NOTICE OF ANNUAL GENERAL MEETING HOLDINGS BERHAD (384662-U) 4 BOARD OF DIRECTORS Dato’ Teoh Boon Beng @ Teoh Eng Kuan Non-Independent Non-Executive Chairman Lee See Jin Managing

NTPM HOLDINGS BERHAD (384662-U)

1

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Eleventh (11th) Annual General Meeting of NTPM Holdings Berhad (“the Company”) will be held at Bukit Jawi Golf Resort, 691, Main Road, Sungai Bakap, 14200 Seberang Perai Selatan, Pulau Pinang on Friday, 14 September 2007 at 9.30 a.m. for the following purposes:

AS ORDINARY BUSINESS: -

1. To receive the Audited Financial Statements for the year ended 30 April 2007 together with the Reports of the Directors and Auditors thereon.

2. To consider and if thought fit, to pass the following resolution in accordance with Section 129(6) of the Companies Act, 1965 as an ordinary resolution:

“That Y.Bhg. Dato’ Teoh Boon Beng @ Teoh Eng Kuan, who is over the age of seventy years and retiring in accordance with Section 129 of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company, to hold office until the next Annual General Meeting of the Company.”

3. To re-elect the following Directors who retire in accordance with Article 133 of the Company’s Articles of Association and being eligible, offer themselves for re-election: -

(i) Mr. Lee See Jin (ii) Mr. Lee Chong Choon

4. To approve the payment of final dividend of 26.5% less 27% income tax for the year ended 30 April 2007.

5. To approve the payment of directors’ fees for the year ended 30 April 2007.

6. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS: -

7. To consider and, if thought fit, to pass with or without modifications, the following resolutions: -

(i) Ordinary Resolution Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

“THAT subject to Section 132D of the Companies Act, 1965 and approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this Resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

(ii) Special Resolution Proposed Amendments to the Articles of Association

“THAT, the amendments to the Articles of Association of the Company in the manner set out in Appendix I of the Circular to Shareholders dated 23 August 2007, be and are hereby approved and adopted AND THAT the Directors of the Company and Company Secretary be and are hereby authorised to take all such steps and carry out all the necessary formalities to effect the aforesaid amendments.

AND THAT authority be and is hereby given to the Directors of the Company to complete and do all such acts and things (including execute such documents as may be required) to give effect to such transactions as authorised by this Resolution.”


2

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)

NOTICE OF ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN that a final dividend of 26.5% less 27% income tax will be payable on 28 September 2007 to depositors who are registered in the Record of Depositors at the close of business on 19 September 2007 if approved by members at the 11th Annual General Meeting on 14 September 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 19 September 2007 in respect of ordinary transfers ; and

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

Securities Berhad.

By Order of the Board,

THUM SOOK FUN (MAICSA 7025619)Company Secretary

PenangDated: 23 August 2007

Explanatory Notes to Special Business:

1. Ordinary Resolution - Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The Ordinary Resolution proposed under item no. 7 (i) above, if passed, will empower the Directors to issue shares up to 10% of the issued capital of the Company for the time being for such purposes as the Directors may consider to be in the interest of the Company. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of period within which the next Annual General Meeting is required by law to be held, whichever is earlier.

2. Special Resolution - Proposed Amendments to the Articles of Association

The Special Resolution proposed under item no. 7 (ii) above, if passed, will give authority for the Company to amend the Articles of Association of the Company in order to be in line with the enhancements to the Listing Requirements of Bursa Malaysia Securities Berhad.

Further information on the Proposed Amendments to the Articles of Association of the Company is set out in the Circular to Shareholder dated 23 August 2007, which is despatched together with the Company’s Annual Report 2007.

Notes:

1. A member is entitled to appoint up to two (2) proxies to attend and vote in his place. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company. If a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

2. Where a member of the Company is an authorised nominee as defined under the Securities 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 of his attorney duly authorised in writing. In the case where a member is a corporation, the proxy form must be executed under its common seal or under the hand of an officer or attorney duly authorised.

4. All proxy forms must be duly executed and deposited at the registered office of the Company at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 Pulau Pinang at least 48 hours before the time for holding the meeting or any adjournment thereof.


3

STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING

1. Directors standing for re-election/re-appointment

(a) Re-appointment in accordance with Section 129(6) of the Companies Act, 1965

(i) Y.Bhg. Dato’ Teoh Boon Beng @ Teoh Eng Kuan

(b) Retiring in accordance with Article 133 of the Company’s Articles of Association

i) Mr. Lee See Jin ii) Mr. Lee Chong Choon

Further details and the family relationship with any director and / or substantial shareholder of the Company of the Directors standing for re-appointment or re-election at the 11th Annual General Meeting are set out in page 5 and their shareholdings information is listed in page 90 of this Annual Report.

2 Details of attendance of Directors at Board meetings held during the financial year ended 30 April 2007

There were four (4) Board meetings held during the financial year ended 30 April 2007. The details of attendance are set out in page 16 of this Annual Report in the Statement on Corporate Governance of the Company.


4

BOARD OF DIRECTORS

Dato’ Teoh Boon Beng @ Teoh Eng KuanNon-Independent Non-Executive Chairman

Lee See JinManaging Director

Lee Chong ChoonExecutive Director

Teoh Teik ToeNon-Independent Non-Executive Director

Lim Han NgeSenior Independent Non-Executive Director

Tan Hock SoonIndependent Non-Executive Director

AUDIT COMMITTEE

Tan Hock SoonIndependent Non-Executive Director, Chairman

Lim Han NgeSenior Independent Non-Executive Director, Member

Lee Chong ChoonExecutive Director, Member

HEAD OFFICE

No. 886, Jalan Bandar Baru, Sungai Kecil14300 Nibong Tebal, Seberang Perai SelatanPulau PinangTel No : 04-593 1296 / 04-593 1326Fax No : 04-593 3373

Email : [email protected] : www.ntpm.com.my

CORPORATE INFORMATION

COMPANY SECRETARY

Thum Sook Fun (MAICSA 7025619)

REGISTERED OFFICE

Suite 18.05, MWE PlazaNo. 8, Lebuh Farquhar, 10200 Pulau Pinang.Tel No : 04-263 1966Fax No : 04-262 8544

AUDITORS

Ernst & YoungChartered Accountants22nd Floor, MWE PlazaNo. 8, Lebuh Farquhar, 10200 Pulau Pinang.

PRINCIPAL BANKERS

Malayan Banking BerhadHSBC Bank Malaysia BerhadUnited Overseas Bank (Malaysia) BhdOCBC Bank (Malaysia) Berhad

SHARE REGISTRAR

Securities Services (Holdings) Sdn BhdSuite 18.05, MWE PlazaNo. 8, Lebuh Farquhar, 10200 Pulau Pinang.Tel No : 04-263 1966Fax No : 04-262 8544

STOCK EXCHANGE LISTING

Main Board of Bursa Malaysia Securities Berhad

Stock Name : NTPMStock Code : 5066


5

BOARD OF DIRECTORS

The details of the Board of Directors are as follows:

DATO’ TEOH BOON BENG @ TEOH ENG KUANNon-Independent Non-Executive Chairman

Dato’ Teoh Boon Beng @ Teoh Eng Kuan, a Malaysian, aged 74, a Justice of Peace, was appointed to the Board of Directors of NTPM Holdings Berhad (“NTHB” or “the Company”) as Non-Independent Non-Executive Chairman on 26 April 2000. He obtained the Higher School Certificate in 1954. He is a businessman with vast experience and knowledge in various business sectors including rice milling, oil palm and rubber plantation and agriculture. Currently, he owns and operates a rice mill. He is the immediate past president of Kedah Chinese Chamber of Commerce and Industries. He also sits on the board of several private limited companies.

He is the uncle of Mr. Teoh Teik Toe, a Non-Independent Non-Executive Director of the Company, and father of Mr. Teoh Teik Lin, a substantial shareholder of the Company. He has no conflict of interest with the Group and has never been charged for any offence other than traffic offences, if any. He had attended all four Board of Directors’ Meetings held in the financial year ended 30 April 2007.

LEE SEE JINManaging Director

Mr. Lee See Jin, a Malaysian, aged 68, was appointed to the Board of Directors of NTHB on 20 October 1996. He obtained the Higher School Certificate in 1960. He is the Managing Director of NTHB and a Director of all subsidiaries of NTHB. He is a founder of the Group and has been in the paper industry for more than 28 years. Over these years, he has gained in-depth experience and knowledge of the paper industry in Malaysia.

He is the father of Mr. Lee Chong Choon, an Executive Director of the Company. He has no conflict of interest with the Group and has never been charged for any offence other than traffic offences, if any. He attended all four Board of Directors’ Meetings held in the financial year ended 30 April 2007.

LEE CHONG CHOONExecutive Director

Mr. Lee Chong Choon, a Malaysian, aged 42, was appointed to the Board of Directors of NTHB on 10 November 1999. He is an Executive Director of NTHB, a member of the Audit Committee and a Director of all the subsidiaries of NTHB. He holds a Diploma in Civil Engineering from the Singapore Polytechnic. He has extensive experience in process engineering and has provided the NTHB Group with technical manufacturing experience expertise. He was the Financial Controller of Nibong Tebal Paper Mill Sdn Bhd (“NTPM”) from 1995 to 1997 and the Country Sales Manager of NTPM from 1997 to 1999. He has also been instrumental in spearheading the progress of the Group and the development of the Group’s products.

He is the son of Mr. Lee See Jin, the Managing Director of the Company. He has no conflict of interest with the Group and has never been charged for any offence other than traffic offences, if any. He had attended all four Board of Directors’ Meetings held in the financial year ended 30 April 2007.

TEOH TEIK TOENon-Independent Non-Executive Director

Mr. Teoh Teik Toe, a Malaysian, aged 38, was appointed to the Board of Directors of NTHB on 9 July 2004. He is a Non-Executive Director of NTHB. He graduated from the University of Southern California, United States of America with a Bachelor of Science in Electrical Engineering (Honours) and later obtained a Master of Science in Computer Engineering from the said University. His first job was a Software Engineer in Hewlett Packard, Singapore before moving to TT Solution Pte Ltd in Singapore as Engineering Manager until current date.

He is a nephew of Dato’ Teoh Boon Beng @ Teoh Eng Kuan, the Non-Independent Non-Executive Chairman of the Company. He has no conflict of interest with the Group and has never been charged for any offence other than traffic offences, if any. He had attended all four Board of Directors’ Meetings held in the financial year ended 30 April 2007.


6

BOARD OF DIRECTORS (CONT’D)

LIM HAN NGESenior Independent Non-Executive Director

Mr. Lim Han Nge, a Malaysian, aged 52, was appointed as the Independent Non-Executive Director of NTHB on 29 January 2003 and was subsequently re-designated as Senior Independent Non-Executive Director on 26 June 2003. He is also a member of the Audit Committee of the Company. He graduated from Coventry University, United Kingdom with a Bachelor of Arts (Honours) in Business Law. Thereafter, he qualified as a barrister (Lincoln’s Inn, United Kingdom) in 1978 and was called to the Malaysian Bar in November 1979. He is a practicing advocate & solicitor and is currently a partner in the legal firm of Messrs. Jin-Nge & Co, Alor Setar. He is a Director of several private limited companies and is a legal adviser to several non-government organizations in Kedah.

He has no family relationship with other Directors and / or substantial shareholders of the Company, nor any conflict of interest with the Group and has never been charged for any offence other than traffic offences, if any. He attended all four Board of Directors’ Meetings held in the financial year ended 30 April 2007.

TAN HOCK SOONIndependent Non-Executive Director

Mr. Tan Hock Soon, a Malaysian, aged 35, was appointed as an Independent Non-Executive Director of NTHB on 29 January 2003. He is also the Chairman of the Audit Committee of the Company. He is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He commenced his career with KPMG in January 1992 before leaving to join the Corporate Finance Division of CIMB in 1996. He left in 1999 to set up his own business. He is currently an Investment Representative licensed by the Securities Commission and an Executive Director of an Investment Advisory Company specializing in Corporate Finance licensed by the Securities Commission.

Mr. Tan also sits on the Board of Leinet Technology Berhad and Vista Jiwa Berhad as well as several private limited companies.

He has no family relationship with other Directors and / or substantial shareholders of the Company, nor any conflict of interest with the Group and has never been charged for any offence other than traffic offences, if any. He had attended all four Board of Directors’ Meetings held in the financial year ended 30 April 2007.

GROUP STRUCTURE AND ACTIVITIES

Note: FMCG consist of sanitary napkins, baby diapers, adult diapers and cotton products.

O V E R S E A S T R A D I N G

M A N U F A C T U R I N G


NTPMNibong Tebal Paper Mill Sdn. Bhd. (22772-A)Manufacturing and trading of paper products such as toilet rolls , tissues, serviette, and investment holding

NTPCNibong Tebal Personal Care Sdn. Bhd. (228234-U)Manufacturing and trading of personal care products such as sanitary products

JIJia In Sdn. Bhd. (161672-A)Printing of operating manuals, journals and packaging materials

NTENibong Tebal Enterprise Sendirian Berhad (95077-H)Trading in tissue paper and paper products and in fast moving consumer goods (FMCG)

NTLNibong Tebal Logistics Sdn. Bhd. (378479-H)Provision of logistic services, warehousing and trading in FMCG

NTITNibong Tebal IT Sdn. Bhd. (500077-H)Provision of information technology support and services

T R A D I N G A N D S E R V I C E S

NSPLNTPM (Singapore) Pte. Ltd. (198600763K)Importers and dealers in all kinds of tissue paper and paper products and trading in FMCG

NTCLNTPM (Thailand) Co., Ltd. (0108454720303)Importers and dealers in all kinds of tissue paper and paper products and trading in FMCG

Investment holding and provision of management services

NTTNibong Tebal Technology Sdn Bhd (202143-M)Undertaking research and development activities on the production technology, biotechnology and recycling of waste materials related to paper industry

7

(NTHB)


8

CHAIRMAN’S STATEMENT

On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of NTPM Holdings Berhad (“Company” or “NTHB”) for the financial year ended 30 April 2007.

FINANCIAL PERFORMANCE

The strong performance for the financial year ended 30 April 2007 saw NTHB and its subsidiaries (“Group”) achieving its best ever consolidated financial results in its corporate history.

The highlights of the financial year ended 30 April 2007 include the following breakthrough:

• Highest ever Group consolidated revenue of RM270.73 million, an increase of 14.2% compared to RM237.06 million achieved in the financial year ended 30 April 2006;

• A record Group profit before taxation of RM38.11 million, an increase of 48.5% from RM25.67 million achieved in the financial year ended 30 April 2006;

• Earnings per share of 5.2sen, the highest since NTHB’s listing on Bursa Securities Malaysia Berhad (“Bursa Securities”);

• Shareholders’ fund stood at RM171.44 million as at 30 April 2007; and

• A record in dividend payment of RM21.12 million, equivalent to 3.38sen per share for the financial year ended 30 April 2007, an increase of 47.0% compared to 2.30sen paid in the previous financial year.

The increase in both revenue and earnings were predominantly driven by contributions from the continued growth of tissue products sales and the increase in market share for the Group’s sanitary napkins, adult and baby diapers businesses.

It is noteworthy that the above were delivered under a competitive business environment characterised by high energy costs, rising raw material prices, and stiff competition from the Group’s competitors.

TRENDS AND PROSPECTS

Sales of tissue products continued to be strong as we maintained our position as the market leader in the Country. Based on the market research report from AC Nielsen for 2006, our brands “Cutie” and “Premier” have been identified as the number one brand for facial tissue and toilet tissue categories respectively.

Export of tissue products increased by 14.6% in the financial year ended 30 April 2007. The Group continues to strengthen its presence in overseas markets namely in Australia and Philippines where sales grew by approximately 72.7% and 310.0% respectively. The year also saw the Group finding inroads to new markets in United Kingdom, Maldives and the Middle East.

Sales of sanitary napkins grew by 36.6% over the past year following the commissioning of a new production line with higher capacity and better technology in July 2006. Apart from the additional capacity, the new line is also capable of producing better quality and a wider range of sanitary napkins to fulfill consumers’ demands in a wider market segment.

Sales of sanitary

napkins grew by 36.6% over

the past year following the

commissioning of a new

production line with higher

capacity and better technology

in July 2006. Apart from the

additional capacity, the new

line is also capable of producing

better quality and a wider range

of sanitary napkins to fulfill

consumers’ demands in a wider

market segment.


9

CHAIRMAN’S STATEMENT (CONT’D)

In view of the growth in market share achieved by the Group for its sanitary napkins business, two more production lines will be implemented during the financial year ending 30 April 2008 and production is scheduled to commence at the end of the financial year.

In line with the increase in sales, the Group also plans to undertake the manufacturing of baby diapers on its own, which is currently being sourced from Original Equipment Manufacturer (“OEM”) suppliers. The production line for baby diapers is scheduled to be commissioned at the end of the next financial year.

Tissue products will remain as the Group’s core products while it continues to nourish its personal care division to ensure the sustainability of the Group’s growth and earnings momentum in the years ahead.

DIVIDENDS

The Board of Directors is pleased to recommend for shareholders’ approval a final dividend of 26.5% less 27% Malaysian income tax for the financial year ended 30 April 2007.

The dividend is recommended in concurrence with the Group’s policy of creating value for its shareholders by maintaining a strong dividend payment rate and yield per share. This is the fifth consecutive year that NTHB has declared and paid dividends to its shareholders since its listing on Bursa Securities on 25 April 2003.

On 23 March 2007, NTHB also announced an interim tax exempt dividend of 14.5% for the financial year ending 30 April 2007. The book closure for this interim dividend was on 30 April 2007 whilst the payment date was on 25 May 2007.

ACKNOWLEDGEMENTS

I would like to express my gratitude on behalf of the Board of Directors to all employees for another year of hard work and selfless contributions. I would also like to thank our business partners for their continuous support and in particular our customers for their confidence in our products.

Last but not least, I would like to express my heartfelt thanks to my fellow colleagues on the Board of Directors for their advice and contributions during the past year.

Tissue products will

remain as the Group’s core products

while it continues to nourish its

personal care division to ensure the

sustainability of the Group’s growth

and earnings momentum in the years

ahead.


10

主席聲明

隨著二零零六年

七月裝置能提高容量及更

好技術的新生產線以來，

衛生棉的銷售額提高卅六

點六巴仙。除了付加容量

外，新生產線行也能製造

更好質量及更廣乏類別的

衛生棉，以履行更寬的市

場顧客的需求量。

兹代表董事會呈交截至二零零七年四月卅日NTPM Holdings Berhad (“公司”或“NTHB”) 年度報告及已審財務報表。

財政業績

二零零七年四月卅日財政年度NTHB及其子公司（“集團”）的卓越表現是公司有史以來新高的財務成果。

二零零七年四月卅日財政年度的焦點包括以下的突破：

‧集團營業收入高達兩百七十點七三百萬令吉，其增加量較二零零六年

四月卅日財政年度的兩百卅七點零六百万令吉還高十四點二巴仙。

‧集團盈利在徵稅之前達卅八點一一百万令吉的記錄，較二零零六年四

月卅日財政年度的廿五點六七百万令吉增加了四十八點五巴仙。

‧五點二仙的每股收益，是NTHB自在大馬股票交易所挂牌上市以來最高點。

‧二零零七年四月卅日財政年度股東權益達一百七十一點四四百万令吉。

‧支付股息達廿一點一二百万令吉，相等于二零零七年四月卅日財政年度每股三點卅八仙，比起去年財政年度的二點卅仙提升了四十七巴仙。

收入与盈利的增加主要來源有賴于持續成長的紙巾產品銷售量及衛生棉﹑成人和嬰兒尿布業務市場股份額的增加。

值得注意的是以上的業績是在具有競爭的商業界如高能源費用﹑上升的原產品价格及激烈的同業削价競爭下取得成長。

趨向和潛在遠景

公司繼續保持著在我國的領先地位，紙巾產品的銷售量也穩健的成長。基于從二零零六年AC Nielsen的市場研究報告，"Cutie"和"Premier"品牌被確認為面巾和衛生紙類別的第一品牌。

二零零七年四月卅日財政年度紙巾產品的出口量增加了十四點六巴仙。集團繼續加強它在海外的市場，特別是澳洲及菲律賓，其銷售量各別增加了七十二點七巴仙及三百一十巴仙，同時也開發了英國﹑毛爾求斯及中東市場。

隨著二零零六年七月裝置能提高容量及更好技術的新生產線以來，衛生棉的銷售額提高卅六點六巴仙。除了付加容量外，新生產線行也能製造更好質量及更廣乏類別的衛生棉，以履行更寬的市場顧客的需求量。

由于市場額份繼續成長，集團將在二零零八財政年度為它的衛生棉業務實施增加兩條生產線，并在年底開始生產操作。

根據銷售量的据增，集團計策自己承攬製造目前由OEM供應商生產的嬰兒尿布。該嬰兒尿布生產線將委予下個財政年度投入生產。

紙巾產品將保持作為集團的核心產品，以確保業務持續成長，以便成為來年收入的推動力。


11

主席聲明（繼續）

股息

於財政年度二零零七年四月卅日，董事會建議派發每股廿六點五巴仙扣除廿七巴仙的稅后年終股息。

以上建議中的股息乃本集團一貫的方針為股東創造价值，并保持強穩持續的派發股息率及股票盈利。

這也是NTHB自二零零三年四月廿五日在大馬股票交易所挂牌上市之后持續五年申報及派發股息予股東。

二零零七年三月廿三日，NTHB也宣布派發截止至二零零七年四月卅日的十四點五巴仙免稅后中期股息。這項中期股息的結算日期為二零零七年四月卅日，付款日期是二零零七年五月廿五日。

鳴謝

兹代表董事會向所有雇員在另一年的付出与無私的貢獻表達謝意，也感謝我們的商務夥伴連續的支持以及我們的顧客對我們產品的信心。

最後再代表董事會衷心的感謝同事們于去年的貢獻及獻議。

紙巾產品將保

持作為集團的核心產品，

以確保業務持續成長，

以便成為來年收入的推動

力。


12

MANAGING DIRECTOR’S REVIEW OF OPERATIONS

Group revenue increased to a record of RM270.73 million compared to RM237.06 million in the preceding financial year. Profits attributable to shareholders, after minority interest stood at RM32.19 million which is 53.9% higher than the preceding financial year and is also a new record for the Group.

The improvement in the results for the current financial year was mainly due to the growth in tissue sales and the successful implementation of various measures that had increase our production output, improved production yield and reduced production cost.

TISSUE PRODUCTS

Sales of tissue products enjoyed a growth of 11.7% during the financial year ended 30 April 2007 mainly due to the increase in export sales of 14.6%. The growth in export markets mainly came from the Asia Pacific region and East Asia. During the year, the Group introduced a new product, “MG Paper” which is mainly to cater for its export segment and the product has received commendable response from its customers.

On the domestic front, initiatives were made to further improve on its strong brand presence and availability, by effective concerted marketing plan and making inroads across all sales channels ranging from hypermarket chain groups in the city to the traditional sundry shops in the rural areas.

SANITARY NAPKINS

The marketing campaign to educate young school girls of personal hygiene, along with the various sales promotions conducted at numerous hypermarkets has amplified the consumer awareness and acceptance of our brands for sanitary napkins – “Intimate” and “Senora”.

Following an impressive back-to-back sales growth of 36.6% in current financial year and 34.5% growth in the previous financial year, plans are in place to shift the existing sanitary napkins manufacturing facilities to a new location to facilitate the expansion of the Group’s personal care division.

The Group has already contracted to purchase two additional production lines for sanitary napkins to complement the Group’s existing four production lines. The new production lines are scheduled to be commissioned at the end of the year. We believe that the relocation, expansion and the implementation of the additional production lines will enable us to further improve on our product quality and production efficiency to an optimal level.

QUALITY MANAGEMENT SYSTEM

The Group continues to re-affirm its commitment to quality management system with NTPM implementing the Hazard Analysis and Critical Control Points “HACCP” systems to its table napkins and serviette segment during the financial year. The implementation of the HACCP system is to ensure that potential hazards to foods safety are recognised, regulated, prevented, monitored and controlled. NTPM was HACCP certified by Moody International Certification on 26 June 2007.

Moody International Certification also successfully completed its surveillance audit for ISO9001:2000 Quality Standards on 10 April 2007 for three companies; NTHB, NTPM and NTE, and on 4 July 2007 for NTPC.

Sales of tissue

products enjoyed a growth of

11.7% during the financial year

ended 30 April 2007 mainly due

to the increased in export sales

of 14.6%. The growth in export

markets mainly came from the

Asia Pacific region and East

Asia. During the year, the Group

introduced a new product, “MG

Paper” which is mainly to cater for

its export segment and the product

has received commendable

response from its customers.


13

MANAGING DIRECTOR’S REVIEW OF OPERATIONS (CONT’D)

NTPM intends to implement the ISO14001:2004 Environmental Management System to its manufacturing environment at the beginning of next year.

FUTURE CHALLENGES

The Group is expected to perform better for the financial year ending 30 April 2008 with the expected increase in demand, but nevertheless the continuous increase in the prices of raw materials and the weakening of United States and Singapore Dollars against Ringgit Malaysia may have an impact on the Group’s results for the said financial year. Many of these costs cannot be contained by the Group and where possible, management will continue to seek improvement in its production facilities and implement efficient methods to reduce production costs to counter and off set the expected higher operating cost.

As a further means to reduce production costs, management is conducting research and development in the production of pulp fiber from local waste materials. If the research and development is successful, pulp fiber being a main item of raw material in the production of tissue paper, it can significantly reduce the cost of raw material and thus lead to lower production cost.

As part of its strategy to further grow and strengthen its position in the industry, NTHB plans to venture into new areas of related businesses. At the moment, management is undertaking research and development on salvaging waste by-products from its tissue production to improve production recovery and plans to undertake the production of recycled plastic pallets from plastic waste and compressed paper board from sludge produced during the tissue production processes.

The above projects are scheduled to commence at the end of the financial year ending 30 April 2008 and as such, are not expected to have any material impact on the earnings or any significant effect on the consolidated net assets of the Group for the said financial year.

Prevailing competition in the market remains keen. However, with its strong brands, quality products and extensive distribution networks, the Group is optimistic that it will be able to generate growth in both the domestic as well as the overseas markets to improve its earnings.

Management

is undertaking research and

development on salvaging waste

by-products from its tissue

production to improve production

recovery and plans to undertake

the production of recycled plastic

pallets from plastic waste and

compressed paper board from

sludge produced during the tissue

production processes.


14

之前財政年度收支為兩百卅七點零六百万令吉而今年集團收支提升到兩

百七十點七三百万令吉的記錄。

扣除稅收及少數股權后淨利為卅二點一九百万令吉，相等于五十三點九

巴仙高于之前的財政年度也是本集團的一項新記錄。

紙巾產品

二零零七年四月卅日財政年度紙巾產品的成長率為十一點七巴仙這有賴

于十四點六巴仙輸出口銷售量的提高。這項成長主要來自亞太地區及東

亞的海外市場。這年其間，本集團生產一項新產品”MG Paper”主要是供應給海外市場，結果得到顧客不俗的反應。

在國內，公司也積極進一步改善打響品牌及把產品分佈全國各地。通過

市場計劃及開拓所有經營渠道以遍布各大行超級市場及傳統商店。

衛生巾產品

展開一連串的市場推銷活動如到女校為女生輸導個人衛生專題﹑在超級

市場舉辦促銷活動讓銷費者留意及了解我們的”Intimate”及”Senora”衛生棉產品。

去年財政年度衛生巾產品銷售量增長為卅四點五巴仙而今年度進一步增

長達卅六點六巴仙，緊接著如此漲幅集團策劃把之前的衛生棉製造設施

擴充迁移到新地點開展集團的個人護理部門。

本集團已經增購另兩條衛生棉生產線來填補原有的四條生產線，該生產

線預定在年底被委托製作。我們想信實施拆迁﹑擴展另外的生產線將使

我們產品的質量和生產效率進一步的改善至更高水品。

質量管理系統

集團繼續重申對与NTPM的質量管理系統的承諾，在財政年度于餐巾產品上實施危險分析和重要控制點“HACCP”系統。“HACCP”系統的實施是確保食品安全性的潛在危機受到認可﹑調控﹑避免﹑檢測及控

制。在二零零七年六月廿六日Moody International Certification成功為NTPM取得HACCP認可。

Moody International Certification 也成功在二零零七年四月十日完成

三家公司的監視審計為ISO9001:2000質量標準；NTHB, NTPM及NTE以及二零零七年七月四日NTPC。

NTPM逾在明年初對它的生產環境實施ISO環境管理系統。

執行董事營運回顧

二零零七年四

月卅日財政年度紙巾產品

的成長率為十一點七巴仙

這有賴于十四點六巴仙輸

出口銷售量的提高。這項

成長主要來自亞太地區及

東亞的海外市場。這年其

間，本集團生產一項新產

品“MG Paper”主要是供

應給海外市場，結果得到

顧客不俗的反應。


15

未來的挑戰

本集團預計在二零零八年四月卅日財政年度表現得更好，然而在原產品

价格的高漲以及美國和新加坡對馬幣的疲弱對集團的財政年度報告有所

沖擊。

許多費用是集團無法避免的，管理層在研究及開發從地方廢料生產的黏

漿狀物質纖維將會是生產紙巾的主要原產品，它極可能減少原產品的費

用因而降低生產成本。

成為該嶺域增長和固地位策略的一部份，N T H B計劃開拓相關業務的新嶺域。此時，管理層承擔研發把廢物利用來改善紙巾的生產和計劃生產從

塑料廢堆被回收的塑料板台以及紙巾生產過程中的壓爛壓縮文間板。

上述項目預定在二零零八年四月卅日財政年年尾開始，任何物質沖擊也

不會對集團財政年度凈資產有任何顯著的影嚮。

在市場上的競爭依然是激烈的。然而，与它堅定的品牌﹑高品質產品及

分布廣泛的行銷網，本集團樂觀的認為必能引至本地及海外市場的成長

及改善增加收入。

執行董事營運回顧（繼續）

管理層承擔研發

把廢物利用來改善紙巾的

生產和計劃生產從塑料廢

堆被回收的塑料板台以及

紙巾生產過程中的壓爛壓

縮文間板。


16

STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors (“the Board”) of NTPM Holdings Berhad (“NTHB” or “the Company”) fully appreciates the importance of adopting the principles and best practices in corporate governance as set out in the Malaysian Code on Corporate Governance (“the Code”). The Board will maintain a transparent disclosure of the manner and extent that the Company has applied the said principles and best practices.

The Company has applied all the Best Practices relating to the Code with the exception of certain areas highlighted below. The reasons for such departures are specified therein.

Best Practices Reasons

i. Appointment of a nomination committee. • The appointment of new Board members will be a matter for the whole Board to deliberate upon.

• The need to change the Board members has not arise as current size and mix of experience have proven to be effective.

ii. Appointment of a remuneration committee. • The remuneration of the Executive Directors is a matter for the Board to deliberate upon as a whole based on market conditions, responsibilities held and the financial performance of the Group.

DIRECTORS

The Board

The Group acknowledges the vital role played by the Board in the stewardship of the directions and business operations of the Group, and ultimately the enhancement of long-term shareholders’ value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including strategic direction, establishing goals for the management and monitoring the achievement of these goals.

Appointment of Directors and Re-election

In accordance with the Company’s Articles of Association, Directors who are appointed either to fill a casual vacancy or as an addition to the existing Board shall hold office until the conclusion of the next annual general meeting and are subject to re-election by shareholders. The Articles also provide that one-third or the number nearest to one-third of the Board including the Managing Director is subject to re-election at regular intervals and shall retire from office at least once in three years.

As an integral element of the purpose of appointing new Directors, new appointees are briefed on the Group’s business, competitive and regulatory environment in which it operates and other changes during meetings with Executive Directors.

Directors are also advised on appointment of their legal and other obligations as a director of a listed company. They are also encouraged to attend training courses at the Company’s expense.

Meetings and Attendance

For the financial year ended 30 April 2007, the Board met four (4) times and details of the attendance are as follows:

Director Total Attendance Percentage (%)

Dato’ Teoh Boon Beng @ Teoh Eng KuanLee See Jin Lee Chong Choon Teoh Teik Toe Lim Han Nge Tan Hock Soon

4/44/44/44/44/44/4

100100100100100100


17

STATEMENT ON CORPORATE GOVERNANCE (CONT’D)

Board Balance

The Board currently has six (6) members comprising two (2) Executive Directors, two (2) Non-Independent Non-Executive Directors and two (2) Independent Non-Executive Directors. The Board has complied with the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) that at least two (2) directors or 1/3 of the Board comprise of Independent Directors.

The Directors collectively, with their different background and specialization, bring with them a diverse wealth of experience and expertise in areas such as business, finance, legal, engineering, regulatory and operations which is relevant to the Group. A brief profile of each individual Directors are set out on pages 5 to 6 of this annual report.

There is a clear division of roles and responsibilities between the Chairman (non-executive) and the Managing Director (executive capacity) to ensure there is a balance of power and authority. The Chairman holds a non-executive position and is primarily responsible for matters pertaining to the Board and overall conduct of the Group. The Managing Director oversees the business operations of the Group and the implementation of the Board’s decisions and policies.

The Board is satisfied that the Independent Directors represent the interest of public shareholders in the Company. Mr. Lim Han Nge is the Senior Independent Non-Executive Director to whom concerns may be conveyed.

Supply of Information

The agenda and a full set of papers which encompass both qualitative and quantitative information are forwarded to the Directors at least seven (7) days prior to the meeting to ensure that the Directors have sufficient time to study them and be properly prepared for each meeting. Where necessary, the Directors can obtain clarifications, further explanations or information so that deliberations at the meeting are focused and constructive.

All Directors have unrestricted access to any information pertaining to the Group. The Directors also have access to the advice and services of the Company Secretary.

Directors’ Training

All Directors have attended the Mandatory Accreditation Programme (“MAP”) as required by Bursa Securities on all directors of listed companies and also successfully accumulated the requisite Continuing Education Programme (“CEP”) points under Practice Note No. 15/2003 of the Listing Requirements of Bursa Securities within the stipulated time frame.

Even though the CEP requirements had been repealed on 1 January 2005, the Board is still encouraged to attend the CEP and other trainings so as to keep abreast with the changes on guidelines issued by the relevant authorities as well as the latest developments in the market place which can complement their services to the Group.

Description of the type of training(s) attended by the Board for financial year ended 30 April 2007 is as follows:

Title of Seminar / Workshops / Courses Mode of Training No. of Hours / Days SpentDato’ Teoh Boon Beng @ Teoh Eng KuanMeeting the Pre & Post Listing Requirements of Bursa Securities Seminar 8 hours

Lee See JinMeeting the Pre & Post Listing Requirements of Bursa Securities Seminar 8 hours

Lee Chong ChoonMeeting the Pre & Post Listing Requirements of Bursa Securities Seminar 8 hours

Lim Han NgeMeeting the Pre & Post Listing Requirements of Bursa SecuritiesAudit Committees: Crucial Updates 2007Workshop on “How To Find The Land Mines In Financial Accounts”

SeminarSeminarSeminar

8 hours8 hours3 hours

Teoh Teik ToeMeeting the Pre & Post Listing Requirements of Bursa Securities Seminar 8 hours

Tan Hock SoonMeeting the Pre & Post Listing Requirements of Bursa SecuritiesDetecting and Overcoming Creative and Deceptive AccountingAudit Committees: Crucial Updates 2007

SeminarSeminarSeminar

8 hours8 hours8 hours


18

STATEMENT ON CORPORATE GOVERNANCE (CONT’D)

Directors’ Remuneration

The remuneration package of each Executive Director is structured so as to link rewards to corporate and individual performance.

The Non-Executive Directors’ remuneration comprises fees and allowances. Determination of the said remuneration is balanced with their expected roles and responsibilities including any additional work and contribution required.

The Directors’ remuneration is analysed as follows:

Annual FeesRM

Salaries & BonusesRM

Benefit-in KindRM

AllowanceRM

TotalRM

Executive Directors

Non-Executive Directors

80,000

160,000

1,612,688

Nil

41,200

Nil

Nil

8,000

1,733,888

168,000

Number of Directors

Range of Remuneration Executive Non-Executive

Less than RM50,000 – 4

RM500,001 – RM550,000 1 –

RM1,200,001 – RM1,250,000 1 –

The Board has considered the Best Practices of the Code on disclosure of details of the remuneration of each Director and is of the view that it is inappropriate to disclose the remuneration of individual Directors. However, the above disclosure was made in accordance with the format as prescribed by the Listing Requirements of Bursa Securities.

SHAREHOLDERS

The Board acknowledges the need for shareholders to be informed of all material business matters affecting the Group. The timely release of financial results on a quarterly basis provides shareholders with an overview of the Group’s performance and operations.

The Executive Directors meet up with and brief financial analysts and representatives from securities firms on an ad hoc basis.

The Annual General Meeting (“AGM”) represents a principal forum for dialogue with shareholders. Notice of the AGM and annual reports are sent out to shareholders at least 21 days before the date of the meeting. The shareholders are encouraged to raise questions both about the Group’s financial results and operations in general.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to provide and present a balanced and understandable assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual audited financial statements and announcement of quarterly reports to shareholders.

Internal Control

The Statement on Internal Control furnished on page 23 of the annual report provides an overview of the state on internal controls within the Group.

Relationship with the Auditors

The Audit Committee (“AC”) maintains an appropriate relationship with the Group’s auditors. The roles, authority and responsibilities of the AC are presented in the report set out on pages 20 to 22 of this annual report.

During the financial year 2007, the Independent Non-Executive Directors had held a dialogue session with the external auditors on 29 June 2006 in compliance with the Best Practices of the Code.

The Group has always maintained a close and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the relevant accounting standards. During the year, non-audit fees of RM30,730 were paid to the Group’s external auditors for professional fees paid to them as tax agent.

This statement is made in accordance with a resolution of the Board dated 28 June2007.


19

OTHER INFORMATION REQUIRED BY THE LISTING REQUIREMENTS OF THE BURSA SECURITIES

UTILISATION OF PROCEEDS

No proceeds were raised by the Company from any corporate exercise during the financial year.

SHARE BUYBACKS

During the financial year, the Company did not enter into any share buyback transactions.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

The Company did not issue any options, warrants or convertible securities during the financial year.

AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME

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

IMPOSITION OF SANCTIONS AND PENALTIES

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

NON-AUDIT FEES

During the year, non audit fees of RM30,730 were paid to the Group’s external auditors as professional fees paid to them as tax agent.

VARIATION IN RESULTS

There were no material variations between the audited results and the un-audited results for the financial year ended 30 April 2007.

PROFIT ESTIMATES, FORECAST AND PROJECTION

The Company did not issue any profit estimate, forecast or projection for the financial year ended 30 April 2007.

PROFIT GUARANTEEE

During the financial year, there was no profit guarantee given by the Company.

MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST

There were no material contracts entered into by the Group involving Directors’ and substantial shareholders’ interest during the financial year.


20

AUDIT COMMITTEE

COMPOSITION

Chairman Tan Hock Soon Independent Non-Executive Director

Members Lim Han Nge Senior Independent Non-Executive Director Lee Chong Choon Executive Director

The Chairman of the AC is a member of the Malaysian Institute of Accountants (“MIA”) in accordance with the Listing Requirements of Bursa Securities.

Terms of Reference

The primary objective of the AC is to assist the Board of NTHB in discharging its statutory duties and responsibilities relating to accounting and financial reporting and determining the adequacy of the Group’s control environments and quality of the audits.

Functions

The duties of the AC are as follows:

• To nominate a person or persons as auditors.

• To discuss with the external auditors before the audit commences the nature and scope of the audit and to ensure co-ordination where more than one audit firm is involved.

• To review the quarterly and annual financial statements before submission to the Board, focusing particularly on : - any changes in accounting policies and practices. - major judgmental areas. - significant adjustments resulting from the audit. - compliance with accounting standards. - compliance with stock exchange and legal requirements.

• To review any related party transactions that may arise within the Company or Group.

• To review with the external auditors, their audit plans, the evaluation of the system of internal controls and their audit reports.

• To review the internal audit program, consider the major findings of the internal audit investigations and management’s response and ensure appropriate action is taken.

• To review the adequacy of the scope, functions and resources of the internal audit functions and ensure that it has the necessary authority to carry out its work.

• To keep under review the effectiveness of the internal control systems in the context of the Company’s and Group’s overall risk management.

• To review any letters of resignation from the external auditors and whether there is any reason why the external auditors should not be re-appointed.

• To monitor the foreign currency transactions and determine and review the policies associated to each transaction annually.

• To consider other functions as may be agreed to by the AC and the Board.


21

AUDIT COMMITTEE (CONT’D)

Authority

The AC is authorized by the Board to investigate any activity within its term of reference. It is authorized to have the resources which are required to perform its duties, have full and unrestricted access to any information pertaining to the Company and Group and have direct communications channels with the external and internal auditors.

The AC is authorized by the Board to obtain external, legal, independent or other professional advice and be able to convene meetings with external parties whenever deemed necessary.

Meetings

The AC shall hold at least four regular meetings per year. In order to form a quorum, the majority of members present must be independent directors.

The AC may invite any management staff and external auditor or professional adviser to be in attendance.

The AC met four times during the financial year 2007 and all the AC members attended all the four meetings. The other Directors who are not AC members, Finance Manager, internal auditors, external auditors and external advisors, upon invitation of the AC, attended the AC meetings to assist in its deliberations.

Activities of the AC during the financial year 2007

During the financial year 2007, the AC carried out the following activities in discharging its functions and duties in accordance with the terms of reference of the AC:

• reviewed the unaudited interim financial results of the Group before recommending to the Board for approval; • reviewed the audited annual financial statements of the Company and the Group before recommending to the Board

for approval; • ensuring compliance to the Listing Requirement of Bursa Securities, applicable accounting standards in Malaysia,

provisions of the Companies Act, 1965 and other legal and regulatory requirements; • reviewed the internal audit plan to ensure key risk areas were covered; • reviewed the reports from the internal auditors to assess the state of the internal control system of the Group and to

ensure that corrective actions were taken by management on audit findings; • reviewed the statement of internal control; • reviewed the related party transactions; • reviewed the foreign currency transactions of the Group; • reviewed with the external auditors, their audit planning memorandum, audit approach and reporting requirements

prior to the commencement of audit work; • reviewed with the external auditors, their audit findings and management letter together with the management response

and approved for adoption their recommendations; and • reviewed the re-appointment and audit fees of the external auditors for the ensuing year.

Reports/Minutes

Minutes of each meeting shall be kept by the Company Secretary as evidence that the AC has discharged its functions. The Chairman of the AC will report to the Board after each AC meeting. The approved minutes of AC meetings are forwarded to Board members for information.

Internal Audit Department

An internal audit department was established within the organization structure of the Group, being an extension of the authority and duties of the AC. The functions of the Internal Audit Department is to provide independent and objective assurance and consulting services designed to add value and improve the Group’s operational efficiency. It assists the Group in accomplishing its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.


22

AUDIT COMMITTEE (CONT’D)

Internal Audit Function

In accordance with the Code, the Board has established an internal audit department (“IAD”) to review the adequacy and integrity of its system of internal control on 19 December 2003.

The major role of IAD is to assist the AC in discharging its duties and responsibilities and provide independent and reasonable assurance that the systems of internal controls are adequate and effective.

During the financial year, IAD had regularly conducted audits in the areas of risk management, credit control and finished goods inventory. The risk-based audits were carried based on the selected risks which had been identified during the enterprise risk management (“ERM”) assessment through verifying the compliance of the controls in each risk management units (“RMU”).

In addition, IAD also assisted and coordinated in the process of risk management such as coordinating the review of all risks and controls which were previously assessed by a professional firm in September 2003 as well as identifying new risks and controls relevant to the Group’s operations. The risks management reports were then presented to the AC by the relevant RMU heads during the quarterly meeting on a rotational basis.

IAD also assist the Managing Director during the meeting of each RMU.

This statement is made in accordance with the resolution of the Board dated 28 June 2007.


23

STATEMENT ON INTERNAL CONTROL

The Board is ultimately responsible for the Group’s system of internal control as well as reviewing its adequacy and integrity. Because of the limitations that are inherent in any system of internal control, this system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, internal controls can only provide reasonable but not absolute assurance against material misstatement or loss. The system of internal control covers, inter alia, risk management and financial, organizational, operational and compliance control.

The Board relies largely on the close involvement of the Executive Directors of the Group in the daily operations. There are periodic reviews of operational performance at management meetings.

The Board also recognizes the need for continuous improvement in its system of internal control as an effective system of internal control is necessary to safeguard shareholders’ investments and an important part of managing risks.

The key process of the internal control functions is inculcated within the various procedures and includes the following:

• The Board reviews quarterly reports from management on the key operating performance, legal, environmental and regulatory matters. Financial performance is also deliberated at the Board meetings.

• Executive members of the Board have day-to-day involvement in all aspects of the business and attend weekly and monthly management meetings attended by senior managers to deliberate on business, financial and operating issues which include reviewing and approving all key business strategic measures and policies.

• An enterprise risk management framework has been established and the Risk Management Committee (“RMC”) has been formed to ensure that the risk management structure is embedded and consistently applied in the Group. The RMC will regularly review the principal risks faced by the Group and the status of management actions.

• The Managing Director heads the RMC and the risk register was reviewed and updated in March 2006. Currently there are eight Risk Management Units (“RMU”) after the addition of a new RMU in the year 2006.

• An Internal Audit function has been established to assist the AC in discharging their duties and responsibilities.

• The Group has a clear organization structure and well defined lines of responsibility which provide a sound framework of authority and approving limits within the organization and to facilitate quality and timely corporate decisions.

The Board continues to take measures to strengthen the internal control environment.

The statement is made in accordance with the resolution of the Board dated 28 June 2007.


24

STATEMENT OF THE DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS

The Board is required by the Companies Act, 1965 to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year.

The Board is satisfied that in preparing the financial statements of the Group for the financial year ended 30 April 2007, the Group has used the appropriate accounting policies and consistently applied and supported by reasonable prudent judgment and estimates and that measures have been taken to ensure that accounting records are properly kept in accordance with the law.

This statement is made in accordance with the resolution of the Board dated 28 June 2007.


25

DIRECTORS’ REPORT 26 – 29

STATEMENT BY DIRECTORS 30

STATUTORY DECLARATION 30

REPORT OF THE AUDITORS 31

INCOME STATEMENTS 32

BALANCE SHEETS 33

STATEMENTS OF CHANGES IN EQUITY 34 - 35

CASH FLOW STATEMENTS 36 – 38

NOTES TO THE FINANCIAL STATEMENTS 39 – 85

Contents


26

DIRECTORS’ REPORT

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 30 April 2007.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiaries are described in Note 13 to the financial statements.

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

RESULTS

GROUP CompanyRM RM

Profit for the year 32,240,956 16,880,290

Attributable to:

Equity holders of the Company 32,190,363 16,880,290Minority interests 50,593 –

32,240,956 16,880,290

There were no material transfers to or from reserves or provisions during the financial year, other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the effects arising from changes in estimates where the estimated useful lives of certain motor vehicles were revised resulting in increase in the Group’s and the Company’s profit for the year by RM1,040,619 and RM79,217 respectively as disclosed in Note 2.5 to the financial statements.

DIVIDENDS

The amount of dividends paid by the Company since 30 April 2006 was as follows:

RMIn respect of the financial year ended 30 April 2006 as reported in the directors’ report of that year:

Final tax-exempt dividend of 11.5% declared on 22 September 2006 and paid on 19 October 2006 7,176,000

In respect of the financial year ended 30 April 2007 as reported in the directors’ report of that year:

Interim tax-exempt dividend of 14.5% declared on 23 March 2007 and paid on 25 May 2007 9,048,000

16,224,000

At the forthcoming Annual General Meeting, a final dividend of 26.5% less income tax of 27% amounting to RM12,071,280 in respect of the financial year ended 30 April 2007, on 624,000,000 ordinary shares of RM0.10 each (1.93 sen per share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders’ equity as an appropriation of retained profits in the financial year ending 30 April 2008.


27

DIRECTORS’ REPORT (CONT’D)

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Teoh Boon Beng @ Teoh Eng KuanLee See JinLee Chong Choon*Teoh Teik Toe Lim Han Nge*Tan Hock Soon*

* Being members of Audit Committee.

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 6 to the financial statements or the fixed salary of a full-time employee of the Company or its related corporations) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 29 to the financial statements.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company during the financial year were as follows:

Number of Ordinary Shares of RM0.10 Each1 May 30 April2006 Bought Sold 2007

The Company

DirectDato’ Teoh Boon Beng @ Teoh Eng Kuan 10,409,500 – – 10,409,500

Lee See Jin 182,534,194 – – 182,534,194

Lee Chong Choon 67,211,265 4,976,800 – 72,188,065

Teoh Teik Toe 4,128,000 – – 4,128,000

IndirectDato’ Teoh Boon Beng @ Teoh Eng Kuan * 25,831,068 1,020,000 – 26,851,068

Lee See Jin ** 3,370,525 35,000 – 3,405,525

* Deemed interested by virtue of his shareholdings in Kota Beras Sdn. Bhd., pursuant to Section 6A of the Companies Act, 1965.

** Deemed interested by virtue of his spouse’s interest in the Company, pursuant to Section 6A and 122A of the Companies Act, 1965.


28


DIRECTORS’ INTERESTS (CONT’D)

Lee See Jin, by virtue of his interests in shares in the Company, is also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.

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

OTHER STATUTORY INFORMATION (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took

reasonable steps:

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

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

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

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

(e) As at the date of this report, there does not exist:

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

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

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.


29


AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 1 August 2007.

LEE SEE JIN LEE CHONG CHOON


30

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, LEE SEE JIN and LEE CHONG CHOON, being two of the directors of NTPM HOLDINGS BERHAD, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 32 to 85 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 April 2007 and of the results and the cash flows of the Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 1 August 2007.

LEE SEE JIN LEE CHONG CHOON

I, DAVID KHOO CHONG BENG, being the officer primarily responsible for the financial management of NTPM HOLDINGS BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 32 to 85 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed DAVID KHOO CHONG BENG at Georgetown in the State of Penang DAVID KHOO CHONG BENG on 1 August 2007

Before me,

CHAI CHOON KIAT, PJM (P.073)COMMISSIONER FOR OATHS

STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

30



31

REPORT OF THE AUDITORS TO THE MEMBERS OFNTPM HOLDINGS BERHAD (INCORPORATED IN MALAYSIA)

We have audited the financial statements set out on pages 32 to 85. 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 the 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 to any other person for the content of this report.

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

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of:

(i) the financial position of the Group and of the Company as at 30 April 2007 and of the results and the cash flows of the Group and of the Company for the year then ended; and

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

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

We have considered the financial statements and the auditors’ report thereon of the subsidiaries of which we have not acted as auditors, as indicated in Note 13 to the financial statements, being financial statements that have been included in the consolidated financial statements.

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

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

ERNST & YOUNG LIM ENG HUATAF: 0039 No. 2403/04/09(J) Chartered Accountants Partner

Penang, MalaysiaDate: 1 August 2007


32

INCOME STATEMENTSFOR THE YEAR ENDED 30 APRIL 2007

GROUP COMPANYNote 2007 2006 2007 2006

RM RM RM RM

Revenue 3 270,730,068 237,061,951 21,955,234 28,605,121

Other operating income 4 388,977 325,445 – –

Advertising and promotional expenses (4,684,001) (4,953,568) – –

Changes in inventories of finished goods and

work–in–progress 2,118,584 1,015,940 – –

Depreciation (17,161,494) (18,095,967) (75,508) (132,617)

Purchase of trading inventories (12,265,542) (11,260,408) – –

Raw materials and consumables used (100,315,114) (86,200,532) – –

Repairs and maintenance (8,090,191) (6,875,834) (179,000) (132,838)

Employee benefits expense 5 (44,817,845) (40,899,510) (4,101,476) (3,855,558)

Sundry wages (1,390,379) (1,485,504) – (1,483)

Transportation and freight charges (16,230,662) (13,658,927) – –

Utilities costs (17,844,531) (14,989,306) (33,995) (37,221)

Other operating expenses 7 (10,146,741) (11,912,126) (653,777) (677,431)

Operating profit 40,291,129 28,071,654 16,911,478 23,767,973

Finance costs 8 (2,179,195) (2,402,359) – –

Profit before tax 38,111,934 25,669,295 16,911,478 23,767,973

Income tax expense 9 (5,870,978) (4,815,265) (31,188) (2,858,134)

Profit for the year 32,240,956 20,854,030 16,880,290 20,909,839

Attributable to:

Equity holders of the Company 32,190,363 20,919,660 16,880,290 20,909,839

Minority interests 50,593 (65,630) – –

32,240,956 20,854,030 16,880,290 20,909,839

Earnings per share attributable to equity holders of the Company (sen):

Basic, for profit for the year 10 5.16 3.35

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


33

BALANCE SHEETS AS AT 30 APRIL 2007

GROUP COMPANYNote 2007 2006 2007 2006

RM RM RM RM

ASSETS (Restated)

Non–current assetsProperty, plant and equipment 11 176,510,279 165,195,568 538,031 608,151

Prepaid land lease payments 12 861,702 880,722 – –

Investments in subsidiaries 13 – – 13,193,793 13,193,793

Other investments 14 45,000 62,817 – –

Deferred tax assets 15 547,333 362,331 35,408 –

177,964,314 166,501,438 13,767,232 13,801,944

Current assetsInventories 16 40,893,333 30,041,613 – –

Trade and other receivables 17 52,734,151 44,297,528 5,224,439 9,841,521

Tax refundable 534,974 4,732,988 365,625 189,214

Cash and bank balances 12,665,961 11,700,957 27,677 42,341

106,828,419 90,773,086 5,617,741 10,073,076

TOTAL ASSETS 284,792,733 257,274,524 19,384,973 23,875,020

EQUITY AND LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 18 62,400,000 62,400,000 62,400,000 62,400,000

Other reserves 19 21,272,854 7,864,401 – –

Retained earnings/(Accumulated losses) 20 87,767,796 71,695,738 (56,077,255) (56,733,545)

171,440,650 141,960,139 6,322,745 5,666,455

Minority interests 555,089 504,496 – –

Total equity 171,995,739 142,464,635 6,322,745 5,666,455

Non–current liabilitiesBorrowings 21 16,795,955 1,643,643 – –

Deferred tax liabilities 15 16,944,577 16,196,906 – 20,743

Retirement benefit obligations 22 614,857 605,927 – –

Negative goodwill 23 – 94,142 – –

34,355,389 18,540,618 – 20,743

Current liabilitiesRetirement benefit obligations 22 51,339 22,485 – –

Borrowings 21 34,320,976 59,309,701 – –

Dividend payable 9,048,000 7,188,481 9,048,000 7,188,481

Trade and other payables 24 33,591,351 29,705,626 4,014,228 10,999,341

Tax payable 1,429,939 42,978 – –

78,441,605 96,269,271 13,062,228 18,187,822

Total liabilities 112,796,994 114,809,889 13,062,228 18,208,565

TOTAL EQUITY AND LIABILITIES 284,792,733 257,274,524 19,384,973 23,875,020



34

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 APRIL 2007

Attributable to equity holders of the CompanyNon–

Distributable DistributableShare Other Retained Minority Total

Note Capital Reserves Earnings Total Interests Equity(Note 19)

GROUP RM RM RM RM RM RM

At 1 May 2005 62,400,000 7,863,232 69,965,728 140,228,960 738,126 140,967,086

Realisation of revaluation reserve, representing net expense recognised directly in equity – 1,169 (1,169) – – –

Profit for the year – – 20,919,660 20,919,660 (65,630) 20,854,030

Total recognised income and expenses for the year – 1,169 20,918,491 20,919,660 (65,630) 20,854,030

Dividends 25 – – (19,188,481) (19,188,481) – (19,188,481)

Dividend paid to minority shareholders of a subsidiary – – – – (168,000) (168,000)

At 30 April 2006 62,400,000 7,864,401 71,695,738 141,960,139 504,496 142,464,635

At 1 May 2006 62,400,000 7,864,401 71,695,738 141,960,139 504,496 142,464,635

Effects of adopting

FRS 3 2.3(a)(ii) – – 105,695 105,695 – 105,695

62,400,000 7,864,401 71,801,433 142,065,834 504,496 142,570,330

Revaluation increase of land and buildings – 12,438,534 – 12,438,534 – 12,438,534

Reversal of deferred tax on Real Property Gains Tax – 933,170 – 933,170 – 933,170

Foreign currency translation – 36,749 – 36,749 – 36,749

Net income recognised directly in equity – 13,408,453 – 13,408,453 – 13,408,453

Profit for the year – – 32,190,363 32,190,363 50,593 32,240,956

Total recognised income and expenses for the year – 13,408,453 32,190,363 45,598,816 50,593 45,649,409

Dividends 25 – – (16,224,000) (16,224,000) – (16,224,000)

At 30 April 2007 62,400,000 21,272,854 87,767,796 171,440,650 555,089 171,995,739


35

STATEMENTS OF CHANGES IN EQUITY (CONT’D)FOR THE YEAR ENDED 30 APRIL 2007

Note Share Capital

Non–Distributable

AssetRevaluation

Reserve

(Accumulated Losses)/ Retained

Earnings Total(Note 19)

COMPANY RM RM RM RM

At 1 May 2005As previously stated 62,400,000 24,972,543 (430,550) 86,941,993

Effect of adopting FRS 127 2.3 (g) – (24,972,543) (58,024,353) (82,996,896)

At 1 May 2005 (restated) 62,400,000 – (58,454,903) 3,945,097

Profit for the year, representing total recognised income and expenses for the year – – 20,909,839 20,909,839

Dividends 25 – – (19,188,481) (19,188,481)

At 30 April 2006 62,400,000 – (56,733,545) 5,666,455

At 1 May 2006 As previously stated 62,400,000 24,972,543 1,290,808 88,663,351

Effect of adopting FRS 127 2.3 (g) – (24,972,543) (58,024,353) (82,996,896)

At 1 May 2006 (restated) 62,400,000 – (56,733,545) 5,666,455

Profit for the year, representing total recognised income and expenses for the year – – 16,880,290 16,880,290

Dividends 25 – – (16,224,000) (16,224,000)

At 30 April 2007 62,400,000 – (56,077,255) 6,322,745



36

CASH FLOW STATEMENTSFOR THE YEAR ENDED 30 APRIL 2007

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMCASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 38,111,934 25,669,295 16,911,478 23,767,973

Adjustments for:

Amortisation of goodwill – 1,445 – –

Amortisation of prepaid land lease payments 19,020 19,020 – –

Amortisation of negative goodwill – (26,424) – –

Bad debts written off 693,261 186,128 – –

Depreciation 17,161,494 18,095,967 75,508 132,617

Dividend income – – (17,000,000) (23,830,925)

Effect of exchange rate changes (36,014) – – –

Loss/(Gain) on disposal of plant and equipment 249,637 (628,419) – –

Impairment loss on unquoted investment 17,817 – – –

Goodwill written off 11,553 – – –

Interest expense 2,179,195 2,402,359 – –

Interest income (33,033) (11,717) – –

Write down of inventories 80,308 39,209 – –

Plant and equipment written off 105,850 35,391 – –

Provision for doubtful debts 426,741 538,116 – –

Provision for retirement benefits 126,004 104,141 – –

Revaluation deficit on freehold land and buildings 223,694 – – –

Reversal of provision for doubtful debts (505,986) – – –

Short term accumulating compensated absences 17,901 68,619 – 687

Unrealised foreign exchange loss 313,327 242,779 – 7,374

Operating profit/(loss) before working capital changes 59,162,703 46,735,909 (13,014) 77,726

(Increase)/decrease in receivables (9,336,651) (4,691,084) (101,388) 315,768

Increase in inventories (10,932,028) (4,768,589) – –

Increase in payables 3,228,772 3,198,569 371,620 117,598

Decrease in retirement benefit obligations (88,220) (33,032) – –

Cash generated from operations 42,034,576 40,441,773 257,218 511,092

Interest paid (2,179,195) (5,954,172) (263,750) (226,605)

Tax paid (7,034,203) (2,402,359) – –

Tax refund 5,801,192 – – –

Net cash generated from/(used in) operating activities 38,622,370 32,085,242 (6,532) 284,487


37

CASH FLOW STATEMENTS (CONT’D)FOR THE YEAR ENDED 30 APRIL 2007

GROUP COMPANY2007 2006 2007 2006

RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (Note A) (13,475,246) (15,425,117) (5,388) (160,783)

Interest received 33,033 11,717 – –

Late charges income earned from disposal of land – 53,080 – –

Purchase of additional shares in subsidiaries – – – (188,602)

Payment of real property gains tax, commission, legal fees and other expenses incurred for the disposal of land – (170,420) – –

Proceeds from disposal of property, plant and equipment 185,672 4,584,185 – –

Dividends received – – 17,000,000 1,830,925

Net change in related companies balances – – (2,638,264) 10,240,016

Net cash (used in)/generated from investing activities (13,256,541) (10,946,555) 14,356,348 11,721,556

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid (14,532,481) (12,000,000) (14,364,480) (12,000,000)

Net change in bank borrowings (25,139,000) (1,185,000) – –

Repayment of term loans (5,117,413) (5,438,620) – –

Drawdown of term loans 20,420,000 1,280,000 – –

Net cash used in financing activities (24,368,894) (17,343,620) (14,364,480) (12,000,000)


38

CASH FLOW STATEMENTS (CONT’D)FOR THE YEAR ENDED 30 APRIL 2007

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMNET INCREASE/ (DECREASE) IN CASH AND CASH

EQUIVALENTS 996,935 3,795,067 (14,664) 6,043

EFFECTS OF EXCHANGE RATE CHANGES (31,931) (49,457) – –

CASH AND CASH EQUIVALENTS AS AT 1 MAY 11,700,957 7,955,347 42,341 36,298

CASH AND CASH EQUIVALENTS AS AT30 APRIL (Note B) 12,665,961 11,700,957 27,677 42,341

A. Purchase of property, plant and equipment

During the financial year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM14,491,946 (2006: RM15,425,117) and RM5,388 (2006: RM160,783) respectively by the following means:

GROUP COMPANY2007 2006 2007 2006

RM RM RM RM

Cash payments 13,475,246 15,425,117 5,388 160,783

Other payables 1,016,700 – – –

14,491,946 15,425,117 5,388 160,783

B. Cash and cash equivalents comprise

GROUP COMPANY2007 2006 2007 2006

RM RM RM RM

Cash on hand and at banks 12,634,030 11,651,500 27,677 42,341

Effects of exchange rate changes on cash and cash equivalents 31,931 49,457 – –

12,665,961 11,700,957 27,677 42,341



39

NOTES TO THE FINANCIAL STATEMENTS30 APRIL 2007

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Board of Bursa Malaysia Securities Berhad. The principal place of business of the Company is located at 886, Jalan Bandar Baru, Sungai Kecil, 14300 Nibong Tebal, Seberang Perai Selatan, Pulau Pinang.

The principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiaries are described in Note 13.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 1 August 2007.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF PREPARATION

The financial statements comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards (“FRS”) in Malaysia. At the beginning of the current financial year, the Group and the Company had adopted new and revised FRSs which are mandatory for financial periods beginning on or after 1 January 2006 as described fully in Note 2.3.

The financial statements of the Group and of the Company have also been prepared on a historical cost basis, except for freehold land and buildings included within property, plant and equipment that have been measured at fair values.

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

2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Subsidiaries and Basis of Consolidation

i. Subsidiaries

Subsidiaries are entities 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 subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

ii. Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.


40

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)30 APRIL 2007

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Subsidiaries and Basis of Consolidation (cont’d)

ii. Basis of Consolidation (cont’d)

Acquisitions of subsidiaries are accounted for using the purchase method. 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 the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

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 represents 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.

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.

(b) Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, 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.

(c) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less accumulated depreciation and any accumulated impairment losses.

Freehold land is stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital work-in-progress are also not depreciated as these assets are not available for use.

Depreciation of other property, plant and equipment is provided on a straight-line basis to write off the cost or valuation of each asset to its residual value over the estimated useful life, at the following annual rates:


41




(c) Property, Plant and Equipment and Depreciation (cont’d)

Buildings 2% - 5% Plant and machinery and electrical installations 10% Motor vehicles 10% Furniture, fittings, renovation, air conditioners and office equipment 5% - 10% Computer 33.33%

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic 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 and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.

(d) Impairment of Non-financial Assets

The carrying amounts of assets, other than inventories and deferred tax assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs to.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An impairment loss is recognised in profit or loss in the year in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.


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(e) Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the first in, first out method. The cost of raw materials comprises costs of purchase. The costs of finished goods and work-in-progress comprise raw materials, direct labour, other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity. The cost of trading goods comprises cost of purchase of inventories.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to completion and estimated costs necessary to make the sale.

(f) Financial Instruments

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

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

i. Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at banks, deposit at call and short term highly liquid investments which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

ii. Other Non-current Investments

Non-current investments other than investments in subsidiaries are stated at cost less impairment losses. On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is recognised in profit or loss.

iii. Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.

iv. Payables

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

v. Interest Bearing Loans and Borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.


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(f) Financial Instruments (cont’d)

vi. Equity Instruments

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.

vii. Derivative Financial Instruments

Derivative financial instruments are not recognised in the financial statements.

(g) Lease

i. Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to ownership. Leases of land and buildings are classified as operating and finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases.

ii. Finance Leases - the Group as Lessee

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

Depreciation of leased assets is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life. Leasehold land is depreciated over the period of the lease term, i.e. 46 years - 60 years.

iii. Operating Leases - the Group as Lessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term.


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(h) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(i) 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. 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 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 difference arises 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 year 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 as income or an expense and included in the profit or loss for the year, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised 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 the amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.

(j) Provisions

Provisions 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, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.

(k) Employee Benefits

i. Short Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year 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. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.


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(k) Employee Benefits (cont’d)

ii. Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Company pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make contributions to the Employees Provident Fund (“EPF”). Some of the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension scheme.

iii. Defined Benefit Plans

A subsidiary operates an unfunded defined benefit plan for its eligible employees, as provided under the agreement between the subsidiary and the Paper And Paper Products Manufacturing Employees Union.

The Group’s obligation under the plan, calculated using the Projected Unit Credit Method, is determined based on actuarial computations by independent actuaries, through which the amount of benefit that employees have earned in return for their services in the current and prior years is estimated. That benefit is discounted in order to determine its present value. Actuarial gains and losses are recognised as income or expense over the expected average remaining working lives of the participating employees when the cumulative unrecognised actuarial gains or losses for the plan exceed 10% of the higher of the present value of the defined benefit obligation and the fair value of plan assets. Past service costs are recognised immediately to the extent that the benefits are already vested, and otherwise are amortised on a straight-line basis over the average period until the amended benefits become vested.

The amount recognised in the balance sheet represents the present value of the defined benefit obligations adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the net total of any unrecognised actuarial losses and past service cost, and the present value of any economic benefits in the form of refunds or reductions in future contributions to the plan.

(l) Foreign Currencies

i. Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

ii. Foreign Currency Transactions

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

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the year.


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(l) Foreign Currencies (cont’d)

ii. Foreign Currency Transactions (cont’d)

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

iii. Foreign Operations

The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows:

− Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date;

− Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and

− All resulting exchange differences are taken to the foreign currency translation reserve within equity.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 May 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the balance sheet date. Goodwill and fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 May 2006 are deemed to be assets and liabilities of the parent company and are recorded in RM at the rates prevailing at the date of acquisition.

(m) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised.

i. Sale of Goods Revenue is recognised net of sales taxes and upon transfers of significant risks and rewards of ownership to the

buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

ii. Dividend Income Dividend income is recognised when the Group’s right to receive payment is established. iii. Interest Income Interest income is recognised on an accrual basis using the effective interest method.

iv. Rental Income Rental income is recognised on an accrual basis.

v. Revenue from Services

Revenue from services rendered is recognised net of discounts as and when the services are performed.

vi. Management Fees

Management fees are recognised when services are rendered.


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2.3 CHANGES IN ACCOUNTING POLICIES AND EFFECTS ARISING FROM ADOPTION OF NEW AND REVISED FRSs

The Malaysian Accounting Standards Board (“MASB”) has issued a number of new and revised FRS that are effective for financial periods beginning on or after 1 January 2006. In addition, the Group has early adopted FRS 117 Leases for the current financial year. These new and revised FRS do not have any other significant impact on the financial statements of the Group and the Company other than as discussed below:

(a) FRS 3: Business Combinations, FRS 136: Impairment of Assets and FRS 138: Intangible Assets

The new FRS 3 has resulted in consequential amendments to two other accounting standards, FRS 136 and FRS 138. In accordance with the transitional provisions, FRS 3 has been applied for business combinations for which the agreement date is on or after 1 January 2006.

(i) Goodwill

Prior to 1 May 2006, goodwill was amortised on a straight-line basis over its estimated useful life of 10 years and at each balance sheet date, the Group assessed if there was any indication of impairment of the cash-generating unit in which the goodwill is attached to. The adoption of FRS 3 and the revised FRS 136 has resulted in the Group ceasing annual goodwill amortisation. Goodwill is now carried at cost less accumulated impairment losses and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired.

In accordance with the transitional provisions of FRS 3, the Group has applied the revised accounting policy for goodwill prospectively from 1 May 2006. The transitional provisions of FRS 3 also required the Group to eliminate the carrying amount of the accumulated amortisation at 1 May 2006 amounting to RM2,890 against the carrying amount of goodwill. The net carrying amount of goodwill as at 1 May 2006 of RM11,553 ceased to be amortised thereafter. This change has no material impact on the Group’s and the Company’s financial statements for the year ended 30 April 2007.

(ii) Excess of Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost (previously known as negative goodwill)

Prior to 1 May 2006, negative goodwill was amortised over its estimated useful life of 10 years. Under FRS 3, any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost of acquisitions, after reassessment, is now recognised immediately in profit or loss. In accordance with the transitional provisions of FRS 3, the negative goodwill as at 1 May 2006 of RM105,695 was derecognised with a corresponding increase in retained earnings.

Because the revised accounting policy has been applied prospectively, the change has had no impact on the amounts reported for 2006 or prior periods. The effects on the consolidated balance sheet as at 30 April 2007 are set out in Note 2.3(f) respectively. This change has no impact on the consolidated income statements and the Company’s financial statements for the year ended 30 April 2007.

(b) FRS 101: Presentation of Financial Statements Prior to 1 May 2006, minority interests at the balance sheet date were presented in the consolidated balance sheet

separately from liabilities and equity. Upon the adoption of the revised FRS 101, minority interests are now presented within total equity. In the consolidated income statement, minority interests are presented as an allocation of the total profit or loss for the year. A similar requirement is also applicable to the statement of changes in equity. The revised FRS 101 also requires disclosure, on the face of the statement of changes in equity, total recognised income and expenses for the year, showing separately the amounts attributable to equity holders of the Company and to minority interests.


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2.3 CHANGES IN ACCOUNTING POLICIES AND EFFECTS ARISING FROM ADOPTION OF NEW AND REVISED FRSs (CONT’D)

(b) FRS 101: Presentation of Financial Statements (cont’d)

These changes in presentation have been applied retrospectively and as disclosed in Note 2.3(g), certain comparatives have been restated. The effects on the consolidated balance sheet as at 30 April 2007 are set out in Note 2.3(f). These changes in presentation have no impact on the Company’s financial statements.

(c) FRS 117: Leases

Prior to 1 May 2006, leasehold land held for own use was classified as property, plant and equipment and was stated at cost less accumulated depreciation and impairment losses. The adoption of the revised FRS 117 has resulted in a change in the accounting policy relating to the classification of leases of land and buildings. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. Leasehold land held for own use is now classified as operating lease and where necessary, the minimum lease payments or the up-front payments made are allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and is amortised on a straight-line basis over the lease term.

The Group has applied the change in accounting policy in respect of leasehold land in accordance with the transitional provisions of FRS 117. At 1 May 2006, the unamortised amount of leasehold land is retained as the surrogate carrying amount of prepaid lease payments as allowed by the transitional provisions. The reclassification of leasehold land as prepaid lease payments has been accounted for retrospectively and as disclosed in Note 2.3(g), certain comparatives have been restated. The effects on the consolidated balance sheet as at 30 April 2007 are set out in Note 2.3(f). There were no effects on the consolidated income statement and the Company’s financial statements for the year ended 30 April 2007.

(d) FRS 121: The Effects of Changes in Foreign Exchange Rates

i. Foreign Operations

Prior to 1 May 2006, where the operations of a foreign company are integral to the operations of the Company, the transactions of the foreign operations are translated into Ringgit Malaysia (“RM”) as if the transactions of the foreign operations had been those of the Company. The adoption of the revised FRS 121 has resulted in a change in the accounting policy relating to the translation of the results and operations of foreign operations. The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows:

− Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date;

− Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and

− All resulting exchange differences are taken to the foreign currency translation reserve within equity.

This change has no material impact on the Group's financial statements for the year ended 30 April 2007.

ii. Hedged foreign currency monetary items

Prior to 1 May 2006, at each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at exchange rates ruling at that date, unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contracts are used. Upon the adoption of the revised FRS 121, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. This change has no material impact on the Group’s financial statements for the year ended 30 April 2007.


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(e) FRS 127: Consolidated and Separate Financial Statements

Prior to 1 May 2006, certain investments in subsidiaries were revalued by the directors based on the adjusted net assets value of the subsidiaries. The adoption of the revised FRS 127 requires the investments in subsidiaries to be accounted for in the separate financial statements at cost or in accordance with FRS139. According to the revised FRS127, this change in accounting policy should be applied retrospectively as disclosed in Note 2.3(g). The effects on the Company’s balance sheet as at 30 April 2007 are set out in Note 2.3(f). There were no effects on the consolidated financial statements and the Company’s income statement for the year ended 30 April 2007.

Prior to 1 May 2006, acquisitions of subsidiaries, which meet the criteria for merger, are accounted for using the merger accounting principles. When the merger method is used, the cost of investment in the Company’s books is recorded at the nominal value of shares issued. The adoption of the revised FRS 127 requires investments in subsidiaries to be recorded at cost, whereby the cost is the fair value of the shares issued as consideration. The Company has applied this change prospectively as it is impracticable to account for it retrospectively.

(f) Summary of effects of adopting new and revised FRSs on the current year’s financial statements

The following table provides estimates of the extent to which each of the line items in the balance sheet for the year ended 30 April 2007 is higher or lower than it would have been had the previous policies been applied in the current year.

Effects on balance sheets as at 30 April 2007

Increase/(Decrease)

FRS 3 FRS 101 FRS 117 FRS 121 FRS 127 Note Note Note Note Note

Description of Change 2.3 (a)(ii) 2.3 (b) 2.3 (c) 2.3 (d) 2.3 (e) TotalRM RM RM RM RM RM

GROUP

Property, plant and equipment – – (861,702) – – (861,702)

Prepaid land lease payments – – 861,702 – – 861,702

Other reserves – – – 36,749 – 36,749

Retained earnings 105,695 – – – – 105,695

Negative goodwill (105,695) – – – – (105,695)

Total equity – 555,089 – – – 555,089


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(f) Summary of effects of adopting new and revised FRSs on the current year’s financial statements (cont’d)

Increase/(Decrease)

FRS 3 FRS 101 FRS 117 FRS 121 FRS 127 Note Note Note Note Note

Description of Change 2.3 (a)(ii) 2.3 (b) 2.3 (c) 2.3 (d) 2.3 (e) TotalRM RM RM RM RM RM

COMPANYInvestments in subsidiaries – – – – (82,996,896) (82,996,896)

Asset revaluation reserve – – – – (24,972,543) (24,972,54)

Retained earnings – – – – (58,024,353) (58,024,353)

(g) Restatement of comparatives

The following comparative amounts have been restated as a result of adopting the new and revised FRSs:

Previously Increase/(Decrease)Stated FRS 101 FRS 117 FRS 127 Restated

Note Note Note Description of Change 2.3 (b) 2.3 (c) 2.3 (e) Total

RM RM RM RM RMAt 1 May 2006

GROUPProperty, plant and equipment 166,076,290 – (880,722) – 165,195,568

Prepaid land lease payments – – 880,722 – 880,722

Total equity 141,960,139 504,496 – – 142,464,635

COMPANY Investments in subsidiaries 96,190,689 – – (82,996,896) 13,193,793

Asset revaluation reserve 24,972,543 – – (24,972,543) –

Retained earnings/(Accumulated losses) 1,290,808 – – (58,024,353) (56,733,545)


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2.4 STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

At the date of authorisation of these financial statements, the following FRS, amendments to FRS and Interpretations were issued but not yet effective and have not been applied by the Group and the Company:

FRS, Amendments to FRS and InterpretationsEffective for financial periods beginning on or after

FRS 139: Financial Instruments: Recognition and Measurement Deferred

FRS 124: Related Parties Disclosures 1 October 2006

FRS 6: Exploration for and Evaluation of Mineral Resources 1 January 2007

Amendment to FRS 1192004: Employee Benefits – Actuarial Gains and Losses, Group Plans and Disclosures

1 January 2007

Amendment to FRS 121: The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation

1 July 2007

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

1 July 2007

IC Interpretation 2: Members’ Shares in Co–operative Entities and Similar Instruments 1 July 2007

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

1 July 2007

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

1 July 2007

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

1 July 2007

IC Interpretation 8: Scope of FRS 2 1 July 2007

FRS 107: Cash Flow Statements 1 July 2007

FRS 111: Construction Contracts 1 July 2007

FRS 112: Income Taxes 1 July 2007

FRS 118: Revenue 1 July 2007

FRS 120: Accounting for Government Grant and Disclosure of Government Assistance 1 July 2007

FRS 134: Interim Financial Reporting 1 July 2007

FRS 137: Provisions, Contingent Liabilities and Contingent Assets 1 July 2007

The above FRS, amendments to FRS and Interpretations are expected to have no significant impact on the financial statements of the Group and the Company upon their initial application other than:

FRS 112 Income Taxes

The Group does not recognise deferred tax assets on unused reinvestment allowances as required by paragraph 36 of FRS1122004 Income Taxes. Under the revised FRS112 Income Taxes, the Group will have to recognise deferred tax asset on such unused reinvestment allowances to the extent that it is probable that future taxable profit will be available against which the unused reinvestment allowances can be utilised. The directors are unable to determine if the initial adoption of this revised FRS will have a material impact on the financial statements of the Group for the year ending 30 April 2009.

The Group and the Company are exempted from disclosing the possible impact, if any, to the financial statements upon the initial application of FRS 124 and FRS 139.


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2.5 CHANGES IN ESTIMATES

The revised FRS 116: Property, Plant and Equipment requires the review of the residual value and remaining useful life of an item of plant and equipment at least at each financial year end. The Group and the Company have revised the estimated useful lives of certain motor vehicles from five to ten years with effect from 1 May 2006. The revisions were accounted for prospectively as a change in accounting estimates and as a result, the depreciation charges of the Group and the Company for the current financial year have been reduced by RM1,040,619 and RM79,217 respectively.

2.6 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

(a) Critical Judgements Made in Applying Accounting Policies The following are the judgements made by the management in the process of applying the Group’s accounting

policies: Exchange rates used for consolidation Bank of Thailand had issued notices regarding the Rules and Practices on Currency Exchange in December 2006.

Consequently, this has resulted in the Thai Baht being traded using different rates in on-shore and off-shore foreign exchange market. For the subsidiary in Thailand, transactions in foreign currencies are recorded and remeasured in the financial statements using the Thai Baht on-shore rate. On consolidation, the Group translates the financial statements of the subsidiary in Thailand into Ringgit Malaysia using the published rates in Malaysia.

(b) Key Sources of Estimation Uncertainty

The key assumption concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

i. Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying value of unrecognised tax losses and capital allowances of the Group was RM674,681 (2006: RM1,441,328).

ii. Depreciation of plant and equipment

The cost of paper making machinery is depreciated on a straight-line basis over the asset’s useful life. Management estimates the useful lives of these plant and machinery to be within 10 years. These are common life expectancies applied in the industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.


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3. REVENUE

Revenue consists of the following:

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMSales of paper products such as toilet

rolls, tissues, serviette; cotton products; diapers; sanitary products. 270,722,373 237,054,180 – –

Printing of operating manuals, journals and packaging materials 7,695 7,771 – –

Management fee – – 4,955,234 4,774,196

Dividend income from subsidiaries – – 17,000,000 23,830,925

270,730,068 237,061,951 21,955,234 28,605,121

4. OTHER OPERATING INCOME

Included in other operating income are:

GROUP2007 2006

RM RM

Interest income 33,033 11,717

Rental income – 9,708

5. EMPLOYEE BENEFITS EXPENSE

GROUP COMPANY2007 2006 2007 2006

RM RM RM RM

Wages and salaries 34,228,876 31,044,787 1,189,955 1,205,184

Directors’ remuneration (Note 6) 2,967,321 3,033,240 2,520,314 2,294,308

Social security contributions 466,437 428,561 15,790 15,992

Short term accumulating compensated absences 694,902 720,209 (7,352) 4,951

Contribution to defined contribution plan 3,639,891 3,405,688 176,372 173,885

Increase in liability for defined benefit plan (Note 22) 126,004 104,141 – –

Other benefits 2,694,414 2,162,884 206,397 161,238

44,817,845 40,899,510 4,101,476 3,855,558

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM1,733,888 (2006: RM1,609,410) and RM1,720,688 (2006: RM1,589,260) respectively as further disclosed in Note 6.


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6. DIRECTORS’ REMUNERATION

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMDirectors of the Company

Executive directors’ remuneration

Fees 80,000 60,000 80,000 60,000

Other emoluments 1,612,688 1,504,010 1,612,688 1,504,010

Benefits–in–kind 41,200 45,400 28,000 25,250

1,733,888 1,609,410 1,720,688 1,589,260

Non–executive directors’ remuneration:

Fees 160,000 120,000 160,000 120,000

Other emoluments 8,000 8,000 8,000 8,000

168,000 128,000 168,000 128,000

Other Directors

Executive directors’ remuneration:

Fees 42,956 42,566 – –

Other emoluments 1,231,677 1,426,664 827,626 730,298

Benefits–in–kind 9,167 9,300 – –

1,283,800 1,478,530 827,626 730,298

Non–executive directors’ remuneration :

Fees – 18,217 – –

Total directors’ remuneration:

Executive directors’ remuneration(Note 5) 2,967,321 3,033,240 2,520,314 2,294,308

Non–executive directors’ remuneration (Note 7) 168,000 146,217 168,000 128,000

3,135,321 3,179,457 2,688,314 2,422,308

Estimated money value of benefits–in–kind 50,367 54,700 28,000 25,250

Total directors’ remuneration including benefits–in–kind 3,185,688 3,234,157 2,716,314 2,447,558

The details of remuneration receivable by directors of the Company during the year are as follows:

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMExecutive:

Salaries and other emoluments 1,872,971 1,803,308 1,477,520 1,486,235

Fees 122,956 102,566 80,000 60,000

Bonus

– Current year provision 932,436 1,030,799 923,836 660,106

– Under provision in prior year 38,958 96,567 38,958 87,967

Benefits–in–kind 50,367 54,700 28,000 25,250

3,017,688 3,087,940 2,548,314 2,319,558


55


6. DIRECTORS’ REMUNERATION (CONT’D)

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMNon–executive (Note 7):

Fee 160,000 138,217 160,000 120,000

Allowance 8,000 8,000 8,000 8,000

168,000 146,217 168,000 128,000

Total 3,185,688 3,234,157 2,716,314 2,447,558

The number of directors of the Company whose total remuneration during the year fall within the following bands is analysed as follows:

Number of Directors2007 2006

Executive directors:

RM500,001 – RM550,000 1 1

RM1,100,001 – RM1,150,000 – 1

RM1,200,001 – RM1,250,000 1 –

Non–Executive directors:

Below RM50,000 4 4

7. OTHER OPERATING EXPENSES

Other operating expenses are stated:-

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMAfter charging/ (crediting):

Auditors’ remuneration

– statutory audit

– current year 155,698 151,094 25,200 25,200

– (over)/under provision in prior years (2,200) 2,981 – 1,981

– other services 30,730 62,153 2,910 41,285

Amortisation of goodwill – 1,445 – –

Amortisation of prepaid land lease payments 19,020 19,020 – –

Amortisation of negative goodwill – (26,424) – –

Bad debts recovered – (2,853) – –

Bad debts written off 693,261 186,128 – –


56


7. OTHER OPERATING EXPENSES (CONT’D)

GROUP COMPANY2007 2006 2007 2006

RM RM RM RM

Goodwill written off 11,553 – – –

Impairment loss on unquoted investment 17,817 – – –

Non-executive directors’ remuneration (Note 6) 168,000 146,217 168,000 128,000

Write down of inventories 80,308 39,209 – –

Loss/(Gain) on disposal of property, plant and equipment 249,637 (628,419) – –

Plant and equipment written off 105,850 35,391 – –

Net foreign exchange losses 449,009 120,857 1,100 7,409

Tax penalty – 1,596,315 – –

Provision for doubtful debts 426,741 538,116 – –

Reversal of provision for doubtful debts (505,986) – – –

Rental expense 564,368 668,445 60,000 60,000

Revaluation deficit on freehold land and buildings 223,694 – – –

8. FINANCE COSTS

Included in finance costs are:

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMInterest expense on:

Bank borrowings 2,179,175 2,402,359 – –

9. INCOME TAX EXPENSE

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMIncome tax:

Malaysian income tax 6,788,458 4,447,849 80,114 2,828,898

Foreign tax 33,287 10,831 – –

6,821,745 4,458,680 80,114 2,828,898

(Over)/Under provided in prior years:

Malaysian income tax (209,036) 1,016,240 7,225 8,493

6,612,709 5,474,920 87,339 2,837,391


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9. INCOME TAX EXPENSE (CONT’D)

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMDeferred tax (Note 15):

Relating to origination and reversal of temporary differences 381,321 (699,978) (53,209) 20,743

Relating to changes in income tax rate (1,095,023) – 753 –

(Over)/Under provided in prior years (28,029) 40,323 (3,695) –

(741,731) (659,655) (56,151) 20,743

5,870,978 4,815,265 31,188 2,858,134

Income tax is calculated at the statutory tax rate of 27% (2006: 28%) of the estimated assessable profit for the year. The domestic statutory tax rate will be reduced to 26% effective year of assessment 2008. The computation of deferred tax as at 30 April 2007 has reflected these changes. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

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

2007 2006RM RM

GROUP

Profit before tax 38,111,934 25,669,295

Taxation at Malaysian statutory tax rate of 27% (2006: 28%) 10,290,222 7,187,403

Tax savings of 7% (2006: 8%) for first RM500,000 (2006: RM500,000) of chargeable income (45,691) (40,758)

Effect on opening deferred tax of reduction in income tax rate (549,965) –

Effect of different tax rates in other countries (25,833) (7,291)

Effect of expenses not deductible for tax purposes 433,555 878,346

Effect of utilisation of previously unrecognised tax losses and unabsorbed capital allowances (152,111) (134,331)

Income not subject to tax (45,106) (89,118)

Deferred tax assets not recognised during the year 84,691 201,216

Deferred tax recognised at different tax rate (545,058) –

Reinvestment allowance claimed during the year (3,336,661) (4,236,765)

(Over)/Under provision of income tax in prior years (209,036) 1,016,240

(Over)/Under provision of deferred tax in prior years (28,029) 40,323

Tax expense for the year 5,870,978 4,815,265


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9. INCOME TAX EXPENSE (CONT’D)

2007 2006RM RM

COMPANY

Profit before tax 16,911,478 23,767,973

Taxation at Malaysian statutory tax rate of 27% (2006: 28%) 4,566,099 6,655,032

Effect of expenses not deductible for tax purposes 50,806 67,268

Effect on opening deferred tax of reduction in income tax rate (609) –

Deferred tax recognised at different tax rate 1,362 –

Income not subject to tax (4,590,000) (3,872,659)

Underprovision of income tax in prior years 7,225 8,493

Overprovision of deferred tax in prior years (3,695) –

Tax expense for the year 31,188 2,858,134

Tax savings during the financial year arising from:

GROUP COMPANY2007 2006 2007 2006

RM RM RM RM

Utilisation of previously unrecognised tax losses 519,613 – – –

10. EARNINGS PER SHARE

Basic

Basic earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary equity holders of the Company by the number of ordinary shares in issue during the financial year.

GROUP2007 2006

Profit attributable to ordinary equity holders of the Company 32,190,363 20,919,660

Number of ordinary shares in issue 624,000,000 624,000,000

Basic earnings per share (sen) 5.16 3.35


59


11. PROPERTY, PLANT AND EQUIPMENT

Furniture, fittings,

Plant and renovation,machinery air

* Land Capital and conditioners,and work–in– electrical Motor and office

GROUP buildings progress installations vehicles equipment Total RM RM RM RM RM RMAt 30 April 2007

Cost/Valuation

At 1 May 2006

At cost 21,592,366 10,578,819 200,010,197 17,739,954 7,171,464 257,092,800

At valuation 38,105,000 – – – – 38,105,000

59,697,366 10,578,819 200,010,197 17,739,954 7,171,464 295,197,800

Additions 889,165 10,175,914 1,396,724 1,607,492 422,651 14,491,946

Disposals/Write offs – (105,292) (579,813) (599,764) (54,418) (1,339,287)

Revaluation adjustment 10,844,853 – – – – 10,844,853

Reclassification 907,614 (14,137,100) 13,209,353 – 20,133 –

Translation difference – – (51,202) 52,149 74,920 75,867

At 30 April 2007 72,338,998 6,512,341 213,985,259 18,799,831 7,634,750 319,271,179

Representing:

At cost – 6,512,341 213,985,259 18,799,831 7,634,750 246,932,181At valuation 72,338,998 – – – – 72,338,998

At 30 April 2007 72,338,998 6,512,341 213,985,259 18,799,831 7,634,750 319,271,179

Accumulated Depreciation and Impairment Losses

At 1 May 2006: 2,810,840 – 109,412,157 12,279,451 5,499,784 130,002,232

Depreciation charge for the year 796,964 – 14,956,716 846,635 561,179 17,161,494

Elimination of accumulated depreciation on revaluation (3,607,804) – – – – (3,607,804)

Disposals/write offs – – (231,925) (536,782) (29,421) (798,128)

Translation difference – – (56,149) 40,295 18,960 3,106

At 30 April 2007 – – 124,080,799 12,629,599 6,050,502 142,760,900

Net carrying amount

At cost – 6,512,341 89,904,460 6,170,232 1,584,248 104,171,281At valuation 72,338,998 – – – – 72,338,998

At 30 April 2007 72,338,998 6,512,341 89,904,460 6,170,232 1,584,248 176,510,279


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


Plant and renovation,machinery air

* Land Capital and conditioners,and work–in– electrical Motor and office

buildings progress installations vehicles equipment Total RM RM RM RM RM RM

At 30 April 2006

Cost/Valuation

At 1 May 2005

At cost 19,471,006 8,106,024 195,851,068 16,096,987 6,838,112 246,363,197

At valuation 38,328,000 – – – – 38,328,000

57,799,006 8,106,024 195,851,068 16,096,987 6,838,112 284,691,197

Additions 1,054,572 10,827,243 707,629 2,477,467 358,206 15,425,117

Disposals/Write offs (3,741,031) (27,157) (290,972) (834,500) (24,854) (4,918,514)

Reclassification 4,584,819 (8,327,291) 3,742,472 – – –

At 30 April 2006 59,697,366 10,578,819 200,010,197 17,739,954 7,171,464 295,197,800

Representing:

At cost 21,592,366 10,578,819 200,010,197 17,739,954 7,171,464 257,092,800

At valuation 38,105,000 – – – – 38,105,000

At 30 April 2006 59,697,366 10,578,819 200,010,197 17,739,954 7,171,464 295,197,800

Accumulated Depreciation and Impairment Losses

At 1 May 2005: 2,089,057 – 94,742,097 11,320,385 4,799,424 112,950,963

Depreciation charge for the year 721,783 – 14,860,955 1,788,236 724,993 18,095,967

Disposals/write offs – – (190,895) (829,170) (24,633) (1,044,698)

At 30 April 2006 2,810,840 – 109,412,157 12,279,451 5,499,784 130,002,232

Net carrying amount

At 30 April 2006

At cost 21,025,648 10,578,819 90,598,040 5,460,503 1,671,680 129,334,690

At valuation 35,860,878 – – – – 35,860,878

56,886,526 10,578,819 90,598,040 5,460,503 1,671,680 165,195,568


61



* LAND AND BUILDINGS

Freehold GROUP land Buildings Total RM RM RMAt 30 April 2007

Cost/Valuation

At 1 May 2006

At cost 6,976,990 14,615,376 21,592,366

At valuation 24,775,000 13,330,000 38,105,000

31,751,990 27,945,376 59,697,366

Additions/Reclassification 902,637 894,142 1,796,779

Revaluation adjustment 6,045,373 4,799,480 10,844,853

At 30 April 2007 38,700,000 33,638,998 72,338,998

Representing:

At cost – – –At valuation 38,700,000 33,638,998 72,338,998

38,700,000 33,638,998 72,338,998

Accumulated Depreciation

At 1 May 2006 – 2,810,840 2,810,840

Depreciation charge for the year – 796,964 796,964

Elimination of accumulated depreciation on revaluation – (3,607,804) (3,607,804)

At 30 April 2007 – – –

Net carrying amountAt cost – – –At valuation 38,700,000 33,638,998 72,338,998

At 30 April 2007 38,700,000 33,638,998 72,338,998

At 30 April 2006

Cost/Valuation

At 1 May 2005

At cost 9,370,078 10,100,928 19,471,006

At valuation 24,998,000 13,330,000 38,328,000

34,368,078 23,430,928 57,799,006

Additions/Reclassification 1,124,943 4,514,448 5,639,391

Disposal (3,741,031) – (3,741,031)

At 30 April 2006 31,751,990 27,945,376 59,697,366

Representing:

At cost 6,976,990 14,615,376 21,592,366

At valuation 24,775,000 13,330,000 38,105,000

31,751,990 27,945,376 59,697,366


62



* LAND AND BUILDINGS (cont’d)

Freehold land Buildings Total RM RM RM


At 1 May 2005 – 2,089,057 2,089,057

Depreciation charge for the year – 721,783 721,783

At 30 April 2006 – 2,810,840 2,810,840

Net carrying amountAt cost 6,976,990 14,048,658 21,025,648

At valuation 24,775,000 11,085,578 35,860,878

At 30 April 2006 31,751,990 25,134,536 56,886,526


renovation,air

conditioners,Motor and office

vehicles equipment Total RM RM RMCOMPANY

At 30 April 2007

Cost

At 1 May 2006 717,987 36,558 754,545

Additions – 5,388 5,388

At 30 April 2007 717,987 41,946 759,933


At 1 May 2006 133,072 13,322 146,394

Depreciation charge for the year 64,380 11,128 75,508

At 30 April 2007 197,452 24,450 221,902

Net carrying amount

At 30 April 2007 520,535 17,496 538,031


63




renovation,air

conditioners,Motor and office

vehicles equipment Total RM RM RMAt 30 April 2006

Cost

At 1 May 2005 568,041 25,721 593,762

Additions 149,946 10,837 160,783

At 30 April 2006 717,987 36,558 754,545


At 1 May 2005 9,467 4,310 13,777

Depreciation charge for the year 123,605 9,012 132,617

At 30 April 2006 133,072 13,322 146,394

Net carrying amount

At 30 April 2006 584,915 23,236 608,151

(a) The latest valuation of land and buildings of the Group were performed on 30 April 2007 by the following professional valuers:

Name of Valuer Qualification Name of Company

Muzlini Said B.Sc. Land Management, MISM, Registered Valuer

C H Williams Talhar & Wong Sdn Bhd *

Danny Yeo Soon Kee Associate Diploma in Valuations, MISM, Registered Valuer


Tan Ka Leong B. Surv (Hons) Prop. Mgt. MISM, Registered Valuer


* A company incorporated in Malaysia.


64



Details of the latest independent professional valuation of properties owned by the Group as at 30 April 2007 are as follows:

Date of Valuation Description of Property Valuation AmountRM

Basis of Valuation

30 April 2007 Freehold industrial land and building at Seberang Perai Selatan, Penang 56,658,998 Comparison method

30 April 2007 Freehold agricultural land at Seberang Perai Selatan, Penang 2,930,000 Comparison method

30 April 2007 Freehold industrial land and building at Senai, Johor Bahru 1,600,000 Comparison method

30 April 2007 Freehold industrial land and building at Shah Alam, Selangor 9,640,000 Comparison method

30 April 2007 Industrial building at Parit Buntar, Perak 1,510,000 Comparison method

72,338,998

(a) Had the revalued properties been carried under the cost model, the carrying amounts of each class of property, plant and equipment that would have been included in the financial statements of the Group as at 30 April 2007 would be as follows:

GROUP2007 2006

RM RM

Freehold land 14,016,406 13,113,769

Buildings 23,771,724 23,594,431

37,788,130 36,708,200

(b) Included in property, plant and equipment of the Group are fully depreciated assets which are still in use costing RM77,728,989 (2006: RM69,023,397).

(c) The net carrying amount of temporarily idle assets of the Group amounted to RM11,920,000 (2006: RM9,641,443).

(d) Included in property, plant and equipment of the Group are motor vehicles with net carrying amount amounting to RM31,180 (2006: RM35,930) held in trust by third parties.

(e) Certain land title deeds of a subsidiary are in the process of being transferred to the subsidiary’s name. The net carrying amount of the land amounted to RM5,170,000 (2006: RM4,356,000).


65


12. PREPAID LAND LEASE PAYMENTS

GROUP2007 2006

RM RM

At 1 May 880,722 899,742

Amortisation for the year (19,020) (19,020)

At 30 April 861,702 880,722

13. INVESTMENTS IN SUBSIDIARIES

COMPANY2007 2006

RM RM

Unquoted shares, at cost 13,193,793 13,193,793

Details of the subsidiaries whose financial year ends on 30 April are as follows:

Name of Subsidiaries Equity interest held Principal ActivitiesCountry of incorporation

2007 2006% %

Nibong Tebal Enterprise Sendirian Berhad 100.00 100.00 Trading in paper, cotton, diapers and sanitary products

Malaysia

Nibong Tebal Paper Mill Sdn. Bhd. 100.00 100.00 Manufacturing and trading of paper products such as toilet rolls, tissues, serviette and investment holding

Malaysia

Nibong Tebal Personal Care Sdn. Bhd. 100.00 100.00 Manufacturing and trading of personal care products such as sanitary products

Malaysia

Nibong Tebal Logistics Sdn. Bhd. 100.00 100.00 Carrying out integrated logistics services,warehousing and trading of fast moving consumer goods

Malaysia

Nibong Tebal IT Sdn. Bhd. 100.00 100.00 Carrying out information technology related businesses

Malaysia


66


13. INVESTMENTS IN SUBSIDIARIES (CONT’D)

Name of Subsidiaries Equity interest held Principal ActivitiesCountry of incorporation

2007 2006% %

Nibong Tebal Technology Sdn. Bhd.

100.00 100.00 Dormant - To carry out research and development activities on the production technology, biotechnology and recycling of waste materials related to paper industry

Malaysia

NTPM (Thailand) Co., Ltd. * 100.00 100.00 Importers and dealers in all kinds of paper products, tissue papers, toilet rolls, paper towels and general merchandise

Thailand

NTPM (Singapore) Pte. Ltd.* 100.00 100.00 Importers and dealers in all kinds of paper products, tissue papers, toilet rolls, paper towels and general merchandise

Singapore

Held Through Nibong Tebal Paper MillSdn. Bhd.

Jia In Sdn. Bhd. 60.00 60.00 Printing of operating manuals, journals and packaging materials

Malaysia

* Audited by a firm of auditors other than Ernst & Young.

14. OTHER INVESTMENTS

GROUP2007 2006

RM RM

Membership in golf club, at cost 66,185 66,185

Impairment loss (21,185) (21,185)

45,000 45,000

Unquoted shares, at cost – 17,817

45,000 62,817


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15. DEFERRED TAX

GROUP2007 2006

RM RM

At 1 May 15,834,575 16,494,587

Recognised in the income statement (Note 9) (741,731) (659,655)

Charged to equity 1,304,647 –

16,397,491 15,834,932

Exchange differences (247) (357)

At 30 April 16,397,244 15,834,575

Presented after appropriate offsetting as follows:

Deferred tax assets (547,333) (362,331)

Deferred tax liabilities 16,944,577 16,196,906

16,397,244 15,834,575

COMPANY2007 2006

RM RM

At 1 May 20,743 –

Recognised in the income statement (Note 9) (56,151) 20,743

At 30 April (35,408) 20,743

Presented after appropriate offsetting as follows:

Deferred tax (assets)/ liabilities (35,408) 20,743

The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:

Deferred Tax Assets of the Group:

RetirementBenefit

Obligations

Unused Tax Losses and

Unabsorbed Capital

Allowances

OtherPayables Others Total

RM RM RM RM RM

At 1 May 2006 (175,955) (137,040) (800,168) (249,008) (1,362,171)

Recognised in the income statement 2,744 137,040 (183,452) (113,044) (156,712)

At 30 April 2007 (173,211) – (983,620) (362,052) (1,518,883)


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15. DEFERRED TAX (CONT’D)

RetirementBenefit

Obligations

Unused Tax Losses and

Unabsorbed Capital

Allowances

OtherPayables Others Total

RM RM RM RM RM

At 1 May 2005 (156,045) (111,387) (605,950) (236,238) (1,109,620)

Recognised in the income statement (19,910) (25,653) (194,218) (12,770) (252,551)

At 30 April 2006 (175,955) (137,040) (800,168) (249,008) (1,362,171)

Deferred Tax Liabilities of the Group:

AcceleratedCapital Revaluation

Allowances of Properties Others TotalRM RM RM RM

At 1 May 2006 15,745,365 1,450,313 1,068 17,196,746

Recognised in the income statement (519,806) (64,145) (1,068) (585,019)

Charged to equity – 1,304,647 – 1,304,647

Exchange differences (247) – – (247)

At 30 April 2007 15,225,312 2,690,815 – 17,916,127

At 1 May 2005 16,124,450 1,479,553 204 17,604,207

Recognised in the income statement (378,728) (29,240) 864 (407,104)

Exchange differences (357) – – (357)

At 30 April 2006 15,745,365 1,450,313 1,068 17,196,746

Deferred Tax Liabilities of the Company:

AcceleratedCapital

AllowancesRM

At 1 May 2006 20,743

Recognised in the income statement (56,151)

At 30 April 2007 (35,408)

At 1 May 2005 –

Recognised in the income statement 20,743

At 30 April 2006 20,743


69


15. DEFERRED TAX (CONT’D)

Deferred tax assets have not been recognised in respect of the following items:

GROUP2007 2006

RM RM

Unused tax losses 674,681 395,525

Unabsorbed capital allowances – 1,045,803

674,681 1,441,328

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that have a recent history of losses.

The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the subsidiaries in the Group are subject to no substantial changes in shareholdings of the subsidiaries under Section 44(5A) and (5B) and Paragraph 75(A) and 75(B) of Schedule 3 of the Income Tax Act, 1967 respectively.

In addition, the Group has unused reinvestment allowances amounting to RM11,224,887 (2006: RM14,241,139) which can be used to offset against future taxable profits.

16. INVENTORIES

GROUP2007 2006

RM RMCost:

Raw materials 27,449,010 18,213,129

Work–in–progress 1,645,470 2,142,501

Finished goods 4,075,469 3,849,241

Trading goods 7,716,357 5,812,322

Computer parts and accessories 7,027 24,420

40,893,333 30,041,613

The cost of inventories recognised as an expense during the financial year of the Group amounted to RM190,990,150 (2006: RM165,508,720).


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17. TRADE AND OTHER RECEIVABLES

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMCurrent

Trade receivables

Due from subsidiaries – – 4,955,234 4,895,347

Trade receivables 50,925,691 43,844,621 – –

Provision for doubtful debts (2,348,006) (2,453,134) – –

Trade receivables, net 48,577,685 41,391,487 4,955,234 4,895,347

Other receivables

Dividend receivable from a subsidiary – – – 4,000,000

Advances to subsidiaries – – 190,485 908,955

Deposits for purchase of property, plant and equipment and raw materials 2,670,973 589,986 – –

Sundry deposits and prepayments 749,910 1,457,905 30,714 –

Sundry receivables 932,722 950,800 43,388 33,659

Staff advances 114,706 213,444 4,618 3,560

4,468,311 3,212,135 269,205 4,946,174

Provision for doubtful debts (311,845) (306,094) – –

Other receivables, net 4,156,466 2,906,041 269,205 4,946,174

52,734,151 44,297,528 5,224,439 9,841,521

(a) Credit risk

The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading terms with its customers are on cash and credit. The Group’s normal trade credit terms range from 30 to 180 days (2006: 30 to 180 days). Other credit terms are assessed and approved on a case-by-case basis. The Group seeks to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade receivables are non interest bearing.

(b) Amount due from related parties

The amount due from subsidiaries included under the trade receivables comprises management fee which are unsecured, interest-free and have no fixed terms of repayment.

The dividend receivable from a subsidiary is the dividend receivable from Nibong Tebal Enterprise Sendirian Berhad.

The advances to subsidiaries are unsecured, interest-free and have no fixed terms of repayment.

Further details on related party transactions are disclosed in Note 29. Other information on financial risks of the receivables are disclosed in Note 30.


71


18. SHARE CAPITAL

Number of Ordinary Shares of RM0.10 Each Amount

2007 2006 2007 2006RM RM

Authorised 2,500,000,000 2,500,000,000 250,000,000 250,000,000

Issued and fully paid 624,000,000 624,000,000 62,400,000 62,400,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

19. OTHER RESERVES

Foreign Asset Currency

Revaluation Translation Note Reserve Reserve Total

RM RM RMGROUP

At 1 May 2005 7,863,232 – 7,863,232

Realisation of revaluation reserve 1,169 – 1,169

At 30 April 2006 7,864,401 – 7,864,401

At 1 May 2006 7,864,401 – 7,864,401

Revaluation increase of land and buildings 12,438,534 – 12,438,534

Reversal of deferred tax on Real Property Gains Tax 933,170 – 933,170

Foreign currency translation – 36,749 36,749

At 30 April 2007 21,236,105 36,749 21,272,854

COMPANYAt 1 May 2005As previously stated 24,972,543 – 24,972,543

Effects of adopting FRS 127 2.3(g) (24,972,543) – (24,972,543)

At 1 May 2005 (restated) – – –

At 30 April 2006/ 30 April 2007 – – –


72

19. OTHER RESERVES (CONT’D)

The nature and purpose of each category of reserve are as follows:

(a) Asset revaluation reserve

The asset revaluation reserve is used to record increases in the fair value of freehold and leasehold land and building and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in equity.

(b) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

20. RETAINED EARNINGS

The Company has, pending agreement with the tax authorities, tax exempt profit of approximately RM7,413,000 (2006: RM5,841,000) available for distribution as at 30 April 2007.

The Company also has, pending agreement with the tax authorities, sufficient tax credit under Section 108 of the Income Tax Act, 1967 to frank by way of non tax exempt dividend approximately RM4,931,000 (2006: RM4,135,000) as at 30 April 2007.

21. BORROWINGS

GROUP2007 2006

RM RMShort Term Borrowings

Secured:

Bankers’ acceptances 16,126,000 37,250,000

Export credit refinancing 13,092,000 17,107,000

Term loans 5,102,976 4,952,701

34,320,976 59,309,701

Long Term Borrowings

Secured:

Term loans 16,795,955 1,643,643

Total Borrowings

Bankers’ acceptances 16,126,000 37,250,000

Export credit refinancing 13,092,000 17,107,000

Term loans 21,898,931 6,596,344

51,116,931 60,953,344



73

21. BORROWINGS (CONT’D)

The bank borrowings, excluding term loans, are secured by the following:

• Corporate guarantee from the Company for RM109,150,000 (2006: RM110,850,000); and • Negative pledge over the assets of a subsidiary.

The term loans are secured by the following:

• Corporate guarantee from the Company for RM26,700,000 (2006: RM15,500,00); and • Negative pledge over the assets of a subsidiary.

Other information on financial risks of borrowings are disclosed in Note 30.

22. RETIREMENT BENEFIT OBLIGATIONS

A subsidiary operates an unfunded defined benefit plan for its eligible employees, as provided under the agreement between the subsidiary and the Paper And Paper Products Manufacturing Employees Union. Under the plan, employees with a minimum period of service of 5 years are entitled to retirement benefits calculated at 4% of final salary on attainment of the retirement age of 55.

The amount recognised in the balance sheet represents the present value of the unfunded defined benefit obligations, analysed as follows:

GROUP2007 2006

RM RM

Current 51,339 22,485

Non–current 614,857 605,927

666,196 628,412

The amounts recognised in the income statement are as follows:

GROUP2007 2006

RM RM

Current service cost 78,180 65,028

Interest cost 47,824 39,113

Total, included in employee benefits expense (Note 5) 126,004 104,141

Movements in the net liability in the current year were as follows:

GROUP2007 2006

RM RM

At 1 May 628,412 557,303

Amounts recognised in the income statement (Note 5) 126,004 104,141

Contributions paid (88,220) (33,032)

At 30 April 666,196 628,412



74


22. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

Principal actuarial assumptions used:

GROUP2007 2006

% %

Discount rate 7.00 7.00

Expected rate of salary increases 7.00 7.00

23. NEGATIVE GOODWILL

GROUPNote 2007 2006

RM RMAt 1 May

Reserve on consolidation 264,239 264,239

Accumulated amortisation (158,544) (158,544)

105,695 105,695Effect of adopting FRS 3 2.3 (a) (ii) (105,695) –

At 30 April – 105,695

At 1 May

Goodwill on consolidation 11,553 14,443

Accumulated amortisation – (2,890)

11,553 11,553

Goodwill written off (11,553) –

At 30 April – 94,142

24. TRADE AND OTHER PAYABLES

GROUP COMPANY2007 2006 2007 2006

RM RM RM RMCurrent

Trade payables 14,427,209 13,167,005 – –

Other payables

Due to directors 251,892 700,504 237,235 135,708

Due to subsidiaries – – 2,244,657 9,601,391

Accrual for payroll related expenses 6,629,234 5,481,335 1,410,011 1,148,776

Indirect taxes and other statutory payables 2,767,363 2,509,651 37,275 39,475

Accruals of expenses 2,942,657 2,517,145 85,050 73,991

Other payables 6,572,996 5,329,986 – –

19,164,142 16,538,621 4,014,228 10,999,341

33,591,351 29,705,626 4,014,228 10,999,341


75


24. TRADE AND OTHER PAYABLES (CONT’D)

(a) Trade payables

The trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90 days (2006: 30 to 90 days).

(b) Other payables The amounts due to directors represent advances from the directors of the Company and subsidiaries, of RM251,892

(2006: RM161,810), dividend payable to directors of a subsidiary of nil (2006: RM168,000) and bonus payable to directors of a subsidiary of nil (2006: RM370,694). The amounts due are unsecured, interest free and repayable upon demand.

Further details on related party transactions are disclosed in Note 29.

Other information on financial risks of other payables are disclosed in Note 30.

(c) Amount due to subsidiaries

Amount due to subsidiaries are mainly advances which are interest free, unsecured and are repayable on demand.

25. DIVIDENDS

Amount Net dividend per share2007 2006 2007 2006

RM RM Sen SenIn respect of the financial year ended

30 April 2007:

Interim tax–exempt dividend of 14.5%

paid on 25 May 2007 9,048,000 – 1.45 –

In respect of the financial year ended

30 April 2006:

Final tax–exempt dividend of 11.5%

paid on 19 October 2006 7,176,000 – 1.15 –

Interim dividend of 16% less

income tax of 28% payable on

25 May 2006 – 7,188,481 – 1.15

In respect of the financial year ended

30 April 2005:

Final tax–exempt dividend of approximately 19.23%, paid on 14 October 2005 – 12,000,000 – 1.92

16,224,000 19,188,481 2.60 3.07


76

25. DIVIDENDS (CONT’D)

At the forthcoming Annual General Meeting, a final dividend of 26.5% less income tax of 27% amounting to RM12,071,280 in respect of the financial year ended 30 April 2007, on 624,000,000 ordinary shares of RM0.10 each (1.93 sen per share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders’ equity as an appropriation of retained profits in the financial year ending 30 April 2008.

26. OPERATING LEASE ARRANGEMENTS

The Group has entered into non-cancellable operating lease agreements for the use of land, buildings and certain plant and machineries. These leases have an average life of between 3 and 5 years with no renewal or purchase option included in the contracts. Certain contracts include escalation clauses or contingent rental arrangements computed based on sales achieved while others include fixed rentals for an average of 3 years. There are no restrictions placed upon the Group by entering into these leases.

The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the balance sheet date but not recognised as liabilities and the total of future aggregate minimum sublease receipts expected to be received under non-cancellable subleases, are as follows:

GROUP2007 2006

RM RMOperating lease commitments payable:

Not later than 1 year 223,473 405,751

Later than 1 year and not later than 5 years 46,833 166,824

270,306 572,575

27. CAPITAL COMMITMENTS

GROUP2007 2006

RM RMCapital expenditure:

Approved and contracted for:

Land and buildings 197,153 981,484

Plant and machinery 3,953,502 2,746,340

Spare parts – 753,622

4,150,655 4,481,446

28. CONTINGENT LIABILITIES (UNSECURED)

COMPANY2007 2006

RM RMCorporate guarantees given to banks as securities for credit facilities granted to a

subsidiary 51,116,931 60,953,344



77


29. SIGNIFICANT RELATED PARTY TRANSACTIONS

COMPANY2007 2006

RM RM

Management fee from subsidiaries 4,955,234 4,774,196

Dividend income from subsidiaries 17,000,000 23,830,925

The directors are of the opinion that all 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 those obtainable in transactions with unrelated parties.

30. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objective 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 interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. The Board reviews and agrees on policies for managing each of these risks and they are summarised below. The Group did not trade in derivative financial instruments during the financial year.

(b) Interest Rate Risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flow are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers.

The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.


78

30. FINANCIAL INSTRUMENTS (CONT’D)

(b) Interest Rate Risk (cont’d)

The following tables set out the carrying amounts, the weighted average effective interest rates (“WAEIR”) as at the balance sheet date and the remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

Note WAEIRWithin 1

Year1 – 2

Years2 – 3

Years3 – 4

Years4 – 5

Years

More than 5 Years Total

% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000At 30 April 2007

GROUP

Fixed rateTerm loans 21 5.42 5,103 4,461 3,989 4,099 4,195 52 21,899

Floating rateBankers’

acceptances 21 3.93 16,126 – – – – – 16,126

Export credit refinancing 21 3.90 13,092 – – – – – 13,092

Note WAEIRWithin 1

Year1 – 2

Years2 – 3

Years3 – 4

Years4 – 5

Years Total% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 30 April 2006

GROUP

Fixed rateTerm loans 21 6.00 4,952 1,171 473 – – 6,596

Floating rateBankers’ acceptances 21 3.68 37,250 – – – – 37,250

Export credit refinancing 21 3.10 17,107 – – – – 17,107

Interest on financial instruments subject to floating interest rates is repriced annually. Interest on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the Group and the Company that are not included in the above tables are not subject to interest rate risks.



79


(c) Foreign Currency Risk

The Group is exposed to transactional currency risk primarily through sales and purchases that are denominated in a currency other than the functional currency of the operations to which they relate. The currencies giving rise to this risk are primarily United States Dollars, Singapore Dollar, Japanese Yen and Euro. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

At 30 April 2007:

GroupNet Financial Assets/(Financial Liabilities)

Held in Non–Functional Currency

Functional Currency

United States Dollar

SingaporeDollar

Euro Japanese Yen Total

RM RM RM RM RM

Trade ReceivablesRinggit Malaysia 2,335,185 – – – 2,335,185

Cash and Bank Balances

Ringgit Malaysia 741,021 21,505 – – 762,526Singapore Dollar 448,307 – – – 448,307

1,189,328 21,505 – – 1,210,833

Trade PayablesRinggit Malaysia – 506,186 – – 506,186

Other PayablesRinggit Malaysia 335,104 117,010 156,065 8,959 617,138



80


(c) Foreign Currency Risk

At 30 April 2006:

GroupNet Financial Assets/(Financial Liabilities)

Held in Non–Functional Currency

Functional Currency

United States Dollar

SingaporeDollar

Euro

Australian Dollar

ThaiBaht Total

RM RM RM RM RM RM

Trade ReceivablesRinggit Malaysia 4,281,471 – – 843 121,375 4,403,689

Cash and Bank BalancesRinggit Malaysia 670,361 22,996 – – – 693,357

Singapore Dollar 109,650 – – – – 109,650

780,011 22,996 – – – 803,007

Trade PayablesRinggit Malaysia – 574,401 – – – 574,401

Other PayablesRinggit Malaysia 221,138 128,918 131,746 – – 481,802

The outstanding forward foreign exchange contracts of a subsidiary are as follows:

Hedged ItemsCurrency to be

received/settled#Amount in

foreign currencyRM

equivalentAverage forward

contract rateFair value

RM

At 30 April 2007:Trade receivables Singapore Dollar 4,000,000 9,107,235 2.2768 8,980,800

At 30 April 2006:Trade receivables Singapore Dollar 3,580,000 8,172,204 2.2827 8,176,720

Trade receivables United States Dollar 128,000 465,920 3.6400 463,360

Trade payables United States Dollar # 50,000 184,440 3.6888 181,500

Other payables Euro # 58,302 261,572 4.4865 267,373

Other payables Great Britain Pound # 53,925 349,921 6.4890 357,524

The maturity dates for the forward foreign exchange contracts are within one year.



81



(d) Liquidity Risk The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that

refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

(e) Credit Risk

The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivables balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. For transactions that are not denominated in the functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval of the Head of Credit Control. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, marketable securities and non-current investments, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

(f) Fair Values

The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance sheet date approximated their fair values except for the followings:

GROUP COMPANY

NoteCarryingAmount

Fair Value

CarryingAmount

Fair Value

RM RM RM RMAt 30 April 2007

Fixed rate term loans 21 16,795,955 14,168,864 – –Forward foreign exchange

contracts:

Receivables 30(c) 9,107,235 8,980,800 – –

At 30 April 2006

Fixed rate term loans 21 1,643,643 1,534,265 – –

Forward foreign exchange contracts:

Receivables 30(c) 8,638,124 8,640,080 – –

Payables 30(c) 795,933 806,397 – –


82


(f) Fair Values (cont’d)

The methods and assumptions used by management to determine fair values of financial instruments other than those whose carrying amounts reasonably approximate their fair values are as follows:

i. Borrowings

Fair value has been determined using discounted estimated cash flows. The discount rates used are the current market incremental lending rates for similar types of lending, borrowing and leasing arrangements.

ii. Forward foreign exchange contracts The fair value of a forward foreign exchange contract is the amount that would be payable or receivable on

termination of the outstanding position arising and is determined by reference to the difference between the contracted rate and forward exchange rate as at the balance sheet date applied to a contract of similar quantum and maturity profile.

31. SEGMENTAL INFORMATION

(a) Business Segments:

The Group is organised into two major business segments:

i. Manufacturing- manufacturing of paper products such as toilet rolls, tissues, serviette and personal care products such as sanitary products.

ii. Trading- trading of paper, cotton, diapers and sanitary products. The directors are of the opinion that all inter-segment 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 those obtainable in transactions with unrelated parties.

Manufacturing Trading Others Amalgamation Eliminations Consolidated30 April 2007 RM RM RM RM RM RM

REVENUE AND EXPENSES

RevenueSegment revenue

External sales 35,124,599 235,605,469 – 270,730,068 – 270,730,068Inter–segment sales 189,028,739 27,144,617 22,509,369 238,682,725 (238,682,725) –

Total revenue 224,153,338 262,750,086 22,509,369 509,412,793 (238,682,725) 270,730,068

ResultsSegment results 21,399,076 18,943,582 (51,529) 40,291,129 – 40,291,129Unallocated results –

Operating profit 40,291,129Finance costs (2,179,195)

Profit before tax 38,111,934Income tax expense (5,870,978)

Profit for the year 32,240,956



83

31. SEGMENTAL INFORMATION (CONT’D)

(a) Business Segments: (cont’d)


ASSETS ANDLIABILITIES

Segment assets 216,541,287 66,433,975 735,164 283,710,426 – 283,710,426Unallocated assets:

Tax assets 534,974Deferred tax assets 547,333

Consolidated total assets 284,792,733

Segment liabilities 26,433,077 5,919,014 10,953,456 43,305,547 – 43,305,547Unallocated liabilities:

Borrowings 51,116,931Tax liabilities 18,374,516

Consolidated total liabilities 112,796,994

Capital expenditure 12,867,908 1,533,862 90,176 14,491,946 – 14,491,946Depreciation 16,182,246 894,730 84,518 17,161,494 – 17,161,494Goodwill written off – – 11,553 11,553 – 11,553Impairment losses – 17,817 – 17,817 – 17,817Amortisation of prepaid

land lease payments 19,020 – – 19,020 – 19,020Non–cash expenses other

than depreciation, goodwill written off and impairment losses 384,608 694,387 – 1,078,995 – 1,078,995



84


(a) Business Segments: (cont’d)


REVENUE AND EXPENSES

RevenueSegment revenue

External sales 29,200,492 207,861,459 – 237,061,951 – 237,061,951

Inter–segment sales 167,671,455 21,372,520 29,081,051 218,125,026 (218,125,026) –

Total revenue 196,871,947 229,233,979 29,081,051 455,186,977 (218,125,026) 237,061,951

ResultsSegment results 21,596,297 6,504,057 (28,700) 28,071,654 – 28,071,654

Unallocated results –

Operating profit 28,071,654

Finance costs (2,402,359)

Profit before tax 25,669,295

Income tax expense (4,815,265)

Profit for the year 20,854,030

ASSETS ANDLIABILITIES

Segment assets 193,902,130 57,578,784 698,291 252,179,205 – 252,179,205

Unallocated assets:

Tax assets 4,732,988

Deferred tax assets 362,331

Consolidated total assets 257,274,524

Segment liabilities 22,814,767 6,055,757 8,651,995 37,522,519 – 37,522,519

Unallocated liabilities:

Borrowings 60,953,344

Tax liabilities 16,239,884

Consolidated total liabilities 114,715,747

Capital expenditure 12,725,736 2,531,691 167,690 15,425,117 – 15,425,117

Depreciation 16,521,942 1,440,350 133,675 18,095,967 – 18,095,967

Amortisation of goodwill – – 1,445 1,445 – 1,445

Amortisation of negative goodwill (26,424) – – (26,424) – (26,424)

Impairment losses – – – – – –

Amortisation of prepaid land lease payments 19,020 – – 19,020 – 19,020

Non–cash expenses other than depreciation, goodwill written off and impairment losses 227,437 642,516 – 869,953 – 869,953



85


(b) Geographical Segments:

The Group’s operations are mainly located in Malaysia, except those of the subsidiaries in Singapore and Thailand. The customers for the manufacturing businesses are located worldwide, namely in Singapore and other countries such as Hong Kong, Brunei, Philippines, Africa, Australia and New Zealand.

Total revenue from external customers Segment assets Capital expenditure

2007 2006 2007 2006 2007 2006RM RM RM RM RM RM

Malaysia 187,874,930 164,772,517 269,781,220 239,706,288 14,416,927 15,276,889

Singapore 49,941,835 46,183,831 11,220,097 10,427,709 31,113 143,555

Others * 32,913,303 26,105,603 2,709,109 2,045,208 43,906 4,673

Consolidated 270,730,068 237,061,951 283,710,426 252,179,205 14,491,946 15,425,117

* Others mainly refer to countries such as Thailand, Hong Kong, Brunei, Philippines, Africa, Australia and New Zealand.

32. COMPARATIVES

The following comparative figures have been reclassified to conform with current year’s presentation:

As Reclassified Adjusted

AsPreviously

StatedGROUP

Income statementsOther operating income 325,445 (741,512) 1,066,957

Depreciation (18,095,967) 19,020 (18,114,987)

Other operating expenses (11,912,126) 434,135 (12,346,261)

Finance costs (2,402,359) 288,357 (2,690,716)



86

LIST OF PROPERTIES

Location/Address

Description of property/Existing use

Land/Built–up Area

(Sq. m.)

ApproximateAge of

Building(Year) Tenure

RegisteredOwner

NBV 30.4.2007

RMDate of

Valuation

1 Lot 1000, Grant No. 35375 and Lot 999, G.M. 514,Mukim 8, Seberang Perai Selatan, Pulau Pinang.

Paper Mill and tissuemanufacturing factory

The factory is located at No. 886, Jalan Bandar Baru, Sungai Kecil, 14300 Nibong Tebal

69,082/28,617

Between9 to 28 years

Freehold industrial

land

NTPM 22,537,000 30.4.2007

2 Lot 642, Grant No.2263, Mukim 8, Seberang Perai Selatan, Pulau Pinang.

A parcel of agricultural land

52,100 – Freehold agricultural

land

NTPM 1,000,000 30.4.2007

3 Lot 109, G.M. 372, I.R.608, Lot 609,G.M. 594, I.R.610Lot 631, G.M. 107, I.R.801, I.R.804, Lot 808, G.M. 598, Lot 810, G.M. 285, Lot 811,G.M. 286, Lot 957, G.M. 501, Lot 958, G.M. 502 & Lot 959 G.M. 503,Mukim 8, Seberang Perai Selatan,Pulau Pinang.

Vacant industrial land except for the followings:

Lot 608 -boiler house, mechanical workshop, wastewater treatment plant,waste wood storage

Lot 631 is utilised as open storage yard for wastepaper

Lot 109, Lot 609, Lot 811, Lot 804 and Lot 808 is utilised as open storage yard for wastepaper

Lot 608 & Lot 609 is utilised as sanitary napkin manufacturing factory, finished goods building,fiber flow drum building andwaste paper building

191,170/31,437

Between 4 to 7

Between 4 to 5

Freehold industrial

land

NTPM 29,482,000 30.4.2007


87

LIST OF PROPERTIES (CONT’D)

Location/Address

Description of property/Existing use

Land/Built–up Area

(Sq. m.)

ApproximateAge of

Building(Year) Tenure

RegisteredOwner

NBV 30.4.2007

RMDate of

Valuation

4 Lot 5787, Pajakan NegeriNo 41687, Mukim of Parit Buntar, District of Krian, Perak.

A factory complex with a gross built-up area of 3,100 sq.m located at P.t. No 139, kawasan PerusahaanParit Buntar, whichpresently is vacant.

4,165/3,100

Between 9 to 11

Leaseholdindustrial

land for a term

of 60 years expiring

on 22.10.2047

NTPM 1,815,163 30.4.2007

5 Lot 442, Grant No.32492 & Lot 443, G.M. 478, Mukim 7, and Lot 794, G.M. 277 Mukim 8, Seberang Perai Selatan, Pulau Pinang.

Lot 442 & 443- vehicle workshop building

Lot 794 - vacantagricultural land

75,919/279

5 Freeholdindustrial

land except for

Lot 794which is

a freeholdagricultural

land

NTPM 4,640,000 30.4.2007

6 H.S.(D) 224308 PTD No. 41665 Senai-Kulai, Johor Bahru, Johor.

An office and warehouse complex

4,390/1,593

4 Freeholdland

NTPM 1,600,000 30.4.2007

7 No 5, Jalan Tiang U8/93, Bukit Jelutong Industrial Park, Shah Alam, Selangor.

An office and warehouse complex

10,000/5,950

2 Freeholdindustrial

land

NTPM 9,640,000 30.4.2007

8 P.T No 385, H.S (D) 2279, Mukim 13, Seberang Perai Tengah, Pulau Pinang.

Vacant industrial land 4,876 – Leaseholdindustrial land for aterm of 60 yearsexpiring

on5.7.2060

Jia In 556,537 19.9.2001

9 Lot No 784, G.M. 267, Lot No 786, G.M. 269,Lot 787, G.M. 270, Lot No 788, G.M. 271, Lot No 789, G.M. 273, Lot No 790, G.M. 274, Lot No 799, G.M. 279, Lot No 800, G.M. 280,Mukim 8, Seberang Perai Selatan, Pulau Pinang.

Vacant agriculture land

96,401 – Freeholdland

NTPM 1,930,000 30.4.2007

73,200,700


88

ANALYSIS OF SHAREHOLDINGSAS AT 31 JULY 2007

SHARE CAPITAL

Authorised Capital : RM250,000,000.00 Issued and Fully Paid-Up Capital : RM62,400,000.00 consisting 624,000,000 ordinary shares of RM0.10 each Class of Equity Securities : Ordinary shares of RM0.10 each (“Shares”)Voting Rights : One vote per Share

DISTRIBUTION SCHEDULE OF SHAREHOLDERS

No. of Holders Holdings Total Shareholdings %

4 Less than 100 173 0.00

458 100 - 1,000 430,780 0.07

1,919 1,001 - 10,000 10,884,400 1.74

865 10,001 to 100,000 28,952,147 4.64

179 100,001 to less than 5% of issued shares 268,645,642 43.05

4 5% and above of issued shares 315,086,858 50.50

3,429 624,000,000 100.00

30 LARGEST SECURITIES ACCOUNT HOLDERS

NO. Name No. of Shares held %

1 Lee See Jin 182,534,194 29.25

2 Lee Chong Choon 69,193,065 11.09

3 HDM Nominees (Tempatan) Sdn Bhd 32,159,599 5.15

[Teoh Teik Lin]

4 Lembaga Tabung Haji 31,200,000 5.00


[Kota Beras Sdn Bhd]


[Teoh Teik Kee]

7 B. T. Teoh Holdings Sdn. Bhd. 21,092,729 3.38


[HDM Capital Sdn Bhd For Khatulistiwa Corporate Services Sdn Bhd]

9 Tan Keat Chew 12,480,022 2.00

10 Ooi Kim Tean @ Ng Ah Ba 11,020,654 1.77

11 UOBM Nominees (Tempatan) Sdn Bhd 10,409,500 1.67

[Pledged Securities Account For Dato’ Teoh Boon Beng @ Teoh Eng Kuan ]

12 ECM Libra Avenue Nominees (Asing) Sdn.bhd. 8,800,000 1.41

[DBS Vickers (Hong Kong) Limited For Perinvest Dividend Equity Fund Ltd]

13 Wangsa Danau Sdn Bhd 8,394,607 1.35

14 CIMB Nominees (Tempatan) Sdn Bhd 6,657,119 1.07

[Lee See Jin]

15 Ng Inn Beo 6,440,284 1.03

16 Teoh Boon Teong 5,298,000 0.85

17 Ginny Teoh Chooi Sean 5,050,000 0.81


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ANALYSIS OF SHAREHOLDINGS (CONT’D)AS AT 31 JULY 2007

30 LARGEST SECURITIES ACCOUNT HOLDERS (CONT’D)

NO. Name No. of Shares held %18 United Overseas Nominees (Tempatan) Sdn Bhd 5,000,000 0.80

[Pledged Securities Account For Teoh Teik Lin ]

19 ECM Libra Avenue Nominees (Asing) Sdn Bhd 4,700,000 0.75

[DBS Vickers (Hong Kong) Limited For Casa Grande De Cartagena S.l.]

20 Mayban Securities Nominees (Tempatan) Sdn Bhd 4,128,000 0.66

[Pledged Securities Account For Teoh Teik Toe ]

21 Tan Keat Chew 4,042,000 0.65

22 Ng Cheng Kee 3,737,822 0.60

23 Teoh Teik Wai 3,691,600 0.59

24 Permodalan Nasional Berhad 3,649,000 0.58

25 Teoh Peng Heong & Sons Sdn. Bhd. 3,430,000 0.55

26 Ooi Yan Hua 3,405,525 0.55

27 CIMSEC Nominees (Tempatan) Sdn Bhd 3,000,000 0.48

[CIMB For Lee Chong Choon ]

28 Ng Lay Kwan 2,272,936 0.36

29 Ng Lay Sin 2,236,936 0.36

30 Ng Lay Tuan 2,020,936 0.32

SUBSTANTIAL SHAREHOLDERS(excluding those who are bare trustee pursuant to Section 69 of the Companies Act, 1965)

No. of Shares beneficially held by the Substantial Shareholders

Name of Substantial Shareholders Direct % Note Indirect % Note

Lee See Jin 182,534,194 29.25 1 3,405,525 0.55 5

Lee Chong Choon 72,193,065 11.57 2 – –

Teoh Teik Lin 37,159,599 5.96 3 – –

Dato’ Teoh Boon Beng @ Teoh Eng Kuan 10,409,500 1.67 4 27,581,068 4.42 6

Lembaga Tabung Haji 31,200,000 5.00 – –

Notes :

1. By virtue of his shareholdings of 182,534,194 shares in his own name only which has excluded 6,657,119 shares held through CIMB Nominees (Tempatan) Sdn Bhd, whereby he has given up his voting rights attached to these shares.

2. By virtue of his shareholdings of 3,000,000 shares held through Cimsec Nominees (Tempatan) Sdn Bhd and 69,193,065 shares held under his own name.

3. By virtue of his shareholdings of 32,159,599 shares held through HDM Nominees (Tempatan) Sdn Bhd and 5,000,000 shares held through United Overseas Nominees (Tempatan) Sdn Bhd.

4. Held through UOBM Nominees (Tempatan) Sdn Bhd.5. Deemed interested by virtue of Madam Ooi Yan Hua, his spouse’s interest in NTHB.6. Deemed interested by virtue of his shareholdings in Kota Beras Sdn Bhd and Teoh Peng Heong & Sons Sdn Bhd.


90

DIRECTORS’ SHAREHOLDINGS (DIRECT & INDIRECT)

No. of Shares beneficially held by the Directors

Name of Directors Direct % Note Indirect % Notes

Dato’ Teoh Boon Beng @ Teoh Eng Kuan 10,409,500 1.67 1 27,581,068 4.42 5

Lee See Jin 182,534,194 29.25 2 3,405,525 0.55 6

Lee Chong Choon 72,193,065 11.57 3 – –

Teoh Teik Toe 4,128,000 0.66 4 – –

Lim Han Nge – – – –

Tan Hock Soon – – – –

Notes :

1. Held through UOBM Nominees (Tempatan) Sdn Bhd.2. By virtue of his shareholdings of 182,534,194 shares in his own name only which has excluded 6,657,119 shares held through

CIMB Nominees (Tempatan) Sdn Bhd, whereby he has given up his voting rights attached to these shares.3. By virtue of his shareholdings of 3,000,000 shares held through Cimsec Nominees (Tempatan) Sdn Bhd and 69,193,065 shares

held under his own name.4. Held through Mayban Securities Nominees (Tempatan) Sdn Bhd.5. Deemed interested by virtue of his shareholdings in Kota Beras Sdn Bhd and Teoh Peng Heong & Sons Sdn Bhd.6. Deemed interested by virtue of Madam Ooi Yan Hua, his spouse’s interest in NTHB.

INTERESTS IN THE RELATED CORPORATION

Mr. Lee See Jin, by virtue of his interests in shares in the Company, is deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.

Save as disclosed above, none of the other Directors in office have any interest in shares in the Company or its related corporations.

ANALYSIS OF SHAREHOLDINGSAS AT 31 JULY 2007

PROXY FORM No. of shares held

I / We ____________________________________________ NRIC/Passport No. _______________________________________, (BLOCK LETTERS)

of ______________________________________________________________________________________________________,(full address)

being a member of NTPM HOLDINGS BERHAD (“the Company”), do hereby appoint _______________________________

________________________________________________ (NRIC/Passport No. _______________________________________)

of ______________________________________________________________________________________________________,

or failing him, _____________________________________ (NRIC/Passport No. ______________________________________)

of ______________________________________________________________________________________________________,or the Chairman of the meeting as my / our proxy to vote in my / our name(s) on my / our behalf at the Eleventh (11th) Annual General Meeting of the Company to be held at Bukit Jawi Golf Resort, 691, Main Road, Sungai Bakap, 14200 Seberang Perai Selatan, Pulau Pinang on Friday, 14 September 2007 at 9.30 a.m. and at any adjournment thereof.

My / Our Proxy is to vote as indicated below:

AGENDA:1. To receive the Audited Financial Statements for the financial year ended 30 April 2007 together with the Reports of the

Directors and Auditors thereon.

RESOLUTIONS FOR AGAINSTOrdinary Business:

2. Re-appointment of Y.Bhg. Dato’ Teoh Boon Beng @ Teoh Eng Kuan as Director.

3. i) Re-election of Mr. Lee See Jin as Director.

ii) Re-election of Mr. Lee Chong Choon as Director.

4. Approval for the payment of final dividend.

5. Approval for the payment of directors’ fees.

6. Re-appointment of Messrs. Ernst & Young as Auditors.

Special Business:7(i). Ordinary Resolution - Authority to issue shares pursuant to Section 132D of the

Companies Act, 1965

7(ii). Special Resolution - Proposed Amendments to the Articles of Association

(Please indicate with an ‘X’ in the space provided how you wish your vote to be cast. In the absence of specific directions, your proxy will vote or abstain as he /she thinks fit)

Signed this _______ day of ________________________, 2007. __________________________________ Signature of Shareholder / Common Seal

Notes:1. A member is entitled to appoint up to two (2) proxies to attend and vote in his place. A proxy may but need not be a

member of the Company and the provisions of Section 149(1)(a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company. If a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

2. Where a member of the Company is an authorised nominee as defined under the Securities 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 of his attorney duly authorised in writing. In the case where a member is a corporation, the proxy form must be executed under its common seal or under the hand of an officer or attorney duly authorised.

4. All proxy forms must be duly executed and deposited at the registered office of the Company at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 Penang at least 48 hours before the time for holding the meeting or any adjournment thereof.

5. Any alterations in this form must be initialed.

To : Company Secretary NTPM Holdings Berhad (384662-U)

Suite 18.05, MWE Plaza No. 8, Lebuh Farquhar, 10200 Pulau Pinang, Malaysia.

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Stamp

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NOTICE OF ANNUAL GENERAL MEETING HOLDINGS BERHAD (384662-U) 4 BOARD OF DIRECTORS Dato’ Teoh Boon Beng @ Teoh Eng Kuan Non-Independent Non-Executive Chairman Lee See Jin Managing

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