2007 - National University of Singaporelibapps2.nus.edu.sg/nus_hl/halifax2007.pdf · 2007 Annual Report Halifax Capital BerHad (11208-M) ... Jalan Tun Tan Cheng Lock, 50000 Kuala

2007Annual Report

Halifax Capital BerHad (11208-M)

Head Office : Suite 2A-11-2, Level 11, Block 2APlaza Sentral, Jalan Stesen Sentral 5Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia.Tel: 03-2274 8081 Fax: 03-2274 8332

Registered Office : 8th Floor, Menara ZeconNo. 92, Lot 393, Section 5 KTLDJalan Satok, 93400 Kuching, Sarawak.Tel: 082-275555 Fax: 082-275500

02NOTICE OF ANNUAL GENERAL MEETING

04STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

05CORPORATE INFORMATION

06CORPORATE STRUCTURE

07DIRECTORS’ PROFILE

11CHAIRMAN’S STATEMENT

13AUDIT COMMITTEE REPORT

16STATEMENT ON CORPORATE GOVERNANCE

20STATEMENT ON INTERNAL CONTROL

21STATEMENT OF DIRECTORS’ RESPONSIBILITY

22ADDITIONAL COMPLIANCE INFORMATION

23CORPORATE SOCIAL RESPONSIBILITY

24DIRECTORS’ REPORT

27STATEMENT BY DIRECTORS AND STATUTORY DECLARATION

28AUDITORS’ REPORT

29INCOME STATEMENTS

30BALANCE SHEETS

31STATEMENTS OF CHANGES IN EqUITY

32CASH FLOw STATEMENTS

33NOTES TO THE FINANCIAL STATEMENTS

67ANALYSIS OF SHAREHOLDINGS

6830 LARGEST SHAREHOLDERS

69ANALYSIS OF wARRANTHOLDINGS

6930 LARGEST wARRANTHOLDERS

70LIST OF PROPERTIES

FORM OF PROXY

CONTENTS

halifax capital berhad • annual report 200702

NOTICE IS HEREBY GIVEN THAT the Thirty-Sixth Annual General Meeting of Halifax Capital Berhad will be held at Conference Room, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak on Thursday, 26 June 2008 at 11.00 a.m for the following purposes:-

AGENDA

AS ORDINARY BUSINESS:-

1. To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2007 and the Reports of the Directors and Auditors thereon.

2. To approve Directors’ fees for the year ended 31 December 2007. Resolution 1

3. To re-elect the following Directors who retire in accordance with Article 110 of the Company’s Articles of Association.

a) Hj Zainurin bin Hj Ahmadb) Prof. Dato’ Mohd Hamdan bin Hj Adnanc) Dato’ Hj Hamzah bin Hj Ghazalli

Resolution 2 Resolution 3Resolution 4

4. To re-appoint Messrs. Ernst & Young as Auditors and to authorise the Directors to fix their remuneration for the ensuing year.

Resolution 5

AS SPECIAL BUSINESS:-

5. To consider and if thought fit, to pass the following resolution:-

Authority To Issue Shares Pursuant To Section 132D of the Companies Act, 1965

“THAT subject to the provisions of Section 132D of the Companies Act, 1965 and the approval of the relevant authorities, the Directors be and are hereby authorised from time to time to issue and allot ordinary shares in the Company upon such terms and conditions and at such times as may be determined by the Directors to be in the interest of the Company provided always that the aggregate number of shares to be issued pursuant to this resolution shall not exceed ten (10) percent of the issued share capital for the time being of the Company and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 6

6. To transact any other business for which due notice shall have been given.

By order of the Board,HALIFAX CAPITAL BERHAD

Koh Fee Lee (MAICSA 7019845)Leong Oi Wah ( MAICSA 7023802)Joint Company Secretaries

Dated this 3rd day of June, 2008Kuching

notice of

annual general meeting36th

halifax capital berhad • annual report 2007 03

notice of 36th

annual general meeting

Notes:-1. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writ-

ing or if such appointer is a corporation under its Common Seal or under the hand of the attorney. A proxy shall be entitled to vote both on a show of hands and on a poll on any question at any General Meeting.

2. A member shall not be entitled to appoint a person who is not a member as his proxy unless that person is a qualified legal practitioner, an approved company auditor or a person approved by the Companies Commission of Malaysia in a particular case.

3. A member shall not be entitled to appoint more than two proxies to attend and vote at the same meeting. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportions of holdings to be represented by each proxy.

4. The instrument of a proxy and power of attorney (if any) under which it is signed or a notarially certified copy thereof shall be deposited at the Registered Office of the Company, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak not less than forty-eight (48) hours before the time for the holding of the meeting or adjourned meeting as the case may be at which the person named in such instrument proposes to vote.

EXPLANATORY NOTES ON SPECIAL BUSINESS

1. Allotment of Shares Pursuant to Section 132D of the Companies Act, 1965

The Ordinary Resolution no. 6 under Agenda 5, if passed, will give powers to the Directors to issue up to a maximum of ten (10) percent of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This authority will, unless revoked or varied by the Company in a General Meeting, expire at the conclusion of the next Annual General Meeting or the expiration of the period within which the next Annual General Meeting is required by law to be held, whichever is earlier.


1. Directors standing for re-election

The Directors who are standing for re-election at the Thirty-Sixth Annual General Meeting of the Company are as follows:-

a) Hj Zainurin bin Hj Ahmadb) Prof. Dato’ Mohd Hamdan bin Hj Adnanc) Dato’ Hj Hamzah bin Hj Ghazalli

2. Details of Directors standing for re-election

The details of the Directors standing for re-election at the forthcoming Thirty-Sixth Annual General Meeting are set out in the Directors’ Profile appearing on pages 7 to 10 of this Annual Report.

3. Details of attendance of Directors at Board Meetings

There were sixteen (16) Board of Directors’ Meetings held during the financial year ended 31 December 2007. The details of attendance of Directors of the Company at Board Meetings are disclosed in the Statement on Corporate Governance set out in pages 16 to 19 of this Annual Report.

4. Place, Date and Time of the 36th Annual General Meeting

Place : Conference Room, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak

Date : Thursday, 26 June 2008 at 11.00 a.m

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

statement accompanyingnotice of annual general meeting


corporate information

BOARD OF DIRECTORS

Tan Sri Dato’ Othman bin Mohd Rijal- Chairman/ Independent Non-Executive Director

Dato’ Hj Zainal Abidin bin Hj Ahmad- Executive Deputy Chairman

Jamel bin Matin@ Ibrahim- Managing Director Hj Zainurin bin Hj Ahmad- Executive Director

Gajalie bin Sazalie -Executive Director

Prof Dato’ Mohd Hamdan bin Hj Adnan- Independent Non-Executive Director

Dato’ Hj Hamzah bin Hj Ghazalli- Independent Non-Executive Director

Dato’ Tan Eng Guan- Independent Non-Executive Director Zailan bin Mohd Zahid- Independent Non-Executive Director

REGISTERED OFFICE

8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak.Tel: 082-275555 Fax: 082-275500

SHARE REGISTRAR

Symphony Share Registras Sdn BhdLevel 26, Menara Multi-Purpose,Capital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala LumpurTel: 03-2721 2222 Fax: 03-2721 2530

FACTORY

No 5, Jalan Riang 24Taman GembiraOff Jalan Tampoi81200 Johor Bahru, JohorTel: 07-332 2188 Fax: 07-331 1841

JOINT COMPANY SECRETARIES

Leong Oi WahMAICSA No. 7023802

Koh Fee LeeMAICSA No. 7019845

PRINCIPAL BANKERS

RHB Bank BerhadGround Floor, Block AnnexeMenara Tun RazakJalan Raja Laut Sambungan50350 Kuala Lumpur

EON Bank BerhadJalan Tun Tan Cheng Lock Branch9, Jalan Tun Tan Cheng Lock,50000 Kuala Lumpur.

Affin Investment Bank Berhad27th Floor, Menara Boustead69, Jalan Raja Chulan50200 Kuala Lumpur.

STOCK EXCHANGE LISTING

Main Board of Bursa Malaysia Securities Berhad

Stock Code : 4294Stock name : HALIFAX

AUDITORS

Ernst & YoungChartered AccountantsLevel 23A, Menara MileniumJalan Damanlela, Pusat Bandar DamansaraDamansara Heights, 50490 Kuala Lumpur

SOLICITORS

Zaid Ibrahim & CoAzmi & Associates


group structure

100%Setron SALeS & Service

(M) Sdn Bhd

51%hALifAx MArine

ServiceS Sdn Bhd

100%hALifAx cApitAL

internAtionAL Ltd

65%dAruLMAS

MAnufActuring ServiceS Sdn Bhd

80%Setin Sdn Bhd

100%Setron eLectronic induStrieS Sdn Bhd

100%Setron LyngSo (M)

Sdn Bhd

70%Setron MAthewS

Sdn Bhd

100%Setron tiMBer

induStrieS Sdn Bhd

100%AL-MArSA worLdtrAde

Sdn Bhd


Tan Sri Dato’ Othman bin Mohd Rijalindependent non-executive chairman

Tan Sri Dato’ Othman bin Mohd Rijal, a Malaysian, aged 63, was appointed to the Board as Independent Non-Executive Chairman of Halifax Capital Berhad on 7 February 2006. He also serves as a member of the Audit Committee.

He began his career in the civil service in 1967 as an Assistant District Officer in Sepang, Selangor. Tan Sri Dato’ Othman bin Mohd Rijal later held various key positions in the Government Ministries which included as the Secretary General Ministry of Transport. His last position in the civil service before retirement in the year 2000 was as the Secretary General Ministry of Finance in which position he also served as the representative of the Ministry on the Board of MAS, Petronas, Khazanah Nasional Berhad and Bank Negara.

After retiring from the civil service, Tan Sri Dato’ Othman held various positions in the corporate sector which included as the Managing Director of Malaysia Airports Holdings Berhad, Non-Executive Chairman of Deutsche Bank (Malaysia) Bhd, Non-Executive Chairman of Ikram Sdn Bhd, Non-Executive Chairman of Penang Port Sdn Bhd and Chairman of Bank Industri & Teknologi Malaysia Berhad.

Tan Sri Dato’ Othman was on 18 November 2002, appointed by Export-Import Bank Malaysia Berhad as the Chairman, a position which he held until 30 April 2008. At present, he is the Chairman of Kumpulan Ikram Sdn Bhd and a member of the Board of Governors of Kuala Lumpur Infrastructure University College (KLIUC).

Tan Sri Dato’ Othman bin Mohd Rijal holds B.A (Hons) from the University of Malaya, and a M.A. in Public Policy & Administration from University of Wisconsin, Madison, U.S.A.

Tan Sri Dato’ Othman bin Mohd Rijal has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years and does not hold any shares in the Company and its subsidiaries.

Tan Sri Dato’ Othman bin Mohd Rijal attended all the sixteen (16) Board meetings of the Company held during the financial year ended 31 December 2007.

directors’profile

Datuk Hj Zainal Abidin bin Hj Ahmad executive deputy chairman

Datuk Hj Zainal Abidin bin Hj Ahmad, Malaysian, aged 50, was appointed to the Board as Executive Director on 27 September 2005 and has assumed the position of Deputy Chairman since 9 March 2006.

Datuk Hj Zainal presently also holds the position of Group Managing Director/Chief Executive Officer of Zecon Berhad, as well as Managing Director of Sarawak Concrete Industries Berhad. Datuk Hj Zainal started his career by joining the Sarawak Civil Service in 1981 until he move to private sector in 1987 involving in the construction industry and later expanded to property development. Datuk Hj Zainal holds a Master of Arts degree in Management ; a Diploma in Accounting from the University of Kent at Canterbury, England and a Bachelor of Arts from the University Kebangsaan Malaysia.

Datuk Hj Zainal has a direct shareholding of 2,515,200 ordinary shares and indirect shareholding of 16,007,100 ordinary shares in the Company and is the major shareholder of the Company. Datuk Hj Zainal Abidin is the brother to Tuan Hj Zainurin, the Executive Director of Halifax Capital Berhad and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years.

Datuk Hj Zainal attended twelve (12) Board meetings of the Company held during the financial year ended 31 December 2007.


directors’profile

Jamel bin Matin @ Ibrahim Managing director

Encik Jamel bin Matin @ Ibrahim, a Malaysian, aged 55, was appointed as the Managing Director of Halifax Capital Berhad on 9 March 2006.

Encik Jamel started his career as Wellsite Petroleum Engineer of Sarawak Shell Berhad in 1978. He served Sarawak Shell Berhad for about 13 years and subsequently Shell Malaysia Ltd for about 3 years. He then further enhanced his exposure in UK and Nigeria during the period from 1995 to 1999, in petroleum development companies. Prior to joining the Company, he was Executive Director and Director of CMS group of companies.

Encik Jamel obtained his Bachelors Degree in Civil Engineering from Queen Mary College, and University of London, United Kingdom in 1978. He is a full member of the Institution of Engineers Malaysia and a Professional Engineer registered with the Board of Engineers Malaysia. In recognition of his achievements, he was awarded the title PPB (Pingat Perkhidmatan Bakti) by the Sarawak State Government in 2005.

Encik Jamel has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has a direct shareholding of 25,000 ordinary shares in the Company and has had no convictions for offences within the past ten (10) years.

Encik Jamel attended fifteen (15) Board meetings of the Company held in the financial year ended 31 December 2007.

Hj Zainurin Bin Hj Ahmad executive director

Tuan Hj Zainurin Bin Hj Ahmad, a Malaysian, aged 47, was appointed to the Board as Executive Director on 27 September 2005.

Tuan Hj Zainurin holds a Master of Commerce Degree in Business Administration from the University of Canterbury, Christchurch, New Zealand, a BSc. in Business Administration from Indiana Institute of Technology, Indiana, USA, as well as a Diploma in Business Studies from the Universiti Teknologi MARA. His forte is in the field of finance and commercial sectors that he gained from Advance Establishment Berhad (previously known as Advance Finance Berhad) as a General Manager prior to joining Zecon Berhad as Executive Director on 12 June 1998.

Tuan Hj Zainurin is the brother to Datuk Hj Zainal Abidin, the Executive Deputy Chairman and major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years and does not hold any shares in the Company and its subsidiaries.

Tuan Hj Zainurin attended fifteen (15) Board meetings of the Company held in the financial year ended 31 December 2007.


directors’profile

Gajalie bin Sazalieexecutive director

Encik Gajalie Bin Sazalie, a Malaysian, aged 43, was appointed to the Board as Non-Executive Director on 13 October 2005 and subsequently as Executive Director on 9 March 2006. Encik Gajalie also serves as a member of the Audit Committee.

Encik Gajalie has over 18 years experience in accounting and financial management field gained through his services in various companies. He is currently the General Manager at Zecon Engineering Berhad. Prior to joining Zecon Engineering Berhad, he was with Eastbourne Corporation Berhad as Financial Controller and Executive Director. En Gajalie did his Advanced Diploma in Accountancy at Universiti Teknologi MARA and is a member of the Malaysian Institute of Accountants.

Encik Gajalie has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years and does not hold any shares in the Company and its subsidiaries.

Encik Gajalie attended fifteen (15) Board meetings of the Company held in the financial year ended 31st December 2007.

Prof Dato’ Mohd Hamdan bin Hj Adnanindependent non-executive director

Prof Dato’ Mohd Hamdan, a Malaysian, aged 59, was appointed to the Board as Independent Non-Executive Director on 27 September 2005. Prof. Dato’ is also the Chairman of the Audit Committee, a member of the Nomination Committee and the Remuneration Committee.

Prof Dato’ Mohd Hamdan is a professor who is actively involved in various positions in the field of academic, social, professional and administrative services, in government departments; social organizations; universities etc. He was a professor of Faculty of Communication and Media Studies, UiTM; Head of School of Mass Communication, Institute Technology Mara; Head for Public Relations & Advertising Programme, School of Mass Communication, ITM; President of the Selangor and Federal Territory Consumers Association; President of Federation of Malaysian Consumers Association (FOCMA), etc. As the President of FOMCA, he is a vocal spokesperson on consumer issues. He was also a commissioner for the National Human Rights Commission of Malaysia (SUHAKAM) from year 2000 to April 2006. He holds a Master of Science (Public Relations) from Boston University, a Master of Communication (Sociology & Political Science) from University of Washington and a Diploma in Mass Communication from ITM.

Prof Dato’ Mohd Hamdan has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years and does not hold any shares in the Company and its subsidiaries.

Prof Dato’ Mohd Hamdan fifteen (15) Board meetings of the Company held in the financial year ended 31 December 2007.

10 halifax capital berhad • annual report 2007

Zailan bin Mohd Zahidindependent non-executive director

Encik Zailan Mohd Zahid, Malaysian aged 48, was appointed to the Board as an Independent Non-Executive Director of Halifax Capital Berhad on 26 August 2005. He is also the Chairman of the Nomination Committee, member of the Audit Committee and the Remuneration Committee. Encik Zailan graduated with a Bachelor of Science in Civil Engineering from Glasgow University, UK in 1984. He also holds a Diploma in Management from the Malaysian Institute of Management. He started his career as an Engineer with Jabatan Kerja Raya and subsequently Jabatan Bekalan Air Johor till 1995. He pursued his career with Syarikat Air Johor until 2001. Encik Zailan has extensive knowledge in the field of water supply, engineering and construction. Throughout his 21 years career, he has been involved in various disciplines including engineering, project management, construction management, human resources, and general management and has held numerous senior management positions in the companies he has served.

Encik Zailan has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has a direct shareholding of 1,700 ordinary shares in the Company and has had no convictions for offences within the past ten (10) years.

Encik Zailan attended thirteen (13) Board meetings of the Company held in the financial year ended 31 December 2007.

Dato’ Hj Hamzah bin Hj Ghazalliindependant non-executive director

Dato’ Hj Hamzah Bin Hj Ghazalli, a Malaysian, aged 59, was appointed to the Board as Independent Non-Executive Director on 27 September 2005. He also serves the Company as the Chairman of the Remuneration Committee as well as member of the Nomination Committee. Dato’ Hj Hamzah is presently also a director of Putera Capital Berhad. He was an Administrative and Diplomatic Services Officer and had served the Government of Malaysia for more than 32 years. He started his career with the Government of Malaysia in April 1973 and retired in April 2005. Prior to his retirement, he was the State Secretary of Negeri Sembilan. He holds a Master Degree of Arts in International Affair (Management) from University of Ohio, United States and B.A Hons from University of Malaya.

Dato’ Hj Hamzah has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years and does not hold any shares in the Company and its subsidiaries.

Dato’ Hj Hamzah attended thirteen (13) Board meetings of the Company held in the financial year ended 31st December 2007.

Dato’ Tan Eng Guanindependent non-executive director

Dato’ Tan Eng Guan, a Malaysian, aged 63, was appointed to the Board as Independent Non-Executive Director on 7 February 2006. He is also a member of the Audit Committee.

Dato’ Tan graduated in 1971 with B.Econs (Hons.) from the University of Malaya and had served the Government until his retirement. For more than 15 years, he was in the Ministry of Finance handling all matters relating to companies in which the Minister of Finance Incorporated had shareholdings. After his retirement, he served several years in Government companies such as Malaysian Kuwaiti Investments Company and Khazanah Nasional Berhad. He had also served on the Board of Directors of various Government companies.

Dato’ Tan Eng Guan has no family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past ten (10) years and does not hold any shares in the Company and its subsidiaries

Dato’ Tan attended fifteen (15) Board meetings of the Company held in the financial year ended 31st December 2007.

directors’profile

11halifax capital berhad • annual report 2007

FINANCIAL HIGHLIGHT

The Group revenue for the 12 months ended 31 December 2007 was RM14.0 million, an increase from RM11.6 million which was recorded in previous financial year. The Group registered a higher net loss of RM3.8 million for the year as compared to RM2.4 million in year 2006, mainly due to non-recurrent advisors’ fees for the preparation of Regularisation Plan.

Current assembly business is still the main contributor to the Group income and it showed slight improvement in turnover. However, the gross margin of the company was still very slim.

OPERATIONS REVIEW

The Company’s performance had not shown significant improvement for the past few years mainly due to stiff competition and adverse market condition. The year 2007 saw an ongoing effort to explore new business opportunities to attain growth and to prepare the Company for its future expansion. At the same time, efforts were also put into the current assembly operations to minimize the cost and maximise production.

A new injection of asset is crucial for the Company for its sustainable ongoing concern and a continuous effort in this direction is being pursued by both Management and the Board of Directors.

Chairman’s Statements

On behalf of the Board of Directors, I hereby present to you the Annual

Report and Financial Statements of Halifax Capital Berhad and the Group

for the financial year ended 31st December 2007.

Tan Sri Dato’ Othman bin Mohd Rijalindependent non-executive chairman


chairman’sstatements

CORPORATE DEVELOPMENT

As reported last year, the Company was designated under the category of Amended Practice Note 17 by Bursa Malaysia Securities Berhad pursuant to Paragraph 8.14C and Paragraph 2.1(a) of Practice Note no. 17/2005 of the Listing Requirements.

As an affected listed issuer, the Company is required to submit a comprehensive proposal of the Company’s restructuring plan to the regulatory authorities for approval. This Regularisation Plan must address all the issues that affect the financial performance of the Group.

The Company had, on 13th June 2007, submitted its Regularisation Plan detailing the scheme to the relevant authorities. Subsequently, on 21st September 2007, the company had revised its Regulatisation Plan to reflect changes in the terms of acquisition of asset with the intention to improve the submission. On 15th February, 2008, the company had withdrawn its submission with the intention to submit a new Regularisation Plan.

In the meantime, the Company is making an appeal to the authorities for a further extension of time for a new submission of the new Regularisation Plan. This is necessitated by a crucial review of the tax implications of the Proposed Asset in consideration for the new Regularisation plan.

It is hoped that if the outcome of the tax implication is favourable on the Proposed Asset, and the new Regularization Plan is in place, the Company will stand a good chance of a sustainable future.

DIVIDEND

The Board of Directors does not recommend any dividend payment for the year.

APPRECIATION

The Group successfully endured a challenging year with the strong support from various internal and external parties. On behalf of the Board of Directors, I would like to take this opportunity to thank the government departments and agencies, financiers, suppliers, business associates and shareholders for their continued support, confidence and invaluable contribution to the Group.

I would also like to convey my sincere appreciation to the management and staff for their continuous contribution, dedication and commitment.

Tan Sri Dato’ Othman Bin Mohd RijalChairman


audit committeereport

COMPOSITION OF MEMBERS

Chairman

Prof Dato’ Mohd Hamdan bin Hj Adnan (Independent Non-Executive Director)

Members Tan Sri Dato’ Othman bin Mohd Rijal (Independent Non-Executive Director)

Dato’ Tan Eng Guan (Independent Non-Executive Director)

Zailan bin Mohd Zahid (Independent Non-Executive Director)

Gajalie bin Sazalie (Executive Director)

TERMS OF REFERENCE

MEMBERSHIP

The Audit Committee shall be appointed by the Board from amongst the Directors of the Company which fulfills the following requirements:-

• The Committee must be composed of not less than three members.

• A majority of the Committee including the Chairman must be independent Directors.

• At least one member of the Committee:

- must be a member of the Malaysian Institute of Accountants (MIA); or- if he is not a member of the MIA, he must have at least 3 years working experience and

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

(2) he must be a member of one of the associations of accountants specified in Part II of the 1st schedule of the Accountants Act, 1967.

• If membership of the Committee for any reason falls below three members, the Board of Directors shall, within three months of that event, appoint such number of new members as may be required to fulfill the minimum requirement.

• No alternate director shall be appointed as member to the Committee.

The terms of office and performance of the Committee and each of its members shall be reviewed by the Board not less than once every three years to determine whether the Committee and its members have carried out their duties in accordance with their terms of reference.



MEETINGS AND MINuTES

Meetings shall be held not less than four times a year, or more frequently when necessary. The presence of external auditors will be requested if required. Other Board members and employees may attend meetings upon the invitation of the Audit Committee. The external auditors may request a meeting if they consider it necessary. Written notice of the meeting together with the agenda shall be given to the members of the Committee and where applicable, the external auditors.

The Secretary to the Audit Committee shall be the Company Secretary. Minutes of each meeting shall be distributed to each member of the Board. The Chairman of the Committee shall report on each meeting to the Board.

During the financial year ended 31 December 2007, the Audit Committee held a total of five meetings. The details of attendance of the Committee members are as follows:-

Chairmen/Members 23.02.2007 25.04.2007 28.05.2007 29.08.2007 29.11.2007Prof Dato’ Mohd Hamdan bin Hj Adnan XTan Sri Dato’ Othman bin Mohd Rijal Dato’ Tan Eng Guan XZailan bin Mohd Zahid Gajalie bin Sazalie

AuTHORITy

The Committee is authorised by the Board to investigate any activity within its terms of reference and shall have unrestricted access to any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee. The Committee is also authorised by the Board to obtain external legal or other independent professional advice as necessary.

The Committee shall have direct access to external auditors and be able to convene meetings with external auditors excluding the attendance of the executive members of the Committee, whenever necessary.

DuTIES AND RESPONSIBILITIES

The duties of the Committee shall be:-

• To consider the appointment of external auditors, audit fees and any questions of resignation and dismissal.

• To discuss with the external auditors, prior to the commencement of audit, the nature and scope of audit.

• To review the quarterly financial reports and year end financial statements of the Group and the Company before submission to the Board, focusing on:-

- going concern assumption- compliance with accounting standards and regulatory requirements- any changes in accounting policies and practices- significant issues arising from the audit- major judgmental areas

• To discuss problems and reservations arising from the interim and final external audits, and any matters the external auditors may wish to discuss (in the absence of management, where necessary).

• To review the external auditors’ management letter and management’s response.



• To review the adequacy of scope, functions and resources of the internal control systems.

• To monitor related party transactions entered into by the Company and the Group, and to ensure that the Directors disclose such transactions as necessary in accordance with the Bursa Malaysia Securities Berhad’s listing requirements.

• To consider other topics as defined by the Board.

SuMMARy OF ACTIVITIES OF THE AuDIT COMMITTEE

During the financial year ended 31 December 2007, the activities undertaken by the Audit Committee included the following:

1. Reviewing the quarterly financial statements before announcements to the Bursa Malaysia Securities Berhad. 2. Reviewing the year-end financial statements. 3. Discussing and reviewing the external auditors’ scope of work, audit plan and procedures.4. Discussing and reviewing the state of internal control in the Company.

INTERNAL AuDIT FuNCTION

One of the main functions of the Audit Committee is to review and access the effectiveness of the system of internal control and to work out the internal findings, recommendations and corrective measures, if necessary, to be taken by the management.

The Audit Committee has relied on reports from internal auditors as well as business and other reports from the management and Executive Directors, reviews of quarterly financial performance and input from the external auditors to discharge its functions.


statement oncorporate governance

The Code

The Board of Directors is committed to ensuring the highest standards of corporate governance are practiced throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of Halifax Capital Berhad.

DIRECTORS

Composition of the Board

The Board presently has 9 members, comprising 4 executive directors and 5 independent non-executive directors. No individual dominates the Board’s decision making and the number of Directors reflects fairly the investment of the shareholders. The Board also fulfills the requirement of having at least one-third of its members as independent non-executive directors.

Tan Sri Dato’ Othman bin Mohd Rijal is the Independent Non-Executive Chairman, Datuk Hj Zainal Abidin bin Hj Ahmad as Deputy Chairman of the Board while Encik Jamel bin Matin@ Ibrahim leads the Board as Managing Director. There is a clear division of responsibility between these roles to ensure balance of power and authority. Together, the Directors bring a wide range of business; commercial and financial experience relevant to the direction of the Group.

The Board continues to give close consideration to its size, composition and spread of experience and expertise. This balance enables the Board to provide effective leadership as well as independent judgement on business decisions taking into account long term interests of shareholders, customers, suppliers and other business associates the Group conducts its business.

The profile of the members of the board is also provided on page 7 to 10 of this Annual Report.

Board Responsibilities

An effective Board leads and controls the Group. This entails reviewing and adopting strategic plans for the company, setting direction, overseeing the conduct of the business and managing the Company. Key matters such as approval of annual financial statements and quarterly financial results, acquisitions and disposals, capital expenditures, budgets, material contracts and business engagements, succession planning for top management are reserved for the Board. These reserved matters are set out in a formal statement of the Board’s role.

The Board has also delegated certain responsibilities to other Board committees, which operate within clearly defined terms of reference. Standing committees of the Board include the Audit Committee, the Nomination Committee and the Remuneration Committee.

Board Meetings and supply of information

The Board holds at least four regularly scheduled meetings annually. During the financial year ended 31st December 2007, the Board met for a total of 16 times where amongst others, it reviewed the Group business reports and quarterly financial results prior to the announcement to the Bursa Malaysia Securities Berhad (“BMSB”). The number of meetings attended by each member of the Board during the financial year ended 31 December 2007 are as follows:

Name of Director Total Meetings Attended

Percentage of Attendance (%)

Tan Sri Dato’ Othman Bin Mohd Rijal 16/16 100Datuk Hj Zainal Abidin Bin Hj Ahmad 12/16 75Jamel Bin Matin@ Ibrahim 15/16 94Hj Zainurin Bin Hj Ahmad 15/16 94Hamzah Bin Mahmood* 16/16 100Gajalie Bin Sazalie 15/16 94Prof Dato’ Mohd Hamdan Bin Hj Adnan 15/16 94Dato’ Tan Eng Guan 15/16 94Dato’ Hj Hamzah Bin Hj Ghazalli 13/16 81Zailan Bin Mohd Zahid 13/16 81

* Resigned on 6 February 2008


Prior to the Board Meeting, all Directors will be provided with an agenda and a board papers for their review. This is issued in sufficient time to enable them to review matters to be deliberated at the Board meeting and to obtain further explanation, where necessary.

All Directors have access to the advice and services of the Company Secretaries, who are responsible for ensuring the Board Meeting procedures are followed and that applicable rules and regulations are complied with. Besides, the Directors also take independent professional advice at the Company’s expense, if necessary.

Directors have access to all information within the Company, whether as a full Board member or in an individual capacity, in the furtherance of their duties.

Minutes of the Board meeting are circulated to each Director for their perusal prior to the confirmation of minutes at the following Board meeting.

The Memorandum and Articles of Association of the Company provides for the Chairman to have the casting vote in the event when an equality of votes arises over an issue in question.

Appointment and Re-election of Directors

Any new appointment to the Board will be deliberated on by the full Board based on recommendation by the Nomination Committee.

The Nomination Committee comprises the following members:

Chairman : Zailan bin Mohd Zahid (Independent Non-Executive Director)

Members : Prof Dato’ Mohd Hamdan bin Hj Adnan (Independent Non-Executive Director) Dato’ Hj Hamzah bin Hj Ghazalli (Independent Non-Executive Director)

The terms of reference approved for the Committee are: -

• Consider and recommend to the Board candidates for directorships proposed by the Managing Director, Board members and senior executives of the Company or shareholders.

• Review the Board’s required mix of skills, experience and other quality including core competencies which non-executive directors should bring to the Board.

• Assess the effectiveness of the Board as a whole, the Committees of the Board and the contribution of each individual director.

• Recommend to the Board, directors to fill the seats on Board committees; consider and recommend a policy regarding the period of service of executive and non-executive directors on the various Boards of the Group, its subsidiaries and associate companies.

• Consider and recommend solutions on issues of conflict of interest affecting directors of the Group and its subsidiaries and associate companies.

• Consider and recommend any measures to upgrade the effectiveness of directors of the Group and its subsidiaries and associate companies.

• To carry out such other assignments as may be delegated by the Board.

On appointment, directors will receive information on the Company, which include financial, corporate business and regulatory information and their formal statement of the Board’s role. Information will regularly be updated through meetings or written circulars.

In accordance with the Company’s Articles of Association, at the first Annual General Meeting of the Company, all the Directors shall retire from office and at the Annual General Meeting in every subsequent year, one-third of the Directors for the time being or if the number is not three or a multiple of three, then the number nearest one-third shall retire from office. All Directors shall retire from office once at least in every 3 years. Directors who are appointed during the year shall retire at the next Annual General Meeting held following their appointments.




Directors’ Training

All the Directors of the Company have attended the Mandatory Accreditation Programme (“MAP”) as required by Bursa Malaysia Securities Berhad. The directors will continue to undergo other relevant training programmes to further enhance their knowledge on a continuous basis in compliance with the Bursa Malaysia Securities Berhad’s Listing Requirements on the Continuing Education Programme.

All Directors have undergone training as determined by the Board of Directors pursuant to para 15.09 (2) of the Listing Requirements, for the financial year ended 31 December 2007.

DIRECTORS’ REMuNERATION

The Board’s Remuneration Committee comprises the following members:

Chairman : Dato’ Hj Hamzah bin Hj Ghazalli (Independent Non-Executive Director)

Member : Prof Dato’ Mohd Hamdan bin Hj Adnan (Independent Non-Executive Director)

Zailan bin Mohd Zahid (Independent Non-Executive Director)

The terms of reference approved for the Committee are:-

• Review and recommend the remuneration policy of the Group.• Recommend to the Board the remuneration of executive directors in all its forms, drawing from outside advice as necessary

and to review annually the compensation of directors. The executive directors will not be present when matters affecting his own remuneration are considered.

• Remuneration packages of non-executive directors including non-executive chairman should be a matter for the Board as a whole and the individual concerned should abstain from discussion of their own remuneration.

• Plan for succession to the position of chairman, deputy chairman and managing director as well as certain other senior management positions in the Group and the managing director to annually provide the Committee with an assessment of senior managers and their potential.

• Review the performance of managing director and executive directors within the Group.• Recommend the appointment and promotion of top executives (general managers and above) within the Group, determine

their salaries and recommend salary revisions and improvements as are considered necessary together with fringe benefits, perquisites and bonus programmes.

• Recommend suitable short and long term incentive plans including the setting of appropriate performance targets as well as a programme for management development.

• To carry out such other assignments as may be delegated by the Board.

The policy of the Remuneration Committee is to reward employees competitively, taking into account performance, market comparisons and competitive pressure in the industry. In the case of executive directors, the component parts of remuneration are structured so as to link rewards to corporate and individual performance. In the case of non-executive directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the particular non-executive Director concerned.

A summary of the remuneration of the Directors for the financial year ended 31 December 2007, distinguishing between executive and non-executive directors in aggregate, with categorization into appropriate components and the number of directors whose remuneration falls into each successive band of RM50,000 are as follows: -

Directors’ Remuneration

Executive Directors

Non-Executive Directors Total

Fees (RM) 15,000 15,000 30,000Salary (RM) 456,000 - 456,000EPF (RM) 54,720 - 54,720Allowance (RM) 14,600 74,400 89,000

Total (RM) 540,320 89,400 629,720



Range of Remuneration

Number of DirectorsExecutiveDirectors

Non-ExecutiveDirectors

Total

RM0 - RM50,000 3 4 7RM 50,001 - RM100,000 - 1 1RM100,001 - RM150,000 - - -RM150,001 - RM200,000 - - -RM200,001 - RM250,000 1 - 1RM250,001 - RM300,000 1 - 1RM300,001 - RM350,000 - - -

RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

Dialogue Between the Company and investors

The Group recognizes the importance of accountability to its shareholders through proper communication with its shareholders. The Group reaches out to its shareholders through the distribution of the annual reports.

The Non-Executive Chairman and Executive Directors are available to meet with investors and shareholders as appropriate to explain the Group’s strategy, major development and performance. However, any information that may be regarded as undisclosed material information about the Group will not be given to any single shareholder or shareholder group.

Dialogue Between the Company and shareholders

The Annual General Meeting is the principal forum for dialogue with the shareholders. Notice of the Annual General Meeting and annual reports are sent out to shareholders at least 21 days before the date of the meeting.

At each Annual General Meeting, the shareholders are encouraged to raise questions in respect of agenda items of the meeting. Executive Directors and where appropriate, the Chairman of the Audit Committee is available to respond to shareholders’ questions during the meeting. Where appropriate, the Chairman will undertake to provide a written answer to any significant question, which cannot be readily answered on the spot.

In case of re-election of Directors, the Board will ensure that full information is disclosed through the notice of the meeting regarding Directors who are retiring and who are willing to serve if re-elected.

Items of special business included in the notice of the meeting will be accompanied by an explanatory statement on the proposed resolution to facilitate full understanding and evaluation of issues involved.

ACCOuNTABILITy AND AuDIT

Financial Reporting

In presenting the annual financial statements and quarterly announcements to shareholders, investors and regulatory authorities, the Directors aim to present a balanced and understandable assessment of the Group’s position and prospects. The Audit Committee assists the Board in scrutinising information for disclosure to ensure accuracy, adequacy and completeness. The Statement by Directors pursuant to section 169 of the Companies Act, 1965 is set out on page 27 of this Annual Report.

Internal Control

The Board has overall responsibility for maintaining a system of internal controls that provides reasonable assurance of effective and efficient operations, and compliance with laws and regulations, as well as with the internal procedures and guidelines.

Information on the internal control is presented in the Statement on Internal Control laid out on page 20.

Relationship with the Auditors

The role of the Board and the Audit Committee in relation to the external auditors is stated in the Report on Audit Committee set out on pages 13 to 15. The Company has always maintained a close and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia.

This Corporate Governance Statement is made in accordance with the resolution of the Board of Directors’ meeting held on 15 May 2008.


statement oninternal control

The Board of Directors (“the Board”) is committed to maintaining a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board is pleased to provide the following Statement on Internal Control which outlines the nature and scope of internal controls of the Group during the year pursuant to Paragraph 15.27(b) of the Bursa Malaysia Securities Berhad’s Listing Requirements.

RESPONSIBILITy

The Board affirms its overall responsibility for the Group’s systems of internal control and for reviewing the adequacy and effectiveness of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines. The review covers financial, operational and compliance controls of the Group. In view of the inherent limitations in any system of internal control, the system is designed to manage rather than eliminate the risk of failure to achieve its corporate objectives. Accordingly, it can only provide reasonable but not absolute assurance against misstatement or loss.

INTERNAL CONTROL

Whilst the Board maintains full control and direction over appropriate strategic, financial, organizational and compliance issues, it has delegated to management the implementation of the system of internal control within an established framework.

The key elements of the Group’s internal control systems include the following: -

• A clearly defined organizational structure, delegation of authorities based on responsibility centres and authority limits.

• The Management is responsible for : -

- identification and evaluation of significant risks applicable to their respective area of business together with the design and operation of suitable internal controls;

- ensuring that an effective systems of internal control is in place;- meeting defined reporting deadlines and ensuring compliance with policies, procedure and regulatory requirement.

• Monthly monitoring and reviewing of financial results and forecasts for the companies within the Group including reporting of performance against the operating plans and annual budgets.

• Corporate values and code of conduct, which emphasize on ethical behaviour are set out in Group’s Employee Handbook.

• Continuous staff training and development are emphasized to enhance employee competences and proficiencies.

The Audit Committee at the material time of the change of Board is committed to a continuous upgrading and strengthening of the internal control system. The Board is of the view that there will be an on going process for improvement of the internal control systems for sufficient safeguard of the Group’s interest.

This statement is made in accordance with a resolution of the Board of Directors’ meeting held on 28 April 2008.


statement ofdirectors’ responsibility

This statement is prepared as required by Paragraph 15.27(a) of the Listing Requirements of the Bursa Malaysia Securities Berhad.

The Directors are required to prepare financial statements, which give a true and fair view of the state of affairs of the Group and of the Company as at the end of each financial year and of the results and cash flows of the Group and of the Company for the financial year then ended.

The directors considered that in preparing the financial statements,

• The Group and the Company have used appropriate accounting policies and are consistently applied;

• Reasonable and prudent judgements and estimates were made; and

• All applicable approved accounting standards in Malaysia have been followed.

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

The directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities.

This Directors’ Responsibility Statement is made in accordance with the resolution of the Board of Directors’ meeting held on 15 May 2008.


Sanctions and /or Penalties

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

Material Contracts

There were no material contracts entered into by the Company and its subsidiaries involving Directors and substantial shareholders during the financial year.

Revaluation Policy on Landed Properties

It is the policy of the Group to revalue the landed properties every five years or at such shorter period as may be considered to be appropriate taking into account the prevailing economic conditions and industry outlook as well as the advice of professional valuers and appraisers.

The Company’s properties as at 31 December 2007 are listed on page 70.

Non-Audit Fees

There is no non-audit fee paid by the Group to the External Auditors, Messrs. Ernst & Young during the financial year ended 31 December 2007. Share Buy-Backs

The Company did not make any share buy-back during the financial year.

Options, Warrants or Convertible Securities

No options, warrants or Convertible Securities were exercised during the financial year.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme

The Company did not sponsor any ADR or GDR programme during the financial year.

Variation in Results

There was a variation of more than 10% between the audited results for the financial year ended 31 December 2007 and the unaudited results previously released for the financial quarter ended 31 December 2007 of the Company mainly due to the recognition of deferred tax asset upon the abolishment of real property gain tax requirement.

Profit Guarantee

The Company did not make any arrangement during the financial year which requires profit guarantee.

Recurrent Related Party Transactions

There were no recurrent related party transactions of revenue or trading nature during the financial year ended 31 December 2007.

additional complianceinformation


corporate socialresponsibility

The Group is committed to carry out its business and affairs in a socially responsible manner taking into consideration the interest of its stakeholders, environment and society at large. The Company views Corporate Social Responsibility as a way to develop its business and employees, and contribute positively to the environment.

The Workplace

Employees are provided with a safe, healthy and comfortable workplace which are condusive for them to discharge their responsibilities and to deal with their internal or external customers. All employees are being treated in a equal and fairly manner and given equal opportunities regardless of their religion, sex, ancestry and age. Where possible, training were provided to employees to improve their skills and knowledge to perform their tasks effective and efficiently.

The Community

The Group supported and encouraged employees be involved in the community work and other institutions that benefitting the society at large. Employees are encouraged to contribute to charitable causes or community work impartially and without prejudice in terms of race, gender, ethnicity or religion.

The Environment

As most of the Group’s operations are carried out in its office or assembly factory, impact on the environment is not substantial. Nevertheless the company is committed to sound business practices and due attention is given to minimise any impact on the environment. Only products that would not cause harm to the environment would be accepted to be assembled in the factory.

The Marketplace

The Group recognises the importance of building and maintaining positive relationships with the stakeholders. Management and staff are expected to continuously uphold high standards of conduct in the performance of their duties and practise good business ethnics. Emphasis is given on this area as the Group believe it ensure the Group’s short and long term success.


The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2007.

PRINCIPAL ACTIVITIES

The principal activities of the Company consist of investment holding, assembly and sale of electrical and electronic products.

Pursuant to the Amended Practice Note No. 17/2005 (“PN17”) and Paragraph 8.14C of the Listing Requirements of Bursa Malaysia Securities Berhad, the Company has been classified as an Affected Listed Issuer, as the Company’s shareholders’ equity is less than 25% of its issued and paid-up share capital.

The principal activities of the subsidiaries are described in Note 12 to the financial statements.

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

RESULTS

Group Company

RM’000 RM’000

Net loss for the year 3,795 2,304

There were no material transfers to or from reserves or provisions during the financial year.

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.

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:

Tan Sri Dato’ Othman Bin Mohd Rijal Datuk Hj Zainal Abidin Bin Hj Ahmad Jamel Bin Matin @ Ibrahim Hj Zainurin Bin Hj Ahmad Gajalie Bin SazalieProf. Dato’ Mohd Hamdan Bin Hj Adnan Dato’ Hj Hamzah Bin Hj Ghazalli Dato’ Tan Eng Guan Zailan Bin Mohd Zahid Hamzah Bin Mahmood (Resigned on 6 February 2008) 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 or the fixed salary of a full-time employee of the Company as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which he has a substantial financial interest.

directors’ report


directors’ report(cont’d)

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 or its related corporations during the financial year were as follows:

Number of Ordinary Shares of RM1 Each

The Company 1.1.2007 Acquired Sold 31.12.2007

Direct Interest:

Datuk Hj Zainal Abidin Bin Hj Ahmad 2,395,200 120,000 - 2,515,200

Hamzah Bin Mahmood 10,000 - - 10,000

Zailan Bin Mohd Zahid 1,700 - - 1,700

Jamel bin Matin @ Ibrahim 25,000 - - 25,000

Datuk Hj Zainal Abidin Bin Hj Ahmad 16,007,100 - - 16,007,100

Datuk Hj Zainal Bin Abidin by virtue of his interest 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 had 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 values 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 provision for doubtful debts inadequate to any substantial extent; and

(ii) the values attributed to 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 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 and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

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


OTHER STATUTORY INFORMATION (Cont’d)

(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 its 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.

SIGNIFICANT EVENTS

Significant events are disclosed in Note 26 to the financial statements. 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 28 April 2008.

Jamel Bin Matin @ Ibrahim Gajalie Bin Sazalie

directors report(cont’d)


statement by directorspursuant to section 169(15) of the companies act, 1965

statutory declarationpursuant to section 169(16) of the companies act, 1965

We, Jamel Bin Matin @ Ibrahim and Gajalie Bin Sazalie, being two of the directors of Halifax Capital Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 29 to 66 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Approved 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 31 December 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 28 April 2008.

Jamel Bin Matin @ Ibrahim Gajalie Bin Sazalie

I, Gajalie Bin Sazalie, being the director primarily responsible for the financial management of Halifax Capital Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 29 to 66 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 Gajalie Bin Sazalie at Kuala Lumpur in the Federal Territory on 28 April 2008 Gajalie Bin Sazalie Before me,


report of the auditorsto the members of halifax capital berhad(incorporated in malaysia)

We have audited the financial statements set out on pages 29 to 66. 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 Approved 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 31 December 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 have been properly kept in accordance with the provisions of the Act.

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 required to be made under Section 174(3) of the Act.

Without qualifying our opinion, we draw attention to:

(i) Note 2.1 to the financial statements which indicates that the Group and Company have incurred a net loss of RM3,795,000 (2006: RM2,440,000) and RM2,304,000 (2006: RM3,772,000) respectively for the year ended 31 December 2007 and, as of that date, the Group’s and the Company’s current liabilities exceeded its current assets by RM13,684,000 (2006: RM10,224,000) and RM12,278,000 (2006: RM9,805,000) respectively; and

(ii) Note 1 to the financial statements which discloses that the Company is an affected issuer under PN17/2005 and the Company is in the process of finalising and re-submitting its proposed restructuring scheme as disclosed in Note 26.

These conditions indicate the existence of a material uncertainty which may cast doubt on the ability of the Group and the Company to continue as a going concern, which is dependent on the timely and successful approval and implementation of the revised proposed restructuring scheme, achieving future profitable operations and generating positive cash flows.

The financial statements of the Group and the Company do not include any adjustments relating to the amounts and classification of assets and liabilities that might be necessary should the Group and the Company be unable to continue as a going concern.

Ernst & Young Nik Rahmat Kamarulzaman bin Nik Ab. Rahman AF: 0039 No. 1759/02/10(J) Chartered Accountants Partner Kuala Lumpur, Malaysia 28 April 2008


Group Company

2007 2006 2007 2006

Note RM’000 RM’000 RM’000 RM’000

RevenueCost of salesGross lossOther incomeSelling and marketing expensesAdministrative expenses Other expenses Loss from operations Finance costs Loss before taxation Taxation Net loss for the year

3 4

58

9

14,008(14,271)

(263)628(122)

(2,779)(992)

(3,528)(649)

(4,177)382

(3,795)

11,594(11,991)

(397)1,349

(114)(2,305)

(576)(2,043)

(419)(2,462)

22(2,440)

12,768(13,296)

(528)1,748

-(2,267)(1,054)(2,101)

(585)(2,686)

382 (2,304)

11,312(11,959)

(647)1,030

-(1,782)(2,016)(3,415)

(357)(3,772)

-(3,772)

Attributable to:

Equity holders of the CompanyMinority interests

(3,795)-

(3,795)

(2,440)-

(2,440)

(2,304)-

(2,304)

(3,772) -

(3,772)

Loss per share attributable to equity holders of the Company (sen): Basic Diluted

10(a)10(b)

(6)(6)

(4)(4)

income statementsfor the year ended 31 december 2007

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


Group Company

Note 2007RM’000

2006 RM’000

2007 RM’000

2006 RM’000

ASSETSNon-current assetsProperty, plant and equipmentInvestment in subsidiaries

1112

16,160-

16,160

16,880-

16,880

16,152-

16,152

16,368-

16,368

Current assets Inventories Trade and other receivables Cash and bank balances Tax recoverable

TOTAL ASSETS

131415

1,111808204

42,127

18,287

1,6321,103

184

2,75719,637

1,013427

374

1,48117,633

1,4141,096

114

2,52518,893

EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital Share premium Other reserves Accumulated losses Total equity

20

21

62,8349,521

13,297(83,178)

2,474

62,8349,521

13,016(79,383)

5,988

62,8349,521

12,883(81,366)

3,872

62,8349,521

12,602(79,062)

5,895

Non-current liabilities Borrowings Deferred tax liabilities

1619

2-2

5663668

2-2

5663668

Current liabilities Borrowings Trade and other payables

Total liabilities TOTAL EQUITY AND LIABILITIES

1618

8,4507,361

15,81115,81318,287

8,1014,880

12,98113,64919,637

7,7016,058

13,75913,76117,633

7,700 4,630

12,330 12,998 18,893

balance sheetsas at 31 december 2007



Non-Distributable

ShareCapital

(Note 20) Share

Premium

OtherReserves(Note 21)

AccumulatedLosses Total

MinorityInterest

(Note 22) Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2006 Net loss for the year At 31 December 2006

At 1 January 2007 Net loss for the year Transfer from deferred tax At 31 December 2007

62,834

- 62,834

62,834 - -

62,834

9,521

- 9,521

9,521

- -

9,521

13,016 -

13,016

13,016 -

281 13,297

(76,943) (2,440)

(79,383)

(79,383) (3,795)

- (83,178)

8,428 (2,440)5,988

5,988(3,795)

281 2,474

- - -

- - - -

8,428 (2,440) 5,988

5,988 (3,795)

281 2,474

Non-Distributable

ShareCapital

(Note 20) Share

Premium

OtherReserves(Note 21)

AccumulatedLosses Total

RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2006 Net loss for the year At 31 December 2006 At 1 January 2007 Net loss for the year Transfer from deferred tax At 31 December 2007

62,834

- 62,834

62,834 - -

62,834

9,521 -

9,521

9,521 - -

9,521

12,602

- 12,602

12,602 -

281 12,883

(75,290) (3,772)

(79,062)

(79,062) (2,304)

- (81,366)

9,667 (3,772) 5,895

5,895 (2,304)

281 3,872

consolidated statement of changes in equityfor the year ended 31 december 2007


company statement of changes in equityfor the year ended 31 december 2007


Group Company

2007RM’000

2006 RM’000

2007 RM’000

2006 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES Loss before taxation Adjustments for:

Depreciation Interest expense Bad debts written off Provision for doubtful debts - subsidiary - others Inventories written down Property, plant and equipment written off Waiver of debt by financial institutions and creditors Gain on disposal of subsidiaries (Note 12) Payables written off Provision for short term accumulating compensated absences

Operating loss before changes in working capitalReceivables Inventories Payables

Cash (used in)/generated from operationsInterest paid Tax refund

Net cash flow (used in)/generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment representing net cash flow used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Drawdown of revolving credits Repayment of hire purchase and lease financing Net cash flow (used in)/generated from

financing activities

NET INCREASE IN CASH AND CASH EQUIVALENTSCASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR (NOTE 15)

(4,177)

223 649

-

- - -

500

- -

(17)

26 (2,796)

295 521

2,472 492 (649)

-

(157)

(3)

- (3)

(3)

(163)

(1,380)

(1,543)

(2,462)

231 419

-

- 287

94 -

(446) (287)

-

32 (2,132)

(754) (533) 952

(2,467) (419)

7

(2,879)

(530)

6,700 (3)

6,697

3,288

(4,668)

(1,380)

(2,686)

219 585

-

(371) - - -

- -

(17)

17 (2,253) 1,040

401 1,428

616 (585)

-

31

(3)

- (3)

(3)

25

(986)

(961)

(3,772)

227 357

2

1,785 -

15 -

(446) - -

27 (1,805) (2,478)

(253) 1,172 (3,364)

(357) 7

(3,714)

(17)

6,700 (3)

6,697

2,966

(3,952)

(986)

cash flows statementsfor the year ended 31 december 2007



1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of the Bursa Malaysia Securities. The registered office of the Company is located at 8th Floor, Menara Zecon, No 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak. The principal place of business of the Company is located at Suite 2A-11-2, Level 11, Block 2A, Plaza Sentral, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur.

Pursuant to the Amended Practice Note No. 17/2005 (“PN17”) and Paragraph 8.14C of the Listing Requirements of Bursa Malaysia Securities Berhad, the Company has been classified as an Affected Listed Issuer, as the Group’s shareholders’ equity is less than 25% of its issued and paid-up share capital.

The principal activities of the Company consist of investment holding, assembly and sale of electrical and electronic products.

The principal activities of the subsidiaries are described in Note 12.

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

The financial statements were authorised for issue by the Board of Directors in accordance witha resolution of the directors on 28 April 2008.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements comply with the provisions of the Companies Act, 1965 and applicable Approved Financial Reporting Standards in Malaysia.

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

The Group and Company have incurred a net loss of RM3,795,000 (2006: RM2,440,000) and RM2,304,000 (2006: RM3,772,000) respectively for the year ended 31 December 2007 and, as of that date, the Group’s and the Company’s current liabilities exceeded its current assets by RM13,684,000 (2006: RM10,224,000) and RM12,278,000 (2006: RM9,805,000) respectively. The Company is in the process of finalising and re-submitting its proposed restructuring scheme as mentioned in Note 26. The financial statements of the Group and the Company have been prepared on a going concern basis as the Board of Directors are of the view that the scheme will be approved and implemented on a timely and sucessful manner.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

The MASB has issued FRS 6: Exploration for and Evaluation of Mineral Resources and Amendment to FRS1192004: Employee Benefits-Actuarial Gains and Losses, Group Plans and Disclosures which will be effective for annual peri-ods beginning on or after 1 January 2007. Both FRS6 and Amendment to FRS1192004

are not applicable to the Group or the Company.

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.

notes to the financial statements31 december 2007


2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

2.2 Summary of Significant Accounting Policies (Contd.)

(a) Subsidiaries and Basis of Consolidation (Contd.)

(i) Subsidiaries (Contd.)

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.

(ii) Basis of Consolidation

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.

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.

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) Property, Plant and Equipment and Depreciation

All items of 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.

Capital-work-in-progress is not depreciated as these assets are not available for use.

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 and buildings are 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.

notes to the financial statements31 december 2007 (contd.)




(b) Property, Plant and Equipment and Depreciation (Contd.)

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. Depreciation of other property, plant and equipment 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, at the following annual rates:

Buildings 2%

Plant and machinery 10% -20%

Equipment, furniture and fittings and motor vehicles 10% -33 1/3%

(c) Impairment of Non-Financial Assets

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.

The carrying amounts of the Group’s 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 goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified.

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. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

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 first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.






(c) Impairment of Non-Financial Assets (Contd.)

An impairment loss is recognised in profit or loss in the period 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 decease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reserved 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 other than goodwill 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 other than goodwil 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.

(d) Inventories

Inventories are stated at 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 costs of raw materials, direct labour, other direct costs and appropriate proportions of assembly overheads based on normal operating capacity.

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

(e) 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, 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 charged directly to 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 bank, net of outstanding bank overdrafts.

(ii) 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 oustanding amounts as at the balance sheet date.

(iii) Payables

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

(iv) Interest Bearing Borrowings

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





(e) Financial Instruments (Contd.)

(v) Equity Instruments

Ordinary shares are classified as equity.

(vi) Derivative Financial Instruments

Derivative financial instruments are not recognised in the financial statements.

(f) Leases

(i) Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. 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. 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 Company’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.

The depreciation policy for lease assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.2(b).

(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.

(iv) Operating Leases -the Group as Lessor

Assets leased out under operating leases are presented on the balance sheets according to the nature of the assets. Rental income from operating leases is recognised ona straight-line basis over the term of the relevant lease (Note 2.2(k)(ii). Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

(g) Borrowing Costs

Borrowing costs are recognised in profit and loss in the period in which they are incurred.




(h) 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 period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the period, 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 over the cost of the combination.

(i) 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.

(j) 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. 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.

(ii) Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group 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 such contributions to the Employees Provident Fund (“EPF”).

(k) 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:





(k) Revenue Recognition (Contd.)

(i) Sale of goods

Revenue is recognised net of sales taxes and upon transfer 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) Rental income

Rental income is recognised on a straight-line basis over the term of the lease.

(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 retranslated.

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

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period.

2.3 Changes in Accounting Policies and their Effects

On 1 January 2007, the Group and the Company adopted the following revised FRS and amendments to FRS:

FRS 117: Leases FRS 124: Related Party Disclosures

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

The MASB has also issued FRS 6: Exploration for and Evaluation of Mineral Resources which will be effective for annual periods beginning on or after 1 January 2007. This FRS is, however not applicable to the Group and the Company.

The adoption of the revised FRS 124 give rise to additional disclosures but did not result in significant changes in accounting policies of the Group and the Company.




2.4 Standards and Interpretations Issued but Not Yet Effective

As at the date of authorisation of those financial statements, the following new and revised FRS, amendment to FRS and Interpretations were issued but not yet effective and have not been applied by the Group and the company.

FRS, Amendment to FRS and Interpretations Effective for financial periods beginning on or after

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 Grants and Disclosure of 1 July 2007

Government Assistance

FRS 134: Interim Financial reporting 1 July 2007

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

FRS 139: Financial Instruments: Recognition and Measurement Deferred

Amendment to FRS 121: The Effects of Changes in 1 July 2007

Foreign Exchange Rates-Net Investment in a Foreign Operation

IC Interpretation 1: Changes in Existing 1 July 2007

Decommissioning, Restoration and Similar Liabilities

IC Interpretation 2: Members’ Shares in Co-operative 1 July 2007

Entities and Similar Instruments

IC Interpretation 5: Rights to interests arising from Decommissioning, 1 July 2007

Restoration and Environmental Rehabilitation Funds

IC Interpretation 6: Liabilities arising from Participating in a 1 July 2007

Specific Market-Waste Electrical and Electronic Equipment

IC Interpretation 7: Applying the Restatement Approach under 1 July 2007

FRS1292004 -Financial Reporting in Hyperinflationary Economies

IC Interpretation 8: Scope of FRS 2 1 July 2007

The above new and revised FRS, amendment 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.




2.5 Significant Accounting Estimates and Judgements

(a) Critical Judgement Made in Applying Accounting Policies

There are no critical judgements made by management in the process of applying the Company’s accounting policies that have significant effect on the amounts recognised in the financial statements.

(b) Key Sources of Estimation Uncertainty

There are no key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than those relating to income taxes.

Significant estimation is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

3. REVENUE

Revenue of the Group and the Company consists:

Group Company

2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Sales of goods -third parties-subsidiaries

14,008

-14,008

11,594-

11,594

-12,76812,768

-11,312 11,312

4. COST OF SALES

Cost of sales represents cost of goods assembled and sold.



5. LOSS FROM OPERATIONS

Loss from operations is stated after charging/(crediting):

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Employee benefits expense (Note 6) Non-executive directors’ remuneration (Note 7) Auditors’ remuneration: - statutory audit - other services Bad debts recovered Depreciation of property, plant and equipment Property, plant and equipment written off Rental of land and building Rental income Waiver of debt by financial institutions and creditors Bad debts written-off Provision for doubtful debts - subsidiary - others Gain on disposal of subsidiaries (Note 12) Payables written off Inventories written down

1,705 89

70 239

- 223 500

- (546)

- -

- - -

(17) -

1,951 77

65 4 (7)

231 -

10 (557)

(446) -

- 287 (287)

- 94

1,267 89

35 239

- 219

- -

(546)

- -

(371) - -

(17) -

1,510 77

30 4 -

227 -

10 (557)

(446) 2

1,785 - - -

15

6. EMPLOYEE BENEFITS EXPENSE

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Wages and salaries Social security contribution Contributions to defined contribution plan Short term accumulating compensate absences Other benefits

1,498 15

124 26 42

1,705

1,670 15

187 32 62

1,966

1,119 11 78 17 42

1,267

1,286 11

141 27 60

1,525

Included in employee benefits expenses of the Group and of the Company are executive directors’ remuneration excluding benefits-in-kind amounting to RM541,000 (2006: RM581,000) as further disclosed in Note 7.



7. DIRECTORS’ REMUNERATION

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

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Executive: Salaries and other emoluments Fees Defined contribution plan Estimated money value of benefit-in-kind

Non-Executive: Allowance and other emoluments Fees Total

471 15 55

- 541

74 15 89

630

506 15 60

- 581

62 15 77

658

471 15 55

- 541

74 15 89

630

506 15 60

- 581

62 15 77

658

The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:

Number of Directors

2007 2006

Executive directors: Below RM50,000 RM150,001 - RM200,000 RM200,001 - RM300,000 RM300,001 - RM350,000

Non-executive directors: Below RM50,000 RM50,001 - RM100,000

3 - 2 -

4 1

3 - 1 1

4 1

8. FINANCE COSTS

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Interest expense on: Bank borrowings Hire purchase liabilities

648 1

649

418 1

419

584 1

585

356 1

357



9. TAXATION

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Malaysian income tax: Overprovision in prior years

Deferred tax (Note 19): Relating to changes in tax ratesOverprovision in prior years

-

68 (450) (382) (382)

(22)

- - -

(22)

-

68 (450) (382) (382)

-

- - - -

Domestic income tax is calculated at the Malaysian 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% from the current year’s rate of 27%, effective year of assessment 2008 and to 25% in subsequent year of assessment. The computation of deferred tax as at 31 December 2007 has reflected these changes.

Some subsidiaries with a paid up ordinary Share Capital of RM2.5 million or less is subject to the following statutory tax rate:

Chargeable income: Tax rate On the first RM500,000 (2006: RM500,000) 20% (2006 : 20%) In the excess of RM500,000 ( 2006: RM500,000) 27% (2006 : 28%)

A reconciliation of income tax expense applicable to loss before taxation 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:

Group2007

RM’0002006

RM’000

Loss before taxation

Taxation at Malaysian statutory tax rate of 27% (2006: 28%) Expenses not deductible for tax purposes Income not subject to tax Deferred tax assets not recognised during the year Effect on opening deferred tax on reduction of income tax rate Effect of utilisation of previously unrecognised tax losses and capital allowances Tax losses not allowable for future utilisationOverprovision of tax in prior yearOverprovision of deferred tax in prior yearTax benefit for the year

(4,177)

(1,128)589

(9) 548

68 - - -

(450) (382)

(2,462)

(689)95

(505) 1,100

- (2) 1

(22) -

(22)



9. TAXATION (CONTD.)

Company2007

RM’0002006

RM’000

Loss before taxation Taxation at Malaysian statutory tax rate of 27% (2006: 28%) Expenses not deductible for tax purposes Deferred tax assets not recognised during the year Effect on opening deferred tax on reduction of income tax rate Overprovision of deferred tax in prior year Tax benefit for the year

(2,686)

(725) 272 453

68 (450) (382)

(3,772)

(1,056) 89

967 - - -

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the balance under Section 108 of the Income Tax Act, 1967 (108 balance) and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional period, the Company may utilise the credit in the 108 balance as at 31 December 2007 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007.

10. LOSS PER SHARE

(a) Basic

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

Group

2007RM’000

2006RM’000

Loss attributable to ordinary equity holders of the Company (RM) Weighted average number of ordinary shares in issue Basic loss per share (sen)

(3,795) 62,834

(6)

(2,440) 62,834

(4)

(b) Diluted

The effect on the basic earnings per share for the current financial year arising from the assumed conversion of the warrants is anti-dilutive. Accordingly, the diluted earnings per share for the current year is presented as equal to the basic earnings per share.



11. PROPERTY, PLANT AND EQUIPMENT

Freehold land

RM’000

Buildings RM’000

Plant and machinery

RM’000

Equipment, furniture,

fittings and motor vehicles

RM’000

Capital- work-in- progress

RM’000 Total

RM’000

Group

At 31 December 2007

Cost or valuationAt 1 January 2007 At cost At valuation

Additions At 31 December 2007

Representing: At cost At valuation At 31 December 2007

Accumulated depreciation and impairment At 1 January 2007 Accumulated depreciation Accumulated impairment losses

Depreciation charge for the year Impairment loss for the year At 31 December 2007

Net carrying amountAt cost At valuation

- 13,403 13,403

- 13,403

- 13,403 13,403

-

1,540 1,540

-

- 1,540

- 11,863 11,863

25 4,991 5,016

- 5,016

25 4,991 5,016

242

430 672

174

- 846

- 4,170 4,170

2,158 -

2,158 3

2,161

2,161 -

2,161

2,057

- 2,057

26

- 2,083

78 -

78

636 -

636 -

636

636 -

636

564

- 564

23

- 587

49 -

49

500 -

500 -

500

500 -

500

-

- -

-

500 500

- - -

3,319 18,394 21,713

3 21,716

3,322 18,394 21,716

2,863

1,970 4,833

223

500 5,556

127 16,033 16,160



11. PROPERTY, PLANT AND EQUIPMENT (CONTD.)

Freehold land

RM’000

Buildings RM’000

Plant and machinery

RM’000



RM’000

Capital- work-in- progress

RM’000 Total

RM’000

Group (contd.)

At 31 December 2006

Cost or valuation At 1 January 2006 At cost At valuation

Additions Write-off Disposals At 31 December 2006 Representing: At cost At valuation At 31 December 2006

Accumulated depreciation and impairment

At 1 January 2006 Accumulated depreciation Accumulated impairment losses Depreciation charge for the year At 31 December 2006

Net carrying amount At cost At valuation

- 13,403 13,403

- - -

13,403

- 13,403 13,403

1,540 1,540

- 1,540

- 11,863 11,863

25 4,991 5,016

- - -

5,016

25 4,991 5,016

68

430 498

174 672

- 4,344 4,344

2,158 -

2,158 - - -

2,158

2,158 -

2,158

2,020

- 2,020

37 2,057

101 -

101

606 -

606 30

- -

636

636 -

636

544

- 544

20 564

72 -

72

- - -

500 - -

500

500 -

500

-

- -

- -

500 -

500

2,789 18,394 21,183

530 - -

21,713

3,319 18,394 21,713

2,632

1,970 4,602

231 4,833

673 16,207 16,880




Freehold land

RM’000

Buildings RM’000

Plant and machinery

RM’000



RM’000 Total

RM’000

Company At 31 December 2007 Cost or valuationAt 1 January 2007 At cost At valuation Additions At 31 December 2007 Representing:At costAt valuationAt 31 December 2007

Accumulated depreciation and impairmentAt 1 January 2007Accumulated depreciationAccumulated impairment losses Depreciation charge for the yearAt 31 December 2007

Net carrying amountAt costAt valuation

- 13,403 13,403

- 13,403

- 13,403 13,403

- 1,540 1,540

- 1,540

- 11,863 11,863

- 4,991 4,991

- 4,991

- 4,991 4,991

217 430 647 174

821

- 4,170 4,170

2,158 -

2,158 3

2,161

2,161 -

2,161

2,057 -

2,057 26

2,083

78 -

78

325 -

325 -

325

325 -

325

265 -

265 19

284

41 -

41

2,483 18,394 20,877

3 20,880

2,486 18,394 20,880

2,539 1,970 4,509

219 4,728

119 16,033 16,152




Freehold land

RM’000

Buildings RM’000

Plant and machinery

RM’000



RM’000 Total

RM’000

Company (contd.) At 31 December 2006 Cost or valuationAt 1 January 2006 At cost At valuation Additions At 31 December 2006 Representing:At costAt valuationAt 31 December 2006

Accumulated depreciation and impairmentAt 1 January 2006Accumulated depreciationAccumulated impairment losses Depreciation charge for the yearAt 31 December 2006

Net carrying amountAt costAt valuation

- 13,403 13,403

- 13,403

- 13,403 13,403

- 1,540 1,540

- 1,540

- 11,863 11,863

- 4,991 4,991

- 4,991

- 4,991 4,991

43 430 473 174 647

- 4,344 4,344

2,158 -

2,158 -

2,158

2,158 -

2,158

2,020 -

2,020 37

2,057

101 -

101

308 -

308 17

325

325 -

325

249 -

249 16

265

60 -

60

2,466 18,394 20,860

17 20,877

2,483 18,394 20,877

2,312 1,970 4,282

227 4,509

161 16,207 16,368




(a) Had the revalued freehold land and buildings been carried under the cost model, the carrying amount of the freehold land and buildings of the Group and the Company as at 31 December 2007 would be RM845,000 (2006: RM845,000) and RM2,641,000 (2006: RM2,736,000) respectively.

(b) Net carrying amounts of property, plant and equipment held under hire purchase and finance lease arrangements are as follows:

Group and Company

2007RM’000

2006RM’000

Office equipment 4 8

(c) The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 16) are as follows:

Group and Company

2007RM’000

2006RM’000

Freehold land and buildings of the Company 16,033 16,207

(d) Details of independent professional valuation of freehold land owned by the Group and the Company are as follows:

Date of valuation Description of propertyValuation amount

RM’000 Basis of valuation

11 October 2005 Lots of freehold land withbuildings in Johor Bahru

16,424 Open market value

The valuation was performed by JB Jurunilai Bersekutu (Johor) Sdn. Bhd., a registered valuer.

12. INVESTMENT IN SUBSIDIARIES

Company

2007RM’000

2006RM’000

Unquoted shares at cost Less: Accumulated impairment losses

16,552 (16,552)

-

16,635 (16,635)

-



12. INVESTMENT IN SUBSIDIARIES (CONTD.)

Details of subsidiaries are as follows:

Name of subsidiaries

Issued and Paid-Up

Share

Proportion of Ownership

InterestIncorporated in Malaysia Capital

RM 2007

% 2006

%Principal Activities

Held by the Company: Setron Sales & Service (M) Sdn. Bhd.

Al-Marsa Worldtrade Sdn. Bhd.

Setin Sdn. Bhd.

Setron Electronic Industries Sdn. Bhd.

Halifax Marine Services Sdn. Bhd.

Darulmas Manufacturing Services Sdn. Bhd.

Setron Lyngso (M) Sdn. Bhd.

Setron Mathews Sdn. Bhd.

Setron Timber Industries Sdn. Bhd.

Halifax Capital International Limited

7,000,000

6,000,000

500,000

2

170,000

400,000

815,000

700,000

1,500,000

4

100

100

80

100

51

65

100

70

100

100

100

100

80

100

100

65

100

70

100

100

Distribution of electrical and electronic products

Investment holding,ceased operations

Trading in watches, ceased operations

General trading, ceased operations

Boat manufacturing

Trading and servicing for commercial vehicles, ceased operations

Provision of related computer services and the distribution of software, ceased operations

Trading of timber mouldings,ceased operations

Trading in sawn timber, timbermouldings and furniture, ceased operations

Investment holding

(a) Dilution of interest in subsidiary On 7 January 2007, the Group disposed of 83,300 ordinary shares of RM1 each in Halifax Marine Services Sdn. Bhd.

for RM1 sales consideration which represents 49% of share capital of Halifax Marine Services Sdn. Bhd. The disposal of shares has resulted in the dilution of the Group’s effective equity interest in the subsidiary from 100% to 51%.

The dilution of interest has no impact on the financial position of the Group as at the end of the year since both of the sales proceeds and the carrying amount of the investment disposed of at the disposal date are RM1 and the subsidiary is in a net liability position of RM311,132 as at that date.



12. INVESTMENT IN SUBSIDIARIES (CONTD.)

(b) Disposal of subsidiaries

On 27 November 2006, the Company disposed of its entire equity interest in its subsidiries, VA Advertising & Promotion Sdn. Bhd., ASH Creative Sdn. Bhd. and Affluent Capital Sdn. Bhd. for a total cash of RM8 on 27 November 2006.

The summary of the effects of the disposal of VA Advertising & Promotion Sdn. Bhd., ASH Creative Sdn. Bhd. and Affluent Capital Sdn. Bhd on the financial position of the Group as at the end of year is as follows:

2006RM’000

Other payables Net liability disposed Total disposal proceeds, settled by cash Gain on disposal to the Group

(287)(287)

* - (287)

* Total disposal proceeds was RM8.

13. INVENTORIES

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

CostRaw materials Work-in-progress

Net realisable valueFinished goods

573 113 686

425 425

1,111

1,030 34

1,064

568 568

1,632

573 113 686

327 327

1,013

1,030 34

1,064

350 350

1,414

The cost of inventories recognised as an expense during the financial year in the Group and Company amounted to RM12,144,000 (2006: RM10,920,000) and RM12,095,000 (2006: RM10,888,000) respectively.



14. TRADE AND OTHER RECEIVABLES

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Trade receivablesThird parties Subsidiary

Less: Provision for doubtful debts Subsidiary Trade receivables, net

Other receivables Amount due from a subsidiary DepositsPrepaymentsSundry receivables

Less: Provision for doubtful debts Amount due from a subsidiary

371 -

371

- 371

- 206

10 221 437

- 437 808

542 -

542

- 542

- 303 158 100 561

- 561

1,103

- 616 616

(616) -

796 206

- 221

1,223

(796) 427 427

- 1,785 1,785

(1,785) -

798 197

1 100

1,096

- 1,096 1,096

(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 mainly on credit. The credit period is generally for a period of one month, extending up to three months for major customers. Each customer has a maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables and hasa credit control department to minimise credit risk. Overdue balances are reviewed regularly by senior management. Trade receivables are non-interest bearing.

As at balance sheet date, the Group has significant concentration of credit risk in the form of outstanding balance due from 3 (2006: 2) customers representing 73% (2006:78%) of total trade debtors.

(b) Amount due from a subsidiary -other receivables

Amounts due from a subsidiary under other receivables are non-interest bearing and repayable on demand. All subsidiary receivables are unsecured and are to be settled in cash.

15. CASH AND CASH EQUIVALENTS

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Cash on hand and at banks Less: Bank overdrafts (Note 16) Total cash and cash equivalents

204 (1,747) (1,543)

18 (1,398) (1,380)

37 (998) (961)

11 (997) (986)



16. BORROWINGS

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Short Term Borrowings Secured: Revolving credits Unsecured: Bank overdrafts (Note 15) Hire purchase and finance lease liabilities (Note 17)

Long Term Borrowings

Unsecured: Hire purchase and finance lease liabilities (Note 17) Total borrowings

Revolving credits Bank overdrafts Hire purchase and finance lease payables

6,700

1,747

3 1,750 8,450

2

6,700 1,747

5 8,452

6,700

1,398

3 1,401 8,101

5

6,700 1,398

8 8,106

6,700

998

3 1,001 7,701

2

6,700 998

5 7,703

6,700

997

3 1,000 7,700

5

6,700 997

8 7,705

The secured revolving credits of the Group and of the Company are secured against the following:

(i) first party charge over the freehold land and building of the Company (Note 11(c)); and

(ii) assignment of the insurance policy on the freehold land and building of the Company.

Other information on financial risks of the borrowings are disclosed in Note 27(b).



17. HIRE PURCHASE AND FINANCE LEASE LIABILITIES

Group and Company

2007RM’000

2006RM’000

Future minimum lease payments: Not later than 1 yearLater than 1 year and not later than 2 years Later than 2 years and not later than 5 years

Less: Future finance charges Present value of finance lease liabilities

Analysis of present value of finance lease liabilities: Not later than 1 year Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years

Less: Amount due within 12 months (Note 16) Amount due after 12 months (Note 16)

5 2 - 7 (2) 5

3 2 - 5 (3) 2

5 5 1

11 (3) 8

3 3 2 8 (3) 5

`The Group has finance leases and hire purchase contracts for certain items of property, plant and equipment (Note 11(b)). There are no restrictions placed upon the Group by entering into these leases and no arrangements have been entered into for contingent rental payments.

Other information on financial risks of hire purchase and finance lease liabilities are disclosed in Note 27(b)

18. TRADE AND OTHER PAYABLES

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Current

Trade payables - third parties

Other payablesDepositsAccrualsSundry payables

1,386

136 1,903 3,936 5,975 7,361

1,575

136 1,636 1,533 3,305 4,880

1,386

136 1,796 2,740 4,672 6,058

1,575

136 1,589 1,330 3,055 4,630

Included in sundry payables in the Group and the Company is an amount due to a director amounting to RM2,324,000 (2006: RM970,000) and RM1,310,000 (2006: RM970,000) respectively. The amount due to a director is unsecured, interest free and has no fixed term of repayment.



19. DEFERRED TAX

Group and Company

2007RM’000

2006RM’000

At 1 January Recognised in income statement Recognised in equity At 31 December Presented after appropriate offsetting as follows: Deferred tax assets Deferred tax liabilities At 31 December

663 (382) (281)

-

(1,004) 1,004

-

663 - -

663

(315)978 663

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

Deferred tax liabilities of the Group and of the Company:

AcceleratedCapital

Allowances RM’000

Revaluation of Freehold

Land and Building RM’000

Total RM’000

At 1 January 2007 Recognised in income statement Recognised in equity At 31 December 2007

At 1 January 2006/ 31 December 2006

315 307

- 622

315

663 -

(281) 382

663

978 307 (281)

1,004

978

Deferred tax assets of the Group and of the Company:

Unutilised Tax Losses

and Unabsorbed

Capital Allowances

At 1 January 2007 Recognised in income statement At 31 December 2007 At 1 January 2006/ 31 December 2006

(315) (689)

(1,004)

(315)



19. DEFERRED TAX (CONTD.)

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

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Unutilised tax losses Unabsorbed capital allowances Other deductible temporary differences

29,103 1,377

386 30,867

27,146 1,326

365 28,837

4,699 699

- 5,398

3,072 650

- 3,722

The unutilised tax losses and unabsorbed capital allowances of the Group amounting to RM31,708,000 (2006: RM29,516,000) and RM1,377,000 (RM1,326,000) respectively are available indefinitely for offsetting against future taxable profits of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act, 1967 and guidelines issued by the tax authority.

The unutilised tax losses and unabsorbed capital allowances of the Company are available for offsetting against future taxable profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.

20. SHARE CAPITAL

Group and Company

Number of OrdinaryShares of RM1 Each Amount

2007’000

2006’000

2007RM’000

2006RM’000

Authorised: At beginning/end of year

Issued and fully paid: At beginning/end of year

100,000

62,834

100,000

62,834

100,000

62,834

100,000

62,834

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.

Warrants

In 2004, the Company completed a renounceable rights issue of 12,566,666 new ordinary shares of RM1.00 each together with 12,566,666 free detachable warrants (“Warrants 2004/2014”) at an issue price of RM1.00 per rights share on the basis of one (1) rights share with one (1) free warrant for every four (4) existing ordinary shares held.

Each Warrant 2004/2014 entitles the warrant holder to subscribe for 1 new ordinary share in the Company at an exercise price of RM1.00 per share. The Warrant 2004/2014 will expire on 11 January 2014.



20. SHARE CAPITAL (CONTD.)

Warrants (Contd.)

The principal terms of the Warrants are set out below:

Exercise Price

The exercise price payable in respect of each new ordinary share of RM1.00 each in the Company to which a Warrant holder will be entitled to subscribe upon exercise of the Exercise Rights (as defined below) or such adjusted price in accordance with the terms and conditions to be set out in the Deed Poll has been fixed at RM1.00 per share.

Exercise Period The Warrants may be exercised at any time within a period of (10) years including and commencing from the issue date. The Warrants not exercised during the Exercise Period will thereafter become lapse and void.

Exercise Rights Each Warrant entitles the registered holder during the Exercise Period to subscribe for one (1) new ordinary share of RM1.00 each in the share capital of the Company at the Exercise Price.

Status of new ordinary shares to be issued pursuant to the exercise of Warrants

The new shares of RM1.00 each in the Company to be issued upon exercise of the Rights Warrants shall, on allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company except that they shall not be entitled to any dividends, that may be declared prior to the date of exercise of the Rights Warrant, nor shall they be entitled to any distributions or entitlements for which the record date is prior to the exercise of the Rights Warrants.

As at 31 December 2007, none of the Warrants 2004/2014 have been exercised.

21. OTHER RESERVES

AssetRevaluation

ReserveRM’000

Capital Reserve RM’000

Total RM’000

GroupAt 1 January 2007 Transfer from deferred tax At 31 December 2007

At 1 January 2006/31 December 2006

12,602 281

12,883

12,602

414 -

414

414

13,016 281

13,297

13,016

AssetRevaluation

RM’000

Total RM’000

Company At 1 January 2007 Transfer from deferred taxation At 31 December 2007

At 1 January 2006/31 December 2006

12,602 281

12,883

12,602

12,602 281

12,883

12,602



21. OTHER RESERVES (CONTD.)

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 land and buildings and decreases to the extent that such decreases relates to an increase on the same asset previously recognised to equity.

(b) Capital reserve

Capital reserve arose from a bonus issue in a subsidiary company via the capitalisation of retained earnings in prior years.

22. MINORITY INTERESTS

The minority shareholders’ share of loss in certain subsidiaries is limited to their share of the paid up capital of these subsidiaries. The balance of the loss will be borne by the Group until such time that these subsidiaries are able to generate profits. The minority shareholders had shared losses up to their share of paid up capital of these subsidiaries of approximately RM450,000 (2006: RM450,000).

The minority shareholders’ share of loss during the year and cumulative losses which are borne by the Group are approximately RM348,000 (2006: RM11,000) and RM8,423,000 (2006: RM11,247,000) respectively.

23. CONTINGENT LIABILITY

Company

2007RM’000

2006RM’000

Unsecured Corporate guarantee to a financial institution for overdraft facility obtained by a subsidiary 749 401

24. RELATED PARTY DISCLOSURES

(a) In addition to the transaction detailed elsewhere in the financial statements, the Group and the Company had the following transactions with the related parties during the financial year:

Group and Company

2007RM’000

2006RM’000

Revenue from sales of products - Setron Sales & Services (M) Sdn. Bhd. 12,768 11,321

The sales above were made according to the published prices and conditions offered to the major customers of the Group and the Company.



24. RELATED PARTY DISCLOSURES (CONTD.)

(b) Composition of key management personnel.

The remuneration of directors and other members of key management personnel during the year was as follows:

Group Company

2007RM’000

2006RM’000

2007RM’000

2006RM’000

Short-term employee benefits Post-employment benefits:- Defined contribution plan

986

97

1,083

985

99

1,084

722

66

788

708

66

774

25. SEGMENT REPORTING

No segment information has been prepared as the Group’s principal activities involve predominantly the assembly and sale of electrical and electronic products and are wholly carried out in Malaysia.

26. SIGNIFICANT EVENTS

(a) Proposed Restructuring Scheme (I)

The Company had on 4 January 2007, announced a Proposed Restructuring Scheme to regularise its financial condition pursuant to Practice Note 17/2005 which include the following proposals:

(i) Proposed Capital Reconstruction

The existing issued and paid-up share capital of Halifax of RM62,833,333 comprising 62,833,333 ordinary shares of RM1.00 each as at 31 December 2006 will be reduced pursuant to Section 64 of the Companies Act, 1965 to RM40,841,666 comprising 62,833,333 ordinary shares of RM0.65 each by way of cancellation of RM0.35 of the par value of each existing ordinary share of RM1.00 each in Halifax in issue.

The share capital amount of any new ordinary shares to be issued arising from exercise of the existing 12,566,666 Warrants 2004/2014 prior to the implementation of the Proposed Share Capital Reduction, if any shall also be reduced and cancelled accordingly. The credit of approximately RM21,992,000 after the Proposed Share Capital Reduction would be utilised to reduce the accumulated losses of the Group.

Upon completion of the Proposed Share Capital Reduction, every ten (10) ordinary shares of RM0.65 each in Halifax will be consolidated into one (1) ordinary share of RM6.50 each, and subsequently subdivided into thirteen (13) ordinary shares of RM0.50 each.

(ii) Proposed Cancellation of Share Premium Account

The entire share premium account will be cancelled pursuant to Section 64(1)(b) of the Companies Act, 1965 and the credit of approximately RM9,521,000 after the Proposed cancellation of Share Premium Account would be utilised to reduce the accumulated losses of the Group.



26. SIGNIFICANT EVENTS (CONTD.)

(a) Proposed Restructuring Scheme (I) (contd.)

(iii) Proposed Renounceable Rights Issue with Warrants

The Proposed Renounceable Rights issue with Warrants involves the issuance of up to 49,009,999 new ordinary shares of RM0.50 (Rights Shares) on the basis of five (5) new Rights shares with one (1) free detachable Warrants for every ten (10) existing shares held after the Proposed Share Capital Reconstruction at an indicative issue price of RM0.50 per Rights Share to the entitled shareholders.

A maximum of 49,009,999 Rights Shares have been arrived at based on the enlarged issued and paid-up share capital of Halifax of RM49,009,999 comprising 98,019,998 ordinary shares of RM0.50 each after the Proposed Share Capital Reconstruction (assuming all the existing Warrants 2004/2014 are exercised prior to the books closure date for the Proposed renounceable Rights Issue with Warrants)

Assuming that none of the existing Warrants 2004/2014 are exercised prior to the books closure date for the Proposed Capital Reconstruction and Proposed Renounceable Rights issue with Warrants, 40,841,666 Rights Shares would be issued.

(iv) Proposed Joint Venture in Boat Building Business

The Proposed Joint Venture would be undertaken via the joint venture Company, namely Halifax Marine Services Sdn. Bhd. (“HMS”). The parties to the Joint Venture agree to jointly via and under HMS to develop, construct, erect, finance, manage and operate the shipyard for the building of boats and similar vessels. The parties to the Joint Venture would be Halifax and Mr Pong Leung Swee (“PLS”) for which the proposed shareholdings are 51% (1,020,000 shares) and 49% (980,000 shares) respectively.

HCB estimates that the Proposed Joint Venture would require a development cost of approximately RM4,500,000 which would be funded by a combination of equity capital in HMS and bank borrowings. Total investment of Halifax in the Proposed Joint Venture via HMS would be RM1,020,000 being the Company’s 51% equity participation in HMS funded by internal funds and bank borrowings.

(v) Proposed Acquisition of 60% Equity Interests in Semaring Offshore Services Sdn. Bhd. and Semaring Enterprise Sdn. Bhd.

Halifax Capital Berhad proposed to acquire 60% of equity interests in Semaring Enterprise Sdn. Bhd. (“SESB”) and Semaring Offshore Sdn. Bhd. (“SOSSB”) to be satisfied by the following:

(a) cash amounting to RM1,600,000 for SESB and RM7,360,000 for SOSSB; and

(b) issue of 800,000 and 3,680,000 new ordinary share of RM0.50 each for SESB and SOSSB respectively, representing approximately 5% of the enlarged issued and paid-up share capital of Halifax.

Subsequent to the announcement, after due consideration of all facts and circumstances, the above Scheme was aborted and no submission to the Securities Commission (“SC”) was made.




(b) Proposed Restructuring Scheme (II)

On 5 June 2007, the Company announced a new Proposed Restructuring Scheme which was submitted to the SC on 13 June 2007. The new Proposed Restructuring Scheme comprises the following proposals:

(i) Proposed Share Capital Reduction

Proposed reduction of the Company’s existing issued and paid up share capital of RM62,833,333 comprising 62,833,333 ordinary shares of RM1.00 each in the Company to RM6,283,333 comprising 62,833,333 ordinary shares of RM0.10 each to be effected by the cancellation of RM0.90 of the par value of each ordinary share.

(ii) Proposed Share Premium Cancellation

Cancellation of the entire share premium account of Halifax to be set-off against the accumulated losses of Halifax.

(iii) Proposed Acquisition

Proposed acquisition of the entire equity interest of Zecon Toll Concessionaire Sdn. Bhd. (“ZTCSB”) from Zecon Berhad (formerly known as Zecon Engineering Berhad.) (“Zecon”) comprising 1,000,000 ordinary shares of RM1.00 each in ZTCSB for a total consideration of approximately RM106.19 million to be satisfied by the issuance of 50,000,000 new ordinary shares of RM0.10 each in Halifax and the remaining RM101.19 million as settlement of the outstanding amount due to ZTCSB by Zecon and its subsidiaries.

(iv) Proposed Waiver

Proposed waiver under Practice Note 2.9.1 of the Malaysian Code on Take-overs and Mergers, 1998 from having to undertakea mandatory offer for the remaining shares in Halifax not held by Zecon and parties acting in concert with it upon the completion of the Proposed Acquisition.

(v) Proposed Rights Issue With Warrants

Proposed renounceable rights issue of up to 783,749,994 new ordinary shares of RM0.10 each (“Rights Shares”) together with up to 156,749,999 free detachable warrants at an indicative issue price of RM0.10 each on the basis of twenty-five (25) new ordinary shares of RM0.10 each for every four (4) ordinary shares of RM0.10 each held in Halifax together with one (1) new warrant for every five (5) Rights Shares subscribed.

(vi) Proposed Disposal

Proposed disposal of land and building of Halifax held under Lot 3848, HS(D) 262662, Lot 3849, HS(D)262660 and PTD 56992, HS(D) 262661, all within Mukim of Tebrau, District of Johor Bahru, Johor Darul Takzim, to a third party to be identified.

Subsequently, after due consideration of all facts and circumstances, certain proposals in the above submission were revised by the Company.

On 20 September 2007, the Company announced a revision to the proposals from that included in the submission to the SC on 13 June 2007. The Proposed Restructuring Scheme was re submitted on 21 September 2007 to the SC and comprises the following revised proposals:

(i) Proposed Share Capital Reduction

Reduction of Halifax’s existing issued and paid-up share capital of RM62,833,333 comprising of 62,833,333 ordinary shares of RM1.00 each to RM6,283,333 comprising 62,833,333 ordinary shares of RM0.10 each to be effected by the cancellation of RM0.90 of the par value of each ordinary share.




(b) Proposed Restructuring Scheme (II) (Contd.)

(ii) Proposed Share Premium Cancellation

Cancellation of the entire share premium account of Halifax to be set-off against the accumulated losses of Halifax.

(iii) Proposed Acquisition

Acquisition of the entire equity interests of ZTCSB from Zecon comprising 1,000,000 ordinary shares of RM1.00 each in ZTCSB for a total purchase consideration of RM42 million to be satisfied by the issuance of 420,000,000 new ordinary shares of RM0.10 each in Halifax.

(iv) Proposed Waiver

Waiver under Practice Note 2.9.1 of the Malaysian Code on Take-overs and Mergers, 1998 from having to undertakea mandatory offer for the remaining shares in Halifax not held by Zecon and parties acting in concert with it upon the completion of the Proposed Acquisition.

(v) Proposed Rights Issue with Warrants

Renounceable rights issue of up to 381,076,922 new ordinary shares of RM0.10 each (“Rights Shares”) together with up to 76,215,384 free detachable warrants at an indicative issue price of RM0.10 each on the basis of ten (10) new ordinary shares of RM0.10 each for every thirteen (13) ordinary shares of RM0.10 each held in Halifax together with one (1) new warrant for every five (5) Rights Shares subscribed.

(vi) Proposed Offer for Sale

Offer for sale of up to 180,000,000 ordinary shares of Halifax of RM0.10 each by Zecon at a price to be determined and to parties to be identified later in order to meet the public shareholding spread of Halifax.

(vii) Proposed Disposals

Disposal of land and building of Halifax held under Lot 3848, HS(D) 262662, Lot 3849, HS(D) 262660 and PTD 56992, HS(D) 262661 to a third party to be identified.

Subsequently, the above submission was withdrawn by the Company.

The Company is currently in the process of finalising and re-submitting a new proposed restructuring scheme and has been granted an extension of time by Bursa Malaysia to resubmit it to the SC by 18 May 2008.

27. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policy

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 risks. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has been throughout the year under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.



27. FINANCIAL INSTRUMENTS (CONTD.)

(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 interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates.

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.

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:

NoteWAEIR

%

Within 1 Year

RM’000

1-2 Years

RM’000

2-3 Years

RM’000 Total

RM’000

At 31 December 2007

Group

Fixed rateHire purchase and finance lease liabilities

Floating rateBank overdraftsRevolving credit

16,17

15,1616

8.00

8.60 7.25

3

(1,747)(6,700)

2

- -

-

- -

5

(1,747)(6,700)

At 31 December 2007

Company



16,17

15,1616

8.00

8.60 7.25

3

(998)(6,700)

3

- -

2

- -

8

(998)(6,700)




(b) Interest Rate Risk (contd.)

NoteWAEIR

%

Within 1 Year

RM’000

1-2 Years

RM’000

2-3 Years

RM’000 Total

RM’000

At 31 December 2006

Group



Company



16,17

15,1616

16,17

15,1616

8.00

8.60 7.25

8.00

8.60 7.25

3

(1,398)(6,700)

3

(997)(6,700)

3

- -

3

- -

2

- -

2

- -

8

(1,398)(6,700)

8

(997)(6,700)

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.

(c) Foreign Exchange Risk

The Group is not significantly exposed to transactional currency risk since the sales and purchases are denominated in Ringgit Malaysia, which is its functional and reporting currency.

(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.

In addition, the Group is conjuring up a strategic move to regularise its earnings via a proposed restucturing plan that is expected to bring in sustainable positive cash flows on the future to address its liquidity issue.





(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, receivable 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, and non-current investments, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

As at balance sheet date, the Group has significant concentration of credit risk in the form of outstanding balance due from 3 (2006: 2) customers representing 73% (2006:78%) of total trade debtors.

(f) Fair Values

The aggregate net fair values of financial assets and financial liabilities which are not carried at fair value on the balance sheets of the Company as at the end of the financial year are amounts due (to)/from subsidiaries. It is not practical to estimate the fair value of amounts due (to)/from subsidiaries due principally to a lack of fixed repayment term entered by the parties involved and without incurring excessive costs.

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) Cash and Cash equivalents, Receivables/Payables and Short Term Borrowings

The carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments.

(ii) Borrowings

The fair value of borrowings is estimated by discounting the expected future cash flows using the current interest rates for liabilities with similar risk profiles.

28. COMPARATIVES

Certain comparative amounts as at 31 December 2006 have been reclassified to conform with current year’s presentation:

AtRestated

RM’000Adjustments

RM’000

As PreviouslyStated

RM’000

Group Income Statements Administrative expenses Other expenses Company Income Statements Administrative expenses Other expenses

2,305 576

1,782 2,016

967 (967)

(831) 831

1,338 1,543

2,613 1,185


analysis of shareholdingas at 15 may 2008

Authorised Share Capital : RM100,000,000 Paid-Up Share Capital : RM62,833,333Class of Shares : Ordinary Share of RM1.00 each Voting rights : One vote per share

LIST OF SUBSTANTIAL SHAREHOLDERSAs At 15th May 2008

No of Shares

Direct % Indirect %

Zecon Berhad 16,007,100 25.48 - -

DIRECTOR’S SHAREHOLDINGAs At 15th May 2008

No of Shares

Direct % Indirect %

Datuk Hj Zainal Abidin Bin Hj Ahmad 2,515,200 4.00 16,007,100(1) 25.48

Jamel Bin Matin @ Ibrahim 25,000 0.04 - -

Zailan Bin Mohd Zahid 1,700 negligible - -

(1) Deemed interested by virtue of his substantial shareholdings in Zecon Berhad.

SHAREHOLDING STATISTICSAs At 15th May 2008

Range of ShareholdingNo of Shares

% Over Total Shares

No ofShareholders

% Over Total Shareholders

Less than 100 6,084 0.01 221 3.97

100 to 1,000 1,946,033 3.10 2,052 36.82

1,001 to 10,000 10,960,456 17.44 2,795 50.15

10,001 to 100,000 13,345,444 21.24 452 8.11

100,001 to less than 5% of issued shares

20,568,216 32.73 52 0.93

5% and above of issued shares 16,007,100 25.48 1 0.02

Total 62,833,333 100.00 5,573 100.00


30 largest shareholdersas at 15 may 2008

NO. SHAREHOLDERS NO OF SHARES PERCENTAGE (%)

1 Zecon Berhad

16,007,100 25.48

2 Zainal Abidin Bin Ahmad 2,515,200 4.00

3 Zulkifli Bin Jafar 1,789,900 2.85

4 Nor Ashikin Binti Khamis 1,200,300 1.91

5 Chin Sin Lin 1,122,350 1.79

6 HLB Nominees (Tempatan) Sdn. Bhd.

Pledge Securities Account for On Boon Kai 1,052,000 1.67

7 Gan Siew Liat 1,030,000 1.64

8 Chin Kiam Hsung 666,500 1.06

9 HDM Nominees (Tempatan) Sdn. Bhd.Lim & Tan Securities Pte Ltd for Ng Cheong Hock

625,700 1.00

10 Jagjit Singh A/L Sarjit Singh 620,000 0.99

11 Chin Kian Fong 499,400 0.79

12 Tan Hin Tan 451,800 0.72

13 Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Ramly Bin Abdullah

450,000 0.72

14 Digital Network Sdn. Bhd. 430,200 0.68

15 Yong Kwee Lian 400,000 0.64

16 Chin Kiam Hsung 370,400 0.59

17 TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for UB CD Management Sdn. Bhd.

350,000 0.56

18 Wong Lay Leng 350,000 0.56

19 Ng Kim Bee 344,900 0.55

20 OSK Nominee (Tempatan) Sdn Bhd Pledge Securities Account for Amin Shah Bin Omar Shah

335,200 0.53

21 RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Chuah Han Seng

295,000 0.47

22 A Jalil Bin Hasan 284,300 0.45

23 Sia Kean Teong 272,400 0.43

24 Ooi Say Hup 264,400 0.42

25 Ooi Say Hup 252,400 0.40

26 Hasnandi Bin Mohamad Jennis 235,900 0.38

27 Kenneth Tung Kong Weng 231,000 0.37

28 Ang Chim Tiam 213,500 0.34

29 Ng Kim Bee 208,000 0.33

30 Ahmad Zaini Bin A. Jamil 207,000 0.33

33,074,850 52.65


analysis of warrantholdingsas at 15 may 2008

Class of Shares : Warrants 2004/2014Voting rights : One vote for each warrant held

WARRANTHOLDING STATISTICSAs At 15th May 2008

Range of WarrantholdingNo of

Warrant% Over Total War-

rantsNo of

Warrantholders% Over Total

Warrantholders

Less than 100 2,368 0.02 47 4.94

100 to 1,000 240,531 1.91 357 37.54

1,001 to 10,000 1,834,350 14.60 345 36.28

10,001 to 100,000 6,295,617 50.10 183 19.24

100,001 to less than 5% of issued warrants

4,193,800 33.37 19 2.00

5% and above of issued warrants - - - -

Total 12,566,666 100.00 951 100.00

No. Name of Warrantholders No. of Warrants Percentage (%)

1. Ong Keh Eon

600,100 4.78

2. Engku Zaina Abidin Bin Sayed Mohammad 600,000 4.77

3. Khor Leong Kee 270,000 2.15

4. Lu Ngie Chiong 263,900 2.10

5. RHB Capital Nominees (Tempatan) Sdn. BhdPledged Securities Account for Chuah Han Seng

255,000 2.03

6. Sim Geok Ngo 209,900 1.67

7. Ng Aik Guan 200,000 1.59

8. Azizah Binti Ismail 200,000 1.59

9. Chuan Han Seng 191,900 1.53

10. HDM Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Eric Gan Eu Leong

190,000 1.51

11. Low Yoke Choo 181,000 1.44

12. Mayban Nominees (Asing) Sdn BhdPledged Securities Account for Lim Ai Ling

152,400 1.21

13. Gooi Seok Ching 150,000 1.19

14. Seri Rahayu Binti Samsudin 147,900 1.18

15. Wong Fook Weng 125,000 0.99

16. TA Nominees (Asing) Sdn. Bhd.Pledged Securities Account for Charles Ross Mckinnon

125,000 0.99

17. Thean Yin Kong 111,100 0.88

30 largest warrantholdersas at 15 may 2008


Location No. 5, Jalan Riang 24Taman GembiraOff Jalan Tampoi81200 Johor BahruJohor Darul Takzim

Lot 1543 Mukim of Serting UluDistrict of Jempol Negeri Sembilan

Area (sq. ft.) 288,475 17,600

Description 3 lots of freehold land for industrial purposes with 6 factory buildings

Factory building comprising of a single storey uninterrupted working area annexed with a 2-storey office block

Existing Use 3 factories2 offices cum warehouse1 warehouse

Vacant

Tenure Freehold 30 years lease commencing 15/8/89

Approx. Age of Building

2 buildings –18 years2 buildings –23 years 2 buildings –36 years

19 years

Net Book Value as at 31 December 2007 (RM’000)

16,034 -

Date of Revaluation October 2005 N/A

No. Name of Warrantholders No. of Warrants Percentage (%)

18. Mayban Securities Nominees (Tempatan) Sdn BhdPledged Securities Account for Dickson Martin Silva A/L Cruz Anthony Silva

110,600 0.88

19. Wong Swee Khoon 110,000 0.88

20. Chong Choy Foong 100,000 0.80

21. Loi Teik Tong @ Lee Teik Tong 100,000 0.80

22. Liew Chook Seong 100,000 0.80

23. Cimsec Nominees (Tempatan) Sdn. Bhd.ING Asia Private Bank Limited for Eng Sim Leong @ Ng Leong Sing

100,000 0.80

24. Azhari Bin Daud 100,000 0.80

25. Lim Ah Leong 100,000 0.80

26. Chiew Nor He 100,000 0.80

27. Meenambal A/P Vijayakumar 100,000 0.80

28. Chuah Chai Hong 90,000 0.72

29. Cimsec Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Chuah Chai Hong

83,000 0.66

30. Ahmad Bin Jamil 83,000 0.66

5,249,800 41.80

30 largest warrantholdersas at 15 may 2008 (contd.)

list of propertiesheld by the halifax capital berhad group

I/We,………………..................................................………………………..………………………………..……………………….…. (FULL NAME IN BLOCK LETTERS)

of…………………………………………..................................................……………………………………………………………….(FULL ADDRESS)

being a member of HALIFAX CAPITAL BERHAD, hereby appoint ……………………………..………..……………………………

……………………………………………………………………………..............................................................……………………..(FULL NAME IN BLOCK LETTERS)

of…………………………………..………………………..............................................................……………………………………. (FULL ADDRESS)

or failing him/her ………………….…………................................................................………………………………………………..(FULL NAME IN BLOCK LETTERS)

of…………………………………..…………………………………………………..............................................................…………. (FULL ADDRESS)

or failing him/her, THE CHAIRMAN OF THE MEETING, as my/our proxy to vote for me/us and on my/our behalf at the Thirty-Sixth Annual General Meeting of the Company, to be held at the Conference Room, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400, Kuching, Sarawak on Thursday, 26 June 2008 at 11.00 a.m. and at any adjournment thereof.

ORDINARY RESOLUTIONS FOR AGAINST

1. To approve payment of Directors’ fees for the financial year ended 31 December 2007.

2. Re-election of Director – Hj Zainurin bin Hj Ahmad

3. Re-election of Director – Prof. Dato’ Mohd Hamdan bin Hj Adnan

4. Re-election of Director – Dato’ Hj Hamzah bin Hj Ghazalli

5. To re-appoint Messrs. Ernst & Young as Auditors and to authorise the Directors to fix their remuneration for the ensuing year.

6. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965.

(Please indicate with an (X) how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his discretion.)

Dated this………….day of ……………………, 2008

Number of Shares Held

………………………………………………{Signature/Common Seal of Shareholder(s)}

Notes:-1. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such

appointer is a corporation under its Common Seal or under the hand of the attorney. A proxy shall be entitled to vote both on a show of hands and on a poll on any question at any General Meeting.

2. A member shall not be entitled to appoint a person who is not a member as his proxy unless that person is a qualified legal practitioner, an approved company auditor or a person approved by the Companies Commission of Malaysia in a particular case.

3. A member shall not be entitled to appoint more than two proxies to attend and vote at the same meeting. Where a member appoints two proxies, the appointments shall be invalid unless he specified the proportions of holdings to be represented by each proxy.

4. The instrument of a proxy and power of attorney (if any) under which it is signed or a notarially certified copy thereof shall be deposited at the Registered Office of the Company, Conference Room, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400, Kuching, Sarawak not less than forty-eight (48) hours before the time for the holding of the meeting or adjourned meeting as the case may be at which the person named in such instrument proposes to vote.

FORM OF PROXY

The Company SecretaryHALIFAX CAPITAL BERHAD (11208-M)8th Floor, Menara Zecon,No. 92, Lot 393,Section 5 KTLD, Jalan Satok,93400 Kuching, Sarawak.

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Documents

2007 - National University of Singaporelibapps2.nus.edu.sg/nus_hl/halifax2007.pdf · 2007 Annual Report Halifax Capital BerHad (11208-M) ... Jalan Tun Tan Cheng Lock, 50000 Kuala