Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report for the financial year ended 31 January 2011.

OVERVIEW

In our first annual report I quoted Lao Tzu:

A big tree was once a small seed, a nine storey building started with a basket of earth, a journey of a thousand miles began with a first step.

This is the 9th year of operation of the private equity division of the Goldis Berhad (“Goldis”) Group. We have lived through some interesting times of boom, doom and uncertainty. Our investments are in various stages of growth but we hope to close this chapter of our private equity journey by 2013. We have started taking steps to divest and exit some of our earlier investments while we continue to nurture the later ones.

FINANCIAL PERFORMANCE

For the financial year ended 31 January 2011, the Group’s revenue increased 33% from RM198 million to RM264 million, contributed by various business segments particularly from the ICT, property and hotel segment. The Group’s pre-tax profit decreased 18% from RM40 million to RM33 million mainly attributable to impairment loss on the assets of G Fish (Asia) Sdn Bhd (formerly known as Protech Yu (Asia) Sdn Bhd) and losses incurred by GTower Sdn Bhd but it was partially offset by an increase in the pharmaceutical segment and share of results of associate, IGB Corporation Berhad.

PERFORMANCE REVIEW OF OUR INVESTMENTS

IGB Corporation Berhad (“IGB”), a listed real estate conglomerate

For the financial year ended 31 December 2010, IGB Group’s revenue increased 12% to RM719 million, from RM642 million the year before. The pre-tax profit increased 25% to RM278 million from RM222 million the year before. During the year, IGB has announced the sale of The Gardens Mall in Mid Valley City to KrisAssets Holdings Berhad (“KrisAssets”), its 75% subsidiary. This will consolidate all the retail assets of Mid Valley City into one entity streamlining operations and further separating the business of IGB into development and KrisAssets into asset holding.

PRIVATE EQUITY INVESTMENTS IN MALAYSIA

The total investment in private companies in Malaysia as at 31 January 2011 was RM81 million as compared to RM83 million last year. A review of the performance of our main investee companies are as follows:

HOEPharma Holdings Sdn Bhd (“HOEPharma”), a dermatological and healthcare company

HOEPharma Group recorded revenue of RM76 million and a pre-tax profit of RM18 million for the financial year ended 31 January 2011 as compared to the year before of RM69 million and RM11 million respectively. The Malaysia’s ethical market contributed an additional RM7 million in revenue and better profitability under the new pricing structure of its current products coupled with continuous cost cutting measures taken by the HOEPharma Group.

On 7 April 2011, on behalf of the Board of Directors of Goldis, AmInvestment Bank Berhad announced that Goldis together with six individual shareholders of HOEPharma, had entered into a conditional Sale and Purchase Agreement (“SPA”) with Taisho Pharmaceutical Co., Ltd to dispose its 6,252,000 ordinary shares of RM1.00 each in HOEPharma for a cash consideration of approximately RM289.2 million subject to the price adjustment provisions as set out in the SPA.

Macro Kiosk Berhad (“Macro Kiosk”), a mobile data communications technology provider

Macro Kiosk Group’s revenue increased 39% from RM62 million to RM86 million. This was largely due to the expansion of its customer base and higher usage of Macro Kiosk’s services by existing customers both in Malaysia and other countries where Macro Kiosk is present. The Group’s pre-tax profit stayed at RM2 million as per last year despite higher revenue due to allowance for doubtful debts of RM1 million and impairment of intangible asset of RM2 million made during the year. Meanwhile, the operating profit increased to RM8 million as compared to RM5 million the year before.

Macro Lynx Sdn Bhd (“Macro Lynx”), a broadband solutions and service provider

Macro Lynx Group’s revenue increased 63% from RM8 million to RM13 million. The Group pre-tax profit increased three times from RM1 million to RM3 million. The improved performance was due to continuous effort and aggressive marketing in providing comprehensive end-to-end broadband internet solutions to new and potential customers.

G Fish (Asia) Sdn Bhd (formerly known as Protech Yu (Asia) Sdn Bhd) (“G Fish”), an aquaculture company

G Fish Group continues to incur a loss of RM14 million as compared to RM4 million a year before due to impairment loss on assets of RM10 million during the year. However, we are confident that with our continuous effort to improve production and cost cutting measures taken by the G Fish Group, it will eventually contribute to Goldis in the long term.

PRIVATE EQUITY INVESTMENTS IN CHINA

The total investment in China as at 31 January 2011 was RM61 million compared to RM65 million the previous year. A review of the performance of our main investee companies are as follows:

Crest Spring (Shanghai) Co Ltd (“Crest Spring”), a water treatment company

Revenue for Crest Spring Group increased to RM10 million from RM6 million the previous year. The Crest Spring Group pre-tax profit dropped from RM3 million to RM2 million.

Tianjin Manax Natural Fibre Thin Film Co Ltd (“Tianjin Manax”), a paper manufacturing company

Tianjin Manax’s revenue increased from RM53 million to RM61 million. However, the company continues to incur a loss of RM4 million as compared to RM8 million a year before. The losses were as a result of depreciation and amortisation of RM4 million and margin squeeze due to an increase in waste paper prices during the year.

PROPERTY INVESTMENT

GTower Sdn Bhd (“GTower”), the first green commercial building in Malaysia

During the year, GTower Group started operations and recorded revenue of RM23 million. As this was its first year of operations, the Group incurred a loss of RM22 million. The losses were mainly due to depreciation and amortisation of RM9 million and interest of RM11 million.

Being the first year of operation, we have achieved occupancy rate of 63% in offices and an average of 30% in the hotel.

OUR PEOPLE

For the financial year under review, the number of employees for the Group has increased to 977 from 842 last year. The Group is fortunate that we have teams of hardworking and dedicated employees who have met the challenges with courage and creativity. We will continue to recruit good talent to build capacity in preparation for growth in the future.

PROSPECTS

There is a time to sow and there is a time to reap. There is a time to invest and a time to divest. The next few years will see us divesting our earlier investments and putting funds aside for future investments. The gearing ratio of the Group remains healthy at 27% for the financial year ended 31 January 2011.

ACKNOWLEDGEMENTS AND APPRECIATION

I wish to take this opportunity to express my sincere gratitude to the members of the Board of Directors for their professionalism and dedicated contribution to steer the Group towards excellence. My special thanks also goes to the management team and staff members for their continued contributions and commitment towards the Group. Finally, I also wish to extend our thanks to our valuable shareholders, customers, business associates, investors as well as banking institutions and relevant authorities for their continued support, guidance and confidence in Goldis Group.

TAN LEI CHENG (MS)
Chairman & CEO