(320888-T)

ANNUAL REPORT 2007 (320888-T) 22nd Floor, Menara Uni.Asia, No. 1008, Jalan Sultan Ismail 1008, No. Menara Uni.Asia, 22nd Floor, Malaysia Lumpur, 50250 Kuala www.malton.com.my : 603-2692 1399 Website : 603-2776 6188 Fax : Tel CORPORATE INFORMATION P.02 CORPORATE STRUCTURE P.03 BOARD OF DIRECTORS P.04 CHAIRMAN’S STATEMENT P.07 OPERATIONS REVIEW P.10 GROUP FIVE-YEAR SUMMARY P.15 STATEMENT ON CORPORATE GOVERNANCE P.16 AUDIT COMMITTEE REPORT P.22 P.25 FINANCIAL STATEMENTS P.80 PARTICULARS OF PROPERTIES P.82 STATEMENT OF SHAREHOLDERS P.85 NOTICE OF ANNUAL GENERAL MEETING P.89 STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING P.91 PROXY FORM contents Malton Berhad (320888-T) P.02 Annual Report 2007

CORPORATE INFORMATION

BOARD OF DIRECTORS Datuk Lim Siew Choon Datin Tan Kewi Yong Executive Chairman Executive Director Guido Paul Philip Joseph Ravelli Lee Tuck Fook Deputy Chairman / Managing Director Independent Non-Executive Director Chua Thian Teck Liew Yuet Siong Executive Director Executive Director Hj Ahmad bin Hj Ismail, PJK Independent Non-Executive Director

AUDIT COMMITTEE COMPANY SECRETARY AUDITORS Guido Paul Philip Joseph Ravelli Hor Shiow Jei Deloitte & Touche, Chartered Accountants Chairman of Committee CHS Tan & Co, Chartered Accountants Chua Thian Teck Member of Committee REGISTERED OFFICE 22nd Floor, Menara Uni.Asia PRINCIPAL BANKERS Hj Ahmad bin Hj Ismail, PJK No. 1008, Jalan Sultan Ismail EON Bank Berhad Member of Committee 50250 Kuala Lumpur OCBC Bank (Malaysia) Berhad Tel : 603-2776 6188 RHB Bank Bhd Fax : 603-2692 1399 REMUNERATION COMMITTEE Alliance Bank Malaysia Berhad AmBank Berhad Guido Paul Philip Joseph Ravelli Chairman of Committee SHARE REGISTRAR Chua Thian Teck Shareworks Sdn Bhd STOCK EXCHANGE LISTING Member of Committee No. 10-1, Jalan Sri Hartamas 8 Main Board of Bursa Hj Ahmad bin Hj Ismail, PJK Sri Hartamas Malaysia Securities Berhad Member of Committee 50480 Kuala Lumpur Tel : 603-6201 1120 NOMINATING COMMITTEE Fax : 603-6201 3121 COMPANY WEBSITE Guido Paul Philip Joseph Ravelli www.malton.com.my Chairman of Committee Hj Ahmad bin Hj Ismail, PJK Member of Committee Malton Berhad (320888-T) Annual Report 2007 P.03

CORPORATE STRUCTURE

KHUAN CHOO KHUAN CHOO 100% REALTY SDN BHD 100% DEVELOPMENT SDN BHD

PEMBINAAN GAPADU 100% GAPADU DEVELOPMENT 100% SDN BHD SDN BHD

ASIA-CONDO KUALA LUMPUR 100% CORPORATION SDN BHD 100% PAVILION SDN BHD

REGAL MARVEL MALTON ASSETS 100% CONSTRUCTION SDN BHD 100% LIMITED PERAK FRUITS & SILVER SETUP DEVELOPMENT 100% SDN BHD 51% MALTON ASIA CORPORATION SDN BHD 100% LIMITED

GAPADU HARTA 100% SDN BHD EHSAN ARMADA 100% SDN BHD HORIZONTAL 100% PROMENADE SDN BHD KHUAN CHOO PROPERTY 100% MANAGEMENT SDN BHD RENTAK SEJATI 100% SDN BHD MALTON DEVELOPMENT 100% SDN BHD KHUAN CHOO 100% SDN BHD BUKIT RIMAU 100% DEVELOPMENT SDN BHD MELARIANG INTERPILE (M) 100% SDN BHD 100% SDN BHD

KUMPULAN GAPADU 100% SDN BHD

DOMAIN RESOURCES DMP CONSTRUCTION 100% SDN BHD 100% SDN BHD

DOMAIN PROPERTY LAYAR RAYA 100% SERVICES SDN BHD 100% SDN BHD

100% DOMAIN EPC 100% BEIJING MALTON INVESTMENT SDN BHD CONSULTANCY LTD DOMAIN PROJECT 100% MANAGEMENT SDN BHD

DOMAIN STABLE 51% CONSTRUCTION SDN BHD Malton Berhad (320888-T) P.04 Annual Report 2007

BOARD OF DIRECTORS

DATUK LIM SIEW CHOON Malaysian / Executive Chairman

Datuk Lim Siew Choon, age 47, received his tertiary education in the United States of America and graduated with a Degree in Business Administration and Finance from University of Central Oklahoma. He has been involved in the property development and construction industries for more than 25 years.

He was appointed the Executive Chairman of Malton Berhad on 15 February 2001. He attended all five board meetings held during the financial year ended 30 June 2007. His spouse, Datin Tan Kewi Yong is an Executive Director of Malton Berhad. He does not have any conflict of interest with Malton Berhad other than the disclosures made under Related Party Transactions in the Financial Statements which appear on pages 64 to 65 of this Annual Report. He does not hold any securities in Malton Berhad other than the disclosure made under Directors’ Interests in the Financial Statements which appears on page 28 of this Annual Report. He has no convictions for offences within the past 10 years.

GUIDO PAUL PHILIP JOSEPH RAVELLI British / Deputy Chairman/Independent Non-Executive Director

Mr Guido Paul Philip Joseph Ravelli, age 56, studied civil engineering at King’s College, University of London and graduated with a Bachelor of Science (Hons) degree in Civil Engineering. He furthered his studies at Ecole Centrale des Arts et Manufacturers, Paris and was later conferred Master of Science in Engineering. He began his career with a major building contractor in Paris and later elected to pursue an international career in the field of construction. He has more than 30 years of experience in the development, implementation and management of buildings, public works and Build/Operation/Transfer projects in France, Portugal, Hong Kong SAR and Malaysia. In year 2000, the President of France conferred a national honour on him by making him, a Chevalier de l’Ordre National du Merite, in recognition of his contribution to the profession and to Franco-Asian business relations.

He was first appointed an Independent Non-Executive Director on 1 March 2002. He is the Chairman of the Audit Committee and also sits in the Nominating Committee and Remuneration Committee. He was appointed the Deputy Chairman of Malton Berhad on 6 November 2002. He also sits on the Board of Directors of Ibraco Berhad.

He attended all five board meetings held during the financial year ended 30 June 2007. He has no family relationship with any of the Directors and/or major shareholders of Malton Berhad. He does not have any conflict of interest with Malton Berhad. He has no convictions for offences within the past 10 years. He does not hold any securities in Malton Berhad. Malton Berhad (320888-T) Annual Report 2007 P.05

BOARD OF DIRECTORS cont’d

DATIN TAN KEWI YONG Malaysian / Executive Director

Datin Tan Kewi Yong, age 51, pursued her tertiary education in the United Kingdom specialising in Business Studies. In her 24 years experience in marketing, finance and human resources management, she has been instrumental in setting up various successful business ventures. Her initial involvement was trading and distribution line and over the years, her scope of involvement has extended to cover many other industries.

She was appointed an Executive Director of Malton on 19 February 2002. She attended all five board meetings held during the financial year ended 30 June 2007.

Her spouse, Datuk Lim Siew Choon is the Executive Chairman and major shareholder of Malton Berhad. She does not have any conflict of interest with Malton Berhad other than the disclosure made under Related Party Transactions in the Financial Statements which appear on pages 64 to 65 in this Annual Report. She has no convictions for offences within the past 10 years. She does not hold any securities in Malton Berhad.

LEE TUCK FOOK Malaysian / Managing Director

Mr Lee Tuck Fook, age 53, holds a Master in Business Administration from the International Management Centre in the United Kingdom and is a member of the Malaysian Institute of Certified Public Accountants. He served as a partner in charge of consulting in KPMG Peat Marwick from 1986 to 1990 before joining Samling Corporation Sdn Bhd in 1990 as its Vice-President of Plywood Division. In 1992, he joined Renong Overseas Corporation Sdn Bhd as Managing Director and subsequently in 1994 joined Peremba Kentz International Ltd as Chairman of the Finance Committee and Chairman of Special Committee of Directors. He joined Cement Industries of Malaysia Berhad (CIMA) as Managing Director in 2001. He also sat on the Board of Directors of Landmarks Berhad until his resignation on 24 October 2007.

He was appointed an Executive Director of Malton Berhad on 2 June 2003 and the Managing Director on 12 December 2003. He attended all five board meetings held during the financial year ended 30 June 2007.

He has no family relationship with any Directors and/or major shareholders of Malton Berhad. He does not have any conflict of interest with Malton Berhad. He has no convictions for offences within the past 10 years. He does not hold any securities in Malton Berhad.

CHUA THIAN TECK Malaysian / Executive Director

Mr Chua Thian Teck, age 48, is a Fellow Member of the Association of Chartered Certified Accountants. He has more than 23 years of experience in accounting and financial services and manufacturing industry and in the course of his career, has acquired valuable knowledge particularly in corporate planning and finance. He was attached to two investment banks and was involved in corporate restructuring, capital and funding issues, privatisations, initial public offerings, merger and acquisitions and other corporate advisory services.

He was appointed an Executive Director of Malton Berhad on 25 September 2002. He is a member of the Audit Committee and Remuneration Committee.

He attended all five board meetings held during the financial year ended 30 June 2007. He has no family relationship with any of the Directors and/or major shareholders of Malton Berhad. He does not have any conflict of interest with Malton Berhad. He has no convictions for offences within the past 10 years. He does not hold any securities in Malton Berhad. Malton Berhad (320888-T) P.06 Annual Report 2007

BOARD OF DIRECTORS cont’d

LIEW YUET SIONG Malaysian / Executive Director

Mr Liew Yuet Siong, age 49, holds a Bachelor of Science (Honours), Civil & Structural Engineering degree from University of Cardiff, Wales and a Masters in Business Administration (MBA) from University of Sheffield. He is a member of the Institution of Engineers, Malaysia.

He began his career in 1981 as a Site/Project Engineer with Teamwork Corporation Sdn Bhd (a subsidiary of Taylor Woodrow International Limited, United Kingdom) and in 1982, joined Perunding Bakti Sdn Bhd as a Consulting Engineer.

He joined Bandar Raya Developments Berhad (BRDB) in 1983. He had held position of Executive Director of Capital Square Sdn Bhd, a subsidiary of BRDB and Group General Manager of BRDB. He was also a director of BRD Construction Sdn Bhd and Mieco Chipboard Berhad, both subsidiaries of BRDB prior to joining Malton Berhad. He has more than 25 years of experience in the property industry involving in land acquisition, joint venture development, residential and commercial development, structural design, civil and structural works including liaising with consultants, government authorities and contractors.

He was appointed an Executive Director of Malton Berhad on 7 April 2004. He attended all five board meetings held during the financial year ended 30 June 2007. He has no family relationship with any of the Directors and/or major shareholders of Malton Berhad. He does not have any conflict of interest with Malton Berhad. He has no convictions for offences within the past 10 years. He does not hold any securities in Malton Berhad.

HJ AHMAD BIN HJ ISMAIL, PJK Malaysian / Independent Non-Executive Director

Hj Ahmad Bin HJ Ismail, PJK, age 65, graduated with an Honours Degree in Malay Studies from Universiti Malaya in 1974. Upon his graduation, he served as a lecturer of Malay Studies at the Universiti Putra Malaysia until his retirement in 1997. During his tenure at the university, he played a prominent role in the development of the Malay Language.

He was appointed an Independent Non-Executive Director of Malton Berhad on 25 September 2002. He was an Independent Non-Executive Director of Paracorp Berhad until his resignation on 15 March 2007. He is a member of the Audit Committee, Nominating Committee and Remuneration Committee.

He attended all five board meetings held during the financial year ended 30 June 2007. He has no family relationship with any of the Directors and/or major shareholders of Malton Berhad. He does not have any conflict of interest with Malton Berhad. He has no convictions for offences within the past 10 years. He does not hold any securities in Malton Berhad.

Malton Berhad (320888-T) Annual Report 2007 P.07

chairman’s statement

DEAR VALUED SHAREHOLDERS, ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED TO PRESENT THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS OF THE GROUP AND COMPANY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007.

Malton Berhad (320888-T) P.08 Annual Report 2007

CHAIRMAN’S STATEMENT cont’d

OPERATING BACKGROUND The Malaysian economy strengthened with real GDP registered at 5.9% in 2006 and is expected to grow between 6% and 6.5% in 2007. Despite the progressive growth in the economy, the broad base residential property market activity moderated, weighed down by cautious buying sentiment and effects of oversupply in secondary locations. Consumer sentiment, however, improved in the first half of 2007 as reflected in higher take up rates in newly launched residential units and increase in the volume of property transactions particularly in the high-end residential segment. The commercial property market registered better performance mainly due to the buoyant growth in business activities as reflected in higher occupancy rate of office space of 84.9% at the end of June 2007. On the construction sector, it continues to benefit from the implementation of the Ninth Malaysia Plan (9MP) projects.

FINANCIAL REVIEW Against the backdrop of mixed property market conditions, the Group performed satisfactorily during the financial year under review.

For the financial year under review, the Group recorded a pre-tax profit of RM8.5 million on a turnover of RM555.5 million compared to pre-tax profit of RM10.5 million on a turnover of RM304.8 million in 2006. Net profit after tax and minority interests was RM3.4 million in 2007 compared to RM2.4 million in 2006.

Turnover increased by RM250.7 million from RM304.8 million in 2006 to RM555.5 million in 2007 of which RM429.9 million was recorded from the construction and project management division and RM124.8 million from the property development division including property trading activities. Revenue from the property development division were marginally lower as previously launched phases of the existing projects have been completed during the financial year and there were delays in certain new launches. The significant increase in revenue from the construction and project management division was attributed to the billings from the Pavilion Kuala Lumpur project, a posh retail mall in the financial district of Kuala Lumpur which was completed in August 2007.

Despite a significant increase in turnover, pre-tax profit declined essentially due to higher overhead costs and generally lower margin contribution from the construction and project management division. Profit after tax and minority interests improved to RM3.4 million in 2007 from RM2.4 million in 2006 due mainly to lower effective tax rate in the current financial year.

Earnings per share improved for the current financial year to 0.97 sen, from 0.70 sen in 2006. The Group’s total assets and shareholders’ funds as at 30 June 2007 stood at RM885.2 million and RM424.8 million respectively.

DIVIDENDS The Board of Directors has proposed a final dividend of 1% less income tax in respect of the financial year ended 30 June 2007.

CORPORATE DEVELOPMENT A wholly-owned subsidiary company, Khuan Choo Realty Sdn Bhd (“KCR”) had on 15 January 2007, acquired 348,600 ordinary shares of RM1.00 each representing the remaining 24.9% equity interest in Melariang Sdn Bhd (“MSB”) not owned by KCR for a total cash consideration of RM3.9 million. Following the acquisition, MSB became a wholly-owned subsidiary of KCR.

During the financial year, the Group has made the following acquisitions and entered into certain joint ventures with land owners:- • Acquisition of 35.4 acres of land in Bandar Sungei Long, Cheras for a cash consideration of RM12.7 million; • Acquisition of 4.81 acres of land in Taman SEA, Petaling Jaya for a cash consideration of RM26 million; • Acquisition of 1.89 acres of land in Taman Maluri, Cheras for a cash consideration of RM11.1 million; • Joint development of 56.1 acres of land in Bandar Ulu Kelang, Selangor; and • Joint development of 35,978 square feet of land in Pulau Tikus, Penang.

Malton Berhad (320888-T) Annual Report 2007 P.09

CHAIRMAN’S STATEMENT cont’d

CORPORATE DEVELOPMENT cont’d The addition of these prime development lands in fast growing locations in the Klang Valley are expected to enhance future earnings and also marks the Group’s foray into Penang where recent positive developments such as the construction of second Penang bridge and outer ring road, launch of the northern corridor economic region and monorail projects, amongst others, augur well for the property market.

CORPORATE SOCIAL RESPONSIBILITY The Group is mindful of its corporate social responsibility in the community that it operates in and will continue to support worthy causes. The Group emphasises on safety and ethics not only in the work place but also the products that it delivers. The Group has also invested in the staff at all levels to ensure continuing growth in human capital development.

CHALLENGES AND PROSPECTS The Malaysian economy is expected to register a robust growth in 2008 in tandem with the Government’s expansionary fiscal policies and favourable business sentiment. The implementation of 9MP projects and the development of the economic corridors will be the main driving forces of the economy growth. Various liberalisation measures and incentives introduced by the Government in the property market such as the exemption of Real Property Gains Tax, the relaxation of Foreign Investment Committee rules for foreign purchases of residential properties over RM250,000, the removal of the limitation on the number of domestic loans to foreign purchasers and the establishment of the one-stop-centre to expedite building and development planning approvals process are definitely a boost to the property market. The newly announced Employees Provident Fund withdrawal scheme for monthly repayment of housing loan and recent pay rise for all civil servants will serve to raise the demand and consumer sentiment in the property market.

To leverage on these positive factors in the property market, the Group is ready to roll out a number of new development projects in the coming year. The new development projects will include both high-end residential and commercial developments to capitalise on the strong market interest in the high value products segment and the rising demand in office space due to buoyant business activities. The Group will continue to focus on its property development by delivering quality and innovative products with value appreciation in tandem with our unwavering commitment to be the Preferred Developer.

Meanwhile, the construction and project management division has RM500 million construction contracts in hand and it anticipates to secure additional contracts from the projects that it has tendered.

Barring unforeseen circumstances, the Group is optimistic that it will be able to improve its performance for the financial year 2008.

ACKNOWLEDGEMENT On behalf of the Board, I would like to express my sincere gratitude and appreciation to the various government agencies, bankers, customers and business associates for their continuing support. I also thank the management and staff for their hard work, dedication and unwavering commitment to the Group. To our shareholders, thank you for your continued support and confidence in the Group. Last but not least, I would like to record my appreciation to all directors for their invaluable support, opinions and commitment in guiding our Group.

On behalf of the Board

DATUK LIM SIEW CHOON Executive Chairman

9 November 2007 Malton Berhad (320888-T) P.10P.10 Annual Report 2007

OPERATIONS REVIEW

PROPERTY DEVELOPMENT DIVISION For the current financial year under review, total revenue from the property development division including property trading activities decreased marginally to RM124.8 million compared to RM125.8 million in the previous financial year. The marginal decrease was mainly due to the completion of previously launched phases of the existing projects and delay in certain new launches.

BUKIT RIMAU Bukit Rimau township is one of the Group’s flagship projects spanning over 358-acre of development land in Shah Alam. It is primarily a well planned residential development including three distinct gated and guarded communities complete with various recreational amenities and public facilities and also an international school.

To-date the Group has successfully delivered 1,816 units of properties comprising luxurious bungalows, semi-detached houses, zero lot line bungalow villas, super link terrace houses and garden terrace cluster houses since the project started in 1996.

Bayu Villas comprising 36 units 2-storey link-bungalows was launched in November 2007 and has achieved over 70% sales to-date.

In the pipeline are the launches of semi-detached homes, link-bungalows and bungalows. The other remaining development phase has been earmarked for commercial development and will include lifestyle inspired commercial shops, hypermarket and possibly a retail mall to cater for the increasingly affluent population and various matured townships in the surrounding vicinity. Malton Berhad (320888-T) Annual Report 2007 P.11

OPERATIONS REVIEW cont’d

MUTIARA PUCHONG Mutiara Puchong is a 64-acre mixed development nestled within a garden ambience along the serenity of a lake, far from the maddening crowd. This exclusive gated community boasts a private 4-acre landscaped park with recreational and sporting amenities and 24-hour security.

Strategically located in the epicenter of Puchong, it is a stone-throw away from the established townships, popular retail shops, restaurants and hypermarkets such as Jusco, Tesco and Giant and is easily accessible via an excellent network of highways comprising the Lebuhraya Damansara Puchong (LDP), KESAS Highway and Expressway Lingkaran Tengah (ELITE).

Since the project started in 2004, a total of 412 units of houses comprising double and two-and-a-half storey terrace houses with a gated community were completed and delivered to house purchasers to-date.

Phase 3B comprising 92 units of double storey terrace houses was launched in March 2007. Construction is ahead of schedule and is anticipated to complete by early 2008.

Future launches of the development will include medium cost apartments and low cost shops. Malton Berhad (320888-T) P.12 Annual Report 2007

OPERATIONS REVIEW cont’d

MUTIARA INDAH Mutiara Indah, a 82-acre mixed development project comprises clustered homes, semi-detached houses, terrace houses, apartments and shop offices in Puchong. Perched on high ground, this exclusive gated community offers a panoramic view of its surroundings amidst landscaped gardens.

Mutiara Indah is in close proximity to the southern growth corridor which is anchored by the National Administrative Centre, Putrajaya, a fast growing belt incorporating a vast array of residential, industrial and commercial projects. It is easily accessible via the LDP, KESAS, KLIA Dedicated Highway and South Klang Valley Expressway. Its prestigious location extends a sophisticated lifestyle with access to facilities and amenities including 5-star hotels, golf courses, medical centres, higher learning institutions, shopping centres, hypermarkets, restaurants and banking centres. Mutiara Indah is undoubtedly poised to be the next nucleus of growth in the area.

A highly successful project which was first launched in 2004, a total of 343 units comprising quartet link semi-detached homes and terrace houses have been completed and delivered to purchasers to-date.

Phase 1B comprising 20 units of shop offices was launched in July 2006 with 65% of the total units sold as of end of the financial year. It is targeted for completion by mid 2008.

Phase 2C and 3B comprising 24 units of semi-detached homes and 145 units of double storey terrace houses respectively were launched in October 2007. There will be more semi-detached homes and double storey terrace houses in the pipeline to be launched.

V SQUARE Strategically located in the heart of Petaling Jaya city centre, recognizable landmark within the 3 km radius of the project are the Hilton Hotel, Armada Hotel, Crystal Crown Hotel, Jaya 33 Shopping Centre, Amcorp Mall, universities and hospitals with excellent accessibility via Jalan Utara off Federal Highway.

V Square is a 2.6-acre commercial development project consisting of 7 blocks of retail and office space with over 1,000 car parks. Featuring modern architectural design with practical layout, a central plaza, landscaped promenade and an elevated facility deck, V Square is offering a fresh concept of modern working environment with a mix of entertainment and relaxation.

Phase 1 of the development comprising 3 blocks of retail and office towers is scheduled to be launched in early December 2007.

Malton Berhad (320888-T) Annual Report 2007 P.13

OPERATIONS REVIEW cont’d

AMAYA SAUJANA RESIDENTIAL SUITES It is located within the quiet neighbourhood of the Saujana Golf & Country Resort, the 5-star Saujana Resort Hotel and surrounded by bungalows and other up market properties, Amaya Saujana is easily accessible via the North Klang Valley Expressway and is within minutes drive to Kelana Jaya, Subang Jaya, Petaling Jaya and Shah Alam.

Amaya Saujana is a service apartment development on 6-acre land with 3 blocks of 14-storey building comprising 378 units of residential suites with spacious layout and high-end quality finishes. The design of the units is based on link-bungalow layouts with built-up area from minimum of 1,569 square feet to 1,895 square feet the largest.

This low-density development comes with comprehensive facilities and landscaped garden at podium level and surrounded by lush greenery and landscapes.

Earthwork has commenced and the project is scheduled to be launched at the end of November 2007.

PEARL VILLAS Cosily tucked away on the green and serene enclave in Section 16, Petaling Jaya, Pearl Villas is an idyllic retreat. It is away from the hustle and bustle of the city but with all the comforts and conveniences of a modern living within easy reach. Facilities and amenities in the surrounding areas include 5-star hotels, golf courses, medical centre, shopping centres, restaurants and banking centres.

The development comprises 42 units of 3 storey semi-detached houses offering generous floor spaces and features modern architectural design.

Earthwork is in progress and the project is scheduled to be launched at the end of November 2007.

Malton Berhad (320888-T) P.14 Annual Report 2007

OPERATIONS REVIEW cont’d

CONSTRUCTION AND PROJECT MANAGEMENT DIVISION Turnover surged from RM178.2 million in the last financial year to RM429.9 million in the current financial year. The significant increase was mainly attributed to the billings from the work done of Pavilion Kuala Lumpur project.

Major construction and project management projects undertaken by the Group during the financial year are set out below.

PAVILION KUALA LUMPUR Pavilion Kuala Lumpur is an integrated urban commercial, shopping and entertainment centre with luxury residential towers situated right in the heart of the Kuala Lumpur Golden Triangle. This landmark prestigious complex comprises a retail podium, office tower, two blocks of high rise luxury service apartments and a six-star boutique hotel.

Construction work for the retail podium and office tower started in March 2004 and was completed in August 2007.

The construction of the two blocks of high rise luxury service apartments commenced in February 2007 and is scheduled for completion in 2009.

PEARL @ KLCC Pearl @ KLCC is conceptualised as a most desired luxurious condominium development located at the distinguished area of Jalan Stonor, Kuala Lumpur. This presumptuous development offers 167 units of condominiums, 7 units of duplexes, and 3 units of penthouses lavishly furnished and supplemented by privileged facilities for a tranquil yet pampered lifestyle. It is exclusive and private yet ubiquitously alive to the pulse and thriving of the Kuala Lumpur city centre.

Domain Resources Sdn Bhd (“DRSB”), a wholly-owned subsidiary company, has been appointed as the exclusive manager for project development and sales.

SEPANG AIRCRAFT ENGINEERING MAINTENANCE, REPAIR AND OVERHAUL (MRO) COMPLEX Malaysia’s first independent MRO complex is located at KLIA and equipped with the most comprehensive and forefront facilities to service the region’s burgeoning airlines industry in line with the government’s vision to establish Malaysia as a regional MRO centre.

The Sepang Aircraft Engineering MRO Complex consists of two main hangars designed to accommodate two Boeing 747 Jumbo jets or eight Airbus A320/Boeing 737 aircrafts simultaneously, spacious workshops, secured bonded stores, offices and 240,000 square feet of aprons and taxi ways with total built-up areas of 500,000 square feet.

The steel portal framed hangar structure with a dimension of 180m (L) x 98m (W) x 31m (H) is one of the largest in the region.

This fast track technically demanding project was undertaken by DRSB on a design, build, testing and commissioning contract according to Federal Aviation Administration (US)’s stringent international aviation standard and was successfully completed in a record time of six months with zero accident.

Malton Berhad (320888-T) Annual Report 2007 P.15

GROUP FIVE-YEAR SUMMARY

600 40

30 400

20 PROFIT 200 BEFORE 10 REVENUE TAXATION

RMmil/year 0 RMmil/year 0 07 06 05 04 03 07 06 05 04 03

25 1.5

1.2 15

0.9 PROFIT/ 5 (LOSS) 0 NET 0.6 ASSETS AFTER -5 TAXATION PER SHARE 0.3

RMmil/year -15 RM/year 0 07 06 05 04 03 07 06 05 04 03

Year ended 30 June 2007 2006 2005 2004 2003#

Revenue (RM’000) 555,535 304,796 265,910 166,007 147,730

Profit Before Taxation (RM’000) 8,468 10,503 6,125 14,840 34,440

Profit/(Loss) After Taxation (RM’000) 4,670 3,647 (12,043) 8,048 22,319

Profit/(Loss) Attributable to Equity 3,372 2,441 (14,104) 7,364 22,830 Holders of the Company (RM’000)

Paid-up Capital (RM’000) 348,353 348,353 348,353 348,353 348,353

Equity Attributable to Equity Holders of the Company (RM’000) 418,049 412,475 410,034 424,138 441,855

Total Assets (RM’000) 885,194 762,156 778,616 717,974 633,006

Basic Earnings/(Loss) Per Share (Sen) 0.97 0.70 (4.05) 2.11 6.55

Net Assets Per Share (RM) 1.20 1.18 1.18 1.22 1.27

# The comparative amounts have been restated to incorporate prior year adjustments

Malton Berhad (320888-T) P.16 Annual Report 2007

STATEMENT ON CORPORATE GOVERNANCE

INTRODUCTION The Board of Directors of Malton Berhad (“Board”) is committed to ensure that high standards of corporate governance are practiced throughout Malton Berhad (“Malton” or “Company”) and its subsidiaries (“Group”). The Board is of the view that this is fundamental towards the protection and enhancement of shareholders’ value. The Board fully supports the principles set out in the Malaysian Code on Corporate Governance (“Code”). The Board is pleased to outline the manner in which the Group has applied the principles set out in the Code and hereby confirms that the Group has complied with the best practices sets out in the Code for the financial year ended 30 June 2007.

THE BOARD 1. Board Membership The Group is led and controlled by an effective Board. The Board comprises five executive directors and two independent non-executive directors as set out below.

Name Directorship

Datuk Lim Siew Choon (Executive Chairman) Executive Guido Paul Philip Joseph Ravelli (Deputy Chairman) Independent and Non-Executive Datin Tan Kewi Yong Executive Lee Tuck Fook (Managing Director) Executive Chua Thian Teck Executive Liew Yuet Siong Executive Hj Ahmad bin Hj Ismail, PJK Independent Non-Executive

The profiles of the Directors are presented from pages 4 to 6.

Composition of the Board complies with the requirement of the Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”). There is balance in the Board as each independent director brings invaluable judgment to bear on issues of strategy, performance, resource allocation, risk management and standards of conduct. In the opinion of the Board, the minority shareholders are fairly represented by the presence of these highly capable and credible independent non-executive directors.

Guido Paul Philip Joseph Ravelli is the senior independent non-executive director. Any concerns relating to the Group may be conveyed to him.

2. Directors’ Duties and Responsibilities Malton is led by a team of experienced directors. Each director comes from different professional background bringing depth and diversity of expertise, a wide range of experience and perspective to the business operations.

There is a clear division of role and responsibilities of the Executive Chairman and the Managing Director to ensure balance of power and authority. The Managing Director is subject to the control of the Board. He reports to the Board and seeks approval from the Board when required.

The Deputy Chairman, an independent non-executive director, ensures that the Board practices good governance in discharging its duties and responsibilities. The Board, as a whole, retains overall control of the Group.

As a matter of course, from time to time, the Board examines its size with a view to determine the impact of its number upon its effectiveness.

Malton Berhad (320888-T) Annual Report 2007 P.17

STATEMENT ON CORPORATE GOVERNANCE cont’d

THE BOARD cont’d 3. Board Meetings The Board meets at least five times a year, with additional matters addressed by way of circular resolutions and additional meetings held as and when necessary. The Board met five times during the financial year ended 30 June 2007. The attendance of each director during the said financial year is as follows:- Name Total Meetings Attended

Datuk Lim Siew Choon (Executive Chairman) 5 of 5 Guido Paul Philip Joseph Ravelli (Deputy Chairman) 5 of 5 Datin Tan Kewi Yong 5 of 5 Lee Tuck Fook (Managing Director) 5 of 5 Chua Thian Teck 5 of 5 Liew Yuet Siong 5 of 5 Hj Ahmad bin Hj Ismail, PJK 5 of 5

4. Board Committees As recommended by the Code, the Board may establish Board Committees to assist the Board in discharging its duties.

The Board has formed the following Committees, each with its own functions and responsibilities. All Board Committees report to the Board.

• Audit Committee • Nominating Committee • Remuneration Committee

5. Appointment to the Board It is recommended in Part 2 of the Code that the assessment of new candidates for appointment as directors is to be made by the Nominating Committee. The decision for appointment of new directors is a matter for deliberation by the Board as a whole.

The Nominating Committee of Malton comprises exclusively of independent non-executive directors. The members of the Nominating Committee are as follows:- • Guido Paul Philip Joseph Ravelli • Hj Ahmad bin Hj Ismail, PJK

The objective and responsibilities of the Nominating Committee are to assess the effectiveness and continually seek ways to upgrade the effectiveness of the Board as a whole and the Committees of the Board. It also assesses the contribution of each Director.

During the financial year ended 30 June 2007, the Nominating Committee met once to review the performance of the Board.

6. Appointment and Re-election of the Directors In accordance with the Articles of Association of the Company, the Board can appoint any person to be a Director as and when it is deemed necessary. Any person so appointed shall hold office until the next Annual General Meeting at which time he will be subject to election by the shareholders.

In compliance with the Listing Requirements, all Directors of the Company, including the Managing Director shall retire from office at least once every three years but be eligible for re-election.

Malton Berhad (320888-T) P.18 Annual Report 2007

STATEMENT ON CORPORATE GOVERNANCE cont’d

THE BOARD cont’d 7. Directors’ Training The Board ensures that there is an orientation and education programme for the new Board members. The Board members will, from time to time, receive training in furtherance of their duties and responsibilities as directors. The Board as a whole, will evaluate and establish or recommend the training required by each Board member in discharging his or her duties and responsibilities. During the financial year ended 30 June 2007, the Directors, with the exception of Datuk Lim Siew Choon and Mr Liew Yuet Siong who resolved to attend courses after the said financial year due to work commitments, have attended courses in relation to Corporate Social Responsibility, Risk Management and Internal Audit Challenges and Updates, Effective Leadership and Business Models and Successes.

8. Supply and Dissemination of Information Board meetings are structured with pre-determined agendas. Appropriate and complete Board papers are prepared prior to each Board meeting. These are distributed to the Board in sufficient time to enable the Directors to obtain further information and explanation, where necessary. Directors also have unfettered access to all information within the Group in furtherance of their duties.

There are matters reserved specifically for the Board’s decision including the approval of acquisitions and disposals of assets and investments that are material to the Group.

The Directors, or the Board as a whole, may take independent advice, where necessary, and at the Group’s expense.

All Directors have access to the advice and services of the Company Secretary.

9. Directors’ Remuneration The Company has adopted the principle recommended in the Code whereby the level of remuneration of the Directors is sufficient to attract and retain Directors needed to manage the Group successfully. The remuneration system is structured to link rewards to corporate and individual performance in the case of executive directors. In the case of non-executive directors, the level of remuneration shall reflect the level of responsibilities undertaken by the particular non-executive director concerned.

To assist the Board in the discharge of its responsibilities in this matter, the Board endorsed the formation of a Remuneration Committee on 24 October 2002. The composition of the Remuneration Committee is as follows:- • Guido Paul Philip Joseph Ravelli • Chua Thian Teck • Hj Ahmad bin Hj Ismail

The Committee will review the remuneration packages of each individual Executive Director from time to time to ensure that the remuneration packages remain competitive in order to attract and retain competent executives who can manage the Group successfully. Executive Directors play no part in decisions on their own remuneration.

The determination of remuneration packages of non-executive directors is a matter of the Board as a whole. The non-executive directors concerned do not partake in decisions affecting their remuneration.

During the financial year ended 30 June 2007, the Remuneration Committee met once to discuss the remuneration structure and packages for approval by the Board.

Malton Berhad (320888-T) Annual Report 2007 P.19

STATEMENT ON CORPORATE GOVERNANCE cont’d

THE BOARD cont’d 9. Directors’ Remuneration cont’d The aggregate remuneration of Directors for the financial year ended 30 June 2007 is as follows:-

Executive Non-Executive Directors Directors Total RM RM RM

Directors’ Salaries 1,643,000 - 1,643,000 EPF 194,976 - 194,976 Directors’ Fees - 48,000 48,000 Meeting Allowance - 24,000 24,000 Bonus 64,750 - 64,750 Benefits in kind 99,953 7,200 107,153

TOTAL 2,002,679 79,200 2,081,879

The number of Directors whole total remuneration falls within the following bands are as follows:-

Executive Non-Executive Directors Directors Total RM RM RM

RM50,000 and below 2 2 4 RM550,001 to RM600,000 1 - 1 RM650,001 to RM700,000 1 - 1 RM700,001 to RM750,000 1 - 1

TOTAL 5 2 7

DIALOGUE BETWEEN THE COMPANY AND INVESTORS The Board values and encourages dialogues with the shareholders to establish better understanding of the Company’s objectives and performance.

The Annual General Meeting provides an appropriate forum for the shareholders to participate in questions and answers sessions. The Company is committed to disseminate information in strict adherence to the disclosure requirements of the Listing Requirements. The Company ensures that material information relating to the Group is disclosed by way of announcement to the Bursa Malaysia Securities as required.

Malton Berhad (320888-T) P.20 Annual Report 2007

STATEMENT ON CORPORATE GOVERNANCE cont’d

ACCOUNTABILITY AND AUDIT 1. Financial Reporting In presenting the annual financial statements and quarterly results, the Board aims to present a balanced and understandable assessment of the Group’s position and prospects.

The Audit Committee assists the Board in examining information to be disclosed to ensure the accuracy and authenticity of such information.

2. Relationship with the External Auditors The Board has established a formal and transparent relationship with the auditors of the Company. The role of the Audit Committee in relation to the external auditors is described on pages 22 to 24.

MATERIAL CONTRACTS There were no material contracts involving the interests of the Directors and/or major shareholders of the Company other than those disclosed in the Related Party Disclosure presented from pages 64 to 65.

RECURRENT RELATED PARTY TRANSACTIONS The Company was given shareholders’ mandate to enter into certain Recurrent Related Party Transactions (“Recurrent Transactions”) with certain related parties at the Adjourned Eleventh Annual General Meeting held on 22 January 2007. None of the Recurrent Transactions conducted during the financial year ended 30 June 2007 with the related parties exceeded RM1 million or 1% of the percentage ratios set out in Paragraph 10.03 of the Listing Requirements.

CORPORATE SOCIAL RESPONSIBILITY The Board recognises the importance of its role as a socially and environmentally responsible corporate citizen. The Group has, from time to time, contributed to humanitarian and worthy causes through donations and sponsorships. The Group reviews its product development and operational practices and procedures from time to time, considering and adopting environmental-friendly methods and processes where applicable and feasible.

STATEMENT ON INTERNAL CONTROL The Board is committed to maintain a sound internal control system to safeguard the shareholders’ interest and the Group’s assets.

The Board has established an appropriate control environment and framework as well as reviewing its adequacy and integrity.

1. Control Environment The Board is committed to ensure that a proper control environment is maintained throughout the Group.

2. Group Structure This is achieved through clearly defined operating and reporting structured with clear lines of accountability and responsibilities. Changes in the Group structure are duly communicated to management team of the Group. In addition, details of directorships within the Group are constantly highlighted to ensured that related parties are duly identified, as necessary.

Malton Berhad (320888-T) Annual Report 2007 P.21

STATEMENT ON CORPORATE GOVERNANCE cont’d

STATEMENT ON INTERNAL CONTROL cont’d 3. Internal Audit Function In addition, the Group has an internal audit department which carries out the internal audit function in the Group. The findings of the internal audit function are regularly reported to the Audit Committee. The Audit Committee meets at least four times a year with the Board to discuss significant issues found during the internal audit process and make necessary recommendations to the Board.

4. Control Framework (a) Financial Information and Information System Monthly management reports are prepared at subsidiary levels and subject to review by senior management and the executive directors.

(b) Performance Reporting and Monitoring Quarterly financial statements are presented to the Audit Committee and the Board for review and discussion.

(c) Standardisation of Policies and Procedures The Audit Committee and the Board are committed to identify any significant risks faced by the Group and assess the financial and operational controls to address these risks.

DIRECTORS’ RESPONSIBILITY IN PREPARING THE FINANCIAL STATEMENTS The Directors are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group at the end of the financial year and of the results and the cash flow of the Group for the financial year.

The Directors are satisfied that, in preparing the financial statements of the Group for the financial year ended 30 June 2007, the Group has adopted approved applicable accounting standards in Malaysia and complied with the provisions of the Companies Act, 1965. Malton Berhad (320888-T) P.22 Annual Report 2007

AUDIT COMMITTEE REPORT

MEMBERSHIP AND MEETINGS The Audit Committee comprises two independent non-executive directors and an executive director as follows:- • Guido Paul Philip Joseph Ravelli (Deputy Chairman/Independent Non-Executive Director) • Chua Thian Teck (Executive Director) • Hj Ahmad bin Hj Ismail, PJK (Independent Non-Executive Director)

Guido Paul Philip Joseph Ravelli is the Chairman of the Audit Committee. Chua Thian Teck is a Fellow Member of the Association of Chartered Certified Accountants.

The Audit Committee met five times during the financial year ended 30 June 2007. The attendance of the members of the Audit Committee is set out below.

Name Total Meetings Attended

Guido Paul Philip Joseph Ravelli 5 out of 5 Chua Thian Teck 5 out of 5 Hj Ahmad bin Hj Ismail, PJK 5 out of 5

SUMMARY OF ACTIVITIES The Audit Committee has carried out its duty in accordance with its Terms of Reference.

During the financial year ended 30 June 2007, the Committee reviewed the quarterly results and financial statement for recommendation to the Board of Directors. The Committee approved the audit plan of the Group and reviewed matters brought up by the internal audit department. The Audit Committee met regularly with the Board of Directors to discuss issues discovered during the internal audit process and make the necessary recommendations.

INTERNAL AUDIT FUNCTION During the financial year ended 30 June 2007, the internal audit department carried out its audit duties covering business audit, system audit, fixed assets audit, operational and financial audit for reporting to the Committee. The Committee reviewed the quarterly results for recommendation to the Board of Directors.

TERMS OF REFERENCE Objectives of Audit Committee The primary objectives of the Committee are to:- 1. Maintain, through regularly scheduled meetings, an open line of communication between the Board, management, external auditors and internal auditors;

2. Oversee and appraise the quality of the audits conducted by the external auditors and the internal auditors; and

3. Provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the Company’s administrative, operating and accounting controls.

Malton Berhad (320888-T) Annual Report 2007 P.23

AUDIT COMMITTEE REPORT cont’d

TERMS OF REFERENCE cont’d Members of the Audit Committee 1. The Company shall appoint an Audit Committee from amongst its directors and shall consist of not less than three in numbers of whom a majority shall be independent non-Executive Directors.

2. At least one member of the Audit Committee:- (i) must be a member of the Malaysian Institute of Accountants; or (ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:- (a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or (b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967. (iii) fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad.

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

4. If a member of the Committee for any reason ceases to be a member with the result that the number is reduced to below 3, the Board of Directors shall, within 3 months of that event, appoint such number of new members as maybe required to make up the minimum number of 3 members.

5. The Board of Directors must review the term of office and performance of the Committee and each of its members at least once every 3 years to determine whether the Committee and its members have carried out their duties in accordance with their terms of reference.

Chairman of Audit Committee The members of the Committee shall elect a Chairman from among their number who shall be an independent director subject to endorsement by the Board.

Meetings and Reporting of Audit Committee 1. The quorum in respect of a meeting of the Committee shall be a majority of independent directors.

2. The Committee shall meet at least each quarter of a financial year and such additional meetings as the Chairman shall decide in order to fulfill its duties.

3. The Company Secretary or any person appointed by the Audit Committee shall act as Secretary of the Audit Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and other supporting explanatory documentation for circulation to the Committee Members prior to each meeting. The Secretary will also be responsible for keeping the minutes of the meetings of the Committee, and circulating them to the members and to other members of the Board of Directors. The Chairman shall convene a meeting of the Committee to consider any matter the external auditor believes should be brought to the attention of the directors or shareholders.

4. The Company must ensure that other directors and employees attend any particular Committee meeting only at the Committee’s invitation, specific to the relevant meeting.

5. All or any of the members of the Committee may participate in a meeting of the Committee by means of a conference telephone, video conferencing or any communication equipment that allows all persons participating in the meeting to hear each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote or be counted in a quorum accordingly.

Malton Berhad (320888-T) P.24 Annual Report 2007

AUDIT COMMITTEE REPORT cont’d

TERMS OF REFERENCE cont’d Authority The Committee shall, in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company:- (i) Have authority to investigate any matter within its terms of reference;

(ii) Have the resources which are required to perform its duties;

(iii) Have full and unrestricted access to any information pertaining to the Company;

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

(v) Be able to obtain independent professional or other advice; and

(vi) Be able to convene meetings with the external auditors, excluding the attendance of the executive members of the Committee, whenever deemed necessary.

Where the 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 Berhad, the Audit Committee shall promptly report such matter to Bursa Malaysia Securities Berhad.

Functions and Responsibilities The primary functions of the Committee are to review the following and report the same to the Board of Directors:- (i) The audit plan, audit report and evaluation of the system of internal controls with the external auditors and assistance given by the employees of the Company to the external auditors;

(ii) The adequacy of scope, functions and resources of the internal audit function and the necessary authority to carry out its duties;

(iii) The internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate actions are taken on the recommendation of the internal audit function;

(iv) The quarterly results and year end financial statements; prior to approval by the Board of Directors, focusing particularly on:-

(a) changes in or implementation of major accounting policy changes;

(b) significant and unusual events; and

(c) compliance with accounting standards and other legal requirements.

(v) Any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(vi) Any letter of resignation from the external auditors of the Company;

(vii) Whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for reappointment; and

(viii) Recommend the nomination of a person or persons as external auditors.

Malton Berhad (320888-T) Annual Report 2007 P.25

DIRECTORS’ REPORT P.26 REPORT OF THE AUDITORS P.30 INCOME STATEMENTS P.31 BALANCE SHEETS P.32 STATEMENTS OF CHANGES IN EQUITY P.34 CASH FLOW STATEMENTS P.35 NOTES TO THE FINANCIAL STATEMENTS P.38 STATEMENT BY DIRECTORS P.79 DECLARATION BY DIRECTOR P.79 financial statements

Malton Berhad (320888-T) P.26 Annual Report 2007

DIRECTORS’ REPORT

The directors of MALTON BERHAD hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2007.

PRINCIPAL ACTIVITIES The principal activity of the Company is that of investment holding and the provision of management services to its subsidiary companies.

The principal activities of the subsidiary companies are disclosed in Note 14 to the Financial Statements.

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

RESULTS OF OPERATIONS The results of operations of the Group and of the Company for the financial year are as follows: The Group The Company RM’000 RM’000

Profit before tax 8,468 6,015 Income tax expense (3,798) (2,030)

Profit for the year 4,670 3,985

Attributable to: Equity holders of the Company 3,372 Minority interests 1,298

4,670

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

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

The directors proposed a final dividend of 1%, less tax, in respect of the year ended 30 June 2007. The proposed dividend, which is subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company, has not been included as a liability in the financial statements.

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

Malton Berhad (320888-T) Annual Report 2007 P.27

DIRECTORS’ REPORT cont’d

ISSUE OF SHARES AND DEBENTURES The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS The Employees’ Shares Option Scheme (“ESOS”) for eligible employees of the Group, which was effective on 23 December 2005, will expire on 22 December 2010. As of 30 June 2007, no options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

Subsequent to the financial year, the Company has on 2 July 2007 made an offer to grant 14,690,000 share options to the eligible employees of the Group pursuant to the ESOS. The salient futures of the ESOS are mentioned in Note 24 to the Financial Statements.

OTHER FINANCIAL INFORMATION Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps: (a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that there were no known bad debts to be written off and that no allowance for doubtful debts was required; and

(b) 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.

At the date of this report, the directors are not aware of any circumstances: (a) which would require the writing off of bad debts or the setting up of allowance for doubtful debts in the financial statements of the Group and of the Company; or

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

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

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

At the date of this report, there does not exist: (a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or

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

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

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the succeeding financial year other than subsequent events as disclosed in Note 35 to the Financial Statements.

Malton Berhad (320888-T) P.28 Annual Report 2007

DIRECTORS’ REPORT cont’d

DIRECTORS The following directors served on the Board of the Company since the date of the last report: Datuk Lim Siew Choon Guido Paul Philip Joseph Ravelli Datin Tan Kewi Yong Lee Tuck Fook Chua Thian Teck Liew Yuet Siong Hj. Ahmad Bin Hj. Ismail

In accordance with Article 100 of the Company’s Articles of Association, Messrs. Guido Paul Philip Joseph Ravelli, Chua Thian Teck and Liew Yuet Siong retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

DIRECTORS’ INTERESTS The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows: Number of ordinary shares of RM1.00 each Balance as Balance as of 1.7.2006 Bought Sold of 30.6.2007

Shares in the Company Indirect interest Datuk Lim Siew Choon 132,064,428 - - 132,064,428*

Number of warrants over ordinary shares of RM1.00 each Balance as Balance as of 1.7.2006 Bought Lapsed of 30.6.2007

Warrants in the Company Indirect interest Datuk Lim Siew Choon 66,032,214* - 66,032,214 -

* Held through Malton Corporation Sdn. Bhd.

By virtue of above director’s interests in shares of the Company, he is deemed to have an interest in shares of all the subsidiary companies to the extent the Company has its interest.

Other than as disclosed above, the directors do not have any other interest in the shares of its related companies during and at the end of the financial year.

Malton Berhad (320888-T) Annual Report 2007 P.29

DIRECTORS’ REPORT cont’d

DIRECTORS’ BENEFITS Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefit (other than the benefit included in the aggregate amount of emoluments received or due and receivable by the directors as disclosed in the financial statements or the fixed salary of full-time employees of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except for any benefits which may be deemed to have arisen by virtue of the transactions as disclosed in Note 21 to the Financial Statements.

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

AUDITORS The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.

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

LEE TUCK FOOK

CHUA THIAN TECK

Kuala Lumpur, 24 October 2007

Malton Berhad (320888-T) P.30 Annual Report 2007

REPORT OF THE AUDITORS TO THE MEMBERS OF MALTON BERHAD

We have audited the accompanying balance sheets as of 30 June 2007 and the related statements of income, cash flows and changes in equity for the year then ended. These financial statements are the responsibility of the Company’s directors. It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility towards any other person for the content of this report.

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

In our opinion: (a) the abovementioned financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable Malaysian Accounting Standards Board approved accounting standards in Malaysia so as to give a true and fair view of: (i) the state of affairs of the Group and of the Company as of 30 June 2007 and of the results and the cash flows of the Group and of the Company for the year ended on that date; and

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

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

We have considered the financial statements and auditors’ reports of the subsidiary companies of which we have not acted as auditors as shown in Note 14 to the Financial Statements, being financial statements that have been included in the consolidated financial statements.

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

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

DELOITTE & TOUCHE AF 0834 Chartered Accountants

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

24 October 2007

Malton Berhad (320888-T) Annual Report 2007 P.31

INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

The Group The Company Note 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Revenue 5 555,535 304,796 12,872 6,194

Cost of sales 6 (510,787) (261,082) - -

Gross profit 44,748 43,714 12,872 6,194

Other income 5,895 5,367 1,767 79 Selling and distribution expenses (2,936) (2,439) - - Other expenses (33,885) (31,188) (6,863) (8,415) Finance costs 7 (5,354) (4,951) (1,761) (23)

Profit/(Loss) before tax 8 8,468 10,503 6,015 (2,165)

Income tax expense 9 (3,798) (6,856) (2,030) (38)

Profit/(Loss) for the year 4,670 3,647 3,985 (2,203)

Attributable to: Equity holders of the Company 3,372 2,441 Minority interests 1,298 1,206

4,670 3,647

Earnings per ordinary share: 10 Basic (sen) 0.97 0.70

Diluted (sen) N/A N/A

The accompanying Notes form an integral part of the Financial Statements. Malton Berhad (320888-T) P.32 Annual Report 2007

BALANCE SHEETS AS OF 30 JUNE 2007

The Group The Company Note 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current Assets Property, plant and equipment 11 31,566 61,184 482 605 Investment properties 12 36,169 4,553 - - Land held for property development 13 161,824 93,438 - - Investment in subsidiary companies 14 - - 215,852 212,052 Other investment 15 3,000 - 3,000 - Deferred tax assets 16 1,572 - - -

Total Non-current Assets 234,131 159,175 219,334 212,657

Current Assets Property development 17 230,647 211,452 - - Inventories 18 42,713 41,942 - - Trade receivables 19 238,761 225,559 - - Other receivables and prepaid expenses 19 40,651 23,671 881 377 Accrued billings 4,835 18,628 - - Amount owing by contract customers 20 349 539 - - Amount owing by subsidiary companies 21 - - 285,302 204,048 Fixed deposits with licensed banks 22 75,504 50,890 71,000 47,000 Cash and bank balances 23 17,603 30,300 836 7,769

Total Current Assets 651,063 602,981 358,019 259,194

Total Assets 885,194 762,156 577,353 471,851

EQUITY AND LIABILITIES

Capital and Reserves Share capital 24 348,353 348,353 348,353 348,353 Reserves 25 69,696 64,122 46,180 42,195

Equity attributable to equity holders of the Company 418,049 412,475 394,533 390,548 Minority interests 6,772 8,329 - -

Total Equity 424,821 420,804 394,533 390,548 Malton Berhad (320888-T) Annual Report 2007 P.33

BALANCE SHEETS AS OF 30 JUNE 2007 cont’d

The Group The Company Note 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Non-current Liabilities Bank borrowings - non-current portion 26 85,428 16,250 48,292 - Hire-purchase payables - non-current portion 27 5,070 4,375 109 214 Deferred tax liabilities 16 1,225 5,474 55 -

Total Non-current Liabilities 91,723 26,099 48,456 214

Current Liabilities Trade payables 28 179,853 114,107 - - Other payables and accrued expenses 28 83,671 74,349 1,767 753 Advance billings 3,654 3,151 - - Amount owing to contract customers 20 3,845 1,363 - - Amount owing to subsidiary companies 21 - - 130,189 80,155 Bank borrowings - current portion 26 63,973 63,357 1,708 - Hire-purchase payables - current portion 27 1,859 1,561 105 181 Tax liabilities 31,795 57,365 595 -

Total Current Liabilities 368,650 315,253 134,364 81,089

Total Liabilities 460,373 341,352 182,820 81,303

Total Equity and Liabilities 885,194 762,156 577,353 471,851

The accompanying Notes form an integral part of the Financial Statements. Malton Berhad (320888-T) P.34 Annual Report 2007

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

Attributable to Issued Share Retained equity holders Minority The Group capital premium earnings of the Company interests Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Balance as of 1 July 2005 348,353 255 61,426 410,034 7,123 417,157 Total recognised income/expense: Profit for the year - - 2,441 2,441 1,206 3,647

Balance as of 30 June 2006/ 1 July 2006 348,353 255 63,867 412,475 8,329 420,804 Effects on adoption of FRS 140: Adjustment on deferred tax liabilities (Note 16) - - 2,202 2,202 2,116 4,318 Income/(Expense) recognised directly in equity: Acquisition of remaining equity interest in an existing subsidiary - - - - (4,671) (4,671) Dividend paid to minority interests - - - - (300) (300) Profit for the year - - 3,372 3,372 1,298 4,670

Total recognised income/expense - - 3,372 3,372 (3,673) (301)

Balance as of 30 June 2007 348,353 255 69,441 418,049 6,772 424,821

Issued Share Retained The Company capital premium earnings Total RM’000 RM’000 RM’000 RM’000

Balance as of 1 July 2005 348,353 255 44,143 392,751 Total recognised income/expense: Loss for the year - - (2,203) (2,203)

Balance as of 30 June 2006/1 July 2006 348,353 255 41,940 390,548 Total recognised income/expense: Profit for the year - - 3,985 3,985

Balance as of 30 June 2007 348,353 255 45,925 394,533

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

Malton Berhad (320888-T) Annual Report 2007 P.35

CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Profit/(Loss) for the year 4,670 3,647 3,985 (2,203) Adjustments for: Finance costs 5,354 4,951 1,761 23 Income tax expense recognised in income statements 3,798 6,856 2,030 38 Depreciation of property, plant and equipment 3,774 3,328 220 171 Impairment loss on property, plant and equipment 2,001 - - - Write-off of: Development expenditure 157 157 - - Property, plant and equipment 4 39 - 1 Goodwill - 101 - - Dividend income - - (5,000) - Gain on fair value adjustments on investment properties (2,032) - - - Interest income (1,207) (943) (1,767) (79) Excess of the net assets over cost of acquisition of the remaining interest in subsidiary company (760) - - - Gain on disposal of property, plant and equipment (110) (72) - -

Operating Profit/(Loss) Before Working Capital Changes 15,649 18,064 1,229 (2,049)

(Increase)/Decrease in: Property development - current portion, net of interest expense of RM1,359,000 (2006: RM1,801,000) (17,993) (132,789) - - Inventories (771) (1,411) - - Trade receivables (13,202) 132,927 - - Other receivables and prepaid expenses (16,878) 31,779 (504) (307) Accrued billings 13,793 31,644 - - Amount owing by contract customers 190 2,585 - -

Increase/(Decrease) in: Trade payables 65,746 (17,459) - - Other payables and accrued expenses 9,322 41,442 1,014 (560) Advance billings 503 1,507 - - Amount owing to contract customers 2,482 (900) - -

Cash Generated From/(Used In) Operations 58,841 107,389 1,739 (2,916) Income tax paid (30,973) (14,242) (30) (38)

Net Cash From/(Used In) Operating Activities 27,868 93,147 1,709 (2,954)

Malton Berhad (320888-T) P.36 Annual Report 2007

CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 cont’d

The Group The Company Note 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Interest received 1,207 943 1,767 79 Dividend received - - 3,650 - (Increase)/Decrease in: Land held for property development, net of interest expense of RM662,000 (2006: RM Nil) (67,724) 9,586 - - Amount owing by subsidiary companies - - (81,254) 61,193 Fixed deposits pledged to licensed banks 173 1,037 - - Investment in subsidiary company - - (3,800) (367) Acquisition of subsidiary company (i) - (1) - (10) Acquisition of minority Interests (3,911) - - - Purchase of property, plant and equipment (ii) (411) (4,925) (97) (106) Proceeds from disposal of property, plant and equipment 424 155 - 3 Purchase of investment properties (2,337) - - - Purchase of other investment (3,000) - (3,000) -

Net Cash (Used In)/From Investing Activities (75,579) 6,795 (82,734) 60,792

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Interest paid (7,375) (7,239) (1,761) (23) Increase/(Decrease) in amount owing to subsidiary companies - - 50,034 (2,926) Proceeds from long-term loans 84,130 18,254 50,000 - Repayment of long-term loans (20,256) (42,208) - - Payment of hire-purchase payables (2,318) (1,205) (181) (177) Dividend paid to minority interests (300) - - -

Net Cash From/(Used In) Financing Activities 53,881 (32,398) 98,092 (3,126)

NET INCREASE IN CASH AND CASH EQUIVALENTS 6,170 67,544 17,067 54,712

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 33,210 (34,334) 54,769 57

CASH AND CASH EQUIVALENTS AT END OF YEAR 29 39,380 33,210 71,836 54,769 Malton Berhad (320888-T) Annual Report 2007 P.37

CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 cont’d

(i) ANALYSIS OF ACQUISITION OF SUBSIDIARY COMPANY During the previous financial year, the Group acquired Layar Raya Sdn. Bhd. The fair value of the assets acquired and the liabilities assumed as of date of acquisition were as follows: The Group 2007 2006 RM’000 RM’000

Other receivables and prepaid expenses - 436 Cash and bank balances - 9 Other payables and accrued expenses - (536)

Net liabilities assumed - (91) Goodwill on consolidation - 101

Total purchase consideration - 10 Less: Cash and bank balances - (9)

Cash flow on acquisition, net of cash and cash equivalents acquired - 1

(ii) During the financial year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM3,722,000 and RM97,000 (2006: RM9,744,000 and RM242,000), respectively, of which RM3,311,000 and RM Nil (2006: RM4,819,000 and RM136,000), respectively was acquired under hire-purchase arrangements. Cash payments made by the Group and the Company for the acquisition of property, plant and equipment amounted to RM411,000 and RM97,000 (2006: RM4,925,000 and RM106,000), respectively.

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

Malton Berhad (320888-T) P.38 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL 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 principal activity of the Company is that of investment holding and the provision of management services to its subsidiary companies.

The principal activities of the subsidiary companies are disclosed in Note 14.

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

The registered office and principal place of business of the Company is located at 22nd Floor, Menara Uni.Asia, No. 1008, Jalan Sultan Ismail, 50250 Kuala Lumpur.

The financial statements of the Group and of the Company have been authorised by the Board of Directors for issuance on 24 October 2007.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 and the applicable Malaysian Accounting Standards Board (“MASB”) approved accounting standards in Malaysia.

Changes in Accounting Policies In the current financial year, the Group and the Company adopted all of the new and revised Financial Reporting Standards (“FRS”) issued by MASB that are relevant to its operations and effective for periods beginning on or after 1 July 2006 as follows: FRS 2 Share-based Payment FRS 3 Business Combinations FRS 101 Presentation of Financial Statements FRS 102 Inventories FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors FRS 110 Events After the Balance Sheet Date FRS 116 Property, Plant and Equipment FRS 121 The Effects of Changes in Foreign Exchange Rates FRS 127 Consolidated and Separate Financial Statements FRS 132 Financial Instruments: Disclosure and Presentation FRS 133 Earnings per Share FRS 136 Impairment of Assets FRS 140 Investment Property

The application of the revised FRS 101 has resulted in a change in the presentation of the income statements, balance sheets, statements of changes in equity and cash flow statements. The changes in the presentation have been applied retrospectively.

The adoption of the abovementioned new and revised FRSs does not have any material financial effect on the results of the Group and of the Company for the current and prior financial years.

With the exception of FRS 140 as explained below, the adoption of the other revised FRSs above did not result in substantial changes to the Group’s accounting policies.

Malton Berhad (320888-T) Annual Report 2007 P.39

NOTES TO THE FINANCIAL STATEMENTS cont’d

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS cont’d Investment Properties In prior years, investment properties consisting of leasehold land and building were held for long-term investment potential and for rental income. Investment properties were stated at cost less any impairment losses. Certain long-term leasehold land and buildings held to earn rentals or for capital appreciation or both and not occupied by the Group were classified as property, plant and equipment and were stated at cost less accumulated depreciation and any impairment losses.

With the adoption of FRS 140 on 1 July 2006, such long-term leasehold land and buildings are reclassified as investment properties. The Group has chosen to apply the fair value model under FRS 140 and accordingly, investment properties are stated at fair value, representing open-market value determined by external valuers. Gains or losses arising from changes in the fair values of investment properties are recognised in the income statements in the period in which they arise.

In accordance with the transitional provisions of FRS 140, this change in accounting policy is applied prospectively and the comparatives as of 30 June 2006 are not restated. Instead, the changes have been accounted for by restating the opening balance as of 1 July 2006 as shown in Note 12.

Accounting Standards Issued but Not Effective The following new and revised FRSs, Amendments and Interpretations have been issued but not yet effective until future periods: Relevant to the Group’s Operations FRS 117 Leases FRS 124 Related Party Disclosures FRS 139 Financial Instruments: Recognition and Measurement Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation IC Interpretation 8 Scope of FRS 2

FRS 117 is effective for accounting periods beginning on or after 1 October 2006 and requires the classification of leasehold land as prepaid lease payments. Such prepaid lease payments will be amortised evenly over the lease term of the land. The adoption of FRS 117 will also require the Group to account for its leasehold properties classified as investment properties using the fair value model under FRS 140 whereby no depreciation will be charged and any gains or losses arising from changes in the fair value of investment properties are included in profit or loss for the period in which they arise. The Group will apply this standard from financial period beginning 1 July 2007.

FRS 124 is effective for accounting periods beginning on or after 1 October 2006 and will affect the identification of related parties and some other related party disclosures. The Group will apply this standard from financial period beginning 1 July 2007.

The effective date of FRS 139 is yet to be determined by MASB. This new standard establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group will apply this standard when it becomes effective.

Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation is effective for accounting periods beginning on or after 1 July 2007. This amendment requires exchange differences arising from monetary items forming part of net investment in a foreign operation to be recognised in a separate component of equity in the consolidated financial statements regardless of the currency of the monetary item. Previously, such treatment is only allowed where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. The Group will apply this amendment from financial period beginning 1 July 2007.

Malton Berhad (320888-T) P.40 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS cont’d Accounting Standards Issued but Not Effective cont’d IC Interpretation 8 Scope of FRS 2 is effective for accounting periods beginning on or after 1 July 2007 and requires unidentifiable goods or services received as consideration for equity instruments of the entity to be measured as the difference between the fair value of the share-based payment and the fair value of any identifiable goods or services received. Such measurement shall be determined at the grant date except for cash-settled transactions, where the liability shall be remeasured at each reporting date until it is settled. The Group will apply this interpretation from financial period beginning 1 July 2007.

Not Relevant to the Group’s Operations FRS 6 Exploration for and Evaluation of Mineral Resources (effective 1 July 2007)

Amendment to FRS 1192004 Employee Benefits – Actuarial Gains and Losses, Group Plans and Disclosures (effective 1 July 2007)

IC Interpretation 1 Changes in Existing Decommissioning, Restoration & Similar Liabilities (effective 1 July 2007)

IC Interpretation 2 Members’ Shares in Co-operative Entities & Similar Instruments (effective 1 July 2007)

IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration & Environmental Rehabilitation Funds (effective 1 July 2007)

IC Interpretation 6 Liabilities arising from Participating in a Specific Market – Waste Electrical & Electronic Equipment (effective 1 July 2007)

IC Interpretation 7 Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economies (effective 1 July 2007)

In addition, on 15 June 2007, MASB issued the Framework for the Preparation and Presentation of Financial Statements (“the Framework”) and 10 revised FRSs. The revised FRSs are as follows: FRS 107 Cash Flow Statements FRS 111 Construction Contracts FRS 112 Income Taxes FRS 118 Revenue FRS 119 Employee Benefits FRS 120 Accounting for Government Grants and Disclosure of Government Assistance FRS 126 Accounting and Reporting by Retirement Benefit Plans FRS 129 Financial Reporting in Hyperinflationary Economies FRS 134 Interim Financial Reporting FRS 137 Provisions, Contingent Liabilities and Contingent Assets

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

(a) FRS 119 Employee Benefits, which supersedes FRS 1192004 Employee Benefits and Amendment to FRS 1192004 Employee Benefits – Actuarial Gains and Losses, Group Plans and Disclosures;

(b) FRS 126 Accounting and Reporting by Retirement Benefit Plans, which supersedes FRS 1262004 Accounting and Reporting by Retirement Benefit Plans; and

(c) FRS 129 Financial Reporting in Hyperinflationary Economies, which supersedes FRS 1292004 Financial Reporting in Hyperinflationary Economies.

Malton Berhad (320888-T) Annual Report 2007 P.41

NOTES TO THE FINANCIAL STATEMENTS cont’d

3. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention.

Basis of Consolidation The Group’s financial statements incorporate the financial statements of the Company and of all the subsidiary companies as listed in Note 14 made up to the end of the financial year. Subsidiary companies are consolidated using the acquisition method of accounting.

Subsidiary companies are companies in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities.

The results of subsidiary companies acquired or disposed of during the year are included in the consolidated income statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.

All intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation. Unrealised losses are eliminated on consolidation unless costs cannot be recovered.

Minority interests in the net assets of consolidated subsidiary companies are identified separately from the Group’s equity therein. Minority interest consists of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary company’s equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

Business Combinations The acquisition of subsidiary companies is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 3, Business Combinations, are recognised at their fair values at the acquisition date.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities recognised exceeds the cost of the business combination, the excess is recognised immediately in consolidated income statement.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Revenue Revenue relating to property development is accounted for based on the percentage of completion method as determined by the proportion of the property development projects sold attributable to the percentage of development work performed during the year where the outcome of the projects can be reliably estimated.

Revenue relating to construction contracts is accounted for based on the percentage of completion method as determined by the proportion of construction cost incurred todate against the total estimated costs of contracts where the outcome of the contracts can be reliably estimated.

Malton Berhad (320888-T) P.42 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d Revenue cont’d Revenue from property trading is recognised upon the finalisation of sale and purchase agreements by the end of the financial year and when the risks and rewards of ownership have passed to the customers.

Rental income, interest income and fees from management services, project management and maintenance are recognised on accrual basis.

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

Income Tax Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year, calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or recoverable).

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet “liability” method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to income statements, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

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 they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Foreign Currency Conversion The individual financial statements of each foreign Group entity are presented in the currency of the primary economic environment in which such entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Ringgit Malaysia, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Malton Berhad (320888-T) Annual Report 2007 P.43

NOTES TO THE FINANCIAL STATEMENTS cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d Foreign Currency Conversion cont’d For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are expressed in Ringgit Malaysia using exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the year. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation adjustment account. Such translation differences are recognised in the income statements in the period in which the foreign operation is disposed of.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statements for the period.

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

Employee Benefits (i) Short-term employee benefits Wages, salaries, paid annual leaves, bonuses and non-monetary benefits are accrued in the year in which the associated services are rendered by employees of the Group and the Company.

(ii) Post-employment benefits The Company and certain subsidiary companies make contributions to approved provident funds and contributions are charged to the income statements. Once the contributions have been paid, there are no further payment obligations. The approved provident funds are in accordance with local practices in which the Company and certain subsidiary companies operate and are defined contribution plans.

(iii) Equity compensation benefits Under the Company’s Employees’ Shares Option Scheme (“ESOS”), share options to acquire ordinary shares of the Company are granted to eligible employees of the Group. Details of the Company’s ESOS are disclosed in Note 24. In accordance with the transitional provisions of FRS 2, no compensation cost in respect of the Company’s ESOS has been recognised in the financial statements of the Group and of the Company as there were no share options granted after 30 June 2005 and not vested as of the effective date of FRS 2 on 1 July 2006.

Operating Leases Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statements on the straight-line basis over the lease period.

Impairment of Assets At each balance sheet date, the Group reviews the carrying amount of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

Malton Berhad (320888-T) P.44 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d Impairment of Assets cont’d If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statements.

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

Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimates accounted for prospectively.

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

Depreciation of property, plant and equipment is computed on the straight-line method to write off the cost of the various property, plant and equipment over their estimated useful lives at the following annual rates: Freehold building 1% Long-term leasehold properties Over the lease period of 70 to 99 years Furniture and fittings 10% Office equipment 10% - 20% Motor vehicles 20% - 25% Plantation and sundry equipment 25% Electrical and water installations 25% Computers 20% - 25% Office renovations 10% - 33 1/3%

Property, Plant and Equipment Acquired Under Hire-Purchase The cost of property, plant and equipment acquired under hire-purchase arrangements which in substance transfer the risk and benefits of ownership of the Group are capitalised.

The property, plant and equipment are recorded at the lower of the minimum hire-purchase instalments or the fair value of the property, plant and equipment at the beginning of the respective hire-purchase terms less accumulated depreciation. Property, plant and equipment acquired under such arrangements are depreciated over the useful lives of equivalent owned assets. The depreciation policy on these assets are similar to that of the Group’s property, plant and equipment depreciation policy.

Outstanding obligation due under the hire-purchase arrangement after deducting finance charges are included as liabilities in the financial statements. Finance charges are allocated to the income statements to give a constant periodic rate of interest on the remaining hire-purchase liabilities.

Malton Berhad (320888-T) Annual Report 2007 P.45

NOTES TO THE FINANCIAL STATEMENTS cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d Investment Properties Investment properties, comprising certain long-term leasehold land and buildings, are held for long-term rental yields or for capital appreciation or both, and are not occupied by the Group.

Investment properties are stated at fair value, representing open-market value determined by external valuers. Gains or losses arising from changes in the fair values of investment properties are recognised in the income statements in the period in which they arise.

On disposal of an investment property, or when its is permanently withdrawn from use and no future economic benefits are expected from its disposal, it shall be derecognised (eliminated from the balance sheets). The difference between the net disposal proceeds and the carrying amount is recognised in the income statements.

Land Held for Property Development Land held for property development consists of land purchased for development and costs incurred thereon, on which no significant development work has been undertaken or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is stated at cost less accumulated impairment losses.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, conversion fees and other relevant levies. Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount.

Land held for property development is transferred to property development costs (under current assets) where development activities have commenced and where the development activities are expected to be completed within the normal operating cycle.

Property Development Property development revenue is recognised based on the percentage of completion method as determined by the proportion of the property development projects sold attributable to the percentage of development work performed during the year where the outcome of the projects can be reliably estimated.

When the outcome of a property development activity cannot be estimated reliably, property development revenue is recognised to the extent of property development costs incurred that are probable of recovery.

Allowance for foreseeable loss is made based on losses estimated to arise upon the completion of property development which are already in progress.

Accrued billings represent the excess of property development revenue recognised in the income statements over the billings to purchasers.

Advance billings represent the excess of billings to purchasers over property development revenue recognised in the income statements.

The Group considers as current assets that portion of property development on which significant development work has been done and is expected to be completed within the normal operating cycle of two to three years.

Malton Berhad (320888-T) P.46 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d Borrowing Costs Borrowing costs directly attributable to construction of assets which require a substantial period of time to get them ready for their intended use are capitalised and included as part of the related assets. Capitalisation of borrowing costs will cease when the assets are ready for their intended use and is suspended during extended period in which active development is interrupted.

All other borrowing costs are recognised as an expense in the year in which they are incurred.

Construction Contracts When the outcome of a contract project can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date, as measured by the proportion of contract costs incurred for work performed todate bear to the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customers.

When the outcome of a contract project cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are probable of recovery. Contract costs are recognised as expenses in the period in which they incurred.

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

Investments Investment in unquoted shares of subsidiary companies, which is eliminated on consolidation, is stated at cost less any impairment losses in the Company’s financial statements. Other investment in unquoted subordinated bond is stated at cost less any impairment losses.

Inventories Inventories, consisting of bungalow land, commercial land and completed units of properties for sale, are stated at the lower of cost and net realisable value. Cost is determined by the specific identification method.

Net realisable value represents the estimated selling price in the ordinary course of business less selling and all other estimated costs to completion.

Receivables Receivables are stated at nominal value as reduced by the appropriate allowances for estimated irrecoverable amounts. Allowance for doubtful debts is made based on estimates of possible losses which may arise from non-collection of certain receivable accounts.

Provisions Provisions are made when the Group and the Company have a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are measured at the directors’ best estimate of the amount required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

At each balance sheet date, the provisions are reviewed by the directors and adjusted to reflect the current best estimate. The provisions are reversed if it is no longer probable that the Group will be required to settle the obligation.

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

Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition and are readily convertible to cash with insignificant risk of changes in value.

Malton Berhad (320888-T) Annual Report 2007 P.47

NOTES TO THE FINANCIAL STATEMENTS cont’d

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (i) Critical judgements in applying the Group’s accounting policies In the process of applying the Group’s accounting policies, which are described in Note 3 above, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

(ii) Key sources of estimation uncertainty Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than as follows: Deferred tax Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Significant 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 profits together with future tax planning strategies.

Property development projects The Group recognises property development revenue and costs in the income statements by using the percentage of completion method. The percentage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs of work performed. Significant judgement is required in determining the percentage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects.

Allowance for doubtful debts The Group makes allowance for doubtful debts based on an assessment of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of doubtful debts requires use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.

Impairment of non-current assets The Group reviews the carrying amount of their non-current assets, which include land held for property development and property, plant and equipment, to determine whether there is an indication that those assets have suffered an impairment loss. As at 30 June 2007, the impairment loss on property, plant and equipment is disclosed in Note 11.

Malton Berhad (320888-T) P.48 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

5. REVENUE The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Construction and project management 429,257 177,845 - - Property development 118,088 124,246 - - Rental income from investment properties 713 543 - - Management fee: Subsidiary companies - - 7,872 6,194 Third parties 674 538 - - Dividend income from subsidiary companies - - 5,000 - Property trading 6,743 1,570 - - Others 60 54 - -

555,535 304,796 12,872 6,194

Direct operating expenses arising from the rental of investment properties during the financial year amounted to RM527,000 (2006: RM471,000).

6. COST OF SALES Included in cost of sales are: The Group 2007 2006 RM’000 RM’000

Cost of construction and project management 411,852 165,918 Cost of property development sold 93,248 93,567 Cost of inventories sold 5,158 1,118

7. FINANCE COSTS The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Interest expense on: Bank overdrafts 3,403 3,382 - - Long-term loans 1,015 787 1,743 - Revolving credits 579 513 - - Hire-purchase 357 210 18 23 Late payment - 59 - -

5,354 4,951 1,761 23

Malton Berhad (320888-T) Annual Report 2007 P.49

NOTES TO THE FINANCIAL STATEMENTS cont’d

8. PROFIT/(LOSS) BEFORE TAX Profit/(Loss) before tax is arrived at after the following credits/(charges): The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Gain on fair value adjustments on investment properties (Note 12) 2,032 - - - Rental income 885 439 - - Excess of the net assets over cost of acquisition of the remaining interest in subsidiary company 760 - - - Interest income on: Fixed deposits 564 217 292 79 Amount owing by subsidiary companies - - 1,475 - Others 643 726 - - Gain on disposal of property, plant and equipment 110 72 - - Income from the sales of site equipment - 1,148 - - Staff costs (14,643) (10,525) (1,782) (1,844) Directors’ remuneration: Salaries and other emoluments (1,732) (2,873) (1,732) (2,873) Employees Provident Fund (“EPF”) (195) (328) (195) (328) Fees (48) (48) (48) (48) Depreciation of property, plant and equipment (Note 11) (3,774) (3,328) (220) (171) Impairment loss on property, plant and equipment (Note 11) (2,001) - - - Rental of: Premises (89) (82) (360) (300) Motor vehicles (2) - - - Tax penalty - (3,349) - (3) Late payment interest on tax expense (334) - - - Audit fee: Statutory: Current (210) (195) (40) (29) Underprovision (20) (3) (11) (8) Others (10) (8) (5) - Write-off of: Development expenditure (Note 17) (157) (157) - - Property, plant and equipment (Note 11) (4) (39) - (1) Goodwill - (101) - - Lease rental (24) (9) (15) (2)

Staff costs include salaries, contributions to EPF and all other staff related expenses. Contributions to EPF by the Group and the Company during the financial year amounted to RM1,446,000 and RM163,000 (2006: RM905,000 and RM156,000), respectively.

The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise in cash from the Group and the Company amounted to RM175,000 and RM107,000 (2006: RM158,000 and RM109,000), respectively. Malton Berhad (320888-T) P.50 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

9. INCOME TAX EXPENSE The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Estimated tax payable: Current 5,167 5,799 1,975 - Underprovision in prior years 134 1,022 - 38

5,301 6,821 1,975 38

Deferred tax (Note 16): Current (1,498) 35 55 - Overprovision in prior years (5) - - -

(1,503) 35 55 -

3,798 6,856 2,030 38

A reconciliation of income tax expense applicable to profit/(loss) before tax at the applicable statutory income tax rate to income tax expense at the effective income tax rate is as follows: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Profit/(Loss) before tax 8,468 10,503 6,015 (2,165)

Tax at the applicable tax rate of 27% (2006: 28%) 2,286 2,941 1,624 (606) Tax effects of expenses not deductible for tax purposes 2,211 2,529 598 414 Realisation of deferred tax assets previously not recognised (828) - (192) - Under/(Over)provision in prior years: Income tax 134 1,022 - 38 Deferred tax (5) - - - Deferred tax assets not recognised - 364 - 192

3,798 6,856 2,030 38

As of 30 June 2007, the Company has tax exempt income account amounting to RM20,965 (2006: RM20,965) arising from chargeable income waived in 1999 in accordance with the Income Tax (Amendment) Act, 1999. The tax exempt income account, which is subject to agreement with the tax authorities, is available for distribution of tax exempt dividends to the shareholders of the Company.

10. EARNINGS PER ORDINARY SHARE Basic The basic earnings per ordinary share of the Group has been calculated based on the profit attributable to ordinary equity holders of the Company of RM3,372,000 (2006: RM2,441,000) and on number of ordinary shares in issue and ranking for dividend of 348,352,928 (2006: 348,352,928) during the year.

Fully diluted The warrants over 174,176,464 unissued ordinary shares of the Company had expired on 26 February 2007 and therefore have no dilutive effect.

Under FRS 1332004 on Earnings Per Share, the warrants over 174,176,464 unissued ordinary shares have no dilutive effect as the conversion price of the warrants is above the average market value of the Company’s shares during the financial year ended 30 June 2006. The terms of the unconverted warrants are set out in Note 24. Malton Berhad (320888-T) Annual Report 2007 P.51

NOTES TO THE FINANCIAL STATEMENTS cont’d (11) otal (358) (331) T 9,744 3,722 (1,057) 69,384 51,616 78,439 RM’000 (29,477) - - - - (1) 45 602 3,179 3,825 3,780 Office RM’000 renovations - (7) (14) (12) (10) 479 207 1,207 1,850 1,660 RM’000 Computers - - - - - 7 450 631 174 624 RM’000 Electrical and water installations - - - - - 7 (12) and 1,131 1,126 1,126 sundry RM’000 Plantation equipment - - - (307) 7,038 5,742 3,308 Motor (1,015) 14,766 12,473 RM’000 vehicles - (1) 78 (23) (35) 113 (143) 1,890 1,879 1,837 Office RM’000 equipment - - - (2) 77 283 and (175) 1,904 2,087 2,010 fittings RM’000 Furniture - - - - - 381 (5,616) 25,956 20,721 26,337 RM’000 leasehold Long-term properties ------land 21,898 21,898 RM’000 (21,898) leasehold Long-term - - - - - 1,963 4,731 4,731 6,694 (1,963) RM’000 building AND EQUIPMENT Freehold PLANT , Y T ransfer to OPER T investment properties (Note 12) 1 July 2005 30 June 2007 adoption of FRS 140: 30 June 2006/ 1 July 2006 Additions PR The Group Cost Balance as of Write-offs Write-offs Disposals Balance as of Effects on Balance as of Additions Disposals . 1 1 Malton Berhad (320888-T) P.52 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d (7) otal (743) (275) (292) T 3,774 3,328 (2,230) 17,255 14,494 18,049 RM’000 - - - - (1) 344 341 2,273 1,933 2,617 Office RM’000 renovations - (1) (8) (8) (7) 246 264 818 1,066 1,304 RM’000 Computers ------17 450 450 467 RM’000 Electrical and water installations - - - - (4) 10 14 and 1,078 1,068 1,088 sundry RM’000 Plantation equipment - - - (712) (253) 2,618 1,709 5,393 3,937 7,299 Motor RM’000 vehicles - - (30) (10) 115 175 (128) 1,301 1,264 1,386 Office RM’000 equipment - - - - 109 145 and (155) 1,324 1,334 1,433 fittings RM’000 Furniture - - - - 267 398 (834) 2,501 2,103 1,934 RM’000 leasehold Long-term properties cont’d ------231 land 1,393 1,162 (1,393) RM’000 leasehold Long-term - - - - (3) 48 51 476 425 521 RM’000 building AND EQUIPMENT Freehold PLANT , Y T ransfer to OPER T investment properties (Note 12) adoption of FRS 140: 30 June 2006/ 1 July 2006 depreciation 1 July 2005 30 June 2007 PR Disposals Charge for the year Disposals Effects on Charge for the year Balance as of The Group Accumulated Balance as of Write-offs Write-offs Balance as of . 1 1 Malton Berhad (320888-T) Annual Report 2007 P.53

NOTES TO THE FINANCIAL STATEMENTS cont’d - otal T 2,001 2,001 61,184 31,566 RM’000 - - - 1,507 1,208 Office RM’000 renovations - - - 594 546 RM’000 Computers - - - 174 164 RM’000 Electrical and water installations - - - 48 38 and sundry RM’000 Plantation equipment - - - 7,080 7,467 Motor RM’000 vehicles - - - 536 493 Office RM’000 equipment - - - 686 654 and fittings RM’000 Furniture - 2,001 2,001 23,836 16,786 RM’000 leasehold Long-term properties cont’d - - - - land 20,505 RM’000 leasehold Long-term - - - 4,210 6,218 RM’000 building AND EQUIPMENT Freehold PLANT , Y T OPER 1 July 2005/ 30 June 2006/ 1 July 2006 30 June 2007 30 June 2007 30 June 2006 Balance as of PR The Group Accumulated impairment loss Balance as of Charge for the year Net book value Balance as of Balance as of . 1 1

Malton Berhad (320888-T) P.54 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

11. PROPERTY, PLANT AND EQUIPMENT cont’d The Company Furniture Office Motor and fittings equipment vehicles Computers Total RM’000 RM’000 RM’000 RM’000 RM’000

Cost Balance as of 1 July 2005 2 41 758 40 841 Additions 6 43 149 44 242 Disposals - - - (6) (6) Write-offs - (2) - - (2)

Balance as of 30 June 2006/ 1 July 2006 8 82 907 78 1,075 Additions 3 26 - 68 97

Balance as of 30 June 2007 11 108 907 146 1,172

Accumulated depreciation Balance as of 1 July 2005 - 5 289 9 303 Charge for the year 1 6 154 10 171 Disposals - - - (3) (3) Write-offs - (1) - - (1)

Balance as of 30 June 2006/ 1 July 2006 1 10 443 16 470 Charge for the year 1 10 184 25 220

Balance as of 30 June 2007 2 20 627 41 690

Net book value Balance as of 30 June 2007 9 88 280 105 482

Balance as of 30 June 2006 7 72 464 62 605

Included in property, plant and equipment of the Group and the Company are property, plant and equipment acquired under hire-purchase arrangements with net book values of RM5,014,000 and RM280,000 (2006: RM4,873,000 and RM464,000), respectively.

Land and buildings of the Group with carrying amount of RM21,796,000 (2006: RM23,265,000) are charged to banks for credit facilities granted to certain subsidiary companies as mentioned in Note 26.

As of 30 June 2007, the Group assessed the recoverable amounts of its long-term leasehold properties based on the current prices in the market of properties of similar conditions and locations provided by professional valuers, and the directors are of their opinion that the carrying amount of the properties of the Group approximates the current market value except for an amount of RM2,001,000 (2006: RM Nil), that has been recognised as impairment loss in the income statements. Malton Berhad (320888-T) Annual Report 2007 P.55

NOTES TO THE FINANCIAL STATEMENTS cont’d

12. INVESTMENT PROPERTIES The Group Leasehold land and Freehold buildings buildings Total RM’000 RM’000 RM’000

At cost: As of 1 July 2005/30 June 2006 4,553 - 4,553

At fair value: As of 1 July 2006 4,553 - 4,553 Effects on adoption of FRS 140: Transfer from property, plant and equipment (Note 11) 25,287 1,960 27,247 Additions during the year - 2,337 2,337 Fair value adjustments 2,032 - 2,032

As of 30 June 2007 31,872 4,297 36,169

The investment properties of the Group amounting to RM15,593,000 (2006: RM11,225,000) are charged to bank for credit facilities granted to certain subsidiary companies as mentioned in Note 26.

The fair value of the Group’s investment properties as of 30 June 2007 has been arrived at on the basis of a valuation carried out by Messrs Khong & Jaafar Sdn. Bhd., Colliers, Jordan Lee & Jaafar Sdn. Bhd. and C.H. Williams Talhar & Wong Sdn. Bhd., independent firms of professional valuers.

13. LAND HELD FOR PROPERTY DEVELOPMENT The Group 2007 2006 RM’000 RM’000

At beginning of year: Freehold land – at cost 25,650 30,572 Long-term leasehold land – at cost 18,460 16,560 Long-term leasehold land – proprietor’s entitlement 25,000 - Development expenditure 24,328 28,615

93,438 75,747

Costs incurred during the year: Freehold land – at cost 44,598 - Long-term leasehold land – at cost 36,247 1,900 Long-term leasehold land – proprietor’s entitlement - 25,000 Development expenditure 7,000 4,733

87,845 31,633

Transfer to property development (Note 17): Freehold land (9,232) (4,922) Development expenditure (10,227) (9,020)

(19,459) (13,942)

Net 161,824 93,438

Malton Berhad (320888-T) P.56 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

13. LAND HELD FOR PROPERTY DEVELOPMENT cont’d Included in current additions to land held for property development is the following: The Group 2007 2006 RM’000 RM’000

Interest expense on: Term loan 490 - Late payment 172 -

As of 30 June 2007, the freehold land and leasehold land of the Group amounting to RM54,658,000 (2006: RM Nil) and RM43,629,000 (2006: RM Nil) respectively, are pledged to licensed banks for term loan and other credit facilities granted to the Group as disclosed in Note 26.

In 2006, Malton Development Sdn. Bhd. (“MDSB”), a wholly-owed subsidiary company, entered into two joint venture development agreements (“JVDA”) with various third parties (“JV Partners”). Pursuant to the JVDA, the JV Partners are required to deliver vacant possession of the leasehold land to MDSB for development. All the development costs will be borne by MDSB and MDSB is entitled to the entire proceeds from the development. In consideration for the land delivered, the JV Partners are entitled to a fixed sum of RM25,000,000 to be paid by the Company in accordance with the terms of the JVDA. The sum is classified as long-term leasehold land – proprietor’s entitlement. The title deeds in respect of the long-term leasehold land – proprietor’s entitlement are not registered under the subsidiary company’s name as these title deeds will be transferred directly to house buyers upon sale of the properties.

14. INVESTMENT IN SUBSIDIARY COMPANIES The Company 2007 2006 RM’000 RM’000

Unquoted shares, at cost 215,852 212,052

The subsidiary companies are as follows: Effective Country of Equity Interest Principal Name Incorporation 2007 2006 Activities %%

Direct Subsidiary Companies Khuan Choo Realty Sdn. Bhd.* Malaysia 100 100 Property development, investment in property and investment holding

Bukit Rimau Development Malaysia 100 100 Property development Sdn. Bhd.

Domain Resources Sdn. Bhd. Malaysia 100 100 Construction, project management and consultancy services

Pembinaan Gapadu Sdn. Bhd. Malaysia 100 100 Construction and project management

Malton Berhad (320888-T) Annual Report 2007 P.57

NOTES TO THE FINANCIAL STATEMENTS cont’d

14. INVESTMENT IN SUBSIDIARY COMPANIES cont’d Effective Country of Equity Interest Principal Name Incorporation 2007 2006 Activities %%

Direct Subsidiary Companies Kuala Lumpur Pavilion Malaysia 100 100 Provision of development Sdn. Bhd.* management services

Malton Assets Limited** British Virgin 100 100 Dormant Islands

Malton Asia Limited ** British Virgin 100 100 Dormant Islands

Ehsan Armada Sdn. Bhd.* Malaysia 100 100 Property development

Khuan Choo Property Malaysia 100 100 Property management Management Sdn. Bhd. and development

Malton Development Malaysia 100 100 Property development Sdn. Bhd.

Kumpulan Gapadu Malaysia 100 100 Property development Sdn. Bhd.

Layar Raya Sdn. Bhd. Malaysia 100 100 Property development

Beijing Malton Investment People’s Republic 100 100 Dormant Consultancy Ltd** of China

Indirect Subsidiary Companies (Held throug Khuan Choo Realty Sdn Bhd) Asia-Condo Corporation Malaysia 100 100 Property development Sdn. Bhd.* and investment

Gapadu Development Malaysia 100 100 Property development Sdn. Bhd.

Gapadu Harta Sdn. Bhd.* Malaysia 100 100 Property development

Khuan Choo Development Malaysia 100 100 Property development Sdn. Bhd.*

Regal Marvel Construction Malaysia 100 100 Construction and project Sdn. Bhd.* management

Horizontal Promenade Malaysia 100 100 Property development Sdn. Bhd.

Rentak Sejati Sdn. Bhd.* Malaysia 100 100 Property development

Silver Setup Sdn. Bhd.* Malaysia 100 100 Investment holding

Malton Berhad (320888-T) P.58 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

14. INVESTMENT IN SUBSIDIARY COMPANIES cont’d Effective Country of Equity Interest Principal Name Incorporation 2007 2006 Activities %%

Indirect Subsidiary Companies (Held throug Khuan Choo Realty Sdn Bhd) cont’d Khuan Choo Sdn. Bhd.* Malaysia 100 100 Property development and trading

Melariang Sdn. Bhd.* Malaysia 100 75.1 Property development and investment holding

Indirect Subsidiary Companies (Held through Domain Resources Sdn Bhd) Domain Property Services Malaysia 100 100 Property management Sdn. Bhd. services

DMP Construction Malaysia 100 100 Construction Sdn. Bhd.

Domain EPC Sdn. Bhd. Malaysia 100 100 Dormant

Domain Project Management Malaysia 100 100 Dormant Sdn. Bhd.

Domain Stable Construction Malaysia 51 51 Construction Sdn. Bhd.

Indirect Subsidiary Company Held through Silver Setup Sdn Bhd) Perak Fruits & Development Malaysia 51 51 Farming, sub-letting Corporation Sdn. Bhd.* of farming land, sale of farm produce and general trading

Indirect Subsidiary Company (Held through Melariang Sdn Bhd) Interpile (M) Sdn. Bhd.* Malaysia 100 75.1 Property development

* The financial statements of these subsidiary companies are audited by auditors other than the auditors of the Company.

** The financial statements of these subsidiary companies are examined for the purpose of consolidation.

Malton Berhad (320888-T) Annual Report 2007 P.59

NOTES TO THE FINANCIAL STATEMENTS cont’d

14. INVESTMENT IN SUBSIDIARY COMPANIES cont’d The Company’s cost of investment in a wholly-owned subsidiary company, Khuan Choo Property Management Sdn. Bhd. (“KCPM”) increased to RM3,800,000 by the subscription for 3,699,980 and 100,000 new ordinary shares of RM1 each in KCPM on 6 December 2006 and 16 April 2007, respectively.

On 15 January 2007, Khuan Choo Realty Sdn. Bhd. (“KCR”), a wholly-owned subsidiary company, acquired the remaining 348,600 shares of RM1 each in Melariang Sdn. Bhd. (“MLSB”) for a cash consideration of RM3,911,000. Accordingly, MLSB and Interpile (M) Sdn. Bhd., its subsidiary company, became wholly-owned subsidiary companies of KCR.

During the previous financial year, the Company acquired Layar Raya Sdn. Bhd., a wholly-owned subsidiary company incorporated in Malaysia, and incorporated a foreign subsidiary company in the People’s Republic of China, Beijing Malton Investment Consultancy Ltd.

Post-acquisition results of the subsidiary company acquired in 2006 were as follows: The Group 2006 RM’000

Administrative expenses (1)

Loss before tax (1) Income tax expense -

Decrease in Group’s profit attributable to shareholders (1)

The effects of this acquisition on the financial position of the Group as of 30 June 2006 were as follows: The Group 2006 RM’000

Other receivables and prepaid expenses 618 Cash and bank balances 9 Other payables and accrued expenses (537)

Group’s share of net assets 90

15. OTHER INVESTMENT The Group and the Company 2007 2006 RM’000 RM’000

Unquoted subordinated bond, at cost 3,000 - Malton Berhad (320888-T) P.60 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

16. DEFERRED TAX ASSETS/(LIABILITIES) Deferred Tax Assets The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

At beginning of year - - - - Transfer from income statements (Note 9) 1,572 - - -

At end of year 1,572 - - -

The deferred tax assets of the Group and the Company represent the following: Deferred Tax Assets The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Tax effects of: Unused tax losses 8,463 7,534 - 164 Unabsorbed capital allowances 406 591 - 28

8,869 8,125 - 192

Deferred tax assets recognised (1,572) - - -

Deferred tax assets not recognised 7,297 8,125 - 192

The unused tax losses and unabsorbed capital allowances, which are subject to agreement by the tax authorities, are available for offset against future taxable income provided there are no substantial changes in the equity ownership of the Group and the Company under Section 44(5A) and (5B) of the Income Tax Act, 1967.

Deferred Tax Liabilities The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

At beginning of year 5,474 5,439 - - Effects on adoption of FRS 140: Adjustments to*: Retained earnings (2,202) - - - Minority interests (2,116) - - -

(4,318) - - -

Transfer from income statements (Note 9) 69 35 55 -

At end of year 1,225 5,474 55 -

* In 2006, the deferred tax liabilities are in respect of tax effects of temporary differences arising from revaluation surplus on property, plant and equipment of a subsidiary company. During the financial year, upon adoption of FRS 140: Investment Property, the tax consequence has been re-measured based on management’s revised intended manner of recovery of the asset and adjusted in the financial statements accordingly. Malton Berhad (320888-T) Annual Report 2007 P.61

NOTES TO THE FINANCIAL STATEMENTS cont’d

16. DEFERRED TAX ASSETS/(LIABILITIES) cont’d The deferred tax liabilities of the Group and the Company represent the following: Deferred Tax liabilities The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Tax effects of temporary differences in respect of: Property, plant and equipment 145 5,474 55 - Investment properties 1,080 - - -

1,225 5,474 55 -

17. PROPERTY DEVELOPMENT The Group 2007 2006 RM’000 RM’000

At beginning of year: Freehold land – at cost 67,408 123,018 Long-term leasehold land – at cost 51,857 51,761 Long-term leasehold land – proprietor’s entitlement 117,300 11,970 Development expenditure 373,370 513,844

609,935 700,593

Costs incurred during the year: Freehold land – at cost 6,178 - Long-term leasehold land – proprietor’s entitlement - 105,330 Development expenditure 89,888 80,492

96,066 185,822

Transfer from land held for property development (Note 13): Freehold land 9,232 4,922 Development expenditure 10,227 9,020

19,459 13,942

Costs recognised as an expense in the income statements: Previous year (392,035) (582,245) Current year (Note 6) (93,248) (93,567) Elimination due to completion of projects 23,586 283,777

(461,697) (392,035)

Costs eliminated during the year due to completion of projects (23,586) (283,777)

Transfer to inventories (6,311) (9,874)

Accumulated impairment losses on freehold land: At beginning and end of year (3,219) (3,219)

Net 230,647 211,452

Malton Berhad (320888-T) P.62 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

17. PROPERTY DEVELOPMENT cont’d Included in current additions to development expenditure are the following: The Group 2007 2006 RM’000 RM’000

Interest expense on: Term loan 1,220 1,801 Bank overdraft 139 - Development expenditure written off 157 157

Certain parcels of freehold and leasehold land under property development amounting to RM18,287,000 (2006: RM41,654,000) and RM30,333,000 (2006: RM51,857,000), respectively are charged to financial institutions for credit facilities granted to the Group as mentioned in Note 26.

In 2006, certain subsidiary companies entered into joint venture development agreements (“JVDA”) with various third parties (“JV Partners”). Pursuant to the JVDA, the JV Partners are required, amongst others, to deliver vacant possession of certain parcels of freehold and leasehold land to the said subsidiary companies for development by the subsidiary companies. All the development costs will be borne by the subsidiary companies and the subsidiary companies are entitled to the entire proceeds from the development. In consideration for the land delivered, the JV Partners are entitled to a fixed sum of RM117,300,000 to be paid by the subsidiary companies in accordance with the terms of the JVDA. The sum is classified as long-term leasehold land – proprietor’s entitlement. The title deeds in respect of the long-term leasehold land – proprietor’s entitlement are not registered under the subsidiary companies’ names as these title deeds will be transferred directly to house buyers upon sale of the properties.

18. INVENTORIES The Group 2007 2006 RM’000 RM’000

At cost: Completed properties 19,788 19,396 Commercial land 12,399 12,020 Bungalow land 10,526 10,526

42,713 41,942

Included in the inventories are completed properties and bungalow land with cost amounting to RM15,821,000 (2006: RM1,413,000) charged to financial institutions for banking facilities granted to a subsidiary company as mentioned in Note 26.

19. TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES Trade receivables comprise mainly amounts receivable from customers for construction works carried out, project management services and sales of properties developed by the Group. The credit period granted to customers generally ranges from 7 to 90 days (2006: 7 to 90 days) unless otherwise agreed under contractual obligations.

Included in trade receivables of the Group is an amount of RM Nil (2006: RM66,817,000) receivable from a trade debtor of a subsidiary company in accordance with the terms and conditions of the turnkey contract entered into between the Company and the debtor. The consideration of the turnkey contract was RM180,000,000. The said construction has been completed during the financial year.

Malton Berhad (320888-T) Annual Report 2007 P.63

NOTES TO THE FINANCIAL STATEMENTS cont’d

19. TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES cont’d Other receivables and prepaid expenses consist of: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Other receivables 8,491 4,250 359 372 Deposits: Joint venture agreements 26,300 5,000 - 4 Purchase of land 1,413 11,284 - - Others 2,164 1,778 9 - Prepaid expenses 1,040 218 513 1 Tax recoverable 1,243 1,141 - -

40,651 23,671 881 377

As mentioned in Note 34(d), Gapadu Harta Sdn Bhd, an indirect wholly-owned subsidiary company, entered into a Joint Venture (“JV”) Agreement with Ukay Spring Development Sdn Bhd, a company incorporated in Malaysia, and Mr Liong Kok Wah, a third party, for the proposed mixed development of the leasehold land for residential and commercial properties. Included in deposits of the Group is an amount of RM21,300,000 (2006: RM Nil) representing deposit paid during the financial year for the JV rights pursuant to the JV Agreement.

Also, included in deposits of the Group is an amount of RM5,000,000 (2006: RM5,000,000) representing amount paid in respect of a right to participate in a joint acquisition and development of two parcels of lands of a subsidiary company. Subsequent to the financial year end, the said amount has been refunded by the joint venture partner of the subsidiary company due to delay in developing the said parcels of lands.

20. AMOUNT OWING BY/(TO) CONTRACT CUSTOMERS The Group 2007 2006 RM’000 RM’000

Contract costs incurred 653,406 382,162 Add: Attributable profit 7,217 30,666

660,623 412,828 Less: Progress billings received and receivable (664,119) (413,652)

(3,496) (824)

Amount owing by contract customers 349 539 Amount owing to contract customers (3,845) (1,363)

(3,496) (824)

Retention sum held by contract customers (included under trade receivables) 35,045 21,308

Retention sum payable to sub-contractors (included under trade payables) 32,661 19,345

Malton Berhad (320888-T) P.64 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

20. AMOUNT OWING BY/(TO) CONTRACT CUSTOMERS cont’d Included in current additions to contract costs are the following: The Group 2007 2006 RM’000 RM’000

Staff costs 753 906 Rental of: Machineries 57 404 Motor vehicles 10 20 Office - 9 Interest on long-term loan - 530

Staff costs include salaries, contributions to Employees Provident Fund (“EPF”) and all other staff related expenses. Contributions to EPF by the Company during the year amounted to RM73,000 (2006: RM88,000).

21. RELATED PARTY TRANSACTIONS AND BALANCES Amount owing by/(to) subsidiary companies, which arose mainly from management fee receivable, unsecured advances and payments made on behalf, is interest-free and has no fixed terms of repayment except for certain advances to the subsidiary companies which bear interest at rates ranging from 8.15% to 10.23% per annum (2006: Nil).

The related parties of the Company and subsidiary companies and their relationships are as follows: Related Parties Relationship Paracorp Berhad A company in which certain directors of the Company, Datuk Lim Siew Choon and Datin Tan Kewi Yong have substantial financial interest. On 10 July 2006, Datuk Lim Siew Choon and Datin Tan Kewi Yong ceased to have substantial financial interest in Paracorp Berhad (“Paracorp”) and on 12 July 2006, Datuk Lim Siew Choon resigned as a director of Paracorp.

Titian Strategik (M) Sdn. Bhd. A company in which the family member of a director of the Company, Datuk Lim Siew Choon has substantial financial interest. On 29 December 2006, the said family member ceased to have financial interest in Titian Strategik (M) Sdn. Bhd.

Glassine Marketing Sdn. Bhd. A company in which a director of the Company, Datin Tan Kewi Yong is a director and has substantial financial interest.

Sagu Intan Sdn. Bhd. A company in which the family member of a director of the Company, Datuk Lim Siew Choon has substantial financial interest.

Significant transactions undertaken with related parties during the financial year are as follows: The Group 2007 2006 RM’000 RM’000

With related parties: Titian Strategik (M) Sdn Bhd - Insurance premium 409 584

Sagu Intan Sdn Bhd - Purchase of building materials - 940

Glassine Marketing Sdn Bhd - Purchase of premium gifts - 95

Paracorp Berhad - Rental income - 439 Malton Berhad (320888-T) Annual Report 2007 P.65

NOTES TO THE FINANCIAL STATEMENTS cont’d

21. RELATED PARTY TRANSACTIONS AND BALANCES cont’d The Group 2007 2006 RM’000 RM’000

With a corporate shareholder of a subsidiary company: Stable Growth Sdn Bhd - Management fee payable 120 -

With subsidiary companies: Management fee receivable: Kuala Lumpur Pavilion Sdn Bhd 2,400 1,140 Domain Resources Sdn Bhd 1,200 1,200 Interpile (M) Sdn Bhd 1,200 1,200 Asia-Condo Corporation Sdn Bhd 960 - Khuan Choo Development Sdn Bhd 720 - Bukit Rimau Development Sdn Bhd 600 600 Ehsan Armada Sdn Bhd 600 600 Pembinaan Gapadu Sdn Bhd 60 480 Khuan Choo Realty Sdn Bhd 60 50 Regal Marvel Construction Sdn Bhd 24 180 Perak Fruits & Development Corporation Sdn Bhd 24 24 Gapadu Harta Sdn Bhd 24 720

7,872 6,194

With subsidiary companies: Rental payable: Khuan Choo Realty Sdn Bhd 360 300

Transfer of property, plant and equipment to the Company: Bukit Rimau Development Sdn Bhd 3 -

Interest income receivable: Asia-Condo Corporation Sdn Bhd 430 - Khuan Choo Development Sdn Bhd 320 - Ehsan Armada Sdn Bhd 262 - Khuan Choo Property Management Sdn Bhd 214 - Horizontal Promenade Sdn Bhd 120 - Gapadu Harta Sdn Bhd 63 - Gapadu Development Sdn Bhd 59 - Layar Raya Sdn Bhd 7 -

1,475 -

The outstanding balances arising from the above transactions with related parties are as follows: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Receivables: Included in other receivables 1,102 1,652 - -

Payables: Included in trade payables - 2,374 - - Included in other payables 60 153 - 73

Malton Berhad (320888-T) P.66 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

22. FIXED DEPOSITS WITH LICENSED BANKS Included in fixed deposits with licensed banks of the Group is an amount of RM1,102,000 (2006: RM1,275,000) pledged/charged to financial institutions for banking facilities granted to subsidiary companies as mentioned in Note 26.

The interest rates for fixed deposits range from 3.0% to 4.0% (2006: 2.3% to 4.0%) per annum. The fixed deposits have an average maturity period of 1 to 90 days (2006: 1 to 90 days).

23. CASH AND BANK BALANCES The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Housing Development Accounts 10,028 18,672 - - Cash and bank balances 7,575 11,628 836 7,769

17,603 30,300 836 7,769

The Housing Development Accounts are maintained by the Group in accordance with Section 7(A) of the Housing Developers (Control and Licensing) Act, 1966. These accounts, which consist of monies received from house purchasers, are for the payment of property development expenditure incurred. The surplus monies, if any, will be released to the Group upon completion of the property development projects and after all property development expenditure have been fully settled.

24. SHARE CAPITAL The Group and the Company 2007 2006 RM’000 RM’000

Authorised: 1,000,000,000 ordinary shares of RM1 each 1,000,000 1,000,000

Issued and fully paid: 348,352,928 ordinary shares of RM1 each 348,353 348,353

The 2002/2007 Warrants issued during the financial period ended 30 June 2002 entitle the registered holders to subscribe for one new ordinary share of RM1.00 each in the Company at an exercise price of RM1.60 per share during the five years’ exercise period commencing on 26 February 2002. The exercise price of the 2002/2007 Warrants is subject to adjustment from time to time in accordance with the Deed Poll executed by the Company on 21 February 2002. The other main features of the 2002/2007 Warrants are as follows: (i) The new shares to be issued pursuant to the exercise of the warrants shall, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company in issue except that they will not be entitled to any dividends, rights, allotment or other distributions, where the entitlement date of the dividend is before the allotment and issuance of the new shares.

(ii) The persons to whom the warrants have been granted have no right to participate, by virtue of the warrants, in any share issue of any other companies.

Malton Berhad (320888-T) Annual Report 2007 P.67

NOTES TO THE FINANCIAL STATEMENTS cont’d

24. SHARE CAPITAL cont’d The movements in the 2002/2007 Warrants during the financial year are as follows: Number of warrants 2007 2006 Warrants’000 Warrants’000

At beginning of year 174,176 174,176 Lapsed during the year (174,176) -

At end of year - 174,176

The subscription rights of the 2002/2007 Warrants expired on 26 February 2007 and were officially removed from the official list of Bursa Malaysia Securities Berhad on 27 February 2007. The 2002/2007 Warrants which have not been exercised at the date of expiry had lapsed and ceased to be valid.

Share Options The Employees’ Shares Option Scheme (“ESOS”) for eligible employees of the Group, which was effective on 23 December 2005, will expire on 22 December 2010. As of 30 June 2007, no options have been granted.

The salient features of the ESOS are as follows: (a) the total number of shares which may be made available shall not exceed 15% of the issued and paid-up share capital of the Company at the time of offer of the ESOS.

(b) the ESOS shall be in force for a duration of five years.

(c) all employees including Directors who are confirmed full-time employees of the Company and have been serving for at least one year within the Group are eligible.

(d) any allocation of options under the ESOS to a Director of the Company shall require prior approval from the shareholders of the Company at a general meeting.

(e) no option shall be granted for less than 100 shares or for more than the maximum allowable allotment as follows: (i) the number of options allocated, in aggregate, to the directors and senior management of the Group shall not exceed 50% of the total options available under the ESOS; and

(ii) the number of options allocated to any individual director or executive who, either singly or collectively through his/her associates (as defined in the Companies Act, 1965), holds 20% or more in the issued and paid-up share capital of the Company shall not exceed 10% of the total options available under the ESOS.

(f) the option price shall be at a discount of not more than 10% from the weighted average market price of the Company as shown in the Daily Official List issued by Bursa Malaysia Securities Berhad for the five market days immediately preceding the date of offer or at par value of the ordinary shares of the Company, whichever is higher.

(g) the Option Committee may at any time and from time to time, before and/or after an option is granted, limit the exercise of the number and/or percentage of the option offered during the duration of the ESOS and impose any other terms and/or conditions deemed appropriate by the Option Committee in its sole discretion including amending or varying any terms and conditions imposed earlier.

Malton Berhad (320888-T) P.68 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

25. RESERVES The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Non-distributable: Share premium 255 255 255 255

Distributable: Retained earnings 69,441 63,867 45,925 41,940

Total 69,696 64,122 46,180 42,195

Share premium Share premium arose from the following: The Group and the Company 2007 2006 RM’000 RM’000

Restricted issue 61,601 61,601 Public issue 64,399 64,399 Warrants issue 250 250

126,250 126,250 Capitalisation for bonus issues (118,732) (118,732) Share issue expenses (7,263) (7,263)

255 255

Retained earnings Taking into consideration the tax exempt income account as mentioned in Note 9 and based on the estimated tax credits available and the prevailing tax rate applicable to dividends, the Company is able to distribute up to RM4,475,000 (2006: RM4,398,000) out of its retained earnings as of 30 June 2007 by way of cash dividends without incurring any additional tax liability. Any dividend paid in excess of this amount will result in tax liability calculated at the prevailing tax rate on the gross amount of the additional dividend paid.

26. BANK BORROWINGS The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Secured: Revolving credits 7,992 7,992 - - Bank overdrafts (Note 29) 52,625 46,705 - - Long-term loans 46,738 8,567 20,000 - Bridging loans 12,046 16,343 - -

Unsecured: Long-term loan 30,000 - 30,000 -

149,401 79,607 50,000 -

Less: Repayment due within next 12 months (included under current liabilities) (63,973) (63,357) (1,708) -

Repayment due after next 12 months 85,428 16,250 48,292 -

Malton Berhad (320888-T) Annual Report 2007 P.69

NOTES TO THE FINANCIAL STATEMENTS cont’d

26. BANK BORROWINGS cont’d The non-current portion is repayable as follows: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Between 1 – 2 years 24,036 2,108 4,002 - Between 2 – 5 years 29,108 14,142 12,006 - Above 5 years 32,284 - 32,284 -

85,428 16,250 48,292 -

The above borrowings of the Group and of the Company, which bear interest at rates ranging from 7.50% to 9.25% (2006: 7.50% to 9.25%) per annum, are secured against the following: (i) Charge over the land and buildings, investment properties, land held for property development, property development, completed properties and bungalow land of certain subsidiary companies as mentioned in Notes 11, 12, 13, 17 and 18, respectively.

(ii) A debenture incorporating a fixed and floating charge over present and future assets of certain subsidiary companies.

(iii) Fixed deposits of certain subsidiary companies as mentioned in Note 22.

27. HIRE-PURCHASE PAYABLES The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Total outstanding 7,595 6,632 228 427 Less: Interest-in-suspense outstanding (666) (696) (14) (32)

Principal outstanding 6,929 5,936 214 395

Less: Amount due within 12 months (shown under current liabilities) (1,859) (1,561) (105) (181)

Non-current portion 5,070 4,375 109 214

The non-current portion is payable as follows: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Between 1 - 2 years 1,686 1,355 53 105 Between 2 - 5 years 3,384 3,020 56 109

5,070 4,375 109 214

For the financial year ended 30 June 2007, the effective interest rates of the hire-purchase payables range from 6.54% to 8.36% (2006: 4.29% to 10.91%) per annum. Interest rates are fixed at the inception of the hire-purchase arrangements.

Malton Berhad (320888-T) P.70 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

28. TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES Trade payables comprise mainly amount outstanding to contractors and consultants for property development projects. The credit period granted to the Group ranges from 30 to 120 days (2006: 30 to 120 days).

Other payables and accrued expenses are as follows: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Other payables 55,121 65,064 567 585 Amount payable to vendor in respect of purchase of freehold land 24,920 - - - Accrued expenses 3,025 2,478 1,200 168 Amount owing to directors 51 2,061 - - Deposits received 554 4,746 - -

83,671 74,349 1,767 753

Amount owing to directors, which arose mainly from unsecured advances, is interest-free and has no fixed terms of repayment.

Included in other payables is an amount of RM23,901,000 (2006: RM58,813,000) owing to joint venture partners pursuant to the joint venture development agreements entered into as mentioned in Note 17. The said amount is interest-free and repayable in accordance with the terms of the joint venture development agreements.

29. CASH AND CASH EQUIVALENTS The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Fixed deposits with licensed banks 75,504 50,890 71,000 47,000 Cash and bank balances 17,603 30,300 836 7,769 Bank overdrafts (Note 26) (52,625) (46,705) - -

40,482 34,485 71,836 54,769 Less: Fixed deposits pledged to licensed banks (Note 22) (1,102) (1,275) - -

39,380 33,210 71,836 54,769

30. SEGMENTAL REPORTING For management purposes, the Group is organised into the following operating divisions: - Property development - Construction and project management - Property trading - Investment holding - Investment property - Others

Information on the Group’s operations by geographical segments has not been provided as the Group operates principally in Malaysia. The inter-segment transactions were conducted at market value. Malton Berhad (320888-T) Annual Report 2007 P.71

NOTES TO THE FINANCIAL STATEMENTS cont’d - 8,468 8,468 4,670 4,670 3,372 1,298 (3,798) RM’000 555,535 555,535 Consolidated - (4,839) (92,028) (92,028) RM’000 Eliminations - 12 60 60 Others RM’000 224 713 780 1,493 RM’000 property Investment - 6,012 12,872 12,872 RM’000 holding Investment - (332) (405) (405) trading RM’000 Property 7,105 78,376 RM’000 429,931 508,307 and project Construction management - 286 RM’000 125,236 125,236 Property development cont’d TING AL REPOR -segment sales Profit before tax SEGMENT Revenue External sales Inter Results Segment results Income tax expense Profit for the year Attributable to: Equity holders of the Company Minority interests 2007 The Group 30. Malton Berhad (320888-T) P.72 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d 11 2,815 3,774 3,722 2,001 33,020 RM’000 885,194 460,373 882,379 427,353 Consolidated - (3) 238 (178) RM’000 (746,497) (481,228) Eliminations - - - 2 26,665 12,340 Others RM’000 85 179 199 1,201 73,021 48,043 RM’000 property Investment - - 98 220 RM’000 577,353 182,192 holding Investment - - - - 42,961 32,935 trading RM’000 Property - 8 1,396 1,142 RM’000 320,292 233,966 and project Construction management 2 800 1,719 2,400 RM’000 588,584 399,105 Property development cont’d , TING , AL REPOR plant and equipment depreciation plant and equipment SEGMENT Impairment loss on property Assets Segment assets Unallocated assets Liabilities Segment liabilities Unallocated liabilities Other information Capital expenditure 2007 The Group Depreciation of property Non-cash expenses other than 30. Malton Berhad (320888-T) Annual Report 2007 P.73

NOTES TO THE FINANCIAL STATEMENTS cont’d - 3,647 3,647 2,441 1,206 (6,856) 10,503 10,503 RM’000 304,796 304,796 Consolidated - (409) (87,363) (87,363) RM’000 Eliminations - 54 54 (354) Others RM’000 (81) 720 687 1,407 RM’000 property Investment - 6,194 6,194 (2,166) RM’000 holding Investment - 834 1,570 1,570 trading RM’000 Property 4,245 80,449 RM’000 258,688 178,239 and project Construction management - 8,434 RM’000 124,246 124,246 Property development cont’d TING AL REPOR -segment sales 2006 The Group SEGMENT Revenue External sales Inter Results Segment results Income tax expense Profit for the year Attributable to: Equity holders of the Company Minority interests Profit before tax 30. Malton Berhad (320888-T) P.74 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d 140 9,744 3,328 1,141 62,839 RM’000 762,156 341,352 761,015 278,513 Consolidated 12 (15) 101 RM’000 (677,292) (428,800) Eliminations - 6 279 26,755 12,441 Others RM’000 - 347 3,850 78,944 RM’000 107,258 property Investment 1 171 242 81,323 RM’000 471,851 holding Investment - 7 225 trading RM’000 160,822 109,279 Property 16 1,343 2,790 RM’000 277,231 182,384 and project Construction management 22 951 2,864 RM’000 394,390 242,942 Property development cont’d TING , AL REPOR plant and equipment Depreciation of property Non-cash expenses other than SEGMENT Assets Segment assets Unallocated assets Liabilities Segment liabilities Unallocated liabilities Other information Capital expenditure depreciation 2006 The Group 30. Malton Berhad (320888-T) Annual Report 2007 P.75

NOTES TO THE FINANCIAL STATEMENTS cont’d

31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The operations of the Group are subject to a variety of financial risks, including interest rate risk, credit risk, liquidity risk and cash flow risk. The Group has taken measures to minimise the Group’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group.

(i) Interest rate risk The Group is exposed to interest rate risk through the impact of rate changes on interest bearing bank borrowings and hire-purchase payables. Interest rates of hire-purchase payables are fixed at the inception of the hire-purchase arrangement. Interest rates of bank borrowings and hire-purchase payables are disclosed in Notes 26 and 27, respectively.

(ii) Credit risk The Group is exposed to credit risk mainly from trade and other receivables. The Group extends credit to its customers based upon careful evaluation of the customer’s financial condition and credit history.

Concentrations of credit risk exist when changes in economic, industry or geographical factors similarly affect group of counterparties whose aggregate credit exposure is significant in relation to the Group’s total credit exposure. As of 30 June 2007, a substantial portion of the receivables of the Group consists of amount outstanding from a few major customers. Although there is a significant concentration of credit risk from the trade receivables, the Group continuously evaluates its risk exposure, by applying stringent monitoring procedures in assessing the credit worthiness of the receivables.

(iii) Liquidity risk The Group practises prudent liquidity risk management to minimise the mismatch of financial assets and liabilities and to maintain sufficient credit facilities for contingent funding requirement of working capital.

(iv) Cash flow risk The Group reviews its cash flow position regularly to manage its exposure to fluctuations in future cash flows associated with its monetary financial instruments.

Financial Assets The principal financial assets of the Group are other investment, cash and bank balances, fixed deposits with licensed banks, trade and other receivables.

The principal financial assets of the Company are other investment, cash and bank balances, fixed deposits with licensed banks, other receivables and amount owing by subsidiary companies.

The accounting policies applicable to the major financial assets are disclosed in Note 3.

Financial Liabilities and Equity Instruments Debts and equity instruments are classified as either liabilities or equity in accordance with the substance of the contractual arrangement.

Significant financial liabilities of the Group include trade and other payables, bank borrowings and hire-purchase payables, which are stated at their nominal values.

Significant financial liabilities of the Company include other payables, amount owing to subsidiary companies and hire-purchase payables, which are stated at their nominal values.

Bank borrowings are recorded at the proceeds received net of direct issue costs. Finance charges are accounted for on accrual basis.

Malton Berhad (320888-T) P.76 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d Fair Values of Financial Assets and Financial Liabilities The carrying amounts and the estimated fair values of the financial instruments of the Group and of the Company as of 30 June 2007 approximate their fair values because of the short maturity period for these instruments except for the following: 2007 2006 Carrying Fair Carrying Fair Note Amount Value Amount Value RM’000 RM’000 RM’000 RM’000

The Group Financial Asset Other investment 15 3,000 * --

Financial Liabilities Long-term loans 26 76,738 60,239 8,567 7,578 Bridging loans 26 12,046 9,238 16,343 14,989 Hire-purchase payables 27 6,929 6,269 5,936 5,301

The Company Financial Asset Other investment 15 3,000 * --

Financial Liabilities Long-term loans 26 50,000 38,621 - - Hire-purchase payables 27 214 197 395 248

* It is not practical to estimate the fair value of the unquoted subordinated bond of the Group as there is a lack of quoted market prices and the related information.

Long-term loans, bridging loans and hire-purchase payables The fair values of long-term loans, bridging loans and hire-purchase payables are estimated using discounted cash flow analysis based on current borrowing/financing rates for similar types of borrowing/financing arrangements.

32. CONTINGENT LIABILITIES - UNSECURED As of 30 June 2007, the Group and the Company have the following contingent liabilities: The Group The Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Corporate guarantee given to financial institutions: For credit facilities granted to subsidiary companies - - 102,145 81,053 For credit facilities granted to joint venture partner of a subsidiary company 14,062 23,000 14,062 23,000 Corporate guarantee given to contractor/ suppliers of subsidiary companies 69,875 41,068 69,875 41,068 Corporate guarantee given to authority for the performance of contractor of a subsidiary company 1,079 1,079 - - Legal claim filed by a third party against a subsidiary company for disputed outstanding sum in respect of work done as a sub-contractor 1,322 1,322 - -

86,338 66,469 186,082 145,121 Malton Berhad (320888-T) Annual Report 2007 P.77

NOTES TO THE FINANCIAL STATEMENTS cont’d

33. COMMITMENTS As of 30 June 2007, the Group has the following commitments in respect of: The Group 2007 2006 RM’000 RM’000

Purchase of land: Approved and contracted for 30,522 46,161

34. SIGNIFICANT CORPORATE EVENTS (a) On 4 September 2006, Layar Raya Sdn Bhd (“LRSB”), a wholly-owned subsidiary company, entered into four Sale and Purchase Agreements with Fong Sing Keon, Chin Sew Kim, Chin Su Loy, Liow Yuen Mooi and Chin Soo Lim to acquire four parcels of contiguously located freehold land in Mukim Cheras, District of Ulu Langat, State of Selangor with a total acreage of 22.6 acres for a total consideration of approximately RM8,029,355.

(b) On 5 October 2006, LRSB entered into a Sale and Purchase Agreement with Tai Pet Yong @ Tye Peck Leong to acquire a parcel of freehold land in Mukim Cheras, District of Ulu Langat, State of Selangor with a total acreage of 6.4 acres for a total consideration of approximately RM2,260,849. The said land is located contiguously to the abovementioned four parcels of land acquired by LRSB on 4 September 2006.

(c) On 9 October 2006, Kumpulan Gapadu Sdn Bhd, a wholly-owned subsidiary company, entered into a Joint Venture Agreement with KCSB Konsortium Sdn Bhd, a company incorporated in Malaysia, and the Company for the proposed development and completion of a new army camp for the Ministry of Defense on land measuring approximately 550.9 acres in Mukim Pulai, District of Johor Bahru, State of Johor and proposed property development on land measuring approximately 382.2 acres in Mukim Plentong and Mukim Tebrau, both in the District of Johor Bahru, State of Johor.

(d) On 12 October 2006, Gapadu Harta Sdn Bhd, an indirect wholly-owned subsidiary company, entered into a Joint Venture Agreement with Ukay Spring Development Sdn Bhd, a company incorporated in Malaysia, and Mr Liong Kok Wah, a third party, for the proposed development on land measuring approximately 56.1 acres in Mukim Bandar Ulu Kelang, District of Gombak, State of Selangor.

(e) On 18 October 2006, LRSB entered into a Sale and Purchase Agreement with Chen Kok Keong, Chen Lee Chin, Chen Lee Fong and Chen Lee Heong to acquire a parcel of freehold land in Mukim Cheras, District of Ulu Langat, State of Selangor with a total acreage of 6.4 acres for a total consideration of approximately RM2,363,385. The said land is located contiguously to the abovementioned five parcels of land acquired by LRSB on 4 September 2006 and 5 October 2006.

(f) On 8 January 2007, Horizontal Promenade Sdn Bhd, an indirect wholly-owned subsidiary company, entered into a Sale and Purchase Agreement with S.E.A. Housing Corporation Sdn Bhd to acquire a parcel of freehold land in Mukim of Sungai Buluh, District of Petaling, State of Selangor measuring approximately 209,497 square feet for a total consideration of RM26,000,000.

(g) On 15 January 2007, Khuan Choo Realty Sdn Bhd (“KCR”), a wholly-owned subsidiary company, acquired 348,600 ordinary shares of RM1.00 each representing the remaining 24.9% equity interest in Melariang Sdn Bhd (“MSB”) for a total cash consideration of RM3,900,000. Following the acquisition, MSB became a wholly-owned subsidiary of KCR.

(h) On 9 March 2007, Malton Assets Limited, a wholly-owned subsidiary company, terminated the Memorandum of Agreement entered into with Lend Lease Asia Holdings on 21 June 2002 to jointly secure, design, construct, market and manage certain projects in Asia under planning and negotiation.

Malton Berhad (320888-T) P.78 Annual Report 2007

NOTES TO THE FINANCIAL STATEMENTS cont’d

34. SIGNIFICANT CORPORATE EVENTS cont’d (i) On 15 May 2007, Gapadu Development Sdn Bhd, an indirect wholly-owned subsidiary company, entered into a Sale and Purchase Agreement with various individuals to acquire a parcel of freehold land in Mukim of Ampang, District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur measuring approximately 1.89 acres for a total consideration of RM11,135,653.

(j) On 16 May 2007, Melariang Sdn Bhd, an indirect wholly-owned subsidiary company, entered into a Joint Venture Agreement with Gading Wangsa Sdn. Bhd., a company incorporated in Malaysia, for the proposed development on land measuring approximately 35,978 square feet in Pulau Tikus fronting Jalan Cantonment, Penang.

(k) On 27 June 2007, Rentak Sejati Sdn Bhd, an indirect wholly-owned subsidiary company, entered into a Mutual Termination and Discharge Agreement with Datuk Ta Kin Yan (“Datuk Ta”), a third party, to terminate the Joint Venture Agreement entered into with Datuk Ta on 3 April 2001.

35. SUBSEQUENT EVENTS (a) On 2 July 2007, the Company made an offer to grant 14,690,000 share options to the eligible employees of the Group pursuant to the ESOS.

(b) On 15 August 2007, Pembinaan Gapadu Sdn Bhd, a wholly-owned subsidiary company, entered into a Joint Venture Agreement with Everest Vista Sdn Bhd, a company incorporated in Malaysia, for the proposed development on land measuring approximately 75,337 square feet located at the junction of Jalan Utara and the Federal Highway next to Armada Hotel in Petaling Jaya, Selangor.

36. COMPARATIVE FIGURES The following comparative figures have been reclassified to conform with current year’s presentation: As previously reported As restated RM’000 RM’000

Balance Sheet as of 30 June 2006 Land held for property development 63,710 93,438 Property development 241,180 211,452 Malton Berhad (320888-T) Annual Report 2007 P.79

STATEMENTS BY DIRECTORS

The directors of MALTON BERHAD state that, in their opinion, the accompanying balance sheets and the related statements of income, cash flows and changes in equity are drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable Malaysian Accounting Standards Board approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as of 30 June 2007 and of the results of their businesses and the cash flows of the Group and of the Company for the year ended on that date.

Signed in accordance with a resolution of the Directors,

LEE TUCK FOOK

CHUA THIAN TECK

Kuala Lumpur, 24 October 2007

DECLARATION BY THE DIRECTOR PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY

I, CHUA THIAN TECK, the director primarily responsible for the financial management of MALTON BERHAD, do solemnly and sincerely declare that the accompanying balance sheets and the related statements of income, cash flows and changes in equity, are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed CHUA THIAN TECK at KUALA LUMPUR this 24th day of October 2007.

Before me,

HEAVEN HO THIAN KOK (W382) COMMISSIONER FOR OATHS Kuala Lumpur Malton Berhad (320888-T) P.80 Annual Report 2007

PARTICULARS OF PROPERTIES AS AT 30 JUNE 2007

DEVELOPMENT PROPERTIES Initial Balance of Net Book Gross Net Land Value As At Year Of Land Area of 30 June 2007 Acquisition/ Location Tenure Area Development Usage RM Revaluation*

C.T. 9616, Lot No. 1875, Freehold 40.00 3.40 acres Commercial centre 7,600,000 16.8.2006* Mukim Petaling, acres Daerah Kuala Lumpur, Negeri Selangor P.T. 1023, HS(D) 2568, Leasehold 1,003.60 1,003.60 Proposed mixed 20,504,988 1.3.2001* Mukim Sungkai, Expiring on acres acres development Daerah Batang Padang, 12.5.2095 comprising Perak of luxurious homestead bungalows and chalets Geran 36409, Freehold 387.74 33.46 Proposed mixed 52,339,918 26.1.2001* Lot No. 3783, acres acres development comprises Mukim and of bungalows, Daerah Klang, link houses, town villas, Selangor semi-detached houses, and commercial development H.S (D) 160841, Leasehold 2.54 2.54 Proposed 3,870,000 24.6.2002 PT2, Pekan Baru Expiring on acres acres commercial Subang, District of Petaling 4.2.2101 development H.S (D) 176205, Leasehold 12.00 12.00 Proposed 15,681,600 24.6.2002 PT44561 Pekan Baru Expiring on acres acres commercial Subang, District of Petaling 2.10.2101 development H.S(D) 48952 Leasehold 64.19 12.34 Proposed 29,651,938 31.10.2002 PT No.5159, Expiring on acres acres mixed Mukim Petaling, 11.12.2089 development Daerah Petaling Selangor Geran No. 27440, Lot 1656 Freehold 50.39 50.39 Proposed 27,559,592 19.6.2003 H.S.(D) 1335 PT No. 1495/5 acres acres mixed 22.8.2006 H.S.(D) 1336 PT No. 1495/6 development } H.S.(D) 1337 PT No. 1495/7 H.S.(D) 1338 PT No. 1495/8 24.5.2007 Geran No. 31298, Lot 4293 } Geran No. 31299, Lot 4294 Geran No. 31300, Lot 4295 } 30.6.2007 Geran No. 31301, Lot 4296 Mukim Cheras District of Ulu Langat, Selangor H.S.(D) 808 & 809 Leasehold 108.49 108.49 Proposed 5,084,000 27.7.2002 Lot 19 & 20 Expiring on acres acres mixed Mukim of Hulu Terengganu 15.9.2061 development H.S.(D) 112592, PT No. 446 Leasehold 2.70 2.70 Proposed 29,000,000 28.6.2007 H.S.(D) 112593, PT No. 445 Expiring on acres acres commercial Section 90 11.12.2105 development Town and District of Kuala Lumpur Wilayah Persekutuan H.S.(D) 18360, PT No.3122 Freehold 4.81 4.81 Proposed 26,000,000 28.6.2007 Mukim Sungai Buloh acres acres residential Petaling, Selangor development

Malton Berhad (320888-T) Annual Report 2007 P.81

PARTICULARS OF PROPERTIES AS AT 30 JUNE 2007 cont’d

INVESTMENT PROPERTIES & OTHER PROPERTIES Approximate Net Net Book age of the Lettable Value As At Year Of building Area 30 June 2007 Acquisition/ Location Tenure Year Sq. Ft. Usage RM Revaluation*

21st & 22nd Floor, Leasehold 6 21,673.00 Office 11,400,000 14.12.2006* Menara Uni.Asia, Expiring on 1008 Jalan Sultan Ismail, 6.2.2078 Kuala Lumpur

Mezzanine Floor, Freehold 23 7,631.62 Office 4,257,574 1.3.2001 Menara ING, Jalan Raja Chulan, Kuala Lumpur

Level 6, West Wing Freehold 23 4,482.00 Office 1,959,668 27.3.2006 Menara ING Jalan Raja Chulan Kuala Lumpur

Level 6, East Wing Freehold 23 4,494.00 Office 2,337,103 30.6.2007 Menara ING Jalan Raja Chulan Kuala Lumpur

Unit 2-111A, Leasehold 8 462.00 Retail 296,158 1.12.1996 2nd Floor, Expiring on Endah Parade 19.2.2083 Shopping Mall, Bukit Jalil, Kuala Lumpur

15th Floor, Leasehold 6 12,989.00 Office 5,700,000 14.12.2006* Menara Uni. Asia Expiring on 1008 Jalan Sultan Ismail 6.2.2078 Kuala Lumpur

4th Floor, Leasehold 9 22,152.00 Office 5,300,000 5.7.2007* Wisma Domain, Expiring on No.18A, Section 51A/223, 8.9.2067 46100 Petaling Jaya, Selangor

20th Floor, Leasehold 6 10,060.00 Office 5,700,000 14.12.2006* Menara Uni. Asia Expiring on 1008 Jalan Sultan Ismail 6.2.2078 Kuala Lumpur

Net book value of the development properties are stated at Group land cost together with the related development expenditure incurred to the on going and remaining unsold properties.

* Year of revaluation

Malton Berhad (320888-T) P.82 Annual Report 2007

STATEMENT OF SHAREHOLDERS AS AT 6 NOVEMBER 2007

Authorised Share Capital : RM1,000,000,000 divided into 1,000,000,000 Ordinary Shares of RM1.00 each Issued and Fully Paid-Up Share Capital : RM348,352,928 divided into 348,352,928 Ordinary Shares of RM1.00 each Class of Shares : Ordinary Shares of RM1.00 each Voting Rights : One Vote per Ordinary Share

ANALYSIS BY SIZE OF SHAREHOLDINGS AS AT 6 NOVEMBER 2007 Size of Shareholdings No of Holders Total Holdings %

Less than 100 6 210 # 100 to 1,000 2,802 2,767,490 0.79 1,001 to 10,000 4,229 20,675,000 5.94 10,001 to 100,000 1,384 46,062,400 13.22 100,001 to less than 17,417,646* 201 146,783,400 42.14 17,417,646* and above 1 132,064,428 37.91

8,623 348,352,928 100.00

# Negligible * 5% of the Issued and Paid-Up Share Capital

LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 6 NOVEMBER 2007 Names Total Holdings %

Malton Corporation Sdn Bhd 132,064,428 37.91

DIRECT AND DEEMED INTEREST OF DIRECTORS IN THE ORDINARY SHARES OF MALTON BERHAD AS AT 6 NOVEMBER 2007 Direct Interest Deemed Interest No of % No of % Shares Shares

Datuk Lim Siew Choon - - 132,064,428 37.91 Guido Paul Philip Joseph Ravelli - - - - Datin Tan Kewi Yong - - - - Lee Tuck Fook - - - - Chua Thian Teck - - - - Liew Yuet Siong - - - - Hj Ahmad bin Hj Ismail, PJK - - - -

Malton Berhad (320888-T) Annual Report 2007 P.83

STATEMENT OF SHAREHOLDERS AS AT 6 NOVEMBER 2007 cont’d

THIRTY LARGEST SECURITIES ACCOUNT HOLDERS AS AT 6 NOVEMBER 2007 Names Shareholdings %

1. UOBM Nominees (Tempatan) Sdn Bhd 132,064,428 37.91 (Malton Corporation Sdn Bhd)

2. EB Nominees (Tempatan) Sdn Bhd 17,069,000 4.90 (Datuk Manan Bin Md Said)

3. UOBM Nominees (Tempatan) Sdn Bhd 10,464,000 3.00 (Teras Layar Sdn Bhd)

4. Uni.Asia General Insurance Berhad 10,000,000 2.87

5. Permodalan Nasional Berhad 9,878,100 2.84

6. Lembaga Tabung Angkatan Tentera 6,948,000 1.99

7. AllianceGroup Nominees (Tempatan) Sdn Bhd 6,085,000 1.75 (PHEIM Asset Management Sdn Bhd for Employees Provident Fund Board)

8. Tay Kim Pong 5,389,800 1.55

9. Yeoh Kean Hua 3,480,000 1.00

10. Eastern Pacific Industrial Corporation Berhad 3,125,000 0.90

11. UOBM Nominees (Tempatan) Sdn Bhd 2,477,000 0.71 (Radius Elit Sdn Bhd)

12. HSBC Nominees (Tempatan) Sdn Bhd 2,325,000 0.67 (HSBC (Malaysia) Trustee for Amanah Saham Sarawak)

13. OSK Nominees (Tempatan) Sdn Bhd 2,100,000 0.60 (Hee Yuen Sang)

14. Tan Chee Sing 2,000,000 0.57

15. Cimsec Nominees (Tempatan) Sdn Bhd 1,782,000 0.51 (Beh Soo Kiang)

16. RHB Capital Nominees (Tempatan) 1,778,000 0.51 (Chow Dai Chin)

17. Tay Kim Pong 1,665,400 0.48

Malton Berhad (320888-T) P.84 Annual Report 2007

STATEMENT OF SHAREHOLDERS AS AT 6 NOVEMBER 2007 cont’d

THIRTY LARGEST SECURITIES ACCOUNT HOLDERS AS AT 6 NOVEMBER 2007 cont’d Names Shareholdings %

18. TA Nominees (Tempatan) Sdn Bhd 1,656,000 0.47 (Tan Sze Keng)

19. HDM Nominees (Tempatan) Sdn Bhd 1,550,000 0.44 (Beh Soo Kiang)

20. RHB Capital Nominees (Tempatan) Sdn Bhd 1,473,000 0.42 (Beh Soo Kiang)

21. RHB Capital Nominees (Tempatan) Sdn Bhd 1,259,000 0.36 (Low Lee Yoong)

22. OSK Nominees (Tempatan) Sdn Bhd 1,221,200 0.35 (Hiew Seek Ling)

23. HDM Nominees (Tempatan) Sdn Bhd 1,075,000 0.31 (Phillip Securities Pte Ltd for Lim Kwee Gee)

24. HSBC Nominees (Asing) Sdn Bhd 1,020,800 0.29 (Exempt An for Credit Suisse)

25. CN Tang Holdings Sdn Bhd 1,000,100 0.29

26. Ghazali Bin Mohd 1,000,000 0.29

27. Mohd Saleh Bin Che Sulong 1,000,000 0.29

28. Abu Bakar Bin Mohd Noor 984,000 0.28

29. HDM Nominees (Tempatan) Sdn Bhd 920,000 0.26 (How Wee Teck)

30. Koperasi Pembangunan Belia Negara Berhad 840,000 0.24 Malton Berhad (320888-T) Annual Report 2007 P.85

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting of MALTON BERHAD (“Company”) will be held at Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70D, Off Jalan Bukit Kiara, 60000 Kuala Lumpur on Thursday, 13 December 2007 at 10.00 a.m. for the following purposes:-

AGENDA ORDINARY BUSINESS 1. To lay the Financial Statements of the Company for the year ended 30 June 2007 together with the Directors’ Report and Report of the Auditors thereon

2. To approve a First and Final Dividend of 1% less Income Tax for every Ordinary Share of RM1.00 each in respect of the year ended 30 June 2007 Ordinary Resolution 1

3. To approve the payment of directors’ fees of RM48,000 for the year ended 30 June 2007 Ordinary Resolution 2

4. To re-elect Mr Guido Paul Philip Joseph Ravelli who retires by rotation pursuant to Article 100 of the Company’s Articles of Association and being eligible, offers himself for re-election Ordinary Resolution 3

5. To re-elect Mr Chua Thian Teck who retires by rotation pursuant to Article 100 of the Company’s Articles of Association and being eligible, offers himself for re-election Ordinary Resolution 4

6. To re-elect Mr Liew Yuet Siong who retires by rotation pursuant to Article 100 of the Company’s Articles of Association and being eligible, offers himself for re-election Ordinary Resolution 5

7. To re-appoint Messrs Deloitte & Touche as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration Ordinary Resolution 6

AS SPECIAL BUSINESS 8. Authority for Directors to issue shares pursuant to Section 132D of the Companies Act, 1965 Ordinary Resolution 7

“THAT, subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant governmental and/ or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this Resolution in any one financial year does not exceed 10% of the issued share capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.” Malton Berhad (320888-T) P.86 Annual Report 2007

NOTICE OF ANNUAL GENERAL MEETING cont’d

9. Proposed Renewal of Authority for Share Buy Back Ordinary Resolution 8

“THAT, subject to compliance with the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and all other applicable laws, regulations and guidelines and if necessary, the approvals of all relevant governmental and/or regulatory authorities, the Company be and is hereby authorised to allocate an amount not exceeding the total of audited share premium reserve and unappropriated profit of the Company for the purpose of and to purchase such amount of ordinary shares of RM1.00 each in the Company (“Proposed Renewal of Authority for Share Buy Back”) as may be determined by the Directors of the Company provided that the aggregate number of shares purchased and/or held as Treasury Shares pursuant to this resolution does not exceed RM34,835,292 comprising 34,835,292 ordinary shares of RM1.00 each in Malton, representing ten percent (10%) of the total issued and paid-up capital of the Company [assuming none of the options under the Employees’ Share Option Scheme of Malton (“Options”) are exercised].

(As at 30 June 2007, the Company has total audited share premium reserve of approximately RM255,000 and retained profit of RM63,867,000.)

THAT upon completion of the purchase by the Company of its own shares, the Directors of the Company are authorised to deal with the said Shares in the following manner:- i) cancel the Shares so purchased: or ii) retain the Shares so purchased as the Treasury Shares; or iii) retain part of Shares so purchased as Treasury Shares and cancel the remainder; or iv) to resell the Treasury Shares on the Bursa Securities and/or distribute the Treasury Shares as dividends to the Company’s shareholders and/or subsequently cancel the Treasury Shares or combination of the three;

and in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the requirements of the Bursa Securities and any other relevant authority for the time being in force.

AND THAT the Directors of the Company be and are hereby empowered to carry out the above immediately upon the passing of this resolution and from the date of the passing of this resolution until: i) the conclusion of the first annual general meeting (“AGM”) of the Company following the general meeting at which this resolution was passed at which time it shall lapse unless by an ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or ii) the expiration of the period within which the next annual general meeting after that date is required by law to be held; or iii) revoked or varied by ordinary resolution passed by the shareholders in general meeting; whichever is the earliest and the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things deem fit and expedient in the interest of the Company to give full effect to the Proposed Renewal of Authority for Share Buy Back contemplated and/or authorised by this Ordinary Resolution.” Malton Berhad (320888-T) Annual Report 2007 P.87

NOTICE OF ANNUAL GENERAL MEETING cont’d

10. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature in respect of Sale of Trading Stock Properties Ordinary Resolution 9

“THAT approval be and is hereby given to the Company and its subsidiaries to enter into and give effect to recurrent transactions of a revenue or trading nature with all classes of related party in respect of sale of trading stock properties as stated in Section 3.4 of the Circular to Shareholders dated 21 November 2007 which are necessary for the Group’s day-to-day operations subject to the following:- (a) the transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public where applicable and not to the detriment of the minority shareholders;

(b) disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the renewal of shareholders’ mandate authority during the financial year in the manner prescribed in the Listing Requirements of Bursa Securities based on the following information:- (i) the type of the recurrent transactions made; and (ii) the names of the related parties involved in each type of the recurrent transaction made and their relationship with the Company.

(c) and such approval shall continue to be in force until: (i) the conclusion of the first AGM of the Company following the general meeting at which such Mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; (ii) the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of Act); or (iii) revoked or varied by resolution passed by the shareholders of the Company in general meeting; whichever is the earlier; and

(d) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution.”

11. Proposed Amendments to the Articles of Association of the Company Special Resolution 1

“THAT the Articles of Association of the Company is amended by deleting the existing clauses in its entirety and substituted with the proposed amendments set out in Appendix II of the Circular to Shareholders dated 21 November 2007.”

BY ORDER OF THE BOARD

HOR SHIOW JEI Company Secretary

Kuala Lumpur Dated: 21 November 2007 Malton Berhad (320888-T) P.88 Annual Report 2007

NOTICE OF ANNUAL GENERAL MEETING cont’d

Notes: 1. A member of the Company entitled to attend and vote, is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attend and vote in his stead.

2. The proxy form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or attorney duly authorised in that behalf.

3. All proxy forms must be deposited at the Registered Office at 22nd Floor, Menara Uni.Asia, No. 1008, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting.

NOTICE OF DIVIDEND PAYMENT AND BOOK CLOSURE NOTICE IS HEREBY GIVEN THAT a First and Final Dividend of 1% less Income Tax for every Ordinary Share of RM1.00 each in respect of the year ended 30 June 2007, if approved by the shareholders of the Company at the Twelfth Annual General Meeting to be held on Thursday, 13 December 2007, will be paid on Friday, 11 January 2008 to the shareholders of the Company whose names appear in the Record of Depositors at the close of business on Thursday, 13 December 2007.

A depositor shall qualify for entitlement to the dividend only in respect of:- (a) Shares transferred into the depositor’s securities account before 4.00 p.m on 13 December 2007 in respect of ordinary transfers; and

(b) Shares 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

HOR SHIOW JEI Company Secretary

Kuala Lumpur Dated: 21 November 2007

EXPLANATORY NOTES ON SPECIAL BUSINESS ORDINARY RESOLUTION 7 The Ordinary Resolution is proposed pursuant to Section 132D of the Companies Act, 1965, and if passed, will primarily give flexibility to the Board of Directors to issue and allot shares at any time in their absolute discretion without convening a general meeting. This authority will expire at the conclusion of the next Annual General Meeting of the Company.

ORDINARY RESOLUTION 8 The proposed Ordinary Resolution 8, if passed, will enable the Company to allocate an amount not exceeding the total of audited share premium reserve and unappropriated profit of the Company for the purchase of ordinary shares of RM1.00 each in the Company to be determined by the Directors of the Company provided that the aggregate number of shares purchased and/or held as Treasury Shares pursuant to this resolution does not exceed RM34,835,292 comprising 34,835,292 ordinary shares of RM1.00 each in Malton, representing ten percent (10%) of the total issued and paid-up capital of the Company (assuming none of the Options are exercised). This authority, unless revoked or varied by resolution passed by the shareholders of the Company at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of the period within which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

ORDINARY RESOLUTION 9 The proposed Ordinary Resolution 9, if passed, will enable the Company and its subsidiaries (“Group”) to enter into any of the recurrent related party transactions of a revenue or trading nature set out in the Circular to Shareholders of the Company dated 21 November 2007 which are necessary for the Group’s day-to-day operations. This authority, unless revoked or varied by resolution passed by the shareholders of the Company at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of the period within which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

SPECIAL RESOLUTION 1 The proposed Special Resolution 1, if passed, will enable the Company to amend its Articles of Association as set out in Appendix II the Circular to Shareholders dated 21 November 2007 to comply with the Listing Requirements of Bursa Malaysia Securities Berhad. Malton Berhad (320888-T) Annual Report 2007 P.89

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

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

1. Directors who are standing for re-election are as follows:- a. Mr Guido Paul Philip Joseph Ravelli pursuant to Article 100 of the Company’s Articles of Association

b. Mr Chua Thian Teck pursuant to Article 100 of the Company’s Articles of Association

c. Mr Liew Yuet Siong pursuant to Article 100 of the Company’s Articles of Association

2. The details of the abovenamed Directors who are standing for re-election are set out on pages 4 to 6 of this Annual Report. None of the abovenamed Directors holds any interest in the securities of the Company as disclosed under Directors’ interests in the Financial Statements which appears on page 28 of this Annual Report.

3. Details of the Annual General Meeting are as follows:- Date: 13 December 2007 Time: 10.00 a.m Venue: Kuala Lumpur Golf & Country Club No. 10, Jalan 1/70D, Off Jalan Bukit Kiara 60000 Kuala Lumpur Malton Berhad (320888-T) P.90 Annual Report 2007

NOTE

This page has been intentionally left blank Proxy Form

I/We (full name in BLOCK) NRIC No/Company No of (address) Tel No being a member of Malton Berhad holding Ordinary Shares of RM1.00 each, hereby appoint (full name in BLOCK) NRIC No/Company No of (address)

(address) or failing him/her, (full name in BLOCK) NRIC No/Company No of (address)

(address) as my/our proxy to vote for me/us on my/our behalf at the Twelfth Annual General Meeting of the Company to be held on Thursday, 13 December 2007 at 10.00 a.m and at any adjournment thereof and to vote as indicated below.

RESOLUTION For Against Ordinary Resolution 1 To approve a First and Final Dividend of 1% less Income Tax for each Ordinary Share of RM1.00 each in respect of the year ended 30 June 2007 Ordinary Resolution 2 To approve the payment of directors’ fees of RM48,000 for the year ended 30 June 2007 Ordinary Resolution 3 To re-elect Mr Guido Paul Philip Joseph Ravelli who retires by rotation pursuant to Article 100 of the Company’s Articles of Association Ordinary Resolution 4 To re-elect Mr Chua Thian Teck who retires by rotation pursuant to Article 100 of the Company’s Articles of Association Ordinary Resolution 5 To re-elect Mr Liew Yuet Siong who retires by rotation pursuant to Article 100 of the Company’s Articles of Association Ordinary Resolution 6 To re-appoint Messrs Deloitte & Touche as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration Ordinary Resolution 7 Authority for Directors to issue shares pursuant to Section 132D of the Companies Act, 1965. Ordinary Resolution 8 Proposed Renewal of Authority for Share Buy Back Ordinary Resolution 9 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature in respect of Sale of Trading Stock Properties Special Resolution 1 Proposed Amendments to the Articles of Association of the Company

Please indicate with an ‘X’ in the respective box of the resolution. Unless voting instructions are indicated in the space above, the proxy will abstain from voting as he/she thinks fit. Number of Shares Held

______Signature of member Date:

Notes: 1. A member of the Company entitled to attend and vote, is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attend and vote in his stead. 2. The proxy form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or attorney duly authorised in that behalf. 3. All proxy forms must be deposited at the Registered Office at 22nd Floor, Menara Uni.Asia, No. 1008, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting. please fold here

Stamp/Setem

The Company Secretary MALTON BERHAD (320888-T) 22nd Floor, Menara Uni. Asia No. 1008, Jalan Sultan Ismail 50250 Kuala Lumpur Malaysia

please fold here (320888-T)

ANNUAL REPORT 2007 (320888-T) 22nd Floor, Menara Uni.Asia, No. 1008, Jalan Sultan Ismail 1008, No. Menara Uni.Asia, 22nd Floor, Malaysia Lumpur, 50250 Kuala www.malton.com.my : 603-2692 1399 Website : 603-2776 6188 Fax : Tel