Contents - MalaysiaStock.Biz

Contents

01.

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2 Corporate Information

3 Notice of Annual General Meeting

4 Statement Accompanying Notice of Annual General Meeting

5 Directors’ Profiles

8 Corporate Structure

9 Chairman’s Statement

11 Corporate Governance Statement

15 Audit Committee’s Report

17 Statement of Internal Controls

19 Other Disclosure Requirements Pursuant to The Listings

Requirements of Bursa Securities

20 Directors’ Report

24 Statement by Directors

24 Statutory Declaration

25 Report of The Auditors

26 Balance Sheets

27 Income Statements

28 Statements of Changes in Equity

29 Cash Flow Statements

31 Notes to The Financial Statements

52 Group’s Landed Properties

60 Analysis of Shareholdings

62 Analysis of ICULS Holdings

64 Analysis of Warrants Holdings

66 Appendix 1

Form of Proxy

BOARD OF DIRECTORS

Harsukhlal A/L Maganlal Kamdar - Executive Chairman

Bipinchandra A/L Balvantrai - Deputy Chairman/Executive Director

Jayesh R Kamdar A/L Rajnikant - Chief Executive Officer/Executive Director

Paresh R. Kamdar - Chief Operating Officer/Executive Director

Kamal Kumar Kishorchandra Kamdar - Non-Independent Non-Executive Director

Datuk Emam Mohd Haniff bin Emam Mohd Hussain - Senior Independent Non-Executive Director

Dato’ Dr. Shanmughanathan A/L Vellanthurai - Independent Non-Executive Director

Rajnikant A/L B.M Kamdar - Alternate Director to Paresh R. Kamdar

AUDIT COMMITTEE

Chairman

Datuk Emam Mohd Haniff bin Emam Mohd Hussain

Members

Dato’ Dr. Shanmughanathan A/L Vellanthurai

Paresh R. Kamdar

REMUNERATION COMMITTEE

Chairman


Members

Bipinchandra A/L Balvantrai

Kamal Kumar Kishorchandra Kamdar

NOMINATION COMMITTEE

Chairman


Members

Datuk Emam Mohd Haniff bin Emam Mohd Hussain


COMPANY SECRETARIES

Lim Seck Wah

(MAICSA NO.: 0799845)

M. Chandrasegaran A/L S. Murugasu

(MAICSA NO.: 0781031)

REGISTERED OFFICE

Level 15-2, Faber Imperial Court

Jalan Sultan Ismail

50250 Kuala Lumpur

Tel: 03-26924271

Fax: 03-27325388

SHARE REGISTRAR

MEGA CORPORATE SERVICES SDN. BHD.

(Company No.: 187984-H)

Level 15-2, Faber Imperial Court

Jalan Sultan Ismail

50250 Kuala Lumpur

Tel No.: 03-26924271

Fax No. : 03-27325388

PRINCIPAL BANKERS

CIMB Bank Berhad

Malayan Banking Berhad

Public Bank Berhad

AmBank Berhad

AUDITORS

Shamsir Jasani Grant Thornton

Chartered Accountants

STOCK EXCHANGE LISTING

Main Board of Bursa Securities

Bursa Securities refers to

Bursa Malaysia Securities Berhad

STOCK CODE

8672

SOLICITORS

Shahrizat Rashid & Lee

Corporate Inform

ation

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Notice O

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Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

AS SPECIAL BUSINESS

To consider, and if thought fit, to pass the following Resolutions:

ORDINARY RESOLUTION

7. AUTHORITY TO ISSUE SHARES BY THE COMPANY PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

SPECIAL RESOLUTION

8. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

9. To transact any other business which may properly be transacted at an Annual

General Meeting for which due notice shall have been given.

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue, new shares in the Company from time to time 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 (excluding the number of ordinary shares arising from the conversion of the ICULS 2004/2009 and exercise of warrants 2004/2009) does not exceed 10% of the issued share capital of the Company as at the date of this Annual General Meeting and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company and THAT the Directors be and are hereby also authorised to obtain the approval from Bursa Securities for the listing and quotation of the additional shares so issued.”

“THAT approval be hereby given for the alterations, modifications, additions and deletions to the Articles of Association of the Company as detailed in Appendix 1 in the Annual Report 2006 in compliance with the Listing Requirements of the Bursa Malaysia Securities Berhad.”

Resolution 7

Resolution 8

NOTICE IS HEREBY GIVEN that the Fifth Annual General Meeting of the members of

the Company will be held at Grand Continental Hotel, Dewan 1, 11th Floor, Jalan Raja

Laut, 50350, Kuala Lumpur on Friday, 29th June 2007 at 10.00 a.m. for the following

purposes:-

AGENDA

AS ORDINARY BUSINESS

To receive the Audited Financial Statements for the financial year ended 31st

December 2006 together with the Directors' and Auditors' Reports thereon. Please

refer to Note A.

To approve the payment of a First and Final Dividend of 4% per ordinary share of

RM1.00 each less 28% Malaysian Income Tax for the financial year ended 31

December 2006.

To approve the payment of Directors’ fees for the year ended 31 December 2006.

To re-elect the following director retiring pursuant to Section 129(6) of the

Companies Act, 1965

- Mr. Harsukhlal A/L Maganlal Kamdar

To re-elect the following directors retiring pursuant to Article 102 of the Company’s

Articles of Association:

- Mr. Bipinchandra A/L Balvantrai

- Datuk Emam Mohd Haniff Bin Emam Mohd Hussain

To re-appoint Messrs Shamsir Jasani Grant Thornton as Auditors of the Company

and to authorise the Directors to fix their remuneration.

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NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENTSubject to the approval of the shareholders, a First and Final Dividend of 4% less 28% Malaysian Income Tax per ordinary share of RM1.00 each for the financial year ended 31 December 2006 will be paid on 27 July 2007 to Depositors registered in the Record of Depositors at the close of business at 5.00 p.m. on 10 July 2007.

A depositor shall qualify for entitlement only in respect of:a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 10 July 2007, in

respect of ordinary transfers; andb) Shares bought on Bursa Securities on a cum entitlement basis according to the Rules of the Bursa

Securities.

By order of the Board

LIM SECK WAH (MAICSA 0799845)

M. CHANDRASEGARAN A/L S. MURUGASU (MAICSA 0781031)

Company Secretaries

Dated this: 7th June 2007

Kuala Lumpur

Notes

A. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 and the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member may appoint more than one proxy to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) & (c) of the Companies Act, 1965 shall not apply.

2. Where a member is an authorised nominee as defined under the Security Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorized.

4. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

5. Explanatory Notes To Special Businesses

5.1 Resolution Pursuant to Section 132D of the Companies Act, 1965 The proposed Ordinary Resolution no.7 is primarily to give flexibility to the Board of Directors to

issue and allot shares at any time in their absolute discretion up to and not exceeding in total ten per centum (10%) of the issued share capital of the Company for the time being for such purposes as they consider would be in the best interest of the Company without convening a general meeting. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting of the Company.

5.2 Resolution Pursuant to Proposed Amendments to the Articles of Association of the Company The proposed Special Resolution no.8 on the amendments to the Company’s Articles of

Association are made to comply with the recent enhancements to the Listing Requirements of Bursa Malaysia Securities Berhad. Please refer to Appendix 1 in the Annual Report 2006 for details of the Proposed Amendments.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

Further details of the Directors who are standing for re-election, namely Mr. Harsukhlal A/L Maganlal Kamdar, Mr. Bipinchandra A/L Balvantrai and Datuk Emam Mohd Haniff Bin Emam Mohd Hussain are set out in the Directors’ Profile of this Annual Report.

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Directors’ P

rofileHARSUKHLAL A/L MAGANLAL KAMDAR – Executive Chairman

Mr. Harsukhlal, a Malaysian, aged 81, is one of the founding members of Kamdar Group (M) Berhad (“KGMB”) Group. He is also a director of all the companies under the KGMB Group, save for Kamdar (South) Sdn. Bhd. (“KSouth”). He has extensive experience in the textile and furnishing fabrics market, having been involved in the leadership of the business for over 50 years.

He was educated in India and came to Malaysia in 1950 having completed his basic education. From 1947 to 1950, he worked at an import-export company in Singapore, where he learned the fundamentals of business and trading. In 1950, he founded the KGMB Group, which began as a textile trading store in Ipoh together with his two late brothers, Kishorchandra A/L Maganlal Kamdar and B.M. A/L Maganlal Kamdar and some other partners. Thereafter, Mr. Harsukhlal continued to develop and build KGMB Group’s business as the Chairman of the KGMB Group, using a prudent approach to management, aggressive cost control measures and by constantly looking out for strategic opportunities.

He was appointed as an Executive Chairman of KGMB on 10 November 2004. He is not a member of any board committee.

He does not hold any directorships in any other public companies.

He holds 21,364,000 shares, 17,063,768 ICULS and 11,734,443 Warrants in KGMB and also has an indirect interest of 5,044,000 shares, 4,028,910 ICULS and 2,770,608 Warrants via his wife’s shareholding, ICULS holding and Warrant holding respectively in KGMB. He has family relationship with other Executive Directors and major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

BIPINCHANDRA A/L BALVANTRAI– Deputy Chairman/Executive Director

Mr. Bipinchandra, a Malaysian, aged 48, has over 27 years experience in the textile and textile-related industries. After completing his General Certificate in Education Ordinary Level in 1976, he joined Globe Textiles Sdn Bhd as a Sales Executive in 1977. He joined Kamdar Sdn. Bhd. (“KSB”) in 1980 and became a director in 1994. He is currently responsible for the Group’s procurement and sourcing of merchandise, locally as well as internationally.

He was appointed as a Deputy Chairman of KGMB on 10 November 2004. He is also a director of KSB, Pusat Membeli-Belah Kamdar (Penang) Sdn. Bhd. (“PMBK (Penang)”), Kesar Sdn. Bhd. (“Kesar”), Kamdar Stores Sdn. Bhd. (“KStores”) and Kamdar Holdings Sdn. Bhd. (“KH”) under the KGMB Group. He is a member of the Remuneration Committee.


He holds 10,378,000 shares, 8,289,706 ICULS and 5,700,680 Warrants in KGMB and also has an indirect interest of 531,000 shares, 424,171 ICULS and 291,695 Warrants via his wife’s shareholding, ICULS holding and Warrant holding respectively in KGMB. He is a sibling to Hamendra A/L B.M. Kamdar and Rajnikant A/L B.M Kamdar. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

JAYESH R KAMDAR A/L RAJNIKANT – Chief Executive Officer/Executive Director

Mr. Jayesh, a Malaysian, aged 35. He graduated in 1992 with a degree in Bachelor of Sciences (Hons) Accounting & Finance from the University of Hull and joined the corporate finance department of Commerce International Merchant Bankers Berhad (“CIMB”) in 1993. He left CIMB to join the KGMB Group in 1994 and is currently responsible for the KGMB Group’s accounting and corporate activities.

He was appointed as a Chief Executive Officer of KGMB on 10 November 2004. He is also currently a director of KSouth under the KGMB Group. He is not a member of any board committee.


He holds 2,570,000 shares, 2,052,376 ICULS and 1,411,382 Warrants in KGMB. He is a son to Rajnikant A/L B.M Kamdar and a sibling to Paresh R. Kamdar. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

PARESH R. KAMDAR – Chief Operating Officer/Executive Director

Mr. Paresh, a Malaysian, aged 30. He graduated in 1997 with a degree in Bachelors of Arts in Economics & Finance from the Royal Melbourne Institute of Technology, Australia and joined the KGMB Group immediately after graduation. He is currently responsible for the daily operations of all the retail outlets of KGMB Group.

He was appointed as an Executive Director & Chief Operating Officer of KGMB on 10 November 2004. He is also currently a director of KSouth under the KGMB Group. He is a member of the Audit Committee.


He holds 2,405,000 shares, 1,920,700 ICULS and 1,320,830 Warrants in KGMB. He is a son to Rajnikant A/L B.M Kamdar and a sibling to Jayesh R Kamdar A/L Rajnikant. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

DATUK EMAM MOHD HANIFF BIN EMAM MOHD HUSSAIN – Senior Independent Non-Executive Director

Datuk Emam Mohd Haniff, a Malaysian, aged 64. He graduated with a Bachelor of Arts (Hons) degree from the University of Malaya in 1966 and, in the same year, joined the Ministry of Foreign Affairs (Wisma Putra). Since then he has held various positions both in the Ministry as well as in Malaysian diplomatic missions abroad, culminating in his appointment as Malaysia’s Ambassador to Pakistan (1983-1986), Ambassador to the Philippines (1987-1991), and High Commissioner to Singapore (1992-1997). He retired from the Malaysian Diplomatic Service upon reaching the then mandatory age of 55 in 1997.

He was appointed as an Independent Non-Executive Director of KGMB on 16 February 2005. He is the Chairman of the Audit Committee and a member of the Nomination Committee.

He currently sits on the boards of Edaran Digital Systems Berhad, Lion Corporation Berhad and LCL Corporation Berhad.

He does not hold any shares, ICULS or warrants in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

DATO’ DR. SHANMUGHANATHAN A/L VELLANTHURAI – Independent Non-Executive Director

Dato’ Dr. Shanmughanathan, a Malaysian, aged 41. He graduated with Bachelors in Accountancy, specialising in Malaysian Taxation from University Utara Malaysia in 1993. He joined Ernst & Young as a tax assistant in 1993 and had been promoted to Senior Tax Consultant by the time he left the firm in 1997. In October 1997, he was appointed by the Ministry of Finance as Company Auditor and set up his own audit firm, Shan & Co with the approval of the Ministry of Finance. He graduated with a Masters in Business Administration from University Putra Malaysia in 1998. He subsequently received his doctorate from Bircham International University in 2004.

He was appointed as an Independent Non-Executive Director of KGMB on 16 February 2005. He is a member of the Audit Committee, Chairman of Remuneration Committee and the Chairman of the Nomination Committee.

He currently sits on the board of MP Technology Resources Berhad.

He does not hold any shares, ICULS or warrants in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

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KAMAL KUMAR KISHORCHANDRA KAMDAR – Non-Independent Non-Executive Director

Mr. Kamal Kumar, a Malaysian, aged 37. He graduated with an LLB (Hons) degree from Leicester University, and completed the Barrister at Law at Middle Temple, United Kingdom. He was previously a manager of KSB. He is also a director of several private limited companies.

He was appointed as a Non-Independent Non-Executive Director of KGMB on 16 February 2005. He is a member of the Remuneration and Nomination Committees.


He holds 8,223,625 shares, 6,267,636 ICULS and 5,301,136 Warrants in KGMB. He has family relationship with other directors and major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

RAJNIKANT A/L B.M KAMDAR – Alternate Director to Paresh R. Kamdar

Mr. Rajnikant, a Malaysian, aged 58, has over 37 years in the textile and textile-related industries and is currently the Central Retail Operations Manager. He is also a director of KSB, PMBK (Penang), Kesar and KH under the KGMB Group.

After completing his Senior Cambridge in 1966, he joined M. J. Chandrakant as a Sales Executive in 1967, and in 1982, became a director of TerryCot Pte Ltd in Singapore, whose principal activities were importing and exporting textile and textile-related products. In 1990, he joined KSB, and in 2003 was promoted to his present position where he is assisted in his duties by the various branch managers.

He was appointed as an Alternate Director to Paresh R. Kamdar on 10 November 2004. He is not a member of any board committee.


He holds 8,488,000 shares, 6,779,401 ICULS and 4,662,070 Warrants in KGMB and also has an indirect interest of 531,000 shares, 424,171 ICULS and 291,695 Warrants via his wife’s shareholding, ICULS holding and Warrant holding respectively in KGMB. He is a sibling to Bipinchandra A/L Balvantrai and Hamendra A/L B.M. Kamdar. He is father to Jayesh R Kamdar A/L Rajnikant and Paresh R. Kamdar. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

Corporate Structure

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KAMDAR Annual Report 2007

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Kamdar Sdn. Bhd.

Pusat Membeli-belah Kamdar Sdn. Bhd.

Beauty Gallant Sdn. Bhd.

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Pusat Membeli-belah Kamdar (Penang) Sdn. Bhd.

Kamdar (South) Sdn. Bhd.

Orisea Trade Sdn. Bhd.Kesar Sdn. Bhd.

Kamdar Holdings Sdn. Bhd.

Kamdar Stores Sdn. Bhd.

Kamdar (B) Sdn. Bhd. (Formerly known as Multirange Trading Sdn. Bhd.)

Mint Saga Sdn. Bhd.

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Chairm

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Financial Reporting

Revenue for the consolidated financial year ended 31 December 2006 decreased by approximately 6% compared to the consolidated financial year ended 31 December 2005 to RM169million from RM179 million due to the continued clearing of old merchandise and the loss in revenue as a result of store upgrading.

The result of the clearing of older merchandise at a more rapid pace for financial year 2006 also adversely affected our gross profit margin, reducing it by almost 1.5% to 35.4% in 2006 compared to 36.9% in 2005. This coupled with the cost of opening new stores and upgrading older stores had reduced our profit from operations but lower tax payments had resulted in net profit increasing by 4%, from RM4.8 million in 2006 compared to RM4.6 million in 2005.

As most old inventories had already been cleared or written down, I expect 2007 to be a more rewarding year in increased revenue and higher profits.

2006 was a surprising year. It was challenging, exciting and a rewarding year in equal measure. Challenging because turnover dipped slightly, exciting because we implemented new strategies to overcome the challenges and rewarding because our strategies paid dividends. Despite our turnover falling slightly due to clearing and writing down old inventories, we were compensated by our new merchandise being sold at better margins resulting in a more profitable year and hopefully this will continue. The competition has increased but KGMB will not shirk from its task and because of the success of our strategy, it has given us added impetus to sell quality merchandise at reasonable prices with better margins whilst writing down and/or clearing older merchandise at a faster rate.

In 2005, we started upgrading our stores and I am very pleased to announce that the upgrading continued in 2006 and this had resulted in increased customer satisfaction thus leading to increase turnover and profits from the upgraded stores. This has prompted the Board and I to speed up the upgrading of our other stores to better serve our customers, increasing their satisfaction and, most pleasing, is the increase in top and bottom line of the stores as a result.

KGMB continued its expansion theme by opening 2 new stores in 2006 and will expand locally as well as regionally through different modes. So watch this space by looking out for our announcements in 2007.

“ I am pleased to present to you Kamdar Group (M) Berhad’s (KGMB) Annual Report for the financial year ended 31 December 2006. ”

The Industry Trend and Development

The general economic situation of global textile and apparel industry is still healthy. The dynamics of sourcing appear to have changed as excess capacity especially in China and the other apparel producers in the world, moderates and cost pressures begin to mount, suggesting deflationary pricing trends of the last several years in global textiles and apparel sourcing are diminishing. Despite this we believe further opportunities exist to offset rising costs and perhaps gain some additional margins by reducing cycle time and improving speed to market.

Speed to market and reduced cycle time has moved to the forefront of priorities in the retail of textile and apparel industry as the biggest opportunity to contain costs with the possibility of further margin expansion.

The other reason for textile and apparel price and margin increase is because apparel is not a commoditized product. Lower production costs do not get as readily competed in the form of lower prices at retail. In fact, with lower sourcing costs, retailers will take the opportunity to build higher quality into their goods and for this higher quality, the customer should be willing to pay slightly more for the product given its higher perceived value. At the same time, because sourcing costs are slowly coming down, the garment does not cost more to the retailer.

With all these factors, retailers with shorter lead times have the ability to respond more quickly to reorders on best-selling items before it is too late and demand for the merchandise cools. This also would enable higher full-priced selling with positive gross margin implications.

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Prospects

KGMB’s prospects are linked closely to the state of the Malaysian economy. Bank Negara Malaysia (BNM) expects Malaysia to grow by 6% in 2007, thus barring any unforeseen circumstances, KGMB envisages a good 2007.

2007 will see KGMB expand further locally and regionally. By expanding regionally through joint-ventures, we will take cautious but concrete steps to grow our store network, increase revenue and profits and diversify into new markets and market segments.

KGMB had and is experiencing better growth and profits in secondary towns and as a result, local expansion will be focused in these towns to cater to the growing affluence of the population. This expansion will be facilitated through franchising which I hope will allow Kamdar to expand and operate all over Malaysia and assist the government in producing young entrepreneurs to spearhead Malaysia to become more dynamic whilst growing the Kamdar brand.

The Board

The Group is pleased to have progressed in its commitment to practicing good corporate governance – not the box ticking variety, but that which safeguards and builds value for shareholders. The Group is working with its internal and External Auditors, Audit Committee and other Advisors and Committees’ as and when necessary, to continuously assess its internal controls, corporate governance and risk management so as to exceed the industry and market standards.

Appreciation

On behalf of KGMB, the Board of Directors and I, would like to express our sincere gratitude and appreciation to our bankers, shareholders, suppliers and business associates for their steadfast support. To our staff, the Group wishes to thank you for your dedication and hard work. To our customers, we would like you to continue to enjoy a great shopping experience at our stores because Kamdar’s merchandise is ‘absolutely worth it’ (memang berbaloi).

Harsukhlal a/l Maganlal Kamdar Executive Chairman

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Corporate G

overnance Statem

entThe Board of Directors (“the Board”) of Kamdar Group (M) Berhad is committed to a corporate culture that emphasises good corporate governance and practices throughout the Company and its subsidiaries (“the Group”).

The Group will continue to endeavor to comply with all the key Principles and Best Practices of the Malaysian Code on Corporate Governance (“the Code”) in its effort to observe high standards of transparency, accountability and integrity. The Group believes that good corporate governance will help to realise long-term Shareholders value, whilst taking into account the interest of other stakeholders.

During the financial year ended 31 December 2006, the outsourced Internal Audit service provider, CGRM Infocomm Sdn Bhd, conducted a “Corporate Governance Compliance Review” and gap analysis based on the Bursa Malaysia Listing Requirements and the Malaysian Code on Corporate Governance. Through this exercise, CGRM also provided an independent, objective assessment on the appropriateness of the organisation's governance structure and the operating effectiveness of specific governance activities. Subsequent to this, a ”Corporate Governance Review Report” was issued noting the full compliance to all Principles and the extent of having adopted or are in the process of adopting the best practices advocated by the Code.

The Board is pleased to disclose below, a description of the application of the principles of good governance and the extent to which the Group has complied with the best practices advocated by the Code.

BOARD OF DIRECTORS

The Company is led and managed by an experienced Board, comprising members with a wide range of experience in relevant fields such as textile and furnishing fabrics, entrepreneurship, economics, marketing, finance, accounting, legal and public service. The Directors bring a broad range of skills, experiences and knowledge required to successfully direct and supervise the Group’s business activities. A brief profile of each Director are set out in the Directors’ Profile of this Annual Report.

Board Composition and Balance

The Board consists of an Executive Chairman, a Deputy Executive Chairman, two (2) Executive Directors, two (2) Independent Non-Executive Directors and one (1) Non-Independent, Non-Executive Director. Two directors had resigned on 26 February 2007.

The roles of the Chairman of the Board and Chief Executive Officer (“CEO”) are segregated. The Chairman is primarily responsible for the proper conduct and working of the Board whilst the CEO is responsible for the day-to-day running of the business and implementation of Board policies and decisions.

The two (2) Independent Non-Executive Directors of the Company are independent of management and free from any business relationship which could materially interfere with the exercise of their judgement. They present a good mix of industry specific knowledge plus broad business and commercial experience They provide guidance, unbiased, fully balanced and independent views, advice and judgement to many aspects of the Group’s strategy so as to safeguard the interests of minority shareholders and to ensure that the highest standards of conduct and integrity were maintained by the Group. The Board has also appointed Datuk Emam Mohd Haniff bin Emam Mohd Hussain as the Senior Independent Director to whom concerns may be conveyed.

Board Responsibilities

The Board retains full and effective control of the Group and has developed corporate objectives and position descriptions including the limits to management’s responsibilities, which the Executive Directors are aware and are responsible for meeting.

The Board has a formal schedule of matters reserved to itself for decision, which includes the overall Group strategy and direction, investment policy, major capital expenditures, consideration of significant financial matters and review of the financial and operating performance of the Group.

The Board understands the principal risks of all aspects of the business that the Group is engaged in recognising that business decisions require the incurrence of risk. To achieve a proper balance between risks incurred and potential returns to shareholders, the Board ensures that there are in place systems that effectively monitor and manage these risks with a view to the long term viability of the Group.

As certain Board functions are delegated to management, the Board ensures management is of the highest calibre and has in place programmes to train and develop management and also provide for the orderly succession of management.

The Company has in place a policy to enable the Group to communicate effectively with its shareholders, other stakeholders and the public generally. The policy ensures that it effectively interprets the operations of the Group to the shareholders and accommodates feedback from shareholders, which should be factored into the Group’s business decisions.

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Supply of InformationPrior to Board meetings, an agenda together with the relevant documents and information are distributed to all Directors. The CEO and/or other relevant Board members will provide comprehensive explanation of pertinent issues and recommendations by the management. The issues would then be deliberated and discussed thoroughly by the Board prior to decision-making.

Apart from the above, the Board members are updated on the Company’s activities and its operations on a regular basis. All Directors have access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable them to discharge their duties and responsibilities.

All Directors have access to the advice and services of the Company Secretary and to obtain independent professional advice, whenever necessary, at the expense of the Company.

Board MeetingsThere were five (5) Board of Directors’ Meetings held during the financial year ended 31 December 2006. Details of the attendance of the Directors at the Board of Directors’ Meetings are as follows:

Attendance

4/5

5/5

5/5

5/5

3/5

4/5

5/5

1/5

5/5

Name of Director

Mr. Harsukhlal A/L Maganlal Kamdar

Mr. Bipinchandra A/L Balvantrai

Mr. Jayesh R Kamdar A/L Rajnikant

Mr. Paresh R. Kamdar

Mr. Hamendra A/L B.M. Kamdar (Resigned on 26.2.2007)

Mr. Kamal Kumar Kishorchandra Kamdar

Datuk Emam Mohd Haniff Bin Emam Mohd Hussain

Dato’ Mohamed Nizam Bin Abdul Razak (Resigned on 26.2.2007)


Appointments to the Board

A Nomination Committee has been established by the Board comprising exclusively Non-Executive Directors, a majority of whom are Independent as follows:

1. Dato’ Dr Shanmughanathan A/L Vellanthurai – Chairman (Independent Non-Executive Director)

2. Datuk Emam Mohd Haniff Bin Emam Mohd – Member (Senior Independent Non-Executive Director)

3. Dato’ Mohamed Nizam bin Abdul Razak – Member (Independent Non-Executive Directors). Resigned with effect from 26 February 2007.

4. Mr Kamal Kumar Kishorchandra Kamdar – Member (Non-Independent Non-Executive Director). Appointed with effect from 26 February 2007.

The Committee is generally responsible to:

i. assess the effectiveness of the Board as a whole, the Committees of the Board and the contribution of each individual Director.

ii. assess the size of the Board and review the mix of skills and experience and other qualities of the Board members required for the Board to function completely and efficiently.

iii. assess and recommend new nominees for appointment to the Board for the Board’s final decision-making.

The Board is entitled to the services of the Company Secretary who would ensure that all appointments are properly made upon obtaining all necessary information from the Directors. The Nomination Committee met twice during the financial year ended 31 December 2006.

During the financial year, the Nomination Committee has not conducted any assessments on directors’ contribution and board effectiveness. These assessments will be undertaken in the following financial year.

Re-election

In accordance with the provisions of the Articles of Association of the Company, one-third (1/3) of the Board of Directors for the time being or if their number is not three (3) or multiples of three (3), then the number nearest to one-third (1/3) shall retire from office at each Annual General Meeting and shall be eligible for re-election. Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129(6) of the Companies Act 1965.

Directors’ Training

All the Directors of the Company have attended the Mandatory Accreditation Programme conducted by Bursa Malaysia Training Sdn Bhd within the stipulated timeframe required in the Listing Requirements.

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Corporate G

overnance Statem

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ont’d

Training attended

Note 2

Note 3

Note 4

Note 5

-

Note 6

-

Note 5

Reason for non-compliance

N/A

N/A

N/A

N/A

Note 1

N/A

Note 1

N/A

Name of Director

Mr. Harsukhlal A/L Maganlal Kamdar

Mr. Bipinchandra A/L Balvantrai

Mr. Jayesh R Kamdar A/L Rajnikant

Mr. Paresh R. Kamdar

Mr. Kamal Kumar Kishorchandra Kamdar

Datuk Emam Mohd Haniff Bin Emam Mohd Hussain


Mr. Rajnikant A/L B.M Kamdar

As the Continuous Education Programme (CEP) has been repealed by Bursa Malaysia with effect from 01 January 2005, the Board of Directors have adopted a training programme deemed appropriate for the Directors.

During the year, the Board Members have attended the directors’ training as detailed below:-

Note 1:

Note 2:

Note 3:

Note 4:

Note 5:

Note 6:

Had an exceptionally committed schedule for 2006, however, they will continue to undergo further training from time to time.

Mode of training

Seminar

Seminar

Seminar

Seminar

Seminar

Title of training

Code of Corporate Compliance

and Ethical Conduct

Managing Business Transformation Process

Tax Planning of Companies Workshop

Code of Corporate Compliance

and Ethical Conduct

Creating A Bridging Culture

Number of hours/days spent

½ day

1 day

1 day

1 day

½ day

Directors’ Remuneration

A Remuneration Committee has been established by the Board comprising a majority of Non-Executive Directors as follows: 1. Dato’ Mohamed Nizam bin Abdul Razak – Chairman (Independent Non-Executive Director). Resigned with effect from 26 February 2007. 2. Dato’ Dr Shanmughanathan A/L Vellanthurai – Chairman (Independent Non-Executive Director). Appointed with effect from 26 February 2007. 3. Hamendra A/L B.M. Kamdar – Member (Executive Director). Resigned with effect from 26 February 2007. 4. Bipinchandra A/L Balvantrai – Member (Executive Director). Appointed with effect from 26 February 2007. 5. Kamal Kumar Kishorchandra Kamdar – Member (Non-Independent Non-Executive Director)

The Remuneration Committee shall ensure that the levels of remuneration are sufficient to attract and retain Directors of the quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the executive directors. In the case of non-executive directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the non-executive directors concerned.

The Remuneration Committee met once during the financial year ended 31 December 2006 to review the remuneration of the Directors.

Details of Directors’ remuneration for the financial year ended 31 December 2006 are set out as below:

Salaries

Other emoluments

Benefits in Kind

Directors’ fees

Total

Executive Directors(RM)

1,992,000

235,890

132,673

-

2,360,563

Non-Executive Directors(RM)

-

-

-

168,000.00

168,000.00

Corporate G

overnance Statem

entC

ont’d

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The number of Directors whose remuneration fall into the following bands are as follows:-

Range of Remuneration (RM)50,000 and below50,001 – 100,000250,001 – 300,000300,001 – 350,000350,001 – 400,000400,001 – 450,000

Executive-11113

Non-Executive4-----

SHAREHOLDERS

Dialogue with InvestorsRecognising the importance of timely dissemination of information to shareholders and other stakeholders, the Board is committed to ensuring that the shareholders and other stakeholders are well informed of major developments of the Company and the information is communicated to them through the following:

(i) the Annual Report;

(ii) the various disclosures and announcements made to Bursa Malaysia Securities Berhad including the Quarterly Results and Annual Results; and

(iii) the website at www.kamdar.com.my which shareholders as well as members of the public are invited to access for the latest information on the Group.

General MeetingsThe Company’s Annual General Meeting (“AGM”) serves as a principle forum for dialogue with shareholders. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. Extraordinary General Meetings is held as and when required.

ACCOUNTABILITY AND AUDITFinancial ReportingThe Directors are responsible to present a true and fair assessment of the Group’s position and prospects in the annual reports and quarterly reports. The quarterly financial results were reviewed by the Audit Committee and approved by the Board of Directors prior to submission to Bursa Malaysia Securities Berhad.

A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing section.

Statement of Directors’ Responsibility for Preparing Financial StatementsThe Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Group for the year ended 31 December 2006, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

Internal ControlThe Board has an overall responsibility in maintaining a sound internal control system that provides reasonable assurance of effective and efficient operations and compliance with internal procedures and guidelines. The Statement on Internal Control is set out in this Annual Report.

Relationship with the AuditorsThe Board has established a formal and transparent arrangement for maintaining appropriate relationships with the external auditors in seeking professional advice and ensuring compliance with the appropriate accounting standards. The Audit Committee met with the external auditors to discuss their audit plan, audit findings and the financial statements. To this effect, the Audit Committee Chairman met the out-sourced Internal Audit service provider without the presence of Management during the financial year.

COMPLIANCE STATEMENTThe group has complied with the principles as set out in parts 1 and 2 respectively of the code.

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Audit C

omm

ittee Report

1. COMPOSITION

Chairman Datuk Emam Mohd Haniff bin Emam Mohd Hussain (Senior Independent Non- Executive Director)

Members Dato’ Dr. Shanmughanathan A/L Vellanthurai (Independent Non- Executive Director) Paresh R. Kamdar (Chief Operating Officer/Executive Director)

2. TERMS OF REFERENCE2.1 Members

2.1.1 The Board shall appoint the committee comprising of no fewer than three (3) directors, a majority of whom shall be independent non-executive directors of the Board. At least one member of the audit committee must be:

- A member of the Malaysian Institute of Accountants, or

- If he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and; either

(i) he must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

(ii) 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.

2.1.2 The Chairman of the Audit Committee should be an Independent Non-Executive director and be elected amongst the members of the Committee.

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

2.1.4 In the event that the Audit Committee is reduced to less than (3) members, the vacancy shall be filled within 3 months.

2.2 Responsibilities and Duties

The duties and responsibilities of the Audit Committee shall be:-

- to consider the nomination of external auditors, the audit fees and any question of resignation or dismissal;

- to oversee all matters pertaining to audit including the review of the audit plan and report;

- to review the adequacy of existing external audit arrangements, with particular emphasis on the scope and quality of the audit;

- to discuss problems and reservations arising from the interim and final results, and any matters the external auditors may wish to discuss (in the absence of management where necessary);

- to review the quarterly interim results, half-year, annual financial statements and audit report, focusing on :

• any changes in accounting and operating policies and practices; • significant adjustments arising from the audit; • adequacy of disclosure of all information in the financial statements essential to a true

and fair representation of the financial affairs of the Company and its subsidiary companies; and

• compliance with applicable approved accounting standards and business practices.

- to review any management letter sent by the external auditors to the Company and the management’s response to such letter;

- to discuss with the external auditors their evaluation of the quality and effectiveness of the internal control and management information systems;

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

- to review the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

- to review and approve the annual audit plan proposed by Internal Auditors;

- to review the co-operation or assistance given by the Company’s officers to both external and internal auditors;

- to review all areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels;

- to review all related party transactions and potential conflict of interests situations; and

- to consider other matters, act upon the Board of Directors’ request to investigate and report on any issues or concerns with regards to the management of the Group, as defined.

Audit C

omm

ittee Report

Cont’d

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2.3 Rights and Authority of the Audit Committee

2.3.1 The Company must ensure that whenever necessary and reasonable for the performance of its duties, the Audit Committee shall, in accordance with the procedures to be determined by the Board and at the cost of the Company to:

- investigate any matters within its terms of reference;

- have adequate resources which it needs to perform its duties;

- have full access to any information which it requires in the course of performing its duties;

- have unrestricted access to the chief executive officer and the chief financial officer;

- have direct communication channels with the external and internal auditors (if any);

- have access to independent professional or other advice in the performance of its duties at the cost of the Company; and

- be able to invite outside professionals with relevant experience and expertise to attend its meetings, if necessary.

3. MEETINGS 3.1 The Committee shall convene at least four (4) regular meetings a year and such additional

meetings as the Chairman shall determine. The Chairman shall convene a meeting of the Committee, if so requested by any member of the Committee, the Management of the Group, the internal auditors or the external auditors.

3.2 The external auditors shall have the right to appear and be heard at any meetings of the Committee and appear before the Committee upon request by the Committee.

3.3 The Head of Internal Audit and a representative of the external auditors shall attend all meetings of the Committee. Other members of the Board may attend meetings of the Committee upon its invitation.

3.4 The quorum for any meeting of the Committee shall be two (2) members present in person, both of whom present shall be independent Non-Executive directors.

4. ATTENDANCE OF MEETINGS There were five (5) meetings held during the year 2006 and all three committee members had attended all the five (5) meetings.

5. SUMMARY ACTIVITIES OF THE AUDIT COMMITTEE DURING THE YEAR 2006 During the financial year, the activities of the Committee included:-

• Reviewing the quarterly financial result announcements of the Group prior to seeking the Board of Directors’ approval;

• Reviewing the audit strategy and plan of the External Auditors;

• Reviewing External Auditors’ reports in relation to audit and accounting issues arising from the audit, and updates of new developments on accounting standards issued by the Malaysian Accounting Standards Board;

• Reviewing the annual financial statements of the Group and the Company; and

• Reviewing the internal audit reports and the recommendations on audit findings.

6. INTERNAL AUDIT FUNCTIONS

The Group’s internal audit functions are outsourced to an external professional internal audit and risk management consulting firm, which reports to the Audit Committee and assists the Board of Directors in monitoring and managing risks and internal controls. The Audit Committee approves the internal audit plan tabled during the Audit Committee meeting during the financial year.

The scope of internal audit covers the audits of all key operations in the Group. The internal auditors have been assigned to review and assess the adequacy of such controls prevailing in those key operational areas selected for review.

The approach adopted by the Group is of a risk based approach to the implementation and monitoring of controls of the subsidiary companies. The audit encompasses the following activities:

• Review and appraise the soundness, adequacy and application of accounting, financial and other controls promoting effective control in the Group.

• Ascertain the extend to which the Group’s assets are safeguarded.

• Ascertain the level of compliance to the Group policy and procedures.

• Recommend improvements to the existing internal control system.

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Statem

ent Of Internal C

ontrol1. Introduction

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal control to safeguard shareholders’ investment and company’s assets. The Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirements require directors of listed companies to include a statement in annual reports on the state of their internal controls. The Bursa Securities’ “Statement on Internal Control: Guidance for Directors of Public Listed Companies published in collaboration with the Institute of Internal Auditors (“Guidance”) provides guidance for compliance with these requirements. The Board of Directors of Kamdar Group (M) Berhad (“the Board”) is pleased to present the Statement of Internal Control, which was prepared in accordance with the Guidance.

2. Board Responsibility

The Board acknowledges its overall responsibility for the internal control system to cover the financial, compliance and operational controls of the Company. The Board also recognizes its responsibility for reviewing the adequacy and integrity of the system of internal control to safeguard shareholders’ investment and the Company’s assets. However, it should be noted that such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

3. Risk Management Framework

The Group is still maintaining its risk management policy and framework to continually update and identify the various risk factors that could have a potentially significant impact on the Group’s mid to long term business objectives. As a result of this, a 3 year audit plan was developed and approved by the Audit Committee and the Board.

The Group has also made risk assessment as part of the Management and Board agenda so that there is periodic review of the risks surrounding the organisation and the quality of the corresponding action plans on a continuous basis.

4. Internal Audit Function

CGRM Infocomm Sdn Bhd (“CGRM”), an independent internal audit service provider, supports the Audit Committee, and by extension, the Board, by providing independent assurance on the effectiveness of the Group’s system of internal control.

In particular, CGRM appraises and contributes towards improving the Group’s risk management and control systems and reports to the Audit Committee on a quarterly basis.

The internal audit work plan, which reflects the risk profile of the Group’s major business sectors is routinely reviewed and approved by the Audit Committee. The scope of the CGRM’s function covered the audit of all business units and operations.

5. Key Process

The Board confirms that there was an ongoing process for identifying, evaluating and managing significant risks of the Company for the financial year under review. The Board has assigned to the Audit Committee the duty of reviewing and monitoring the effectiveness of the Company’s internal control system.

The embedded control system is designed to facilitate achievement of the Group’s business objectives. It comprises the underlying control environment, control process, communication and monitoring systems.

The Company’s key internal control processes were assessed based on the principles of COSO (“Committee of Sponsoring Organisations of the Treadway Commission”) as follows:

Control Environment

• There is a clear organisational structure with well-defined lines of responsibility and delegation of authority to ensure proper identification of accountabilities and segregation of duties. These are communicated to all levels of the organisation.

• The company has a framework for recruitment activities to maintain a capable workforce.

• A series of in-house, knowledge sharing forums were conducted as part of career and knowledge enhancement in the areas of human resource and financial matters.

Statem

ent Of Internal C

ontrolCont’d

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Risk Assessment

• In line with the recent on-going integration of the point-of-sales, inventory and financial systems, the Group has or is in the midst of reassessing the risks exposure to the Group.

Control Activities

• The Group’s computerised information systems are being streamlined to ensure compliance with hardware and software regulations and guidelines for system integrity, effectiveness and efficiency.

• Standard operating policies and procedures are set out and communicated to all levels of the organisation.

• The automated back-end offices collectively provide the information technology control to support the achievement and monitoring of its financial reporting objectives.

Information & Communication

• Issues and matters arising from various outlets, departments and functions are discussed and resolved in Management and merchandisers’ bi-monthly meetings. Minutes are prepared following each meeting.

• Independent appraisals by internal and external auditors ensure ongoing compliance with policies, procedures, standards and legislations whilst assessing the effectiveness of the Group’s system of financial, compliance and operational controls.

Monitoring

• The company has also placed monitoring controls, by way of retainer services with qualified external service providers, to assist management in ensuring compliance with requirements of regulatory bodies.

6. Conclusion

Management maintains an ongoing commitment to strengthen the Group’s control environment and processes. During the year, there were no material losses caused by breakdown in internal controls.

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Other D

isclosure Requirem

ents Pursuant To The

Listing Requirem

ents Of B

ursa Securities

1. UTILISATION OF PROCEEDS FROM CORPORATE EXERCISE The Company did not undertake any corporate exercise during the financial year, hence no

proceeds were raised there of.

2. SHARE BUY-BACKS There were no share buy-back arrangements during the financial year.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES There were no options and warrants exercised in respect of the financial year.

During the financial year ended 31 December 2006 a total number of 9,000 Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) were converted into 9,000 ordinary shares of RM1.00 each as stated in Note 25 of the financial statements.

4. AMERICAN DEPOSITORY RECEIPT (“ADR”) /GLOBAL DEPOSITORY RECEIPT (“GDR”) The Company did not sponsor any ADR or GDR programmes during the financial year.

5. IMPOSITION OF SANCTIONS / PENALTIES There were no public imposition of sanctions or penalties imposed on the Company and its

subsidiaries, directors or management by the regulatory bodies during the financial year.

6. NON-AUDIT FEES There was no non-audit fees paid to the external auditors by the Group for the financial year ended

31 December 2006.

7. PROFIT ESTIMATE, FORECAST OR PROJECTION The Company did not undertake any profit estimate, forecast or projection for the financial year.

8. PROFIT GUARANTEE The Company did not give any form of profit guarantee to any parties during the financial year.

9. MATERIAL CONTRACTS AND CONTRACTS RELATING TO LOANS There were no contracts relating to loan and material contracts of the Company and its subsidiaries

involving the Directors and substantial shareholders since the end of the previous financial year.

10. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND TRADING NATURE The recurrent related party transaction of the Company during the year amounted to RM96,000.00

with details as stated in Note 27 to the financial statements.

11. REVALUATION POLICY ON LANDED PROPERTIES The Group does not adopt a policy on regular revaluation to its landed properties.

Net profit for the year

Group

RM

4,809,723

Company

RM

3,789,521

FINANCIAL RESULTS

DIVIDENDS

Company

RM

4,535,640

The amount of dividends paid by the Company since 31 December 2005 were

as follows:

In respect of the year ended 31 December 2005 as reported in the the

Directors’ report of that year:

Final dividend of 5% less 28% income tax paid on 28 July 2006.

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The Directors hereby submit their report together with the audited financial statements of the Group and

of the Company for the year ended 31 December 2006.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of its subsidiary companies are disclosed in Note 11 to the financial statements. There have been no significant changes in the nature of these activities during the year.

At the forth coming Annual General Meeting, a final dividend in respect of the year ended 31 December 2006, of 4% less 28% taxation on 125,999,002 ordinary shares, amounting to a dividend payable of RM3,628,770 will be proposed for shareholders’ approval. The financial statements for the current year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profits in the year ending 31 December 2007.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the year except as disclosed in the Notes to the financial statements.

SHARES CAPITAL AND DEBENTURES

During the year, the Company has increased its issued and paid up share capital from RM125,990,002 to RM125,999,002 by way of issuance of 9,000 ordinary shares of RM1 each through the conversion of 9,000 Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) of RM1 each on the basis of one new ordinary share for every one ICULS exercised.

The new ordinary shares issued during the year ranked pari passu in all respect with the existing ordinary shares of the Company.

There were no debentures issued during the year.

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INFORMATION ON THE FINANCIAL STATEMENTSBefore the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:-

At the date of this report, the Directors are not aware of any circumstances:-

which would render the amounts written off as bad debts or the amount of provisions for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

which would render the values attributed to current assets in the financial statements of the Group and of the Companys misleading; or

which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Companys misleading or inappropriate.

to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all bad debts had been written off and adequate provisions had been made for doubtful debts; and

to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.

(a)

(b)

(a)

(b)

(a)

(b)

(a)

(b)

(c)

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 year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet its obligations as and when they fall due.

At the date of this report, the following:-

any charge on the assets of the Group and of the Company which has arisen since the end of the year which secures the liability of any other person; or

any contingent liability of the Group and of the Company which has arisen since the end of the year.

SIGNIFICANT EVENT DURING THE YEARSignificant event during the year is disclosed in Note 32 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATESignificant events subsequent to the balance sheet date is disclosed in Note 33 to the financial statements.

OTHER STATUTORY INFORMATIONThe Directors state that:-

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

In their opinion:-

the results of the Group’s and of the Company’s operations during the year were not substantially affected by any item, transaction or event of a material and unusual nature except as disclosed in the Note 3(b) to the financial statements; or

there has not arisen in the intervals between the end of the year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the year in which this report is made.

At 1.1.2006

10,378,000

8,674,000

21,364,000

2,570,000

8,488,000

2,405,000

3,657,000

350,000

Direct Interest


Hamendra A/L B.M. Kamdar

Harsukhlal A/L Maganlal Kamdar

Jayesh R Kamdar A/L Rajnikant

Rajnikant A/L B.M. Kamdar

Paresh R. Kamdar


Dato’ Mohamed Nizam bin Abdul Razak

Bought

-

-

-

-

-

-

4,566,625

-

Sold

-

(1,000,000)

-

-

-

-

-

-

At 31.12.2006

10,378,000

7,674,000

21,364,000

2,570,000

8,488,000

2,405,000

8,223,625

350,000

Ordinary shares of RM1 each

At 1.1.2006

8,289,706

6,928,214

17,063,768

2,052,376

6,779,401

2,920,816

1,920,700

Direct Interest







Paresh R. Kamdar

Bought

-

-

-

-

-

3,346,820

-

Sold

-

-

-

-

-

-

-

At 31.12.2006

8,289,706

6,928,214

17,063,768

2,052,376

6,779,401

6,267,636

1,920,700

Convertible Unsecured Loan Stocks 2004/2009

Directors’ R

eportC

ont’d

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

Bipinchandra A/L BalvantraiHarsukhlal A/L Maganlal KamdarJayesh R Kamdar A/L RajnikantParesh R. KamdarDatuk Emam Mohd Haniff bin Emam Mohd HussainDato’Dr. Shanmughanathan A/L VellanthuraiKamal Kumar Kishorchandra KamdarRajnikant A/L B.M. Kamdar (alternate to Paresh R. Kamdar)Dato’ Mohamed Nizam bin Abdul Razak (resigned on 26.2.2007)Hamendra A/L B.M. Kamdar (resigned on 26.2.2007)

According to the register of Directors’ shareholdings, the interests of Directors in office at the end of the year in shares, 3% ICULS 2004/2009 and Warrants 2004/2009 in the Company and its related corporations were as follows:

ICULS 2004/2009 Number of RM1 nominal value of 3% Irredeemable

At 1.1.2006

5,700,680

4,764,407

11,734,443

1,411,382

4,662,070

1,320,830

2,008,592

Direct Interest






Paresh R. Kamdar


Bought

-

-

-

-

-

-

3,292,544

Sold

-

-

-

-

-

-

-

At 31.12.2006

5,700,680

4,764,407

11,734,443

1,411,382

4,662,070

1,320,830

5,301,136

WARRANTS 2004/2009 Number of Warrants

By virtue of the Directors’ interests in the shares of the Company, Directors having interest in the shares of the Company are also deemed interested in the shares of its related corporations to the extent that the Company has an interest under Section 6A of the Companies Act, 1965.

No other Directors held any shares or had any interest in shares of the Company and its related corporations during the year.

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DIRECTORS’ BENEFITSDuring and at the end of the year, no arrangements subsisted to which the Company is a party, with the

object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition

of shares in or debentures of the Company or any other body corporate other than interest in respect of

ICULS and Warrants as stated above.

Since the end of the previous year, no Director has received or become entitled to receive any benefit

(except as disclosed in the Notes to the financial statements) by reason of a contract made by the

Company or related corporation with the Director or with a firm of which the Director is a member, or

with a company in which the Director has a substantial financial interest.

AUDITORSMessrs Shamsir Jasani Grant Thornton have expressed their willingness to continue in office.

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

Directors dated 23 April 2007.

HARSUKHLAL A/L MAGANLAL KAMDAR

JAYESH R KAMDAR A/L RAJNIKANT

Directors’ R

eportC

ont’d

DIRECTORS

)))

))

)))

))

)))))

))

Kuala Lumpur

23 April 2007

Statem

ent By D

irectors

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eport 2007

In the opinion of the Directors, the financial statements set out pages 26 to 51 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2006, results of the operations and cash flows of the Group and of the Company for the year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors dated23 April 2007.

HARSUKHLAL A/L MAGANLAL KAMDAR JAYESH R KAMDAR A/L RAJNIKANT

Kuala Lumpur

STATUTORY DECLARATION

I,Jayesh R Kamdar A/L Rajnikant, being the Director primarily responsible for the financial management of Kamdar Group (M) Berhad., do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 26 to 51 are 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 above named at Kuala Lumpur in the Federal Territory this

day of 23 April 2007

)))

)

JAYESH R KAMDAR A/L RAJNIKANT

Before me:

T. THANDONEE RAJAGOPAL ( No.W228)

Commissioner for Oaths

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eport 2007

Report O

f The Auditors

REPORT OF THE AUDITORS TO THE MEMBERS OF KAMDAR GROUP (M) BERHAD (Incorparated in Malaysia)

We have audited the financial statements set out on pages 26 to 51 of Kamdar Group (M) Berhad.

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 applicable Approved Standards on Auditing in Malaysia. These standards require that we plan and perform the audit to obtain all the information and explanations, which we considered necessary to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. An audit includes an assessment of 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:

the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and Applicable MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities so as to give a true and fair view of:-

the state of affairs of the Group and of the Company as at 31 December 2006 and of the results and cash flows of the Group and of the Company for the year ended on that date; and

the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company;

(i)

(ii)

a)

b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and by the subsidiary companies have been properly kept in accordance with the provisions of the said Act.

and

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

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

SHAMSIR JASANI GRANT THORNTON

(NO. AF : 0737)

CHARTERED ACCOUNTANTS

DATO’ N.K. JASANI

CHARTERED ACCOUNTANT

(NO: 708/03/08(J/PH))

PARTNERKuala Lumpur

23 April 2007

Balance S

heets

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eport 2007

SHARE CAPITAL

RESERVES

Total Equity

NON-CURRENT LIABILITIES

LONG TERM BORROWINGS

DEFERRED TAX LIABILITIES

FINANCE PAYABLES

BALANCE SHEETS AS AT 31 DECEMBER 2006

125,999,002

69,712,086

195,711,088

63,891,762

2,786,840

-

262,389,690

125,990,002

70,467,205

196,457,207

65,463,986

5,401,200

-

267,322,393

125,990,002

11,541,802

137,531,804

91,984,898

3,650,397

829,237

233,996,336

125,999,002

11,806,885

137,805,887

92,668,118

3,980,497

802,592

235,257,094

2005RM

2006RM

2006RM

2005RM

Company Group

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

5

6

7

8

9

Note

Represented by:-

PROPERTY, PLANT AND

EQUIPMENT

INVESTMENT IN SUBSIDIARY

COMPANIES

DEFERRED TAX ASSET

GOODWILL

FIXED DEPOSITS WITH

LICENSED BANKS

172,521,857

-

1,654,918

433,506

2,385,689

165,306,390

-

1,981,437

433,506

2,345,975

-

256,430,002

1,575,918

-

-

-

256,430,000

1,981,437

-

-

10

11

8

12

13

87,342,019

8,481,523

4,328,254

-

3,260,520

1,500,000

9,535,890

114,448,206

96,763,100

8,461,805

4,108,981

-

1,935,975

-

6,623,711

117,893,572

-

-

7,166,160

100,000

2,823,507

-

220,145

10,309,812

-

-

13,888,800

200,000

5,401,200

-

13,368

19,503,368

CURRENT ASSETS

Inventories

Trade receivables

Other receivables, deposits and

pre-payments

Amount due from subsidiary

companies

Tax recoverable

Fixed deposits with licensed banks

Cash and bank balances

Total current assets

14

15

16

17

CURRENT LIABILITIES

Trade payables

Other payables and accruals

Amount due to subsidiary companies

Short term borrowings

Finance payables

Tax payable

Total current liabilities

NET CURRENT ASSETS

6,353,300

6,467,920

-

42,631,961

319,588

414,313

56,187,082

58,261,124

235,257,094

7,768,065

5,117,622

-

40,535,523

250,533

292,801

53,964,544

63,929,028

233,996,336

-

1,555,471

2,634,055

1,736,516

-

-

5,926,042

4,383,770

262,389,690

-

1,545,665

7,377,837

1,612,576

-

56,334

10,592,412

8,910,956

267,322,393

18

17

7

9

EQUITY

19

20

21

22

23(a)

23(b)

2005RM

2006RM

2006RM

2005RMNote

Company Group

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eport 2007

Income S

tatements

Revenue

Cost of sales

Gross profit

Other income

Selling and distribution expenses

Administration expenses

Other expenses

Profit from operations

Finance costs

Profit before exceptional items

Exceptional items

Profit before taxation

Taxation


Earnings per share (cent)

- Basic

- Diluted

INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006

168,645,897

(108,916,311)

59,729,586

1,423,376

(4,402,736)

(40,676,794)

(448,406)

15,625,026

(5,674,258)

9,950,768

-

9,950,768

(5,141,045)

4,809,723

3.8

2.7

178,875,929

(112,760,676)

66,115,253

1,423,050

(3,436,168)

(40,075,332)

(654,096)

23,372,707

(5,733,580)

17,639,127

(5,186,620)

12,452,507

(7,829,916)

4,622,591

3.7

2.6

9,953,000

-

9,953,000

448,000

-

(436,360)

-

9,964,640

(2,946,018)

7,018,622

-

7,018,622

(3,229,101)

3,789,521

19,290,000

-

19,290,000

531,793

-

(464,902)

-

19,356,891

(3,081,604)

16,275,287

(5,186,620)

11,088,667

(5,957,554)

5,131,113


Statem

ents Of C

hanges In Equity

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eport 2007

Group

Balance at 1 January 2005

Issue of ordinary shares


Balance at 31 December 2005

Effect of adopting FRS 3


Final dividend of 5% less 28%income tax



Company

Balance at 1 January 2005





Final dividend of 5% less 28% income tax



Sharecapital

RM

Sharepremium

RM

ICULS(equity

component)RM

Mergerdeficit

RM

Capitalreserve

RM

Reserve onconsolidation

RM

Distributable

Retainedprofits

RMTotal

RM

124,430,002

1,560,000

-

125,990,002

-

9,000

-

-

125,999,002

124,430,002

1,560,000

-

125,990,002

9,000

-

-

125,999,002

110,000

-

-

110,000

-

-

-

-

110,000

-

-

-

-

-

-

-

-

65,790,537

-

-

65,790,537

-

(9,000)

-

-

65,781,537

65,790,537

-

-

65,790,537

(9,000)

-

-

65,781,537

(176,580,000)

-

-

(176,580,000)

-

-

-

-

(176,580,000)

-

-

-

-

-

-

-

-

823,924

-

-

823,924

-

-

-

-

823,924

-

-

-

-

-

-

-

-

2,784,161

-

-

2,784,161

(2,784,161)

-

-

-

-

-

-

-

-

-

-

-

-

113,990,589

-

4,622,591

118,613,180

2,784,161

-

(4,535,640)

4,809,723

121,671,424

(454,445)

-

5,131,113

4,676,668

-

(4,535,640)

3,789,521

3,930,549

131,349,213

1,560,000

4,622,591

137,531,804

-

-

(4,535,640)

4,809,723

137,805,887

189,766,094

1,560,000

5,131,113

196,457,207

-

(4,535,640)

3,789,521

195,711,088

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2006

Non-distributable


2005RM

2006RM

2006RM

2005RM

Company Group

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eport 2007

Cash Flow

Statem

entsCASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2006

Adjustments for:

Bad debts recovered

Bad debts written off

Provision for doubtful debts no longer required

Depreciation

Dividend income

Gain on disposal of property, plant and equipment

Interest expenses

Interest income

Loss/(Gain) on disposal of other investments

Property, plant and equipment written off

Operating profit/(loss) before working capital changes

Changes in working capital:-

Inventories

Payables

Receivables

Subsidiary companies

Cash generated from/(used in) operations

Interest received

Interest paid

Tax paid

Tax refund

Net cash generated from/(used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of a subsidiary company

Deferred expenditure paid

Dividend received

Placement of fixed deposits

Proceeds from disposal of other investments

Proceeds from disposal of property, plant and equipment

Purchase of property, plant and equipment (Note A)

Net cash (used in)/generated from investing activities

9,950,768

-

111,420

-

4,631,286

-

(62,594)

5,613,407

(82,139)

-

336,986

20,499,134

9,421,081

(478,596)

(350,410)

-

29,091,209

82,139

(6,647,564)

(5,687,459)

-

16,838,325

-

-

-

(39,714)

-

203,252

(12,004,696)

(11,841,158)

12,452,507

(780)

13,707

(187)

3,935,731

-

(348,865)

5,664,456

(179,597)

1,559,999

644,287

23,741,258

(134,865)

(1,782,620)

6,116,968

-

27,940,741

179,597

(7,199,609)

(7,390,405)

181,114

13,711,438

-

3,114,018

-

(2,345,975)

1

1,576,446

(14,026,071)

(11,681,581)

7,018,622

-

-

-

-

(9,953,000)

-

2,946,018

-

-

-

11,640

-

(326,193)

-

(4,643,782)

(4,958,335)

-

(4,058,303)

(129,743)

-

(9,146,381)

(2)

-

13,888,800

-

-

-

-

13,888,798

11,088,667

-

-

-

-

(19,290,000)

-

3,081,604

(91,793)

1,559,999

-

(3,651,523)

-

1,199,666

-

4,051,775

1,599,918

91,793

(4,725,698)

(66,666)

-

(3,100,653)

-

3,114,018

-

-

1

-

-

3,114,019

CASH FLOWS FROM OPERATING ACTIVITIES


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CASH FLOW STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2006(cont’d)

Cash Flow

Statem

entsC

ont’d

2005RM

2006RM

2006RM

2005RM

Company Group

2005RM

2006RM

2006RM

2005RM

Company Group

CASH FLOWS FROM FINANCING ACTIVITIES

Bankers' acceptances

Drawdown of term loan

Dividend paid

Repayment of finance payables

Repayment of term loans

Revolving credits

Trust receipts

Net cash generated from/

(used in) financing activities

CASH AND CASH EQUIVALENTS

Net changes

Brought forward

Carried forward (Note B)

(2,663,000)

6,791,024

(4,535,640)

(277,290)

(3,089,940)

5,700,000

(171,983)

1,753,171

6,750,338

4,149,920

10,900,258

(56,000)

8,200,000

(2,669,400)

(188,230)

(15,145,620)

(700,000)

(85,749)

(10,644,999)

(8,615,142)

12,765,062

4,149,920

-

-

(4,535,640)

-

-

-

-

(4,535,640)

206,777

13,368

220,145

-

-

-

-

-

-

-

-

13,366

2

13,368

NOTES TO CASH FLOW STATEMENTS

A. PROPERTY, PLANT AND EQUIPMENTS

B. CASH AND CASH EQUIVALENTS COMPRISE OF :-

Fixed deposits with licensed banks

Bank overdrafts

Cash and bank balances

1,500,000

(135,632)

9,535,890

10,900,258

-

(2,473,791)

6,623,711

4,149,920

-

-

220,145

220,145

-

-

13,368

13,368


During the year, the Group acquired property, plant and equipment with an aggregate cost of RM12,324,396

(2005: RM15,294,071) of which RM319,700 (2005: RM1,268,000) were acquired by means of hire purchase Cash

payments of RM12,004,696 (2005: RM14,026,071) were made to purchase the property, plant and equipments.

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Notes To The Financial S

tatements

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2006

1. BASIS OF PREPARATION OF THE 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 applicable MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities.

The financial statements are presented in Ringgit Malaysia (RM).

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its risks. The Group operates within guidelines approved by the Board and the Group’s policy is not to engage in speculative transactions.

The main areas of financial risks faced by the Group and the policy in respect of the major areas of treasury activity are set out as follows:-

(a) Foreign currency riskThe Groupis exposed to foreign currency risk as a result of its normal external trading activities where the currency denomination differs from the local currency, Ringgit Malaysia (RM). The Group’s policy is to minimise the exposure to foreign currency risk by monitoring and approving requisitions which involve foreign currencies.

(b) Interest rate riskThe Group’s exposure to the risk of changes in the interest rates relates primarily to the Group’s bank borrowings from licensed banks. The Group’s policy is to manage its interest costs by obtaining the most favorable interest rates on its borrowings. Surplus funds of the Group are invested with a licensed bank such as fixed deposits to generate interest income.

(c) Credit riskThe credit risk is controlled by the application of credit approvals, limits and monitoring procedures and an internal credit review is conducted if the credit risk is material.

(d) Market riskFor key product purchases, the Group establishes floating price levels that the Group considers acceptable and enters physical supply to achieve these levels. The Group does not face significant exposure from the risk from changes in price levels.

(e) Liquidity and cash flow risksThe Group seeks to achieve a balance between certainty of funding even in difficult times for the markets or the Group and a flexible, cost-effective borrowing structure. This is to ensure that at the minimum, all projected net borrowing needs are covered by committed facilities. Also, the objective for debt maturity is to ensure that the amount of debt maturing in any one year is not beyond the Group’s means to repay and refinance.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Accounting convention

The financial statements of the Group and of the Company have been prepared under the historical

cost convention unless otherwise indicated in the other significant accounting policies.

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tatements

Cont’d

(b) Adoption of new and revised Financial Reporting Standards (“FRS”)

The following FRSs have been adopted by the Group and of the Company effective for period

beginning on or after 1 January 2006:-

FRS 2

FRS 3

FRS 5

FRS 101

FRS 102

FRS 108

FRS 110

FRS 116

FRS 121

FRS 127

FRS 128

FRS 131

FRS 132

FRS 133

FRS 136

FRS 138

FRS 140

Share-based Payment

Business Combinations

Non-Current Assets Held for Sale and Discontinued Operations

Presentation of Financial Statements

Inventories

Accounting Policies, Changes in Accounting Estimates and Errors

Events after the Balance Sheet Date

Property, Plant and Equipment

The Effects of Changes in Foreign Exchange Rates

Consolidated and Separate Financial Statements

Investments in Associates

Interests in Joint Ventures

Financial Instruments: Disclosure and Presentation

Earnings per Share

Impairment of Assets

Intangible Assets

Investment Property

The Group has not early adopted the following:-

a) FRSs that are effective for periods beginning on or after 1 October 2006:-

(i) FRS 117 – Leases.

(ii) FRS 124 – Related Party Disclosures.

b) FRSs that are effective for periods beginning on or after 1 January 2007:-

(i) FRS 6 – Exploration for and Evaluation of Mineral Resources.

(ii) Amendment to FRS 119 2004: Employee Benefits – Actuarial Gains and

Losses, Group Plans and Disclosures.

c) FRS 139 – Financial Instruments: Recognition and Measurement.

The Malaysian Accounting Standards Board has yet to announce the effective date of this

standard.

The adoption of the abovementioned FRSs does not result in significant changes in accounting

policies of the Group and of the Company , other than changes discussed below:-

(i) FRS 3: Business Combinations

Under FRS 3, any excess of the Group’s interest in the net fair value of acquirees’ identifiable assets,

liabilities and contingent liabilities over cost of acquisition (previously referred to as “ negative

goodwill”), after reassessment, is now recognised immediately in profit or loss. Prior to 1 January

2006, negative goodwill was carried at cost. In accordance with the transitional provisions of FRS 3,

the negative goodwill as at 1 January 2006 of RM2,784,161 was derecognised with a corresponding

increase in retained profits.

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tatements

Cont’d

(c) Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of

financial statements. They affect the application of the Group's accounting policies and reported

amounts of assets, liabilities, income and expenses and disclosures made. They are assessed on an

ongoing basis and are based on experience and relevant factors, including expectations of future

events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key sources of estimation uncertainty at the

balance sheet date that have significant risk of causing a material adjustment to the carrying

amounts of assets and liabilities within the next year are discussed below:-

Income taxes

There are certain transactions and computations for which the ultimate tax determination is

uncertain during the ordinary course of business. The Company recognised tax liabilities based on

estimates of whether additional taxes will be due. Where the final tax outcome of these matters is

different from the amounts that were initially recognised, such difference will impact the income tax

and deferred tax provisions in the period in which such determination is made.

Depreciation of property, plant and equipment

The estimates for the residual values, useful lives and related depreciation charges for the

property, plant and equipment are based on commercial and production factors which could

change significantly as a result of technical innovations and competitors’ actions in response to

the market conditions.

Changes in the expected level of usage and technological development could impact the

economic useful lives and the residual values of these assets, therefore future depreciation

charges could be revised.

Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires the

estimation of the value in use of the cash-generating units to which goodwill are allocated. Estimating

the value in use requires the Group to make an estimate of the expected future cash flows from the

cash-generating unit and also to choose a suitable discount rate in order to calculate the present

value of those cash flows.

d) Basis of consolidation

The consolidated financial statements comprises the financial statements of the Company and its

subsidiary companies as at the balance sheet date. The financial statements of the subsidiary

companies are prepared for the same reporting date as the Company.

Acquisition of subsidiary companies are accounted for using the purchase method except for

Kamdar (South) Sdn Bhd, Kamdar Sdn Bhd, Pusat Membeli-belah Kamdar Sdn Bhd, Pusat

Membeli-belah Kamdar (Penang) Sdn Bhd and Kesar Sdn Bhd which are consolidated using merger

method of accounting.

Under the purchase method of accounting, the results of subsidiary companies acquired are

included in the consolidated income statements from the date on which the control is transferred

to the Group and are no longer consolidated from the date that control ceases. The purchase

method of accounting involves allocating the cost of the acquisition to the fair value of the assets

acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an

acquisition is measured as the aggregate of the fair values, at the date of exchange, of assets

given, liabilities incurred or assumed, and equity instruments issued, plus any cost directly

attributable to the acquisition.

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tatements

Cont’d

(d) Basis of consolidation (cont’d)

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the

identifiable assets, liabilities and contingent liabilities represent goodwill. Any excess of the Group’s

interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost

of acquisition is recognised immediately in profit or loss.

Under the merger method of accounting, the results of the subsidiary companies are accounted on

a full year basis irrespective of the date of merger. The difference between the nominal value of

shares issued as consideration for the merger and the nominal value of the shares received will be

adjusted against reserves.

In preparing the consolidated financial statements, intragroup balances, transactions and unrealised

gain or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated

financial statements for the like transaction and events in similar circumstances.

(e) Subsidiary companies

Subsidiary companies are entitied over which the Group has the ability to control the financial and

operating policies so as to obtain benefits from their activities. The existence and effect of potential

voting rights that are currently exercisable or convertible are considered when assessing whether

the Group has such power over another entity.

In the Company’s separate financial statements, investments in subsidiary companies are stated at

cost less impairment losses. On disposal of such investment, the difference between net disposal

proceeds and their carrying amounts is included in profit or loss.

(f) Goodwill

Goodwill acquired in a business combination is initially measured at cost. Subsequently, goodwill is

measured at cost less any accumulated impairment losses. It is reviewed for impairment, annually

or more frequently if events or changes in circumstances indicate that the carrying value may be

impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill

relating to the entity sold.

(g) Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and

impairment losses.

The policy for the recognition and measurement of impairment loss is in accordance with Note 3 (x).

Freehold land is not depreciated. All other properties, plants and equipments are depreciated over

their estimated useful lives to write off the cost of each property, plant and equipment.The principal

annual rates of depreciation used are as follows:-

Long term leasehold land and building

Buildings

Plant and machinery

Furniture and fittings

Electrical fittings

Office equipment, air conditioners, signboards and renovation

Computer equipment

Electrical lift

Motor vehicles

over remaining lease period

2%

10%

5 – 10%

7.5–10%

5– 50%

20%

7.5– 10%

10–20%

35.

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eport 2007


tatements

Cont’d

(g) Property, plant and equipment and depreciation (cont’d)

The residual values, useful life and depreciation method are reviewed at each year end to ensure

that the amount, method and period of depreciation are consistent with previous estimates and

expected pattern of consumption of future economic benefits embodied in the items of property,

plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future

economic benefits are expected from its use or disposal. The difference between the net disposal

proceeds, if any and the net carrying amount is recognised in profit or loss.

(h) Inventories

Inventories are stated at the lower of cost and net realisable value less provision for obsolete and

slow moving items. Cost includes an appropriate of freight charges and custom duties and

generally determined on a first in first out basis.

(i) Provisions for liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past

event and it is probable that an outflow of resources embodying economic benefits will be required

to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed

at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the

time value of money is material, the amount of a provision is the present value of the expenditure

expected to be required to settle the obligation.

(j) Receivables

Trade and other receivables are carried at an anticipated realisable value. Known bad debts are

written off and specific provision is made for debts which are considered doubtful of collection.

(k) Payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in

the future for goods and services received.

(l) Revenue recognition

Revenue is recognised when it is probable that the economic benefits associated with the

transaction will flow to the enterprise and the amount of the revenue can be measured reliably.

i) Sale of goods

Revenue relating to sale of goods is recognised net of sales returns and discounts upon the

transfer of risks and rewards.

ii) Rental income

Revenue from property investment is recognised based on rental received and receivable from

letting of properties.

iii) Interest income

Interest income is recognised on a time proportion basis that reflects the effective yield on

the asset.

iv) Dividend income

Dividend income is recognised when the right to receive payment has been established and no

significant uncertainty existed with regards to its receipt.

36.

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tatements

Cont’d

(m) Foreign currency transactions

Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the date of the transaction. At each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at exchange rates ruling at that date. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined.

All exchange rate differences are taken to the income statement.

The exchange rate ruling at balance sheet date used is as follows:-

2006RM

2005RM

1 US Dollar 3.53 3.78

(n) Equity instrument

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

(o) Income tax

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

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that the taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary differences arise from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

(p) Financial instruments

Financial instruments carried on the balance sheets include cash and bank balances, investments, receivables, payables, bank borrowings and convertible loan stocks. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as liability are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Company has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

37.

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eport 2007


tatements

Cont’d

(q) Convertible loan stocks

Convertible loan stocks are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible loan stocks. The differences between the proceeds of issue of the convertible loan stocks and the fair value assigned to the liability component, representing the conversion option is included in the shareholders’ equity. The liability component is subsequently stated at amortised cost using the effective interest rate method until extinguished on conversion whilst the value of the equity component is not adjusted in subsequent periods. Attributable transaction costs are apportioned and deductible directly from the liability and equity component based on their carrying amounts at the date of issue.

Under the effective interest rate method, the interest expense on the liability component is calculated by applying the prevailing market interest rate for a similar non-convertible loan stocks to the instrument. The difference between this amount and the interest paid is added to the carrying value of the convertible loan stocks.

(r) Cash and cash equivalents

Cash comprises of cash and bank balances, bank overdraft and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(s) Employee benefits

(i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the

period in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans Obligations for contributions to defined contribution plans such as Employees Provident Fund

(“EPF”) are recognised as an expense in the income statement as incurred.

(t) Segmental results

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, intangibles and property, plant and equipment, net of provision and accumulated depreciation and amortisation. While most such assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include income tax assets, income tax liabilities and deferred income taxes.

(u) Intersegment transfers

Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the economic entity at an arm’s length transactions. These transfers are eliminated on consolidation.

(v) Property, plant and equipment acquired under hire purchase arrangements

The cost of property, plant and equipment acquired under hire purchase arrangements are capitalised. The depreciation policy on these property, plant and equipment is similar to that of the Group’s property, plant and equipment depreciation policy. Outstanding obligations due under the hire purchase arrangements after deducting finance expenses are included as liabilities in the financial statements. Finance charges on hire purchase agreements are allocated to income statement over the period of the respective agreements.

2006RM

2005RM

Group and Company

38.

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eport 2007


tatements

Cont’d

Interest-bearing bank borrowings are recorded at the amount of proceeds received net of transaction cost. Borrowing costs are charged to the income statement as an expense in the period in which they are incurred.

The carrying values of assets are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount is the higher of fair value less costs to sell and its value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets, or if it is not possible, for the cash generating unit.

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

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in the income statement.

4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

The principal activity of the Company is investment holding. The principal activities of its subsidiary companies are disclosed in Note 11 to the financial statements.

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

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of Bursa Malaysia Securities Berhad.The registered office of the Company is located at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur. The principal place of business of the Company is located at 109, 2nd Floor, Jalan Bunus, Off Jalan Masjid India, 50100 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in accordance with a Resolution of the Directors on 23 April 2007.

5. SHARE CAPITAL

Authorised:


At beginning/end of year

Issued and fully paid:


At beginning of year

Ordinary shares issued during the year:

Pursuant to conversion of ICULS

Acquisition of subsidiary company

At end of year

500,000,000

125,990,002

9,000

-

125,999,002

500,000,000

124,430,002

-

1,560,000

125,990,002

(w) Interest-bearing borrowings

(x) Impairment of assets

39.

KA

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eport 2007


tatements

Cont’d

6. RESERVES

Share premium

ICULS (equity component) (Note 25)

Merger reserve

Capital reserve

Reserve on consolidation

Total non - distributable

Retained profits

2006RM

2005RM

2006RM

2005RM

Company Group

2006RM

2005RM

2006RM

2005RM

Company Group

110,000

65,781,537

(176,580,000)

823,924

-

(109,864,540)

121,671,425

11,806,885

110,000

65,790,537

(176,580,000)

823,924

2,784,161

(107,071,378)

118,613,180

11,541,802

-

65,781,537

-

-

-

65,781,537

3,930,549

69,712,086

-

65,790,537

-

-

-

65,790,537

4,676,668

70,467,205

7. BORROWINGS

Secured:

Revolving credits

Bankers’ acceptances

Bank overdrafts

Term loans

Unsecured:


Bank overdrafts

ICULS (liability component) (Note 25)

Revolving credits

Trust receipts

Secured:

Term loans

Unsecured:

Bonds (Note 26)


2,200,000

14,420,000

129,733

4,722,464

21,472,197

14,072,000

5,899

1,736,516

5,000,000

345,349

21,159,764

42,631,961

1,500,000

17,375,000

165,196

3,276,824

22,317,020

13,780,000

2,308,595

1,612,576

-

517,332

18,218,503

40,535,523

-

-

-

-

-

-

-

1,736,516

-

-

1,736,516

1,736,516

-

-

-

-

-

-

-

1,612,576

-

-

1,612,576

1,612,576

Short Term Borrowings

2006RM

2005RM

2006RM

2005RM

Company GroupLong Term Borrowings

28,776,356

28,776,356

60,000,000

3,891,762

63,891,762

92,668,118

26,520,912

26,520,912

60,000,000

5,463,986

65,463,986

91,984,898

-

-

60,000,000

3,891,762

63,891,762

63,891,762

-

-

60,000,000

5,463,986

65,463,986

65,463,986

2006RM

2005RM

2006RM

2005RM

Company Group

40.

KA

MD

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Annual R

eport 2007


tatements

Cont’d

Total Borrowings

Bank overdrafts

Revolving credits


Term loans


Trust receipts

Bonds (Note 26)

Maturity of borrowings:

Within one year

More than 1 year and less than 5 years

After 5 years

135,632

7,200,000

28,492,000

33,498,820

5,628,278

345,349

60,000,000

135,300,079

42,631,961

87,448,421

5,219,697

135,300,079

2,473,791

1,500,000

31,155,000

29,797,736

7,076,562

517,332

60,000,000

132,520,421

40,535,523

84,663,766

7,321,132

132,520,421

-

-

-

-

5,628,278

-

60,000,000

65,628,278

1,736,516

63,891,762

-

65,628,278

-

-

-

-

7,076,562

-

60,000,000

67,076,562

1,612,576

65,463,986

-

67,076,562

The secured revolving credits, bank overdrafts and bankers’ acceptances of the Group are secured by:

(a) fixed charge over certain subsidiary companies’ landed properties;

(b) negative pledge over the assets of certain subsidiary companies;

(c) a pledge of fixed deposits of a subsidiary company;

(d) joint and several guarantees by the Directors; and

(e) corporate guarantee by the Company and its subsidiary company.

The secured term loans are secured by:

(a) legal charge on certain subsidiary companies’ landed properties;

(b) assignment of rental proceeds over the abovementioned properties;

(c) joint and several guarantees by the Directors; and

(d) corporate guarantee by the holding company

8. DEFERRED TAX ASSET/(LIABILITIES)

2006RM

2005RM

2006RM

2005RM

Company Group

2006RM

2005RM

2006RM

2005RM

Company Group


Recognised in income statements (Note 22)

At end of year

(1,668,960)

(656,619)

(2,325,579)

(766,686)

(902,274)

(1,668,960)

(3,419,763)

2,208,841

(1,210,922)

2,414,791

(5,834,554)

(3,419,763)

Presented after appropriate offsetting as follows:

Deferred tax asset

Deferred tax liabilities

1,654,918

(3,980,497)

(2,325,579)

1,981,437

(3,650,397)

(1,668,960)

1,575,918

(2,786,840)

(1,210,922)

1,981,437

(5,401,200)

(3,419,763)

7. BORROWINGS (Cont’d)

2006RM

2005RM

2006RM

2005RM

Company Group

2006RM

2005RM

2006RM

2005RM

Company Group

2006RM

2005RM

Group

41.

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MD

AR

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eport 2007


tatements

Cont’d

The components of deferred tax asset and liabilities during the year prior to off setting are as follows:-

ICULS (equity component)

Excess of property,plant and equipment’s

carrying amounts over its tax base

Unutilised tax loss

Unabsorbed capital allowance

1,575,918

(58,000)

93,000

44,000

1,654,918

1,981,437

-

-

-

1,981,437

1,575,918

-

-

-

1,575,918

1,981,437

-

-

-

1,981,437

Deferred tax asset

Fair value adjustment in acquisition

of subsidiary companies

Excess of property, plant and equipment’s

carrying amounts over its tax base

Dividends income receivable

Deferred tax liabilities

2,101,497

1,879,000

-

3,980,497

2,101,497

1,548,900

-

3,650,397

-

-

2,786,840

2,786,840

-

-

5,401,200

5,401,200

9. FINANCE PAYABLES

Payable within 1 year

Payable after 1 year but not later than 5 years

Less: Interest in suspense

Present value of finance payables

- within 1 year

- after 1 year but not later than 5 years

376,524

871,238

1,247,762

(125,582)

1,122,180

319,588

802,592

1,122,180

284,227

940,480

1,224,707

(144,937)

1,079,770

250,533

829,237

1,079,770

42.

KAMDAR Annual Report 2007 Notes To The Financial StatementsCont’d

10. PROPERTY, PLANT AND EQUIPMENT

53,870,829

2,800,000

-

-

56,670,829

-

-

-

-

-

56,670,829

53,870,829

-

84,958,957

3,766,000

-

-

88,724,957

5,651,891

1,924,403

-

-

7,576,294

81,148,663

79,307,066

1,919,558

14,137,180

-

-

-

14,137,180

559,866

190,880

-

-

750,746

13,386,434

13,577,314

177,541

6,182,973

-

-

-

6,182,973

981,784

122,723

-

-

1,104,507

5,078,466

5,201,189

169,531

1,775,892

436,279

(16,000)

(98,430)

2,097,741

735,124

142,484

-

(36,068)

841,540

1,256,201

1,040,768

114,994

4,761,401

441,455

(147,194)

-

5,055,662

2,116,350

590,543

(112,788)

-

2,594,105

2,461,557

2,645,051

482,794

20,716,072

4,880,662

(100,230)

(807,165)

24,689,339

11,051,899

1,660,253

(9,979)

(532,541)

12,169,632

12,519,707

9,664,173

1,071,313

186,403,304

12,324,396

(263,424)

(905,595)

197,558,681

21,096,914

4,631,286

(122,767)

(568,609)

25,036,824

172,521,857

-

-

174,330,698

15,294,071

(1,947,190)

(1,274,275)

186,403,304

18,510,780

3,935,731

(719,609)

(629,988)

21,096,914

-

165,306,390

3,935,731

Cost


Additions

Disposals

Written off

At end of year

Accumulated depreciation


Charge for the year

Disposals

Written off

At end of year

Net book Value

2006

2005

Depreciation charge for the

year ended 31 December 2005

Freehold landRM

Freeholdbuildings

RM

Long termleaseholdland andbuilding

RM

Short termleaseholdland andbuilding

RM

Plant andmachinery

RM

Motorvehicles

RM

Equipment,furniture,

fittings andrenovation

RM

Total2006

RM

Total2005

RM

2006RM

2005RM

Company

43.

KA

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Annual R

eport 2007


tatements

Cont’d

11. INVESTMENT IN SUBSIDIARY COMPANIES

Net book value of certain land and buildings of the subsidiary companies amounting to

RM91,464,901 (2005:RM136,202,111) are charged to licensed banks as security for banking

facilities granted to the subsidiary companies.

Title deeds of land and building of certain subsidiary companies costing RM30,011,777

(2005:RM23,445,777) are yet to be transferred to the respective subsidiary companies.

Included in property, plant and equipment of the Group are motor vehicles with net book value

of RM1,507,347 (2005: RM1,441,093) held under hire purchase arrangements.

Interest expenses capitalised during the year under freehold land and buildings of a subsidiary

company amounted to NIL (2005: RM77,573).

(i)

(ii)

(iii)

(iv)

Unquoted shares, in Malaysia

At cost 256,430,002 256,430,000

2006RM

2005RM

Group

433,506 433,506

A detailed list of subsidiary companies incorporated in Malaysia is as follows:-

% effective equity interest Principal activities

Kamdar Sdn. Bhd.

Pusat Membeli-belah Kamdar Sdn. Bhd.

Pusat Membeli-belah Kamdar (Penang) Sdn. Bhd.

Kamdar (South) Sdn. Bhd.

Kesar Sdn. Bhd.

Kamdar Holdings Sdn. Bhd.

Kamdar Stores Sdn. Bhd.

Mint Saga Sdn. Bhd.

Beauty Gallant Sdn. Bhd.

Orisea Trade Sdn. Bhd.

Kamdar (B) Sdn. Bhd. (Formerly known as Multirange Trading Sdn. Bhd.)

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

Retail of textile and textile-based products




Importers, exporters, retailer and wholesaler of textile and textile-based products

Letting out of properties




Letting of movable and immovable assets

Property investments

Name of company2006 2005

On 17 June 2006, the Group acquired 100% equity interest in Kamdar (B) Sdn. Bhd. (formerly known as Multirange Trading Sdn. Bhd.), a company incorporated in Malaysia, for a cash consideration of RM2.

The acquisition of the subsidiary company do not have material effect on the financial position and results of the Group.

12. GOODWILL

At beginning and end of year

10. PROPERTY, PLANT AND EQUIPMENT (cont’d)

2006RM

2005RM

Group

2006RM

2005RM

Group

2006RM

2005RM

Company

44.

KA

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eport 2007


tatements

Cont’d

13. FIXED DEPOSITS WITH LICENSED BANKS

GroupThe fixed deposits with licensed banks have been pledged to licensed banks as security for banking facilities granted to a subsidiary company.

14. INVENTORIES

GroupInventories consist of textiles and textile-based products for sale.

The reversal of inventories written down amounted to Nil (2005: RM 821,220). The reversal arose from an increase in the net realisable value as a result of improving prices for finished goods.

15. TRADE RECEIVABLES

Trade receivables

Less: Provision for doubtful debts

8,489,803

(8,280)

8,481,523

8,470,085

(8,280)

8,461,805

Credit terms of trade receivables range from 30 to 120days.

16. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Company

Included in other receivables, deposits and prepayments is an amount of RM7,166,160

(2005:RM13,888,800) being dividend income receivable from subsidiary companies.

17. AMOUNT DUE FROM/(TO) SUBSIDIARY COMPANIES

CompanyThe amount due from/(to) subsidiary companies are unsecured, interest free and have no fixed term of repayment.

18. TRADE PAYABLES

GroupCredit terms of trade payables range from 30 days to 120 days.

19. REVENUE

Dividend income

Sales of goods

-

168,645,897

168,645,897

-

178,875,929

178,875,929

9,953,000

-

9,953,000

19,290,000

-

19,290,000

2006RM

2005RM

Group

2005RM

Company

2006RM

2005RM

Group

2006RM

2005RM

Company

45.

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MD

AR

Annual R

eport 2007


tatements

Cont’d

20. PROFIT BEFORE EXCEPTIONAL ITEMSProfit before exceptional items has been determined after charging/ (crediting) amongst other items the following:-

Audit fee

- statutory

- current year

- (over)/underprovided in prior year

Bad debts written off

Depreciation

Directors’ remuneration

- fees

- other emoluments

Rental expenses

Interest expenses:

-term loans

-bank overdrafts and revolving credits

-bankers’ acceptances

-bonds

-ICULS

-finance payables

Bad debts recovered

Property, plant and equipment written off

Provision for doubtful debts no longer required

Interest income

Gain on disposal of property, plant and equipment

Realised loss/(gain) on foreign exchange

Rental income

96,800

(2,377)

111,420

4,631,286

168,000

2,227,890

4,999,228

1,833,599

750,051

17,474

2,400,000

546,018

66,265

-

336,986

-

(82,139)

(62,594)

28,339

(768,301)

95,000

2,197

13,707

3,935,731

147,000

2,141,920

6,161,876

2,241,312

290,303

27,236

2,400,000

681,604

24,001

(780)

644,287

(187)

(179,597)

(348,865)

(1,351)

(848,869)

12,000

2,453

-

-

168,000

-

-

-

-

-

2,400,000

546,018

-

-

-

-

-

-

-

-

12,000

(1,396)

-

-

147,000

-

-

-

-

-

2,400,000

681,604

-

-

-

-

(91,793)

-

-

-

The estimated monetary value of benefits provided to the Directors of the Group during the year amounted to RM132,673(2005: RM134,974).

21. EXCEPTIONAL ITEMS

Listing expenses

Loss on disposal of other investment

-

-

-

-

-

-

3,626,621

1,559,999

5,186,620

3,626,621

1,559,999

5,186,620

2006RM

2006RM

2005RM

Group

2006RM

2005RM

Company

2006RM

2005RM

Group

2006RM

2005RM

Company

46.

KA

MD

AR

Annual R

eport 2007


tatements

Cont’d

22. TAXATION

Income tax:-

Provision for current year

(Over)/Under provision in previous year

Deferred tax:-

Relating to origination and reversal of

temporary differences (Note 8)

Relating to crystallisation of deferred

tax assets (Note 8)

Underprovision in previous year (Note 8)

4,576,849

(92,423)

4,484,426

181,100

405,519

70,000

656,619

5,141,045

6,756,000

171,642

6,927,642

57,920

433,354

411,000

902,274

7,829,916

5,467,200

(29,258)

5,437,942

(2,614,360)

405,519

-

(2,208,841)

3,229,101

123,000

-

123,000

5,401,200

433,354

-

5,834,554

5,957,554

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


Income tax at rate of 28%

Tax effect in respect of :

Non-allowable expenses

Effect of income subject to the tax

rate of 20% for small- medium enterprise

Expenses subject to double deduction

Current year tax expense

(Over)/Under provision of tax in

previous year

Underprovision of deferred tax in

previous year

Tax expense for the year

9,950,768

2,786,215

2,459,256

(77,200)

(4,803)

5,163,468

(92,423)

70,000

5,141,045

12,452,507

3,486,702

3,889,167

(117,877)

(10,718)

7,247,274

171,642

411,000

7,829,916

7,018,622

1,965,214

1,293,145

-

-

3,258,359

(29,258)

-

3,229,101

11,088,667

3,104,826

2,852,728

-

-

5,957,554

-

-

5,957,554

(b) Diluted earnings per share

For the purpose of calculating diluted earnings per share, the net profit for the year and the

weighted average number of ordinary shares in issue during the year have been adjusted for the

dilutive effects of all potential ordinary shares, i.e. Irredeemable Convertible Unsecured Loan

Stocks (“ICULS”) and Warrants.

2006RM

2005RM

Group

2006RM

2005RM

Company

2006 2005

2006 2005

47.

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eport 2007


tatements

Cont’d

23. EARNINGS PER SHARE(a) Basic earnings per share

Basic earnings per share of the Group is based on the net profit attributable to shareholders of

RM4,809,723 (2005: RM4,622,591) and the weighted average number of ordinary shares in issue

during the year of 125,990,865 (2005: 125,725,016).

Net profit for the year (RM)

Weighted average number of ordinary shares in issue

Basic earnings per share (cent)

4,809,723

125,990,865

3.8

4,622,591

125,725,016

3.7

Net profit for the year (RM)

After-tax effect of interest on ICULS (RM)

Adjusted net profit for the year (RM)

Weighted average number of ordinary share in issue

Effect of dilution:

ICULS

Warrants

Adjusted weighted average number of ordinary share

in issue and issuable

Diluted earnings per share (cent)

4,809,723

545,949

5,355,672

125,990,865

71,999,137

-

197,990,002

2.7

4,622,591

681,604

5,304,195

125,725,106

72,000,000

9,349,593

207,074,609

2.6

24. EMPLOYEE BENEFITS EXPENSE

Salaries and wages

Contribution to defined contribution plan

Other benefits

16,583,326

1,717,531

1,264,785

19,565,642

16,802,636

1,699,349

838,484

19,340,469

-

-

-

-

-

-

-

-

48.

KA

MD

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Annual R

eport 2007


tatements

Cont’d

25. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS

On 10 November 2004, the Company issued RM72,000,000 nominal value of Irredeemable

Convertible Unsecured Loan Stocks (“ICULS”).

The terms of the conversion and the redemption of ICULS are as follows:-

(a) Conversion Ratio – on the basis of 1 ICULS for 1 new ordinary share of RM1.00 in the Company.

(b) Conversion Right – the registered holder of ICULS shall have the rights at any time during the

conversion period to convert the ICULS at the conversion ratio.

(c) Conversion Period – anytime from and including the second (2nd) anniversary date and ending

on the day immediately preceding the fifth (5th) anniversary of the issue date. Any nominal value

of ICULS not converted by 9 November 2009 will be automatically converted into new ordinary

shares of the Company on the maturity date.

(d) The ICULS bear interest which is payable annually in arrears at 3% commencing from the date

of issue of the ICULS on 10 November 2004 and the last payment shall be made on the maturity

date on 9 November 2009.

(e) The new ordinary shares to be allocated and issued upon conversion of the ICULS will rank pari

passu in all respects with the existing ordinary shares of the Company.

During the year, 9,000 ICULS were converted into ordinary shares in the Company. As at 31 December

2006, outstanding ICULS totaling RM71,991,000 (2005: RM72,000,000) has not been exercised.

The proceeds received from the issue of the ICULS have been split between the liability component

and the equity component, representing the fair value of the conversion option. The ICULS are

accounted for in the balance sheets of the Group and of the Company as follows:-


Converted to ordinary shares

Interest paid

Interest expense

At end of year

65,790,537

(9,000)

-

-

65,781,537

7,076,562

-

(1,994,301)

546,018

5,628,279

72,867,099

(9,000)

(1,994,301)

546,018

71,409,816

2006

Group and Company

Equitycomponent

RM

Liabilitycomponent

RMTotal

RM

2005


Interest paid

Interest expense

At end of year

65,790,537

-

-

65,790,537

8,720,656

(2,325,698)

681,604

7,076,562

74,511,193

(2,325,698)

681,604

72,867,099

Group and Company

2006RM

2005RM

The liability component at end of year is further analysed as follows:-

Within 1 year

After 1 year and not later than 5 years

1,736,516

3,891,763

5,628,279

1,612,576

5,463,986

7,076,562

Interest expense on the ICULS is calculated on the effective yield basis by applying a coupon

interest rate of 8% which is assumed to be equivalent to the prevailing market interest rate for

non-convertible loan stocks at the date of issue.

Group and Company

2006RM

2005RM

49.

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eport 2007


tatements

Cont’d

26. BONDS

Unsecured:

Bonds 60,000,000 60,000,000

2006RM

2005RM

On 10 November 2004, the Company issued RM60,000,000 nominal value of Bonds together with 50,000,000 detachable warrants. The bonds carry a maximum maturity period of five (5) years from the date of issuance on 10 November 2004 and bear a coupon rate of 4% per annum, which are payable annually for five (5) year up to maturity. The bonds, which are redeemable at the end of the fifth (5) years, are not listed on Bursa Malaysia Securites Berhad but tradable on Real Time Electronic Transfer of Funds and Securities (“RENTAS”).

The bonds are secured by way of corporate guarantee by the Company.

The salient features of the Warrants are as follows:-

(i) each Warrant entitles the registered holder at any time during the subscription period to subscribe for one new ordinary share of RM1.00 each at an exercise price of RM1.00 per ordinary share;

(ii) the subscription price may be adjusted, where appropriate under circumstances provided for in the Deed Poll;

(iii) the subscription period is five years from the date of issue;

(iv) upon expiry of the subscription period, any unexercised rights will lapse and cease to be valid for any purposes.

27. SIGNIFICANT RELATED PARTY TRANSACTIONS

Group

Transactions with company in which a Director, Harsukhlal A/L

Maganlal Kamdar has interest:

Rental expenses paid to Koshguard Sdn. Bhd.

Company

Management fees received/receivable from subsidiary companies

Gross dividend income receivable from subsidiary companies

96,000

448,000

9,953,000

96,000

440,000

19,290,000

The Directors are of the opinion that the above transactions have been entered into in the normal

course of business and have been established on terms and conditions that are not materially

different from that obtainable in transactions with unrelated parties.

28. SEGMENTAL REPORTING

No segment reporting is prepared as the principal activities of the Group are predominantly carried out

in Malaysia and are engaged in a single business segment of retailing textile and textile based products

within the retailing industry.

Less than1 year

RM

1 to 5 years

RM

After5 years

RMTotal

RM

Effectiveinterest rate

during the yearRM

50.

KA

MD

AR

Annual R

eport 2007


tatements

Cont’d

29. FINANCIAL INSTRUMENTS

(a) Interest rate risk

The interest rate risk that financial instruments’ values will fluctuate as a result of changes in

market interest rates and the effective weighted average interest rates on classes of financial

assets and financial liabilities are as follows:-

Group

2006

Financial assets

Fixed deposits with

licensed banks

Financial liabilities

Bank overdrafts


Finance payables

Revolving credits

Trust receipts

Term loans

ICULS (liability component)

Bonds

2005

Financial assets

Fixed deposits with

licensed banks


Bank overdrafts


Finance payables

Revolving credits

Trust receipts

Term loans


Bonds

1,500,000

135,632

28,492,000

319,588

7,200,000

345,349

4,722,464

1,736,516

-

-

2,473,791

31,155,000

250,533

1,500,000

517,332

3,276,824

1,612,576

-

2,385,689

-

-

802,592

-

-

23,556,659

3,891,762

60,000,000

2,345,975

-

-

829,237

-

-

19,199,780

5,463,986

60,000,000

-

-

-

-

-

-

5,219,697

-

-

-

-

-

-

-

-

7,321,132

-

-

3,885,689

135,632

28,492,000

1,122,180

7,200,000

345,349

33,498,820

5,628,278

60,000,000

2,345,975

2,473,791

31,155,000

1,079,770

1,500,000

517,332

29,797,736

7,076,562

60,000,000

2.45%- 3.10%

7.75%-8.50%

3.31%- 5.40%

2.60%-3.85%

5.00%- 6.05%

7.75%-8.50%

5.47%- 8.00%

8.00%

4.00%

3.20%- 3.70%

7.00%-8.00%

2.00%- 4.80%

2.60%-3.70%

4.80%- 5.50%

7.00%-7.80%

5.50%- 7.70%

8.00%

4.00%

Company

2006



Bonds

2005



Bonds

1,736,516

-

1,612,576

-

3,891,762

60,000,000

5,463,986

60,000,000

-

-

-

-

5,628,278

60,000,000

7,076,562

60,000,000

8.00%

4.00%

8.00%

4.00%

51.

KA

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eport 2007


tatements

Cont’d

(b) Credit risk

The maximum credit risk associated with recognised financial assets is the carrying amount

shown in the balance sheet.

The Group has no significant concentration of credit risk with any single counterparty.

(c) Fair value

The carrying amounts of all financial assets and liabilities of the Group and the Company at the

balance sheet date approximated their fair values except as set out below:

Group and Company

Carryingamount

RMFair value

RM

2006

Bonds

2005

Bonds

60,000,000

60,000,000

53,457,935

52,050,896

The fair value of bonds is estimated by discounting the expected future cash flows using the

current interest rates for liabilities with similar risk profiles.

30. COMMITMENTS

2006RM

2005RM

Authorised and contracted for:

Purchase of property

Contracted but not provided for:

Purchase of operation system

-

-

2,039,400

249,960

Group

31. CONTINGENT LIABILITIES

2006RM

2005RM

Company

2006RM

2005RM

Group

Unsecured:

Corporate guarantee given to licensed

banks for credit facilities granted to the

subsidiary companies - - 51,140,000 -

32. SIGNIFICANT EVENT DURING THE YEAR

On 21 February 2006, a wholly owned subsidiary company of the Company,Kamdar Stores Sdn Bhd entered into a Sale and Purchase Agreement with Anekakiara Realty Sdn. Bhd. to acquire two pieces of leasehold lands together with a 2 storey commercial building to be constructed thereon for a purchase consideration of RM4,300,000. The Sale and Purchase Agreement has been completed during the year.

33. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

(a) On 22 February 2007 and 5 March 2007, the Company had increased its paid-upsharecapital from RM125,999,002 to RM126,022,002 by way of issuance of 23,000 ordinary shares of RM1 each through the conversion of 23,000 Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) of RM1 each on the basis of one new ordinary share for every one ICULS exercised.

(b) On 6 March 2007, a wholly owned subsidiary company of the Company, Kamdar Holdings Sdn Bhd entered into a Sale and Purchase Agreement with Cosmic Region Sdn. Bhd., to dispose a five storey commercial building bearing a postal address of No. 83 & 85, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur for a sale consideration of RM9,400,000.

52.

KA

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AR

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eport 2007

Group Landed P

ropertiesC

ont’d

(A) LANDED PROPERTIES OWNED BY THE REVENUE-BASED COMPANIES

Registered Owner/

Postal Address

Title/Lot No. Brief Description/

Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

* Date of

Certificate

of Fitness

Issued

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

KSB

No.61 Jalan SS2/64,

47300 Petaling Jaya

Selangor

Title No: H.S. (D)

161279 (formerly

H.S. (D) 36652)

Lot No: 25500

Town of Petaling

Jaya, District of

Petaling, State of

Selangor

Brief Description:

An intermediate 3 ½

storey shop lots

Existing Use:

Own retail use

716,178 18.02.1989 1,680 6,548 Freehold 31 years1.

112,416 27.05.1993 1,327,219

(Parent

Lot)

1,538 Freehold 9 yearsKSB

Unit No. B3-7-25A,

Taman Puteri (Venice

Hill Condominium

And Golf Resort)

43200 Cheras,

Selangor

Parent Title No:

CT 23206, Geran

47895 (formerly CT

23207) and 44134

(formerly CT 23209)

Lot No: 4380, 4381

and 4383, Mukim of

Ulu Langat, District

of Ulu Langat, State

of Selangor

Brief Description:

Three (3) bedroom

apartment

Existing Use:

Unoccupied

2.

105,549 27.05.1993 1,327,219

(Parent

Lot)


Unit No. B3-10-22B,

Taman Puteri (Venice

Hill Condominium

And Golf Resort)

43200 Cheras,

Selangor

Parent Title No:

CT 23206, Geran

47895 (formerly

CT 23207) and

44134 (formerly

CT23209)

Lot No: 4380, 4381

and 4383, Mukim of

Ulu Langat, District

of Ulu Langat, State

of Selangor

Brief Description:

Three (3) bedroom

apartment

Existing Use:

Unoccupied

3.

53.

KA

MD

AR

Annual R

eport 2007

Group Landed P

ropertiesC

ont’d(A) LANDED PROPERTIES OWNED BY THE REVENUE-BASED COMPANIES

Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

* Date of

Certificate

of Fitness

Issued

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

484,441 08.09.2000 227,056

(Parent

Lot)


Unit No. Floor

A22-03, Tower A,

Aloha Towers

Condominium

Jalan Kolam Air,

80100 Johor Bahru

Parent Title No:

Geran 40177

Lot No: 3214 Town

of Johor Bahru,

District of Johor

Bahru, State of

Johor

Brief Description:

A Three (3) bedroom

Condominium Unit

Existing Use:

Unoccupied

4.

3,179,999 01.03.1991 5,908 36,882 Freehold 24 yearsPMBK

No 4-6, Jalan Raja

Musa Aziz

30300 Ipoh, Perak

Title No:

Geran 22783,

8373 and 22784

Lot No: 1313N,

1314N and 8683U,

Town of Ipoh,

District of Kinta,

State of Perak

Brief Description:

5 ½ storey

detached building

with a basement

floor

Existing Use:

Retail and storage

purpose

5.

54.

KA

MD

AR

Annual R

eport 2007

Group Landed P

roperties67,579 08.07.1993 160,312

(Parent

Lot)

573 12 yearsLeasehold

99 years,

expiring on

13 October

2091

PMBK(Penang)

No. 3-12-8

Pangsapuri Pelangi,

Lintang Macallum 2,

George Town, 10300

Pulau Pinang

Strata Title No:

Pajakan Negeri

HBM50/M2/12/323,

Section 11E,

George Town,

North-East District,

Pulau Pinang.

Parent Title No:

12-8, HS (D) 258

Lot No: 321

(Previously known

as PT No. 282)

Section 11E,


Pulau Pinang.

Brief Description:

An intermediate unit

two (2) bedroom

low medium cost flat

Existing Use:

Occupied by

company staff for

residential use

PMBK

No.68 Jalan

Langgar, 05460 Alor

Setar, Kedah

Title No:

4(GRN 32748),

5(GRN 32749)

and 6(GRN 32750)

Lot No: 4,5, and 6,

Section 19, Mukim

of Kota Setar,

Daerah Kota

Setar, Kedah

Brief Description:

Renovated

intermediate three

(3) adjoining units

of three (3) storey

terrace shop office

with mezzanine

floor

Existing Use:

Retail and storage

purpose

1,415,431 05.09.1990 6,000 15,240 Freehold 41 years

1,320,164 *07.08.1986 2,800 11,200 20 years

Freehold378,524 23.06.2000 11,117 Nil Not

applicable

PMBK

No. 15 and 16,

Kompleks Seri

Temin, Jalan

Ibrahim, 08000

Sungai Petani,

Kedah

Title No:

P.N. 370 and 371

Lot No: 20 and 21,

and Section 46,

Mukim and town of

Sungai Petani,

Kedah

Brief Description:

Two (2) adjoining

units of four (4)

storey-terrace

shop offices

Existing Use:

Retail and storage

purposes.

Leasehold

99 years,

expiring

4 October

2080

PMBK

761, 1463 and 1481,

Off Jalan

Muthupalaniappa,

14000 Bukit

Mertajam,

Pulau Pinang

Title No:

Geran 26220, H.S.

(D) 12064 (previously

known as H.S.

(D) 227) and H.S.(D)

12078 (previously

known as H.S.

(D) 245)

Lot No: 761,1463

and 1481, Section 3,

Town of Bukit

Mertajam, District of

S eberang Perai

Tengah,

Pulau Pinang

Brief Description:

Commercial

development land

Existing Use:

Rented to two (2)

third parties

(individuals) for

commercial

use purposes

Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

* Date of

Certificate

of Fitness

Issued

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building


6.

7.

8.

9.

55.

KA

MD

AR

Annual R

eport 2007

Group Landed P

ropertiesC

ont’d

Leasehold

99 years,

expiring on

13 October

2091

6 yearsPMBK (Penang)

No 135, 137, 139,

141, 143, 145 and

147, Persiaran

Bunga Raya,

Langkawi Mall, Jalan

Kelibang 07000

Kuah Langkawi,

Kedah

Parent Title No:

Grant 6787

Lot No: 1598 Mukim

of Kuah District of

Langkawi, State

of Kedah

Brief Description:

Seven (7) adjoining

units of 3-storey

terrace shop offices

Existing Use: Retail

and storage

purposes

3,857,711 01.11.1998 8,899 26,697 Freehold

29 years

12 years

PMBK (Penang)

Premise No.14,

Jalan Burma,

10050 Pulau

Pinang

Title No:

Geran 12418

Lot No: 118, Section

15, Georgetown


Pulau Pinang

Brief Description:

An intermediate

five (5) storey

commercial building

Existing Use:

Retail and storage

purposes

3,032,784 11.06.1992 7,255 26,541

138,708 *8.10.1994 160,312

(Parent

Lot)

573 sq ft

per unit

Freehold

Kesar

Flat Unit Nos:

a) 3-17-2 and

b) 3-17-3

Pangsapuri Pelangi,

Lintang Macallum 2,

George Town,

10300 Pulau Pinang

Strata Title Nos:

Pajakan Negeri

HBM 50/M2/17/377

and HBM50/M2/

17/376

Lot No: P.T.282

Section 11E

Township of

Georgetown,


Pulau Pinang

Brief Description:

Two (2) adjacent

intermediate units,

two (2) bedroom low

cost medium

cost flats

Existing Use:

Rented to third

parties for

residential use

236,679 * Not

applicable81,880 Not

applic-

able

Freehold

(in

perpetuity)

Not

applicable

892,353 * 22.08.1992 4,150 7,356 14 years

Kesar

Lot No. 1219,

Mukim of Kuah,

District of Langkawi,

Kedah

Title No:

Geran 2116

(formerly SPK 4102)

Lot No: 1219,

Mukim of Kuah,

District of Langkawi,

Kedah

Brief Description:

A parcel of small

agriculture land with

development

potential

Existing Use:

Vacant

Kesar

No: 108 and 109

Persiaran Mutiara,

Kelana Mas

Commercial and

Tourist Centre,

07000 Kuah

Langkawi Kedah

Title No:

HSD 275/91 and

276/91

Lot No: PT. 1426

and 1427 Mukim of

Kuah, District of

Langkawi, Kedah

Brief Description:

Two (2) units of

double storey-

terrace shop office

Existing Use:

Storage purpose

Leasehold

99 years,

expiring on

16 August

2090

1,285,175 23.11.2005 2,605 7,556 9 yearsLeasehold

expiring on

29 May

2099

Kesar

No.10 Jalan PJS,

Bandar Sunway,

41650 Petaling

Jaya, Selangor.

Title No:

4.5.(0)137518

Lot No: 109, Bandar

Sunway, Petaling

Jaya, Selangor.

Brief Description:

Three (3) Storey Mid

Terraced Shop/

Office

Existing Use:

Rented to Third

Parties


Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

* Date of

Certificate

of Fitness

Issued

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

10.

11.

12.

13.

14.

15.

56.

KA

MD

AR

Annual R

eport 2007

Group Landed P

ropertiesC

ont’d

1,137,716 * No

certificate of

fitness was

issued as

this property

was

constructed

prior to

World War II

5,956 14,515 57 yearsFreeholdKesar

Premise No. 33,

Lebuh China/20,

Lorong Che Em ,

10200 Pulau Pinang

Title No:

Geran 36807

Lot No: 304,

Section 20,

George-Town,

North-Eas District,

Pulau Pinang

Brief Description:

An intermediate

pre-war double

storey shophouse

with mezzanine floor

Existing Use:

Storage purpose

307,351 *23.11.1999 119,386

(Parent

Lot)

700 sq ft

per unit7 yearsFreehold

345,064 *17.12.1997 317,428

(Parent

Lot)

700 sq ft

per unit9 yearsFreehold

6,418,646 23.06.2000 15,716 105,138 13 yearsFreehold

Kesar

Apt unit Nos:

a) 98-19-19 and

b) 98-19-20,

19th Floor Sinar,

Bukit Dumbar,

Jalan Faraday,

11600 Pulau Pinang

Parent Title No:

Grant 63288

Lot No: 730 as

subdivided from the

amalgamation of

Lot No: 79,80, 81,

85, 87 and part of


4 Town of Jelutong,


Pulau Pinang held

under Parent Lot

Title No: Geran

63288

Brief Description:

A corner and

its adjacent

intermediate

unit of three (3)

bedroom medium

cost apartments

(2 units)

Existing Use:

For apt unit

No:98-19-19, the

unit is rented to third

party for residential

use. For apt unit

No:98-19-20, the

unit is rented to

staff for

residential use

Kesar

Condominium

Unit Nos:

a) 3D-22-07

b) 3D-22-08,

Jalan Batu Uban

N-Park, 11700

Pulau Pinang

Strata Title Nos:

Grant No. 58573/M1

MENARA D/22/902

and Grant No.

58573/M1 MENARA

D/22/903

Lot No: PT 9768,

Mukim 13,


Pulau Pinang

Brief Description:

Two (2) adjacent

three (3) bedroom

condominium units

Existing Use:

Rented to third party

for residential use

BGallant

Gedung Kamdar

No.1763, Jalan

Muthupalaniappa

14000 Bukit

Mertajam, Seberang

Prai Tengah,

Pulau Pinang

Title No:

H.S.(D) 23036 to

H.S.(D) 23050,

(formerly known as

HS (D) 361-365)

Lot No: 1464 to Lot

No. 1471 and Lot

No. 1474 to 1480,

Section 3, Town of

Bukit Mertajam,

District of Seberang

Perai Tengah,

Pulau Pinang

Brief Description:

Five (5) storey

shopping complex

complete with sub

basement car park

Existing Use:

Retail, commercial

and storage

purposes. Rooftop

space of building

rented to third party.

Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

* Date of

Certificate

of Fitness

Issued

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building


16.

17.

18.

19.

57.

KA

MD

AR

Annual R

eport 2007

Group Landed P

ropertiesC

ont’d

5,964,732 * 22.04.2005 11,000 44,000 Freehold 2 years

5,078,466 * 21.11.1997 43,563 72,107 Leasehold

for 60

years,

expiring

on 15

December

2054

9 years

BGallant

No.1 Persiaran

PM 2/1, Pusat

Bandar Seri

Manjung, Seksyen 2,

32000 Seri Manjung,

Perak

Title No:

HSD 18502 to

HSD 18505

Lot No: PT 25954 to

PT 25957, Mukim

Setiawan, Daerah

Manjung, Negeri

Perak

Brief Description:

Four (4)-commercial

building

Existing Use:

Rented to PMBK

for retail use at

RM360,000 per

annum

Orisea

Factory Premise

No. Plot 31, Hilir

Sungai Keluang 1,

Bayan Lepas

Industrial Park

(Phase IV), Bayan

Lepas, 11900

Pulau Pinang

Title No:

No H.S.(D) 18976

(PreviouslyH.S.

(D) 8701)

Lot No: PT 2842

(also known as Lot

No: 31, Bayan

Lepas, Industrial

Park, Phase IV),

Mukim 12, District

of Barat Daya,

Pulau Pinang

Brief Description:

Four (4) storey

detached factory

Existing Use:

Rented to Kesar for

industrial use at

RM720,000

per annum

30,317,274 *10.06.2002 9,483 70,110 24 yearsFreeholdKStores

No. 113, Jalan

Tuanku Abdul

Rahman, 50100,

Kuala Lumpur

Title No:

Geran 5561 & 10270

Lot No: 93 & 94,

Section 36, Town

of Kuala Lumpur,

District of Kuala

Lumpur, State of

Wilayah

Persekutuan,

Kuala Lumpur

Brief Description:

7 ½ storey

commercial building

erected on two (2)

contiguous plots of

commercial land.

Existing Use:

Rented to KSB for

retail use at RM3.6

million per annum

4,270,000 *23.09.2006 5,435 18,500 3 monthsFreeholdKStores

No. 1, Jalan Tun

Fatimah, Bachang

Utama, 75350

Melaka

HS(D) 51286

PT 5968

HS(D) 51287

PT 5969

Lot No: 6915

Melaka Tengah

Mukim Bachang

Brief Description:

2 storey

commercial building

Existing Use:

Rented to Ksouth

for retail use at

RM0.6 million


Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

* Date of

Certificate

of Fitness

Issued

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

(B) LANDED PROPERTIES OWNED BY THE ASSET-BASED COMPANIES

Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

*revaluation

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

20.

21.

1.

2.

58.

KA

MD

AR

Annual R

eport 2007

Group Landed P

ropertiesC

ont’d

3,687,168 *10.06.2002 3,488.5 16,607.37 24 yearsFreeholdKH

No. 83 and 85,

Jalan Tuanku Abdul

Rahman, 50100

Kuala Lumpur

Title No:

Geran 35817

(formerly known as

CT 14999) & 12930

(formerly known

as CT 12512)

Lot No: 43 & 158,

Section 33, Town

of Kuala Lumpur,

District of Kuala

Lumpur, State of

Wilayah

Persekutuan,

Kuala Lumpur

Brief Description:

Five (5)-storey

commercial building

erected on two (2)

contiguous plots

on commercial land.

Existing Use:

Rented to KSB for

retail use at

RM600,000

per annum

7,064,715 *10.06.2002 7,750 53,975 8 yearsFreeholdKH

No.429, 431, 433

and 435, Jalan

Tuanku Abdul

Rahman, 50100

Kuala Lumpur

Title No:

Geran 1029, 1030,

43326 (formerly

known as Geran

34879), & 43327

(formerly known as

Geran 34878)

Lot No: 710, 711,

2382 & 2383,

Section 41, Town of

Kuala Lumpur,

District of Kuala

Lumpur, State of

Wilayah

Persekutuan,

Kuala Lumpur

Brief Description:

6 ½ storey

commercial building

erected on four (4)

contiguous plots of

commercial land

Existing Use:

Rented to KSB for

retail use at RM1.2

million per annum

19,968,000 * 30.6.2004 4,413 27,655 Freehold 11 yearsKH

No. 171-173, Jalan

Tuanku Abdul

Rahman, 50100

Kuala Lumpur

Title No:

Geran 29507


37, Town of Kuala

Lumpur, District of

Kuala Lumpur,

State of

Wilayah

Persekutuan,

Kuala Lumpur

Brief Description:

7 storey commercial

building

Existing Use:

Rented to KSB for

retail use at

RM1.2 million

per annum

10,167,023 11.07.2002 1,098,247

(Parent

Lot)

105,745 Interest-in-

perprtuity9 yearsKH

No. 1-888A, 1-888B

(1st Floor), 2-888A,

2-888B (2nd Floor),

3-888A and 3-888B

(3rd Floor), Kompleks

Bukit Jambul,

Jalan Rumbia, Off

Jalan Dr. Awang,

11900 Pulau Pinang

Title No:

Master Titles

GM1730, GM349,

GM350, GM542,

GM543, GM544,

GM429 and GM430

Lot No: 1859, 1860,

1861, 4562, 4563,

4564, 624 and 625,

in Mukim 13, District

of Timur Laut,

Pulau Pinang

Brief Description:

6 units of retail

space

Existing Use:

Rented to PMBK

(Penang) for retail

use at RM960,000

per annum


Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

*revaluation

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

3.

4.

5.

6.

59.

KA

MD

AR

Annual R

eport 2007

Group Landed P

ropertiesC

ont’d

7,652,820 *10.06.2002 41,228 99,076 Leasehold

for 99

years,

expiring

6 August

2072

26 yearsMS

No.1, Jalan 241,

Section 51A, 46100

Petaling Jaya,

Selangor Darul

Ehsan

Title No:

PN 6645


32 Town of Petaling

Jaya, District of

Petaling, State of

Selangor

Brief Description:

Four (4)-storey

office/industrial

building.

Existing Use:

Rented to KSB for

industrial use at

RM540,000 per

annum


Registered Owner/

Postal Address


Existing Use

Audited

NBV as at

31.12.06

RM

Date of

acquisition/

*revaluation

Land

Area

Sq ft

Built

up

Area

Sq ft

Tenure Approxi-

mate

Age of

Building

KH

E52-GA, E44-GB to

E53-GB, E44-1A to

E53-1A, E44-1B to

E53-1B, Taman

Prima Saujana,

43000 Kajang,

Selangor

Title No:

Master Title Geran

30570, Lot 1779,

Mukimg of Kajang,

istrict of Ulu Langat,

State of Selangor

3,638,827 *25.10.2005 27,222

(Parcel

Area)

29,740 Freehold 2 yearsBrief Description:

3 Storey Building

Existing Use:

Rented to KSB for

retail use at

RM240,000

per annum

KH

No. 3 Jalan

Diplomatic 2/2,

62050 Precinct 15,

Putrajaya, Wilayah

Persekutuan

Putrajaya

Lot No:

D3-20, Design Type

Topics

1,398,000 *22.11.2006 3,507 6,335 Freehold 0 yearBrief Description:

3 Storey Shop

KH

No. 5 Jalan

Diplomatic 2/2,

62050 Precinct 15,

Putrajaya, Wilayah

Persekutuan

Putrajaya

Lot No:

D3-20, Design Type

Topics

868,000 *22.11.2006 2,357 3,895 Freehold 0 yearBrief Description:

3 Storey Shop

7.

8.

10.

9.

Direct Indirect

Analysis O

f Shareholdings A

s At 30 A

pril 2007

60.

KA

MD

AR

Annual R

eport 2007

Authorized Share Capital : RM500,000,000.00

Issued and Fully Paid-Up Share Capital : RM126,022,002.00

Class of Shares : Ordinary Shares of RM1.00 Each

Voting Rights : One Vote Per Ordinary Share

No. of Shareholders : 3,137

DISTRIBUTION OF SHAREHOLDINGS AS AT 30 APRIL 2007

No. of Shareholders

40

2,567

401

81

42

6

3,137

Category

Less than 100

100 - 1,000

1,001 - 10,000

10,001 - 100,000

100,001 - less than 5% of issued shares

5% and above of issued shares

Total

No. of Shares

1,166

662,996

1,596,900

2,032,708

55,795,932

65,932,300

126,022,002

Percentage

0.00

0.53

1.27

1.61

44.27

52.32

100.00

LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 30 APRIL 2007

DIRECTORS’ INTERESTS IN SHARES AS AT 30 APRIL 2007

No. of Shares

21,364,000

5,044,000

10,378,000

531,000

9,192,800

8,898,500

7,674,000

1,483,000

8,488,000

531,000

8,223,625

No. of Shares

5,044,000

21,364,000

531,000

10,378,000

-

-

1,483,000

7,674,000

531,000

8,488,000

-

%

16.95

4.00

8.24

0.42

7.24

7.06

6.09

1.18

6.74

0.42

6.52

%

4.00

16.95

0.42

8.24

-

-

1.18

6.09

0.42

6.74

-

No. Names

1. Harsukhlal A/L Maganlal Kamdar

2. Lalita Jaganath I/K Harsukhlal

3. Bipinchandra A/L Balvantrai

4. Mehta Trupti Ratilal

5. Lembaga Tabung Angkatan Tentera

6. Perbadanan Nasional Berhad

7. Hamendra A/L B.M. Kamdar

8. Ila Hemendra Kamdar

9. Rajnikant A/L B.M Kamdar

10. Baby @ Sudhakumari A/P Amartlal

11. Kamal Kumar Kishorchandra Kamdar

Direct Indirect

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

No. of Shares

21,364,000

10,378,000

8,488,000

8,223,625

2,570,000

2,405,000

-

-

No. of Shares

5,044,000

531,000

531,000

-

-

-

-

-

%

16.95

8.24

6.74

6.52

2.04

1.91

-

-

%

4.00

0.42

0.42

-

-

-

-

-

No. Names





5. Jayesh R. Kamdar A/L Rajnikant

6. Paresh R. Kamdar

7. Datuk Emam Mohd Haniff Bin Emam Mohd Hussain

8. Dato’ Dr. Shanmughanathan A/L Vellanthurai

(a)

(c)

(g)

Note:

(a) Indirect Interest by virtue of his wife’s (Lalita Jaganath I/K Harsukhlal) shareholding in the Company.

(b) Indirect Interest by virtue of her husband’s (Harsukhlal A/L Maganlal Kamdar) shareholding in the Company.

(c) Indirect Interest by virtue of his wife’s (Mehta Trupti Ratilal) shareholding in the Company.

(d) Indirect Interest by virtue of her husband’s (Bipinchandra A/L Balvantrai) shareholding in the Company.

(e) Indirect Interest by virtue of his wife’s (Ila Hemendra Kamdar) shareholding in the Company.

(f) Indirect Interest by virtue of her husband’s (Hamendra A/L B.M. Kamdar) shareholding in the Company.

(g) Indirect Interest by virtue of his wife’s (Baby @ Sudhakumari A/P Amartlal) shareholding in the Company.

(h) Indirect Interest by virtue of her husband’s (Rajnikant A/L B.M Kamdar) shareholding in the Company.

No. of Shares Held

21,364,000

10,378,000

9,129,800

8,898,500

8,488,000

7,674,000

5,044,000

4,566,625

4,001,000

3,949,220

3,657,000

3,262,700

2,884,900

2,570,000

2,405,000

2,186,600

2,013,000

1,893,000

1,856,900

1,483,000

1,427,375

1,410,100

1,159,600

1,159,000

960,800

833,900

786,700

773,000

594,700

531,000

117,341,420

%

16.95

8.24

7.24

7.06

6.74

6.09

4.00

3.62

3.17

3.13

2.90

2.59

2.29

2.04

1.91

1.74

1.60

1.50

1.47

1.18

1.13

1.12

0.92

0.92

0.76

0.66

0.62

0.61

0.47

0.42

93.09

Name



3. Lembaga Tabung Angkatan Tentera

4. Perbadanan Nasional Berhad




8. AMSEC Nominees (Tempatan) Sdn. Bhd.

- Kamal Kumar Kishorchandra Kamdar (9562-3101)

9. Yashesh Chandrakant Patel

10. MIDF Sisma Nominees (Tempatan) Sdn. Bhd.

- Pledged Securities Account for Yap Kim Hong (CTS-YKH0006C)


12. Ansuya A/P Shantilal Rupani

13. Sharadkumar A/L Kishorchandra


15. Paresh R. Kamdar

16. RHB Nominees (Tempatan) Sdn. Bhd.

- Pledged Securities Account for Sivaloganathan A/L Yoganathan

17. Khew Siew Keow

18. Sharda A/P Naran Dass

19. Sangeeta Kaur Sidhu


21. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd.

-Pledged Securities Account for Kishorchandra A/L Maganlal Kamdar (AK0013)

22. CIMSEC Nominees (Tempatan) Sdn. Bhd.

-Pledged Securities Account for Jaikishin A/L Shewandas

23. Simran Kaur Raina

24. RHB Nominees (Tempatan) Sdn. Bhd.

-Pledged Securities Account for Vijay Kumar A/L Mohinder Lal Dua


-Pledged Securities Account for Sharadkumar A/L Kishorchandra (AS0022)


-Pledged Securities Account Cheong May Yee (CTS-CMY0003C)

27. Mayban Nominees (Tempatan) Sdn. Bhd.

-Pledged Securities Account for Yusoff Bin Md Shah

28. Sonal Domadia

29. Pragna A/P K M Kamdar


Total

LIST OF TOP 30 SHAREHOLDERS/DEPOSITORS AS AT 30 APRIL 2007

61.

KA

MD

AR

Annual R

eport 2007

Analysis O

f Shareholdings A

s At 30 A

pril 2007C

ont’d

Direct Indirect

Direct Indirect

62.

KA

MD

AR

Annual R

eport 2007

Analysis O

f ICU

LS H

oldings As A

t 30 April 2007

DISTRIBUTION OF ICULS HOLDINGS AS AT 30 APRIL 2007

No. of ICULS Holders

3

182

105

18

20

5

333

Category

Less than 100

100 - 1,000

1,001 - 10,000

10,001 - 100,000

100,001 - less than 5% of issued ICULS

5% and above of issued ICULS

Total

No. of ICULS

220

125,300

362,800

640,921

27,748,760

43,089,999

71,968,000

Percentage

0

0.17

0.51

0.89

38.55

59.88

100.00

LIST OF SUBSTANTIAL ICULS HOLDERS AS AT 30 APRIL 2007

DIRECTORS’ INTERESTS IN ICULS AS AT 30 APRIL 2007

No. of ICULS

17,063,768

4,028,910

8,289,706

424,171

6,928,214

385,610

6,779,401

424,171

6,267,636

3,143,608

751,356

No. of ICULS

4,028,910

17,063,768

424,171

8,289,706

385,610

6,928,214

424,171

6,779,401

-

751,356

3,143,608

%

23.71

5.60

11.52

0.59

9.63

0.54

9.42

0.59

8.71

4.37

1.04

%

5.60

23.71

0.59

11.52

0.54

9.63

0.59

9.42

-

1.04

4.37

No. Names











11. Sonal Domadia

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

No. of ICULS

17,063,768

8,289,706

6,779,401

6,267,636

2,052,376

1,920,700

-

-

No. of ICULS

4,028,910

424,171

424,171

-

-

-

-

-

%

23.71

11.52

9.42

8.71

2.85

2.67

-

-

%

5.60

0.59

0.59

-

-

-

-

-

No. Names






6. Paresh R. Kamdar



(a)

(c)

(g)

Issued Size : RM71,968,000.00 nominal value 5-year 3% Irredeemable

Convertible Unsecured Loan Stocks (“ICULS”)

Nominal Value : ICULS of RM1.00 Each

Voting Rights : NIL

No. of ICULS Holders : 333

Note:

(a) Indirect Interest by virtue of his wife’s (Lalita Jaganath I/K Harsukhlal) ICULS holding in the Company.

(b) Indirect Interest by virtue of her husband’s (Harsukhlal A/L Maganlal Kamdar) ICULS holding in the Company.

(c) Indirect Interest by virtue of his wife’s (Mehta Trupti Ratilal) ICULS holding in the Company.

(d) Indirect Interest by virtue of her husband’s (Bipinchandra A/L Balvantrai) ICULS holding in the Company.

(e) Indirect Interest by virtue of his wife’s (Ila Hemendra Kamdar) ICULS holding in the Company.

(f) Indirect Interest by virtue of her husband’s (Hamendra A/L B.M. Kamdar) ICULS holding in the Company.

(g) Indirect Interest by virtue of his wife’s (Baby @ Sudhakumari A/P Amartlal) ICULS holding in the Company.

(h) Indirect Interest by virtue of her husband’s (Rajnikant A/L B.M Kamdar) ICULS holding in the Company.

(i) Indirect Interest by virtue of his wife’s (Sonal Domadia) ICULS holding in the Company.

(j) Indirect Interest by virtue of her husband’s (Sharadkumar A/L Kishorchandra) ICULS holding in the Company.

No. of ICULS Held

17,063,768

8,289,706

6,928,214

6,779,401

4,028,910

3,346,820

3,196,164

3,143,608

2,920,816

2,660,255

2,052,376

1,920,700

1,608,072

1,512,156

1,441,071

751,356

751,356

538,500

424,171

424,171

385,610

215,145

163,000

155,325

138,088

100,000

99,900

99,000

93,342

47,379

71,278,380

%

23.71

11.52

9.63

9.42

5.60

4.65

4.44

4.37

4.06

3.70

2.85

2.67

2.23

2.10

2.00

1.04

1.04

0.75

0.59

0.59

0.54

0.30

0.23

0.21

0.19

0.14

0.14

0.14

0.13

0.06

99.04

Name














13. Khew Siew Keow



- Pledged Securities Account for Kishorchandra A/L Maganlal Kamdar (AK0013)


17. Sonal Domadia

18. Milankumar P. Doshi




22. Patel Vishakha Chandrakant

23. Paresh A/L Bhanulal Shantilal

24. Mayban Securities Nominees (Tempatan) Sdn. Bhd.

-Pledged Securities Account for Paresh A/L Bhanulal Shantilal

25. Jugal Kishor Shivlal

26. Cheah See Han

27. Eu Mui @Ee Soo Mei

28. See Leong Chye @ Sze Leong Chye


-Pledged Securities Account for Patel Vishakha Chandrakant

30. Dipakkumar A/L Vrajlal Premchand

Total

LIST OF TOP 30 ICULS HOLDERS/DEPOSITORS AS AT 30 APRIL 2007

63.

KA

MD

AR

Annual R

eport 2007

Analysis O

f ICU

LS H

oldings As A

t 30 April 2007

Cont’d

Direct Indirect

Direct Indirect

64.

KA

MD

AR

Annual R

eport 2007

Analysis O

f Warrants H

oldings As A

t 30 April 2007

DISTRIBUTION OF WARRANTS HOLDINGS AS AT 30 APRIL 2007

No. of Warrants Holders

2

176

141

33

15

6

373

Category

Less than 100

100 - 1,000

1,001 - 10,000

10,001 - 100,000

100,001 - less than 5% of issued Warrants

5% and above of issued WARRANTS

Total

No. of Warrants

180

124,300

616,640

965,442

15,368,686

32,924,752

50,000,000

Percentage

0

0.24

1.23

1.94

30.74

65..85

100

LIST OF SUBSTANTIAL WARRANTS HOLDERS AS AT 30 APRIL 2007

No. of Warrants

11,734,443

2,770,608

5,700,680

291,695

4,764,407

265,177

5,301,136

4,662,070

291,695

2,161,802

516,694

No. of Warrants

2,770,608

11,734,443

291,695

5,700,680

265,177

4,764,407

-

291,695

4,662,070

516,694

2,161,802

%

23.47

5.54

11.40

0.58

9.53

0.53

10.60

9.32

0.58

4.32

1.03

%

5.54

23.47

0.58

11.40

0.53

9.53

-

0.58

9.32

1.03

4.32

No. Names











11. Sonal Domadia

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

LIST OF SUBSTANTIAL WARRANTS HOLDERS AS AT 30 APRIL 2007

No. of Warrants

11,734,443

5,700,680

5,301,136

4,662,070

1,411,382

1,320,830

-

-

No. of Warrants

2,770,608

291,695

-

291,695

-

-

-

-

%

23.47

11.40

10.60

9.32

2.82

2.64

-

-

%

5.54

0.58

-

0.58

-

-

-

-

No. Names






6. Paresh R. Kamdar



(a)

(c)

(g)

Issued Size : 50,000,000 5 year detachable warrants pursuant to the issuance of KGMB Bonds together with detachable KGMB Warrants at 100% of the nominal value of the KGMB Bonds

No. Of Warrants Holders : 373

Note:

(a) Indirect Interest by virtue of his wife’s (Lalita Jaganath I/K Harsukhlal) Warrants holding in the Company.

(b) Indirect Interest by virtue of her husband’s (Harsukhlal A/L Maganlal Kamdar) Warrants holding in the Company.

(c) Indirect Interest by virtue of his wife’s (Mehta Trupti Ratilal) Warrants holding in the Company.

(d) Indirect Interest by virtue of her husband’s (Bipinchandra A/L Balvantrai) Warrants holding in the Company.

(e) Indirect Interest by virtue of his wife’s (Ila Hemendra Kamdar) Warrants holding in the Company.

(f) Indirect Interest by virtue of her husband’s (Hamendra A/L B.M. Kamdar) Warrants holding in the Company.

(g) Indirect Interest by virtue of his wife’s (Baby @ Sudhakumari A/P Amartlal) Warrants holding in the Company.

(h) Indirect Interest by virtue of her husband’s (Rajnikant A/L B.M Kamdar) Warrants holding in the Company.

(i) Indirect Interest by virtue of his wife’s (Sonal Domadia) Warrants holding in the Company.

(j) Indirect Interest by virtue of her husband’s (Sharadkumar A/L Kishorchandra) Warrants holding in the Company.

No. of WARRANTS Held

11,734,443

5,700,680

4,764,407

4,662,070

3,292,544

2,770,608

2,197,944

2,161,802

2,008,592

1,829,409

1,411,382

1,320,830

1,105,842

1,039,882

516,694

496,694

291,695

291,695

265,177

218,907

212,141

96,000

94,961

50,000

49,600

48,100

40,000

39,900

35,500

32,581

48,780,080

%

23.47

11.40

9.53

9.32

6.59

5.54

4.40

4.32

4.02

3.66

2.82

2.64

2.21

2.08

1.03

0.99

0.58

0.58

0.53

0.44

0.42

0.19

0.19

0.10

0.10

0.10

0.08

0.08

0.07

0.07

97.55

Name














13. Khew Siew Keow


15. Sonal Domadia





20. Mayban Securities Nominees (Tempatan) Sdn. Bhd.

- Pledged Securities Account for Paresh A/L Bhanulal Shantilal (PA0029)

21. Patel Vishakha Chandrakant

22. See Leong Chye @ Sze Leong Chye

23. Jugal Kishor Shivlal

24. Shim Sui Ching

25. Tan Lay Hian

26. Ng Cheong Sang

27. Goh Swee Keah

28. Indar Kaur A/P Dan Singh

29. Ong Kok Cheng

30. Dipakkumar A/L Vrajlal Premchand

Total

LIST OF TOP 30 WARRANTS HOLDERS/DEPOSITORS AS AT 30 APRIL 2007

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Cont’d

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

ARTICLE NO. EXISTING PROVISIONS AMENDED PROVISIONS

“Approved Market Place” means A stock Exchange which is specified to be an approved market place in the Securities Industry (Central Depositories) (Exemption) (No. 2) Order 1998 or such other legislative instrument.

Article 2(b)(Definition)

Deleted.

Article 2(d)(Definition)

“Central Depository” means Malaysian Central Depository Sdn. Bhd. and shall include its successors in title.

“Depository” means the Bursa Malaysia Depository Sdn. Bhd. and that the words “Central Depository” which appears throughout the Articles be substituted with “Depository”.

Article 5 Without prejudice to any special rights previously conferred on the holders of any shares or class of shares already issued but subject to the provisions of the Act, the Central Depositories Act, the Rules, these Articles and applicable laws, the Company shall have the power with the sanction of an ordinary resolution to issue preference shares carrying a right to redemption out of profits or liable to be redeemed at the option of the Company or to issue further preference shares ranking equally with or in priority to preference shares already issued. Subject thereto, the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time. The holder of a preference share shall have the same rights as a holder of ordinary share as regards receiving notices, reports and audited accounts, and attending general meetings of the Company. The holder of a preference share shall be entitled to a return of capital in preference to holders of ordinary shares when the Company is wound up.

Without prejudice to any special rights previously conferred on the holders of any shares or class of shares already issued but subject to the provisions of the Act, the Central Depositories Act, the Rules, these Articles and applicable laws, the Company shall have the power with the sanction of an ordinary resolution to issue preference shares carrying a right to redemption out of profits or liable to be redeemed at the option of the Company or to issue further preference shares ranking equally with or in priority to preference shares already issued. The holder of a preference share shall have the same rights as a holder of ordinary share as regards receiving notices, reports and audited accounts, and attending general meetings of the Company.

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Article 5

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Where :

(a) the securities or shares of the Company are listed on an Approved Market Place; and

(b) the Company is exempted from compliance with Section 14 of the Central Depositories Act (or such other provisions of the Act or any other laws in substitute, amendment or supplement to the same), or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act, 1998 (or such other provisions of the Act or any other laws in substitution, amendment or supplemental to the same) and/or such other legislative instrument, as the case may be, under the rules of the Central Depository in respect of such securities.

The Company shall, upon request of a securities holder, permit a transmission of securities held by such securities holder from the register of holders maintained by the Registrar of the Company in the jurisdiction of the Approved Market Place (“herein after referred to as “the Foreign Register”), to the register of holders maintained by the Registrar of the Company in Malaysia (“herein after referred to as “the Malaysian Register”) subject to the following conditions :-

Where :

(a) the Securities of the Company are listed on another stock exchange; and

(b) the Company is exempted from compliance with Section 14 of the Securities Industries (Central Depositories) Act 1991 or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act 1998, as the case may be, under the Rules of the Depository in respect of such Securities,

the Company shall, upon request of a Securities holder, permit a transmission of Securities held by such Securities holder from the register of holders maintained by the registrar of the Company in the jurisdiction of the other stock exchange, to the register of holders maintained by the registrar of the Company in Malaysia and vice versa provided that there shall be no change in the ownership of such Securities.

Article 51(1)

The holder of a preference share shall also have the right to vote at any general meeting convened for each of the following purposes :-

a) When the dividend or part of the dividend on the preference shares is in arrears for more than six (6) months;

b) On a proposal to reduce the Company’s share capital;

c) On a proposal for the disposal of the whole of the Company’s property, business and undertaking;

d) On a proposal that affects rights and privileges attaching to the preference shares;

e) On a proposal to wind up the Company; and

f) During the winding up of the Company.

The holder of a preference share shall also have the right to vote at any general meeting convened for each of the following purposes :-

a) When the dividend or part of the dividend on the preference shares is in arrears for more than six (6) months;

b) On a proposal to reduce the Company’s share capital;

c) On a proposal for the disposal of the whole of the Company’s property, business and undertaking;

d) On a proposal that affects rights and privileges attaching to the preference shares;

e) On a proposal to wind up the Company; and

f) During the winding up of the Company.

The Company shall inform the Central Depository of the dates of the general meeting and shall by written request made in duplicate in the prescribed form request the Central Depository, at least three (3) market days (or such other date as may be prescribed by applicable laws) prior to and not including the date of the general meeting in accordance with the Rules and applicable laws, to issue a Record of Depositors (hereinafter “General Meeting Record of Depositors”). The General Meeting Record of Depositors shall, subject to the Foreign Ownership Regulations (where applicable) and any other applicable provisions of the written law, be the final record of all depositors who shall be deemed to be the registered holders of ordinary shares of the Company eligible to be present, to speak and vote at such meetings.

Article 64 The Company shall inform the Depository of the dates of the general meeting and shall by written request made in duplicate in the prescribed form, request the Depository, in accordance with the Rules of the Depository, to issue a Record of Depositors as at the latest date which is reasonably practicable which shall in any event be not less than three (3) market days before the general meeting (hereinafter referred to as “the General Meeting Record of Depositors”). The General Meeting Record of Depositors shall, subject to the Foreign Ownership Regulations (where applicable) and any other applicable provisions of the written law, be the final record of all depositors who shall be deemed to be the registered holders of ordinary shares of the Company eligible to present, to speak and vote at such meetings.


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Article 51(1) (i) there shall be no change in the ownership of such securities or shares; and

(ii) the transmission shall be executed by causing such securities/shares to be credited directly into the Securities Account of such securities holder.

Article 51(2) For the avoidance of doubt, where the Company fulfils the requirements of paragraph (1) (a) and (b) of this Article, it shall not allow any transmission of securities / shares from the Malaysian Register into the Foreign Register.

Deleted.


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Subject to any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a show of hands every person present who is a member or a member’s representative or proxy or attorney shall have one vote and in the case of a poll every member present in person or by proxy or by attorney or other duly authorized representative shall have one vote for every share held by him.

At least fourteen (14) days’ notice, or twenty one (21) days’ notice in the case where any special resolution is to be proposed or where it is the Annual General Meeting (or such notice period a may be prescribed by applicable laws), of every such meeting shall be given by advertisement in a daily press and in writing to each stock exchange upon which the Company is listed PROVIDED THAT in respect of a Deposited Security, the Company shall inform the Central Depository of the dates of general meetings and shall by written request made in duplicate in the prescribed form, request the Central Depository at least three (3) Market Days (or such other date as may be prescribed by applicable laws) prior to and not including the date of the general meeting, to prepare the Record of Depositors to whom the notice of the general meeting shall be given by the Company. Such Record of Depositors shall be the final record of all depositors who shall be deemed to be the registered holders of ordinary shares of the Company who are eligible to be present, speak and to vote at such general meeting.

At least fourteen (14) days’ notice, or twenty one (21) days’ notice in the case where any special resolution is to be proposed or where it is the Annual General Meeting (or such notice period a may be prescribed by applicable laws), of every such meeting shall be given by advertisement in at least one (1) nationally circulated daily newspaper either in Bahasa Malasia or English and in writing to each stock exchange upon which the Company is listed PROVIDED THAT in respect of a Deposited Security, the Company shall inform the Depository of the dates of general meetings and shall by written request made in duplicate in the prescribed form, request the Depository to prepare the Record of Depositors, as at the latest date which is reasonably practicable which shall in any event be not less than three (3) Market Days before the general meeting (hereinafter referred to as “the General meeting Record of Depositors”) to whom the notice of the general meeting shall be given by the Company. Such Record of Depositors shall be the final record of all depositors who shall be deemed to be the registered holders of ordinary shares of the Company who are eligible to be present, speak and to vote at such general meeting.

Article 65Second Paragraph

Article 87 Subject to any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a show of hands every person present who is a member or a member’s representative or proxy or attorney shall have one vote and in the case of a poll every member present in person or by proxy or by attorney or other duly authorized representative shall have one vote for every share held by him. On a resolution to be decided on a show of hands, a holder of ordinary shares or preference shares who is personally present and entitled to vote shall be entitled to 1 vote.


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A member may appoint two or more proxies to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy.

The First Directors of the Company shall be Ng Ah Pong and Teng Mee Leng. All Directors of the Company shall be natural persons.

Article 95 A member may appoint up to two proxies to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy.

Article 99 The First Directors of the Company shall be Ng Ah Pong and Teng Mee Leng.

The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointer is a corporation, either under the corporation’s seal or under the hand of an officer or attorney duly authorized. The Directors may, but shall not be bound to require evidence of the authority of any such attorney or officer. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) & (c) of the Act (or such other provisions of the Act or any other laws in substitution, amendment or supplemental to the same) shall not apply to the Company. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

Article 94 The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointer is a corporation, either under the corporation’s seal or under the hand of an officer or attorney duly authorized. The Directors may, but shall not be bound to require evidence of the authority of any such attorney or officer. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Section 149(1)(a) & (b) of the Act (or such other provisions of the Act or any other laws in substitution, amendment or supplemental to the same) shall not apply to the Company. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

FORM OF PROXY(Before completing this form please refer to the notes below)

I/We I.C No./Co.No./CDS No.: (Full name in block letters)of

KAMDAR GROUP (M) BERHAD(Company No: 577740 A)(Incorporated in Malaysia)

No. of ordinary shares held

(Full address)being a member/members of KAMDAR GROUP (M) BERHAD hereby appoint the following person(s):-

1.

2.

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Fifth Annual General Meeting of the Company to be held at Grand Continental Hotel, Dewan 1, 11th Floor, Jalan Raja Laut, 50350, Kuala Lumpur on Friday, 29th June 2007 at 10.00 a.m. My/our proxy/proxies is/are to vote as indicated below:-

RESOLUTIONS RELATING TO :-

1. Ordinary Resolution 1







8. Special Resolution 8

FIRST PROXY SECOND PROXYFor AgainstFor Against

(Please indicate with a “ ✓” in the space provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy/proxies may vote or abstain from voting at his/her/their discretion).

Signature/Common SealNotes

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member

may appoint more than one proxy to attend the same meeting provided that he specifies the proportion of his shareholding to be

represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to

be his proxy without limitation and the provisions of Section 149(1)(b) & (c) of the Companies Act, 1965 shall not apply.

2. Where a member is an authorised nominee as defined under the Security Industry (Central Depositories) Act, 1991, it may appoint

at least one (1) proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of

the said securities account.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if

the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so

authorized.

4. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Faber Imperial Court, Jalan Sultan

Ismail, 50250 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

Dated this day of 2007

No. of shares to be represented by proxy

Name of proxy, NRIC No. & Address

The SecretaryKAMDAR GROUP (M) BERHAD (577740 A)

Level 15-2, Jalan Sultan Ismail,Faber Imperial Court,50250 Kuala Lumpur.

Affix Stamp

FOLD HERE

FOLD HERE

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