TO THE MEMBERS OF HAI-O ENTERPRISE BERHAD


BALANCE SHEETSAS AT 30 APRIL 2008

Group Company

2008 2007 2008 2007

Note RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 7 21,596,819 22,004,741 11,140,814 11,088,393

Plant and equipment on lease 8 - - - -

Investment properties 9 20,921,870 21,580,190 22,445,848 23,092,460

Prepaid lease payments for land 10 1,750,501 1,784,562 81,600 83,200

Investment in subsidiaries 11 - - 15,723,845 13,724,199

Investment in associates 12 - - - -

Investment in jointly controlled entities 13 - - 1,115,399 1,111,205

Other investments 14 2,741,412 5,533,761 736,560 3,040,021

Trade and other receivables 15 1,372,630 1,582,936 - -

Deferred tax assets 16 1,683,930 1,080,402 - -

Goodwill on consolidation 17 84,930 273,833 - -

Total non-current assets 50,152,092 53,840,425 51,244,066 52,139,478

Current assets

Inventories 18 41,374,508 33,927,296 23,288,097 17,396,430

Trade and other receivables 15 25,726,842 14,699,895 17,497,455 23,347,976

Tax recoverable 167,107 202,046 - -

Other investments 14 13,423,881 18,621,605 2,888,000 4,426,670

Deposits with licensed banks 19 21,264,966 10,792,067 201,398 3,450,684

Cash and bank balances 52,000,924 16,880,384 26,259,784 6,822,917

Total current assets 153,958,228 95,123,293 70,134,734 55,444,677

TOTAL ASSETS 204,110,320 148,963,718 121,378,800 107,584,155

EQUITY AND LIABILITIES

Equity attributable to equity holders

of the Company

Share capital 20 83,088,342 68,814,000 83,088,342 68,814,000

Reserves 21 57,484,408 36,851,222 17,557,567 18,416,499

Total equity attributable to equity holders

of the Company 140,572,750 105,665,222 100,645,909 87,230,499

Minority interest 5,499,583 5,214,496 - -

TOTAL EQUITY 146,072,333 110,879,718 100,645,909 87,230,499


Group Company

2008 2007 2008 2007

Note RM RM RM RM

LIABILITIES

Non-current liabilities

Borrowings (interest bearing) 22 - - 667,335 389,040

Deferred tax liabilities 16 64,294 57,623 161,931 248,724

Total non-current liabilities 64,294 57,623 829,266 637,764

Current liabilities

Trade and other payables 24 39,351,888 23,537,935 13,139,757 12,475,217

Provisions 25 5,616,748 3,886,350 - -

Borrowings (interest bearing) 22 5,214,000 7,396,275 5,397,352 7,003,159

Tax liabilities 7,791,057 3,205,817 1,366,516 237,516

Total current liabilities 57,973,693 38,026,377 19,903,625 19,715,892

TOTAL LIABILITIES 58,037,987 38,084,000 20,732,891 20,353,656

TOTAL EQUITY AND LIABILITIES 204,110,320 148,963,718 121,378,800 107,584,155

The accompanying notes form an integral part of the fi nancial statements.

BALANCE SHEETS (CONT’D)

AS AT 30 APRIL 2008


INCOME STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 APRIL 2008

Group Company

2008 2007 2008 2007

Note RM RM RM RM

Revenue 26 373,822,575 189,346,178 146,142,735 83,476,987

Cost of sales (247,743,220) (119,597,737) (87,853,036) (49,281,080)

Gross profi t 126,079,355 69,748,441 58,289,699 34,195,907

Other operating income 4,956,263 3,941,870 2,639,500 2,449,393

Marketing and distribution costs (33,540,804) (23,097,789) (6,374,844) (5,776,596)

Administration expenses (28,698,317) (18,471,575) (16,385,330) (9,625,337)

Other operating expenses (688,755) (1,185,212) (265,265) (461,863)

Finance costs (391,562) (328,440) (412,269) (302,980)

Share of losses of associates - - - -

Profi t before tax 27 67,716,180 30,607,295 37,491,491 20,478,524

Tax expense 28 (18,598,225) (8,493,543) (10,448,277) (4,508,097)

Net profi t for the fi nancial year 49,117,955 22,113,752 27,043,214 15,970,427

Attributable to:-

Equity holders of the Company 48,535,332 21,383,862 27,043,214 15,970,427

Minority interest 582,623 729,890 - -

49,117,955 22,113,752 27,043,214 15,970,427

Earnings per ordinary share attributable to

equity holders of the Company (sen):-

Basic 29 60.41 27.07

Diluted 29 60.28 26.93

Gross dividend per ordinary share (sen):- 30

Interim dividend 8.00 5.00 8.00 5.00

Proposed fi nal dividend 32.00 13.00 32.00 13.00

40.00 18.00 40.00 18.00



STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 30 APRIL 2008

----

----

----

----

----

----

--

Att

rib

uta

ble

to

eq

uit

y h

old

ers

of

the

Co

mp

an

y

----

----

----

----

----

----

---

No

n d

istr

ibu

tab

leD

istr

ibu

tab

le

Sh

are

Sh

are

Sh

are

op

tio

ns

Ex

ch

an

ge

fl u

ctu

ati

on

Tre

as

ury

Ca

pit

al

Re

tain

ed

Min

ori

tyT

ota

l

ca

pit

al

pre

miu

mre

se

rve

res

erv

es

ha

res

res

erv

ee

arn

ing

sT

ota

lin

tere

st

Eq

uit

y

Gro

up

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Ba

lan

ce a

t 3

0 A

pril 2

00

66

6,3

29

,00

0-

-6

28

,86

1(1

,16

4,9

07

)6

69

,67

22

2,9

31

,65

28

9,3

94

,27

84

,61

8,8

60

94

,01

3,1

38

Issu

e o

f o

rdin

ary

sh

are

s p

urs

ua

nt

to e

xerc

ise

of

ES

OS

2

,48

5,0

00

59

9,8

50

--

--

3,0

84

,85

0-

3,0

84

,85

0

Pu

rch

ase

of

Co

mp

an

y’s

ow

n s

ha

res

--

--

(1,0

78

,08

6)

--

(1,0

78

,08

6)

-(1

,07

8,0

86

)

Re

alis

atio

n o

f e

xch

an

ge

fl u

ctu

atio

n r

ese

rve

on

dis

po

sal o

f a

s

ub

sid

iary

, re

pre

sen

ting

inco

me

re

cog

nis

ed

dire

ctly

in e

qu

ity-

--

605

--

-6

05

-6

05

Ne

t p

rofi t

fo

r th

e fi

na

nci

al y

ea

r-

--

--

-2

1,3

83

,86

22

1,3

83

,86

27

29

,89

02

2,1

13

,75

2

To

tal r

eco

gn

ise

d in

com

e a

nd

exp

en

se f

or

the

fi n

an

cia

l ye

ar

--

-6

05

--

21

,38

3,8

62

21

,38

4,4

67

72

9,8

90

22

,11

4,3

57

Div

ide

nd

pa

id t

o m

ino

rity

sh

are

ho

lde

rs o

f su

bsi

dia

rie

s-

--

--

--

-(1

02

,63

5)

(10

2,6

35

)

Min

ority

sh

are

ho

lde

rs o

f d

isp

ose

d s

ub

sid

iary

--

--

--

--

(31

,61

9)

(31

,61

9)

Fin

al d

ivid

en

d in

re

spe

ct o

f la

st fi

na

nci

al y

ea

r -

--

--

-(3

,78

7,9

72

)(3

,78

7,9

72

)-

(3,7

87

,97

2)

Inte

rim

div

ide

nd

in r

esp

ect

of

curr

en

t fi n

an

cia

l ye

ar

--

--

--

(3,3

32

,31

5)

(3,3

32

,31

5)

-(3

,33

2,3

15

)

Ba

lan

ce a

t 3

0 A

pril 2

00

76

8,8

14

,00

0

59

9,8

50

-6

29

,46

6(2

,24

2,9

93

)6

69

,67

2

37

,19

5,2

27

10

5,6

65

,22

25

,21

4,4

96

11

0,8

79

,71

8

Issu

e o

f o

rdin

ary

sh

are

s p

urs

ua

nt

to:

- e

xerc

ise

of

ES

OS

86

2,0

00

99

3,2

10

--

--

-1

,85

5,2

10

-1

,85

5,2

10

- B

on

us

issu

e1

3,4

12

,34

2-

--

--

(13

,41

2,3

42

)-

--

Pu

rch

ase

of

Co

mp

an

y’s

ow

n s

ha

res

--

--

(4,0

48

,10

9)

--

(4,0

48

,10

9)

-(4

,04

8,1

09

)

Re

alis

atio

n o

f ca

pita

l re

serv

e o

n d

isp

osa

l of

a s

ub

sid

iary

,

r

ep

rese

ntin

g e

xpe

nse

re

cog

nis

ed

dire

ctly

in e

qu

ity-

--

--

(12

,48

0)

12

,48

0-

--

Ne

t p

rofi t

fo

r th

e fi

na

nci

al y

ea

r-

--

--

- 4

8,5

35

,33

24

8,5

35

,33

25

82

,62

34

9,1

17

,95

5

To

tal r

eco

gn

ise

d in

com

e a

nd

exp

en

se f

or

the

fi n

an

cia

l ye

ar

--

--

-(1

2,4

80

)4

8,5

47

,81

24

8,5

35

,33

25

82

,62

34

9,1

17

,95

5

Div

ide

nd

pa

id t

o m

ino

rity

sh

are

ho

lde

rs o

f S

ub

sid

iarie

s-

--

--

--

-(2

96

,53

6)

(29

6,5

36

)

Acq

uis

itio

n o

f a

dd

itio

n in

tere

st in

a s

ub

sid

iary

f

rom

min

ority

inte

rest

--

--

--

--

(1,0

00

)(1

,00

0)

Sh

are

s o

ptio

ns

gra

nte

d u

nd

er

ES

OS

--

91

7,5

54

--

--

91

7,5

54

-9

17

,55

4

Re

serv

e r

ea

lise

d u

po

n e

xerc

ise

of

ES

OS

-2

32

,53

4(2

32

,53

4)

--

--

--

-

Fin

al d

ivid

en

d in

re

spe

ct o

f la

st fi

na

nci

al y

ea

r (N

ote

30

)-

--

--

-(7

,60

4,7

59

)(7

,60

4,7

59

)-

(7,6

04

,75

9)

Inte

rim

div

ide

nd

in r

esp

ect

of

curr

en

t fi n

an

cia

l ye

ar

(No

te 3

0)

--

--

--

(4,7

47

,70

0)

(4,7

47

,70

0)

-(4

,74

7,7

00

)

Ba

lan

ce a

t 3

0 A

pril 2

00

88

3,0

88

,34

21

,82

5,5

94

68

5,0

20

62

9,4

66

(6,2

91

,10

2)

65

7,1

92

59

,97

8,2

38

14

0,5

72

,75

05

,49

9,5

83

14

6,0

72

,33

3

Th

e a

cco

mp

an

yin

g n

ote

s f

orm

an

in

teg

ral p

art

of

the fi

nan

cia

l sta

tem

en

ts.


STATEMENTS OF CHANGES IN EQUITY (CONT’D)

FOR THE FINANCIAL YEAR ENDED 30 APRIL 2008

Non distributable Distributable

Share

Share Share options Treasury Capital Retained Total

capital premium reserve shares reserve earnings equity

Company RM RM RM RM RM RM RM

Balance at 30 April 2006 66,329,000 - - (1,164,907) 210 11,209,292 76,373,595

Issue of ordinary shares pursuant

to exercise of ESOS 2,485,000 599,850 - - - - 3,084,850

Purchase of Company’s own shares - - - (1,078,086) - - (1,078,086)

Net profi t for the fi nancial year,

representing total recognised

income and expense for the

fi nancial year - - - - - 15,970,427 15,970,427

Final dividend in respect of last

fi nancial year - - - - - (3,787,972) (3,787,972)

Interim dividend in respect of

current fi nancial year - - - - - (3,332,315) (3,332,315)

Balance at 30 April 2007 68,814,000 599,850 - (2,242,993) 210 20,059,432 87,230,499

Issue of ordinary shares

pursuant to:

- exercise of ESOS 862,000 993,210 - - - - 1,855,210

- Bonus issue 13,412,342 - - - - (13,412,342) -

Purchase of Company’s

own Shares - - - (4,048,109) - - (4,048,109)

Profi t for the fi nancial year,

representing total recognised

income and expense for the

fi nancial year - - - - - 27,043,214 27,043,214

Share options granted under ESOS - - 917,554 - - - 917,554

Reserve realised upon exercise

of ESOS - 232,534 (232,534) - - - -

Final dividend in respect of last

fi nancial year (Note 30) - - - - - (7,604,759) (7,604,759)

Interim dividend in respect of

current fi nancial year (Note 30) - - - - - (4,747,700) (4,747,700)

Balance at 30 April 2008 83,088,342 1,825,594 685,020 (6,291,102) 210 21,337,845 100,645,909



CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 APRIL 2008

Group Company

2008 2007 2008 2007

Note RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profi t before tax 67,716,180 30,607,295 37,491,491 20,478,524

Adjustments for:-

Allowance for doubtful debts 27 90,942 860,023 57,576 371,914

Allowance for doubtful debts no longer required 27 - (42,407) - (33,707)

Amortisation of prepaid lease payments for land 10 34,061 33,578 1,600 1,600

Bad debts written off 27 217,601 19,897 - -

Depreciation of property, plant and equipment 7 1,767,289 1,812,930 673,285 713,653

Depreciation of investment properties 7 429,696 440,829 520,989 522,687

Dividend income (448,683) (168,697) (20,742,770) (8,924,916)

Gain on disposal of a subsidiary 11.2 (126,343) - (183,780) (9,958)

Gain on disposal of other investments 27 (986,936) (973,234) (854,627) (729,068)

Impairment losses on investment in jointly

controlled entity 27 - - - 148,795

Impairment loss on goodwill 17 189,303 - - -

Interest expense 391,562 328,440 412,269 302,980

Interest income (868,813) (471,298) (206,831) (203,724)

Inventories written off 27 630,168 306,168 162,212 300,000

Inventories written down 27 847,490 - 447,161 -

Loss on disposal of subsidiaries 11.2 - 190,614 - -

Net gain on disposal of property,

plant and equipment (19,992) (52,349) (9,959) (26,246)

Property, plant and equipment written off 7 373,459 95,720 207,106 15,190

Current year provisions 25 4,356,407 2,617,539 - -

Over provision in prior year 25 (949,551) - - -

Waiver of debts 27 (594,741) (930,910) (594,741) (930,910)

Share options granted under ESOS 917,554 - 338,316 -

Operating profi t before working capital changes 73,966,653 34,674,138 17,719,297 11,996,814

Increase in inventories (8,951,678) (5,725,449) (6,501,040) (6,663,636)

(Increase)/decrease in trade and other receivables (11,482,464) 5,578,993 5,792,945 (2,610,550)

Increase/(decrease) in trade and other payables 16,408,694 500,261 1,259,281 (3,855,355)

Cash generated/(used in) from operations 69,941,205 35,027,943 18,270,483 (1,132,727)

Interest paid (950) (488) (950) (488)

Payments for sales campaign, trip and tour incentive 25 (1,676,458) (395,418) - -

Tax paid (14,499,245) (6,829,095) (4,000,977) (2,839,797)

Net cash from/(used in) operating activities 53,764,552 27,802,942 14,268,556 (3,973,012)


CASH FLOW STATEMENTS (CONT’D)

FOR THE FINANCIAL YEAR ENDED 30 APRIL 2008

Group Company

2008 2007 2008 2007

Note RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of additional interest in a subsidiary

from minority interest (1,400) - - -

Disposal of jointly controlled entities, net of cash

and cash equivalent disposed - (957) - -

Disposal of subsidiaries, net of cash and

cash equivalent disposed 11 783,760 300,513 - -

Dividend received 379,757 148,435 15,337,677 7,595,903

Interest received 868,813 471,298 206,831 203,724

Acquisitions of subsidiaries - - (2,024,602) -

Purchase of property, plant and equipment 32 (1,826,983) (1,929,451) (96,029) (267,119)

Purchase of other investments (34,671,565) (27,599,876) (22,494,045) (8,244,218)

Proceeds from disposal of other investments 43,648,574 17,328,223 27,190,803 9,321,313

Proceeds from disposal of subsidiaries - - 783,780 280,000

Proceeds from disposal of property, plant

and equipment 62,712 231,885 20,746 64,940

Net cash from/(used in) investing activities 9,243,668 (11,049,930) 18,925,161 8,954,543

CASH FLOWS FROM FINANCING ACTIVITIES

Net of repayment of term loan - (165,848) - -

Net (repayment)/drawdown of bill payables - (351,073) - -

Net (repayment)/drawdown of

bankers’ acceptances (2,182,275) 3,339,275 (1,641,275) 3,350,275

Proceeds from issue of shares 1,855,210 3,084,850 1,855,210 3,084,850

Purchase of Company’s own shares (4,048,109) (1,078,086) (4,048,109) (1,078,086)

Net repayment of hire-purchase creditors - - (408,184) (131,871)

Interest paid (390,612) (327,952) (411,319) (302,492)

Dividend paid (12,352,459) (7,120,287) (12,352,459) (7,120,287)

Dividend paid to minority shareholders

of subsidiaries (296,536) (102,635) - -

Net cash used in fi nancing activities (17,414,781) (2,721,756) (17,006,136) (2,197,611)

NET INCREASE IN CASH AND CASH

EQUIVALENTS 45,593,439 14,031,256 16,187,581 2,783,920

CASH AND CASH EQUIVALENTS AT BEGINNING

OF FINANCIAL YEAR 27,672,451 13,641,195 10,273,601 7,489,681

CASH AND CASH EQUIVALENTS AT END OF

FINANCIAL YEAR 33 73,265,890 27,672,451 26,461,182 10,273,601



NOTES TO THE FINANCIAL STATEMENTS30 APRIL 2008

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main

Board of Bursa Malaysia Securities Berhad.

The registered offi ce of the Company is located at Room 803, 8th Floor, Sun Kompleks, Jalan Bukit Bintang, 55100

Kuala Lumpur.

The principal places of business of the Company are located at Wisma Hai-O, Lot 11995, Batu 2, Jalan Kapar,

41400 Klang, Selangor Darul Ehsan.

The fi nancial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional

currency.

The fi nancial statements were authorised for issue in accordance with a resolution by the Board of Directors on 25

August 2008.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the wholesaling and retailing of herbal medicines and healthcare products and

investment holding. The principal activities of the subsidiaries are set out in Note 11 to the fi nancial statements.

There have been no signifi cant changes in the nature of these activities during the fi nancial year.

3. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The fi nancial statements of the Group and of the Company have been prepared in accordance with applicable

approved Financial Reporting Standards (‘FRS’) in Malaysia and the provisions of the Companies Act, 1965.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The fi nancial statements of the Group and of the Company have been prepared under the historical cost

convention except as otherwise stated in the fi nancial statements.

The preparation of fi nancial statements requires the Directors to make estimates and assumptions that affect

the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and

contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process

of applying the accounting policies. The areas involving such judgements, estimates and assumptions are

disclosed in Note 6 to the fi nancial statements. Although these estimates and assumptions are based on

the Directors’ best knowledge of events and actions, actual results could differ from those estimates.

4.2 Basis of consolidation

The consolidated fi nancial statements incorporate the fi nancial statements of the Company and all its

subsidiaries made up to the end of the fi nancial year using the purchase method of accounting.

Under the purchase method of accounting, the cost of business combination is measured at the aggregate

of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments

issued plus any costs directly attributable to the business combination.


4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.2 Basis of consolidation (continued)

At the acquisition date, the cost of business combination is allocated to identifi able assets, liabilities and

contingent liabilities in the business combination which are measured initially at their fair values at the

acquisition date. The excess of the cost of business combination over the Group’s interest in the net fair

value of the identifi able assets, liabilities and contingent liabilities is recognised as goodwill. If the cost of

business combination is less than the interest in the net fair value of the identifi able assets, liabilities and

contingent liabilities, the Group will:

(a) reassess the identifi cation and measurement of the acquiree’s identifi able assets, liabilities and

contingent liabilities and the measurement of the cost of the combination; and

(b) recognise immediately in profi t or loss any excess remaining after that reassessment.

When a business combination includes more than one exchange transaction, any adjustment to the fair

values of the subsidiary’s identifi able assets, liabilities and contingent liabilities relating to previously held

interests of the Group is accounted for as a revaluation.

Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively

obtains control, until the date on which the Group ceases to control the subsidiaries. Control exists when the

Group has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from

its activities. In assessing control, potential voting rights that are exercisable are taken into account.

Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated

in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated fi nancial

statements. If a subsidiary uses accounting policies other than those adopted in the consolidated fi nancial

statements for like transactions and events in similar circumstances, appropriate adjustments are made to

its fi nancial statements in preparing the consolidated fi nancial statements.

The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds

and the Group’s share of its net assets as of the date of disposal including the carrying amount of goodwill

and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the

consolidated income statement.

Minority interest is that portion of the profi t or loss and net assets of a subsidiary attributable to equity

interests that are not owned, directly or indirectly through subsidiaries, by the Group. It is measured at the

minority’s share of the fair value of the subsidiaries’ identifi able assets and liabilities at the acquisition date

and the minority’s share of changes in the subsidiaries’ equity since that date.

Where losses applicable to the minority in a subsidiary exceed the minority’s interest in the equity of that

subsidiary, the excess and any further losses applicable to the minority are allocated against the Group’s

interest except to the extent that the minority has a binding obligation and is able to make additional investment

to cover the losses. If the subsidiary subsequently reports profi ts, such profi ts are allocated to the Group’s

interest until the minority’s share of losses previously absorbed by the Group has been recovered.

Minority interest is presented in the consolidated balance sheet within equity and is presented in the

consolidated statement of changes in equity separately from equity attributable to equity holders of the

Company.

Minority interest in the results of the Group is presented in the consolidated income statement as an allocation

of the total profi t or loss for the fi nancial year between minority interest and equity holders of the Company.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)

30 APRIL 2008



4.3 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is

directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as

appropriate, only when the cost is incurred and it is probable that the future economic benefi ts associated

with the asset will fl ow to the Group and the cost of the asset can be measured reliably. The carrying

amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant

and equipment are recognised in the income statement as incurred. Cost also comprises the initial estimate

of dismantling and removing the asset and restoring the site on which it is located for which the Group is

obligated to incur when the asset is acquired, if applicable.

Each part of an item of property, plant and equipment with a cost that is signifi cant in relation to the total cost

of the asset and which has different useful life, is depreciated separately.

After initial recognition, property, plant and equipment are stated at cost less any accumulated depreciation

and any accumulated impairment losses.

Depreciation is calculated to write off the cost or valuation of the assets to their residual values on a straight

line basis over their estimated useful lives. The principal depreciation periods and rates are as follows:

Motor vehicles 20%

Furniture and offi ce equipment 10% - 20%

Electrical fi ttings 10%

Renovation 10%

Plant and machinery 20%

Laboratory equipment 10%

Fire-fi ghting system 10%

Warehouse fi ttings 10%

Freehold land is not depreciated.

At each balance sheet date, the carrying amount of an item of property, plant and equipment is assessed

for impairment when events or changes in circumstances indicate that its carrying amount may not be

recoverable.

The residual values, useful lives and depreciation method are reviewed at each fi nancial year end 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 benefi ts embodied in the items of property, plant

and equipment.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no

future economic benefi ts are expected from its use or disposal. The difference between the net disposal

proceeds, if any, and the carrying amount is included in profi t or loss and the revaluation surplus related to

those assets, if any, is transferred directly to retained earnings.


30 APRIL 2008



4.4 Assets acquired under leases and hire-purchase agreements

(a) Finance leases and hire-purchase

Assets acquired under fi nance leases and hire-purchase which transfer substantially all the risks and

rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the

leased assets or, if lower, the present value of the minimum lease payments, each determined at the

inception of the lease. The discount rate used in calculating the present value of the minimum lease

payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Group’s

incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the

amount recognised as an asset. The assets are capitalised as property, plant and equipment and the

corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are

depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between the fi nance charges and the reduction of the

outstanding liability. The fi nance charges are recognised in profi t or loss over the period of the lease

term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase

liabilities.

(b) Operating leases

Lease payments under operating leases are recognised as an expense on a straight line basis over

the lease term.

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for the

purpose of lease classifi cation and these leases are classifi ed as operating or fi nance leases in the

same way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the interest

in the land and buildings, are allocated between the land and the buildings elements in proportion to

the relative fair values of the leasehold interests in the land element and the buildings element of the

lease at the inception of the lease.

Leasehold land that normally has an indefi nite economic life and where the lease does not transfer

substantially all the risk and rewards incidental to ownership is treated as an operating lease. The

lump-sum upfront payments made on entering into or acquiring leasehold land are accounted for as

prepaid lease payments and are amortised over the lease term on a straight line basis.

The buildings element is classifi ed as a fi nance or operating lease in accordance with Note 4.4(a)

or Note 4.4(b). If the lease payment cannot be allocated reliably between these two elements, the

entire lease is classifi ed as a fi nance lease, unless it is clear that both elements are operating leases,

in which case the entire lease is classifi ed as an operating lease.

For a lease of land and buildings in which the amount that would initially be recognised for the land

element is immaterial, the land and buildings are treated as a single unit for the purpose of lease

classifi cation and is accordingly classifi ed as a fi nance or operating lease. In such a case, the

economic life of the buildings is regarded as the economic life of the entire leased asset.


30 APRIL 2008



4.5 Assets leased out under lease and hire-purchase agreements

(a) Finance leases and hire-purchase

Assets leased out under fi nance leases and hire-purchase arrangements which transfer substantially

all the risks and rewards of ownership to customers are stated in the balance sheet as fi nance lease

and hire-purchase receivables after deducting unearned fi nance income.

Finance income is credited to the income statement over the period of the agreements to give a

constant periodic rate of return on the remaining fi nance lease and hire-purchase receivables.

(b) Operating lease

Leases other than a fi nance lease are classifi ed as operating leases. Assets leased out under operating

lease are included in plant and equipment on lease in the balance sheet and outstanding amounts

owing by customers are stated in the balance sheet as lease rental receivables. Depreciation of plant

and equipment on lease is calculated to write off the cost of each asset on a straight line basis over

the period of the respective lease.

Lease rental income is recognised on a straight line basis over the respective lease term.

4.6 Investment properties

Investment properties are properties which are held to earn rentals or for capital appreciation or for both.

Investment properties are initially measured at cost, which includes transaction costs. After initial recognition,

investment properties are stated at cost less accumulated depreciation and impairment losses.

Depreciation is charged to the income statement on a straight line basis over the estimated useful lives of

the investment properties. The estimated useful lives of the buildings are between 32 to 50 years.

Investment properties are derecognised when either they have been disposed of or when they are

permanently withdrawn from use and no future economic benefi t is expected from their disposal. The gains

or losses arising from the retirement or disposal of investment property is determined as the difference

between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profi t

or loss in the period of the retirement or disposal.

4.7 Investments

(a) Subsidiaries

A subsidiary is an entity in which the Group and the Company has power to control the fi nancial and

operating policies so as to obtain benefi ts from its activities. The existence and effect of potential

voting rights that are currently exercisable or convertible are considered when assessing whether the

Group has such power over another entity.

An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate

fi nancial statements at cost less impairment losses, if any. On disposal of such an investment, the

difference between the net disposal proceeds and its carrying amount is included in profi t or loss.


30 APRIL 2008



4.7 Investments (continued)

(b) Associates

An associate is an entity over which the Group and the Company has signifi cant infl uence and that is

neither a subsidiary nor an interest in a joint venture. Signifi cant infl uence is the power to participate

in the fi nancial and operating policy decisions of the investee but is not control or joint control over

those policies.

In the Company’s separate fi nancial statements, an investment in associate is stated at cost less

impairment losses, if any.

An investment in associate is accounted for in the consolidated fi nancial statements using the equity

method of accounting. The investment in associate in the consolidated balance sheet is initially

recognised at cost and adjusted thereafter for the post acquisition change in the Group’s share of net

assets of the investment.

The interest in the associate is the carrying amount of the investment in the associate under the

equity method together with any long-term interest that, in substance, form part of the Group’s net

interest in the associate.

The Group’s share of the profi t or loss of the associate during the fi nancial year is included in the

consolidated fi nancial statements, after adjustments to align the accounting policies with those of the

Group, from the date that signifi cant infl uence commences until the date that signifi cant infl uence

ceases. Distributions received from the associate reduce the carrying amount of the investment.

Adjustments to the carrying amount may also be necessary for changes in the Group’s proportionate

interest in the associate arising from changes in the associate’s equity that have not been recognised

in the associate’s profi t or loss. Such changes include those arising from the revaluation of property,

plant and equipment and from foreign exchange translation differences. The Group’s share of those

changes is recognised directly in equity of the Group.

When the Group’s share of losses in the associate equals or exceeds its interest in the associate,

the carrying amount of that interest is reduced to nil and the Group does not recognise further losses

unless it has incurred legal or constructive obligations or made payments on its behalf.

The most recent available fi nancial statements of the associate are used by the Group in applying

the equity method. Where the reporting dates of the fi nancial statements are not coterminous, the

share of results is arrived at using the latest audited fi nancial statements for which the difference in

reporting dates is no more than three months. Adjustments are made for the effects of any signifi cant

transactions or events that occur between the intervening period.

Upon disposal of an investment in associate, the difference between the net disposal proceeds and

its carrying amount is included in profi t or loss.

(c) Jointly controlled entities

A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership

or other entities over which there is contractually agreed sharing of joint control over the economic

activity of the entity. Joint control exists when strategic fi nancial and operational decisions relating to

the activity require the unanimous consent of all the parties sharing control.

In the Company’s separate fi nancial statements, an investment in jointly controlled entities is stated

at cost less impairment losses, if any.


30 APRIL 2008



4.7 Investments (continued)

(c) Jointly controlled entities (continued)

The investment in jointly controlled entity is accounted for in the consolidated fi nancial statements by

proportionate consolidation method of accounting. The Group combine its share of the joint ventures’

individual assets and liabilities, income and expenses and cash fl ows with the similar items, line by

line, in the Group’s fi nancial statements.

Upon disposal of such investment, the difference between the net disposal proceeds and its carrying

amount is included in profi t or loss.

(d) Other investments

Non-current investments other than investments in subsidiaries, associates, jointly controlled entities

and investment properties are stated at cost and an allowance for diminution in value is made

where in the opinion of the Directors, there is a decline other than temporary in the value of such

investments.

All current investments are carried at the lower of cost and market value, determined on an aggregate

portfolio basis by category of investments.

Upon disposal of such investment, the difference between net disposal proceeds and its carrying

amount is recognised in profi t or loss.

4.8 Goodwill

Goodwill acquired in a business combination is recognised as an asset at the acquisition date and is initially

measured at cost being the excess of the cost of business combination over the Group’s interest in the net

fair value of the identifi able assets, liabilities and contingent liabilities. After initial recognition, goodwill is

measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested

for impairment annually or more frequently if events or changes in circumstances indicate that the carrying

value may be impaired.

Goodwill arising on acquisition of an associate is the excess of cost of investment over the Group’s share of

the net fair value of net assets of the associates’ identifi able assets, liabilities and contingent liabilities at the

date of acquisition.

Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised.

The excess of the Group’s share of the net fair value of the associate’s identifi able assets, liabilities and

contingent liabilities over the cost of investment is included as income in the determination of the Group’s

share of the associate’s profi t or loss in the period in which the investment is acquired.

4.9 Impairment of non-fi nancial assets

The carrying amounts of assets, except for fi nancial assets (the fi nancial assets in this context do not include

investment in subsidiaries, associates and jointly controlled entities), inventories and deferred tax assets are

reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such

indication exists, the asset’s recoverable amount is estimated.

Goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate

that the goodwill might be impaired.


30 APRIL 2008



4.9 Impairment of non-fi nancial assets (continued)

The recoverable amount of an asset is estimated for an individual asset. Where it is not probable to estimate

the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit

(CGU) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date,

allocated to each of the Group’s CGU or groups of CGU that are expected to benefi t from the synergies of

the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree

are assigned to those units or groups of units.

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in

use.

In estimating the value in use, the estimated future cash infl ows and outfl ows to be derived from continuing

use of the asset and from its ultimate disposal are discounted to their present value using a pre-tax discount

rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset

for which the future cash fl ow estimates have not been adjusted. An impairment loss is recognised in the

income statement when the carrying amount of the asset or the CGU, including the goodwill or intangible

asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, fi rst,

to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU

on a pro-rata basis of the carrying amount of each asset in the CGU.

The impairment loss is recognised in the income statement immediately except for the impairment on a

revalued asset where the impairment loss is recognised directly against the revaluation reserve to the extent

of the surplus credited from the previous revaluation for the same asset with the excess of the impairment

loss charged to the income statement.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is

reversed if, and only if, there has been a change in the estimates used to determine the assets’ recoverable

amount since the last impairment loss was recognised.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the

carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss

had been recognised.

Such reversals are recognised as income immediately in the income statement except for the reversal of an

impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation

increase and credited to the revaluation reserve account of the same asset. However, to the extent that an

impairment loss on the same revalued asset was previously recognised in profi t or loss, a reversal of that

impairment loss is also recognised in profi t or loss.

4.10 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined on the weighted average basis. The cost of consumables and raw materials comprises

all costs of purchase plus the cost of bringing the inventories to their present location and condition. The

cost of work-in-progress and fi nished goods includes the cost of raw materials, direct labour, other direct cost

and a proportion of production overheads based on normal operating capacity of the production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs

of completion and the estimated costs necessary to make the sale.


30 APRIL 2008



4.11 Financial instruments

4.11.1 Financial instruments recognised on the balance sheets

Financial instruments are recognised on the balance sheet when the Group has become a party to the

contractual provisions of the instrument.

Financial instruments are classifi ed as liabilities or equity in accordance with the substance of the contractual

arrangement. Interest, dividends and losses and gains relating to a fi nancial instrument or a component that

is a fi nancial liability shall be recognised as income or expense in profi t or loss. Distributions to holders of an

equity instrument are debited directly to equity, net of any related tax effect. Financial instruments are offset

when the Group has a legally enforceable right to offset and intends to settle on a net basis or to realise the

asset and settle the liability simultaneously.

(a) Receivables

Receivables including amounts owing by subsidiaries, associates and jointly controlled entities, are

carried at anticipated realisable value. Known bad debts are written off and specifi c allowance is

made for debts considered to be doubtful of collection.

Receivables are not held for trading purposes.

(b) Cash and cash equivalents

Cash and cash equivalents include cash and bank balances, deposits with fi nancial institutions and

other short term, highly liquid investments which are readily convertible to cash and which are subject

to insignifi cant risk of changes in value. For the purpose of cash fl ow statement, cash and cash

equivalents are presented net of bank overdrafts and pledged deposits.

(c) Payables

Payables, including amounts owing to subsidiaries, associates and jointly controlled entities

are recognised at fair value of the consideration to be paid in the future for goods and services

received.

(d) Interest bearing loans and borrowings

All loans and borrowings are recognised at the fair value of the consideration received less directly

attributable transaction costs.

(e) Equity instruments

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value

of shares issued, if any, are accounted for as share premium. Both ordinary shares and share

premium are classifi ed as equity. Transaction costs of an equity transaction are accounted for as

a deduction from equity, net of any related income tax benefi t. Otherwise, they are charged to the

income statement.

Dividends to shareholders are recognised in equity in the period in which they are declared.

If the Company reacquires its own equity instruments, the consideration paid, including any attributable

transaction costs is deducted from equity as treasury shares until they are cancelled. No gain or

loss is recognised in profi t or loss on the purchase, sale, issue or cancellation of the Company’s

own equity instruments. Where such shares are issued by resale, the difference between the sales

consideration and the carrying amount is shown as a movement in equity. When the treasury shares

are distributed as share dividend, the cost of the treasury shares will be reduced against the share

premium account or the distributable reserves, or both.


30 APRIL 2008



4.11 Financial instruments (continued)

4.11.2 Financial instruments not recognised on the balance sheets

There are no fi nancial instruments not recognised on the balance sheets.

4.12 Income taxes

Income taxes include all domestic and foreign taxes on taxable profi t. Income taxes also include other taxes,

such as withholding taxes, which are payable by a foreign subsidiary, associate or jointly controlled entity on

distributions to the Group and Company.

Taxes in the income statement comprises current tax and deferred tax.

(a) Current tax

Current tax is the amount of income taxes payable or receivable in respect of the taxable profi t or loss

for a period.

Current tax for the current and prior periods are measured at the amount expected to be recovered

from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are

those that have been enacted or substantially enacted by the balance sheet date.

(b) Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arising between

the carrying amount of an asset or liability in the balance sheet and its tax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill

or the initial recognition of an asset or liability in a transaction which is not a business combination

and at the time of transaction, affects neither accounting profi t nor taxable profi t.

A deferred tax asset is recognised only to the extent that it is probable that taxable profi t will be

available against which the deductible temporary differences, unused tax losses and unused tax

credits can be utilised. The carrying amount of a deferred tax asset is reviewed at each balance

sheet date. If it is no longer probable that suffi cient taxable profi t will be available to allow the benefi t

of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset

will be reduced accordingly. When it becomes probable that suffi cient taxable profi t will be available,

such reductions will be reversed to the extent of the taxable profi t.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current

tax assets against current tax liabilities and when the deferred income taxes relate to the same

taxation authority.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year

when the asset is realised or the liability is settled, based on tax rates and tax laws that have been

enacted or substantively enacted by the balance sheet date.


30 APRIL 2008



4.13 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past

event, when it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle

the obligation and a reliable estimate can be made of the amount of the obligation.

Where the effect of the time value of money is material, the amount of a provision will be discounted to its

present value at a pre-tax rate that refl ects current market assessments of the time value of money and the

risks specifi c to the liability.

4.14 Employee benefi ts

4.14.1 Short term employee benefi ts

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary

benefi ts are recognised as an expense in the year when employees have rendered their services to the

Group.

Short term accumulating compensated absences such as paid annual leave are recognised as an expense

when employees render services that increase their entitlement to future compensated absences. Short

term non-accumulating compensated absences such as sick leave are recognised when the absences

occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make

such payments, as a result of past events and when a reliable estimate can be made of the amount of the

obligation.

4.14.2 Defi ned contribution plans

The Company and subsidiaries incorporated in Malaysia make contributions to a statutory provident fund

and foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. The

contributions are recognised as a liability after deducting any contribution already paid and as an expense in

the period in which the employees render their services.

4.14.3 Share-based payments

The Group operates an equity-settled share-based compensation plan, allowing the employees of the Group

to acquire ordinary shares of the Company at predetermined prices.

The total fair value of share options granted to employees is recognised as an expense with a corresponding

increase in the share options reserve within equity over the vesting period and taking into account the

probability that the options will vest.

The fair value of share options is measured at grant date, taking into account, if any, the market vesting

conditions upon which the options were granted but excluding the impact of any non-market vesting

conditions. Non-market vesting conditions are included in assumptions about the number of options that are

expected to become exercisable on vesting date.

At each balance sheet date, the Group revises its estimates of the number of options that are expected to

become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in

profi t or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount

is recognised in the share options reserve until the options are exercised, upon which it will be transferred to

share premium, or until the options expires, upon which it will be transferred directly to retained earnings.

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

options are exercised.


30 APRIL 2008



4.14 Employee benefi ts (continued)

4.14.3 Share-based payments (continued)

The Group has adopted the transitional provision for “FRS 2: Share-Based Payments” in respect of equity

instruments granted after 31 December 2004 and not vested on 1 January 2006. Accordingly, the above is

applicable only to all the options granted by the Company after 31 December 2004.

4.15 Foreign currencies

4.15.1 Functional currency

The separate fi nancial statements of each entity in the Group are measured using the functional currency,

which is the currency of the primary economic environment in which the entity operates.

4.15.2 Foreign currency transactions and translations

A foreign currency transaction is recorded, on initial recognition in the functional currency, by applying to the

foreign currency amount the spot exchange rate between the functional currency and the foreign currency

at the date of the transaction.

At each balance sheet date, foreign currency monetary items are translated using the exchange rate at that

date. Non-monetary items that are measured in terms of historical cost in a foreign currency is translated

using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in

a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates

different from those at which they were translated on initial recognition during the period or in previous

fi nancial statements are recognised in profi t or loss in the period in which they arise.

Exchange differences arising on a monetary item that forms part of the Company’s net investment in a foreign

operation shall be recognised in profi t or loss in the fi nancial statements of the Company or the individual

fi nancial statements of the foreign operation, as appropriate. In the consolidated fi nancial statements, such

exchange differences are recognised initially in the exchange translation reserve except for a monetary item

that is denominated in a currency other than the functional currency of either the Company or the foreign

operation, which exchange differences is recognised in profi t or loss in the consolidated fi nancial statements.

On the disposal of the foreign operation, the cumulative amount of the exchange differences relating to the

foreign operation is recognised in profi t or loss when the gain or loss on disposal is recognised.

The results and fi nancial position of an entity whose functional currency is not the currency of a hyperinfl ationary

economy shall be translated into a different presentation currency using the following procedures:

(a) assets and liabilities for each balance sheet presented (i.e. including comparatives) shall be translated

at the closing rate at the date of that balance sheet;

(b) income and expenses for each income statement (i.e. including comparatives) shall be translated at

exchange rates at the dates of the transactions; and

(c) all resulting exchange differences shall be recognised as a separate component of equity.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying

amounts of assets and liabilities arising on the acquisition of a foreign operation is treated as assets and

liabilities of the foreign operation and is translated at the exchange rate at the balance sheet date.


30 APRIL 2008



4.16 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable net of discounts and

rebates.

Revenue is recognised to the extent that it is probable that the economic benefi ts associated with the

transaction will fl ow to the Group, and the amount of revenue and the cost incurred or to be incurred in

respect of the transaction can be reliably measured and specifi c recognition criteria have been met for each

of the Group’s activities as follows:

(a) Sale of goods

Revenue from sale of goods is recognised when signifi cant risk and rewards of ownership of the goods

has been transferred to the customer and where the Group retains neither continuing managerial

involvement over the goods, which coincides with delivery of goods and services and acceptance by

customers.

(b) Services

Revenue in respect of the rendering of services is recognised when the stage of completion at the

balance sheet date and the cost incurred can be reliably measured. The stage of completion is

determined by the services performed to date as a percentage of total services to be performed.

(c) Finance income

Finance income from hire-purchase and fi nance leases is recognised upon commencement of the

hire-purchase agreement or the lease agreement, on the sum of digit method over the period of the

agreement. Lease rental income from operating leases is recognised on a straight line basis over the

lease term.

(d) Dividend income

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

(e) Interest income

Interest income is recognised on an accrual basis.

(f) Rental income

Rental income is accounted for on a straight line basis over the lease term of an ongoing lease.

5. ADOPTION OF NEW FRS AND AMENDMENT TO FRS

5.1 New FRS and amendments to FRS adopted

(a) FRS 6 Exploration for and Evaluation of Mineral Resources is mandatory for annual periods beginning

on or after 1 January 2007. FRS 6 is not relevant to the Group’s operations.


30 APRIL 2008


5. ADOPTION OF NEW FRS AND AMENDMENT TO FRS

5.1 New FRS and amendments to FRS adopted (continued)

(b) FRS 1192004

Amendment to FRS 1192004

Employee Benefi ts – Actuarial Gains and Losses, Group

Plans and Disclosures is mandatory for annual periods beginning on or after 1 January 2007.

This amendment permits any systematic method that results in recognition of actuarial gains and

losses in the period in which they occur provided that the same basis is applied to both, gains and

losses and the basis is applied consistently from period to period.

As the Group does not participate in any multi-employer plans, the adoption of this amendment has

not resulted in signifi cant changes in accounting policies of the Group.

(c) FRS 124 Related Party Disclosures is mandatory for fi nancial periods beginning on or after 1 October

2006.

This FRS does not have any material impact to the Group, other than additional disclosure on key

management personnel remuneration and disclosure on related party transactions.

5.2 New FRS and amendments to FRS not adopted

The Group has not adopted FRS 139 Financial Instruments: Recognition and Measurement and the

consequential amendments resulting from FRS 139 which effective date is deferred to a date to be announced

by the MASB. FRS 139 establishes the principles for the recognition and measurement of fi nancial assets

and fi nancial liabilities including circumstances under which hedge accounting is permitted. By virtue of the

exemption provided under paragraph 103AB of FRS139, the impact of applying FRS 139 on its fi nancial

statements upon fi rst adoption of the standard as required by paragraph 30(b) of FRS 108 is not disclosed.

The Group has also not adopted the following FRS and amendments that have been issued as at the date

of authorisation of these fi nancial statements but are not yet effective for the Group. The Directors do not

anticipate that the application of these standards when they are effective will have a material impact on the

results and the fi nancial position of the Group:

(a) FRS which are effective for annual 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

These amendments align the MASB’s FRS with the equivalent International Accounting Standards

(“IAS”), both in terms of form and content. The adoption of these standards will only impact the

form and content of disclosures presented in the fi nancial statements. The Group will apply this

amendment for its annual period beginning 1 May 2008.


30 APRIL 2008


5. ADOPTION OF NEW FRS AND AMENDMENT TO FRS (CONTINUED)

5.2 New FRS and amendments to FRS not adopted (continued)

(b) Framework for the Preparation and Presentation of Financial Statements (‘Framework’) which is

effective for annual periods beginning on or after 1 July 2007.

The Framework sets out the concepts that underlie the preparation and presentation of fi nancial

statements for external users. It is not an MASB approved accounting standard and hence does

not defi ne standards for any particular measurement or disclosure issue. The Group will apply this

Framework for its annual period beginning 1 May 2008.

(c) Amendments and IC Interpretations which are effective for annual periods beginning on or after 1 July

2007

Amendment to FRS 121

The Effects of Changes in

Foreign Exchange Rates –

Net Investment in a Foreign

Operation

This amendment results in exchange differences arising from a

monetary item that forms part of the Group’s net investment in

a foreign operation to be recognised in equity irrespective of the

currency in which the monetary item is denominated and if whether

the monetary item results from a transaction with the Company or

any of its subsidiaries. Previously, exchange differences arising

from such transactions between the Company and its subsidiaries

would be accounted for in the income statement or in equity

depending on the currency of the monetary item. The Group will

apply this amendment for its annual period beginning 1 May 2008.

IC Interpretation 1

Changes in Existing

Decommissioning, Restoration

and Similar Liabilities

IC Interpretation 1 is not relevant to the Group’s operations.

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 Specifi c Market

– Waste Electrical and Electronic

Equipment


IC Interpretation 7

Applying the Restatement Approach

under FRS 1192004

Financial

Reporting in Hyperinfl ationary

Economies


IC Interpretation 8

Scope of FRS 2 : Share-Based

Payment

This interpretation applies to transactions in which goods or

services are received, including transactions in which the entity

cannot identify specifi cally some or all of the goods or services

received. Where the fair value of the share-based payment is

in excess of the identifi able goods or services received, it is

presumed that additional goods or services have been or will

be received. The whole fair value of the share based payment

will be charged to income statement. The Group will apply this

interpretation from its annual periods beginning 1 May 2008.


30 APRIL 2008


6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

6.1 Critical judgements made in applying accounting policies

The following are the judgements made by management in the process of applying the Group’s accounting

policies that have the most signifi cant effect on the amounts recognised in the fi nancial statements. .

Classifi cation between investment properties and property, plant and equipment

The Group has developed certain criteria based on FRS 140 Investment Property in making judgement

whether a property qualifi es as an investment property. Investment property is a property held to earn

rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion

that is held for use in the production or supply of goods or services or for administrative purposes. If these

portions could be sold separately (or leased out separately under a fi nance lease), the Group would account

for the portions separately. If the portions could not be sold separately, the property is an investment

property only if an insignifi cant portion is held for use in the production or supply of goods or services or for

administrative purposes. Judgment is made on an individual property basis to determine whether ancillary

services are so signifi cant that a property does not qualify as investment property.

During the fi nancial year, the Group has transferred part of its investment property for own use purposes.

Accordingly, a portion of the investment property is transferred and classifi ed as property, plant and

equipment.

6.2 Key sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty at

the balance sheet date that have a signifi cant risk of causing a material adjustment to the carrying amounts

of assets and liabilities within the next fi nancial year.

(a) Impairment of goodwill on consolidation

The Group determines whether goodwill on consolidation is impaired at least on an annual basis.

This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated.

Estimating a value-in-use amount requires management to make an estimate of the expected future

cash fl ows from the subsidiaries and also to choose a suitable discount rate in order to calculate

the present value of those cash fl ows. Further details are disclosed in Note 17 to the fi nancial

statements.

(b) Depreciation

The Group depreciates the property, plant and equipment over their estimated useful lives and after

taking into account their estimated residual values, using the straight line method. The estimated

useful lives applied by the Group as disclosed in Note 4.3 to the fi nancial statements refl ect the

Directors’ estimate of the periods that the Group expects to derive future economic benefi ts from

the use of the Group’s property, plant and equipment. Changes in the expected level of usage and

technological developments could impact the economic useful lives and the residual values of these

assets, therefore future depreciation charges could be revised.


30 APRIL 2008


6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

6.2 Key sources of estimation uncertainty (continued)

(c) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances

to the extent that it is probable that taxable profi t will be available against which the tax losses and

capital allowances can be utilised. Signifi cant management judgement is required to determine the

amount of deferred tax assets that can be recognised, based upon the likely timing and level of future

taxable profi ts together with future tax planning strategies.

(d) Income taxes

Signifi cant judgment is involved in determining the provision for income taxes. There are certain

transactions and computations for which the ultimate tax determination is uncertain during the ordinary

course of business. Where the fi nal tax outcome of these matters is different from the amounts that

were initially recognised, such differences will impact the income tax and deferred tax provisions in

the period in which such determination is made.

(e) Allowance for doubtful debts

The policy for assessing the impairment of the trade receivables of the Group is based on the ongoing

evaluation of the collectability and ageing analysis of the trade receivables and on the management’s

judgment. A considerable amount of judgment is required in assessing the ultimate realisation of

these receivables, including creditworthiness and the past collection history of each customer. If the

fi nancial condition of any customer of the Group were to deteriorate, resulting in an impairment of its

ability to make payment, additional allowance may be required.

The Company has recognised additional allowance for doubtful debts against amounts due from

those subsidiaries in net liabilities position. In making the judgment, the Company evaluates the

recoverability based on past experience on the probability of collections from these subsidiaries.

7. PROPERTY, PLANT AND EQUIPMENT

Group

2008Balance

as at 1.5.2007 Additions Disposals

Disposal of a

subsidiary

Depreciation charge for the

fi nancial year

Written off

Transfer from

investment properties

(Note 9)

Balance as at

30.4.2008Carrying amount RM RM RM RM RM RM RM RM

Freehold land 2,170,747 - - (98,407) - - 81,485 2,153,825Buildings 14,539,711 - - (153,556) (383,812) - 147,139 14,149,482Motor vehicles 789,477 714,419 (3) - (325,020) - - 1,178,873Furniture and offi ce equipment 2,409,204 664,747 (39,094) (6,214) (596,602) (158,105) - 2,273,936Electrical fi ttings 156,459 99,519 (2,127) - (52,489) (10,470) - 190,892Renovation 1,026,764 267,324 (1,496) (174,472) (204,884) - 913,236Plant and machinery 636,337 35,251 - (21,884) (196,877) - - 452,827Laboratory equipment 267,227 45,723 - - (32,005) - - 280,945Fire fi ghting system - - - - - - - -Warehouse fi ttings 8,815 - - - (6,012) - - 2,803

22,004,741 1,826,983 (42,720) (280,061) (1,767,289) (373,459) 228,624 21,596,819


30 APRIL 2008


7. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

-------------------------------- At 30.4.2008 -----------------------------

CostAccumulated depreciation

Accumulated impairment

lossesCarrying amount

RM RM RM RM

Freehold land 2,153,825 - - 2,153,825

Buildings 16,806,161 (2,609,676) (47,003) 14,149,482

Motor vehicles 2,784,718 (1,605,845) - 1,178,873

Furniture and offi ce equipment 7,911,955 (5,638,019) - 2,273,936

Electrical fi ttings 756,859 (565,967) - 190,892

Renovation 2,893,753 (1,980,517) - 913,236

Plant and machinery 1,663,485 (1,210,658) - 452,827

Laboratory equipment 431,216 (150,271) - 280,945

Fire fi ghting system 10,000 (10,000) - -

Warehouse fi ttings 60,116 (57,313) - 2,803

35,472,088 (13,828,266) (47,003) 21,596,819

Group

2007Balance

as at 1.5.2006 Additions Disposals

Depreciation charge for

the fi nancial year

Written off

Balance as at

30.4.2007

Carrying amount RM RM RM RM RM RM

Freehold land 2,170,747 - - - - 2,170,747

Buildings 14,914,020 - - (374,309) - 14,539,711

Motor vehicles 683,787 395,740 (5) (288,875) (1,170) 789,477

Furniture and offi ce equipment 2,467,601 678,025 (54,165) (662,032) (20,225) 2,409,204

Electrical fi ttings 236,608 39,072 (47,416) (51,623) (20,182) 156,459

Renovation 1,113,025 285,608 (77,644) (224,867) (54,143) 1,041,979

Plant and machinery 548,257 245,959 - (173,094) - 621,122

Laboratory equipment 19,096 277,547 (306) (29,110) - 267,227

Fire fi ghting system - - - - - -

Warehouse fi ttings 10,335 7,500 - (9,020) - 8,815

22,163,476 1,929,451 (179,536) (1,812,930) (95,720) 22,004,741

-------------------------------- At 30.4.2007 -----------------------------

CostAccumulated depreciation

Accumulated impairment

lossesCarrying amount

RM RM RM RM

Freehold land 2,170,747 - - 2,170,747

Buildings 16,812,578 (2,225,864) (47,003) 14,539,711

Motor vehicles 2,156,004 (1,366,527) - 789,477

Furniture and offi ce equipment 9,133,951 (6,724,747) - 2,409,204

Electrical fi ttings 1,042,117 (885,658) - 156,459

Renovation 3,128,018 (2,086,039) - 1,041,979

Plant and machinery 1,663,118 (1,041,996) - 621,122

Laboratory equipment 394,533 (127,306) - 267,227

Fire fi ghting system 10,000 (10,000) - -

Warehouse fi ttings 60,116 (51,301) - 8,815

36,571,182 (14,519,438) (47,003) 22,004,741


30 APRIL 2008



Transfer Company Depreciation from

Balance charge for investment Balance2008 as at the fi nancial properties Written as at

1.5.2007 Additions Disposals year (Note 9) off 30.4.2008Carrying amount RM RM RM RM RM RM RM

Freehold land 1,257,372 - - - 81,485 - 1,338,857Buildings 8,278,022 - - (218,211) 44,138 - 8,103,949Motor vehicles 4 - - - - - 4Motor vehicles under hire-purchase 582,330 665,275 - (265,982) - - 981,623Furniture and offi ce equipment 695,733 152,701 (10,787) (169,023) - (27,429) 641,195Electrical fi ttings 8,104 - - (2,370) - - 5,734Renovation 266,828 - - (17,699) - (179,677) 69,452Plant and machinery - - - - - - -

11,088,393 817,976 (10,787) (673,285) 125,623 (207,106) 11,140,814

--------------------- At 30.4.2008 -------------------

Accumulated Carrying

Cost depreciation amount

RM RM RM

Freehold land 1,338,857 - 1,338,857

Buildings 9,631,421 (1,527,472) 8,103,949

Motor vehicles 4 - 4

Motor vehicles under hire-purchase 2,230,236 (1,248,613) 981,623

Furniture and offi ce equipment 2,328,138 (1,686,943) 641,195

Electrical fi ttings 183,767 (178,033) 5,734

Renovation 334,971 (265,519) 69,452

Plant and machinery 72,900 (72,900) -

16,120,294 (4,979,480) 11,140,814

Company

2007

Balance

as at

1.5.2006 Additions Disposals

Depreciation

charge for

the fi nancial

year

Written

off

Balance

as at

30.4.2007

Carrying amount RM RM RM RM RM RM

Freehold land 1,257,372 - - - - 1,257,372

Buildings 8,494,536 - - (216,514) - 8,278,022

Motor vehicles 2,008 - (4) (2,000) - 4

Motor vehicles under hire-purchase 484,437 333,741 - (235,848) - 582,330

Furniture and offi ce equipment 747,550 149,108 (5,440) (195,205) (280) 695,733

Electrical fi ttings 15,520 - - (7,416) - 8,104

Renovation 367,178 - (33,250) (52,190) (14,910) 266,828

Plant and machinery 4,480 - - (4,480) - -

11,373,081 482,849 (38,694) (713,653) (15,190)11,088,393


30 APRIL 2008



--------------------- At 30.4.2007 -------------------



RM RM RM

Freehold land 1,257,372 - 1,257,372

Buildings 9,577,098 (1,299,076) 8,278,022

Motor vehicles 275,603 (275,599) 4

Motor vehicles under hire-purchase 1,396,007 (813,677) 582,330

Furniture and offi ce equipment 2,466,193 (1,770,460) 695,733

Electrical fi ttings 183,767 (175,663) 8,104

Renovation 642,550 (375,722) 266,828


15,871,490 (4,783,097) 11,088,393

8. PLANT AND EQUIPMENT ON LEASE

Group Depreciation

Balance charge for Balance

2008 as at the fi nancial as at

1.5.2007 Addition year 30.4.2008

Carrying amount RM RM RM RM

Plant and machinery - - - -

Lift system - - - -

Computer - - - -

Offi ce equipment - - - -

Furniture and fi ttings - - - -

- - - -

--------------------- At 30.4.2008 -------------------

--------------------- At 30.4.2008 -------------------



RM RM RM


Lift system 750,000 (750,000) -

Computer 1,003,480 (1,003,480) -

Offi ce equipment 196,408 (196,408) -

Furniture and fi ttings 63,066 (63,066) -

2,462,254 (2,462,254) -


30 APRIL 2008


8. PLANT AND EQUIPMENT ON LEASE (CONTINUED)

Group Depreciation



1.5.2006 Addition year 30.4.2007


Plant and machinery - - - -

Lift system - - - -

Computer - - - -

Offi ce equipment - - - -

Furniture and fi ttings - - - -

- - - -

--------------------- At 30.4.2007 ---------------------



RM RM RM


Lift system 750,000 (750,000) -

Computer 1,003,480 (1,003,480) -

Offi ce equipment 196,408 (196,408) -

Furniture and fi ttings 63,066 (63,066) -

2,462,254 (2,462,254) -

9. INVESTMENT PROPERTIES

Group

2008

Balance

as at

1.5.2007

Depreciation

charge for

the fi nancial

year

Transfer to

property,

plant and

equipment

(Note 7)

Balance

as at

30.4.2008


Freehold land 2,300,878 - (81,485) 2,219,393

Buildings 19,279,312 (429,696) (147,139) 18,702,477

21,580,190 (429,696) (228,624) 20,921,870

----------------------------- At 30.4.2008 ------------------------------

Accumulated

Accumulated impairment Carrying

Cost depreciation losses amount

RM RM RM RM

Freehold land 2,219,393 - - 2,219,393

Buildings 22,308,736 (3,428,613) (177,646) 18,702,477

24,528,129 (3,428,613) (177,646) 20,921,870


30 APRIL 2008


9. INVESTMENT PROPERTIES (CONTINUED)

Group Depreciation



1.5.2006 year 30.4.2007

Carrying amount RM RM RM

Freehold land 2,300,878 - 2,300,878

Buildings 19,720,141 (440,829) 19,279,312

22,021,019 (440,829) 21,580,190

----------------------------- At 30.4.2007 ------------------------------

Accumulated

Accumulated Impairment Carrying

Cost depreciation losses amount

RM RM RM RM

Freehold land 2,300,878 - - 2,300,878

Buildings 22,466,060 (3,009,102) (177,646) 19,279,312

24,766,938 (3,009,102) (177,646) 21,580,190

Company

2008

Balance

as at

1.5.2007

Depreciation

charge for

the fi nancial

year

Transfer to

property,

plant and

equipment

(Note 7)

Balance

as at

30.4.2008


Freehold land 2,784,777 - (81,485) 2,703,292

Buildings 20,307,683 (520,989) (44,138) 19,742,556

23,092,460 (520,989) (125,623) 22,445,848

------------------- At 30.4.2008 -------------------



RM RM RM

Freehold land 2,703,292 - 2,703,292

Buildings 23,389,485 (3,646,929) 19,742,556

26,092,777 (3,646,929) 22,445,848

Company Depreciation



1.5.2006 year 30.4.2007


Freehold land 2,784,777 - 2,784,777

Buildings 20,830,370 (522,687) 20,307,683

23,615,147 (522,687) 23,092,460


30 APRIL 2008


9. INVESTMENT PROPERTIES (CONTINUED)

------------------- At 30.4.2007 -------------------



RM RM RM

Freehold land 2,784,777 - 2,784,777

Buildings 23,443,808 (3,136,125) 20,307,683

26,228,585 (3,136,125) 23,092,460

The fair values for the investment properties of the Group and of the Company as at 30 April 2008 was estimated

at RM29,415,667 and RM30,542,846 respectively by a professional valuer using the Comparison Method. Recent

transactions and asking prices of similar properties in the locality are analysed for comparison purposes, adjusted

for differences in characteristics to arrive at the market value.

10. PREPAID LEASE PAYMENTS FOR LAND

Group

2008

Balance

as at

1.5.2007

Amortisation

charge for

the fi nancial

year

Balance

as at

30.4.2008


Leasehold land 1,784,562 (34,061) 1,750,501

------------------- At 30.4.2008 -------------------


Cost amortisation amount

RM RM RM

Leasehold land 2,107,440 (356,939) 1,750,501

2007

Balance

as at

1.5.2006

Amortisation

charge for

the fi nancial

year

Balance

as at

30.4.2007


Leasehold land 1,818,140 (33,578) 1,784,562

------------------- At 30.4.2007 -------------------



RM RM RM

Leasehold land 2,107,440 (322,878) 1,784,562


30 APRIL 2008


10. PREPAID LEASE PAYMENTS FOR LAND (CONTINUED)

Company

2008

Balance

as at

1.5.2007

Amortisation

charge for

the fi nancial

year

Balance

as at

30.4.2008


Leasehold land 83,200 (1,600) 81,600

------------------- At 30.4.2008 -------------------



RM RM RM

Leasehold land 96,000 (14,400) 81,600

2007

Balance

as at

1.5.2006

Amortisation

charge for

the fi nancial

year

Balance

as at

30.4.2007


Leasehold land 84,800 (1,600) 83,200

------------------- At 30.4.2007 -------------------



RM RM RM

Leasehold land 96,000 (12,800) 83,200

11. INVESTMENT IN SUBSIDIARIES

Company

2008 2007

RM RM

Equity contribution in subsidiaries 575,044 -

Unquoted shares - at cost 16,575,461 15,150,859

Less: Impairment losses (1,426,660) (1,426,660)

15,723,845 13,724,199


30 APRIL 2008


11. INVESTMENT IN SUBSIDIARIES (CONTINUED)

The details of subsidiaries are as follows:

Interest in

equity held by

Country of Company Subsidiaries

Name of company incorporation 2008 2007 2008 2007 Principal activities

% % % %

Hai-O I. Sdn. Bhd.*

(formerly known as

Adil Mewah Sdn. Bhd.)

Malaysia 100.00 100.00 - - Dormant

Dawin Trading Sdn. Bhd.* Malaysia 92.50 92.50 - - Dormant

Grand Brands (M) Sdn. Bhd. Malaysia 100.00 100.00 - - General importer, exporter

and commission agent

Hai-O Medicine Sdn. Bhd. Malaysia 100.00 100.00 - - Dealing in Chinese herbs

and medicines

Hai-O Properties Sdn. Bhd.* Malaysia 100.00 100.00 - - Investment holding

Hai-O Raya Bhd. Malaysia 56.63 56.60 - - Retail chain stores

Hai-O (PG) Sdn. Bhd.* Malaysia 95.29 95.29 - - Rental of property

Hai-O Credit & Leasing Sdn. Bhd. Malaysia 100.00 100.00 - - Leasing of machinery and

equipment and

investment holding

Hai-O Marketing Sdn. Bhd. Malaysia 100.00 100.00 - - Multi level direct marketing

SG Global Biotech Sdn. Bhd. Malaysia 100.00 100.00 - - Manufacturing of

pharmaceutical products

Kinds Resource Sdn. Bhd. Malaysia 100.00 100.00 - - Trading in Chinese herbs

MCC City Sdn. Bhd. Malaysia 100.00 100.00 - - Dormant

Sea Gull Advertising Sdn. Bhd. Malaysia 100.00 100.00 - - Advertising services

Teik Seang Wine

Merchants Sdn. Bhd.

Malaysia - 100.00 - - Production and distribution

of alcoholic and non -

alcoholic drinks

Hai-O Energy (M) Sdn. Bhd.*

(formerly known as Ten Plus

Three Trade Centre Sdn. Bhd.)

Malaysia 100.00 100.00 - - Heat transmission and

energy saving

technology


30 APRIL 2008



Interest in

equity held by



% % % %

Vintage Wine Sdn. Bhd.* Malaysia 100.00 100.00 - - Import and trading of wine

Samariatan Sdn. Bhd. Malaysia 66.40 66.40 - - Investment holding

Hai-O Polaris (M) Sdn. Bhd. Malaysia 55.00 55.00 - - Trading of time piece

Mengniu Marketing (M) Sdn.

Bhd*

Malaysia 100.00 - - - Has not commence

business during the year

Hai-O (Hong Kong)

Investment Limited *

Hong Kong 100.00 - - - Investment holding

Subsidiaries of Hai-O

Properties Sdn. Bhd.

Tyher Tea & Arts Culture

Sdn Bhd* (formerly known as

Anekajaya Sdn Bhd)

Malaysia - - 100.00 100.00 Dormant

Hai-O Development Sdn. Bhd.* Malaysia - - 100.00 100.00 Dormant

Subsidiary of

Samariatan Sdn. Bhd.

Chop Aik Seng Sdn. Bhd. Malaysia - - 100.00 100.00 Dealing in tea and

other beverages

Subsidiary of

Chop Aik Seng Sdn. Bhd.

Chop Aik Seng

Trading Sdn. Bhd.

Malaysia - - 100.00 100.00 Dormant

Subsidiary of

Hai-O Credit &

Leasing Sdn. Bhd.

Sri Pangkor Credit &

Leasing Sdn. Bhd.

Malaysia - - 100.00 100.00 Licensed money lender

and insurance agent

Subsidiary of

Hai-O Marketing Sdn. Bhd

.

Hai-O Marketing

(Philippines) Inc.*

Philippines - - 100.00 100.00 Dormant


30 APRIL 2008



Interest in

equity held by



% % % %

Subsidiary of

SG Global Biotech Sdn. Bhd.

QIS Research Laboratory Malaysia - - 100.00 100.00 Research and

Sdn. Bhd. laboratory services

* Subsidiaries not audited by Messrs. BDO Binder

11.1 Acquisition of new subsidiaries and additional shares in a subsidiary

(a) On 20 July 2007, the Company acquired an additional 1,000 ordinary shares of RM1.00 each in

the share capital of Hai-O Raya Bhd. from a minority shareholder for a total cash consideration of

RM1,400.

(b) On 25 September 2007, the Company acquired 1,000 ordinary shares of HKD1.00 each in the share

capital of Hai-O (Hong Kong) Investment Limited for a total cash consideration of HKD1,000 or

equivalent to RM400.

Subsequently, on 25 September 2007 and 10 December 2007, the Company subscribed for additional

9,000 and 2,370,000 ordinary shares of HKD1.00 each respectively in the share capital of Hai-O

(Hong Kong) Investment Limited for a total cash consideration of HKD9,000 and HKD2,370,000 or

equivalent to RM3,960 and RM1,018,802 respectively.

(c) On 25 September 2007, the Company subscribed for 2 ordinary shares of RM1.00 each in the share

capital of Mengniu Marketing (M) Sdn Bhd for a total cash consideration of RM2.

(d) On 17 December 2007, the Company subscribed for additional 999,998 ordinary shares of RM1.00

each in the share capital of Hai-O Energy (M) Sdn. Bhd. (formerly known as Ten Plus Three Trade

Centre Sdn. Bhd.) for a total cash consideration of RM999,998.

The effect of the acquisition of new subsidiaries on the fi nancial results of the group for the fi nancial year

ended 30 April 2008 is as follows:-

2008

RM

Operating income 1,341

Operating costs (86,238)

Decrease in Group net assets (84,897)


30 APRIL 2008



11.1 Acquisition of new subsidiaries and additional shares in a subsidiary (continued)

The acquisition has no material fi nancial effect on the cash fl ows of the Group for the fi nancial year ended

30 April 2008.

In the previous fi nancial year, the Group subscribed for 2 ordinary shares of RM1.00 each via its wholly

owned subsidiary, SG Global Biotech Sdn. Bhd. (formerly known as Hai-O Pharmaceutical (M) Sdn. Bhd.) in

the share capital of QIS Research Laboratory Sdn. Bhd. for a cash consideration of RM2 on 16 May 2006.

Subsequently on 16 June 2006 and 21 November 2006, the Group subscribed for additional 349,998 and

150,000 new ordinary shares of RM1.00 each respectively in the share capital of QIS Research Laboratory

Sdn. Bhd. for a cash consideration of RM349,998 and RM150,000 respectively.

The effect of the acquisition of QIS Research Laboratory Sdn. Bhd. on the fi nancial results of the Group for

the fi nancial year ended 30 April 2007 is as follows:-

2007

RM

Revenue 13,750

Operating income 15,286


Decrease in Group net assets (223,202)

The acquisition has no fi nancial effect on the cash fl ows of the Group for the fi nancial year ended 30 April

2007.

11.2 Disposal of subsidiaries

During the year, the Group disposed of its entire 100.00% equity interest in Teik Seang Wine Merchants

Sdn. Bhd. (“Teik Seang Wine”) for a total consideration of RM783,780.

The effect of the above disposal of Teik Seang Wine on the fi nancial results of the Group for the fi nancial

year ended 30 April 2008 are as follows:-

Up to the date

of disposals

2008

RM

Revenue 284,029

Other operating income 150


Loss before tax (63,825)

Tax expense -

Net loss for the fi nancial year (63,825)

Gain on disposal of a subsidiary 126,343

Increase in Group profi t 62,518


30 APRIL 2008



11.2 Disposal of subsidiaries (continued)

The effect of disposal of Teik Seang Wine on the fi nancial position and cash fl ow of the Group are as

follows:-

At date of

disposals

2008

RM

Property, plant and equipment 280,061

Inventories 26,808

Other receivables, deposits and prepayments 357,280

Tax recoverable 10,670

Cash and bank balances 20

Deferred tax liabilities (17,402)

Net assets disposed 657,437

Gain on disposals of a subsidiary 126,343

Net proceeds received 783,780

Less: Cash and cash equivalents of a subsidiary disposed (20)

Cash fl ow on disposal, net of cash and cash equivalents disposed 783,760

In the previous fi nancial year, the Group disposed of the following subsidiaries:-

(a) Disposal of its entire 62.00% equity interest in Add One Promotions Sdn. Bhd. (“Add One”), via its

wholly-owned subsidiary, Sea Gull Advertising Sdn. Bhd. for a total consideration of RM31,000.

(b) Disposal of its entire 100.00% equity interest in Hai-O Informtech Sdn. Bhd. (“Informtech”) for a total

consideration of RM280,000.

The effect of the above disposal of Add One and Informtech on the fi nancial results of the Group for the

fi nancial year ended 30 April 2007 are as follows:-

Up to the date

of disposals

2007

RM

Revenue 10,633

Other operating income 843


Profi t before tax 1,703

Tax expense (451)

Net profi t for the fi nancial year 1,252

Loss on disposal of subsidiary companies (190,614)

Decrease in Group profi t (189,362)


30 APRIL 2008



11.2 Disposal of subsidiaries (continued)

The effect of disposal of Add One and Informtech on the fi nancial position and cash fl ow of the Group are as

follows:-

At date of

disposals

2007

RM

Trade receivables 12,540

Other receivables, deposits and prepayments 1,142,572

Cash and bank balances 10,487

Trade payables (274)

Other payables and accruals (664,261)

Goodwill on consolidation 31,564

Exchange fl uctuation reserve 605

Minority interest (31,619)

Net assets disposed 501,614

Loss on disposals of subsidiaries (190,614)

Net proceeds received 311,000

Less: Cash and cash equivalents of subsidiaries disposed (10,487)

Cash fl ow on disposal, net of cash and cash equivalents disposed 300,513

12. INVESTMENT IN ASSOCIATES

Group Company

2008 2007 2008 2007

RM RM RM RM

Unquoted shares-at cost 624,000 1,114,000 - -

Less: Impairment losses - (143,636) - -

624,000 970,364 - -

Group’s share of post acquisition

Losses (624,000) (970,364) - -

- - - -

Hai-O Enterprise (Thailand) Co. Ltd. has been struck off during the fi nancial year. The winding up of Hai-Enterprise

(Thailand) Co. Ltd. does not have any signifi cant fi nancial effect on the Group for the current fi nancial year.


30 APRIL 2008


12. INVESTMENT IN ASSOCIATES (CONTINUED)

The details of associates are as follows:

Effective

Country of equity interest

Name of company Incorporation 2008 2007 Principal activities

% %

Indirect

Hai-O Enterprise (Thailand) Co. Ltd.* Thailand - 49.00 Wound up

Hai-O Enterprise (C.M.) Sdn. Bhd. Malaysia 48.00 48.00 Investment holding

The unrecognised amounts of share of losses of associates are as follows:

Group Company

2008 2007 2008 2007

RM RM RM RM

Balance as at 1 May 2007/2006 894,829 585,534 - -

Loss during the fi nancial year 12,803 309,295 - -

Balance as at 30 April 2008/2007 907,632 894,829 - -

* Associates not audited by Messrs. BDO Binder and management account of the associates are used

The summarised fi nancial information of the associates are as follows:

Group

2008 2007

RM RM

Assets and liabilities

Current assets 724,984 787,917

Non-current assets 39,010 48,715

Total assets 763,994 836,632

Group

2008 2007

RM RM

Current liabilities 436,687 484,653

Non-current liabilities 2,256,500 2,254,500

Total liabilities 2,693,187 2,739,153

Results

Revenue 27,672 998,474

(Loss)/Profi t for the fi nancial year (26,672) 934,486


30 APRIL 2008


13. INVESTMENT IN JOINTLY CONTROLLED ENTITIES

Group Company

2008 2007 2008 2007

RM RM RM RM

Equity contribution in a jointly

controlled entity - - 4,194 -

Unquoted shares, at cost - - 1,260,000 1,260,000

Less: Impairment losses - - (148,795) (148,795)

- - 1,115,399 1,111,205

The details of the jointly controlled entities are as follows:

Effective

Country of equity interest

Name of company Incorporation 2008 2007 Principal activities

% %

Peking Tongrentang (M) Sdn. Bhd. Malaysia 40.00 40.00 Providing traditional

Chinese physician

services and retail

of traditional

Chinese medicine

Sanjiu Hai-O TCM (M) Sdn. Bhd. Malaysia 50.00 50.00 Providing traditional

Chinese physician

services and retail

of traditional

Chinese medicine

The Group’s aggregate share of the assets, liabilities and income and expenses of the jointly controlled entities are

as follows:

Group

2008 2007

RM RM

Assets and liabilities

Current assets 1,369,869 1,263,937

Non-current assets 933,144 926,037

Total assets 2,303,013 2,189,974

Group

2008 2007

RM RM

Current liabilities 424,103 458,041

Non-current liabilities 23,960 13,200

Total liabilities 448,063 471,241

Results

Revenue 1,402,289 1,323,145

Expenses including fi nance cost and tax expense (1,212,690) (1,108,255)


30 APRIL 2008


14. OTHER INVESTMENTS

Group Company

2008 2007 2008 2007

RM RM RM RM

(a) Non current investments

Quoted shares in Malaysia - at cost 2,716,429 4,032,481 738,517 3,065,702

Less: Allowance for diminution in value (201,396) (225,099) (1,957) (25,681)

2,515,033 3,807,382 736,560 3,040,021

Unquoted shares - at cost 717,779 717,779 - -

Less: Allowance for diminution in value (491,400) (491,400) - -

226,379 226,379 - -

KLIBOR Callable Range Accrual Investment - 1,500,000 - -

2,741,412 5,533,761 736,560 3,040,021

Market value of quoted shares in Malaysia 3,422,186 5,147,210 784,521 3,866,090

(b) Short term investments

Quoted unit trusts in Malaysia 11,535,881 17,733,605 1,000,000 3,538,670

Unquoted unit trust in Malaysia 1,000,000 - 1,000,000 -

Unquoted unit trust in overseas 888,000 888,000 888,000 888,000

13,423,881 18,621,605 2,888,000 4,426,670

Market value of quoted unit trusts in Malaysia 11,350,085 18,062,768 1,061,336 3,644,524

15. TRADE AND OTHER RECEIVABLES

Group Company

2008 2007 2008 2007

RM RM RM RM

Trade receivables

Third parties 19,033,014 13,076,684 6,768,730 8,024,901

Subsidiaries - - 5,657,957 10,371,211

Hire-purchase receivables

- not later than one year 528,389 496,906 - -

- later than one year and not later than fi ve years 1,228,344 1,271,799 - -

- later than fi ve years 31,194 134,100 - -

1,787,927 1,902,805 - -

Less: Unearned interest charges (205,613) (241,553) - -

Carrying value of hire-purchase receivables 1,582,314 1,661,252 - -

Finance lease receivables


- later than one year and not later than fi ve years 219,318 340,146 - -

367,284 477,774 - -

Less: Unearned interest charges (97,049) (133,631) - -

Carrying value of fi nance lease receivables 270,235 344,143 - -


30 APRIL 2008


15. TRADE AND OTHER RECEIVABLES (CONTINUED)

Group Company

2008 2007 2008 2007

RM RM RM RM

Carrying value of fi nance lease receivables 270,235 344,143 - -

Loan receivables



159,595 368,440

21,045,148 15,450,519 12,426,687 18,396,112

Less: Allowance for doubtful debts, net of bad

debts written off of RM644,788

(2007:RM1,165,581) for the Group and

RM638,014 (2007:RM395,189) for the Company (591,350) (1,152,419) (481,644) (1,062,082)

20,453,808 14,298,100 11,945,043 17,334,030

Other receivables

Amounts owing by related parties:

- Subsidiaries - - 277,974 5,207,813

- Associates 3,259,923 3,257,923 1,003,423 1,003,423

- Jointly controlled entities 157,416 - 21,703 30,943

3,417,339 3,257,923 1,303,100 6,242,179

Other receivables 425,126 452,926 199,700 183,147

Deposits 5,633,023 1,186,174 4,832,006 407,277

Prepayments 574,986 486,038 352,029 315,766

6,633,135 2,125,138 5,383,735 906,190

10,050,474 5,383,061 6,686,835 7,148,369

Less: Allowance for doubtful debts

- Third parties (146,887) (140,407) (131,000) (131,000)

- Associates (3,257,923) (3,257,923) (1,003,423) (1,003,423)

(3,404,810) (3,398,330) (1,134,423) (1,134,423)

Other receivables, net 6,645,664 1,984,731 5,552,412 6,013,946

27,099,472 16,282,831 17,497,455 23,347,976

Current:-

Trade receivables

- Third parties 19,033,014 13,076,684 6,768,730 8,024,901

- Subsidiaries - - 5,657,957 10,371,211

Less: Allowance for doubtful debts

- Third parties (591,350) (1,152,419) (481,644) (1,062,082)

18,441,664 11,924,265 11,945,043 17,334,030

Carrying value of hire-purchase receivables not

later than one year 439,784 407,818 - -

Carrying value of fi nance lease receivables

not later than one year 113,584 101,046 - -

Loan receivables 86,146 282,035 - -

Trade receivables, net 19,081,178 12,715,164 11,945,043 17,334,030


30 APRIL 2008



Group Company

2008 2007 2008 2007

RM RM RM RM

Other receivables

Amounts owing by related parties:

Subsidiaries - - 277,974 5,207,813

An associate 3,259,923 3,257,923 1,003,423 1,003,423

Less: Allowance for doubtful debts (3,257,923) (3,257,923) (1,003,423) (1,003,423)

2,000 - - -

Jointly controlled entities 157,416 - 21,703 30,943

159,416 - 299,677 5,238,756

Other receivables 425,126 452,926 199,700 183,147

Less: Allowance for doubtful debts, net of bad

debts written off of RM743 (2007:

RM217,333)

for the Group (146,887) (140,407) (131,000) (131,000)

278,239 312,519 68,700 52,147

Deposits 5,633,023 1,186,174 4,832,006 407,277

Prepayments 574,986 486,038 352,029 315,766

Other receivables, net 6,645,664 1,984,731 5,552,412 6,013,946

25,726,842 14,699,895 17,497,455 23,347,976

Non current:-

Carrying value of hire-purchase receivables:-

- later than one year and not later than fi ve years 1,114,245 1,122,396 - -

- later than fi ve years 28,285 131,038 - -

1,142,530 1,253,434 - -

Carrying value of fi nance lease receivables:-


Carrying value of loan receivables:-


1,372,630 1,582,936 - -

27,099,472 16,282,831 17,497,455 23,347,976

(a) The credit terms of trade receivables range from 7 days to 120 days.

(b) Amounts owing by subsidiaries

Amounts owing by subsidiaries represent balances arising from normal trade transactions, advances and

payments made on behalf of the subsidiaries which are unsecured, have no fi xed terms of repayment and

are interest-free.

(c) Amount owing by an associate

Amount owing by an associate represents balances arising from normal trade transactions and payments

made on behalf of the associate which are unsecured, interest-free and have no fi xed terms of repayment

except for normal trade transactions which are subject to a credit term of 90 days from date of invoice.


30 APRIL 2008



(d) Amounts owing by jointly controlled entities

The amounts owing by jointly controlled entities represent balances arising from normal trade transactions

and payments made on behalf of the jointly controlled entities which are unsecured, interest-free and have

no fi xed terms of repayment except for normal trade transactions which is subject to a credit term of 90 days

from date of invoice.

16. DEFERRED TAX

(a) The deferred tax assets/(liabilities) are made up of the following:-

Group Company

2008 2007 2008 2007

RM RM RM RM

Balance as at 1 May 2007/2006 1,022,779 301,496 (248,724) (179,253)

Disposal of a subsidiary 17,402 - - -

Recognised in the income

statements (Note 28)

- current year 594,031 864,405 76,441 5,256

- under/(over) provision in prior years (14,576) (143,122) 10,352 (74,727)

579,455 721,283 86,793 (69,471)

Balance as at 30 April 1,619,636 1,022,779 (161,931) (248,724)

Presented after appropriate offsetting:

Deferred tax assets, net 1,683,930 1,080,402 - -

Deferred tax liabilities, net (64,294) (57,623) (161,931) (248,724)

1,619,636 1,022,779 (161,931) (248,724)

(b) The components and movements of deferred tax assets and liabilities during the fi nancial year prior to

offsetting are as follows:

Group Company

2008 2007 2008 2007

RM RM RM RM

Deferred tax assets

Balance as at 1 May 2007/2006 1,700,239 1,050,836 138,474 240,475

Disposal of a subsidiary (1,569) - - -

Recognised in the income statement

Provisions/allowances 731,564 715,861 116,502 10,522

Inventories (57,172) 114,757 - -

Allowance for doubtful debts (1,300) (57,815) - (59,115)

Change in tax rate (47,130) (82,225) (15,649) (11,427)

Unabsorbed industrial building allowances (1,569) (41,175) - (41,981)

624,393 649,403 100,853 (102,001)

Balance as at 30 April 2,323,063 1,700,239 239,327 138,474


30 APRIL 2008


16. DEFERRED TAX (CONTINUED)

(b) The components and movements of deferred tax assets and liabilities during the fi nancial year prior to

offsetting are as follows: (continued)

Group Company

2008 2007 2008 2007

RM RM RM RM

Deferred tax liabilities

Balance as at 1 May 2007/2006 677,460 749,340 387,198 419,728

Disposal of a subsidiary (18,971) - - -

Recognised in the income statement

Property, plant and equipment 92,890 (45,447) 45,721 (2,466)

Change in tax rate (47,952) (26,433) (31,661) (30,064)

44,938 (71,880) 14,060 (32,530)

Balance as at 30 April 703,427 677,460 401,258 387,198

(c) The components of deferred tax assets and liabilities as at the end of the fi nancial year comprise the tax

effects of:-

Group Company

2008 2007 2008 2007

RM RM RM RM

Deferred tax assets

Inventories 248,513 305,685 - -

Unabsorbed industrial building allowances - 1,569 - -

Provisions/allowances 2,074,550 1,391,685 239,327 138,474

Allowance for doubtful debts - 1,300 - -

2,323,063 1,700,239 239,327 138,474

Deferred tax liabilities

Property, plant and equipment

- Excess of capital allowance over

corresponding depreciation 703,427 677,460 401,258 387,198

(d) The amount of temporary differences for which no deferred tax assets have been recognised in the balance

sheet are as follows:-

Group

2008 2007

RM RM

Provisions/allowances 170,000 272,000

Unutilised tax losses 812,000 843,000

Unabsorbed capital allowances 217,000 205,000

1,199,000 1,320,000


30 APRIL 2008


16. DEFERRED TAX (CONTINUED)

(d) The amount of temporary differences for which no deferred tax assets have been recognised in the balance

sheet are as follows:- (continue)

Deferred tax assets have not been recognised in respect of these items as it is not probable that taxable

profi t of certain subsidiaries will be available against which the deductible temporary differences can be

utilised.

The deductible temporary differences do not expire under current tax legislation unless there is a substantial

change in shareholders of those dormant subsidiaries of more than 50%. If there is such a change, the

unused tax losses carry forward amounting to RM174,000 will not be available to those subsidiaries.

17. GOODWILL ON CONSOLIDATION

Group

2008 2007

RM RM

Balance as at 1 May 2007/2006 273,833 781,381

Less: Acquisition of a subsidiary 400 -

Disposal of subsidiaries - (197,418)

Disposal of a jointly controlled entity - (144)

Effect of adopting FRS 3 - (309,986)

Balance as at 30 April 274,233 273,833

Accumulated amortisation

Balance as at 1 May 2007/2006 - 309,986

Less: Effect of adopting FRS 3 - (309,986)

Balance as at 30 April - -

Less: Impairment losses (189,303) -

Carrying value as at 30 April 84,930 273,833

The recoverable amount was determined based on a value in use calculation using cash fl ow projections based on

fi nancial budgets prepared by the management covering a fi ve-year period. The discount rate applied to the cash

fl ow projections were 12.86% based on the weighted average cost of capital of the Group.

18. INVENTORIES

Group Company

2008 2007 2008 2007

RM RM RM RM

Raw materials 286,611 292,265 - -

Work-in-progress 8,627 16,840 - -

Packaging materials 334,105 292,974 - -

Finished goods and trading goods 40,745,165 33,325,217 23,288,097 17,396,430

41,374,508 33,927,296 23,288,097 17,396,430


30 APRIL 2008


19. DEPOSITS WITH LICENSED BANKS

Group and

Company

2008 2007

% %

Effective annual interest rate 2.70 - 3.20 2.50 - 3.30

The deposits of the Group and of the Company have a range of maturity of 7 to 365 days (2007: 7 to 365 days).

20. SHARE CAPITAL

Group and Company

2008 2007

Number Number

of shares RM of shares RM

Ordinary shares of RM1.00 each:-

Authorised 100,000,000 100,000,000 100,000,000 100,000,000

Issued and fully paid:

Balance as at 1 May 2007/2006 68,814,000 68,814,000 66,329,000 66,329,000

Bonus issue 13,412,342 13,412,342 - -

Exercise of ESOS 862,000 862,000 2,485,000 2,485,000

Balance as at 30 April 83,088,342 83,088,342 68,814,000 68,814,000

Employees’ Share Option Scheme

The ESOS which became effective on 21 December 1998 is made available to eligible employees of the Group.

At an Extraordinary General Meeting held on 28 February 2003, the Company’s shareholders approved the

proposed amendments to the By-Laws of its existing ESOS. The main features of the ESOS are as follows:-

(a) The total maximum number of new shares which may be made available under the ESOS (including any

shares already allotted pursuant to the exercise of any options) shall not at any time exceed ten percent

(10%) of the total number of shares comprised in the issued and paid-up share capital of the Company.

(b) Eligible employees are those full time employees (including executive directors) of the Company within the

Group who as at the date of offer are at least eighteen (18) years old; confi rmed and is employed by and on

the payroll of a company/companies within the Group with at least one (1) year of continuous service in the

Group; and any foreign employee who is employed by and on the payroll of a company/companies within the

Group and whose contribution is vital to the Company and have completed at least two (2) years of service

or if such foreign employee is serving under a limited term contract, the contract should be for a duration of

at least three (3) years.

(c) The options holder may, in any year, exercise up to such a maximum number of shares in the Option

Certifi cate as determined by the ESOS Committee and as specifi ed in the Option Certifi cate, options

exercisable in a particular year but not exercised in that year can be carried forward and be exercised in the

subsequent years.


30 APRIL 2008


20. SHARE CAPITAL (CONTINUED)

Employees’ Share Option Scheme (continued)

(d) The maximum entitlement of an eligible employee under the ESOS shall be determined and subject to the

following:-

(i) not more than fi fty percent (50%) of the shares available under the ESOS should be allocated, in

aggregate, to executive directors and senior management; and

(ii) not more than ten percent (10%) of the shares available under the ESOS should be allocated to

any individual eligible employee who, singly or collectively through his/her associates holds twenty

percent (20%) or more of the issued and paid-up share capital of the Company.

(e) The option price shall be determined by the ESOS Committee, based on the weighted average market price

of the Company’s ordinary shares as shown in the Daily Offi cial List issued by the Bursa Malaysia Securities

for the fi ve (5) trading days preceeding the respective dates of the offer and may be set at a discount of not

more than ten percent (10%).

(f) The duration of the option was extended to another fi ve years from 21 December 2003 to 20 December 2008.

The option granted may be exercised on any working day before the expiry of the term on 20 December

2008 upon giving notice in writing to the Company.

(g) The actual number of shares which may be offered to any eligible employee shall be at the discretion of the

ESOS Committee. The number of shares to be offered shall be in multiples of one thousand (1,000) new

shares and shall not exceed the maximum allowable allotment of such eligible employee.

(h) Employees to whom the options have been granted are not eligible to participate in any other employees’

share option scheme that may be established by the Company or the Group subsequent hereto.

(i) The shares shall on issue and allotment rank pari passu in all respects with the then existing issued shares

of the Company.

The movements in the Company’s unissued shares under ESOS during the fi nancial year are as follows:-

Date of offer ----------- Option over Ordinary Shares of RM1.00 each -----------

Exercise Balance Balance

price as at as at

2008 RM/Share 1 May Granted (Forfeited) (Exercised) 30 April

16 December 2003 1.43* 364,000 - (27,000) (337,000) -

9 January 2004 1.00 30,000 - (4,000) (26,000) -

19 December 2007 2.70 - 1,969,000 - (499,000) 1,470,000

2007

16 December 2003 1.43* 1,864,000 - (105,000) (1,395,000) 364,000

9 January 2004 1.00 1,367,000 - (247,000) (1,090,000) 30,000

* Price adjusted for the effect of the bonus and right issue.


30 APRIL 2008



Employees’ Share Option Scheme (continued)

During the fi nancial year, the Company issued 862,000 ordinary shares of RM1.00 each pursuant to the shares

exercised under the ESOS and the fair value of shares issued at the exercise date are follows:

Number Option Fair value of

<------ share issued ------>of shares exercise

issued price Consideration Per share Total

RM RM RM RM

2008

May 2007 77,000 1.00 - 1.43 107,100 2.29 176,330

June 2007 84,000 1.00 - 1.43 118,830 2.83 237,720

July 2007 57,000 1.00 - 1.43 74,630 2.98 169,860

August 2007 145,000 1.43 207,350 2.72 394,400

January 2008 237,000 2.70 639,900 2.96 701,520

February 2008 235,000 2.70 634,500 2.93 688,550

March 2008 2,000 2.70 5,400 2.85 5,700

April 2008 25,000 2.70 67,500 3.20 80,000

862,000 1,855,210 2,454,080

Ordinary share capital - at par 862,000

The abovementioned shares rank pari passu in all respects with the then existing shares of the Company.

The fair value of share options granted during the fi nancial year was estimated by an external professional valuer

using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options

were granted. The fair value of share options measured at grant date and the assumptions are as follows:

2008

Fair value of share options at grant date 19 December 2007 (RM) 0.466

Weighted average share price (RM) 3.06

Exercise price (RM) 2.70

Expected volatility (%) 32.00

Expected life (years) 1.00

Risk-free rate of interest (%) 3.54

Expected dividend yield (%) 8.00

Bonus Issue

The Company issued 13,412,342 new ordinary shares of RM1.00 each by way of bonus issue on the basis of one

new ordinary share of RM1.00 each for every 5 existing ordinary shares of RM1.00 each held, by way of capitalising

RM13,412,342 from retained earnings of the Company on 14 September 2007.

The abovementioned shares rank pari passu in all respects with the then existing shares of the Company. There

were no other issues of shares during the fi nancial year.


30 APRIL 2008



Share Buy-Back

The shareholders of the Company, at the various general meetings of shareholders held previously, authorised

the directors to buy back the Company’s own shares. This will enable the Company to utilise its surplus fi nancial

resources to purchase its own shares and to stabilise the supply and demand and market prices of the Company’s

shares.

All the shares so purchased during the fi nancial year were retained as treasury shares as defi ned in the Companies

Act, 1965.

Of the total 83,088,342 (2007: 68,814,000) issued and fully paid ordinary shares of RM1.00 each as at 30 April 2008,

3,123,886 (2007: 1,710,186) ordinary shares of RM1.00 each amounting to RM6,291,102 (2007: RM2,242,993) are

held as treasury shares by the Company. The number of outstanding shares in issue after the share buy-back is

79,964,456 (2007: 67,103,814) ordinary shares of RM1.00 each as at 30 April 2008.

21. RESERVES

Group Company

2008 2007 2008 2007

RM RM RM RM

Non – distributable:

Share premium 1,825,594 599,850 1,825,594 599,850

Share options reserve 685,020 - 685,020 -

Exchange translation reserve 629,466 629,466 - -

3,140,080 1,229,316 2,510,614 599,850

Distributable:

Treasury shares (6,291,102) (2,242,993) (6,291,102) (2,242,993)

Capital reserve 657,192 669,672 210 210

Retained earnings 59,978,238 37,195,227 21,337,845 20,059,432

54,344,328 35,621,906 15,046,953 17,816,649

57,484,408 36,851,222 17,557,567 18,416,499

(a) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the

translation of the fi nancial statements of foreign operations whose functional currencies are different from

that of the Group’s presentation currency. It is also used to record the exchange differences arising from

monetary items which form part of the Group’s net investment in foreign operations, where the monetary

item is denominated in either the functional currency of the reporting entity or the foreign operation.

(b) Share options reserve

The share options reserve represents the equity-settled share options granted to employees. This reserve

is made up of the cumulative value of services received from employees recorded on grant date of share

options.

When the options are exercised, the amount from the share options reserve is transferred to share premium.

When the share options expire, the amount from the share options reserve is transferred to retained

earnings.


30 APRIL 2008


21. RESERVES (CONTINUED)

(c) Capital reserve

The capital reserves represent gain arising from disposal of property, plant and equipment and quoted

investment.

Subject to the agreement of the Inland Revenue Board, the Company has suffi cient tax credit under Section

108 of the Income Tax Act, 1967 and tax exempt income to frank and distribute the payment of net dividends

out of its entire capital reserves as at 30 April 2008 without incurring additional tax liability.

(d) Retained earnings

Subject to the agreement of the Inland Revenue Board, the Company has suffi cient tax credit under Section

108 of the Income Tax Act, 1967 and tax exempt income to frank and distribute the payment of net dividends

out of its entire retained profi ts as at 30 April 2008 without incurring additional tax liability.

Effective 1 January 2008, the Company is also given the option to make an irrevocable election to move

to single tier system or continue to use its tax credit under section 108 of the Income Tax Act 1967 for the

purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December 2013.

22. BORROWINGS (INTEREST BEARING)

Group Company

2008 2007 2008 2007

RM RM RM RM

Current liabilitiesBankers’ acceptances - unsecured 5,214,000 7,396,275 5,128,000 6,769,275

Hire-purchase liabilities due to a subsidiary (Note 23) - - 269,352 233,884

5,214,000 7,396,275 5,397,352 7,003,159

Non-current liabilities Hire-purchase liabilities due to a subsidiary (Note 23) - - 667,335 389,040

- - 667,335 389,040

Total borrowingsBankers’ acceptances - unsecured 5,214,000 7,396,275 5,128,000 6,769,275

Hire-purchase liabilities due to a subsidiary (Note 23) - - 936,687 622,924

5,214,000 7,396,275 6,064,687 7,392,199

Group Company

2008 2007 2008 2007

% % % %

Average effective annual interest rate:-

Bankers’ acceptances 3.68 3.76 3.68 3.67

The bankers’ acceptances of the subsidiaries are guaranteed by the Company.


30 APRIL 2008


23. HIRE-PURCHASE LIABILITIES DUE TO A SUBSIDIARY

Company

2008 2007

RM RM

Minimum hire-purchase payments:-

- not later than one year 333,120 272,505

- later than one year but not later than fi ve years 750,916 431,714

1,084,036 704,219

Less: Future interest charges (147,349) (81,295)

Carrying value of hire-purchase liabilities 936,687 622,924

Repayable as follows:

Current liabilities

- not later than one year 269,352 233,884

Non-current liabilities

- later than one year but not later than fi ve years 667,335 389,040

667,335 389,040

936,687 622,924

Information on fi nancial risks of hire-purchase liabilities due to a subsidiary is disclosed in Note 37 to the fi nancial

statements.

24. TRADE AND OTHER PAYABLES

Group Company

2008 2007 2008 2007

RM RM RM RM

Trade payables

Third parties 8,861,663 9,473,021 3,957,788 5,233,873

Subsidiaries - - 286,196 486,402

8,861,663 9,473,021 4,243,984 5,720,275

Other payables

Amounts owing to related parties:

- Subsidiaries - - 2,700,993 2,418,854

- Jointly controlled entity 151,603 - - -

Other payables 3,340,127 1,998,829 169,361 894,416

Deposits 3,546,834 2,909,647 1,150,686 804,276

Accruals 23,451,661 9,156,438 4,874,733 2,637,396

30,490,225 14,064,914 8,895,773 6,754,942

39,351,888 23,537,935 13,139,757 12,475,217

(a) Trade payables

The credit terms of trade payables of the Group and the Company range from 30 to 150 days from date of

invoice.


30 APRIL 2008


24. TRADE AND OTHER PAYABLES (CONTINUED)

(b) Amounts owing to subsidiaries

Amounts owing to subsidiaries represent balances arising from normal trade transactions, advances and

payments made on behalf which are unsecured, interest-free and have no fi xed terms of repayment except

for normal trade transactions which is subject to a credit term of 90 days from date of invoice.

(c) Amount owing to a jointly controlled entity

Amount owing to a jointly controlled entity represents advances and payments on behalf which are unsecured,

bear interest at 2% per annum and payable on demand.

25. PROVISIONS

Group

2008 2007

RM RM

Commission 119,452 119,452

Development fund - 271,767

Trip and tour incentives 1,557,202 695,131

Sales campaign 3,140,000 2,800,000

Others 800,094 -

5,616,748 3,886,350

-------------------------------------------------------- Group ---------------------------------------------------

Trip and

Development tour Sales

Commission fund incentives campaign Others Total

RM RM RM RM RM RM

Balance as at 1 May 2007 119,452 271,767 695,131 2,800,000 - 3,886,350

Current year provision - - 906,313 2,650,000 800,094 4,356,407

Over provision in prior year - (271,767) - (677,784) - (949,551)

Payment made during

the fi nancial year - - (44,242) (1,632,216) - (1,676,458)

Balance as at 30 April 2008 119,452 - 1,557,202 3,140,000 800,094 5,616,748

26. REVENUE

Group Company

2008 2007 2008 2007

RM RM RM RM

Sale of goods 371,774,644 187,129,138 123,183,959 71,964,202

Rendering of services 368,367 271,926 - 2,638

Hire-purchase and lease rental income 135,968 124,519 - -

Interest income 21,058 - - -

Gross dividends 251,440 162,539 20,742,770 8,924,916

Rental income 1,258,454 1,637,134 2,216,006 2,584,189

Others 12,644 20,922 - 1,042

373,822,575 189,346,178 146,142,735 83,476,987


30 APRIL 2008


27. PROFIT BEFORE TAX

Group Company

2008 2007 2008 2007

Note RM RM RM RM

Profi t before tax is arrived at after charging:

Allowance for doubtful debts 90,942 860,023 57,576 371,914

Amortisation of prepaid lease

payments for land 10 34,061 33,578 1,600 1,600

Auditors’ remuneration:-

Statutory:-

- current year 135,282 137,180 30,000 30,000

- under provision in prior years 20,000 20 20,000 -

Bad debts written off 217,601 19,897 - -

Depreciation of:-

- property, plant and equipment 7 1,767,289 1,812,930 673,285 713,653

- investment properties 7 429,696 440,829 520,989 522,687

Directors’ remuneration payable to :-

- directors of the Company:-

- fees 189,967 189,800 120,000 120,000

- emoluments other than fee 3,108,714 2,047,513 1,690,768 1,148,355

- directors of the subsidiaries

- fees 107,083 111,665 - -

- emoluments other than fee 1,427,439 1,101,876 - -

- directors of a jointly controlled entity:-

- fees 15,200 15,200 - -

Impairment loss on goodwill 17 189,303 - - -

Impairment loss on investment

in jointly controlled entities - - - 148,795

Interest expense:-

- bank overdrafts 950 488 950 488

- bankers’ acceptances and trust receipts 390,612 321,838 349,361 263,146

- hire-purchase - - 61,958 39,346

- term loans - 6,114 - -

Inventories written off 630,168 306,168 162,212 300,000

Inventories written down 847,490 - 447,161 -

Loss on disposal of:-

- subsidiaries - 190,614 - -

- property, plant and equipment 1,005 - - -

Property, plant and equipment written off 7 373,459 95,720 207,106 15,190

Provision for:-

- trip and tour incentives 25 906,313 310,592 - -

- sales campaign 25 2,650,000 2,306,947 - -

- others 25 800,094 - - -

Realised loss on foreign exchange 7,489 7,653 583 7,652

Rental of premises 2,270,881 2,353,220 127,467 410,893

Share options granted under ESOS 917,554 - 338,316 -


30 APRIL 2008


27. PROFIT BEFORE TAX (CONTINUED)

Group Company

2008 2007 2008 2007

Note RM RM RM RM

And crediting:

Allowance for doubtful debts

no longer required - 42,407 - 33,707

Bad debts recovered 8,967 128,218 6,617 -

Gain on disposal of other investments 986,936 973,234 854,627 729,068

Gain on disposal of property,

plant and equipment 20,997 52,349 9,959 26,246

Gain on disposal of a subsidiary 32 126,343 - 183,780 9,958

Gross dividend income from:-

- quoted shares in Malaysia 448,683 168,697 111,924 107,470

- unquoted subsidiary - - 20,554,846 8,817,446

- a jointly controlled entity - - 76,000 -

Interest income 868,813 471,298 206,831 203,724

Management fees received from

- subsidiaries - - 411,414 418,914

- jointly controlled entity 21,600 21,600 36,000 36,000

- others 47,100 - - -

Over provision for:-

- sales campaign 25 677,784 - - -

- development fund 25 271,767 - - -

Rental income 1,595,533 1,975,726 2,216,006 2,584,189

Realised gain on foreign exchange 19,476 15,730 - -

Waiver of debts 594,741 930,910 594,741 930,910

The estimated monetary value of benefi ts-in-kind received by the Directors otherwise than in cash from the Group

and the Company amounted to RM39,668 (2007: RM37,219).

28. TAX EXPENSE

Group Company

2008 2007 2008 2007

RM RM RM RM

Current tax expense based on profi t for

the fi nancial year:

-Income tax 19,295,148 9,406,625 10,526,523 4,650,000

-Deferred tax (Note 16) (594,031) (864,405) (76,441) (5,256)

18,701,117 8,542,220 10,450,082 4,644,744

(Over)/Under provision in prior years

-Income tax (117,468) (191,799) 8,547 (211,374)

-Deferred tax (Note 16) 14,576 143,122 (10,352) 74,727

(102,892) (48,677) (1,805) (136,647)

18,598,225 8,493,543 10,448,277 4,508,097


30 APRIL 2008


28. TAX EXPENSE (CONTINUED)

The Malaysian income tax is calculated at the statutory tax rate of 26% (2007: 27%) of the estimated taxable profi t

for the fi scal year. The Malaysian statutory tax rate has been reduced to 26% from the previous year’s rate of 27%

for the fi scal year of assessment 2008 and to 25% for fi scal year of assessment 2009 onwards. The computation

of deferred tax as at 30 April 2008 has refl ected these changes.

The numerical reconciliation between the average effective tax rate and the applicable tax rate of the Group and of

the Company are as follows:

Group Company

2008 2007 2008 2007

% % % %

Applicable tax rate 26.0 27.0 26.0 27.0

Tax effects in respect of:

Non-allowable expenses 2.4 6.4 2.8 2.2

Utilisation of previously unrecognised

deferred tax assets (0.1) - - -

Reduction in deferred tax resulting from

reduction in tax rates - (0.2) - (0.1)

Income not subject to tax (0.5) (4.6) (0.7) (6.4)

Reduction in statutory tax rate on fi rst RM500,000

of chargeable income of certain subsidiaries (0.3) (0.6) - -

27.5 28.0 28.1 22.7

Under/(over) provision in prior years (0.1) (0.2) (0.2) (0.7)

Average effective tax rate 27.4 27.8 27.9 22.0

Tax savings of the Group is as follows:

Group

2008 2007

RM RM

Arising from utilisation of previously unrecognised tax

Losses and capital allowances 32,000 -

29. EARNINGS PER SHARE

(a) Basic

Basic earnings per ordinary share for the fi nancial year is calculated by dividing the profi t for the fi nancial year

attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares

outstanding during the fi nancial year after adjusting for the bonus issues and the treasury shares as disclosed in

Note 20 to the fi nancial statements. The preceding year comparative fi gures have been adjusted accordingly.

Group

2008 2007

RM RM

Profi t attributable to equity holders of the Company 48,535,332 21,383,862

Weighted average number of ordinary shares in issue 80,338,548 78,987,027


30 APRIL 2008


29. EARNINGS PER SHARE (CONTINUED)

(a) Basic (continued)

Group

2008 2007

Sen Sen

Basic earnings per ordinary share 60.41 27.07

(b) Diluted

Diluted earnings per ordinary share for the fi nancial year is calculated by dividing the profi t for the fi nancial

year attributable to ordinary equity holders of the Company by the weighted average number of ordinary

shares outstanding during the fi nancial year adjusted for the effects of dilutive potential ordinary shares.

Group

2008 2007

RM RM

Profi t attributable to equity holders of the Company 48,535,332 21,383,862

Weighted average number of ordinary shares in issue 80,338,548 78,987,027

Effect of dilutive share options 179,807 402,720

Adjusted weighted average number of ordinary

shares applicable to diluted earnings per share 80,518,355 79,389,747

Group

2008 2007

Sen Sen

Diluted earnings per ordinary share 60.28 26.93

30. DIVIDENDS

Group/Company

2008 2007

RM RM

Gross fi nal dividend of 32% (2007: 13%) per share, less tax 19,772,800 7,604,759

Gross interim dividend of 8% (2007: 5%) per share, less tax 4,747,700 3,332,315

24,520,500 10,937,074

As approved by the shareholders at the Annual General Meeting held on 30 October 2007, a fi rst and fi nal dividend

of 13% gross, less tax, amounting to RM7,604,759 in respect of the previous fi nancial year was paid on 12

December 2007.

The amount paid of RM7,604,759 is in excess of the dividend of RM6,530,449 proposed in last year’s directors’

report. The difference of RM1,074,310 was in respect of additional shares issued arising from the bonus issue and

the exercise of the option under the ESOS subsequent to the end of previous fi nancial year, but prior to the closing

date of the entitlement to dividend.


30 APRIL 2008


30. DIVIDENDS (CONTINUED)

An interim dividend of 8% gross, less tax, amounting to RM4,747,700 in respect of current fi nancial year was

declared on 19 February 2008 and paid on 28 March 2008.

The proposed fi nal dividend of 32% gross, less tax, amounting to RM18,935,583 in respect of the current fi nancial

year has yet to be approved by the shareholders. This dividend, upon approval by the shareholders, will be

accounted for as an appropriation of retained earnings in the fi nancial year ending 30 April 2009.

31. EMPLOYEE BENEFITS

Group Company

2008 2007 2008 2007

RM RM RM RM

Wages, salaries and bonuses 15,971,873 13,853,516 5,516,779 4,432,517

Defi ned contribution plan 1,533,552 1,360,705 484,107 388,606

Other employee benefi ts 1,140,506 1,122,609 441,531 417,111

Staff incentive 2,630,049 1,843,562 898,881 580,633

21,275,980 18,180,392 7,341,298 5,818,867

32. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

During the fi nancial year, the Group and the Company made the following cash payments to purchase property,

plant and equipment:-

Group Company

2008 2007 2008 2007

RM RM RM RM

Purchase of property, plant and equipment

(Note 7) 1,826,983 1,929,451 817,976 482,849

Financed by hire-purchase arrangements - - (721,947) ( 215,730)

Cash payments on purchase of property, plant

and equipment 1,826,983 1,929,451 96,029 267,119

33. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash fl ow statements comprise the following balance sheet amounts:

Group Company

2008 2007 2008 2007

RM RM RM RM

Deposits with licensed banks 21,264,966 10,792,067 201,398 3,450,684

Cash in hand and at bank 52,000,924 16,880,384 26,259,784 6,822,917

73,265,890 27,672,451 26,461,182 10,273,601


30 APRIL 2008


34. RELATED PARTY DISCLOSURES

(a) Identities of related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control

the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice

versa, or where the Group and the party are subject to common control or common signifi cant infl uence.

Related parties may be individuals or other entities.

The Company has controlling related party relationship with its direct and indirect subsidiaries.

(b) In addition to the transactions detailed elsewhere in the fi nancial statements, the Group and the Company

had the following transactions with related parties during the fi nancial year:

Group Company

2008 2007 2008 2007

RM RM RM RM

Subsidiaries:

Sales - - 88,316,399 40,006,040

Purchases - - 2,158,979 1,418,504

Rental income - - 901,881 911,985

Management fees received - - 411,414 415,914

Advertising expenses - - 3,297,255 2,512,219

Jointly controlled entities:

Sales 814,953 892,115 - 194,198

Purchases 369,475 527,849 - -

Rental income 139,180 147,928 139,180 147,928

Management fees received 36,000 36,000 36,000 36,000

Professional fees received - 24,000 - -

Commission received - 54,455 - -

Accounting fees received 20,000 20,000 20,000 -

The related party transactions described above have been established under negotiated terms.

(c) Compensation of key management personnel

The remuneration of Directors and other key management personnel during the fi nancial year was as

follows:

Group Company

2008 2007 2008 2007

RM RM RM RM

Short term employee benefi ts 4,655,207 3,314,747 1,756,744 1,229,835

Contribution to defi ned contribution plans 193,196 151,307 54,024 38,520

Share options granted under share

options scheme 345,772 - 178,012 -

5,194,175 3,466,054 1,988,780 1,268,355


30 APRIL 2008


34. RELATED PARTY DISCLOSURES (CONTINUED)

Executive Directors of the Group and the Company and other key management personnel have been granted the

following number of options under the ESOS:

Group Company

2008 2007 2008 2007

As at 1 May 2007/2006 - 553,000 - 553,000

Granted 742,000 - 382,000 -

Exercised (227,000) (503,000) (122,000) (503,000)

Lapsed - (50,000) - (50,000)

As at 30 April 515,000 - 260,000 -

The terms and conditions of the share options are detailed in Note 20.

35. SEGMENT INFORMATION

(a) Reporting format

The primary reporting segment information is in respect of business segments as the Group’s risks and

returns are affected predominantly by differences in the products it produces.

As the Group’s operation and location of customers are predominantly in Malaysia, no segment information

is presented on geographical segments.

(b) Business segments

The Group’s operations comprise the following main business segments:-

Wholesale : Wholesaling and trading in herbal medicines and healthcare products,

herbs and tea.

Multi level marketing : Operating multi level direct marketing of healthcare and beauty

products.

Retail : Retail chain stores.

Manufacturing : Manufacturing, producing and distributing pharmaceutical products,

alcoholic and non-alcoholic drinks.

Others : Businesses involving leasing of machinery and equipment, licensed

money lender, insurance agent, advertising services, rental income,

trading of clocks and investment holding.

(c) Allocation basis and inter-segment pricing

Segment results, assets and liabilities include items that are directly attributable to a segment as well as

those that can be allocated on a reasonable basis. Unallocated items comprise mainly income tax and

related tax assets and tax liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are

expected to be used for more than one period.

Inter-segment pricing is determined based on negotiated terms.


30 APRIL 2008


35. SEGMENT INFORMATION (CONTINUED)

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by

business segment:-

Multi-

level Manufac- Elimi- Consoli-

2008 Wholesale marketing Retail turing Others nation dated

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue

External sales 49,366 281,587 39,340 1,199 2,331 - 373,823

Inter-segment sales 118,715 - 152 2,594 6,568 (128,029) -

Total revenue 168,081 281,587 39,492 3,793 8,899 (128,029) 373,823

RESULT

Segment result 37,121 46,792 1,999 454 1,590 (20,718) 67,238

Interest income 207 531 105 - 26 - 869

Interest expense (388) - - (3) - - (391)


Tax expense (18,598)

Profi t after tax 49,118

Minority interest (583)


Other information

Segment assets 137,179 65,794 19,321 2,918 11,198 (34,151) 202,259

Unallocated corporate assets 1,851

Total assets 204,110

Segment liabilities 25,228 27,756 8,090 586 5,459 (16,936) 50,183

Unallocated corporate liabilities 7,855

Total liabilities 58,038

Capital expenditure 834 104 641 109 139 - 1,827


payments for land 2 32 - - - - 34

Depreciation of:

- property, plant and equipment 850 167 454 251 45 - 1,767

- investment properties 365 65 - - - - 430

Non-cash expenses other than

depreciation and amortisation 2,016 4,828 282 56 250 189 7,621


30 APRIL 2008


35. SEGMENT INFORMATION (CONTINUED)

Multi-

level Manufac- Elimi- Consoli-

2007 Wholesale marketing Retail turing Others nation dated

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue

External sales 48,473 99,685 37,571 1,055 2,562 - 189,346

Inter-segment sales 57,805 8 104 2,442 5,039 (65,398) -

Total revenue 106,278 99,693 37,675 3,497 7,601 (65,398) 189,346

RESULT

Segment result 21,581 13,870 1,647 330 2,187 (9,088) 30,527

Interest income 204 100 91 - 14 - 409

Interest expense (321) - (6) (2) - - (329)


Tax expense (8,493)

Profi t after tax 22,114

Minority interest (730)


Other information

Segment assets 123,788 33,919 19,260 3,461 8,719 (41,466) 147,681

Unallocated corporate assets 1,282

Total assets 148,963

Segment liabilities 25,658 20,904 8,964 591 4,390 (25,686) 34,821

Unallocated corporate liabilities 3,263

Total liabilities 38,084

Capital expenditure 562 188 530 639 11 - 1,930


payments for land 2 32 - - - - 34

Depreciation of:

- property, plant and equipment 878 239 437 221 38 - 1,813

- investment properties 380 62 - - - (1) 441

Non-cash expenses other than

depreciation and amortisation 697 3,131 5 6 154 (93) 3,900

37. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives and policies

The operations of the Group are subject to a variety of risks, including credit risk, foreign currency risk,

interest rate risk, liquidity and cash fl ow risk.


30 APRIL 2008


37. FINANCIAL INSTRUMENTS (CONTINUED)

(a) Financial risk management objectives and policies (continued)

(i) Credit risk

The Group is exposed to credit related losses in the event of non-performance by counterparties.

However, the Group has in place a policy to mitigate this risk by careful evaluation of customers’

fi nancial condition and credit history.

The Group has no signifi cant concentration of credit risk. The maximum exposures to credit risk are

represented by the carrying amounts of the fi nancial assets in the balance sheets.

(ii) Foreign currency risk

The Group has signifi cant purchases from overseas, thus exposing it to foreign currency risk.

The Group will monitor changes in the exchange rate and, where appropriate, enter into forward

foreign currency exchange contracts to limit its exposure on foreign currency payables. There is no

formal hedging policy with regards to foreign currency exposure.

The fi nancial assets and liabilities of the Group and the Company that are not denominated in their

functional currencies are as follows:

Group

2008 2007

RM RM

Financial assets and liabilities not held in functional currency:

Trade payables

US Dollar 1,991,462 1,426,913

Euro 43,056 -

Pound Sterling 221,382 -

2,255,900 1,426,913

Company

2008 2007

RM RM

Trade payables

US Dollar 888,478 374,489

(iii) Interest rate risk

The Group’s primary interest rate risk relates to interest-earning deposits and interest-bearing

borrowings from fi nancial institutions. Threre is no formal hedging policy with respect to interest rate

exposure.


30 APRIL 2008



(iii) Interest rate risk (continued)

The following tables set out the carrying amounts, the average effective interest rates as at the balance

sheet date and the remaining maturities of the Group’s and the Company’s fi nancial instruments that are

exposed to interest rate risk:

Average

effective More

interest Within 1 - 2 2 - 3 3 - 4 4 - 5 than

rate 1 year years years years years 5 years Total

Group Note % RM RM RM RM RM RM RM

As at 30 April 2008

Fixed rates

Hire-purchase receivables 15 3.50 - 8.00 439,784 385,448 317,662 257,419 153,716 28,285 1,582,314

Deposits with licensed banks 19 2.70 - 3.20 21,264,966 - - - - - 21,264,966

Bankers acceptances 22 3.68 5,214,000 - - - - - 5,214,000

As at 30 April 2007

Fixed rates

Hire-purchase receivables 15 3.50 - 8.00 407,818 331,063 298,759 261,550 231,024 131,038 1,661,252


Bankers acceptances 22 3.76 7,396,275 - - - - - 7,396,275

Weighted

average

effective More

interest Within 1 - 2 2 - 3 3 - 4 4 - 5 than

rate 1 year years years years years 5 years Total

Company Note % RM RM RM RM RM RM RM

As at 30 April 2008

Fixed rates

Deposits with licensed banks 19 2.70 - 3.20 201,398 - - - - - 201,398

Bankers’ acceptances 22 3.68 5,128,000 - - - - - 5,128,000

Hire-purchase liabilities

due to a subsidiary 23 7.42 - 8.30 269,352 222,378 189,160 182,702 73,095 - 936,687

As at 30 April 2007

Fixed rates


Bankers’ acceptances 22 3.67 6,769,275 - - - - - 6,769,275

Hire-purchase liabilities

due to a subsidiary 23 7.42 - 8.30 233,884 165,824 108,776 65,485 48,955 - 622,924


30 APRIL 2008



(a) Financial risk management objectives and policies (continued)

(iv) Liquidity and cash fl ow risk

The Group and the Company monitor and maintain a level of cash and cash equivalents and bank

facilities deemed adequate by management to fi nance the Group and the Company’s operations and

to mitigate the effects of fl uctuations in cash fl ows.

(b) Fair values

The carrying amounts of the fi nancial instruments of the Group and of the Company as at the balance sheet

date approximate their fair values except as set out below:

Group Company

Carrying Fair Carrying Fair

amount value amount value

RM RM RM RM

As at 30 April 2008

Quoted investments 14,050,914 14,772,271 1,736,560 1,845,857

Unquoted investments 2,114,379 # 1,888,000 #

As at 30 April 2007

Quoted investments 21,540,987 23,209,978 6,578,691 7,510,614

Unquoted investments 2,614,379 # 888,000 #

# It is not practical to estimate the fair value of the long term unquoted investments because of the lack

of quoted market prices and the inability to estimate fair value without incurring excessive costs. The

directors believe that the carrying amount represents the recoverable value.

The following methods and assumptions are used to determine the fair values of fi nancial instruments:-

(i) The carrying values of the fi nancial assets and liabilities maturing within 12 months are stated

at approximately their fair values due to the relatively short term maturity of these fi nancial

instruments.

(ii) The fair values of quoted investments are based on quoted market prices at the balance sheet

date.

38. CAPITAL COMMITMENTS

Group and

Company

2008 2007

RM RM

Approved and contracted for in respect of capital expenditure 40,500,000 -


30 APRIL 2008


39. CONTINGENT LIABILITIES - UNSECURED

Company

2008 2007

RM RM

Corporate guarantee in respect of banking facilities granted to subsidiaries 86,000 627,000

40. MATERIAL LITIGATION

By a Writ of Summon and Statement of Claim dated 13 January 1995 (“Suit 34”), Nguang Chan Liquor Trade and

Nguang Chan (M) Sdn Bhd (Collectively known as “ the Nguang Chan Group”) instituted an action and sought an

injunction against the Company to restrain publication of alleged defamatory statements made against the Nguang

Chan Group as well as against slander of a product named Zhan Qiao Pai Ling Zhi (“the Product”). The High Court

has dismissed the Nguang Chan Group’s application for injunction with cost on 19 December 1995.

The directors of the Company are of the opinion that, based on legal advise, the Company has a good case to

establish that the Nguang Chan Group’s present claim is without merit. The Company is entitled to protect its

Product and that its actions against what appear to be clear counterfeits cannot be the subject matter of complaint

by the Nguang Chan Group.

By a Writ of Summon and Statement of Claim dated 23 May 1997 (“Suit 400”), the Company and Shandong

Medicine & Health Products Import & Export Corp., Changyu Pioneer Wine Co. and Yantai Native Product Import &

Export Corp. (“the Chinese Parties”) has fi led an action against the Nguang Chan Group and Golden Spring Spirits

Agency claiming for damages for infringement of the Product.

On 5 August 1997, the High Court has ordered to hear both Suits 34 and 400 together and further ordered that the

outcome of the Suit 400 shall bind Suit 34.

The Company has made several applications seeking for further discovery, production and inspection of documents

against the Nguang Chan Group. Order in terms of the these applications were given by the High Court on 23 April

2001. However, the Nguang Chan Group had thereafter appealed to the Court of Appeal against this decision.

The Court of Appeal heard the appeal on 14 March 2006 wherein Nguang Chan Group’s appeal was allowed. The

Company has appealed against the Court of Appeal’s decision to the Federal Court. The application for leave to

appeal was fi xed for hearing on 22 August 2006.

The application was heard as scheduled. The Federal Court has adjourned the application to a date to be fi xed with

directions to the Court of Appeal to deliver its written decisions to the Federal Court.

On Suit 34 and Suit 400, the High Court has fi xed the date for case management on 18 September 2006. The High

Court has fi xed for trial on 11 June 2007, 12 June 2007, 16 July 2007 and 17 July 2007. The High Court has vacated

the Trial Dates to 3 October 2007 and 4 October 2007 with a mention date fi xed on 17 September 2007. The trial

had been vacated to enable the matters to be transferred to the newly established Intellectual Property Court on 17

September 2007 and the learned judge of the Intellectual Property Court has fi xed for trial on 11 February 2009 and

12 February 2009.

Based on legal advice, the Board of Directors of the Company is of the opinion that the Company and the Chinese

Parties have a good case in claiming common law proprietary rights if the Company and the Chinese Parties can

successfully show that the Chinese Parties are instrumental in the manufacture, production and export to the

Company of the Infringing Product.


30 APRIL 2008


41. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 17 July 2007, the Company obtained approval from the Securities Commission on the Proposed Transfer

from the Second Board to the Main Board of Bursa Malaysia Securities Berhad (“Bursa Securities”). The

Company had also obtained approval from Bursa Securities and the Shareholders for the Proposed Bonus

Issue of One (1) new ordinary share for every fi ve (5) existing ordinary shares held, on 15 August 2007 and

23 August 2007 respectively. The Proposed Bonus Issue was completed on 14 September 2007 of which

13,412,342 bonus shares were issued. On 8 October 2007, the entire enlarged issued and paid-up share

capital was transferred from the Second Board to the Main Board of Bursa Securities.

(b) On 20 July 2007, the Company acquired an additional 1,000 ordinary shares of RM1.00 each in the share

capital of Hai-O Raya Bhd. from a minority shareholder for a total cash consideration of RM1,400.

(c) On 29 August 2007, the Company disposed of its entire 100% equity interest in a subsidiary, Teik Seang Wine

Merchants Sdn. Bhd. comprising 600,000 ordinary shares of RM1.00 each for a total consideration of RM783,780.

(d) On 25 September 2007, the Company acquired 1,000 ordinary shares of HKD1.00 each in the share capital of

Hai-O (Hong Kong) Investment Limited for a total cash consideration of HKD1,000 or equivalent to RM440.

Subsequently, on 25 September 2007 and 10 December 2007, the Company subscribed for additional 9,000

and 2,370,000 ordinary shares of HKD1.00 each respectively in the share capital of Hai-O (Hong Kong)

Investment Limited for a total cash consideration of HKD9,000 and HKD2,370,000 or equivalent to RM3,960

and RM1,018,802 respectively.

(e) On 25 September 2007, the Company subscribed for 2 ordinary shares of RM1.00 each in the share capital

of Mengniu Marketing (M) Sdn Bhd for a total cash consideration of RM2.

(f) On 17 December 2007, the Company subscribed for additional 999,998 ordinary shares of RM 1.00 each in

Hai-O Energy (M) Sdn Bhd (formerly known as Ten Plus Three Trade Centre Sdn Bhd) (“Hai-O Energy”), a

wholly owned subsidiary company, for a total cash consideration of RM999,998. The Company is principally

involved in the design, research and manufacture of devices in connection to heat transmission, energy

saving technology and related products.

(g) On 21 December 2007, the Company announced the acquisition of land and building measuring an aggregate

area of approximately 1,245,746 square feet located in the Mukim of Kapar, Daerah Klang, Negeri Selangor

by the Company from Bata (Malaysia) Sdn Bhd (“Bata”) for a total consideration of RM45,000,000 . During

the fi nancial year, the Company paid 10% deposit of RM4.5 million to Bata.

42. EVENTS SUBSEQUENT TO BALANCE SHEET DATE

(a) On 15 May 2008, the Company had made full settlement of the remaining balance of the purchase

consideration amounting to RM40.5 million to Bata through internally generated fund of RM20.5 million and

bank borrowing of RM20 million on the acquisition of land and building.

(b) On 22 May 2008, the Company’s 66.4% owned subsidiary, Samariatan Sdn. Bhd., had disposed of its entire

100% equity interest in Chop Aik Seng Trading Sdn. Bhd., which comprising 100,000 ordinary shares of RM1

each via its wholly owned subsidiary, Chop Aik Seng Sdn. Bhd. for a total consideration of RM20,000.

(c) The Company had on 31 July 2008, completed the formation of PT. Hai-O Indonesia. The Company

subscribed for 80% or 80,000 shares of the paid-up share capital of Hai-O Indonesia for a total investment

cost of USD80,000 or equivalent to Rupiah 743,040,000.

(d) On 26 June 2008, the Company had declared a distribution of one (1) treasury share for every twenty fi ve

(25) existing ordinary shares of RM1.00 each (“Share Dividend”), in respect of the fi nancial year ended 30

April 2009, held by shareholders whose names appear in the record of depositors of the Company at the

close of business on 31 July 2008.

A total of 3,225,542 treasury shares were distributed to entitled shareholders in relation to this Share Dividend.


30 APRIL 2008


43. COMPARATIVE FIGURES

The following comparative fi gures have been reclassifi ed to be consistent with current year’s presentation:

As previously As

reported Reclassifi cation restated

Balance Sheet RM RM RM

Group

Trade and other payables 21,603,037 1,934,898 23,537,935

Provisions 5,821,248 (1,934,898) 3,886,350

Company

Trade and other payables 11,842,624 632,593 12,475,217

Provision 632,593 (632,593) -

Cash fl ows

Group

Current year provisions 4,507,461 (1,889,922) 2,617,539

Over provision in prior year (236,360) 236,360 -

Increase/(decrease) in trade and other payables 126,915 373,346 500,261

Payments for sales campaign, trip and tour incentive (1,675,634) 1,280,216 (395,418)

Company

Current year provisions 597,413 (597,413) -

Over provision in prior year (52,816) 52,816 -

Increase/(decrease) in trade and other payables (3,954,156) 98,801 (3,855,355)

Payments for sales campaign, trip and tour incentive (445,796) 445,796 -


30 APRIL 2008


Authorised Share Capital : RM100,000,000Paid-up & Issued Share Capital : RM 84,164,342Class of Share : Ordinary shares of RM 1.00 eachVoting Right : 1 Vote per share

DISTRIBUTION OF SHAREHOLDERS AS AT 05 SEPTEMBER 2008

Size of Holdings

No. Of

Shareholders

% Of

Shareholders

No. Of

Shares

% Of

Shares

Less than 100 549 15.41 20,407 0.02

100 - 1,000 314 8.82 114,402 0.14

1,001 - 10,000 1,934 54.31 7,095,625 8.47

10,001 - 100,000 651 18.28 17,148,155 20.46

100,001 and less than 5% of issued shares 111 3.12 47,000,093 56.09

5% and above of issued shares 2 0.06 12,416,716 14.82

Total Shares Issued Excludes Treasury Shares 3,561 100.00 83,795,398 100.00

Note: Treasury Shares No. Of Shares BoughtName/Qualifi er As at 05-09-2008HAI-O ENTERPRISE BHD 368,944

THIRTY LARGEST SHAREHOLDERS AS AT 05 SEPTEMBER 2008

Name

No. Of

Shares

% Of

Shares

1. Tan Kai Hee 8,097,638 9.66

2. Excellant Communication Sdn Bhd 4,319,078 5.15

3. Akintan Sdn Bhd 3,795,169 4.53

4. Tan Siow Eng 3,399,485 4.06

5. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account For Chia Kee Siong

3,191,312 3.81

6.

Malaysia Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Akintan Sdn Bhd (02-00210-001)

2,096,640 2.50

7. Malaysia Nominees (Tempatan) Sendirian BerhadGreat Eastern Life Assurance (Malaysia) Berhad (LPF)

1,653,433 1.97

8. Daritan Sdn Bhd 1,336,517 1.60

9. Oon Chong Eong 1,185,600 1.42

ANALYSIS OF SHAREHOLDINGSAS AT 05 SEPTEMBER 2008


Name

No. Of

Shares

% Of

Shares

10. Chin Chin Sing @ Tan Cheng Beng 1,151,176 1.37

11. Tan Keng Song 1,129,571 1.35

12. Tan Keng Kang 1,002,019 1.20

13. Oon Chong Eong 977,600 1.17

14. Huang,Chin-Chueh 934,941 1.12

15. Lim Chin Luen 889,777 1.06

16. Huang Shunyao 780,296 0.93

17. Tan Kee Hock 754,278 0.90

18. Leong @ Wong Nam Meng 753,475 0.90

19. Tan Puah Khin @ Tan Puan Hee 700,006 0.83

20. Chen Tam Chai 589,784 0.70

21. Mayban Nominees (Tempatan) Sdn BhdMayban Trustees Berhad For MAAKL Value Fund (950290)

574,579 0.69

22. Ea Nio @ Yee Soh Yeow 553,904 0.66

23. DB (Malaysia) Nominee (Tempatan) Sendirian BerhadICapital. Biz Berhad

530,400 0.63

24. Mayban Nominees (Tempatan) Sdn BhdMalaysia Trustees Berhad For AMB Smallcap Trust Fund (240165)

516,753 0.62

25. Citigroup Nominess (Asing) Sdn BhdExempt An For Merrill Lynch Pierce Fenner & Smith Incorporated (Foreign)

510,640 0.61

26. Png Tee Jue @ Fang Shye Yong 508,892 0.61

27. Lien Siao-Yen 505,772 0.60

28. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account For Lee Yoke Fong

492,918 0.59

29. Soh Choo @ Soh Ai Choo 446,954 0.53

30. HSBC Nominees (Tempatan) Sdn BhdHSBC (M) Trustee Bhd For MAAKL Progress Fund (4082)

424,320 0.51

TOTAL 43,802,927 52.28

ANALYSIS OF SHAREHOLDINGS

(CONT’D)


ANALYSIS OF SHAREHOLDINGS

(CONT’D)

SUBSTANTIAL SHAREHOLDERS AS AT 05 SEPTEMBER 2008

Direct Holdings Indirect Holdings

Name No. of Shares % of Shares No. of Shares % of Shares

1. Akintan Sdn Bhd 5,891,809 7.03 -

2. Tan Kai Hee 8,097,638 9.66 13,172,335 (note a) 15.72

3. Tan Siow Eng 3,500,419 4.18 17,769,554 (note b) 21.20

4. Excellant Communication Sdn Bhd 4,319,078 5.15 - -

5. Tan Keng Song 1,316,771 1.57 19,953,202 (note c) 23.81

6. Tan Keng Kang 1,002,019 1.20 20,267,954 (note d) 24.18

7. Phan Van Denh 124,800 0.15 21,145,173 (note e) 25.23

DIRECTORS’ INTEREST AS AT 05 SEPTEMBER 2008

Direct Holdings Indirect Holdings

Name No. of Shares % of Shares No. of Shares % of Shares

1. Tan Sri Osman S Cassim - - - -

2. Tan Kai Hee 8,097,638 9.66 13,172,335 (note a) 15.72

3. Dato’ Abdul Rani Bin Mohd Razalli 59,668 0.07 - -

4. Dr. MK Rajakumar MRK Nayar 41,932 0.05 - -

5. Lim Chin Luen 889,777 1.06 - -

6. Quek Ah Ba 34,401 0.04 - -

7. Tan Keng Song 1,316,771 1.57 19,953,202 (note c) 23.81

8. Tan Keng Kang 1,002,019 1.20 20,267,954 (note d) 24.18

a) Deemed interested by virtue of his substantial interest in Akintan Sdn Bhd and Daritan Sdn Bhd and through the direct and indirect of her family members in Hai-O respectively.

b) Deemed interested by virtue of her substantial interest in Akintan Sdn Bhd and Daritan Sdn Bhd, and through the direct and indirect of her family members in Hai-O respectively.

c) Deemed interested through the direct and indirect interest of her family members in Hai-O respectively.

d) Deemed interested through the direct and indirect interest of his family members in Hai-O respectively.

e) Deemed interested through the direct and indirect interest of her husband, Tan Keng Kang.


TOP 10 PROPERTIESAS AT 30 APRIL 2008

Land Net Book Value Date of Area Existing Expire as at 30/04/08

Location Description Acquisition (sq.ft.) Tenure Use Age Date RM

Geran 7155/M1Sun Kompleks, Jalan Bukit Bintang55100 Kuala Lumpur

Shoplots,Offi ce lot - groundfl oor, 1st, 6th, 8th,9th fl oor &241 number ofcar park bays at2nd, 3rd, 4th, 5th& 6th Flr

22 Aug 1995 60,210 Freehold Shoplots, Offi ces & Car park

bays

30 years - 16,263,256

HS(M) 9019 Lot P.T. 11995Mukim of Kapar, 1 1/2 Miles41400 Klang, Selangor

Factory/ Warehouse &6 storey building

05 June 1982 &20 Sept 1997

100,796 Freehold Offi ce &Warehouse

25 years &

11 years

- 11,793,155

Garden City BusinessCentre PT 15752 Unit No. C01/2 - C12/2Phase 2B Taman DagangJalan Ampang Kuala Lumpur

12 units of offi ce lots(2nd fl oor)

20 Oct 1995 18,708 Leasehold for

99 years

Offi ces 13 years 20 Oct 2084 3,101,594

GM 2645 Lot No. 4953Mukim Kapar Sungai Binjai Road, Batu 5 Meru Klang, Selangor

Industrial land

17 Mar 1995 3 acres Freehold Vacant 13 years - 1,588,775

Lot 2708 & 2709 Centre Park Jalan Tun Ahmad ZaidiAdruce Kuching, Sarawak

2 units of 4 storeyshop-lot

04 Apr 1997 12,160 Leasehold for

60 years

Offi ce &Warehouse

11 years 23 Jul 2057 1,388,333

Garden City BusinessCentre PT 15752 Unit No. C01/3 - C03/3Mukim Ampang District Ulu Langat Selangor

3 units of offi ce lots(3rd fl oor)

26 Oct 1998 4,677 Leasehold for

99 years

Offi ces 13 years 20 Oct 2084 823,023

Lot 409 Geran 19663Section 21 District of Klang (78 Jalan Nanas41400 Klang, Selangor)

4 storey terraceshophouses

06 Mar 1984 1,799 Freehold Shops 25 years - 609,762




Lot 2411 Block 5Miri Concession, Miri-Pujut RoadMiri, Sarawak

3 storey terraceshophouse

15 Nov 1999 1,690 Leaseholdfor

50 years

Shops 9 years 21 Jan 2050 533,000




This page has left blank intentionally.

FORM OF PROXY

I/We, ___________________________________________________________________________________________

of ______________________________________________________________________________________________

being a member of HAI-O ENTERPRISE BERHAD (22544-D), hereby appoint _________________________________

of ______________________________________________________________________________________________

or failing him/her __________________________________________________________________________________

of ______________________________________________________________________________________________

as my/our proxy, to vote on my/our behalf at the 33rd Annual General Meeting of the Company to be held at Banquet

Hall, 2nd Floor, The Federal Hotel Kuala Lumpur, No. 35, Jalan Bukit Bintang, 55100 Kuala Lumpur on Wednesday, 29

October 2008 at 11.30 a.m. and at any adjournment thereof in the manner indicated below in respect of the following

Resolutions:-

Resolutions For Against

Resolution 1 Adoption of Reports and Accounts.

Resolution 2 Re-election of Mr. Lim Chin Luen as Director.

Resolution 3 Re-appointment of Tan Sri Osman S Cassim as Director pursuant to

Section 129(6) of the Companies Act 1965.

Resolution 4 Re-appointment of Dato’ Abdul Rani bin Mohd Razalli as Director

pursuant to Section 129(6) of the Companies Act 1965.

Resolution 5 Re-appointment of Dr. M.K. Rajakumar A/L M.R.K. Nayar as Director

pursuant to Section 129(6) of the Companies Act 1965.

Resolution 6 Re-appointment of Mr. Tan Kai Hee as Director pursuant to Section

129(6) of the Companies Act 1965.

Resolution 7 Approval of Directors’ fees.

Resolution 8 Declaration of fi nal dividend of 32% less 25% tax.

Resolution 9 Re-appointment of Messrs. BDO Binder as Auditors of the Company and

to authorise Directors to fi x their remuneration.

Resolution 10 Authority to allot and issue shares pursuant to Section 132D of the

Companies Act 1965.

Resolution 11 Proposed Share Buy-Back by the Company

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. If you do not indicate how you

wish your proxy to vote on any Resolution, the proxy will vote or abstain from voting at his/her discretion.

Dated : ____________________ __________________________

Signature of Shareholder(s)

Notes :

1. A member entitled to attend and vote at the above meeting is entitled to appoint not more than two (2) proxies to attend and vote instead of him. A proxy

may but need not be a member of the Company.

2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifi es the proportions of his holding(s) to be represented by

each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a

corporation, either under its Common Seal or attorney duly authorised in writing.

4. The Form of Proxy must be deposited at the Registered Offi ce of the Company at Room 803, 8th Floor, Sun Kompleks, Jalan Bukit Bintang, 55100 Kuala

Lumpur, not less than forty-eight (48) hours before the time appointed for holding the meeting.

No. of Shares held

Please fold along this line (1)


HAI-O ENTERPRISE BERHAD (22544-D)

(Incorporated in Malaysia under the Companies Act, 1965)

The Company Secretary

Registered Offi ce

Room 803, 8th Floor,

Sun Kompleks,

Jalan Bukit Bintang, 55100,

Kuala Lumpur.

Stamp

投票授权委任书投票授权委任书

本人/我们, _______________________________________________________________________________________

来自地址 ________________________________________________________________________________________

为上述公司股东，在此委任 __________________________________________________________________________

来自地址 ________________________________________________________________________________________

或他/她弃权将委任 ________________________________________________________________________________

来自地址 ________________________________________________________________________________________

本人/我们的投票授权人，代表本人/我们在二零零八年十月二九日上午十一時三十分在Banquet Hall 2nd Floor, The

Federal Hotel Kuala Lumpur, No 35, Jalan Bukit Bintang, 55100 Kuala Lumpur 举行的三十三届股东常年大会和其连续会

议中投下下列的议案：

有关议案如下附议非议

议决案 1 接纳董事报告及已稽查账目。

议决案 2 重新委任董事林钟龙先生。

议决案 3 重新委任依循1965年公司法令第129(6)条文退任的Tan Sri Osman S.Cassim 为

董事。

议决案 4 重新委任依循1965年公司法令第129(6)条文退任的 Dato’ Abdul Rani bin Mohd

Razalli 为董事。

议决案 5 重新委任依循1965年公司法令第129(6)条文退任的 Dr.M.K. Rajakumar A/L

M.R.K.Nayar 为董事。

议决案 6 重新委任依循1965年公司法令第129(6)条文退任的陈凱希为董事。

议决案 7 批准董事费。

议决案 8 提议分派每股32%之年终股息，须扣税25%。

议决案 9 重新委任Messrs. BDO Binder为本公司的稽查師以及授权董事部决定其酬金。

议决案 10 特別事务议程：根据1965年公司法令132D条文下发行股票的授权。

议决案 11 特別事务议程：建议更新股票回购授权。

请在空格已“x”行使您的投票权，若您沒有指示您的授权人投票，则授权人将以他的判断行使投票权或弃权。

日期 : ____________________ __________________________

股东签名

附注：附注：

1. 每一名有权出席及投票的股东均可委任不超过2名代表出席股东常年大会并参与投票。股东代表无须为本公司的股东。

2. 若股东委任2名代表，委任书必须注明各别代表委托的股份，否则其委任书将失效。

3. 授权委任书必须为书面，并由他的适当书面授权的代理人签名或者如果委托人为一家公司，则须在公司的印章下或由一名获适当授权

的公司代表签名。

4. 授权委任书须于召开会议前四十八小時内送达公司注冊处位于 Room 803, 8th Floor, Sun Kompleks, Jalan Bukit Bintang, 55100 Kuala

Lumpur。

拥有股票单位拥有股票单位



HAI-O ENTERPRISE BERHAD (22544-D)

(Incorporated in Malaysia under the Companies Act, 1965)

The Company Secretary

Registered Offi ce

Room 803, 8th Floor,

Sun Kompleks,

Jalan Bukit Bintang, 55100,

Kuala Lumpur.

Stamp

玻璃市Perlis

槟城Penang

吡叻Perak

雪兰莪Selangor

柔佛Johor

北马 North Malaysia

Hai-O Chain Store’s Network 海鸥连锁店网络

Corporate Profi leEstablished in 1975, Hai-O has since become a famous household name offering a wide range of Chinese

medicines, medicated tonic and healthcare products. Providing superior quality healthcare products at a

reasonable price is our business policy.

Hai-O was listed on the Second Board of Bursa Malaysia Securities Berhad in 1996, being the fi rst traditional

healthcare company on the stock exchange. The company had then successfully transferred to the Main

Board of Bursa Malaysia on 8th October 2007.

The principal business of the company involves wholesaling, retailing, multi-level marketing, pharmaceutical

factory and modern Chinese Medicinal Clinics. For the past three decades, Hai-O had honed its expertise by

building extensive and effi cient distribution network and strong marketing strategies in Malaysia.

1. ALOR STAR 亚罗士打 Tel: 04-7775815

2. AYER ITAM 阿依淡 Tel: 04-8288606

3. CHAI LENG PARK 北海才能园 Tel: 04-3990710

4. JALAN BURMAH 车水路 Tel: 04-2265909

5. QUEENSBAY 巴六拜皇后园广场 Tel: 04-6432200

6. IPOH 怡保 Tel: 05-2547733

7. TELUK INTAN 安顺 Tel: 05-6218173

8. KUANTAN 关丹 Tel: 09-5667022

9. KLANG 巴生 Tel: 03-33431167

10. JALAN SULTAN 苏丹街 Tel: 03-20703282

11. SUN COMPLEX 太阳大厦 Tel: 03-21417700

12. TAMAN PERTAMA 第一花园 Tel: 03-92848961

13. SETAPAK 文良港 Tel: 03-40226053

14. JINJANG 增江 Tel: 03-62589081

15. PJ SS2 八打灵 Tel: 03-78778088

16. SERDANG 沙登 Tel: 03-89433536

17. METRO KAJANG 美景广场 Tel: 03-87344001

18. TAMAN MUDA AMPANG 安邦太子园 Tel: 03-42966941

19. USJ SUBANG 梳邦 Tel: 03-56387239

20. KEPONG 甲洞 Tel: 03-62776097

21. ENDAH PARADE 恩达广场 Tel: 03-95430951

22. MCC CITY 马中商城 Tel: 03-92837787

23. DESA AMAN PURI 甲洞逸富园 Tel: 03-62803195

24. PUSAT BANDAR RAWANG 万挠镇 Tel: 03-60927880

25. SUNGAI LONG 加影双溪龙 Tel: 03-90758889

26. PEARL POINT 旧巴生路珍城 Tel: 03-79822946

27. ONE UTAMA 万达 Tel: 03-77241015

28. CARREFOUR MIDVALLEY 谷中城广场 Tel: 03-22872136

29. CARREFOUR SUBANG JAYA 梳邦再也家乐福 Tel: 03-33438889

30. JUCSO BUKIT TINGGI 2 JUSCO武吉丁宜2 Tel: 03-33262408

31. GIANT BANDAR PUTERI PUCHONG 蒲种公主城大人超市 Tel: 03-80600637

32. CARREFOUR JALAN PEEL 蕉赖家乐福 Tel: 03-33438889

33. PANDAMARAN 班达马兰 Tel: 03-33232045

34. JLN IPOH 怡保路 Tel: 03-62502887

35. KAPAR INDAH 加埔7支 Tel: 03-32913651

36. SELAYANG JAYA 士拉央 Tel: 03-61387908

中马 Central Malaysia

南马 South Malaysia

东海岸 East Coast

37. TITI 知知港 Tel: 06-6111768

38. SEREMBAN 芙蓉 Tel: 06-7627903

39. JUSCO SEREMBAN 2 JUSCO芙蓉2 Tel: 06-6015422

40. MELAKA 马六甲 Tel: 06-2836935

41. BATU BERENDAM 马六甲巴株安南 Tel: 06-3178262

42. LUKUT 芦骨 Tel: 06-6515519

43. KLUANG 居銮 Tel: 07-7721773

44. BATU PAHAT 巴株巴辖 Tel: 07-4310451

45. JOHOR BAHRU 新山 Tel: 07-3325377

46. SEGAMAT 昔加末 Tel: 07-9321262

47. MUAR ASTAKA 麻坡 Tel: 06-9532842

48. MUAR LEGENDA 麻坡凯荣 Tel: 06-9510714

49. PLAZA TASEK 皇后广场 Tel: 07-5543925

50. GIANT PLENTONG JB 避兰东大人超市 Tel: 07-3591636

51. CARREFOUR SUTERA MALL, J.B 五福城广场家乐福 Tel: 03-33438889

52. JOHOR JAYA 柔佛再也 Tel: 07-3575332

53. KULAI 古来 Tel: 07-6621398

54. TAMAN PERLING 新山柏龄花园 Tel: 07-2345941

55. TAMAN UNIVERSITY 新山大学城 Tel: 07-5202566

56. TANGKAK 东甲 Tel: 06-9785127

彭亨Pahang

森美兰N. Sembilan

登嘉楼Terengganu

吉兰丹Kelantan

吉打Kedah

马六甲Melaka

企业有限公司HAI-O ENTERPRISE BERHAD (22544-D)


We Delivered

ANNUAL REPORT

2008二零零八常年报告书

Room 803, 8th Floor, Sun Kompleks, Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.Tel : 03 - 2142 2611 Fax : 03 - 2142 2840 www.hai-o.com.my [email protected]

ANN

UAL REPORT 2008HAI-O EN

TERPRISE BERHAD (22544-D

)

企业有限公司 HAI-O ENTERPRISE BERHAD (22544-D)


Date post:	18-Sep-2020
Category:	Documents
Upload:	others
View:	5 times
Download:	0 times

HAI-O ENTERPRISE BERHAD We Delivered · 2012. 1. 16. · 7. teluk intan 安顺 tel: 05-6218173 8....

Documents