Cover Rationale. Stockbroking and Related Services. Futures and Derivatives. Unit Trust. Asset Management. Credit and Financial Services

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2 Stockbroking and Related Services Futures and Derivatives Unit Trust Asset Management Credit and Financial Services Property Development and Management Hotel Operations Cover Rationale The power of unity plays an important role in the success and achievement of the company. Riding on a wave of opportunities with dynamic and innovative management, teamwork and commitment to excellence, the Company is confi dent of achieving its goals and objectives. The leaf motive signifi es TA s commitment to be a responsible and caring corporate citizen towards its employees, shareholders, other stakeholders, the community and the environment.

3 CONTENTS 02 Notice of Eighteenth Annual General Meeting 03 Statement Accompanying Notice of Annual General Meeting 04 Corporate Information 06 Profile of Directors 10 Chairman s Statement 17 Corporate Social Responsibility 19 Statement on Corporate Governance 23 Statement on Directors Responsibility in Relation to the Financial Statements 24 Report on Audit Committee 28 Statement on Internal Control 32 5-year Group Financial Summary 37 Financial Statements 125 List of Properties 129 Analysis of Shareholdings 132 Analysis of Warrantholdings Enclosed Form of Proxy TA ENTERPRISE BERHAD ANNUAL REPORT

4 notice of eighteenth annual general meeting NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of TA Enterprise Berhad will be held at the Auditorium, 10th Floor, Menara TA One, 22 Jalan P. Ramlee, Kuala Lumpur on Thursday, 19 June 2008 at a.m. for the following purposes: AGENDA As Ordinary Businesses 1. To received and adopt the Audited Accounts for the year ended 31 January 2008 and the Reports of the Directors and Auditors thereon. 2. To approve a first and final dividend of 10% less taxation for the year ended 31 January Resolution 1 Resolution 2 3. To re-elect the following Directors: a. Mr Jory Leong Kam Weng who retires by rotation in accordance with Article 102 of the Company s Articles of Association. b. Mr Christopher Koh Swee Kiat who retires by rotation in accordance with Article 102 of the Company s Articles of Association. c. Datuk Tiah Thee Kian who retires by rotation in accordance with Article 109 of the Company s Articles of Association. d. Puan Rahmah Binti Mahmood who retires by rotation in accordance with Article 109 of the Company s Articles of Association. 4. To approve the payment of Director s fees of RM173,890 for the year ended 31 January To re-appoint Messrs Ernst & Young as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration. As Special Business 6. To consider and if thought fit, to pass the following ordinary resolution: Resolution 3a Resolution 3b Resolution 3c Resolution 3d Resolution 4 Resolution 5 Resolution 6 THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant government/regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965 to further allot and issue ordinary shares in the Company from time to time upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares to be allotted and issued pursuant to this resolution does not exceed ten percent (10%) of the total issued share capital of the Company in any one financial year and that such authority shall remain in force until the conclusion of the next Annual General Meeting of the Company. 7. To transact any other business of which due notice shall have been received. NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS HEREBY GIVEN THAT the first and final dividend of 10% less taxation for the year ended 31 January 2008, if approved by the shareholders at the Company s Eighteenth Annual General Meeting, will be paid on 1 August 2008 to members whose names appear in the Company s Register of Members at the close of business on 3 July A depositor shall qualify for entitlement only in respect of: 1. Shares transferred to the depositor s securities account before 4.00 p.m. on 3 July 2008 in respect of ordinary transfers; and 2. Shares deposited into the depositor s securities account before p.m. on 1 July 2008 (in respect of shares exempted from mandatory deposit); and 02 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

5 notice of eighteenth annual general meeting (cont d) 3. Shares bought on the Bursa Malaysia on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad. BY ORDER OF THE BOARD Khoo Poh Kimmy Yong Kim Kiong Secretaries 28 May 2008 Notes: 1. A member entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies (but not more than two) to attend and vote in his stead. A proxy may but need not be a member of the Company and if he is not a member, he need not be an advocate, an approved company auditor or a person approved by the Companies Commission of Malaysia for this purpose. 2. The Form of Proxy must be deposited at the Company s Registered Office, 34th Floor, Menara TA One, 22, Jalan P.Ramlee, Kuala Lumpur not less than Forty-eight (48) hours before the time appointed for holding the meeting. 3. Explanatory Notes on Special Business: The proposed Ordinary Resolution No. 6, if passed, will empower the Directors of the Company to issue and allot shares in the Company up to an amount not exceeding ten percent (10%) of the issued capital of the Company for the time being, for such purpose as they consider would be in the interest of the Company. This authority unless revoked or varied at a general meeting will expire at the next Annual General Meeting of the Company. statement accompanying notice of annual general meeting 1. THE DIRECTORS WHO ARE STANDING FOR RE-ELECTION Datuk Tiah Thee Kian Puan Rahmah Binti Mahmood Mr Jory Leong Kam Weng Mr Christopher Koh Swee Kiat 2. DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETINGS There were six (6) Board of Directors Meetings held during the financial year ended 31 January The attendance of the Directors at the Board Meetings is presented in the Statement of Corporate Governance on page PLACE, DATE AND HOUR OF MEETING Date : Thursday, 19 June 2008 Time : a.m. Place : The Auditorium 10th Floor, Menara TA One 22 Jalan P. Ramlee Kuala Lumpur 4. PROFILE OF DIRECTORS STANDING FOR RE-ELECTION Further details pertaining to Directors standing for re-election are outlined on pages 6 to 9 of the Annual Report. Details pertaining to securities holding of Directors in the Company are outlined on pages 129 and 132 of the Annual Report. TA ENTERPRISE BERHAD ANNUAL REPORT

6 corporate information BOARD OF DIRECTORS Datuk Tiah Thee Kian Executive Chairman Mr Peter U Chin Wei Independent Non-Executive Director Datin Tan Kuay Fong Managing Director & Chief Executive Officer Mr Jory Leong Kam Weng Independent Non-Executive Director Puan Zainab Binti Ahmad Executive Director Mr Christopher Koh Swee Kiat Independent Non-Executive Director Dato Mohamed Bin Abid Executive Director Puan Rahmah Binti Mahmood Independent Non-Executive Director 04 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

7 corporate information (cont d) Audit Committee Mr Peter U Chin Wei Chairman Company Secretaries Khoo Poh Kimmy (LS 04542) Registered Office 34th Floor, Menara TA One 22 Jalan P. Ramlee Kuala Lumpur Malaysia Tel : Fax : Mr Jory Leong Kam Weng Member Yong Kim Kiong (MIA 19777) Share Registrar Tenaga Koperat Sdn Bhd 20th Floor, Plaza Permata Jalan Kampar off Jalan Tun Razak Kuala Lumpur Tel : Fax : Mr Christopher Koh Swee Kiat Member Auditors Ernst & Young Stock Exchange Listing The Main Board of Bursa Malaysia Securities Berhad Stock Code 4898 TA ENTERPRISE BERHAD ANNUAL REPORT

8 PrOfilE Of DirECTOrS DaTuK Tiah ThEE KiaN Executive Chairman Aged 61 Malaysian Y Bhg Datuk Tiah Thee Kian holds a Bachelor of Science from University of Malaya and a Masters in Business Management from Asian Institute of Management, Philippines. He joined TA Securities Berhad as a General Manager in September 1987 and was appointed the Managing Director in November 1988 and thereafter, Executive Chairman in July In year 1990, he initiated the public listing of TA Enterprise Berhad and was appointed as the Executive Chairman and Managing Director of TA Enterprise Berhad in October 1990, a position that he held till May On 16 August 2007, he resumed his position as the Executive Chairman of TA Enterprise Berhad. He is the Chairman of the Company s Property Management Committee, Group Investment Committee and Tender Committee. He is the husband of Datin Tan Kuay Fong, Managing Director & Chief Executive Offi cer of the Company. He has attended all the Board Meetings held after his appointment as Director/Executive Chairman till the end of the fi nancial year. On 10 May 2002, he was convicted in the Sessions Court in Shah Alam, Selangor for permitting the furnishing of a false report on share prices to the Kuala Lumpur Stock Exchange and was convicted and fi ned RM3,000,000.00, which he paid on the same day. DaTiN TaN KuaY fong Managing Director & Chief Executive Offi cer Aged 57 Malaysian Y Bhg Datin Tan Kuay Fong holds a Bachelor of Economics (Honours) Degree and a Post Graduate Diploma in Accounting from the University of Malaya. She joined TA Securities Berhad in 1987 as an Executive Director and was appointed the Managing Director in July She resigned from the Board of TA Securities Berhad on 23 June 2003 to concentrate more on the property investments and other business activities of the TA Group. She was appointed as Executive Director of TA Enterprise Berhad on 13 March 1990 and subsequently was appointed as Executive Chairman of TA Enterprise Berhad on 10 May On 16 August 2007 she was re-designated as Managing Director & Chief Executive Offi cer of TA Enterprise Berhad. She is a member of the Company s Property Management Committee, Group Investment Committee, Tax Planning Committee, Option Committee, Tender Committee and Information Technology Management Committee. She is also an advisor to the Stockbroking Management Committee. She is the wife of Datuk Tiah Thee Kian, Executive Chairman and a substantial shareholder of the Company. She has attended all six of the Board Meetings held during the fi nancial year. 06 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

9 PrOfilE Of DirECTOrS (cont d) DaTO mohamed BiN abid Executive Director Aged 65 Malaysian Y Bhg Dato Mohamed Bin Abid studied Business Management at The MARA Institute of Technology and was admitted as a Member of the British Institute of Management. He was appointed as Executive Director of TA Enterprise Berhad on 1 July He has extensive experience in the shipping industry and has held various senior positions, both locally and abroad. Over the years, his established network of local and international business contacts have been invaluable to the growth and development of the TA Group. In addition, he has also actively been involved in building the corporate as well as public image of the TA Group of Companies. He sits on the Boards of a number of companies within the TA Group. He is a member of the Company s Property Management Committee. He has attended all six of the Board Meetings held during the fi nancial year. He is deemed to have a vested interest in the joint venture between TA Properties Sdn Bhd and Beringin Terrace Sdn Bhd to develop all that piece of freehold land held under No. H.S. (D) 32163, PT 938 in the Mukim of Kuala Lumpur, Wilayah Persekutuan measuring approximately 12, square metres, by virtue of Section 122A of the Companies Act, 1965 as Y Bhg Dato Mohamed Bin Abid who is an Executive Director and Shareholder of the Company and a Director of TA Properties Sdn Bhd, whereas his son Hafez Bin Mohamed is a Director and Shareholder of Beringin Terrace Sdn Bhd. PuaN ZaiNaB BiNTi ahmad Executive Director Aged 56 Malaysian Puan Zainab Binti Ahmad holds a Bachelor in Business Administration Degree from the ITM/University of Ohio. She was appointed as Director of TA Securities Sdn Bhd in December 1987 till October She was then appointed as Executive Director of TA Enterprise Berhad on 13 March She also sits on the Boards of a number of companies within the TA Group. She is a member of the Company s Property Management Committee and Tender Committee. She has attended fi ve of the six Board Meetings held during the fi nancial year. mr PETEr u ChiN WEi Independent Non-Executive Director Aged 57 Malaysian Mr Peter U Chin Wei is a Fellow of the Institute of Chartered Accountants in England and Wales. He was appointed as Executive Director of TA Enterprise Berhad in October 1990 till October He was then re-appointed as Independent Non-Executive Director of TA Enterprise Berhad on 15 July Prior to joining the Company, he was attached to a few companies including 8 years in the MUI Group in various capacities. He also sits on the Board of Kumpulan Europlus Berhad. He is the Chairman of the Company s Audit Committee, Nomination Committee and Remuneration Committee. He has attended fi ve of the six Board Meetings held during the fi nancial year. TA ENTERPRISE BERHAD ANNUAL REPORT

10 PrOfilE Of DirECTOrS (cont d) mr JOrY leong Kam WENg Independent Non-Executive Director Aged 44 Malaysian Mr Jory Leong Kam Weng holds a Bachelor of Economics Degree and a Bachelor of Laws Degree from Monash University, Australia. He is a Certifi ed Public Accountant of CPA Australia and a Chartered Accountant of the Malaysian Institute of Accountants. He is also a certifi ed mediator on the panel of the Malaysian Mediation Centre, Bar Council Malaysia. He was called to the Malaysian Bar in In February 1992, he joined TA Enterprise Berhad as the Group Legal Manager and served in that position until July He was the Vice President, International Division of TA Enterprise Berhad from November 1993 to October Between November 1995 to February 1997, he held the position of General Manager/Director of TA First Credit Sdn Bhd. He also held the post of Executive Director of TA Bank of Philippines, Inc from March 1997 to June 1998 and from June 1998 to July 1999, he was the Chief Executive Offi cer of TA Securities Berhad. Since July 1999, he has been a Partner of Messrs Iza Ng Yeoh & Kit as a practicing Advocate and Solicitor. He is also a Director of Spring Hill Management Sdn Bhd, a venture capital management corporation registered with the Securities Commission. He was appointed as Independent Non-Executive Director of TA Enterprise Berhad on 19 May He is a member of the Company s Audit Committee, Nomination Committee, Remuneration Committee and Corporate Governance Committee. He has attended all the six Board Meetings held during the fi nancial year. mr ChriSTOPhEr KOh SWEE KiaT Independent Non-Executive Director Aged 40 Malaysian Mr Christopher Koh Swee Kiat graduated with a L.L.B (Hons) from the University of Malaya and was called to the High Court of Malaya as an Advocate and Solicitor in March He also holds an ACCA postgraduate diploma in Accounting and Finance. He joined TA Securities Berhad in November 1995 and was subsequently appointed as the Head of Legal Affairs Department. He has negotiated and prepared the legal documentation for the various overseas ventures of the Company including a bank and stockbroking companies in over four countries. He was previously an in-house counsel for MasterCard International in its Asia Pacifi c regional offi ce in Singapore. He established Messrs Chris Koh & Chew, Advocates & Solicitor in January On 24 May 2006, he was appointed as Independent Non-Executive Director of TA Enterprise Berhad. He is a member of the Company s Audit Committee, Remuneration Committee and Nomination Committee. He has attended all the six Board Meetings held during the fi nancial year. 08 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

11 PrOfilE Of DirECTOrS (cont d) PuaN rahmah BiNTi mahmood Independent Non-Executive Director Aged 50 Malaysian Puan Rahmah Binti Mahmood holds a Bachelor of Science in Marketing and a Bachelor of Science in Mass Communications from Syracuse University, New York and a Masters of Journalism/Public Relations from University of Southern California. She holds the position of Chairman and Managing Director of Syarikat Mahmood Ambak & Sons Sdn Bhd since March She is also a shareholder and plays an active role on the Board of Malaysian Automotive Lighting Sdn Bhd, a global manufacturing partnership with Automotive Lighting Reutlingen Gmbh, Germany. She also sits on the Board of Spanfi eld Sdn Bhd and Clearwater Towers Sdn Bhd, environmental companies. On 16 August 2007, she was appointed as Independent Non-Executive Director of TA Enterprise Berhad. She has attended all the Board Meetings held after her appointment as Independent Non-Executive Director till the end of the fi nancial year. Notes:. family relationship of Directors Save as disclosed, none of the directors has any family relationship with any director and/ major shareholder of the Company. 2. Conflict of interest Save as disclosed, none of the Directors has any confl ict of interest with the Company. 3. Conviction of Offence Save as disclosed, none of the Directors has been convicted of any offence in the past 10 years. 4. Securities holdings The particulars of the Directors securities holdings are set out in pages 129 and 132. Datin Alicia Tiah receiving The Ernst & Young Entrepreneur of The Year R Malaysia 2007, Women Category J.W. Marriott Hotel, Kuala Lumpur. TA s Company Dinner, Glitz & Glamour Kuala Lumpur Convention Centre. TA ENTERPRISE BERHAD ANNUAL REPORT

12 chairman s statement Dear Shareholders, On behalf of the Board members of TA ENTERPRISE BERHAD, it gives me great pleasure to present to you the 18th Annual Report and Financial Statements of the Company and the Group for the financial year ended 31 January FINANCIAL REVIEW FY2008 was an exciting year as the Group registered significant improvement in profit on the back of a buoyant stockmarket and a growing property contribution. The Group s profit before tax ( PBT ) increased by 100% to RM286.9 million as compared to RM143.1 million achieved for the financial year ended 31 January The Group s net profit attributable to shareholders improved by 68.5% to RM224.2 million. As a result, earning per share ( EPS ) rose to sen from sen in the previous financial year and the Group s return on shareholders equity ( ROE ) improved to 10.5%. As at 31 January 2008, the Group s shareholders funds stood at RM2.1 billion. The net tangible asset per share increased from RM1.42 to RM1.51. Riding on the wave of the stock market rally in the region, the Group s Stockbroking Division was the star performer in FY2008. PBT for this division increased by more than double for the financial year under review and at the same time maintained its status as the main earning contributor to the Group at 54.7%. The Group s Property Development Division made great strides with a 74% increase in PBT to RM67.5 million. Notwithstanding the financial improvement, the Division has laid the foundation for a greater performance in the years ahead. Apart from Stockbroking and Property Development Division, all the other business divisions within the Group also chalked up higher revenue and PBT in this financial year. DIVIDEND In line with the Company s dividend payout policy of distributing between 40% to 60% of the Group s profit after tax, the Board is recommending a first and final dividend of 10% less taxation (approximately 50% of the Group s profit after tax) for the financial year ended 31 January 2008 for shareholders approval. 10 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

13 ChairmaN S STaTEmENT (cont d) OPEraTiONS review and DEVElOPmENT Stockbroking malaysia During the fi nancial year under review TA Securities Holdings Berhad ( TASH ) recorded a pretax profi t of RM118.3 million, a 127 per cent increase from the previous fi nancial year of RM52.1 million. The continued support from our large retail and growing institutional base and a buoyant equity market had signifi cantly contributed to the spectacular stockbroking performance. During the year, TASH was granted approval to carry out corporate fi nance activities. TASH s investment research was ranked by StarMine/Business Times as among the top research houses in Malaysia. Looking ahead, we expect a challenging year in FY2009. The aftermath of the US sub-prime loans crisis, high fuel cost and high commodities prices are exerting downward pressure on the global equity market. These challenges will require us to identify new business strategies to maintain our market share and profi tability. In respond to the needs of our valued clients, TASH will move beyond the traditional buying and selling of shares and stocks to providing valued added services and products. Fee based business activities such as corporate fi nance and advisory services, placement and underwriting activities and the offer of structured products will be expanded to meet the needs and appetite of our clientele base. Our foreign trading desk will also be expanded to increase our reach to the global markets. TA Properties participated in the Smart Investment & International Property Suntec City, Singapore To improve our services to our clients, TASH is targeting to open more branches in selected locations and to upgrade its online trading platform. hong Kong TA Securities (HK) Limited ( TAHK ) posted another encouraging result for the year ended 31st January 2008, with pre-tax profi t surged 231% to HK$52 million from HK$15.7 million in the previous fi nancial year. The signifi cant growth was mainly attributable to the rise in brokerage generated from trades on HK stocks coupled with the rise in interest income on margin lending and IPO fi nancing. Boosted by the buoyant market sentiment, our yearly trade volume on HK stocks improved further to HK$157.4 billion from HK$33.8 billion in the corresponding period of last year. Interest on margin lending and IPO fi nancing also increased 33% as compared to the preceding year with considerable fund-raising activities being undertaken in the local market. The rise in brokerage generated from overseas stocks, especially Malaysian stocks, also contributed to the overall revenue growth. Showcasing of TA Properties s projects in the International Homebuyer & Property Investor KL Convention Centre The local market extended its rally in 2007 with Hang Seng Index added 3,349 points or 16.66% to 23,455 from 20,106 a year earlier. The robust market sentiment was mainly boosted by the expansion of Qualifi ed Domestic Institutional Investors Scheme in Mainland as well as the proposed Pilot Scheme for Mainland Individual to invest in HK stocks directly. The continuous infl ow of foreign funds in speculating the further appreciation of Chinese RMB also helped to boost the market further. The Hong Kong s economy has staged a strong recovery over the past few years, with a marked improvement in employment and a rise in asset prices. The fi nancial position of most enterprises and individual has improved and domestic demands are likely to remain strong. Hong Kong s close proximity to China and its position as a fi nancial centre in the region offer great potential for TAHK. We anticipate that the local market to be volatile in the near term until we see greater clarity in the US economy. TAHK would continue to take strategic steps to enhance our business volume as well as looking for business opportunities ahead. Idaman Residence luxury condominium is expected to be completed in end 2008 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

14 ChairmaN S STaTEmENT (cont d) Derivatives TA Futures Sdn Bhd ( TAF ) emerged once again as the Top Crude Palm Oil (CPO) broker in With the exception of 2006, TAF has been a consecutive top CPO broker from 2003 to During the fi nancial year under review, TAF opened a representative offi ce in Jakarta, Indonesia. The main objective of setting up the rep offi ce in Jakarta is to target the oil palm plantation companies in Indonesia that need to hedge their produce. The representative offi ce managed to breakeven after 2 months of operation and is now a profi table concern. In view of the potential of the Indonesian market, we intend to put in more efforts and resources to develop this market. TAF intends to offer the Direct Market Access (DMA) facilities to our clients by 3rd quarter 2008 to target overseas clientele base. Offi cial launch of the TA ABN AMRO Utilities Fund in August 2007 Overall, we are optimistic of the prospects of the derivatives market in Malaysia. unit Trust and asset management TA Investment Management Berhad ( TAIM ) grew handsomely in FY2008 with its total assets under management expanding by 18% to reach RM763 million as at 31st January This was due in part to the successful launch of two foreign unit trust funds - the TA European Equity Fund and the TA ABN AMRO Utilities Fund. In terms of returns, approximately 57% 1 of TAIM s funds outperformed their benchmarks since their respective launch dates. In terms of 3-year performance, the TA High Growth Fund (+59.84%), TA Comet Fund (+55.25%) and TA Growth Fund (+47.57%) delivered the 3 best returns for TAIM and its investors, while the best 1-year performance of % was achieved by the TA High Growth Fund 2. 1 As at 31 Jan 2008; source: Lipper Hindsight 2 As of 31 Jan 2008; source: Lipper Hindsight Datin Alicia Tiah delivering her keynote address at the offi cial launch of the TA European Equity Fund in March 2007 TAIM is committing itself to achieving another round of remarkable growth in the coming year. In this respect, TAIM intends to fully capitalise on the current lull in the market to launch more innovative products as it believes the existing market down-cycle is highly conducive for picking up undervalued investment opportunities. TAIM is also setting its aim to hit the RM1billion AUM mark by the end of the fi nancial year. To do this, TAIM is to gear itself towards growing its agency force exponentially and expanding its branch network. Credit and lending TA First Credit Sdn Bhd ( TAFC ) turned in another year of excellent performance especially in the area of share fi nancing. Its pre-tax profi t contribution for the year under review was RM40.1 million, which include recovery income of RM27.6 million from fi nancial receivables previously provided for. Compared to the previous year s performance there is an increase of RM10.7 million or 36.6%. Fund size of the TA European Equity Fund doubled from 300 million units to 675 million units as a result of overhelming response amongst investors Having established its presence in the share fi nancing business, TAFC has been active in the fi nancing of Employee Share Option schemes (ESOS) implemented by public listed companies on Bursa Malaysia. With its experienced marketing teams, fast loan processing time, attractive fi nancing package and good customer service, TAFC has built itself a reputation for being one of the top fi nanciers for ESOS fi nancing. TAFC will also continue to increase its business revenue by providing term loan fi nancing and mezzanine fi nancing to assist companies requiring short term and medium term loans for their working capital and business expansion. 2 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

15 ChairmaN S STaTEmENT (cont d) Properties malaysia FY2008 saw TA Properties Sdn. Bhd. ( TAP ) making signifi cant strides into the luxury lifestyle segment of the property sector in Malaysia. TAP s contribution to the Group pre-tax profi t increased by 74% to RM67.5 million from RM38.7 million last fi nancial year. The success of TAP s luxury development launches in Damansara Idaman and Idaman Residence in particular speaks well of TAP s acceptance by the market as a niche luxury lifestyle property developer. TAP expects its contribution to the Group s earnings to increase signifi cantly in the near future with the anticipated commencement of three signature developments within Kuala Lumpur s Golden Triangle and the Klang Valley. Property Development Damansara idaman TAP s maiden luxury residential development, Damansara Idaman is a freehold gated and guarded residential enclave. Nestled in Tropicana, one of the most exclusive residential precincts in Petaling Jaya, Damansara Idaman showcases contemporary tropical themes that epitomise resort living within a gated and guarded environment. Damansara Idaman was awarded the Garden Sanctuary Award in March 2007 In March 2007, Damansara Idaman was awarded the prestigious Garden Sanctuary Award from the Institute of Landscape Architect Malaysia (ILAM) for its contribution towards landscape development in Malaysia. As at January 2008, a total of three (3) phases of the development consisting of 109 units of bungalows have been successfully completed and handed-over with CF within schedule. This accounts for 75% of the overall development. Phase 4, the fi nal phase at Damansara Idaman, comprising of 27 luxury Bungalows is scheduled for launch at the end of idaman Villas Idaman Villas, a freehold gated and guarded development is located immediately adjacent to Damansara Idaman. Idaman Villas comprises of 54 units of semi-detached villas. The development also incorporates a resident s only recreation centre and swimming pool. Contemporary tropical resort Damansara Idaman Idaman Villas is truly a residential enclave that balances the natural ambience of outdoor living with the stylishness of contemporary architecture. Initially launched in February 2007, the takeup rate was encouraging as of end January Construction has been progressing well and is on schedule for targeted completion in end idaman residence Launched in end 2005, Idaman Residence is a 34-storey freehold condominium, strategically located within Kuala Lumpur Golden Triangle and a stone s throw away from the highly acclaimed Petronas Twin Towers. Idaman Residence offers 9 condominium unit designs with modern contemporary themes. TAP s fi rst high rise development is scheduled for completion in end 2008 and enjoyed brisk sales of over 82% as at end January Phase 3 of Damansara Idaman comprising 36 units has been duly completed within schedule and sold units were successfully handed over to purchasers with the Certifi cate of Fitness for Occupation TA ENTERPRISE BERHAD ANNUAL REPORT

16 ChairmaN S STaTEmENT (cont d) New Projects mixed Commercial Development in Sri Damansara Located at Bandar Sri Damansara, this freehold mixed commercial development will sprawl over 48 acres in the heart of Petaling Jaya and is envisioned as a lifestyle commercial hub. This iconic landmark will comprise a cluster of distinctive buildings casting an exciting labyrinth of themed courtyard and streetscape malls, service apartments, corporate offi ce towers and F&B alfresco themed dining outlets. It is easily accessible via major highways namely, NKVE, LDP and SPRINT. The development will be implemented in two main zones. Zone 1 of the development comprises of shop offi ces, service apartments and retail outlets. The Phase 1 of Zone 1 is scheduled for launching by end Idaman Villas was launched on 9 February 2007 mixed Commercial Development in Bukit Bintang This prime 3-acre mixed freehold commercial development is strategically located in the heart of the Golden Triangle, Kuala Lumpur. The development will encompass 2 towers of modern & contemporary luxury residences, a 5-star hotel block and a lifestyle podium comprising of alfresco F&B dining style outlets, a banquet hall and multi-purpose function halls. The project is scheduled for launching in year mixed Commercial Development Opposite KlCC Poised to be a luxurious integrated commercial development comprising of two iconic towers in the core of Kuala Lumpur s bustling prime business district, this development is located directly opposite the highly acclaimed Petronas Twin Towers. The project comprises a luxury hotel, serviced luxury residences and complemented with a high-end retail podium. Performance during launch of Idaman Villas Property investment Canada Our award-winning triple-a rated Terasen Centre in Vancover, Canada continued to deliver superior performance in FY2008. As a choice offi ce building, Terasen Centre is 100% fully leased. In fact, some of the existing tenants are eager to expand and are on the wait list for space. Income is on the steady increase as rent escalation steps in, resulting in a 4% increase from previous year. The Terasen Centre, which has a high ratio of parking stalls per square foot (394 parking stalls), is also benefi ting from the premium charges for car parks as downtown parking becoming more scarce. Revenue from parking operations has increase by 16.74% over the last couple of years. The Terasen Centre has a well-balanced mix of tenants ranging from cutting edge laser dermatologist, law fi rms, fi nancial institutions, software developers to utility provider. Some of the high profi le tenants are Microsoft, Connor Clark & Lunn Financial Group, Credential, and Hewitt & Associates. The newest tenant, HSBC Canada Bank, joins this mix taking an entire fl oor space of 14,610 square feet area. Outdoor water Idaman Villas show unit Although the U.S. and Eastern Canada provinces showed weakness in their economies, Western Canada in particular Alberta and British Columbia is less affected. Since 2000, the property market has steadily appreciated and going forward we expect to see a leveling effect. Unlike the U.S., we do not anticipate to see a steep decline, as infrastructure works created by the 2010 Olympics continues. 4 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

17 ChairmaN S STaTEmENT (cont d) Going forward, we will begin monitoring the U.S. property market. Within the next 6 to 18 months, there will be a buying opportunity in particular within the Sun Belt states such as California, Nevada and Arizona. Residential properties have already declined by 40% to 50% due to the sub-prime mortgage crisis and will reach below replacement costs level. malaysia The Group s other portfolio of properties including Menara TA One and shop offi ces at USJ Taipan and Subang Business Centre continue to yield good rental income to the local property investment division. hotel OPEraTiONS 2007 saw the Radisson Plaza Hotel Sydney being recognised by both Company and Industry professionals as a leader in the delivery of service excellence as well as innovative business practices. The Hotel was the recipient of 8 major Awards in addition to being recognised as a fi nalist in 5 other Award ceremonies. These Awards included the Hotel being voted as one of the Top 10 Best Luxury Hotels in the South Pacifi c and one of the Top 25 Most Popular Hotel Destinations in the World. Idaman Residence show unit The Hotel has accommodated many high profi le events and guests during the past year including hosting the Canadian Prime Minister during APEC, the English and Indian Cricket Teams as well as the Australian Prime Minister and his Cabinet. Moving forward, the Hotel is preparing to host members of the Clergy for World Youth Day and will have members of the South African Cricket Team at the Hotel in early Financially, the Hotel exceeded its budget and performed well against its competitive set in both average room rate and occupancy. This was recognised by the Hotel winning a Carlson Aspire Award for RevPAR Management. During the fi nancial year, Radisson Plaza Hotel Sydney has maintained its business relationships with many key accounts and has also signed new corporate accounts, including Singapore Airlines, ensuring that the hotel will be well positioned within the Sydney market in the coming year. For the new fi nancial year the Hotel is focusing on continuing to grow its average rate and RevPAR to ensure ongoing success. PrOSPECTS and OuTlOOK The operating environment in 2008 will be challenging for the Group. With the backdrop of global economic uncertainties arising from the sub-prime mortgage crisis, rising food price infl ation and unsettling fi nancial markets, it will be a challenging task for the Malaysian economy to reach the projected growth of 5.8% this year. The change in political momentum in Malaysia and the uncertainties surrounding some of the projects under the Ninth Malaysia Plan could further stymie growth in the short term. Lavishly designed bedroom for modern family Idaman Residence Nevertheless, Malaysia is expected to demonstrate its natural resilience given its diversifi ed economic profi le. While infl ation is expected to accelerate to 3.0% from 2.0% in 2007 due to higher food, energy and commodities prices, Bank Negara Malaysia s monetary policy is expected to remain supportive of growth as the pressure is mostly supply driven. On the external front, the actions taken by the central bankers and governments in countries that are affected by sub-prime mortgage crisis are expected to bear fruits later this year. Though sporadic concerns on the effectiveness of these measures are to be expected, the risks of a concurrent recession in major developed economies have likely been averted. Spacious living Idaman Residence TA ENTERPRISE BERHAD ANNUAL REPORT

18 ChairmaN S STaTEmENT (cont d) The competition within the Financial Services Industry is expected to become more intense as players are aggressively trying to outdo each other to gain market share. To survive this competition, we need to be more innovative by offering the right products and services to our clients via the right distribution channel. In this regard, the Group is mapping out its strategies to stay relevant in the market. With regard to the Property Division, the Group is committed to develop TAP into a premier lifestyle property developer. Toward this end, we have laid a strong foundation during the fi nancial year under review by deepening our management pool. Based on the unbilled sales and the progress of the projects on hand we are confi dent that the performance of the Property Division will improve signifi cantly next year. Apart from organic growth, your Board is also looking at various ways to unlock the values within the group and maximise the return of our assets. Damansara Idaman consists of 3 nature theme park acknowledgement On behalf of the Board, I would like to express our gratitude to all our valued shareholders, clients, bankers, business partners and the government authorities, for your continued support and confi dence in our Group. I am also deeply thankful to the management team, remisiers, agents and all employees of the TA Group for their unwavering loyalty, commitment and invaluable contribution, without which our continuous growth and strong performance over the years would not be possible. I would like to record my word of thanks to Datin Tan Kuay Fong, who has so ably lead the Group as Executive Chairman for the past 5 years. She remains on Board as Group Managing Director and CEO. I would like to welcome Puan Rahmah Binti Mahmood who joined the Board as Independent Non-Executive Director. To my other fellow Board members, I thank each and every one of you for your strong support and guidance extended to me throughout the year. Damansara Idaman show unit DaTuK Tiah ThEE KiaN Executive Chairman Resort-style clubhouse facilities - gym, infi nity pool, wading pool and jacuzzi at Idaman Villas 6 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

19 COrPOraTE SOCial responsibility In TA Enterprise Berhad ( TA ), our Corporate Social Responsibility ( CSR ) initiatives are in line with Bursa Malaysia Securities Berhad s CSR Framework. We believe that CSR is not only about how the company spends the money instead it is about how the company makes money. CSR is far beyond just philanthropy or mere compliance. Instead, it is about strategy, ideals, visions and policies that the Company develops for its continued profi table existence while striking a balance of being a responsible corporate citizen based on a set of ethical values and giving back to the community, employees, the environment, shareholders and stakeholders. Ta S responsibility TO ThE COmmuNiTY CSR is not something new to TA. In the early days, we initiated several corporate donation program which supports worthwhile causes across Malaysia and overseas through charitable donations, goodwill advertisements, promotional items and donations-in-kind in order to address the needy, the orphans, the aged, the physically challenged people, and helping to improve their quality of life. In November 2007, TA continued its CSR heritage through its TA Community Care, a charitable and community project implemented through strategic relationships with charitable organizations that share our value. With the collaboration of charitable organizations, we hope to meet the community needs, implement responsible corporate initiatives for the under-privileged, shape and enhance the quality of life of the less fortunate. Launch of TA Community Care Logo Display of TA Mobile Community Clinic at the lobby of Menara TA One Launch of TA Mobile Community Clinic During the fi nancial year under review, TA Community Care in collaboration with Gethsemane Medical Care, a voluntary medical care group, launched the TA Mobile Community Clinic to create a sustainable community development programme in healthcare. TA purchased a van ambulance and converted it into the TA Mobile Community Clinic which will assist and equip Gethsemane Medical Care to reach out to the more needy community and provide them with various forms of medical assistance, services, treatment and prevention care. Towards the end of 2007, employees of TA joined hands to raise fund for the under privileged children and old folks. Various fund raising projects such as jumble sale, food fair, karaoke contest, bowling competition and personal donations were conducted to contribute to the TA CSR s Fund. The employees, assigned to various groups, took turns to spread joy, laughter and good cheers during the year-end festive season by visiting a few orphanages and old folk s homes such as Desa Amal Jireh and Shepherd s Centre Foundation in Selangor, Jireh s Home in Ipoh, Darul Aitam Puteri in Kuantan, Salvation Army in Kuching and Methodist Children s Home in Sibu. Orphanage & old folk s home visitation by TA s staff and family members TA ENTERPRISE BERHAD ANNUAL REPORT

20 COrPOraTE SOCial responsibility (cont d) Besides donating provisions such as food, clothes, stationery, furniture and monetary donations, children from various social homes were taken for outings by our staff and family members. Ta S responsibility TO ThE marketplace Accountability and transparency are our core values. TA always strives to make CSR a working culture in all our business practices and policies. We strongly believe that by adopting sustainable and responsible business practices, we will be able to deliver positive outcome through transparent and ethical conduct, guided by high corporate governance standards. The Company also endeavours to adopt best practices in all our operations. TA acknowledges its responsibility for ensuring proper maintenance of accounting, statutory and business records. External auditors accredited by professional bodies are appointed to fulfi l our obligations as a listed company on Bursa Malaysia. Ta S responsibility TO ThE WOrKPlaCE TA recognises the power of unity among its workforce. We believe that teamwork will enable us to live up to our motto, Together We Grow from Strength to Strength. As part of our commitment to our employees, promoting the well being of the workforce in the workplace has always been an emphasis. All employees of TA are granted gym membership to our TA s Staffs Gymnasium located at the 11th Floor of Menara TA One. This fully equipped gymnasium was set up two years ago to promote a healthy lifestyle among its employees as we believe that a healthy body will promote high productivity through work-life balance. TA strongly believes in training, building up and empowering its people. In 2007, we have allocated approximately 5% of overall payroll costs for staff training and development. These include in areas of management, communications, team-building, fi nancial, information technology skills and professional related courses. We have also allocated a total of 6 internship program positions for undergraduates at relevant departments. As at 31st January 2008, we have a total workforce of 657 employees within TA group of companies in Malaysia. TA has always practised fair and equal employment opportunity policy that does not discriminate against gender and race. We take great pride in being a responsible and caring corporate citizen with its mission to bring about positive impact on the community, environment, workplace and marketplace. TA Charity Bowling Tournament TA Financial Services Division: Senior Management Team-building cum Planning Putrajaya 8 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

21 STATEMENT ON CORPORATE GOVERNANCE Corporate Governance is the process and structure used to direct and manage the business and affairs of the Company towards enhancing business prosperity and corporate accountability, with the ultimate objective of realising long term shareholders value whilst taking into account the interests of stakeholders. The Board of Directors is committed in ensuring that The Principles and Best Practices of the Malaysian Code on Corporate Governance (the Code ) are observed and practised as a fundamental part of discharging its responsibilities to protect and enhance shareholders value. In preparing this report, the Board has considered the application of the principles of the Code and the extent, which it has complied with the Best Practices of the Code. DIRECTORS A. Composition of the Board As at the date of this statement, the Board consists of eight (8) members; comprising an Executive Chairman, three (3) Executive Directors and four (4) Independent Non-Executive Directors. As such, at least one third of the Board are Independent Directors, thereby bringing objective and independent judgement elements into the decision making process of the Board. The Directors through their vast experiences and qualifications in economics, accounting, stockbroking, finance, legal, property development and business management provide effective contribution and support to the functions of the Board. They bring with them a broad range of skills, experiences and knowledge required to successfully direct and supervise the Group s business activities, which are vital to its success. A brief profile of each Director is presented on pages 6 to 9 of this Annual Report. There is a clear division of responsibilities at the helm of the Group to ensure a balance of authority and power. The Executive Chairman is responsible in ensuring Board effectiveness in constructive deliberation on matters in addition to her overall responsibility for operational performance, organisational effectiveness and implementation of the Board s policies and decisions. This is balanced by the presence of Independent Non-Executive Directors who exercise their independent judgement on issues of strategy, standards of conduct, resources, processes and safeguarding of interests of minority shareholders. In addition, all queries and concerns of shareholders and public in general, are directed to our Independent Non-Executive Director, Mr Jory Leong Kam Weng. B. Board Responsibilities The Board has the overall responsibility for corporate governance, strategic direction and overseeing the investment and business of the Group. The Board maps out the Group s medium and long term strategies in addition to its responsibility to review the Management s action plans. The Board s other primary duties are to conduct regular review of the Group s business operations and performances and to ensure that effective controls and systems exist to measure and manage business risks. The number of Directors meetings and attendance for the financial year in review are as set out below: Number of Board Meetings Held During Directors Tenure in Office Attended Datuk Tiah Thee Kian - appointed on 16 August Datin Tan Kuay Fong 6 6 Zainab Binti Ahmad 6 6 Dato Mohamed Bin Abid 6 6 Peter U Chin Wei 6 5 Jory Leong Kam Weng 6 6 Christopher Koh Swee Kiat 6 6 Rahmah Binti Mahmood - appointed on 16 August TA ENTERPRISE BERHAD ANNUAL REPORT

22 STATEMENT ON CORPORATE GOVERNANCE (cont d) The Board has set up several Board Committees as well as Management Committees to assist the Board in discharging its duties and responsibilities. The functions and terms of reference of the Board Committees and Management Committees together with the authority delegated by the Board to these committees are clearly defined in their respective terms of reference. Board Committees include the Audit Committee, Nomination Committee and Remuneration Committee. Management Committees comprise of Option Committee, Stockbroking Management Committee, Property Management Committee, TA Investment Management Committee, Tender Committee, Group Investment Committee, Corporate Governance Committee, Tax Planning Committee, Information Technology Management Committee and Futures Management Committee. The Management Committees meet from time to time to discuss, deliberate, consider and submit proposals on issues of financial performance, tax planning, risk management, information technology support, corporate governance issues, business development, investment activities, property development, stockbroking and unit trust operations as well as asset and fund management. The Board receives regular status reports, updates and briefing from these committees. Where necessary, these committees make recommendations to the Board for their final decision. C. Supply of Information Board meetings are held to review Management reports on the progress of business operations and to consider, and if deemed fit, to approve such proposals that requires the sanction of the Board. The agenda of the Board meetings together with its detailed reports, proposition papers and other relevant information on matters requiring the consideration of the Board are circulated to all Directors for their perusal and consideration well in advance of each Board meeting. There is a schedule of matters reserved specifically for the Board s deliberation and decision which includes the overall Group strategy, acquisition and disposal of material assets and approval of corporate plans, financial statements, budgets and dividends. The Board papers are comprehensive and encompass both quantitative and qualitative factors so that informed decisions are being concluded. All proceedings from the Board meetings are recorded and confirmed by the Chairman of the meeting. The Board has access to all information within the Group and also to the advice or services of the Company Secretary and Senior Management in carrying out their duties. The Directors seek external professional advice, if required. D. Appointments of the Board and Re-election The appointment of any new member(s) to the Board is proposed and recommended by the Nomination Committee. The Nomination Committee had met twice and passed eighteen (18) resolutions during the financial year. The members of the Committee which is wholly comprised of Independent Non-Executive Directors are as follows: Peter U Chin Wei (Chairman) Jory Leong Kam Weng Christopher Koh Swee Kiat Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director The Nomination Committee considers and recommends to the Boards of the Company and the Group, technically competent persons with integrity and a strong sense of professionalism to be appointed to the relevant Boards. Further, the Committee assesses the effectiveness of the Boards, the committees of the Board and the contribution of each individual Director including Independent Non-Executive Directors and the Chief Executive Officer. The Committee annually reviews the required mix of skills and experience which the Non-Executive Directors bring to the Boards. The Committee also has the discretion to recommend the size and composition of the respective Boards of the Company and the Group. In accordance with the Company s Articles of Association, at least one third of the Board are required to submit themselves for re-election at each Annual General Meeting. This means that every Director will stand for re-election at least once every three (3) years. 20 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

23 STATEMENT ON CORPORATE GOVERNANCE (cont d) E. Directors Training All the members of the Board have attended an in-house seminar entitled The Malaysian Private Debt Securities or Bond Market - A Director s Perspective on Efficient and Alternative Financing Sources which was conducted by RAM Holdings Berhad. Apart from this, one of the directors also attended the National Accountants Conference (NAC) Apart from the above, the directors are encouraged to attend seminars and other training programmes to keep abreast with the development in the industry and in the market place. DIRECTORS REMUNERATION A Remuneration Committee reviews the remuneration packages of the Directors and subsequently furnishes recommendations to the Board on specific adjustments in remuneration to commensurate with the respective contributions of the Directors. The members of the Committee which is wholly comprised of Independent Non-Executive Directors are as follows: Peter U Chin Wei (Chairman) Jory Leong Kam Weng Christopher Koh Swee Kiat Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director The Remuneration Committee had met once and passed ten (10) resolutions upon reviewing the remuneration packages of directors and senior management during the financial year. The Remuneration Committee is also authorised by the Board to assess and review from time to time the remuneration packages of the Directors and Senior Management personnel in all forms and also to review Directors fees of the Company and the Group. However, the remuneration for the Independent Non-Executive Directors is determined by the Board as a whole. Recommendations of the Committee will be reported to the Board for their final decision. The remuneration of the Directors of the Company during the financial year are disclosed in Note 37 of the Audited Financial Statements. COMMUNICATION WITH SHAREHOLDERS AND INVESTORS The Board recognises the importance of maintaining effective communication with its shareholders. Thus, the annual report contains a balance of reports on results and progress of the business. In addition, the shareholders and investors have timely and convenient access to public information on the TA Group via the Company s annual report, circulars to shareholders and Bursa LINK for corporate announcements, quarterly financial results and annual report. The main forum for dialogue with shareholders is during the Annual General Meeting. At each Annual General Meeting, the Board presents the progress and performance of the business and encourages shareholders to participate in a question and answer session. Directors and senior management staff are available to respond to shareholders questions during the meeting. Extraordinary General Meetings are held as and when required. The Company also maintains a website at that allows all the shareholders and investors to gain access to information about the Group. ACCOUNTABILITY AND AUDIT A. Financial Reporting The Board is responsible for ensuring the proper maintenance of accounting records of the Group. The Audit Committee assists the Board in reviewing the quarterly reports to Bursa Malaysia and the annual report to shareholders to ensure its accuracy, adequacy and completeness. The Statement by Directors pursuant to Section 169 of the Companies Act, 1965 is set out on page 42 of this Annual Report. TA ENTERPRISE BERHAD ANNUAL REPORT

24 STATEMENT ON CORPORATE GOVERNANCE (cont d) B. Internal Control The Board acknowledges its responsibility for the Group s systems of internal controls and risk management and for reviewing the effectiveness of those systems. Such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives. Any system can only provide a reasonable but not absolute assurance against material misstatement, loss or fraud. Information on the Group s internal control is presented in the Statement on Internal Control laid out on pages 28 to 31 of this Annual Report. C. Relationship with Auditors The role of the Audit Committee in relation to external auditors may be found in the Report on Audit Committee set out on pages 24 to 27. The external auditors meet with the Audit Committee to present the scope of the financial audit and to review the results of the said audit after the conclusion of the audit. The Audit Committee also meets with the external auditors at least twice a year without the executive Board members being present. 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. COMPLIANCE STATEMENT The Board considers that it has complied with The Best Practices of the Code for the financial year ended 31 January OTHER INFORMATION A. Shares Buy-Back There was no Shares Buy-Back scheme in place during the financial year ended 31 January B. Options, Warrants or Convertible Securities Exercised There were no options or convertible securities exercised during the financial year ended 31 January However, the Company issued 98,496,136 new shares for the cash consideration of RM1 per new ordinary shares pursuant to the exercise of 98,496,136 warrants by warrantholders. The number of warrants outstanding and unexercised after the above is 474,083,326. C. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme The Company has not sponsored any ADR or GDR programme. D. Sanctions and/or Penalties Imposed Save as disclosed previously, the Company is not aware of any other sanctions or penalties imposed on the Company, its subsidiaries, Directors or management by the relevant regulatory bodies that have been made public which have yet to be disclosed. E. Non-Audit Fees The amount of non-audit fees paid to the External Auditors, Messrs. Ernst & Young, by the Group and the Company for the financial year amounted to RM21,000 and RM5,000 respectively. 22 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

25 STATEMENT ON CORPORATE GOVERNANCE (cont d) F. Material Contracts Involving Directors and Major Shareholders Interest Save as disclosed below, there were no material contracts during the current financial year, entered into by the Company or its subsidiaries involving the interests of Directors or major shareholders. In the Joint Venture between TA Properties Sdn Bhd and Beringin Terrace Sdn Bhd which was entered to develop a piece of freehold vacant land held under No. H.S. (D) 32163, PT 938 in Mukim Kuala Lumpur, Wilayah Persekutuan measuring 12, square metres, Dato Mohamed Bin Abid is deemed to have an interest in the Joint Venture by virtue of Section 122A of the Companies Act, Section 122A of the Companies Act, 1965 was invoked because Dato Mohamed bin Abid is currently an Executive Director and Shareholder of the Company and a Director of TA Properties Sdn Bhd, whilst his son, Hafez bin Mohamed, is a Director and Shareholder of Beringin Terrace Sdn Bhd. G. Variation in Results There were no variances of 10% or more between the audited results of the financial year and the announced unaudited results. H. Profit Guarantee During the financial year, there were no profit guarantees given by the Company. I. Revaluation Policy on Landed Properties The Group does not revalue its landed properties classified as Property, Plant and Equipment, Investment Property, Land Held for Property Development, Property Development Costs, Properties Held for Resale, Land Held for Resale and Non- Current Asset Classified as Held for Sale. STATEMENT ON DIRECTORS RESPONSIBILITY in Relation to the Financial Statements The Board of Directors is required under Paragraph (a) of the Listing Requirements of Bursa Malaysia Securities Berhad to issue a statement explaining their responsibility for preparing the annual audited financial statements. The Directors are required to ensure that the financial statements for each financial year are properly drawn up in accordance with the provisions of the Companies Act, 1965 and in compliance with applicable approved accounting standards to give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the results and cash flows of the Group and the Company for the financial year. In preparing those financial statements, the Directors are satisfied that: 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 and confirmed that the financial statements have been prepared on a going concern basis. The Directors are responsible for keeping proper accounting records, which discloses with reasonable accuracy the financial position of the Company and of the Group at any time and to ensure that these financial statements comply with the Companies Act, TA ENTERPRISE BERHAD ANNUAL REPORT

26 REPORT ON AUDIT COMMITTEE 1. MEMBERSHIP AND ATTENDANCE The Audit Committee (Committee) was set up on 26 May The Committee comprises the following members and details of attendance of each member at Committee meetings held during the financial year are as follows: Number of Committee Meetings Held During Composition of Audit Committee Tenure in Office Attended Peter U Chin Wei (appointed on 3 August 2007) Chairman / Independent Non-Executive Director 2 2 Jory Leong Kam Weng Member / Independent Non-Executive Director 5 5 Christopher Koh Swee Kiat Member / Independent Non-Executive Director 5 5 Mr Peter U Chin Wei is a Fellow of the Institute of Chartered Accountants in England and Wales. Mr Jory Leong Kam Weng is a Certified Public Accountant of CPA Australia and a Chartered Accountant of the Malaysian Institute of Accountants ( MIA ). Mr Christopher Koh Swee Kiat holds an ACCA postgraduate diploma in Accounting and Finance. 2. COMPOSITION AND TERMS OF REFERENCE 2.1 Members i. The Committee shall be appointed by the Board pursuant to a Board Resolution. ii. iii. 2.2 Chairman It shall comprise of at least three (3) members of whom a majority shall be independent non-executive directors. At least one member of the Committee: must be a member of the MIA; if he/she is not a member of the MIA, he/she must have at least three years working experience and: he/she must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or he/she must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad. The Chairman of the Committee shall be an independent non-executive director nominated by the Board and shall be appointed amongst the members. 2.3 Objectives i. To provide an additional assurance to the Board by giving objective and independent review of financial, operational and administrative controls and procedures. ii. iii. iv. To assist the Board in establishing and maintaining internal controls for areas of risk as well as safeguarding of assets. To assess and supervise the quality of audits conducted by the internal and external auditors. To reinforce the independence of the company s external auditor, and ensure that the auditors have free reign in the audit process. 24 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

27 REPORT ON AUDIT COMMITTEE (cont d) v. To provide a forum for regular, informal and private discussions between the external auditor and directors who have no significant relationships with management. vi. 2.4 Authority To reinforce the objectivity of the internal audit department. i. The Committee is authorised by the Board to investigate any activities within its terms of reference. ii. iii. iv. It shall have the resources which are required to perform its duties and full and unrestricted access to any information pertaining to the Company. It shall also have the authority to obtain independent legal or other professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. It shall also have the power to establish Sub-Audit Committee(s) and delegate its powers to such Sub-Audit Committee(s) for the purpose of carrying out certain investigations on behalf of the Committee in such manner as the Committee shall deem fit and necessary and, to appoint such officers of the Group as members of the Sub-Audit Committee(s). v. It shall have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity. vi. It shall be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the listed issuer, whenever deemed necessary. 2.5 Functions, Duties and Responsibilities i. To review with the external and/or internal auditors their audit plans, reports and evaluation of the system of internal controls. ii. iii. iv. To review the scope of the internal audit program and procedures, consider the result of the internal audit investigations and assess the management s response and actions to rectify any reported shortcoming. To evaluate the adequacy and effectiveness of internal control systems as well as the administrative, operating and accounting policies. To review the assistance given by the officers of the Group to the auditors. v. To review the quarterly result, half-yearly, annual and consolidated financial statements and thereafter to submit them to Board, focusing particularly on any changes in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; compliance with accounting standards and other legal requirements. vi. vii. To review any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity. To identify and direct any special project or investigations deemed necessary. viii. To nominate a person or persons as the Company s external auditors. To consider the audit fee and any questions of resignations or dismissal. ix. To discuss with the external auditor before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved. x. To discuss problems and reservations arising from the interim and final audits, and any other matter the auditor may wish to discuss (in the absence of management where necessary). xi. xii. To review the external auditor s management letter and management s response. To carry out such other functions and consider other topics, as may be agreed upon with the Board. xiii. To review reports and consider recommendations of the Sub-Audit Committee(s), if any. xiv. To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work. xv. To review any letter of resignation from the external auditors and any resignation of the internal auditors of the Company. xvi. To review whether there is reason (supported by grounds) to believe that the Company s external auditor is not suitable for re-appointment. TA ENTERPRISE BERHAD ANNUAL REPORT

28 REPORT ON AUDIT COMMITTEE (cont d) 3. SUMMARY OF ACTIVITIES OF AUDIT COMMITTEE The Committee meets at least four (4) times annually, or more frequently as circumstances dictate. As part of its duty to foster open communication, the Head of Internal Audit, the relevant heads for the departments being audited (if required) and representatives of the external auditors (if required) will normally attend the meetings. Other Board members and/or officers of the Company or Group may attend meetings upon specific invitation of the Committee. Besides reviewing the year end financial statements, the Committee met five (5) times during the year for the following purposes: To review the financial statements before the quarterly announcements to Bursa Malaysia Securities Berhad. To discuss the audit plan with external auditors and scope for the year as well as the audit procedures to be utilised. To discuss with internal auditors on its audit plan, processes and scope, adequacy of resources and co-ordination with external auditors. To review the operational and investigation reports prepared by the internal auditors on the state of internal control of the Group. To review the follow-up audit reports prepared by the internal auditors ascertain if the responsible operating units rectified the findings noted in the audit reports. 4. SUMMARY OF ACTIVITIES OF INTERNAL AUDIT FUNCTION The Group has an established internal audit department, which assists the Committee in the discharge of its duties and responsibilities. The Committee is aware that an independent and resourceful internal audit function is essential in ensuring that the internal control system is effective. The main role of the internal audit function is to review the effectiveness of the internal control system and this review is performed in an impartial, proficient and professional manner. The internal audit department covers the review and the adequacy of risk management; operational controls; compliance with established procedures, guidelines and statutory requirements; quality of assets; management efficiency and comparison of the level of customer services provided by other competitors. A risk-based approach is adopted for all audit programs. These audit programs ensure that the instituted controls are appropriate, effectively applied and reduce the risk of exposures to an acceptable level which is consistent with the Group s risk management policy. Where there is any area concerned the Senior Management, investigations and/or special audits were performed to identify the root causes and to improve the internal controls. The Company s internal audit function is performed in-house. The direct payroll costs and field work expenses incurred for this function in respect of the financial year were approximately RM342, The activities of internal audit function include but is not limited to the following areas: Contrives audit programs, budget and checklist for each department and subsidiary companies. To prepare annual internal audit plan. Plans the audit, collects, analyses, interprets and documents down information to support audit result. To evaluate the adequacy and effectiveness of internal controls. To review and establish and efficient, effective and systematic workflow in the department/subsidiary companies. To check and examine whether the rules and regulations of Bursa Malaysia Securities Berhad, Securities Commission and others regulatory bodies have been adhered to. To discuss with the relevant Head of Departments on audit findings. To perform investigations and/or special audits and ad-hoc project requests by Management. Report findings to Management and Audit Committee with recommendation for rectification. To perform follow-up audit findings. 26 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

29 REPORT ON AUDIT COMMITTEE (cont d) 5. Allocation of options Subsequent to the termination of the previous Employees Share Option Scheme on 9 January 2004, the Company has adopted an Employees Share Option Scheme which became effective on 30 January To-date, the Company has yet to allocate options in regard to the Employees Share Option Scheme to its eligible employees. The Committee will verify the criteria for allocation of options to eligible employees, as proposed by the Option Committee, during the relevant financial year. TA ENTERPRISE BERHAD ANNUAL REPORT

30 STATEMENT ON INTERNAL CONTROL The Board of Directors ( the Board ) is committed to maintaining a sound system of internal control and risk management practices in accordance with paragraph (b) of the Bursa Malaysia Securities Berhad (Bursa Malaysia) Listing Requirements and as guided by the Bursa Malaysia s guidelines on Statement on Internal Control: Guidance for Directors of Public Listed Companies. Set out below is the Board s Statement on Internal Control which outlines the nature and the scope of the Group during the year. INTERNAL CONTROL TA Enterprise Berhad and its subsidiaries ( the Group ) system of internal controls is designed to provide a sound system of internal control to safeguard shareholders investment and the Group s assets as well as to improve the Group s operations and risk management functions. It covers risk management and financial, operational and compliance controls. RESPONSIBILITY The Board affirms its overall responsibilities for maintaining a sound system of internal control and risk management practices in all aspects of the Group s business. In recognition of that responsibility, the Board sets policies, guidelines, control systems and seeks regular assurance from its Management that the system of internal control is operating effectively and is in compliance with laws and regulations. The role of management is to implement the Board s policies on risk and control and to ensure proper compliance. The Board is ultimately responsible for the Group s system of internal control and for reviewing its effectiveness, adequacy and integrity. However, due to the limitations inherent in any system of internal control, it should be noted that such a system is designed to enable the Group to meet its business objectives and minimize rather than eliminate the risk of failure. As such, the system can only provide a reasonable and not absolute assurance against risk, material misstatement or loss or failure. INTERNAL AUDIT & RISK MANAGEMENT FUNCTIONS The Group s Internal Audit Department and Risk Management Department report directly to the Audit Committee and are independent of the activities or operations of the subsidiaries, departments and sections under review. The Internal Audit Department performs regular reviews on the internal control procedures, surveillance and audit of business processes to assess the effectiveness of internal controls and to monitor compliance with procedures. It assesses the integrity of financial information provided and any major weaknesses in control procedures. Significant risks impacting the Group are highlighted with recommendations for improvement and mitigation. Follow-up procedures are in place to monitor the implementation of recommendations made by the Internal Audit Department. The respective Management of the Company and its subsidiaries, with feedback from Risk Management Department, determine the applicability of risk monitoring and reporting procedures and are responsible for the identification and evaluation of significant risks applicable to their areas of business, together with the design and operation of suitable internal controls. Whilst risk management is an integral part of the Group s business, the Risk Management Department had and will continue to formalize appropriate risk policy and risk management framework for the Group and significant risk areas are highlighted and brought to the Board s attention for further assessment. The duties of the Internal Audit Department and Risk Management Department are performed with independence, proficiencies and due professional care. This provides the Audit Committee and the Board with reasonable assurance on the adequacy, integrity and reliability of the internal control systems. The Board through its Audit Committee is ultimately responsible for the Group s system of internal controls and for reviewing its effectiveness. Therefore, the Audit Committee, on behalf of the Board, together with Internal Audit Department reviews the effectiveness of the internal financial and operating control environment of the Group primarily through reviews of reports from the internal audit function and any recommendation from the external auditors. Discussions are held with Management of the Company and its subsidiaries on the actions taken in relation to internal control issues identified. During the current financial year, nineteen (19) internal audit reports were received and reviewed by the Audit Committee. In addition to the above, the Audit Committee reviews the quarterly results before approval by the Board for public release, the audit findings and issues of the external auditors, the annual financial statements and the Annual Report of the Group. It also reviews and approves the annual audit plan for the year prior to their execution. 28 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

31 STATEMENT ON INTERNAL CONTROL (cont d) The Board also seeks regular assurance on the continuity and effectiveness of its systems of internal controls through independent appraisals by the internal auditors and any recommendations or issues raised by the external auditors. MONITORING MECHANISM AND MANAGEMENT STYLE Scheduled periodic meetings of the Board, Board Committees and Management Committees represent the fundamental platform by which the Group s performance, business activities and conduct are monitored. The daily running and management of the business is entrusted to the Executive Chairman, Executive Directors and the Management. Under the purview of the Executive Chairman and Executive Directors, the Chief Operating Officers and Heads of the respective operating subsidiaries of the Group are empowered with the responsibilities of managing their respective operations and business. The Executive Chairman actively communicates the Board s expectations to the Management at the Management meetings as well as through the various Project meetings, Hotel Owners meetings, Management Committee meetings and Board meetings of the various subsidiaries. At these meetings, operational and financial risks, management and corporate issues, business developments and performance, opportunities and threats including competitors, market and cross border environmental analysis are discussed and dealt with. The Board is responsible for setting the business direction and overseeing the overall conduct of the Group s operations and business through its various Management Committees and management reporting mechanism. Through these mechanisms the Board is promptly informed of major or recent developments pertaining to internal controls, regulatory compliance, risk taking and financial commitment. KEY PROCESSES The Board has a broad overview on risk policies of the Group and is committed in maintaining a sound system of internal controls in the Group. Members of the Management Committee and the Board would assess the cost and return on investment, profit margin, impact to the Group, review the availability of cash flow before any commitment, investment or significant expenditure is made. The various Departments and Management Committees are involved in the day-to-day process of: Identifying, evaluating and managing risks; and Designing and implementing the procedures for planning, capital expenditure, information and reporting system for monitoring the Group s performance. The key processes and elements adopted to monitor and review the effectiveness of the Group s internal control system are as follows and these processes are embedded within the Group s overall business operations and guided by operational manuals on policies and procedures: Each of the key companies within the Group has its own management and internal control structures. The Management of each business unit bears responsibility for the identification and mitigation of major business risks and each maintains controls and procedures appropriate to its own business environment. These include procedures to identify and then mitigate significant risks; The Management Committees and Management of the Company and its subsidiaries are responsible for effective risk management. Each business area/division/department/section within the Group will evaluate its key risks and controls. Periodic reports confirming the effectiveness of all significant control policies and procedures and/or any changes to the business and external environment are prepared by the Senior Executive in each business area/division/department/ section within the Group and reviewed by the respective Senior Management of the Company and its subsidiaries. The Internal Audit Department also reviews these reports independently and advises the Audit Committee and the Board of any significant matters arising or changes to the business that could have an impact on the significant risks affecting the Group; TA ENTERPRISE BERHAD ANNUAL REPORT

32 STATEMENT ON INTERNAL CONTROL (cont d) The Board maintains an organizational structure with clearly defined delegation of responsibilities to the Board Committees, Management Committees and the Management of the operating units and subsidiaries. Clear and well-defined lines of accountabilities, appropriate organization structure for planning, executing, controlling and monitoring business operations and authority limits for all significant aspects of the businesses have been established in the Company and its subsidiaries. These organization structure and authority limits are subject to regular review and improvement; Board Committees comprising Audit Committee, Nomination Committee, Remuneration Committee and various Management Committees comprising Stockbroking Management Committee, Property Management Committee, Futures Management Committee, Option Committee, Group Investment Committee, TA Investment Management Committee, Tender Committee, Corporate Governance Committee, Tax Planning Committee and Information Technology Management Committee with well defined terms of reference and functions have been established. The Committees meet on a monthly, bi-monthly or on an ad-hoc basis as and when required; Regular Board meetings are held to discuss and decide on policies and major business matters, while the Management Committees discussions, briefings and meetings are held from time to time to: i) Identify, discuss and resolve financial and key management issues; ii) iii) iv) Manage the operational controls; Monitor and assess the business performance; Review the risks and controls of the businesses; v) Discuss appropriate tax planning measure and plans; vi) vii) Review and evaluate the information technology requirements and systems support of the various subsidiaries; and Deliberate on the investment proposals. The proceedings of these meetings are minuted or documented in reports, memorandums and proposals submitted to the Board of the Company, the respective Boards of the subsidiaries and/or its Management from time to time; Policies and procedures for key business processes are formalized and documented for each of the significant operating units. Relevant regulations, rules, guidelines, laws, policies and procedures governing the major operations of the Group are translated into operational manuals and guidelines. The manuals are reviewed and approved by the respective Heads of Department, Compliance Officer and Management before they are tabled to the Board for adoption and implementation; Corporate values which emphasize ethical behavior and quality service are set out in the TA Group Employees Code of Conduct; There are strategic planning, annual budgeting and target-setting processes for key areas of business, which are reviewed and approved by the Board. A detailed budgeting process is in place where subsidiaries prepare budgets for the forthcoming financial year, for approval by the Board. The Board evaluates and assesses the long and short-term risks and opportunities identified by each of the subsidiaries in the course of the Company s annual planning process. Regular forecasts support the active monitoring of the Group s performance against plan to ensure that the objectives of the subsidiaries are in the context of the Group s overall s business strategies and objectives; Regular management reports and information are provided to the Board from the Management of various business division, on the key operating statistics, assessment of business performance against approved budgets, environmental and regulatory matters; The Board has through the relevant Management Committees adopted an effective and prudent stance with regard to the management of credit risks. Credit approval for high value loans are deliberated at Management Committees level to ensure that the loans are within the credit risk capacity and are adequately secured by collateral of good quality. For recovery of loans, Debt Recovery Unit within the Credit Control Department as well as external consultant is appointed if necessary to assist in the collection /restructuring of such loans; 30 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

33 STATEMENT ON INTERNAL CONTROL (cont d) The Group emphasizes continuous effort in maintaining the quality of its property development products and services. Its Property Development Division has ensured that safety and health regulations, environmental controls and all other legislations in connection with the industry have been considered and complied with; As property development becomes an integral part of the Group s business, the Board placed emphasis in implement appropriate controls and management of the following key functions of its Property Division: (a) (b) (c) (d) (e) Sales and Marketing of its development products; Project Management function covering product planning and designing, project planning and scheduling, project cost control and environmental, health and safety; Credit Control and Administration function on billings and collections; Construction Management function covering construction of buildings, quality assurance and quality control, time and cost control, building material purchase and control, and Management of its properties and buildings covering lease and rental, building management and services; Key functions such as finance, tax, treasury, insurance and legal matters are centralized at head office; The professionalism and competence of staff are maintained through a rigorous recruitment process, an annual appraisal system and training and development programmes to conform with regulatory requirements. Suitable employees with the required qualifications and experienced are appointed to assume their responsibilities. In addition, on-going internal and external training and development programmes are provided to develop and to enhance the competencies, skills and technical knowledge of the employees. BOARD S CONCLUSION The Board recognizes that the Group operates in a dynamic business environment in which the internal control system must be responsive in order to support its business objectives. As such, it is pleased to report that the current system of internal controls in place throughout the Group is adequate and satisfactory in addressing its principle risks and to safeguard the Group s interest and assets. The Board believes that a balanced achievement of its business objectives and operational efficiency has been attained and there is no control failure or weakness that would have material adverse effect on the performance and results of the Group for the year under review. TA ENTERPRISE BERHAD ANNUAL REPORT

34 5-YEar group financial SummarY YEar ENDED 3 JaNuarY (rm 000) (rm 000) (rm 000) (rm 000) (rm 000) OPEraTiNg results Revenue 546, , , , ,445 Profi t before tax ^ 286, ,115 89, , ,164 Profi t after taxation ^ 225,63 133,735 80, , ,943 Profi t attributable to equity holders of the parent ^ 224,23 133,063 80, , ,189 KEY BalaNCE ShEET DaTa Total assets 3,087,499 2,932,810 2,381,692 2,433,687 2,337,467 Cash and cash equivalents * 379, , , , ,931 Total liabilities 944,35 1,061, , , ,077 Total borrowings ** 37,07 147, , , ,530 Paid up share capital,426,97 1,328,475 1,328,475 1,328,475 1,328,475 Shareholders equity 2,34,062 1,863,072 1,781,321 1,766,486 1,679,203 SharE information Per share (sen) - Earnings (Basic) Earnings (Fully diluted) Net tangible assets ^^ Gross dividends Share price as at 31 January (RM) Market capitalisation (RM 000),797,983 1,169, ,436 1,142,489 1,448,038 financial ratios Return on total assets (%) 7.3% 4.5% 3.4% 4.4% 4.4% Return on shareholders equity (%) 0.5% 7.1% 4.5% 6.1% 6.1% Gearing ratio (times) Price to earnings ratio (times) * Comprises short term funds but excluding monies held in trust, Housing Development Accounts and pledged for bank guarantees. ** Secured foreign currency denominated term loan and short term borrowings. ^ Restated for FY 06, 05 and 04 due to the change in accounting policy as described in 2007 Annual Report - Note 3.1(e). ^^ Net tangible assets = total assets - total liabilities - intangible assets - deferred tax assets + deferred tax liabilities. Restated for FY 07 on intangible assets. 32 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

35 revenue and profit after tax 5-year group financial summary (cont d) Financial Years Profit After Tax Revenue RM Million earnings per share and gross dividends per share Financial Years Gross Dividends Per Share Earnings Per Share Sen shareholders equity, total assets and total liabilities Financial Years ,062 1,863 2,134 2,933 3,087 Total Assets Total Liabilities Shareholders Equity ,781 2, ,766 2, ,679 2,337 RM Million profit after tax (attributable to equity holders of the parent) and year-end share price RM Million Profit After Tax Share Price Financial Years TA ENTERPRISE BERHAD ANNUAL REPORT

36 5-year group financial summary (cont d) 2006 : Revenue, net segment results and net segment assets RM Million 390 Revenue Net Segment Results Net Segment Assets (10) Stockbroking and financial services Investment holding Credit and lending Property investment Property development Hotel operations Business Segments 2007 : Revenue, net segment results and net segment assets RM Million (20) Stockbroking and financial services Investment holding Credit and lending Property investment Property development Hotel operations Revenue Net Segment Results Net Segment Assets Business Segments 2008 : Revenue, net segment results and net segment assets RM Million (20) Stockbroking and financial services Investment holding 34 TA ENTERPRISE BERHAD ANNUAL REPORT 2008 Credit and lending Property investment Property development Hotel operations Revenue Net Segment Results Net Segment Assets Business Segments

37 5-year group financial summary (cont d) TA ENTERPRISE BERHAD ANNUAL REPORT

38 5-year group financial summary (cont d) 36 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

39 financial statements 38 Directors Report 42 Statement by Directors 42 Statutory Declaration 43 Report of the Auditors 44 Consolidated Balance Sheet 46 Consolidated Income Statement 47 Consolidated Statement of Changes in Equity 48 Consolidated Cash Flow Statement 50 Balance Sheet 51 Income Statement 52 Statement of Changes in Equity 53 Cash Flow Statement 55 Notes to the Financial Statements

40 DIRECTORS REPORT The directors have pleasure in presenting their report together with the audited financial statements of the Group and the Company for the financial year ended 31 January PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and the provision of management services and funding facilities to its subsidiaries. The principal activities of the subsidiaries are described in Note 9 to the financial statements. Other than as disclosed in Note 9 for the certain subsidiaries, there have been no significant changes in the nature of these activities during the financial year. RESULTS Group RM 000 Company RM 000 Profit for the year 225, ,983 Attributable to: Equity holders of the Company 224, ,983 Minority interests , ,983 There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. DIVIDENDS The amount of dividends paid by the Company since 31 January 2007 were as follows: RM 000 In respect of the financial year ended 31 January 2007 as reported in the Directors Report of that year: Ordinary final dividend of 7% less 26% taxation, paid on 2 August ,693 At the forthcoming Annual General Meeting, a final dividend in respect of the current financial year ended 31 January 2008 of 10% less 25% taxation (7.50 sen net per ordinary share), on the number of shares in issue on the entitlement date to be announced, will be proposed for shareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the shareholders equity as an appropriation of retained profits in the next financial year ending 31 January SIGNIFICANT AND SUBSEQUENT EVENTS The significant and subsequent events of the Group and the Company are as disclosed in Note 47 to the financial statements. 38 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

41 DIRECTORS REPORT (cont d) EMPLOYEES SHARE OPTION SCHEME The Company had obtained the approval of the Securities Commission on 11 December 2003 and its shareholders on 9 January 2004 for the issuance of a Employees Share Option Scheme ( ESOS ). The ESOS became effective on 30 January 2004 and shall be in force for a period of five years from the date of implementation of the ESOS. The option price of the ESOS shall be the higher of the par value of TA Enterprise Berhad ( TAE ) shares or the weighted average market price of TAE as shown in the Daily Official List of Bursa Malaysia for the five market days immediately preceding the Offer Date with a discount of not more than ten percent (10%) therefrom. The aggregate maximum number of ESOS shares to be offered and allotted to eligible employees shall be at the discretion of the ESOS Committee after taking into consideration the position, performance, seniority and the length of service of the eligible employee. As at the date of this report, the Company has not allocated any option to eligible employees. WARRANTS The 1999/2009 Warrants were constituted by a Deed Poll dated 20 April 1999 executed by the Company. The warrants were listed on Bursa Malaysia Securities Berhad on 1 July The main features of the 1999/2009 Warrants are as follows: (a) (b) (c) Each warrant will entitle the registered holders to subscribe for one new ordinary share of RM1.00 each at par in the Company at an exercise price of RM1.00 each, subject to adjustment from time to time in accordance with the conditions as stipulated in the Deed Poll. The warrants may be exercised at any time on or before the expiry date of 24 June 2009, ten years from the date of issue of the rights to allotment of warrants of 25 June Warrants not exercised during the exercise period will thereafter lapse and cease to be valid. The new ordinary shares of RM1.00 each to be issued pursuant to the exercise of the warrants will rank pari passu in all respects with the existing issued ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the record date of which is on or before the date of allotment and issue of the new ordinary shares of the Company pursuant to the exercise of the warrants. For the purpose hereof, record date means the date as at the close of business on which the shareholders must be registered as members of the Company in order to participate in any dividends, rights, allotments or any other distributions. As at the balance sheet date, 474,083,326 (2007: 572,579,462) warrants remain unexercised. DIRECTORS The names of directors of the Company in office since the date of the last report and at the date of this report are: Datuk Tiah Thee Kian (appointed on 16 August 2007) Datin Tan Kuay Fong Zainab binti Ahmad Dato Mohamed bin Abid Peter U Chin Wei Jory Leong Kam Weng Christopher Koh Swee Kiat Rahmah binti Mahmood (appointed on 16 August 2007) DIRECTORS BENEFITS Neither at the end of the financial year, nor at any time during the 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, other than those arising from warrants issued by the Company. TA ENTERPRISE BERHAD ANNUAL REPORT

42 DIRECTORS REPORT (cont d) DIRECTORS BENEFITS (cont d) Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than a benefit 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 or related corporations, or legal and consultancy fees and interest expense on loans paid and payable to certain directors as shown in Notes 37 and 42 to the financial statements) by reason of a contract made by the Company or related corporations with the director or with a firm of which he or she is a member, or with a company in which he or she has a substantial financial interest. DIRECTORS INTERESTS According to the register of directors shareholdings, the direct and indirect interests of directors in office at the end of the financial year in shares and warrants in the Company during the financial year were as follows: Number of Ordinary Shares of RM1.00 Each 1 February 2007/date of 31 January appointment Bought Sold 2008 The Company Datuk Tiah Thee Kian 480,478, ,478,200 Datin Tan Kuay Fong 3,061, ,000-3,861,000 Dato Mohamed bin Abid 480,000 - (205,100) 274,900 Christopher Koh Swee Kiat 16, ,000 Jory Leong Kam Weng - indirect interest - 5,000-5,000 Number of 1999/2009 Warrants 1 February 2007/date of Bought/ 31 January appointment (Sold) Exercised 2008 The Company Datuk Tiah Thee Kian 29,000,000 (29,000,000) - - Datin Tan Kuay Fong 800,000 - (800,000) - Zainab binti Ahmad 724, ,500 Dato Mohamed bin Abid 200, ,000 Jory Leong Kam Weng - indirect interest 10,000 (5,000) (5,000) - Other than the above, the other directors in office at the end of the financial year did not have any interest in shares in the Company or its related corporations during the financial year. OTHER STATUTORY INFORMATION (a) Before the balance sheets and income statements of the Group and of the Company were made out, the directors took reasonable steps: (i) (ii) 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 to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. 40 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

43 DIRECTORS REPORT (cont d) OTHER STATUTORY INFORMATION (cont d) (b) At the date of this report, the directors are not aware of any circumstances which would render: (i) (ii) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and the values attributed to current assets in the financial statements of the Group and of the Company misleading. (c) (d) (e) 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. 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. As at the date of this report, there does not exist: (i) (ii) 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 any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year. (f) In the opinion of the directors: (i) (ii) no contingent liability 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 and of the Company to meet their obligations as and when they fall due; and 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. 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. ZAINAB BINTI AHMAD DATO MOHAMED BIN ABID Kuala Lumpur, Malaysia 16 May 2008 TA ENTERPRISE BERHAD ANNUAL REPORT

44 STATEMENT BY DIRECTORS pursuant to Section 169(15) of the Companies Act,1965 We, ZAINAB BINTI AHMAD and DATO MOHAMED BIN ABID, being two of the directors of TA ENTERPRISE BERHAD, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 44 to 124 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia and so as to give a true and fair view of the financial position of the Group and of the Company as at 31 January 2008 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. ZAINAB BINTI AHMAD DATO MOHAMED BIN ABID Kuala Lumpur, Malaysia 16 May 2008 STATUTORY DECLARATION pursuant to Section 169(16) of the Companies Act,1965 I, YONG KIM KIONG, being the officer primarily responsible for the financial management of TA ENTERPRISE BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 44 to 124 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, Subscribed and solemnly declared by the abovenamed YONG KIM KIONG at Kuala Lumpur in Wilayah Persekutuan on 16 May 2008 YONG KIM KIONG Before me, 42 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

45 REPORT OF THE AUDITORS to the members of TA Enterprise Berhad We have audited the accompanying financial statements set out on pages 44 to 124. 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 the 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 the applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of: (i) (ii) the financial position of the Group and of the Company as at 31 January 2008 and of the results and the cash flows of the Group and of the Company for the year then ended; and the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and (b) the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and the auditors reports of the subsidiaries of which we have not acted as auditors, as indicated in Note 9 to the financial statements, being financial statements that have been included in the consolidated financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and in respect of subsidiaries incorporated in Malaysia, did not include any comment required to be made under Section 174(3) of the Act. Ernst & Young AF: 0039 Chartered Accountants Chan Hooi Lam No. 2844/02/10(J) Partner Kuala Lumpur, Malaysia 16 May 2008 TA ENTERPRISE BERHAD ANNUAL REPORT

46 CONSOLIDATED BALANCE SHEET as at 31 January 2008 Note RM 000 RM 000 (restated) ASSETS Non-current assets Property, plant and equipment 4 483, ,592 Investment property 5 205, ,931 Land held for property development 6(a) 410, ,949 Prepaid land lease payments 7 9,856 10,641 Intangible assets Associated companies 10 15,085 15,231 Other investments 11 44,191 34,182 Deferred tax assets 26 4,442 1,097 1,172,909 1,093,129 Current assets Property development costs 6(b) 80,182 95,726 Properties held for resale ,128 Land held for resale 13 6,931 9,470 Inventories 14 1, Financial receivables , ,752 Trade receivables , ,151 Other receivables , ,148 Tax recoverable 41,018 25,673 Due from associated companies Short term investments 21 2,149 6,720 Short term funds , ,535 1,914,328 1,807,889 Non-current assets classified as held for sale ,792 1,914,590 1,839,681 TOTAL ASSETS 3,087,499 2,932, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

47 CONSOLIDATED BALANCE SHEET as at 31 January 2008 (cont d) Note RM 000 RM 000 (restated) EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital 24 1,426,971 1,328,475 Reserves 707, ,597 2,134,062 1,863,072 Minority interests 9,122 8,044 Total equity 2,143,184 1,871,116 Non-current liabilities Deferred tax liabilities 26 21,082 19,564 Term loan , , , ,778 Current liabilities Provision for liabilities 28 1, Short term borrowings 27 7,883 21,867 Trade payables , ,135 Other payables 30 51, ,738 Due to remisiers 31 77,356 76,489 Due to directors Due to associated companies ,028 Income tax payable 15,606 8, , ,916 Total liabilities 944,315 1,061,694 TOTAL EQUITY AND LIABILITIES 3,087,499 2,932,810 The accompanying notes form an integral part of the financial statements TA ENTERPRISE BERHAD ANNUAL REPORT

48 CONSOLIDATED INCOME STATEMENT for the year ended 31 January 2008 Note RM 000 RM 000 (restated) Revenue , ,520 Other income 35 94,178 44,227 Purchase of inventories (6,539) (4,252) Cost of properties sold (62,706) (49,439) Contract costs (9,973) - Hotel operation costs (exclude personnel costs) (20,224) (22,923) Personnel costs 36 (91,003) (69,416) Depreciation 4,5 (27,123) (27,369) Remisiers, agents and commissioned futures broker representatives commission (61,353) (31,007) Foreign exchange gains/(losses), net (9,920) Other expenses 39 (66,230) (32,130) Profit from operations 296, ,291 Finance costs 40 (9,300) (9,178) Share of (losses)/profits of associated companies, net of tax (146) 2 Profit before tax 286, ,115 Income tax expense 41 (61,784) (9,380) Profit for the year 225, ,735 Attributable to: Equity holders of the parent 224, ,063 Minority interests , ,735 Earnings per share (sen) attributable to equity holders of the parent Basic, for profit for the year Diluted, for profit for the year The accompanying notes form an integral part of the financial statements 46 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

49 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 January Attributable to Equity Holders of the Parent Non-distributable Distributable #Exchange Differences Share Share Capital *General Translation Recognised Retained Minority Total capital premium reserve reserve reserve in Equity profits Total Interests Equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At 31 January 2006 as restated in financial year ended 31 January 2007 due to the adoption of new and revised FRSs as disclosed in the previous financial year 1,328,475 63,273 10, ,663 53, ,104 1,785,699 7,462 1,793,161 Currency translation differences, representing net loss not recognised in the income statement (15,324) (11,671) - (26,995) (90) (27,085) Profit for the year , , ,735 Dividend (Note 44) (28,695) (28,695) - (28,695) At 31 January ,328,475 63,273 10, ,339 41, ,472 1,863,072 8,044 1,871,116 At 1 February ,328,475 63,273 10, ,339 41, ,472 1,863,072 8,044 1,871,116 Currency translation differences, representing net gain not recognised in the income statement ,359 12,625-21, ,112 Profit for the year , , ,163 Dividend (Note 44) (73,693) (73,693) - (73,693) Issuance of ordinary shares pursuant to exercise of Warrants 1999/2009 (Note 24) (98,496) (98,496) - (98,496) Costs associated with issuance of shares - (10) (10) - (10) At 31 January ,229,979 63,263 10, ,698 54, ,992 1,937,070 9,122 1,946,192 * Maintained by a local stockbroking subsidiary for compliance with the Rules Relating to Participating Organisations of Bursa Securities. # Foreign exchange differences arising from designated intra-group monetary items that form part of the Group s net investment in foreign subsidiaries and trusts. The accompanying notes form an integral part of the financial statements TA ENTERPRISE BERHAD ANNUAL REPORT

50 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 January RM 000 RM 000 (restated) CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 286, ,115 Adjustments for: Depreciation 27,123 27,369 Amortisation of: - premium on unquoted bonds and debt securities prepaid land lease payments deferred financing costs deferred leasing costs 2,922 2,685 - intangible asset Accretion of discount on unquoted bonds - (58) Provision for doubtful debts 2, Write-back of provision for doubtful debts (9,500) (14,800) Bad debts written off (Write-back of)/provision for impairment loss on: - property, plant and equipment (3,746) (5,345) - other investment 5,757 (1,752) - short term investment - (9) Property, plant and equipment written off 10 - Net loss/(gain) on disposal of property, plant and equipment 18 (990) Net gain on disposal of non current asset classified as held for sale (2,178) - Net gain on disposal of land held for resale (859) - Net gains on disposals of investments (44,686) (16,832) Loss on disposal of club membership - 91 Purchaser s deposit forfeited (30) (9) Provision/(write back) for liabilities, net 212 (1,974) Unrealised loss on foreign exchange translation, net 1,437 8,248 Interest expense 9,155 8,987 Interest income (52,813) (24,547) Gross dividends from quoted and unquoted investments (733) (1,383) Share of losses/(profits) of associated companies, net of tax 146 (2) Operating profit before working capital changes 222, ,098 Decrease/(increase) in property development costs, properties and land held for resale 16,990 (6,912) Increase in inventories (781) (139) Decrease/(increase) in receivables 254,545 (597,376) Decrease/(increase) in short term investments 32,810 (2,867) Increase in balance in Housing Development Accounts (8,723) (2,578) (Decrease)/increase in payables (219,138) 469,595 Decrease in net amount due to associated companies (585) (641) Cash generated from/(used in) operations 297,844 (16,820) Interest received 10,014 6,124 Taxes paid (72,012) (3,905) Taxes refunded Net cash generated from/(used in) operating activities 236,012 (14,371) 48 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

51 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 January 2008 (cont d) RM 000 RM 000 (restated) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (Note 4) (8,657) (9,187) Purchase of intangible assets (Note 8) (5) (388) Payment of stamp duties and other costs incidental to acquisition of property - (8,728) Proceeds from disposal of property, plant and equipment 46 1,043 Part proceeds from disposal of non current asset classified as held for sale (Note 47(b)(i)) 35,137 - Proceeds from disposal of land held for resale (Note 47(b)(ii)) Purchase of land held for development (54,300) (255,566) Deposits paid for acquisition of properties - (1,064) Development costs on land held for development (Note 6(a)) (3,890) (957) Purchase of other investments (30,000) (24,174) Proceeds from disposals of other investments 30,150 72,214 Proceeds from disposals of club membership - 35 Interest received 41,112 14,918 Dividends received 567 1,152 Net cash generated from/(used in) investing activities 10,507 (210,702) CASH FLOWS FROM FINANCING ACTIVITIES Repayment of short term loan (7,502) (19,968) Decrease/(increase) in pledged deposits for financing facilities 12,645 (8,245) Net (repayment)/drawdown of loan from a substantial shareholder (Note 30) (49,085) 6,139 (Repayment)/drawdown of revolving credit facility (15,000) 15,000 Interest paid (7,468) (5,482) Dividends paid (73,693) (28,695) Proceeds from issuance of ordinary shares, net of related expenditure 98,486 - Net cash used in financing activities (41,617) (41,251) NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS 204,902 (266,324) EFFECTS OF EXCHANGE RATE CHANGES 109 (315) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 174, ,986 CASH AND CASH EQUIVALENTS AT END OF YEAR 379, ,347 Cash and cash equivalents (Note 22) are as follows: Cash and bank balances 84,862 35,742 Fixed deposits and placements with licensed financial institutions 294, , , ,347 The accompanying notes form an integral part of the financial statements TA ENTERPRISE BERHAD ANNUAL REPORT

52 BALANCE SHEET as at 31 January 2008 Note RM 000 RM 000 (restated) ASSETS Non-current assets Property, plant and equipment 4 16,002 15,114 Prepaid land lease payments 7 2,601 2,667 Subsidiaries 9 1,311,124 1,223,636 Associated companies Other investments , ,998 Due from subsidiary 19 9,000 13,000 1,490,814 1,381,628 Current assets Other receivables Tax recoverable 23,809 22,155 Due from subsidiaries , ,166 Due from associated company Short term funds 22 10,122 10, , ,583 TOTAL ASSETS 1,784,736 1,641,211 EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital 24 1,426,971 1,328,475 Reserves 341, ,212 Total equity 1,768,463 1,569,687 Non-current liabilities Deferred tax liabilities Current liabilities Other payables 30 2,042 51,021 Borrowings 27-15,000 Due to directors Due to subsidiaries 33 14,009 5,449 16,225 71,497 Total liabilities 16,273 71,524 TOTAL EQUITY AND LIABILITIES 1,784,736 1,641,211 The accompanying notes form an integral part of the financial statements 50 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

53 INCOME STATEMENT for the year ended 31 January 2008 Note RM 000 RM 000 (restated) Revenue 34 43,995 53,592 Other income 35 4,511 3,552 Personnel costs 36 (12,043) (9,314) Depreciation 4 (825) (724) Foreign exchange gains Other expenses , ,058 Profit from operations 184, ,190 Finance costs 40 (2,467) (2,001) Profit before tax 182, ,189 Income tax expense 41 (8,256) (2,004) Profit for the year 173, ,185 The accompanying notes form an integral part of the financial statements TA ENTERPRISE BERHAD ANNUAL REPORT

54 STATEMENT OF CHANGES IN EQUITY for the year ended 31 January 2008 Nondistributable Distributable Share Share Retained capital premium profits Total RM 000 RM 000 RM 000 RM 000 At 31 January 2006 as restated in financial year ended 31 January 2007 due to the adoption of new and revised FRSs as disclosed in the previous financial year 1,328,475 63,273 27,449 1,419,197 Profit for the year , ,185 Dividend (Note 44) - - (28,695) (28,695) At 31 January ,328,475 63, ,939 1,569,687 At 31 January ,328,475 63, ,939 1,569,687 Profit for the year , ,983 Dividend (Note 44) - - (73,693) (73,693) Issuance of ordinary shares pursuant to exercise of Warrants 1999/2009 (Note 24) (98,496) - - (98,496) Costs associated with issuance of shares - (10) - (10) At 31 January ,229,979 63, ,229 1,571,471 The accompanying notes form an integral part of the financial statements 52 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

55 CASH FLOW STATEMENT for the year ended 31 January RM 000 RM 000 (restated) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 182, ,189 Adjustments for: Depreciation Amortisation of premium on unquoted bonds and debt securities 3 20 Amortisation of prepaid land lease payments Accretion of discounts on unquoted bonds - (59) Net write-back of provision for doubtful debts due from subsidiaries (65,251) (135,763) (Write-back)/provision for impairment losses on: - investment in subsidiaries, (net) (87,488) (2,348) - associated company - (23) - other investments, (net) - 32 Gain on disposal of other investments (439) (246) Gain on disposal of property, plant and equipment (40) - Loss on disposal of club membership - 16 Interest expense 2,467 1,989 Interest income (3,619) (2,393) Gross dividend income (37,675) (48,792) Operating loss before working capital changes (8,912) (5,588) Increase in receivables (635) (40) Increase in payables 279 1,531 Cash used in operations (9,268) (4,097) Taxes paid (93) - Net cash used in operating activities (9,361) (4,097) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (Note 4) (1,711) (368) Subscription of ordinary shares in a subsidiary - (5) Subscription of preference shares in subsidiaries - (189,545) Proceeds from redemption of redeemable preference shares in a subsidiary - 5,442 Purchase of quoted trust units in Malaysia (30,000) (10,082) Proceeds from disposal of quoted trust units in Malaysia - 22,352 Proceeds from disposal of unquoted bonds 5,561 6,459 Proceeds from disposal of property, plant and equipment 40 - Interest received 3,618 2,393 Dividends received 27,880 43,742 Net cash generated from/(used in) investing activities 5,388 (119,612) TA ENTERPRISE BERHAD ANNUAL REPORT

56 CASH FLOW STATEMENT for the year ended 31 January 2008 (cont d) RM 000 RM 000 (restated) CASH FLOWS FROM FINANCING ACTIVITIES Net (repayment)/drawdown of loan from a substantial shareholder (Note 30) (49,085) 5,919 Net payments from/(to) subsidiaries 45,021 (20,321) (Repayment)/drawdown of revolving credit facility (Note 27) (15,000) 15,000 Interest paid (2,468) (1,990) Dividends paid (73,693) (28,695) Proceeds from issuance of ordinary shares, net of related expenditure 98,486 - Net cash generated from/(used in) financing activities 3,261 (30,087) NET DECREASE IN CASH AND CASH EQUIVALENTS (712) (153,796) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10, ,630 CASH AND CASH EQUIVALENTS AT END OF YEAR 10,122 10,834 Cash and cash equivalents (Note 22) comprise: Cash and bank balances Fixed deposits and placements with financial institutions 9,838 10,539 10,122 10,834 The accompanying notes form an integral part of the financial statements 54 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

57 notes to the financial statements 31 January PRINCIPAL ACTIVITIES AND GENERAL INFORMATION The principal activities of the Company are investment holding and the provision of management services and funding facilities to its subsidiaries. The principal activities of the subsidiaries are described in Note 9 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year, other than as disclosed in Note 9 for certain subsidiaries. The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of Bursa Malaysia Securities Berhad. The registered office and principal place of business of the Company is located at 34th Floor, Menara TA One, No. 22, Jalan P. Ramlee, Kuala Lumpur. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 16 May FINANCIAL RISK MANAGEMENT POLICIES The Group s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group s businesses whilst managing its currency, interest rate, market, credit, liquidity and cash flow risks. The Group manages and allocates its capital resources centrally to ensure that all business units of the Group maintain the required levels of capital and prudent levels of liquidity at all times. The Group operates within clearly defined guidelines that are approved by the Board of Directors. The Group s stockbroking businesses in Malaysia are supervised by the Securities Commission ( SC ) and Bursa Malaysia Securities Berhad whilst the Group s derivative trading subsidiary in Malaysia is supervised by the SC, Bursa Malaysia Derivatives Berhad and Bursa Malaysia Derivatives Clearing House Berhad. These subsidiaries are required to comply with minimum capital adequacy requirements. The stockbroking business in Hong Kong is supervised by the Hong Kong Securities and Futures Commission ( HKSFC ) and is required to maintain liquid capital in accordance with the financial resources rules of the HKSFC. The Group s asset management and unit trust businesses in Malaysia are supervised by the SC and are required to adhere to the Guidelines issued by the SC. The Group s property development activities in Malaysia, in its capacity as housing developers are governed by the Housing Development (Control and Licensing) Act, As a licensed housing developer in Malaysia, the relevant subsidiaries are required to maintain Housing Development Accounts for all monies received from the sale of housing accommodation by its Malaysian property arm. The Group s policies in respect of the major areas of treasury activities are set out as follows: (a) Currency Risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Australian Dollar, Canadian Dollar, United States Dollar, Hong Kong Dollar, Singapore Dollar, South African Rand, Sri Lankan Rupee, Philippine Peso and Chinese Renminbi. Foreign exchange transaction risk s impact on the Group s income statement arises both from external and intragroup trading, investing and funding activities. Currency risks relating to operating activities in the normal course of business of the Group are generally not hedged. Such risks may be naturally hedged through planned course of business and by matching income and expenditure to minimise currency exchange. Currency exposures arising on the holding of monetary assets and liabilities denominated in foreign currencies, mainly intra-group and external loans and deposits with financial institutions, are generally hedged selectively. Hedges may be taken using derivative financial instruments such as forward foreign exchange contracts for foreseeable significant exchange rate fluctuations and are managed by the Group Treasury. TA ENTERPRISE BERHAD ANNUAL REPORT

58 notes to the financial statements 31 January 2008 (cont d) 2. FINANCIAL RISK MANAGEMENT POLICIES (cont d) (a) Currency Risk (cont d) The derivative trading subsidiary of the Group in Malaysia receives foreign currency denominated clients monies that are deposited in foreign currency denominated bank accounts maintained in Malaysia. The foreign currencies accepted include United States Dollar and Singapore Dollar and other foreign currencies permitted are Australian Dollar, British Pound, Japanese Yen and Euro. Such currency risk is naturally hedged in the absence of any open positions from such clients. Any gains or losses on conversion of currencies on instructions by customers are normally borne by customers. Foreign exchange translation differences arising on consolidation and those attributable to net investment in foreign subsidiaries are recorded and disclosed within shareholders equity of the Group. The Group maintains a natural hedge for certain subsidiaries/trust, by borrowing in the currency of the country in which the property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments. International business, by its nature, is subject to risks including, but not limited to: changing economic conditions, changes in global political environment, changes in financial and trade regulations and foreign exchange rate volatility. In general, the Group maintains appropriate reserves to address normal currency fluctuations. (b) Interest Rate Risk The Group s interest rate risk also arises from its interest-bearing borrowings. The Group s policy is to borrow principally on a floating rate basis but to retain a proportion of fixed rate debt. The objectives for the mix between fixed and floating rate borrowings are to reduce the impact of an upward change in interest rates while enabling benefits to be enjoyed if interest rates fall. The mix between fixed and floating rate borrowings are monitored and varied according to changes in interest rates to ensure that the Group s cost of financing is kept at the lowest possible. The Group does not generally hedge interest rate risks. Hedging of risks through the use of financial instruments may be adopted should its use results in significant cost savings. Interest rates on investments and borrowings are determined based on prevailing market rates. The Group has a policy to ensure that the rates obtained are competitive. (c) Market Risk The Group s principal exposure to market risk arises mainly from changes in equity prices and the state of the domestic and foreign property markets. The Group does not use derivative financial instruments to manage equity risk. The risk of loss in value is minimised via thorough analysis before making the investments and continuous monitoring of the performance and risk of the investments made. Equity investments classified as current assets are available for sale and the Group manages disposal of its investments to optimise returns on realisation. Provisions are established for adverse changes in fair values of short term investments whilst reversals are recognised to income statement to the extent of previously provided amounts. Total gains are recognised only upon disposal of investment. Equity investments classified as non-current assets are held for long term. Changes in market values of long term investment held for strategic reasons, except where an impairment occurs, do not affect the book value of the investments. The Group manages its exposure to adverse fluctuation in property value via thorough analysis before investing in the property and continuous monitoring of the state of the property market. The Group optimises its returns on realisation by managing its decisions to dispose or hold, continue or postpone development of these properties based on the current and expected future trend of the property market. Provision for impairment losses will be made when there is indication of adverse changes in fair values of these properties. Reversals are made to the income statement immediately to the extent of the previously provided amount when the adverse condition which leads to the impairment of assets cease to exist. Intrinsic in all businesses, the overall performance of the Group is also driven by external conditions such as global and domestic economies that are largely unpredictable and uncontrollable. Generally, development and performance of both the regional and domestic capital and property markets have a direct impact on the Group. 56 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

59 notes to the financial statements 31 January 2008 (cont d) 2. FINANCIAL RISK MANAGEMENT POLICIES (cont d) (d) Credit Risk Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Group s associations to business partners with high creditworthiness. A credit approval limit structure approved by the Board of Directors is in place for all lending activities of the Group. Trade and financial receivables are monitored on an ongoing basis via group-wide management reporting procedures. For effective management of non-performing accounts ( NPAs ), a debt recovery unit has been established to focus on formulating and executing recovery action plans for major NPAs. On the whole, NPAs are monitored closely by the Group with greater emphasis being placed on TA Centre Berhad, TA Securities Holdings Berhad, TA First Credit Sdn. Bhd., TA Securities (HK) Limited and TA Antarabangsa Finance South Africa Limited. Generally, provisions are made in accordance with specific regulatory requirements or for the unsecured portion of the Group s NPAs. Write-off of debts against specific provisions are made only when avenues of recovery have been exhausted and the loans are deemed to be irrecoverable in the foreseeable future. Detailed information on NPAs and provisioning requirements are disclosed in the relevant notes to the financial statements. The Group does not have any significant exposure or concentration of credit risk that may arise from exposures to a single debtor or to groups of related debtors other than as disclosed in Note 15 to the financial statements. (e) Liquidity and Cash Flow Risk The Group seeks to achieve a balance between certainty of funding even in difficult times for the markets or the Group and a flexible, cost-effective borrowing structure. The policy, therefore, seeks to ensure that, at a minimum, all projected net borrowing needs are covered by committed facilities. In addition, debt maturities are closely monitored to ensure that the Group is able to meet its obligations as they fall due and any refinancing needs are met with. The Group s Treasury Department manages the Group s funding needs and allocates funds in such a manner that all business units maintain optimum levels of liquidity sufficient for their operations without leaving them unutilised. To this end, daily cash flow forecasts are prepared taking into account all major transactions. Any excess funds from operating cash cycles, which are temporary in nature, are invested in deposits as and when available with financial institutions at the most competitive interest rates obtainable. 3. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements of the Group and the Company have been prepared under the historical cost convention unless otherwise indicated in the accounting policies below and comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards ( FRSs ) in Malaysia. At the beginning of the current financial year, the Group and the Company had adopted new and revised FRSs which are mandatory for financial periods beginning on or after 1 October 2006 or 1 January 2007 as described fully in Note 3.1. (b) Revenue Recognition (i) Gross brokerage fees in stockbroking subsidiaries are recognised on an accrual basis upon the execution of trade on behalf of clients, computed based on a pre-determined percentage of the contract value. (ii) (iii) Interest earned by the local stockbroking subsidiaries included in service and administrative charges are generally recognised on an accrual basis, except when the receivable is classified as non-performing. Where an account is classified as non-performing, interest is suspended until it is realised on a cash basis, except for margin accounts where interest is suspended until the account is reclassified as performing. The suspension of interest income is made in accordance with the Rules of Bursa Malaysia Securities Berhad. Interest income from financial receivables of money lending and finance subsidiaries is generally recognised on an accrual basis, except when a loan debtor becomes non-performing. Interest income on non-performing loan is suspended until it is realised on a cash basis. Generally, loan debtors are deemed to be non-performing when repayments are in arrears for more than 3 months or when the outstanding balance is greater than the value of the collateral pledged. TA ENTERPRISE BERHAD ANNUAL REPORT

60 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (b) Revenue Recognition (cont d) (iv) Interest income from fixed deposits with licensed banks are recognised on an accrual basis. Interest income from other sources is recognised on a receipt basis upon physical receipt if there is uncertainty over its realisation. (v) Rollover fees and penalty interest for late payments earned from financial receivables are recognised on a receipt basis due to uncertainty over recoverability of income. Rollover fees earned by the local stockbroking subsidiaries are generally recognised on an accrual basis, except when the receivable is classified as non-performing. Recognition of rollover fees from margin accounts will be suspended until the accounts are reclassified as performing. (vi) Acceptance fees earned by a money lending subsidiary are recognised upon the drawdown of loan facility in accordance with the terms of the agreement. (vii) Service and processing fees earned on money lending and ESOS financing activities of a money lending subsidiary included in the service and administrative charges are recognised upon the drawdown of loans. (viii) Dividend income from marketable securities and unquoted shares are recognised when the Group s or the Company s right to receive payment is established, except when there is substantial uncertainty over the recoverability of income so recognised. In such instances, dividend income is recognised on a receipt basis. (ix) (x) (xi) Rental income is recognised rateably over the period of tenancy. Income from disposals of marketable securities and sale of completed properties are recognised upon the transfer of risks and rewards of ownership. Revenue from sale of development properties is accounted for by the stage of completion method in respect of all property units that have been sold. The stage of completion is determined by reference to the project costs incurred to date to the total estimated costs where the outcome of the projects can be reliably estimated. (xii) Revenue from construction contracts is accounted for by the stage of completion method as described in Note 3(j). (xiii) Placement and underwriting fee in stockbroking subsidiaries are recognised when the right to receive payment is established in accordance with the terms of the placement and/or underwriting agreements. (xiv) Manager s fee from unit trust funds, management fees and nominee service charges are recognised when the services are performed. (xv) Service charges from the sale of units to unitholders is recognised upon the allotment of the trust units, net of cost of units sold. (xvi) Revenue from rental of hotel rooms, sale of food and beverage and other related income from hotel operations are recognised upon the sale of goods or the delivery of the services to the customers. All such revenue from a subsidiary incorporated in Australia are stated net of the amount of goods and service tax applicable to such revenue. (xvii) All other income is recognised on an accrual basis. (c) Subsidiaries and Basis of Consolidation (i) Subsidiaries Subsidiaries are entities over which the Group has power to exercise control over the financial and operating policies so as to obtain benefits therefrom. 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. 58 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

61 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (c) Subsidiaries and Basis of Consolidation (cont d) (i) Subsidiaries (cont d) In the Company s separate financial statements, subsidiaries are stated at cost less provision for any impairment losses. The assessment and recognition of impairment of assets are in accordance with the accounting policy referred to in Note 3(v). On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in income statement. (ii) Basis of consolidation The consolidated financial statements include the financial statements of the Company and all its subsidiaries and trusts, of which the Group is the beneficiary, made up to the end of the financial year. Subsidiaries and trusts are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiaries and trusts acquired or disposed during the year are included in the consolidated income statement from the effective date of acquisition, being the date on which the Group obtains control, and continue to be consolidated up to the date that such control ceases. The assets and liabilities or net assets (including intangible assets acquired and contingent liabilities assumed) of a subsidiary or trust are measured at their fair values at the date of acquisition and these values are reflected in the consolidated balance sheet. The difference between the cost of an acquisition and the fair value of the Group s share of the net assets of the acquired subsidiary or trust at the date of acquisition is included in the consolidated balance sheet as goodwill or reserve arising on consolidation. Costs of 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 acquisitions. Reserve arising on consolidation is recognised immediately in the income statement in the year of acquisition. Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances. Minority interests represent the portion of results and net assets in subsidiaries not held by the Group. It is measured at the minorities share of the fair values of the identifiable assets and liabilities of the acquiree at the acquisition date and the minorities share of changes in the subsidiaries equity since then. (d) Associated Companies The Group treats associated companies as those companies in which a long term equity interest of between 20 and 50 percent is held and that is neither a subsidiary nor an interest in a joint venture and where it exercises significant influence over the financial and operating policies through management participation but not in control or joint control over those policies. The associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting based on the audited or management financial statements of the associated companies. The Group s share of post-acquisition profits less losses of associated companies is included in the consolidated income statement and the Group s interest in associated companies is stated at cost plus the Group s share of postacquisition retained profits or accumulated losses and reserves. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes. Unrealised gains on transactions between the Group and the associated companies are eliminated to the extent of the Group s interest in the associated companies. Unrealised losses are eliminated unless cost cannot be recovered. After the application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group s net investment in the associate. The Group does not have any goodwill relating to its associates. TA ENTERPRISE BERHAD ANNUAL REPORT

62 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (d) Associated Companies (cont d) When the Group s share of losses in an associate equals or exceeds its interest in the associate, including any long-term interests that, in substance, form part of the Group s net investment in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. The most recent available audited financial statements of the associates are used by the Group in applying the equity method. When the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances. In the Company s separate financial statements, associates are stated at cost less provision for any impairment losses.the assessment and recognition of impairment losses are in accordance with the accounting policy referred to in Note 3(v). On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in income statement. (e) Investments Short term investments (i) Marketable securities are carried at the lower of cost and market value, determined on a contract-by-contract basis. Cost is determined based on the contract value while market value is determined based on quoted market values. Increases or decreases in the carrying amount of marketable securities are credited or charged to the income statement. On disposal of marketable securities, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statement. (ii) Cost of trust units are determined using the weighted average method of valuation. Market value of the trust units is determined based on the underlying value of these trust funds. Long term investments Marketable securities and other investments held for the long term are stated at cost less provision for any impairment losses. The assessment and recognition of impairment of assets are in accordance with the accounting policy referred to in Note 3(v). On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statement. (f) 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 at rates of exchange approximating those ruling at the date of transaction. At each balance sheet date, foreign currency monetary items are translated into each entity s respective functional currency at exchange rates approximating those ruling at that date. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition and any non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined. All exchange rate differences are taken to the income statement with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These exchange differences are taken directly to equity until the disposal of the net investment, at which time they are recognised in the income statement. 60 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

63 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (f) Foreign Currencies (cont d) (iii) Foreign operations (cont d) Financial statements of foreign consolidated subsidiaries and trusts are translated at year-end exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with respect to the income statement. All resulting translation differences are recognised in equity. The principal exchange rates used for each respective unit of foreign currency ruling at the balance sheet date are as follows: RM RM Australian Dollar ( A$ ) Canadian Dollar ( C$ ) United States Dollar ( US$ ) Hong Kong Dollar ( HK$ ) Singapore Dollar ( S$ ) South African Rand ( Rand ) Sri Lankan Rupee ( Rs ) Philippine Peso ( Peso ) Chinese Renminbi ( RMB ) (g) Property, Plant and Equipment and Depreciation Property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset s carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Group and the cost of the items can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property, plant and equipment is provided 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% to 6.67% Lifts and renovations 10% to 33.33% Furniture and fittings 10% to 33.33% Motor vehicles 20% Office equipment and computers 10% to 33.33% The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. An item of property, plant and equipment is derecognised upon the 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 the income statement. (h) Investment Properties Investment properties are properties which are held either to earn rental income or for capital appreciation or both. Such properties are measured initially at cost, including transaction costs. The Group adopts the cost model and subsequent to recognition, investment properties are stated in accordance with the accounting policies applicable to property, plant and equipment referred to in Note 3(g). TA ENTERPRISE BERHAD ANNUAL REPORT

64 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (h) Investment Properties (cont d) Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or losses on the retirement or disposal of an investment property are recognised in the income statement in the year in which they arise. (i) Land Held for Property Development and Property Development Costs (i) Land held for property development Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost plus incidental expenditure incurred to put the land in a condition ready for development and less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3(v). Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (ii) Property development costs Land and development costs are classified as property development costs when significant development work has been undertaken and is expected to be completed within the normal operating cycle. Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities, less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3(v). When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs. Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred. Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately. Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value. The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables. (j) Construction Contracts Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. 62 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

65 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (j) Construction Contracts (cont d) When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the total of costs incurred on construction contracts plus, recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts. (k) Land Held for Resale Land held for resale relates to freehold land stated at cost, including all incidental expenditure incurred in acquiring the land and preparing it for resale, less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3(v). (l) Properties Held for Resale Properties held for resale are stated at the lower of cost and net realisable value and relate to development projects which have been completed. Cost is determined on the specific identification basis and includes costs of land, construction and appropriate development expenses. (m) Intangible Assets (i) Goodwill Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group does not have any goodwill on consolidation as at the balance sheet date. (ii) Other Intangible Assets (n) Inventories Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amorised on a straight-line basis over the estimated economic useful lives and assesed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each balance sheet date. The useful life of computer software classified as intangible assets is three years. The useful life of trading rights in the Stock Exchange of Hong Kong Limited is estimated at 5 years and had been fully amortised as at the balance sheet date. Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable. The Group presently does not have intangible assets with indefinite useful life as at the balance sheet date. Inventories, which comprise building materials, food, beverages and other consumables, are stated at the lower of cost (determined on a first-in, first-out basis) and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less any estimated costs of completion or costs necessary to make the sale. TA ENTERPRISE BERHAD ANNUAL REPORT

66 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (o) Financial, Trade and Other Receivables and Amounts Due From Subsidiaries These receivables are carried at anticipated realisable values. Bad debts are written-off when identified. An estimate is made for doubtful debts based on review of all outstanding amounts as at the balance sheet date. For trade and financial receivables of subsidiaries involved in stockbroking and financial services, specific provision is made for debts which are considered doubtful or have been classified as non-performing, net of interest-in-suspense, rollover fees-in-suspense and taking into consideration any collateral held. The classification of trade receivable as either performing or non-performing is in accordance with the Rules of Bursa Malaysia Securities Berhad for the Malaysian subsidiary involved in stockbroking business. (p) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, bank balances, short term deposits and placements with licensed financial institutions, excluding monies held in trust, deposits pledged, balances in Housing Development Accounts, net of any outstanding bank overdrafts. (q) Equity Instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. Direct expenses incurred in the issuance of equity instruments are recognised directly in equity. (r) Warrants Warrants are recognised on the date of issue at an amount equivalent to consideration received. The issue of ordinary shares upon exercise of warrants are treated as new subscription of ordinary shares for the consideration equivalent to the warrants exercise price. (s) Trade and Other Payables and Amounts Due To Subsidiaries These payables are stated at the fair value of the consideration to be paid in the future for goods and services received. (t) Borrowings and Borrowing Costs All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Interest incurred on borrowings for working capital is charged to the income statement as expense as and when incurred. Interest incurred on borrowings relating to property development costs is capitalised during the period of active development until they are ready for sale or upon the suspension of development activities. (u) Leases 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, with the following exceptions: - Property held under operating leases that would otherwise meet the definition of an investment property is classified as an investment property on a property-by-property basis and, if classified as investment property, is accounted for as if held under a finance lease; and - Land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is also clearly held under an operating lease. 64 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

67 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (u) Leases (cont d) (i) 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 leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 3(g). (ii) Operating Leases - the Group as Lessee Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term. (iii) 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 on a straight-line basis over the term of the relevant lease (Note 3(b)(ix)). 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. (v) Impairment of Non-financial Assets The carrying amounts of assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated to determine the amount of impairment loss. For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating units (CGU) to which the asset belongs to. An asset s recoverable amount is the higher of an asset s or cash-generating units ( CGU ) 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 prorata basis. TA ENTERPRISE BERHAD ANNUAL REPORT

68 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (v) Impairment of Non-financial Assets (cont d) An impairment loss is recognised in the income statement in the period in which it arises. Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its 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 is recognised in the income statement. (w) Forward Exchange Contracts Outstanding forward exchange contracts at the balance sheet date are stated at fair value based on applicable forward rates ruling at that date, taking maturity profiles into account. Gains or losses are recognised in the income statement in the year they arise. The Group may use derivative financial instruments to mitigate certain currency risks. The Group s criteria for a derivative instrument to be classified as a hedge includes: the hedge transaction is expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk; the effectiveness of the hedge can be reliably measured; there is adequate documentation of the hedging relationships at the inception of the hedge; and for cash flow hedges, the forecasted transaction that is a subject of the hedges must be highly probable. When an anticipated future transaction is hedged and the underlying position has not been recognised in the financial statemnets, any change in the fair value of the hedging instrument is recognised in equity and will be recognised in the income statement only in the period when the underlying position hedged affects the income statement or when the hedge designation is revoked. Gains and losses on derivative financial instruments used for hedging of the underlying position that has been recognised in the financial statements are recognised as income or expense on the same basis as the corresponding hedged position. (x) Provision for Liabilities Provision for liabilities is recognised when the Group and the Company have a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is discounted using a current pre-tax rate that reflects, where appropriate, the risk specific to the liability to the present value of the expenditure expected to be required to settle the obligation. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost. (y) Employee Benefits Short term benefits Wages, salaries, bonuses and social security contributions are recognised as expenses in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. 66 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

69 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (y) Employee Benefits (cont d) 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. As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund ( EPF ). Some of the Group s foreign subsidiaries make contributions to their respective countries statutory pension schemes. Such contributions are recognised as an expense in the income statement as incurred. Equity compensation benefits The TA Enterprise Berhad Employees Share Option Scheme ( ESOS ), an equity-settled, share-based compensation plan, allows the Group s employees to acquire ordinary shares of the Company. The total fair value of share options granted to employee is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the options will vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date. The Group has not granted any ESOS as at the balance sheet date. At each subsequent balance sheet date should the Group have granted any ESOS, the Group will revise its estimate of the number of options that are expected to become exercisable on vesting date. It will recognise the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs will be credited to equity when the options are exercised. Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits as a liability an expense when it is demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefits is based on the number of employees expected to accept the offer. (z) Income Tax Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that 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 reserve arising on consolidation or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or reserve arising on consolidation. TA ENTERPRISE BERHAD ANNUAL REPORT

70 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (aa) 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. Financial instruments on the balance sheets include short term funds, borrowings, current and non-current investments, financial, trade and other receivables and payables, related and associated company balances, amounts due to directors and remisiers. The accounting policies on recognition and measurement of these items are disclosed in their respective accounting policies. (ab) Non-current Assets (or Disposal Groups) Held for Sale and Discontinued Operation Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary. Immediately before classification as held for sale, the measurement of the non-current assets (or all the assets and liabilities in a disposal group) is brought up-to-date in accordance with applicable FRSs. Then, on initial classification as held for sale, non-current assets or disposal groups (other than investment properties, deferred tax assets, employee benefits assets, financial assets and inventories) are measured in accordance with FRS 5 that is at the lower of carrying amount and fair value less costs to sell. Any differences are included in profit or loss. A component of the Group is classified as a discontinued operation when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations, is part of a single co-ordinated major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. 3.1 changes in Accounting Policies, Effects and Changes in Comparatives Arising from Adoption of New and Revised FRSs On 1 February 2007, the Group and the Company adopted the following FRSs mandatory for financial periods beginning on or after 1 October 2006 or 1 January 2007: FRS 6 FRS 117 Amendment to FRS FRS 124 Exploration for and Evaluation of Mineral Resources Leases Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures Related Party Disclosures FRS 6 and Amendment to FRS are not applicable to the Company. The adoption of FRS 124 does not have a significant financial impact on the Group and the Company other than the disclosure of compensation of key management personnel. 68 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

71 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) 3.1 changes in Accounting Policies, Effects and Changes in Comparatives Arising from Adoption of New and Revised FRSs (cont d) The effects of the changes in accounting policies are as follows: (a) FRS 117: Leases (i) Leasehold land classified as land held for development Prior to 1 February 2007, certain leasehold land classified as property, plant and equipment and leasehold land held for development were stated at cost less accumulated depreciation and impairment losses. The adoption of the revised FRS 117 has resulted in a change in the accounting policy relating to the classification of leases of land and buildings. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. Leasehold land held for own use is now classified as operating lease, the minimum lease payments or the upfront payments made are allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The upfront payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term. Upon adoption of the revised FRS 117 on 1 February 2007, the unamortised amount of leasehold land is retained as the surrogate carrying amount of prepaid lease payments as allowed by the transitional provisions. The reclassification of leasehold land as prepaid land lease payments has been accounted for retrospectively and certain comparatives have been restated as shown below: Before adoption of Effect of As FRS 117 FRS 117 restated RM 000 RM 000 RM 000 Group Consolidated Balance Sheets As at 31 January 2007 Property, plant and equipment 487,978 (10,386) 477,592 Land held for property development 361,204 (255) 360,949 Prepaid land lease payments - 10,641 10, , ,182 Consolidated Income Statement For the Year Ended 31 January 2007 Depreciation 27,597 (228) 27,369 Amortisation of prepaid land lease payments (within other expenses) ,597-27,597 Company Balance Sheet As at 31 January 2007 Property, plant and equipment 17,781 (2,667) 15,114 Prepaid land lease payments - 2,667 2,667 17,781-17,781 TA ENTERPRISE BERHAD ANNUAL REPORT

72 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) 3.1 changes in Accounting Policies, Effects and Changes in Comparatives Arising from Adoption of New and Revised FRSs (cont d) (a) FRS 117: Leases (cont d) (i) Leasehold land classified as land held for development (cont d) Company Income Statement Before adoption of Effect of As FRS 117 FRS 117 restated RM 000 RM 000 RM 000 For the Year Ended 31 January 2007 Depreciation 790 (66) 724 Amortisation of prepaid land lease payments (within other expenses) (ii) Initial direct costs Prior to 1 February 2007, the Group and the Company, as lessors in operating lease arrangements, had recognised initial direct costs incurred in negotiating and arranging leases as an expense in the income statement in the period in which they were incurred. The revised FRS 117 requires such costs to be added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income. According to the revised FRS 117, this change in accounting policy should be applied retrospectively. The Group and the Company do not incur significant initial direct costs on negotiating and arranging leases and as a result, this change in accounting policy does not have material effects on the financial statements of the Group and the Company. (b) FRS 124 Related Party Disclosures The key changes of FRS 124 are: (i) (ii) Removal of the exemption for disclosure of related party transactions in the Company s financial statements in respect of transactions with subsidiaries. Disclosure of the compensation of key management personnel. The disclosures in compliance with the requirements above have been included in Note 42. (c) FRS, Amendments to FRSs and Interpretation Not Yet Effective The Group has not early adopted the following FRSs, amendments to FRSs and Interpretations which have effective dates as follows: FRSs, Amendment to FRSs and Interpretations Effective for financial periods beginning on or after FRS Financial Instruments: Recognition and Measurement Deferred 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 1 July 2007 Disclosure of Government Assistance FRS 134: Interim Financial Reporting 1 July 2007 FRS 137: Provisions, Contingent Liabilities and Contingent Assets 1 July TA ENTERPRISE BERHAD ANNUAL REPORT 2008

73 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) 3.1 changes in Accounting Policies, Effects and Changes in Comparatives Arising from Adoption of New and Revised FRSs (cont d) (c) FRS, Amendments to FRSs and Interpretation Not Yet Effective (cont d) FRSs, Amendment to FRSs and Interpretations Effective for financial periods beginning on or after Amendment to FRS 121: The Effects of Changes in Foreign Exchange Rates 1 July Net Investment in a Foreign Operation IC Interpretation 1: Changes in Existing Decommissioning, Restoration and 1 July 2007 Similar Liabilities IC Interpretation 2: Members Shares in Co-operative Entities and Similar Instruments 1 July 2007 IC Interpretation 5: Rights to Interests arising from Decommissioning, Restoration 1 July 2007 and Environmental Rehabilitation Funds IC Interpretation 6: Liabilities arising from Participating in a Specific Market 1 July Waste Electrical and Electronic Equipment IC Interpretation 7: Applying the Restatement Approach under FRS July Financial Reporting in Hyperinflationary Economies IC Interpretation 8: Scope of FRS 2 1 July 2007 The above FRSs, amendments to FRSs and Interpretations are expected to have no significant impact on the financial statements of the Group and the Company upon their initial application (except possibly for FRS 139 which is exempted from disclosure). 3.2 Significant Accounting Estimates and Judgements (a) Critical Judgements Made in Applying Accounting Policies The following are the judgements made by management in the process of applying the Group s accounting policies that have the most significant effect on the amounts recognised in the financial statements. The judgements are made based on historical knowledge and best available current information. (i) classification between investment properties, property, plant and equipment or prepaid land lease payments The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as an investment property. Investment property is a property held to earn rentals or for capital appreciation or both considered on an individual property basis. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group or the Company would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property. (ii) Classification of computer software The Group has developed the following criteria to identify computer software to be classified as property, plant or equipment or intangible asset: software that is embedded in computer-controlled equipment, including operating system that cannot operate without that specific software is an integral part of the related hardware and is treated as property, plant and equipment; application software that is being used on a computer is generally easily replaced and is not an integral part of the related hardware and is treated as intangible asset. TA ENTERPRISE BERHAD ANNUAL REPORT

74 notes to the financial statements 31 January 2008 (cont d) 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) 3.2 Significant Accounting Estimates and Judgements (cont d) (a) Critical Judgements Made in Applying Accounting Policies (cont d) (iii) Operating lease commitments - Group as a lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined that it retains all the significant risks and rewards of ownership of these properties which are deemed to be leased out on operating leases. (b) Key Sources of Estimation Uncertainty The 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 are discussed below: (i) Depreciation and residual values of property, plant and equipment, investment properties and intangible assets Certain assets of the Group, e.g. renovation, computers, office equipment, electrical installations and motor vehicles may have a historical usage of more than their current estimate of useful economic lives. Nonetheless, the directors are of the opinion that the current estimates are reflective of the future expected usage in view of the likelihood of technology changes, depletion through regular usage, downward pressure on secondary market value of used motor vehicles, etc. (ii) Impairment of property, plant and equipment and investment properties The Group carried out the impairment test based on a variety of estimation for the purpose of determining the fair value and value-in-use of the property, plant and equipment and investment properties. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the asset and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Expected future cash flows are compared to the historical track record for reasonableness. Discount rate is based on the Group s average cost of fund. (iii) Property development The Group recognises property development revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists. (iv) Deferred tax assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. Total amount of tax losses and capital allowances of the Group which deferred tax effects were recognised is approximately RM1,367,000 (2007: RM1,640,000) and the amount of tax losses and capital allowances of the Group of which deferred tax effects were not recognised is approximately RM416,964,000 (2007: RM425,537,00). (v) Provision for doubtful debts on financial receivables The Group maintains a provision for doubtful accounts representing management s estimate of the amount of asset impairment in its financial receivables portfolio. The Group determines the provision based on on-going review and evaluation performed whether the specific debts are considered doubtful or have been classified as non-performing and taking into consideration the values of any collaterals held. Certain collaterals pledged are properties which are not readily quoted in the market, requires the management to exercise judgement in assigning values to them. 72 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

75 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT Office Furniture equipment *Land and Lifts and and Motor and Group buildings Renovations fittings vehicles computers Total At 31 January 2008 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Cost At 1 February 2007 as previously stated 537,108 93,876 9,208 6,730 87, ,727 Reclassified to intangible assets (Note 8) (663) (663) Effects of adopting FRS 117 (Note 7) (12,062) (12,062) Effects of foreign exchange translation At 1 February 2007 as restated 525,261 93,876 9,208 6,730 87, ,217 Effects of foreign exchange translation 15,097 2,949 (2) 8 2,247 20,299 Additions 155 2, ,966 4,060 8,657 Write-offs - - (111) (666) (122) (899) Disposals - - (17) (169) (48) (234) Reclassified as held for sale (Note 23) (1,670) (1,670) At 31 January ,843 98,992 9,387 7,869 93, ,370 Accumulated Depreciation and Provision for Impairment Losses At 1 February 2007 as previously stated 86,061 65,539 7,211 5,046 82, ,734 Reclassified to intangible assets (Note 8) (648) (648) Effects of adopting FRS 117 (Note 7) (1,676) (1,676) At 1 February 2007 as restated 84,385 65,539 7,211 5,046 82, ,410 Effects of foreign exchange translation 2,105 1, ,066 6,079 Depreciation for the year 8,111 6, ,268 20,962 Reversal of impairment loss (Note 39) (3,746) (3,746) Other write-offs - - (108) (666) (115) (889) Disposals - - (17) (107) (46) (170) Reclassified as held for sale (Note 23) (1,408) (1,408) At 31 January ,447 74,355 7,318 4,716 89, ,238 Net Carrying Amount At 31 January ,396 24,637 2,069 3,153 3, ,132 TA ENTERPRISE BERHAD ANNUAL REPORT

76 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT (cont d) Office Furniture equipment *Land and Lifts and and Motor and Group buildings Renovations fittings vehicles computers Total At 31 January 2007 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Cost At 1 February 2006 as restated in the previous financial year due to adoption of new FRSs as disclosed in the previous financial year 621,866 88,926 9,126 6,499 88, ,406 Effects of adopting FRS 117 (Note 7) (12,514) (12,514) Reclassified to intangible assets (Note 8) (655) (655) At 1 February 2006 as restated 609,352 88,926 9,126 6,499 88, ,237 Effects of foreign exchange translation (20,882) (2,124) (32) - (1,821) (24,859) Reclassified from deposits paid in prior years Additions as restated after certain reclassification to intangible assets 1,144 4, ,891 9,187 Write-offs - - (110) (5) (1,790) (1,905) Disposals - - (11) (377) (472) (860) Cost of lifts aggregated with building cost reclassified (2,770) 2, Reclassified as held for sale (Note 23) (61,723) (61,723) At 31 January ,261 93,876 9,208 6,730 87, ,217 Accumulated Depreciation and Provision for Impairment Losses At 1 February 2006 as restated in the previous financial year due to adoption of new FRSs as disclosed in the previous financial year 115,002 58,483 7,086 5,139 82, ,329 Effects of adopting FRS 117 (Note 7) (1,300) (1,300) Reclassified to intangible assets (Note 8) (505) (505) At 1 February 2006 as restated 113,702 58,483 7,086 5,139 82, ,524 Effects of foreign exchange translation (1,793) (1,292) (31) - (1,804) (4,920) Depreciation for the year as restated after certain reclassification to amortisation of intangible assets 8,391 7, ,165 21,009 Reversal of impairment loss (Note 39) (5,345) (5,345) Other write-offs - - (109) (3) (1,793) (1,905) Disposals - - (11) (343) (453) (807) Accumulated depreciation of lifts aggregated with building costs reclassified (424) Reclassified as held for sale (Note 23) (29,931) (29,931) At 31 January ,600 65,539 7,211 5,046 82, ,625 Net Carrying Amount At 31 January ,661 28,337 1,997 1,684 4, , TA ENTERPRISE BERHAD ANNUAL REPORT 2008

77 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT (cont d) Office Furniture equipment *Land and and Motor and Company buildings Renovations fittings vehicles computers Total 31 January 2008 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Cost At 1 February 2007 as previously stated 20,380 1,461 2,464 1, ,932 Effects of adopting FRS 117 (Note 7) (3,300) (3,300) At 1 February 2007 as restated 17,080 1,461 2,464 1, ,632 Additions , ,711 Disposal # - # Transfer from subsidiary (Note 42) At 31 January ,080 1,468 2,487 2, ,345 Accumulated Depreciation At 1 February 2007 as previously stated 3,907 1,087 2, ,151 Effects of adopting FRS 117 (Note 7) (633) (633) At 1 February 2007 as restated 3,274 1,087 2, ,518 Charge for the year At 31 January ,616 1,252 2, ,343 Net Carrying Amount At 31 January , , , January 2007 Cost At 1 February 2006 as previously stated 20,380 1,403 2, ,487 Effects of adopting FRS 117 (Note 7) (3,300) (3,300) At 1 February 2006 as restated 17,080 1,403 2, ,187 Additions Transfer from subsidiaries (Note 42) At 31 January ,080 1,461 2,464 1, ,632 Accumulated Depreciation At 1 February 2006 as previously stated 3, , ,361 Effects of adopting FRS 117 (Note 7) (567) (567) At 1 February 2006 as restated 2, , ,794 Charge for the year At 31 January ,274 1,087 2, ,518 Net Carrying Amount At 31 January , ,114 # At a cost of RM1 TA ENTERPRISE BERHAD ANNUAL REPORT

78 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT (cont d) * Land and buildings comprise: Long term Buildings- Freehold leasehold in- Group land land Buildings progress Total At 31 January 2008 RM 000 RM 000 RM 000 RM 000 RM 000 Cost At 1 February 2007 as previously stated 52,212 3, ,297 3, ,108 Effects of adopting FRS (3,560) (8,502) - (12,062) Effects of foreign exchange translation At 1 February 2007 as restated 52, ,010 3, ,261 Effects of foreign exchange translation 2,293-12,892 (88) 15,097 Reclassification upon completion - - 1,857 (1,857) - Additions Reclassified as held for sale (Note 23) - - (1,670) - (1,670) At 31 January , ,089 1, ,843 Accumulated Depreciation and Provision for Impairment Losses At 1 February 2007 as previously stated ,383-86,061 Effects of adopting FRS (678) (998) - (1,676) At 1 February 2007 as restated ,385-84,385 Effects of foreign exchange translation - - 2,105-2,105 Depreciation for the year - - 8,111-8,111 Reversal of impairment loss - - (3,746) - (3,746) Reclassified as held for sale (Note 23) - - (1,408) - (1,408) At 31 January ,447-89,447 Net Carrying Amount At 31 January , ,642 1, , TA ENTERPRISE BERHAD ANNUAL REPORT 2008

79 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT (cont d) * Land and buildings comprise: Long term Buildings- Freehold leasehold in- Group land land Buildings progress Total At 31 January 2007 RM 000 RM 000 RM 000 RM 000 RM 000 Cost At 1 February 2006 restated in the previous financial year due to adoption of new FRSs as disclosed in the previous financial year 49,620 3, , ,866 Effects of adopting FRS 117 (Note 7) - (3,560) (8,954) - (12,514) At 1 February 2006 as restated 49, , ,352 Effects of foreign exchange translation restated for the above reclassifications (4,047) - (16,835) - (20,882) Reclassified from deposits paid in prior years Additions ,093 1,144 Reclassification of uncompleted buildings - - (1,806) 1,806 - Land cost aggregated within building cost reclassified 15,316 - (15,316) - - Cost of lifts aggregated with building cost reclassified - - (2,770) - (2,770) Reclassified as held for sale (Note 23) (8,677) - (53,046) - (61,723) At 31 January , ,010 3, ,261 Accumulated Depreciation and Provision for Impairment Losses At 1 February 2006 as restated in the previous financial year due to adoption of new FRSs as disclosed in the previous financial year , ,002 Effects of adopting FRS 117 (Note 7) - (607) (693) - (1,300) At 1 February 2006 as restated , ,702 Effects of foreign exchange translation restated for the above reclassifications - - (1,793) - (1,793) Depreciation for the year - - 8,391-8,391 Reversal of impairment loss - - (5,345) - (5,345) Accumulated depreciation of lifts aggregated within building costs reclassified - - (424) - (424) Reclassified as held for sale (Note 23) - - (29,931) - (29,931) At 31 January ,600-84,600 Net Carrying Amount At 31 January , ,410 3, ,661 TA ENTERPRISE BERHAD ANNUAL REPORT

80 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT (cont d) Long term leasehold Company land Buildings Total RM 000 RM 000 RM 000 Cost At 1 February 2007 as previously stated 3,300 17,080 20,380 Effects of adoption FRS 117 (Note 7) (3,300) - (3,300) At 1 February 2007 as restated and as at 31 January ,080 17,080 Accumulated Depreciation At 1 February 2007 as previously stated 633 3,274 3,907 Effects of adoption FRS 117 (Note 7) (633) - (633) At 1 February 2007 as restated - 3,274 3,274 Charge for the year At 31 January ,616 3,616 Net Carrying Amount At 31 January ,464 13,464 Cost At 1 February 2006 as previously stated 3,300 17,080 20,380 Effects of adoption FRS 117 (Note 7) (3,300) - (3,300) At 1 February 2006 as restated and as at 31 January ,080 17,080 Accumulated Depreciation At 1 February 2006 as previously stated 567 2,932 3,499 Effects of adoption FRS 117 (Note 7) (567) - (567) At 1 February 2006 as restated - 2,932 2,932 Charge for the year At 31 January ,274 3,274 Net Carrying Amount At 31 January ,806 13,806 (a) The net book values of property, plant and equipment of a trust and a subsidiary pledged to financial institutions for credit facilities granted to but not utilised by the trust and a subsidiary as referred to in Note 27 are as follows: Group RM 000 RM 000 Freehold land 39,370 37,077 Buildings 216, , , ,503 (b) The titles of the freehold buildings acquired by a wholly-owned subsidiary in previous years are in the midst of being transferred into that subsidiary s is name pending the splitting of master title deeds. The carrying amount of these buildings is RM8,739,000 (2007: RM8,997,000). 78 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

81 notes to the financial statements 31 January 2008 (cont d) 4. PROPERTY, PLANT AND EQUIPMENT (cont d) (c) The net book value of a freehold building of a subsidiary pledged to a financial institution for credit facilities granted to the Company at the end of the financial year as disclosed in Note 27 is as follows: Group RM 000 RM 000 Freehold land 15,100 15,100 Building 160, , , ,124 (d) (e) Reversal of impairment loss of the Group of Rand10,087,434 (RM5,345,331 equivalent) made during the previous financial year was related to a freehold building situated at 160 Jan Smuts Avenue, Rosebank, Johannesburg, South Africa based on a signed Agreement of Sale entered on 6 September The sale became unconditional and the disposal was completed during the current financial year (Note 47(b)(i)). The titles of certain properties classified as buildings-in-progress amounting to RM1,096,000 (2007: RM1,223,000) will only be transferred to the Group upon the completion of construction. 5. INVESTMENT PROPERTY Freehold Group land Building Total RM 000 RM 000 RM 000 Cost At 1 February , , ,495 Effects of foreign exchange translation (5,154) (22,053) (27,207) At 31 January , , ,288 Effects of foreign exchange translation 4,936 21,117 26,053 At 31 January , , ,341 Accumulated Depreciation and Provision for Impairment Losses At 1 February ,970 82,970 Effects of foreign exchange translation - (7,973) (7,973) Depreciation for the year - 6,360 6,360 At 31 January ,357 81,357 Effects of foreign exchange translation - 7,741 7,741 Depreciation for the year - 6,161 6,161 At 31 January ,259 95,259 Net Carrying Amount At 31 January , , ,082 At 31 January , , ,931 Fair value At 31 January ,925 At 31 January ,575 TA ENTERPRISE BERHAD ANNUAL REPORT

82 notes to the financial statements 31 January 2008 (cont d) 5. INVESTMENT PROPERTY (cont d) The net book values of the freehold land and building are pledged to a financial institution for credit facilities as disclosed in Note 27. The fair value of the investment property of C$175,000,000 as at the balance sheet date was estimated by the Directors based on an indicative offer received for the investment property and no separate independent valuation was obtained. Changes in fair value during the current financial year is due to the effects of exchange rate changes. The direct-operating costs of this revenue-generating investment property is C$6,625,614 (RM21,492,829 equivalent) (2007: C$6,389,840 or RM20,540,141 equivalent), most of which are recoverable from the tenants. 6. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (a) Land Held for Property Development Freehold Leasehold Group land land Total RM 000 RM 000 RM 000 Year Ended 31 January 2008 Cost of land purchased At 1 February 2007 as previously stated 355, ,539 Effects of adopting FRS 117 (Note 7) - (311) (311) At 1 February 2007 as restated 355, ,228 Reclassified from deposits paid in previous financial year 1,064-1,064 Additions 44,975-44,975 At 31 January , ,267 Development costs * At 1 February ,721-5,721 Additions 3,890-3,890 At 31 January ,611-9,611 Accumulated amortisation At 1 February (56) (56) Effects of adopting FRS 117 (Note 7) At 1 February 2007 as restated and as at 31 January Carrying Amount at 31 January , , TA ENTERPRISE BERHAD ANNUAL REPORT 2008

83 notes to the financial statements 31 January 2008 (cont d) 6. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (cont d) (a) Land Held for Property Development (cont d) Freehold Leasehold Group land land Total RM 000 RM 000 RM 000 Year Ended 31 January 2007 Cost of land purchased At 1 February 2006 as previously stated 93, ,968 Effects of adopting FRS 117 (Note 7) - (311) (311) At 1 February 2006 as restated 93,657-93,657 Reclassified from deposits paid in previous financial year 12,163-12,163 Additions 266, ,686 Deemed (17,278) - (17,278) At 31 January , ,228 Development costs * At 1 February ,061-5,061 Additions Deemed (297) - (297) At 31 January ,721-5,721 Accumulated amortisation At 1 February 2006 as previously stated - (49) (49) Effects of adopting FRS 117 (Note 7) At 1 February 2006 as restated and as at 31 January 2007 as restated Carrying Amount at 31 January , ,949 The titles of certain freehold land held for development purchased during the current year with a carrying amount of RM27,125,726 (2007: nil) is in the process of being transferred to the subsidiaries Certain cost of land and development costs were accounted for as deemed disposals to a developer, Beringin Terrace Sdn. Bhd. ( BT ) (see Note 16) during the previous financial year, in conjunction with the grant of vacant possession of the land by a subsidiary, TA Properties Sdn. Bhd. ( TAP ) to BT, for their commencement of construction work. Gain from the disposal of land of RM2,425,000 will be recognised upon the receipt of full payment for the disposal. TAP is also entitled to a share of development profits in the future, which cannot be presently determined with certainty. * The development costs on land held for development comprise mainly the costs incurred in the preparation and submission of development plans that are not considered significant relative to the total estimated property development costs of the land held for development. TA ENTERPRISE BERHAD ANNUAL REPORT

84 notes to the financial statements 31 January 2008 (cont d) 6. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (cont d) (b) Property Development Costs Group RM 000 RM 000 Freehold land At 1 February 2007/ ,440 86,947 Reversal of completed projects - (29,308) Unsold units transferred to properties held for resale - (199) As at 31 January 57,440 57,440 Development costs At 1 February 2007/ ,223 75,458 Cost incurred during the financial year 43,223 59,982 Reversal of completed projects - (81,969) Unsold units transferred to properties held for resale - (1,248) As at 31 January 95,446 52,223 Cumulative costs recognised in income statement At 1 February 2007/2006 (12,937) (74,775) Recognised during the year (58,767) (49,439) Reversal of completed projects - 111,277 As at 31 January (71,704) (12,937) Accumulated impairment losses At 1 February 2007/2006 and 31 January (1,000) (1,000) Property development costs at 31 January 80,182 95,726 Progress billings account: Group RM 000 RM 000 Cumulative revenue recognised 156, ,013 Cumulative progress billings made (141,233) (215,942) 15,438 (929) Accrued billings in trade receivables (Note 16) 18,919 4,285 Progress billings in trade payables (Note 29) (3,481) (5,214) 15,438 (929) 82 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

85 notes to the financial statements 31 January 2008 (cont d) 7. PREPAID LAND LEASE PAYMENTS Group Company RM 000 RM 000 RM 000 RM 000 At 1 February 2007/2006 as previously stated Effects of adopting FRS 117 (Notes 4 and 6) 10,641 11,477 2,667 2,733 At 1 February 2007/2006 as restated 10,641 11,477 2,667 2,733 Effects of foreign exchange translation (567) (608) - - Amortisation for the year (Note 39) (218) (228) (66) (66) At 31 January 9,856 10,641 2,601 2,667 Analysed as: Long term leasehold land 9,856 10,641 2,601 2,667 ^ Long term leasehold land has unexpired lease periods between 51 to 72 years. 8. INTANGIBLE ASSETS Trading rights in Stock Exchange of Group Hong Kong Limited Software Total RM 000 RM 000 RM 000 Cost At 1 February As previously stated Reclassified from property, plant and equipment (Note 4) As restated 167 1,374 1,541 Additions At 31 January ,379 1,546 Accumulated amortisation At 1 February As previously stated Reclassified from property, plant and equipment (Note 4) As restated ,035 Amortisation for the year (Note 39) At 31 January ,136 1,303 Net carrying amount At 31 January TA ENTERPRISE BERHAD ANNUAL REPORT

86 notes to the financial statements 31 January 2008 (cont d) 8. INTANGIBLE ASSETS (cont d) Trading rights in Stock Exchange of Group Hong Kong Limited Software Total RM 000 RM 000 RM 000 Cost At 1 February 2006 as restated in the previous financial year due to adoption of FRS Reclassified from property, plant and equipment (Note 4) At 1 February 2006 as restated ,153 Additions as restated to conform with current year s presentation At 31 January ,374 1,541 Accumulated amortisation At 1 February 2006 as restated in the previous financial year due to adoption of FRS Reclassified from property, plant and equipment (Note 4) At 1 February 2006 as restated Amortisation for the year restated to conform with current year s presentation At 31 January ,035 Net carrying amount At 31 January SUBSIDIARIES Company RM 000 RM 000 Unquoted shares: At cost 1,339,504 1,339,504 Less: Provision for impairment losses (28,380) (115,868) 1,311,124 1,223,636 RM 000 Provision for impairment losses: At 1 February 2007 (115,868) Reversed in income statement during the year (Note 39) 87,488 At 31 January 2008 (28,380) 84 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

87 notes to the financial statements 31 January 2008 (cont d) 9. SUBSIDIARIES (cont d) Details of the subsidiaries are as follows: Effective Name of Country of Interest (%) Subsidiaries incorporation Principal Activities TA Centre Berhad Malaysia Investment holding TA Securities Holdings Berhad Malaysia Stockbroker and dealer in securities TA Nominees (Tempatan) Sdn. Bhd. Malaysia Nominee services TA Nominees (Asing) Sdn. Bhd. Malaysia Nominee services TASEC Nominees (Tempatan) Malaysia Nominee services Sdn. Bhd. TASEC Nominees (Asing) Sdn. Bhd. Malaysia Nominee services TA Investment Management Berhad Malaysia Licensed fund manager managing unit trust and private funds TA Muamalah Nominees (Tempatan) Malaysia Nominee services for Islamic broking Sdn. Bhd. TA Muamalah Nominees (Asing) Malaysia Nominee services for Islamic broking Sdn. Bhd. ** TA Team Stars Sdn. Bhd. Malaysia Property investment (formerly nominee (formerly known as Botly Nominees services) (Tempatan) Sdn. Bhd.) ** Idaman Parkland Sdn. Bhd. Malaysia Property investment (formerly nominee (formerly known as Botly Nominees services) (Asing) Sdn. Bhd.) TA Asset Management Sdn. Bhd. Malaysia Ceased operations as a licensed fund management company Menara TA Sdn. Bhd. Malaysia Property investment and provision of management services ** TA Nominees Sdn. Bhd. Malaysia Dormant ** TA Capital Sdn. Bhd. Malaysia Dormant ** TA Commodities Sdn. Bhd. Malaysia Commodities trading TA Futures Sdn. Bhd. Malaysia Futures and options broking TA Properties Sdn. Bhd. Malaysia Investment holding and property development ** TA Ventures Sdn. Bhd. Malaysia Dormant ** Beta Vector Sdn. Bhd. Malaysia Property investment and development ** Ample Era Sdn. Bhd. Malaysia Property investment and development ** Ample Equities Sdn. Bhd. Malaysia Property investment and development ** Peramah Setia (M) Sdn. Bhd. Malaysia Dormant Orchard Park Sdn. Bhd. Malaysia Property investment and development ** Pure Factor Sdn. Bhd. Malaysia Property investment and development ** Sharp Factor Sdn. Bhd. Malaysia Property investment and development ** Factor Synergy Sdn. Bhd. Malaysia Property investment and development ** TA Project Management Sdn. Bhd. Malaysia Project management Binaprestij Maju Sdn. Bhd. Malaysia General construction ** TA Binaprestij Sdn. Bhd. Malaysia Property construction TA ENTERPRISE BERHAD ANNUAL REPORT

88 notes to the financial statements 31 January 2008 (cont d) 9. SUBSIDIARIES (cont d) Effective Name of Country of Interest (%) Subsidiaries incorporation Principal Activities TA First Credit Sdn. Bhd. Malaysia Lending of monies, leasing, hire purchase and property development ** TA Property Management Sdn. Bhd. Malaysia Property management Cosmic Legion Sdn. Bhd. Malaysia Investment holding Sanjung Padu (M) Sdn. Bhd. Malaysia Property investment Parallel Legion Sdn. Bhd. Malaysia Investment holding Fine Legion Sdn. Bhd. Malaysia Investment holding ** ERF Properties Sdn. Bhd. Malaysia Dormant ** TA Properties (Sarawak) Sdn. Bhd. Malaysia Investment holding and property investment ** Star Winners Sdn. Bhd. Malaysia Property investment and development TA International Sdn. Bhd. Malaysia Investment holding and management services ** TA Gemilang Trading Sdn. Bhd. Malaysia Investment holding ** TA Dotcom Sdn. Bhd. Malaysia Dormant Astra Dinamik Sdn. Bhd. Malaysia Property investment and development Indo Aman Bina Sdn. Bhd. Malaysia Property investment and development * Winner Star Group Limited Hong Kong Dormant ** TA Securities (HK) Limited Hong Kong Stockbroker and dealer in securities * TA International Investment Limited Hong Kong Investment holding * Ace Fit International Limited Hong Kong Property investment ** TA Ace Fit Investment Management The People s Dormant (Kunming) Co. Ltd. Republic of China ** TA Financial Services Pty. Ltd. Australia Investment holding ** TA Ausfinance Limited Australia Share investment ** Bold Holdings Pty. Ltd. Australia Management services ** Wales House Nominees Pty. Ltd. Australia Trusteeship ** Wales House Hotel Ltd. Australia Hotel management services TA Antarabangsa Limited The British Investment holding and provision of funding Virgin Islands facilities ** TA Antarabangsa Development Ltd. The British Dormant Virgin Islands ** TA Property Development The Republic Dormant (Philippines), Inc. of the Philippines ** Philippine TA Securities, Inc. The Republic Stockbroker and dealer in securities of the (currently under voluntary suspension) Philippines TA Investment Holdings The Republic Investment holding South Africa Limited of South Africa TA Antarabangsa The Republic Ceased operations as licensed bank Finance South Africa Limited of South Africa pursuant to its deregistration on 5 April TA ENTERPRISE BERHAD ANNUAL REPORT 2008

89 notes to the financial statements 31 January 2008 (cont d) 9. SUBSIDIARIES (cont d) Effective Name of Country of Interest (%) Subsidiaries incorporation Principal Activities TA Centre (Proprietary) Ltd. The Republic Property investment of South Africa ** Yorcom No. 13 (Pty) Ltd. The Republic Dormant of South Africa ** TA Development Lanka (Pvt) Ltd. Sri Lanka Dormant * Indian Ocean Lanka (Pvt) Ltd. Sri Lanka Investment holding ** TA Properties (Canada) Ltd. Canada Property investment ** TA Management Ltd. Canada Management services ** TA Development One (Canada) Ltd. Canada Trusteeship ** Empress II Holdings Limited Canada Dormant ** TA Management (Empress II) Ltd. Canada Dormant In addition, the Group is the beneficiary of the following wholly-owned trusts where the trusts financial statements have been included into the Group s financial statements using the line-by-line reporting format: Name of Trust Country of Inception ** TA Properties (Canada) Trust Antigua ** TA Development One (Canada) Trust Canada ** TA Development One (Barbados) Trust Barbados ** Wales House Trust Australia ** Empress Holdings Trust Barbados ** Empress Investments Trust Barbados * Audited by affiliate of Ernst & Young ** Audited by firms of auditors other than Ernst & These subsidiaries commenced Member s Voluntary Winding Up during the financial year. (i) On 1 June 2007, TA Securities Holdings Bhd, a wholly-owned subsidiary of the Company disposed two ordinary shares of RM1.00 each representing 100% equities in Botly Nominees (Tempatan) Sdn. Bhd. (subsequently changed its name to TA Team Stars Sdn. Bhd.) and Botly Nominees (Asing) Sdn. Bhd. (subsequently changed its name to Idaman Parkland Sdn. Bhd.) to another wholly-owned subsidiary of the Company, TA Properties Sdn. Bhd. for a total cash consideration of RM4.00. The intra-group disposals and acquisitions do not have any effects on the financial position of the Group. (ii) On 15 November 2007, TA International Investment Ltd., a wholly-owned foreign subsidiary of TA International Sdn. Bhd. disposed 1,325,000 ordinary shares of AUD1.00 each representing 100% equities in TA Financial Services Pty. Ltd. to TA International Sdn. Bhd., a wholly-owned subsidiary of the Company for a total cash consideration of HKD1.00. The intra-group disposal and acquisition do not have any effects on the financial position of the Group. TA ENTERPRISE BERHAD ANNUAL REPORT

90 notes to the financial statements 31 January 2008 (cont d) 10. ASSOCIATED COMPANIES Group Company RM 000 RM 000 RM 000 RM 000 Unquoted shares at cost 11,899 11, Share of post-acquisition profits less losses 3,186 3, Less: Provision for impairment losses - - (112) (112) 15,085 15, The summarised financial information of the associates are as follows: RM 000 RM 000 Assets and liabilities Current assets 15,196 3,145 Non-current assets 138,478 98,884 Total assets 153, ,029 Current liabilities/total liabilities (7,857) (7,747) Results Revenue 21,008 16,859 Loss for the year (542) (27) The details of the associated companies, all of which are incorporated in Malaysia, are as follows: Effective Interest Financial Name of Associates Year End Principal Activities % % Held by the Company: * TA Travel Sdn. Bhd December Tour and travel agency Held by subsidiaries: * Dinar Ehsan Sdn. Bhd January Investment holding * Panca Resmi Sdn. Bhd January Property investment and property investment holding ** TFC Nominees (Asing) Sdn. Bhd January Dormant * The results of the associated companies have been equity accounted for based on the management financial statements for the relevant period. ** The results of the associated company has been equity accounted for based on the audited financial statements for the relevant period. 88 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

91 notes to the financial statements 31 January 2008 (cont d) 11. OTHER INVESTMENTS Group Company RM 000 RM 000 RM 000 RM 000 At cost: 1 seat in Philippines Stock Exchange, Inc. ( PSE ) 4,507 4, unit of non-cumulative A preference share in Bursa Malaysia Derivatives Berhad ( BMDB ) 1,500 1, unit of non-cumulative C preference share in BMDB Quoted securities: - In Malaysia 3,569 28, Outside Malaysia Unquoted shares: - In Malaysia Quoted trust units in Malaysia # 30, ,000 - Unquoted trust units outside Malaysia , ,384 Unquoted bonds and debt securities in Malaysia 14,814 20,280 10,000 15,156 55,659 56, , ,030 Less: Provision for impairment losses: - on the seat in PSE (4,226) (4,257) other quoted investments (2,419) (17,814) unquoted bonds and debt securities (4,708) Accumulated amortisation of premium on unquoted bonds and debt securities (115) (106) - (32) 44,191 34, , ,998 Market/indicative value: Quoted securities - In Malaysia 1,336 26, Unquoted bonds and debt securities in Malaysia 10,000 20,543 10,000 15,488 Quoted trust units in Malaysia 31, ,572 - Included in investment in quoted securities in Malaysia of the Group is an amount of RM482,000 (2007: RM3,182,000) representing an unsold 250,000 (2007: 1,700,000) ordinary shares in Bursa Malaysia Berhad previously distributed to subsidiaries of the Group that were participating organisations of Bursa Malaysia Securities Berhad, arising from the demutualisation of the Kuala Lumpur Stock Exchange. These shares have been quoted since 18 March 2005 on the Main Board of Bursa Malaysia Securities Berhad. # Included in quoted trust units in Malaysia of the Group and the Company were unit trust funds managed by a subsidiary totalling RM30,525,000 (2007: RM512,080) and RM30,000,000 (2007: nil), respectively. Unquoted trust units outside Malaysia of the Company represent investment in 64,510,755 (2007: 64,510,755) trust units of A$1.00 each at par in Wales House Trust ( WHT ), a trust incepted in Australia. This represents 50% interest in WHT while the remaining 50% is held by TA Properties Sdn. Bhd., a wholly-owned subsidiary incorporated in Malaysia. This investment has been eliminated at Group level, upon consolidation, as the financial statements of this trust have been included in the Group s financial statements. 12. PROPERTIES HELD FOR RESALE Included in properties held for resale of the Group are certain titles of the properties with a carrying amount of approximately RM68,000 (2007: RM68,000) previously charged to a financial institution for a term loan granted to a subsidiary that are in the process of being discharged. The term loan was fully settled in the financial year ended 31 January TA ENTERPRISE BERHAD ANNUAL REPORT

92 notes to the financial statements 31 January 2008 (cont d) 13. LAND HELD FOR RESALE Included in land held for resale of the Group are certain titles of land with a carrying amount of approximately RM4,497,000 (2007: RM7,036,000) that are in the process of being transferred into those respective subsidiaries names pending the final settlement of expenses. 14. INVENTORIES Group RM 000 RM 000 Construction materials, at cost Food and beverages, at cost Consumables, at cost , FINANCIAL RECEIVABLES Group RM 000 RM 000 Loans and advances 331, ,604 Loan receivables 444, ,624 Lease receivables 673 1,214 Gross financial receivables 776, ,442 Less: Provision for doubtful debts (332,294) (345,125) Interest-in-suspense (248,760) (246,565) (581,054) (591,690) Net financial receivables 195, ,752 Group RM 000 RM 000 The movements in provision for doubtful debts are as follows: At 1 February 345, ,304 Provision made during the year 497 1,093 Provision written-back during the year (9,324) (18,059) Provision written-off during the year (3,712) (39) Exchange differences (292) (1,174) 332, ,125 Provision written-off during the year was in relation to debts which have previously been provided for in the income statement and are now deemed irrecoverable. All gross financial receivables are classified as current assets as they originated from the same trade cycle. 90 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

93 notes to the financial statements 31 January 2008 (cont d) 15. FINANCIAL RECEIVABLES (cont d) The financial receivables include an amount of RM48,000 (2007: RM55,000), representing the total amount due from customers of a foreign former banking subsidiary, net of provision for doubtful debts and interest-in-suspense. The subsidiary was deregistered as a commercial bank in the financial year ended 31 January 2003 and the net financial receivables are expected to be collectible in accordance with the remaining maturity dates in place before the deregistration. The five (2007: five) largest loan receivables, which contributed 72% (2007: 46%) of the net financial receivables, represent the Group s significant concentration of credit risks, as follows: Provision for doubtful Interest Gross debts in-suspense Net RM 000 RM 000 RM 000 RM 000 Five largest loan receivables 185,590 (26,321) (19,029) 140,240 Others 590,641 (305,973) (229,731) 54, ,231 (332,294) (248,760) 195,177 The range of interest rates of financial receivables of the Group are disclosed in Note 49(b). 16. TRADE RECEIVABLES Group RM 000 RM 000 Trade receivables from stockbroking subsidiaries: - Due from brokers 173, ,584 - Due from clients 589, ,902 Due from unit trust funds 5,383 10,374 Accrued billings in respect of property development costs [(Note 6(b)] 18,919 4,285 Amount due from customers on contracts (Note 18) 9,543 - Retention sums on contracts Due from a developer [Note 6(a)] 18,275 17,575 Other trade receivables 14,169 11, , ,995 Less: Provision for doubtful debts (28,410) (34,921) Interest-in-suspense (136,749) (114,923) 665, ,151 Due from brokers and clients represent amounts receivable from the stockbroking subsidiaries margin clients and nonmargin clients; and outstanding contracts entered into on behalf of these clients where settlements via the Central Depository System for the Malaysian subsidiary or Central Clearing and Settlement System for the Hong Kong subsidiary have yet to be made at the balance sheet date. Due from unit trust funds are receivable by a subsidiary that is a manager for unit trust funds and relate to management fees receivables and release of trust units receivables. Due from a developer, Beringin Terrace Sdn. Bhd., a company in which the son of a director of the Company, Dato Mohamed bin Abid, has interest, relates mainly to amount receivable from the disposal of property [Note 6(a)]. The amount is interest-free and repayable in accordance with the terms of a joint venture agreement ( JVA ). Land titles for the property disposed are held by the solicitors pending the full settlement of balance from the developer. Per the terms of the JVA, the Group will not share any loss from the JVA and any share of profit from the JVA can only be measured with certainty upon achieving certain milestone as specified in the JVA. TA ENTERPRISE BERHAD ANNUAL REPORT

94 notes to the financial statements 31 January 2008 (cont d) 16. TRADE RECEIVABLES (cont d) Other trade receivables mainly arise from subsidiaries in futures broking, hotel operations, property investment and development and construction contracts. The Group has no significant concentration of credit risk from exposures to a single debtor or to groups of debtors within its trade receivables. The trade credit term for non-margin clients for the Malaysian stockbroking subsidiary is 3 market days in accordance with the Bursa Malaysia Securities Berhad Fixed Delivery and Settlement System ( FDSS ) trading rules whilst for the overseas stockbroking subsidiary, the trade credit term is 2 market days. The trade credit terms for margin clients for the Malaysian stockbroking subsidiaries are set within standard margin agreements. Release of trust units receivable from unit trust funds has a trade credit term of not exceeding 10 days from the date of release. The Group s normal trade credit terms for other trade receivables are assessed and approved on a case-by-case basis. The range of interest rates of on interest-bearing trade receivables of the Group are disclosed in Note 49(b). 17. OTHER RECEIVABLES Group Company RM 000 RM 000 RM 000 RM 000 Deposits for acquisition of land held for development - 1, Proceeds from disposal of land (Note 47(b)(ii)) 3, Other deposits 2,882 2, Retention monies paid by housebuyers to stakeholder - 7,161 - Other prepayments 5,813 5, Deferred leasing and financing costs 1 17,988 16, Amount with derivative clearing house 2 98,235 69, Club membership Receivable from Employees Provident Fund 3 3,030 3, Sundry receivables 4 11,338 6, , , Less: Provision for doubtful debts - (3,558) , , Deferred leasing costs relate to tenant inducements and leasing commissions prepaid by a subsidiary that are deferred and amortised over the respective terms of the lease. Deferred financing costs relate to prepaid amounts on a mortgage loan in a trust of which the Group has interest and are amortised over the term of the loan. 2 The amount with derivative clearing house represents unsegregated clearing accounts, security deposits and clearing funds for Kuala Lumpur Composite Index Futures ( FKLI ), Crude Palm Oil Futures ( FCPO ) and Ethylene Over-The- Counter contracts and clearing funds for FKLI and FCPO placed by a subsidiary licensed to carry on derivatives broking business in Malaysia, which is also a clearing member. The amount is calculated by the clearing house in accordance with its Business Rules with reference to open positions of all derivative contracts where the subsidiary is a party in relation to the other clearing members. These amounts are interest bearing, with weighted average rate of interest earned on unsegregated clearing accounts of 2.2% (2007: 1.38%) per annum, 2.3% (2007: 1%) per annum on the security deposits, 3.47% (2007: 1% to 1.38%) per annum on the clearing funds. The subsidiary relies on the clearing house to monitor the creditworthiness of other clearing members via its financial and operational requirements for minimum membership standards. 3 The amount receivable from Employees Provident Fund arose from the sales of trust units by a subsidiary under the Kumpulan Wang Simpanan Pekerja Members Investment Schemes. 4 Included in sundry receivables of the Group of the previous financial year was RM3,312,000 which was in relation to advances made to a third party for the purchase of investments in the financial year ended 31 January 2006 that had been full provided in the prior years. The amount was deemed irrecoverable and has been fully written off against the provision for doubtful debts during the financial year. 92 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

95 notes to the financial statements 31 January 2008 (cont d) 17. OTHER RECEIVABLES (cont d) The Group and the Company have no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors within its other receivables. 18. DUE FROM/(TO) CUSTOMERS ON CONTRACTS Group RM 000 RM 000 Construction contract costs incurred to date 9,408 - Attributable profits 310-9,718 - Less: progress billings (175) - 9,543 - Due from customers on contracts (Note 16) 9, DUE FROM SUBSIDIARIES Company RM 000 RM 000 Subordinated loan to a subsidiary 9,000 13,000 Unsecured advances to subsidiaries 260, , , ,192 Less: Provision for doubtful debts (2,026) (2,026) 267, ,166 Repayable on demand 258, ,166 Due more than 1 year and less than 2 years - 13,000 Due more than 2 year and less than 5 years 9, , ,166 The amounts due from subsidiaries of the Company are unsecured and interest-free except for an amount of RM9,000,000 (2007: RM13,000,000) due from a derivative trading subsidiary that bore interest of 7% (2007: 7%) per annum. The subordinated loan has a maximum aggregate principal amount of RM13,000,000, of which the full amount has been drawndown as at the balance sheet date. The subordinated loan has rescheduled its maturity date to 5 May 2011 (2007: 5 May 2008), unless modified at any request from Bursa Malaysia Derivatives Berhad. Unsecured advances have no fixed terms of repayment. During the current financial year, the Company recovered the remaining RM65,251,000 (2007: RM136,218,000) from a subsidiary that had been written off as bad debts in the prior financial years (Note 39). 20. DUE FROM/(TO) ASSOCIATED COMPANIES The amounts due from/(to) associated companies are unsecured, interest-free and have no fixed terms of repayment. TA ENTERPRISE BERHAD ANNUAL REPORT

96 notes to the financial statements 31 January 2008 (cont d) 21. SHORT TERM INVESTMENTS Group RM 000 RM 000 Quoted securities in Malaysia 1,965 6,163 Quoted securities outside Malaysia Derivatives quoted in Malaysia 40 - Quoted trust units in Malaysia for sale by a unit trust management subsidiary in the ordinary course of business ,728 7,234 Less: Provision for impairment losses (579) (514) 2,149 6,720 Market value: Quoted securities: - In Malaysia 1,829 6,294 - Outside Malaysia Quoted derivatives in Malaysia 40 - Quoted trust units in Malaysia CASH AND CASH EQUIVALENTS Group Company RM 000 RM 000 RM 000 RM 000 Cash and bank balances 205, , Fixed deposits and placements with: - Licensed banks 215,586 83, Licenced investment banks and other financial institutions 357, ,909 9,838 10,539 Short term funds 778, ,535 10,122 10,834 Less: Monies held in trust (364,047) (202,050) - - Housing Development Accounts (33,216) (24,493) - - Pledged for bank guarantees (2,000) (14,645) - - Cash and cash equivalents 379, ,347 10,122 10,834 Included in the short term funds of the Group are: (i) (ii) (iii) monies held in trust of approximately RM364,047,000 (2007: RM202,050,000) arising from stockbroking and derivative trading subsidiaries; monies held pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966 of RM33,216,000 (2007: RM24,493,000) and therefore restricted for use in other operations. fixed deposits of RM1,000,000 (2007: RM1,000,000) in a stockbroking subsidiary pledged for bank guarantee facilities granted to the subsidiary. The said facilities were partly utilised as at the balance sheet date by the subsidiary; 94 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

97 notes to the financial statements 31 January 2008 (cont d) 22. CASH AND CASH EQUIVALENTS (cont d) (iv) fixed deposits of RM1,000,000 (2007: RM1,000,000) of an investment holding subsidiary pledged to a financial institution for bank guarantee facilities granted to the subsidiary and a related company. The said facilities were fully utilised as at the balance sheet date. (v) Prior year s fixed deposits in foreign currencies of C$999,980 and HK$21,500,000, or RM12,645,462 equivalent of an oversea subsidiary were pledged to a financial instituition for a standby letter of credit facility extended to the Company. The said facilitiy expired during the current financial year. The weighted average effective interest rates of deposits at the balance sheet date were as follows: Group Company % % % % Licensed banks Licensed investment bank and other financial institutions The average maturities of deposits at the balance sheet date were as follows: Group Company Days Days Days Days Licensed banks Licensed investment bank and other financial institutions NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE The non-current assets classified as held for sale on the Group s balance sheet as at 31 January 2008 are as follows: Group RM 000 RM 000 Freehold land and buildings: Cost (Note 4) 1,670 61,723 Accumulated impairment loss - (26,727) 1,670 34,996 Accumulated depreciation (1,408) (3,204) ,792 During the current year, the Group has reclassified 2 properties in Philippines as non-current assets held for sale (2007: a property in South Africa as disclosed in Note 47(b)(i)). The Group expects to sell these properties in TA ENTERPRISE BERHAD ANNUAL REPORT

98 notes to the financial statements 31 January 2008 (cont d) 24. SHARE CAPITAL Number of Ordinary Shares of RM1 Each Amount RM 000 RM 000 Authorised At beginning/end of year 4,000,000 4,000,000 4,000,000 4,000,000 Issued and fully paid At beginning of year 1,328,475 1,328,475 1,328,475 1,328,475 Issued during the year pursuant to the exercise of Warrants 1999/ ,496-98,496 - At end of year 1,426,971 1,328,475 1,426,971 1,328,475 The Company had previously obtained the approvals of the Securities Commission on 11 December 2003 and its shareholders on 9 January 2004 for the issuance of a Employees Share Option Scheme ( ESOS ). The ESOS became effective on 30 January 2004 and shall be in force for a period of five years from the date of implementation of the ESOS. The option price of the ESOS shall be the higher of the par value of TA Enterprise Berhad ( TAE ) s shares or the weighted average market price of TAE as shown in the Daily Official List of Bursa Malaysia for the five market days immediately preceding the Offer Date with a discount of not more than ten percent (10%) therefrom. The aggregate maximum number of ESOS shares to be offered and allotted to eligible employees shall be at the discretion of the ESOS Committee after taking into consideration the position, performance, seniority and the length of service of the eligible employee. As at todate, the Company has not allocated any option to eligible employees. 25. WARRANTS The 1999/2009 Warrants issued in financial year ended 31 January 2000 entitle the registered holders to subscribe for one new ordinary share of RM1.00 each at par in the Company at an exercise price of RM1.00 each, exercisable at any time within a period of ten years commencing 25 June The exercise price of the 1999/2009 Warrants is subject to adjustment from time to time in accordance with the conditions as stipulated in the Deed Poll executed by the Company on 20 April The movement in the number of outstanding 1999/2009 Warrants during the financial year are as follows: At 1 February At 31 January 2007 Exercised 2008 Number of 1999/2009 Warrants 572,579,462 (98,496,136) 474,083,326 No warrants were exercised during the previous financial year. As at the end of the previous financial year, the outstanding warrants were excluded from the computation of fully diluted earnings per RM1.00 ordinary share as disclosed in Note 43 as their effects were anti-dilutive. 96 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

99 notes to the financial statements 31 January 2008 (cont d) 26. DEFERRED TAXATION Group Company RM 000 RM 000 RM 000 RM 000 At 1 February 18,467 20, Recognised in income statement (Note 41) (1,844) (1,921) 21 1 Effect of changes in opening tax rate on fair value adjustment of assets acquired (136) (345) - - Effects of foreign exchange translation 153 (146) - - At 31 January 16,640 18, Presented after appropriate offsetting as follows: Deferred tax assets (4,442) (1,097) - - Deferred tax liabilities 21,082 19, ,640 18, 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 Fair Value Property, Deferred Adjustment Plant and leasing For Assets Equipment costs Acquired Others Total RM 000 RM 000 RM 000 RM 000 RM 000 At 1 February ,555 1,547 4,487 1,191 21,780 Transfer from deferred tax assets Effect of changes in tax rate not recognised in the income statement - - (136) - (136) Recognised in the income statement 1,152 (207) (948) Exchange differences At 31 January ,707 1,486 3,403 1,947 22,543 At 1 February ,240 1,958 6, ,234 Transfer from deferred tax assets Effect of changes in tax rate not recognised in the income statement - - (345) - (345) Recognised in the income statement (685) (254) (1,508) 225 (2,222) Exchange differences - (157) - (60) (217) At 31 January ,555 1,547 4,487 1,191 21,780 TA ENTERPRISE BERHAD ANNUAL REPORT

100 notes to the financial statements 31 January 2008 (cont d) 26. DEFERRED TAXATION (cont d) Deferred Tax Assets of the Group General Provision for Property, Bad and Plant and Doubtful Tax Equipment Debts Losses Others Total RM 000 RM 000 RM 000 RM 000 RM 000 At 1 February 2007 (771) (669) (501) (1,372) (3,313) Transfer to deferred tax liabilities (632) (632) Recognised in the income statement 473 (201) 184 (2,359) (1,903) Exchange differences (9) - (25) (21) (55) At 31 January 2008 (307) (870) (342) (4,384) (5,903) At 1 February 2006 (794) (562) (1,775) (224) (3,355) Transfer to deferred tax liabilities (330) (330) Recognised in the income statement 2 (107) 1,232 (826) 301 Exchange differences At 31 January 2007 (771) (669) (501) (1,372) (3,313) Deferred Tax Liabilities of the Company: Accelerated Capital Allowances RM 000 At 1 February Recognised in the income statement 21 At 31 January At 1 February Recognised in the income statement 1 At 31 January Deferred tax assets have not been recognised in respect of the following items: Group RM 000 RM 000 Unused tax losses 74,628 82,083 Unabsorbed capital allowances 342, ,454 The unused tax losses and unabsorbed capital allowances of the subsidiaries are available indefinitely for offset against future taxable profits of the subsidiaries in which those items arose other than would C$267,700 or RM870,293 equivalent (2007: C$267,700 or RM794,800 equivalent) arising in a Canadian subsidiary that would expire in financial year ending 31 January In respect of subsidiaries incorporated in Malaysia, the availability of their unused tax losses for offsetting against future taxable profits of the subsidiaries is subject to no substantial changes in shareholdings of the subsidiaries under Section 44(5A) and (5B) of the Income Tax Act, Deferred tax assets have not been recognised in respect of these items as they cannot be used to offset future taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that have a recent history of losses. 98 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

101 notes to the financial statements 31 January 2008 (cont d) 27. BORROWINGS Group Company RM 000 RM 000 RM 000 RM 000 Short Term Borrowings (secured) Foreign currency denominated term loan 7,883 6, Revolving credits - 15,000-15,000 7,883 21,867-15,000 Long Term Borrowings (secured) Foreign currency denominated term loan 129, , Total Borrowings (secured) Foreign currency denominated term loan 137, , Revolving credits - 15,000-15, , ,081-15,000 Maturity of borrowing: Within one year 7,883 21,867-15,000 More than 1 year and less than 2 years 8,266 7, More than 2 years and less than 5 years 27,279 23, years or more 93,679 94, , ,081-15,000 The refinanced foreign currency loan of the Group which will mature on 5 December 2020 bears a fixed interest rate of 4.79% per annum, repayable in monthly instalments of C$364,412 (RM1,184,703 equivalent) per month. The term loan of the Group is secured against certain freehold land and building as disclosed in Note 5, the assignment of rentals and a general security agreement over a property. The Company s prior year s revolving credit facilities were secured by way of a fixed charge and lienholders caveat over a freehold building of a subsidiary as disclosed in Note 4 and a third party assignment of rentals from the building that was pledged. The short term borrowing facilities of a trust and a subsidiary of the Company that were not utilised at the end of the current financial year are secured by way of a fixed charge and lienholders caveat over freehold land and buildings of a trust and a subsidiary, held as property, plant and equipment (as disclosed in Note 4) and corporate guarantees issued by the Company. 28. PROVISION FOR LIABILITIES Group Employee Benefits RM 000 At 1 February Provision made during the year under personnel costs in Note Exchange differences 58 At 31 January ,240 TA ENTERPRISE BERHAD ANNUAL REPORT

102 notes to the financial statements 31 January 2008 (cont d) 28. PROVISION FOR LIABILITIES (cont d) Contingent loss Employee on legal claims Benefits Total RM 000 RM 000 RM 000 At 1 February , ,040 Provision made during the year under personnel costs Provision written-back during the year (Note 35) (1,974) - (1,974) Payment made during the year (1,300) - (1,300) Exchange differences - (37) (37) At 31 January Provision for employee benefits is in respect of annual leave, long service leave and sick leave in an Australian subsidiary when it is probable that settlement will be required and they are capable of being measured reliably. 29. TRADE PAYABLES Group RM 000 RM 000 Trade payables for stockbroking subsidiaries: - Due to brokers 150, ,311 - Due to clients 76, ,258 Clients and trust monies 409, ,201 Unrealised (loss)/gain on clearing accounts on open positions of clients in a derivative trading subsidiary (28,641) 13,811 Due to unit trust funds 8, Progress billings in respect of property development costs [Note 6(b)] 3,481 5,214 Other trade payables 20,177 14, , ,135 Trade payables for stockbroking subsidiaries mainly relate to amounts payable to margin and nonmargin clients and outstanding contracts entered into on behalf of clients where settlements via the Central Depository System or the Central Clearing and Settlement System for the Malaysian and Hong Kong subsidiaries respectively have yet to be made as at the balance sheet date. Clients and trust monies relate to monies owing to clients maintained in segregated accounts of stockbroking and derivative broking subsidiaries. Included in the prior year s trust monies was an amount of RM1,015,252 due to a director of the Company, that earned interest of 2.10% to 3.20% per annum. This amount was paid back by a stockbroking subsidiary during the current year. Due to unit trust funds are payable by a subsidiary that is a manager for unit trust funds and relate to amounts arising from the creation of trust units by the subsidiary for sale in the ordinary course of business. Other trade payables arise mainly from subsidiaries involved in general construction, property management and property development activities. The trade credit term for amount payable to non-margin clients in the Malaysian stockbroking subsidiary is 3 market days according to the Bursa Malaysia Securities Berhad FDSS trading rules whilst for the overseas stockbroking subsidiary, the trade credit term is 2 market days. Clients and trust monies have no fixed terms of repayment. The trade credit term for the amount due to unit trust funds is not exceeding 10 days from the date of creation. The Group s credit terms for other trade payables are determined and approved on a case-by-case basis. 100 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

103 notes to the financial statements 31 January 2008 (cont d) 30. OTHER PAYABLES Group Company RM 000 RM 000 RM 000 RM 000 Other trade related payables 7,803 5, Due to a substantial shareholder of the Company - 49,085-49,085 Other interest payable Amount payable for properties purchased 1,795 11, Sundry payables 13,634 18, Accruals 27,574 28,260 1,944 1,888 51, ,738 2,042 51,021 Other trade related payables of the Group represent amounts payable arising directly from the Group s daily operations. The amount due to a substantial shareholder in the previous financial year bore interest of 3% to 5% per annum and has been repaid during the current financial year. 31. DUE TO REMISIERS Group RM 000 RM 000 Current accounts 3,641 4,166 Security deposits 73,715 72,323 77,356 76,489 The amounts due to remisiers by the stockbroking subsidiairies are unsecured. The current account balances are interestfree and repayable not later than one month. Security deposits are received as collateral for trading limits granted to the customers of the remisiers. Floating rate interest earned and paid to the remisiers on security deposits placed as deposits with licensed financial institutions ranged from 2% to 3.4% (2007: 2% to 3.4%) per annum. Repayment of security deposits are subject to the terms in the remisiers agreement. 32. DUE TO DIRECTORS Group Company RM 000 RM 000 RM 000 RM 000 Directors of the Company: Current accounts Current account payables to Directors of the Company are unsecured, interest-free and have no fixed terms of repayment. 33. DUE TO SUBSIDIARIES The amounts due to subsidiaries are unsecured, have no fixed terms of repayment and interest-free other than an amount of RM4,334,507 (2007: RM3,291,885 up to December 2006 and not including January 2007) due to TA Centre Berhad that bore interest of 2% per annum. TA ENTERPRISE BERHAD ANNUAL REPORT

104 notes to the financial statements 31 January 2008 (cont d) 34. REVENUE Group Company RM 000 RM 000 RM 000 RM 000 Gross brokerage 207, , Service and administration charges 28,043 18, Underwriting commission and placement fee Nominee service charges Service charges from sale of trust units 18,409 6, Manager s fee from unit trust funds 8,367 8, Rollover fees Acceptance fees Interest income 10,385 6, Gross dividends from: - subsidiaries (Note 42) ,530 48,535 - quoted trust units in Malaysia unquoted shares in Malaysia Management fees from: - subsidiaries (Note 42) - - 6,320 4,800 - others Sales of properties 136,048 94, Construction contracts 10, Rental income 41,667 40, Hotel room rental and related revenue 82,182 73, Other revenue 1, , ,520 43,995 53, OTHER INCOME Included in other income are: Group Company RM 000 RM 000 RM 000 RM 000 Accretion of discount on unquoted bonds Bad debts recovered Gross dividends from quoted investments: - in Malaysia 492 1, outside Malaysia Interest income from: - subsidiaries (Note 42) placements in financial institutions 16,394 12,430 2, others 1,098 3, ,132 - overdue financial receivables 24,936 2, Rental income from: - a director (Note 42) others Net (loss)/gain on disposal of property, plant and equipment (18) Net gain on disposal of non-current assets held for sale 2, Net gain on disposal of other investments 10,253 1, Net gain on disposal of short term investments 34,433 14, Purchaser s deposit forfeited Write-back of provision for liabilities (Note 28) - 1, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

105 notes to the financial statements 31 January 2008 (cont d) 36. PERSONNEL COSTS Group Company RM 000 RM 000 RM 000 RM 000 Wages, salaries and bonuses 77,771 60,370 10,027 7,916 Post employment benefits Social security costs Contribution to Employees Provident Fund 6,429 5,066 1, Unutilised annual leave 1,648 1, Payment under Voluntary Separation Scheme of a subsidiary Other staff related expenses 4,793 1, ,003 69,416 12,043 9,314 The above personnel costs include remuneration paid/payable to directors of the Group and the Company (excluding fees, benefits-in-kind and commission that are not classified as personnel costs) that are disclosed in Note 37 below. 37. DIRECTORS REMUNERATION Group Company RM 000 RM 000 RM 000 RM 000 Directors of the Company Executive: Salaries and other emoluments 3,228* 2,639 3,251 2,369 Bonus Benefits-in-kind ,624 3,699 4,647 3,395 Non-executive: Other emoluments Fees Other Directors Executive: Salaries and other emoluments 3,409 2, Bonus 1, Benefits-in-kind Fees Commission Gratuity ,131 4,576 1,157 1,062 * Inclusive of an adjustment of approximately RM23,000 relating to overprovision in the previous financial year. TA ENTERPRISE BERHAD ANNUAL REPORT

106 notes to the financial statements 31 January 2008 (cont d) 37. DIRECTORS REMUNERATION (cont d) Group Company RM 000 RM 000 RM 000 RM 000 Other Directors (cont d) Non-executive: Other emoluments Benefits-in-kind Fees Total 11,145 8,521 6,021 4,502 Total excluding benefits-in-kind 10,630 7,945 5,565 4,034 The number of directors of the Company whose total remuneration paid by the Group during the year fall within the following bands is as follows: Number of Directors Executive Directors: RM350,000 - RM400, RM400,000 - RM450, RM450,000 - RM500,000-1 RM1,450,000 - RM1,500, RM2,300,000 - RM2,350, RM2,650,000 - RM2,700,000-1 Former Executive Directors: RM100,000 - RM150,000-1 Non-Executive Directors: Below RM50, RM50,000 - RM100, The above directors remuneration is excluding legal or consultancy fees paid to firms where certain directors have interest as disclosed in Note FOREIGN EXCHANGE GAINS/(LOSSES), NET Foreign exchange gains/(losses), net comprise: Group Company RM 000 RM 000 RM 000 RM 000 Realised net gain on foreign exchange transactions 2, Realised net loss on forward contracts (30) (1,880) - - Unrealised loss on foreign exchange translation, net (1,437) (8,248) (9,920) TA ENTERPRISE BERHAD ANNUAL REPORT 2008

107 notes to the financial statements 31 January 2008 (cont d) 39. OTHER EXPENSES Included in other expenses are: Group Company RM 000 RM 000 RM 000 RM 000 (restated) Auditors remuneration: Parent auditors Statutory audit - current year over provision in prior year - (1) - - Other services - current year Other firms of auditors Statutory audit - current year under/(over) provision in prior year 22 (35) - - Other services - current year Amortisation of: - intangible assets (Note 8) prepaid land lease payments (Note 7) premium on unquoted bonds and debt securities deferred financing costs deferred leasing costs 2,922 2, Provision for doubtful debts - subsidiaries others 2, Write-back of provision for doubtful debts - others (9,500) (14,800) - - Bad debts recovered from a subsidiary - - (65,251) (136,218) Bad debts written off Properties, plant and equipment written off Provision for impairment losses on: - investment in subsidiaries ,740 - other investments 5, Net loss on disposals of investments Loss on disposal of club membership Rental of premises to: - a subsidiary (Note 42) others Rental of equipment 1,273 1, Management fees to: - a subsidiary (Note 42) others 3,021 2, Fees paid to firms in which certain directors of the Company have interests (Note 42) Write-back of impairment losses on: - property, plant and equipment (Note 4) (3,746) (5,345) investment in subsidiaries - - (87,488) (17,088) - associated company (23) - other investments (2) (1,752) - (208) - short term investment - (9) - - TA ENTERPRISE BERHAD ANNUAL REPORT

108 notes to the financial statements 31 January 2008 (cont d) 40. FINANCE COSTS, NET Included in finance costs, net are: Group Company RM 000 RM 000 RM 000 RM 000 Interest expense: - Term loan 6,743 7, Revolving credit Bank overdrafts Subsidiary (Note 42) Loan from a director cum substantial shareholder of the Company (Note 42) 2,258-2, Loan from a substantial shareholder of the Company (Note 42) - 1,745-1,745 9,155 8,987 2,467 1,989 Guarantee and commitment fees Others ,300 9,178 2,467 2, INCOME TAX EXPENSE Group Company RM 000 RM 000 RM 000 RM 000 Current income tax: Malaysian income tax 54,462 13,222 8,044 3,758 Foreign tax 8,497 3, ,959 16,955 8,044 3,758 Deferred tax: Relating to origination and reversal of temporary differences (Note 26) (1,844) (1,921) 21 1 Under/(over)provided in prior years: Malaysian income tax 669 (1,377) 191 (1,755) Foreign tax - (4,277) (5,654) 191 (1,755) 61,784 9,380 8,256 2,004 Domestic income tax is calculated at the Malaysian statutory tax rate of 26% (2007: 27%) of the estimated assessable profit for the year. During the financial year, the concessionary income tax rate applicable to subsidiaries incorporated in Malaysia with paid up capital of RM2.5 million and below is subject to the concessionary tax rate of 20% on chargeable income of up to RM500,000 (2007: RM500,000). For chargeable income in excess of RM500,000 (2007: RM500,000), the tax rate of 26% (2007: 27%) is applicable. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The statutory tax rate in Malaysia will be reduced to 25% effective year of assessment The computation of deferred tax as at 31 January 2008 has reflected these changes. 106 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

109 notes to the financial statements 31 January 2008 (cont d) 41. INCOME TAX EXPENSE (cont d) Reconciliations of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows: RM 000 RM 000 Group Profit before tax 286, ,115 Taxation at Malaysian statutory tax rate of 26% (2007: 27%) 74,606 38,641 Effect of (income)/loss subject to concessionary tax rate of 20% (87) 34 Effect of different tax rates in other countries (1,308) 518 Effect of income not subject to tax (9,776) (16,154) Effect of expenses not deductible for tax purposes 8,235 13,775 Benefit from utilisation of group relief (134) (1,280) Effect of utilisation of previously unrecognised tax losses and unabsorbed capital allowances (10,998) (20,940) Deferred tax assets not recognised during the year Under/(over) provided in prior years 669 (5,654) Tax expense for the year 61,784 9,380 Company Profit before tax 182, ,189 Taxation at Malaysian statutory tax rate of 26% (2007: 27%) 47,382 48,921 Effect of income not subject to tax (39,842) (45,455) Effect of expenses not deductible for tax purposes Under/(over) provided in prior years 191 (1,755) Tax expense for the year 8,256 2,004 Group Company RM 000 RM 000 RM 000 RM 000 Tax losses are analysed as follows: Tax savings recognised during the year arising from utilisation of tax losses brought forward 6,895 13, Unutilised tax losses carried forward 75,995 83, Unabsorbed capital allowances are analysed as follows: Tax savings recognised during the year arising from: Utilisation of unabsorbed capital allowances brought forward from previous years 4,103 4, Unabsorbed capital allowances carried forward 342, , As at 31 January 2008, the Company has tax exempt profits available for distribution of approximately RM144,962,000 (2007: RM144,962,000), subject to the agreement of the Inland Revenue Board. TA ENTERPRISE BERHAD ANNUAL REPORT

110 notes to the financial statements 31 January 2008 (cont d) 41. INCOME TAX EXPENSE (cont d) Prior to the year of assessment 2008, Malaysian companies adopt 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 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 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 As at 31 January 2008, the Company has sufficient balance in the 108 account and the balance in the tax-exempt account to pay franked dividends out of its entire retained earnings. 42. SIGNIFICANT RELATED PARTY TRANSACTIONS In addition to the transactions detailed elsewahere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year: Included in revenue (Note 34) are: Group Company RM 000 RM 000 RM 000 RM 000 Gross dividends from subsidiaries: - TA Securities Holdings Berhad ,000 32,500 - TA Futures Sdn. Bhd TA Centre Berhad - - 2,220 15,725 - TA Properties Sdn. Bhd Management fees received from subsidiaries: - TA Centre Berhad TA Securities Holdings Berhad - - 5,000 3,600 - TA Futures Sdn. Bhd TA First Credit Sdn. Bhd TA Investment Management Berhad Orchard Park Sdn. Bhd Menara TA Sdn. Bhd Rental income received from a firm where Christopher Koh, a Director of the Company, has interest Rental income, tenant recoveries and reimbursement for leasehold improvements received from a company related to Datin Tan Kuay Fong, a director of the Company Portfolio management fee earned from Datin Tan Kuay Fong by: - TA Investment Management Berhad TA Asset Management Sdn Bhd Included in other income (Note 35) are: Interest income received from TA Futures Sdn. Bhd Rental income received from - Datuk Tiah Thee Kian, a director of the Company Datin Tan Kuay Fong, a director of the Company Unit trust management fee rebate from TA Investment Management Berhad TA ENTERPRISE BERHAD ANNUAL REPORT 2008

111 notes to the financial statements 31 January 2008 (cont d) 42. SIGNIFICANT RELATED PARTY TRANSACTIONS (cont d) Included in other expenses (Note 39) are: Group Company RM 000 RM 000 RM 000 RM 000 Rental of premises paid to subsidiary: - Menara TA Sdn. Bhd Management fees paid to subsidiary: - TA Project Management Sdn. Bhd Legal fees paid to a firm where Jory Leong Kam Weng, a director of the Company, has interest Consultancy fees paid to a firm where Peter U Chin Wei, a director of the Company has interest Legal fees paid to a firm where Christopher Koh, a director of the Company, has interest Included in finance costs, net (Note 40) are: Interest expense to subsidiary: - TA Centre Berhad Interest expense on loans from Datuk Tiah Thee Kian, a director cum substantial shareholder of the Company 2,258 1,745 2,258 1,745 Others: Property, plant and equipment transferred from subsidiaries: - TA Centre Berhad TA Securities Holdings Berhad Net (repayment)/drawdown of loan from: - Datuk Tiah Thee Kian (49,085) 5,919 (49,085) 6,139 Details of a subordinated loan granted to TA Futures Sdn. Bhd., a subsidiary, is disclosed in Note 19. Other than the transfer of motor vehicles from a wholly-owned subsidiary to the Company at net book value, the directors are of the opinion that the above transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties. Compensation of key management personnel The remuneration of directors (as disclosed in Note 37) and other members of key management during the year was as follows: Group Company RM 000 RM 000 RM 000 RM 000 Short-term employee benefits, fees, commission and gratuity 11,815 8,326 4,991 4,301 Post-employment benefits: Defined contribution plan 1, ,043 9,037 5,492 4,615 TA ENTERPRISE BERHAD ANNUAL REPORT

112 notes to the financial statements 31 January 2008 (cont d) 43. EARNINGS PER SHARE (a) Basic Basic earnings per share are calculated by dividing profit 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: Profit attributable to ordinary equity holders of the Company (RM 000) 224, ,063 Weighted average number of ordinary shares in issue ( 000) 1,392,877 1,328,475 Basic earnings per share (sen) (b) Diluted For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, i.e. Warrants 1999/2009 (Note 25) Profit attributable to ordinary equity holders of the Company (RM 000) 224, ,063 Weighted average number of ordinary shares in issue ( 000) 1,392,877 1,328,475 Effects of dilution: Warrants 1999/2009 ( 000) 241,882 - Adjusted weighted average number of ordinary shares in issue ( 000) 1,634,759 1,328,475 Diluted earnings per share (sen) The outstanding warrants (Note 25) as at the end of the previous financial year were excluded from the computation of fully diluted earnings per RM1.00 ordinary share as the effects of their conversion to ordinary shares were antidilutive. 44. DIVIDENDS Dividend Recognised Dividend in respect of Year in Year Ended RM 000 RM 000 RM 000 RM 000 RM 000 Recognised in the financial statements: Final dividend for 2006: 3% less 28% taxation, on 1,328,474,702 ordinary shares (2.16 sen per ordinary share) ,695-28,695 Final dividend for 2007: 7% less 26% taxation, on 1,422,637,857 ordinary shares (5.18 sen per ordinary share) - 73,693-73,693 - Proposed for approval at AGM Final dividend for 2008: 10% less 25% taxation (7.50 sen per ordinary share) * ,693 28,695 73,693 28, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

113 notes to the financial statements 31 January 2008 (cont d) 44. DIVIDENDS (cont d) * At the forthcoming Annual General Meeting, a final dividend in respect of the current financial year ended 31 January 2008 of 10% less 25% taxation (7.5 sen net per ordinary share), on the number of shares in issue on the entitlement date to be announced, will be proposed for shareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the shareholders equity as an appropriation of retained profits in the next financial year ending 31 January COMMITMENTS Group RM 000 RM 000 Approved and contracted for: Land to be held for property development - 9,574 Underwriting commitment in respect of new ordinary shares to be issued by a listed issuer - 5,000 As at the end of the previous financial year, a subsidiary had entered into a put option agreement to require a third party to acquire the abovementioned shares underwritten by the subsidiary. Both the underwriting commitment and the put option agreement expired during the financial year. Non-Cancellable Operating Lease Commitments - Group as Lessee Group RM 000 RM 000 Future minimum rentals payable: Not later than 1 year Later than 1 year and not later than 5 years Operating lease payments represent rental payable by the Group for use of buildings. Leases are negotiated for an average of 2 (2007: 2) years and rentals are fixed for an average of 3.8 (2007: 2.7) years. 46. CONTINGENT LIABILITIES WITHDRAWN DURING THE YEAR (unsecured) TA Antarabangsa Finance South Africa Limited, a wholly owned subsidiary incorporated in The Republic of South Africa, had provided an indemnity to the purchaser of TA Securities South Africa Limited, a former wholly-owned subsidiary incorporated in The Republic of South Africa which was disposed during the financial year ended 31 January 2001, for any potential claims against the latter arising from events occurring before the agreed disposal date. On 22 May 2007, the only potential claim amounting to Rand1,600,000 or RM775,200 equivalent (2007: Rand1,600,000 or RM767,000 equivalent) was withdrawn by the plaintiff with the release of a Court Order, and each party was to pay its own costs. TA ENTERPRISE BERHAD ANNUAL REPORT

114 notes to the financial statements 31 January 2008 (cont d) 47. OTHER SIGNIFICANT AND SUBSEQUENT EVENTS (a) Acquisition of properties (i) On 22 Jan 2007, a wholly-owned subsidiary of TA Properties Sdn. Bhd. ( TAP ) (which in turn is wholly - owned by the Company), Star Winners Sdn. Bhd. ( SWSB ) entered into a Sale and Purchase Agreement for the acquisition of 3 pieces of freehold lands held under Grant Lot 1266, Grant Lot 1267 and Grant Lot 1268, measuring approximately 30, square feet in Section 57, Town and District of Kuala Lumpur, State of Wilayah Persekutuan, for a total cash consideration of RM10,638,000 that was pending completion as at 31 January The acquisition was completed during the financial year and recognised as addition to land held for property development. The land title is in the process of being transferred to SWSB. (ii) (iii) (iv) On 15 February 2007, Sharp Factor Sdn. Bhd., a wholly owned subsidiary of TAP, entered into a Sale and Purchase Agreement for the acquisition of a piece of land held under HS(D) 36998, PT 13861, Bandar Serendah, Ulu Selangor, measuring approximately 35, square feet, for a total cash consideration of RM150,000. The acquisition was completed during the financial year and recognised as addition to property, plant and equipment. On 25 July 2007, a wholly-owned subsidiary of TAP, TA Team Stars Sdn Bhd ( TATSSB ) entered into a Sale and Purchase Agreement for the acquisition of a piece of land held under Geran Mukim 284, Lot 677, Mukim Empang,Daerah Hulu Langat, Negeri Selangor measuring approximately 137,486 square feet for a total cash consideration of RM14,800,000. The acquisition was completed during the financial year and recognised as addition to property, plant and equipment. On 28 August 2007, Idaman Parkland Sdn. Bhd. (formerly known as Botly Nominees (Asing) Sdn. Bhd.), a wholly-owned subsidiary of TAP, entered into a Sale and Purchase Agreement to acquire a piece of freehold land held under Geran Lot No.211 and Geran Lot No.212 Seksyen 89A Town and District of Kuala Lumpur with an aggregate area of 34, square feet together with a one and a half storey building, for a total cash consideration of RM18,000,000. The acquisition was completed during the financial year and recognised as addition to land held for property development. (b) Disposal of properties (i) TA Antarabangsa Finance South Africa Limited, a wholly-owned subsidiary of the Company incorporated in the Republic of South Africa, had on 6 September 2006 entered into an Agreement of Sale with Paramount Property Fund Limited ( PPFL ) for the sale of the rental enterprise including all land and buildings erected on the property in Rosebank Township for a total cash consideration of Rand73,000,000 (equivalent to RM35,137,000). The sale was completed during the current financial year after the consolidation and transfer of titles of the properties and the full receipt of the consideration. (ii) On 19 July 2007 and 4 November 2007, Ample Era Sdn. Bhd. ( AEra ), a wholly owned subsidiary of TAP, entered into certain Sale and Purchase Agreements for the disposals of certain land held for resale measuring 267,768 square feet ( Lot 61, Lot 62 and Lot 67 ) for a total cash consideration of RM3,474,216, at a net gain of RM858,889 which has been recognised in the current financial year. In respect of Lot 61, AEra has received 10% of the sale proceeds totaling RM130,500 during the current financial year and the remaining 90% of the sale proceeds of RM1,174,500 was paid to a solicitor in trust subsequent to the financial year end on 5 May In respect of Lot 62 and Lot 67, 10% of the sale proceeds totalling RM216,922 was paid to a solicitor in trust during the financial year and the remaining proceeds totalling RM1,952,294 is due for payment not later than 6 June (c) Launch of fund by a subsidiary TA Investment Management Berhad, which is a 70% owned subsidiary of TA Securities Holdings Berhad ( TASH ) (which in turn is wholly-owned by the Company) had launched TA European Equity Fund on 20 March 2007, and TA ABN AMRO Utilities Fund on 15 August (d) Strategic Partnership Agreement between a subsidiary and Orient Securities Corporation ( ORS ) During the financial year, a wholly-owned subsidiary, TASH signed a Strategic Partnership Agreement with ORS to explore areas of mutual cooperation in establishing securities trading facilities in both Malaysia and Vietnam. (e) Intra-group disposals and acquisitions during the year are as disclosed in Notes 9(i) and 9(ii). 112 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

115 notes to the financial statements 31 January 2008 (cont d) 48. SEGMENTAL INFORMATION (a) Business Segments: The Group is organised on a worldwide basis into six major business segments: (i) (ii) (iii) (iv) (v) (vi) Broking and financial services - stockbroking, fund management, unit trust, derivatives brokings and trading; Investment holding - provision of funding and investment related services; Credit and lending - provision of finance and related services; Property investment - investment in residential and commercial properties; Property development - development of residential and commercial properties; and Hotel operations - operation of hotel and related services. TA ENTERPRISE BERHAD ANNUAL REPORT

116 notes to the financial statements 31 January 2008 (cont d) 48. SEGMENTAL INFORMATION (cont d) (a) Business Segments (cont d): Other business segments include other inactive operations, none of which are of a sufficient size to be reported separately. Broking Credit and financial Investment and Property Property Hotel 2008 services holding lending investment development operations Others Elimination Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Revenue External sales 260, ,822 46, ,574 82,181 10, ,706 Inter-segment sales - 46,010-5, (52,474) - Total revenue 260,633 46,155 14,822 51, ,574 82,181 11,092 (52,474) 546,706 Result Operating results 156,457 (7,193) 40,108 24,146 67,523 21,003 (558) - 301,486 Foreign exchange gains/(losses) 593 (47) - (83) Net segment results 157,050 (7,240) 40,108 24,063 67,523 21,051 (409) - 302,146 Unallocated corporate expenses (5,753) Operating profit 296,393 Finance costs, net (9,300) Share of results of associates (147) (146) Profit before tax 286,947 Income tax expense (61,784) Profit for the year 225,163 Assets Segment assets 1,231, , , , , ,185 2,305-3,026,954 Investment in equity method of associates , ,085 Unallocated corporate assets 45,460 Consolidated total assets 3,087, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

117 notes to the financial statements 31 January 2008 (cont d) 48. SEGMENTAL INFORMATION (cont d) (a) Business Segments (cont d): Broking Credit and financial Investment and Property Property Hotel 2008 (cont d) services holding lending investment development operations Others Elimination Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Liabilities Segment liabilities 716,739 9, ,460 21,172 6,095 1, ,627 Unallocated corporate liabilities 36,688 Consolidated total liabilities 944,315 Other Information Capital expenditure 1,686 2, , , ,662 Depreciation 3, ,487-9, ,123 Amortisation , ,481 Impairment losses, net of write back - 1 5,758 (3,748) ,011 Non-cash expenses other than depreciation, amortisation and impairment losses, net of reversal of accruals 1,955 - (7,265) (1,193) - (1) (224) - (6,728) TA ENTERPRISE BERHAD ANNUAL REPORT

118 notes to the financial statements 31 January 2008 (cont d) 48. SEGMENTAL INFORMATION (cont d) (a) Business Segments (cont d): Broking Credit and financial Investment and Property Property Hotel 2007 services holding lending investment development operations Others Elimination Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Revenue External sales 134, ,354 41,369 94,657 73, ,520 Inter-segment sales ,498-4, ,398 - (75,353) - Total revenue 134,572 55,754 10,354 45,604 94,720 88,869 - (75,353) 354,520 Result Operating results 63,226 (3,556) 29,359 23,478 38,717 16,032 (506) - 166,750 Foreign exchange gains/(losses) 96 (10,068) - (4) - 58 (2) - (9,920) Net segment results 63,322 (13,624) 29,359 23,474 38,717 16,090 (508) - 156,830 Unallocated corporate expenses (4,539) Operating profit 152,291 Finance costs, net (9,178) Share of results of associates (17) Profit before tax 143,115 Income tax expense (9,380) Profit for the year 133,735 Assets Segment assets 1,173, , , , , , ,890,809 Investment in equity method of associates , ,231 Unallocated corporate assets 26,770 Consolidated total assets 2,932, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

119 notes to the financial statements 31 January 2008 (cont d) 48. SEGMENTAL INFORMATION (cont d) (a) Business Segments (cont d): Broking Credit and financial Investment and Property Property Hotel 2007 (cont d) services holding lending investment development operations Others Elimination Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Liabilities Segment liabilities 770,456 71,711 1, ,661 24,971 6, ,033,468 Unallocated corporate liabilities 28,226 Consolidated total liabilities 1,061,694 Other Information Capital expenditure 1, , ,575 Depreciation 3, ,194-8, ,369 Amortisation , ,248 Impairment losses, net of write back - (217) (1,784) (5,230) (7,106) Non-cash expenses other than depreciation, amortisation and impairment losses, net of reversal of accruals (498) - (11,121) (2,437) - (3) - - (14,059) TA ENTERPRISE BERHAD ANNUAL REPORT

120 notes to the financial statements 31 January 2008 (cont d) 48. SEGMENTAL INFORMATION (cont d) (b) Geographical Segment Although the Group s six major business segments are managed on a worldwide basis, they operate in six principal geographical areas of the world as follows: (i) (ii) Malaysia - stockbroking, investment holding, provision of funding activities, fund management and unit trust, derivatives broking and trading, property development and investment; Hong Kong - stockbroking; (iii) South Africa - property investment and ceased operation as a licensed bank since 5 April 2002 (iv) (v) (vi) Canada - property investment (commercial properties); Australia - hotel operations; and British Virgin Islands - investment holding. British Hong South Virgin Malaysia Kong Australia Africa Canada Islands Others Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM External revenue 404,537 29,232 82,181 4,402 26, ,706 Segment assets 2,255, , , ,298 52,751 2,455 3,026,954 Capital expenditure 5, , , External revenue 237,788 11,248 73,471 6,986 25, ,520 Segment assets 2,240,998 62, ,306 33, ,259 47,074 1,286 2,890,809 Capital expenditure 7,471 1, ,575 The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties. 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (a) Information about the extent and nature of the financial instruments, including significant terms and conditions are presented in their respective notes, where applicable. 118 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

121 notes to the financial statements 31 January 2008 (cont d) 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont d) (b) Interest rate risk The carrying amounts, the effective interest rates as at the balance sheet date and the remaining maturities of the Group s and the Company s financial instruments that are directly exposed to interest rate risk are tabled below: Non interest Interest bearing Bearing Interest Within 1 to 2 2 to 3 3 to 4 4 to 5 More than Note rates 1 year years years years years 5 years Total Group % RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM Fixed rate Unquoted bonds and debts securities in Malaysia ^ , ,000 Financial receivables - gross ,070 8, ,231 Trade receivables - gross , , ,643 Fixed deposits and placements , ,668 Term loan (7,883) (8,266) (8,666) (9,086) (9,527) (93,679) - (137,107) Floating rate Amount with derivative clearing house , ,235 Interest-bearing client and trust monies (257,620) (151,733) (409,353) Security deposits due to remisiers (73,715) (73,715) 2007 Fixed rate Unquoted bonds and debts securities in Malaysia ,124-10,000-5,156-20,280 Financial receivables - gross , ,442 Trade receivables - gross , , ,995 Fixed deposits and placements , ,977 Term loan (6,867) (7,200) (7,548) (7,914) (8,298) (94,254) - (132,081) Floating rate Amount with derivative clearing house , ,016 Revolving credit (15,000) (15,000) Interest-bearing client and trust monies (160,201) (160,201) Due to a substantial shareholder (49,085) (49,085) Security deposits due to remisiers (72,323) (72,323) ^ Excludes certain unquoted bonds and debts securities in Malaysia that have an average coupon interest of approximately 6.6% and which full provision for impairment losses have been made as at the balance sheet date. TA ENTERPRISE BERHAD ANNUAL REPORT

122 notes to the financial statements 31 January 2008 (cont d) 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont d) (b) Interest rate risk (cont d) Non interest Interest bearing Bearing Interest Within 1 to 2 2 to 3 3 to 4 4 to 5 More than Note rates 1 year years years years years 5 years Total Company % RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM Fixed rate Unquoted bonds and debts securities in Malaysia ^ , ,000 Due from subsidiaries , , ,954 Fixed deposits and placements , , Fixed rate Unquoted bonds and debts securities in Malaysia ^ ,000-5,156-15,156 Due from subsidiaries , , ,166 Fixed deposits and placements , , TA ENTERPRISE BERHAD ANNUAL REPORT 2008

123 notes to the financial statements 31 January 2008 (cont d) 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont d) (c) Currency exposure The net unhedged financial assets and liabilities of entities within the Group that are not denominated in their respective functional currencies are as follows: At 31 January 2008: Denominating Currencies United Functional Ringgit States Canadian Singapore Other Currencies Malaysia Dollars Dollars Dollars currencies Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Trade receivables Ringgit Malaysia - 7, ,600 Hong Kong Dollars 5, ,186 5,069 7, ,786 Short term funds Ringgit Malaysia Philippines Peso United States Dollars - - 8, ,852 16,463 Hong Kong Dollars , ,865 17,501 Other investments Ringgit Malaysia Other receivables United States Dollars Trade payables Hong Kong Dollars (53) (91) (144) Ringgit Malaysia - (24,461) (24,461) (53) (24,461) - - (91) (24,605) 5,528 (16,351) 8, ,870 5,689 TA ENTERPRISE BERHAD ANNUAL REPORT

124 notes to the financial statements 31 January 2008 (cont d) 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont d) (c) Currency exposure (cont d) At 31 January 2007: Denominating Currencies United Functional Ringgit States Canadian Singapore Other Currencies Malaysia Dollars Dollars Dollars currencies Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Trade receivables Hong Kong Dollars 15, ,189 Short term funds Ringgit Malaysia - 14, ,561 United States Dollars Hong Kong Dollars 1, ,336 1,150 14, ,043 Other investments Ringgit Malaysia United States Dollars Trade payables Hong Kong Dollars (12,794) (12,794) Ringgit Malaysia - (13,625) (13,625) (12,794) (13,625) (26,419) 3,506 1, ,065 (d) Fair values The aggregate net fair values of financial assets and financial liabilities of the Group and the Company which are not carried at fair value on the balance sheets are as follows: Financial Assets Group Company Carrying Carrying Amount Fair Value Amount Fair Value RM 000 RM 000 RM 000 RM 000 At 31 January 2008: Long term other investments (Note 11) 44,191 45, , ,446 Due from subsidiaries - repayable on demand (Note 19) ,954 * Short term investments (Note 21) 2,149 2, At 31 January 2007: Long term other investments (Note 11) 34,182 47, , ,362 Due from subsidiaries - repayable on demand (Note 19) ,166 * Short term investments (Note 21) 6,720 6, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

125 notes to the financial statements 31 January 2008 (cont d) 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont d) (d) Fair values (cont d) Financial Liabilities Group Company Carrying Carrying Amount Fair Value Amount Fair Value RM 000 RM 000 RM 000 RM 000 At 31 January 2008: Due to subsidiaries (Note 33) ,009 * At 31 January 2007: Due to subsidiaries (Note 33) - - 5,449 * * It is not practicable to estimate the fair values of the amounts due from/to subsidiaries that are included in current assets and liabilities principally due to a lack of fixed terms of repayment in the transactions entered into by the parties involved and a reasonable estimate of fair values could not be made without incurring excessive costs. However, the Company does not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the values that would eventually be received or settled. The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments: (i) Long term and short term investments The fair values of publicly traded instruments are estimated based on quoted market prices. For other instruments for which there are no quoted market prices, a reasonable estimate of fair value has been calculated based on the expected cash flows or the underlying net asset base for each investment. (ii) Financial receivables The fair values of financial receivables are the estimated recoverable amounts from the respective loans which are mainly due for repayment within a year. For non-performing loans, the Group has taken into account the values of their collateral, latest updates from settlement negotiations with customers and the latest outcome from legal proceedings initiated. (iii) trade receivables, trade payables, other receivables (except prepayments and deferred leasing and financing costs) and other payables The carrying amounts of trade receivables and payables are subject to normal trade credit terms which are short term in nature and thus approximate their fair values. The carrying amounts of other receivables (excluding prepayments and deferred leasing and financing costs) and payables are reasonable estimates of fair values because of their short maturities. (iv) Subordinated loan to a subsidiary The fair value of subordinated loan to a subsidiary was estimated using discounted cash flow method based on the expected repayment timing and amount of future cash flows. The discount factor used was 7.00% (2007: 7.00%) per annum, which was based on the prevailing market rates and is the same as the interest rate charged on the loan. (v) Amount due to directors and remisiers The carrying amounts of the amount due to directors and remisiers approximate their fair values as these amounts have no fixed terms of repayment and can be repayable on demand. (vi) Short term funds and borrowings The carrying amounts of short term funds and borrowings approximate their fair value due to the relatively short term maturities of these instruments. TA ENTERPRISE BERHAD ANNUAL REPORT

126 notes to the financial statements 31 January 2008 (cont d) 49. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont d) (d) Fair values (cont d) (vii) Term loans The fair values of term loans are estimated using discounted cash flow method based on the expected timing of amounts payable at the applicable rates of interest levied over the tenure of these loans. 50. COMPARATIVES The following comparative figures for the Group have been reclassified to conform with current year s presentation: As As Re- previously Group restated classification stated RM 000 RM 000 RM 000 Consolidated Balance Sheet Property, plant and equipment 477,592 (10,401) 487,993 Land held for property development 360,949 (255) 361,204 Prepaid land lease payments 10,641 10,641 - Intangible assets , ,688 Consolidated Income Statement Depreciation 27, ,655 Other expenses 32,130 (286) 31,844 59,499-59, CURRENCY All amounts are stated in Ringgit Malaysia, unless stated otherwise. 124 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

127 List of Properties held by TA Enterprise Berhad Group as at 31 January 2008 Approximate Age of Book Value Date of Buildings (ACC) Location Description Existing Use Acquisition (years) RM IN MALAYSIA 1 Lot No 653, Freehold Land Held for 18/11/1994-7,520,991 Mukim of Kluang Mixed Development Land Development Area: 4,145,170 sq. ft. 2 Lot 2463, GM1783, Freehold Land Held for 28/11/1994-2,031,294 Mukim of Batu, Agricultural Land Development District of Kuala Lumpur Area: 122,491 sq. ft. 3 2/3 of Lot 1580, Freehold Land Held for 31/10/1994-2,703,048 EMR. 6715, Agricultural Land Development Mukim of Batu, Area: 131,580 sq. ft. District of Kuala Lumpur 4 1/3 of Lot 1580, Freehold Land Held for 07/02/2005-4,430,582 Geran Mukim No 3602, Agricultural Land Development Mukim of Batu, Area: 65, sq. ft. District of Kuala Lumpur 5 PT No 981, H.S.(D)1690, Leasehold Idle 03/06/ ,412 Mukim of Tras, (Expiring on 4/12/2080) Daerah Raub, Pahang Residential Land Area: 85,486 sq. ft. 6 Idaman Residence Freehold Residential 25/05/ ,441,655 Lot 114 to 117, Residential Land Condominium 03/06/1993 G to 36029, Area: 65,229 sq. ft. Project under Section 58, Mukim and Development District of Kuala Lumpur 7 Lot 25 & 26, Freehold Land Held for 31/07/ ,971,848 Section 58, Mukim and Commercial Land Development District of Kuala Lumpur Area: 43,497 sq. ft. 8 Lot 77, Freehold Land Held for 01/12/1995-7,443,297 Section 58, Mukim and Residential Land Development District of Kuala Lumpur Area: 11,172 sq. ft. 9 Geran 27052, Freehold Land Held for 19/10/ ,176,730 No Lot 174, Seksyen 57, Residential Land Development Bandar Kuala Lumpur Area: 45,246 sq. ft. 10 Damansara Idaman/ Freehold Residential 22/01/ ,767,889 Idaman Villas Mixed Development Land Bungalow & Semi-D Grant No 5963, Lot 2806 Area: 717,457 sq. ft. Projects under Mukim of Sungai Buloh, Development District of Petaling TA ENTERPRISE BERHAD ANNUAL REPORT

128 List of Properties held by TA Enterprise Berhad Group as at 31 January 2008 (cont d) Approximate Age of Book Value Date of Buildings (ACC) Location Description Existing Use Acquisition (years) RM IN MALAYSIA 11 PT , Freehold Shophouses 09/08/ ,583 Mukim and District of Klang, 6 units Shophouses Held for TA Industrial Park Area: 9,552 sq. ft. Sale/Rent 12 PT 7346, 7347, 7348, 7349, Freehold Land Held 10/03/1992-3,648,896 Mukim of Serendah, Industrial Land for Resale District of Ulu Selangor Area: 387,259 sq. ft. 13 PT 7137, Freehold Land Held 10/03/ ,035 Mukim of Serendah, Industrial Land for Resale District of Ulu Selangor Area: 87,000 sq. ft. 14 PT 7135, 7138, 7139, Freehold Land Held 29/08/1992-2,457,085 Mukim of Serendah, Industrial Land for Resale District of Ulu Selangor Area: 260,800 sq. ft. 15 Geran 15376, Lot 421, Freehold Land Held for 27/07/2005-3,623,198 Mukim Kuala Lumpur Residential Land Development Area: 120,095 sq. ft. 16 HSD PT Freehold Land Held for 20/05/ ,995,661 & HSD PT 34082, Commercial Land Development Mukim Sungai Buloh, Area: 937,149 sq. ft. Daerah Petaling, Negeri Selangor 17 HSD Freehold Land Held for 20/07/ ,417,488 HSD & Commercial Land Development PT PT34079, Area: 1,156,713 sq. ft. Mukim Sungai Buloh, Daerah Petaling, Negeri Selangor 18 Geran 27879, 26388, Freehold Land Held for 16/09/ ,331, , , Commercial Land Development , Area: 129,881 sq. ft , 37034, and Lot 624, in Seksyen 67, Mukim and Bandar of Kuala Lumpur 19 Lot No , Leasehold Disaster 29/05/ ,867 Mukim Hulu Kinta, (Expiring on 17/11/2079) Recovery Daerah Kinta Shop-Office Site Area: 3,684 sq. ft. 20 HS (D) 12959, Freehold Property Held 11/01/ ,473 PT No 2910, 1 unit Townhouse for Internal Use Mukim of Pasir Panjang, Built-up Area: 1,367 sq. ft. District of Port Dickson 126 TA ENTERPRISE BERHAD ANNUAL REPORT 2008

129 List of Properties held by TA Enterprise Berhad Group as at 31 January 2008 (cont d) Approximate Age of Book Value Date of Buildings (ACC) Location Description Existing Use Acquisition (years) RM IN MALAYSIA 21 Lot 11502, HS (D) 52730, Freehold Property with 18/08/ ,840 Mukim of Damansara, 3 Storey Shop-Office Rental Income District of Petaling Built-up Area: 4,000 sq. ft. 22 HS (D) 88660, Freehold Properties for 06/04/ ,550,139 PT No 13638, 3 Blocks of 7 Storey Office Internal Use and Mukim of Damansara, Built-up Area: with Rental Income District of Petaling, Subang 48,173 sq. ft. 23 HS (D) 36998, PT 13861, Freehold Own Use 15/02/ ,000 Bandar Serendah, Area: 35, sq. ft. Ulu Selangor 24 Geran 42988, Freehold Land Held for 22/01/ ,841, , 42990, Area: 30, sq. ft. Development in Section 57, Town and District of Kuala Lumpur 25 Geran Mukim 284, Freehold Land Held for 25/07/ ,283,820 Lot 677, Mukim Empang, Area: 137, sq. ft. Development Daerah Hulu Langat, Negeri Selangor 26 Geran Lot No 212 & Freehold Land Held for 28/08/ ,589,538 Geran Lot No 211, Area: 34, sq. ft. Development Seksyen 89A, Daerah dan Bandar Kuala Lumpur with one and a half storey house building 27 Lot PT 22, HS (D) 63, Leasehold TA Official 24/11/ ,394,818 Mukim and (Expiring on 24/3/2073) Guest House District of Kuala Lumpur Residential Land and Building Area: 55,694 sq. ft. 28 Lot PN 10009, Leasehold Property with 30/03/ ,103,667 Mukim and (Expiring on 26/3/2073) Rental Income District of Kuala Lumpur Residential Land and Building Area: 32,726 sq. ft. 29 Menara TA One Freehold TA Corporate 10/06/ ,960,795 Lot 1261, G.39187, 37 Storey Office Building Head Office and Section 57, Mukim and Built-up Area: Rental Income District of Kuala Lumpur 418,502 sq. ft. Land Area: 44,057 sq. ft. TA ENTERPRISE BERHAD ANNUAL REPORT

130 List of Properties held by TA Enterprise Berhad Group as at 31 January 2008 (cont d) Approximate Age of Book Value Date of Buildings (ACC) Location Description Existing Use Acquisition (years) RM OUTSIDE MALAYSIA 30 Terasen Centre Lot E, Freehold Investment 11/08/ ,081,634 Block 7, District Lot 185, 24 Storey Office & Property with Land District 36, Commercial Building Rental Income Plan 22865, Built-up area: West Georgie, 400,000 sq. ft. Vancouver, Canada 31 E-1204, Freehold Principal Business 10/01/ ,036 Phip. Stock Exch. Center, Office Units Office of Phil. TA Exchange Road, Area: 2,895 sq. ft. Sec, Inc, and Ortigas Center Pasig City, Rental Income Metro Manila, Philippines (Non-current Asset Classified as Held for Sale) D, Renaissance Freehold Property with 19/09/ ,959 Tower Condominium Residential Rental Income Meralco Avenue, Condominium (Non-current Asset Ortigas Center Pasig City, Area: 2,281 sq. ft. Classified as Held Metro Manila, Philippines for Sale) 33 Radisson Plaza Hotel Freehold Property with 08/12/ ,371,729 66, Pitt Street, 363 Room, 5 Star Hotel Rental Income Sydney, Australia Build-up Area: 231,299 sq. ft. Land Area: 18,510 sq. ft. 34 Units 1203 & 1204A, Government Lease Principal 03/07/ ,983,219 12th Floor, Tower I, (Expiring on 14/2/2059) Business Office Lippo Centre, Commercial Building of TA Sec 89 Queensway, Area: 4,045 sq. ft. (HK) Limited Hong Kong 35 Kunming Dianchi Golf Lakeview Villa Uncompleted 15/11/ ,056,903 Community, G187, Built-up area: Unit Type 7C Yunnan, China 4, sq. ft. 36 No 131, Baita Road, 3 Huido International Uncompleted 29/12/ ,096,045 Kunming, Yunnan, China Office Units Office Units Built-up area: 4,440 sq. ft. TOTAL 1,187,595, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

131 analysis of shareholdings as at 5 May 2008 Authorised Share Capital : RM4,000,000, Issued and paid-up capital : RM1,426,970, Class of Shares : Ordinary Shares of RM1.00 each Voting Rights : One vote per share Number of Shareholders : 38,359 No. of % of shareholders/ shareholders/ No. of % of Size of holdings depositors depositors shares held issued capital , ,000 7, ,822, ,001-10,000 24, ,136, , ,000 6, ,039, ,001 - to less than 5% of issued shares ,240, % and above of issued shares ,713, Total 38, ,426,970, SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS % of issued Name Note No of shares share capital Direct Indirect Datuk Tiah Thee Kian 1 480,478, Charles Jobson 2 72,696, Note: ,713,000 shares held through TASEC Nominees (Tempatan) Sdn Bhd. 2. Held through Delta Partners, LLC; with 48,418,592 shares registered under Prism Offshore Fund Ltd, 13,924,043 shares registered under Prism Partners QP LP, 9,089,541 shares registered under Prism Partners LP and 1,264,783 shares registered under Triton 200, Ltd. DIRECTORS INTERESTS IN SHARES IN THE COMPANY OR IN RELATED CORPORATION Direct Deemed No. of shares % No. of shares % Datuk Tiah Thee Kian 480,478, Datin Tan Kuay Fong 3,861, Zainab Binti Ahmad Dato Mohamed Bin Abid 274, Peter U Chin Wei Jory Leong Kam Weng Christopher Koh Swee Kiat 16, Rahmah Binti Mahmood TA ENTERPRISE BERHAD ANNUAL REPORT

132 analysis of shareholdings as at 5 May 2008 (cont d) LIST OF TOP 30 SHAREHOLDERS Normal Holdings No Name Holdings Percentage 1 Tasec Nominees (Tempatan) Sdn Bhd Tiah Thee Kian 454,713, Ta Nominees (Asing) Sdn Bhd Fleet Investments Management Limited 65,091, Tasec Nominees (Asing) Sdn Bhd Ta Securities (Hk) Ltd For Delroy Investment Holdings Limited 55,275, Citigroup Nominees (Asing) Sdn Bhd Ubs Ag For Prism Offshore Fund Ltd 48,418, Tasec Nominees (Asing) Sdn Bhd Ta Securities (Hk) Ltd For Globalbase Enterprise Ltd 44,714, Tasec Nominees (Asing) Sdn Bhd Ta Securities (Hk) Ltd For Goldcape International Limited 40,068, Amanah Raya Nominees (Tempatan) Sdn Bhd Skim Amanah Saham Bumiputera 29,568, Tiah Thee Kian 25,765, Tasec Nominees (Asing) Sdn Bhd Fortis Private Banking Singapore Limited For Savern Finance Limited 15,421, Hsbc Nominees (Asing) Sdn Bhd Exempt An For Morgan Stanley & Co. Incorporated 15,000, Citigroup Nominees (Asing) Sdn Bhd Ubs Ag For Prism Partners Qp Lp 13,924, Tasec Nominees (Asing) Sdn Bhd Ta Securities (Hk) Ltd For Jeffrey Smith 13,453, Hsbc Nominees (Asing) Sdn Bhd Bny Brussels For Queensland Investment Corporation 10,300, Citigroup Nominees (Asing) Sdn Bhd Cbny For Dfa Emerging Markets Fund 10,119, Hsbc Nominees (Asing) Sdn Bhd Exempt An For Jpmorgan Chase Bank, National Association (Denmark) 9,296, Citigroup Nominees (Asing) Sdn Bhd Ubs Ag For Prism Partners Lp 9,089, Citigroup Nominees (Asing) Sdn Bhd Cb Ldn For Stichting Pensioenfonds Zorg En Welzijn 8,240, Hsbc Nominees (Asing) Sdn Bhd Tntc For Lsv Emerging Markets Equity Fund L.p. 7,574, Alliancegroup Nominees (Tempatan) Sdn Bhd Pheim Asset Management Sdn Bhd For Employees Provident Fund 6,650, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Growth Fund 5,795, Cartaban Nominees (Asing) Sdn Bhd Investors Bank And Trust Company For Ishares, Inc. 5,132, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

133 analysis of shareholdings as at 5 May 2008 (cont d) LIST OF TOP 30 SHAREHOLDERS (cont d) Normal Holdings No Name Holdings Percentage 22 Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees Berhad For Public Regular Savings Fund (N ) 4,753, Hdm Nominees (Asing) Sdn Bhd Exempt An For Uob Kay Hian (Hong Kong) Limited (Clients) 4,130, Citigroup Nominees (Asing) Sdn Bhd Gsco For Truffle Hound Global Value Llc 4,105, Cartaban Nominees (Asing) Sdn Bhd Ssbt Fund I007 For Pimco Rcm Global Small-cap Fund 4,077, Citigroup Nominees (Asing) Sdn Bhd Cbny For Dfa Emerging Markets Small Cap Series 4,058, Hsbc Nominees (Asing) Sdn Bhd Bbh And Co. Boston For Vanguard Emerging Markets Stock Index Fund 3,809, Hsbc Nominees (Asing) Sdn Bhd Bbh (Lux) Sca For Fidelity Funds - Asia Pacific Growth & Income Fund 3,800, Citigroup Nominees (Asing) Sdn Bhd Ubs Ag For Npj Global Opportunities Master Fund (Pledged) 3,678, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Equity Fund 3,235, Total 929,258, TA ENTERPRISE BERHAD ANNUAL REPORT

134 analysis of warrantholdings for Warrants 1999/2009 as at 5 May 2008 No. of Warrants in issue : RM474,083, Exercise Price of Warrants : RM1.00 per new ordinary share throughout the entire tenure of the Warrants Voting Rights : One vote per warrant Number of warrantholders : 18,284 No. of % of No. of % of Size of holdings warrantholders warrantholders warrants held issued capital , ,000 2, ,392, ,001-10,000 10, ,190, , ,000 4, ,908, ,001 - to less than 5% of issued warrants ,067, % and above of issued warrants ,505, Total 18, ,083, DIRECTORS INTERESTS IN WARRANTS IN THE COMPANY OR IN RELATED CORPORATION Direct Deemed No. of warrants % No. of warrants % Datuk Tiah Thee Kian Datin Tan Kuay Fong Zainab Binti Ahmad 724, Dato Mohamed Bin Abid 200, Peter U Chin Wei Jory Leong Kam Weng Christopher Koh Swee Kiat Rahmah Binti Mahmood TA ENTERPRISE BERHAD ANNUAL REPORT 2008

135 analysis of warrantholdings for Warrants 1999/2009 as at 5 May 2008 (cont d) List Of Top 30 Warrantholders Normal Holdings No Name Holdings Percentage 1 Citigroup Nominees (Asing) Sdn Bhd Goldman Sachs International 32,505, Poh Ewe Wing 11,333, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Equity Fund 7,427, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Far-east Property & Resorts Fund 7,384, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Far-east Balanced Fund 5,429, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Growth Fund 5,326, Malaysian Assurance Alliance Berhad 4,490, Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees Berhad For Public Aggressive Growth Fund (N ) 4,315, Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees Berhad For Public Balanced Fund (N ) 4,070, Bhlb Trustee Berhad Public Focus Select Fund 3,707, Mayban Nominees (Asing) Sdn Bhd Dbs Bank For Bloomswick Limited (230089) 3,500, Ke-zan Nominees (Asing) Sdn Bhd Kim Eng Securities Pte Ltd For The Nassim Fund 3,500, Bhlb Trustee Berhad Public Regional Sector Fund 3,436, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Savings Fund 3,115, Public Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Chia Siya Heng (E-ss2) 3,045, Amanah Raya Nominees (Tempatan) Sdn Bhd Public Far-east Select Fund 2,846, Irene Yap Yin Fei 2,647, Mayban Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Sow Cheng Kow 2,513, Osk Nominees (Asing) Sdn Berhad Pledged Securities Account For Lee Sui Hee 2,482, Cimsec Nominees (Tempatan) Sdn Bhd Cimb Bank For Sow Cheng Kow (My0248) 2,470, Mak Ngia Mak Yoke Lum 2,373, TA ENTERPRISE BERHAD ANNUAL REPORT

136 analysis of warrantholdings for Warrants 1999/2009 as at 5 May 2008 (cont d) List Of Top 30 Warrantholders (cont d) Normal Holdings No Name Holdings Percentage 22 Moo Khean Mu Kan Chong 2,165, Hdm Nominees (Asing) Sdn Bhd Dbs Vickers Secs (S) Pte Ltd For Rin Nan Yoong 1,881, Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Ho Sey Chen (Rem 611) 1,800, Hii Yu Guan 1,761, Amanah Raya Nominees (Tempatan) Sdn Bhd Pb Asia Real Estate Income Fund 1,685, Foo Choon Tow 1,650, Sim Kay Huan 1,559, Hlb Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Mah Siew Seong 1,550, Hdm Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Seow Kah Heng (M03) 1,550, Total 133,519, TA ENTERPRISE BERHAD ANNUAL REPORT 2008

137 form of proxy Incorporated in Malaysia No. of Shares Held I/We (name of shareholder as per NRIC, in capital letters) NRIC No./ID No./Company No. (new) (old) of (full address) being a member(s) of TA ENTERPRISE BERHAD, hereby appoint (name of proxy as per NRIC, in capital letters) NRIC No. (new) (old) of (full address) or failing him/her (name of proxy as per NRIC, in capital letters) NRIC No. (new) (old) of (full address) as my/our proxy to vote for me/us on my/our behalf at the Eighteenth Annual General Meeting of the Company to be held at the Auditorium, 10th Floor, Menara TA One, 22, Jalan P. Ramlee, Kuala Lumpur on Thursday, 19 June 2008 at a.m. and at each and every adjournment thereof. My/our proxy is to vote as indicated below: RESOLUTIONS FOR AGAINST 1 Adoption of Reports and Financial Statements Resolution 1 2 Approval of First and Final Dividend Resolution 2 3 Re-election of Directors: a. Mr Jory Leong Kam Weng Resolution 3a b. Mr Christopher Koh Swee Kiat Resolution 3b c. Datuk Tiah Thee Kian Resolution 3c d. Puan Rahmah Binti Mahmood Resolution 3d 4 Approval of Directors Fees Resolution 4 5 Re-appointment of Auditors Resolution 5 6 Authority for Directors to issue shares pursuant to Section 132D of the Companies Act, 1965 Resolution 6 (Please indicate with an X in the spaces provided how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his/her discretion) For appointment of two proxies, percentage of shareholdings to be represented by the proxies: No. of shares Percentage Signature/Common Seal Date: Proxy 1 % Proxy 2 % Total 100% Notes: 1. A member entitled to attend and vote is entitled to appoint a proxy or proxies (but not more than two) to attend and vote at this Meeting in his stead. A proxy may but need not be a member of the Company. 2. This Form of Proxy, in the case of an individual, shall be signed by the appointor or his attorney and in case of a corporation, shall be given under its common seal or signed on its behalf by an attorney or officer of the corporation so authorised. 3. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. 4. This Form of Proxy must be deposited at the Company s Registered Office at 34th Floor, Menara TA One, 22, Jalan P. Ramlee, Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

138 Fold this flap for sealing Then fold here STAMP The Company Secretary TA ENTERPRISE BERHAD ( M) 34th Floor, Menara TA One 22, Jalan P. Ramlee Kuala Lumpur 1st fold here

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