RAM Annual Report 2007

The RAM group of companies works towards a common goal – to provide
direction to our stakeholders in all that we undertake.
PROVIDING Our challenge – is about constantly seeking innovative and refreshing
DIRECTION
ways to generate world-class services to meet the discerning needs of our
stakeholders and to prepare them for challenges in the future.
Providing Direction is therefore about endless possibilities, having the

right composition and strength in diversity, and leading through innovation.
CORPORATE
INFORMATION
CONTENTS BOARD OF DIRECTORS
YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob
(Chairman)
YBhg Datuk Zainal Aznam bin Mohd Yusof
(Director)
Notice of Annual General Meeting... >page 03 Subsidiaries of RAM... >page 22 YBhg Dato' Syed Md. Amin bin Syed Jan Aljeffri
(Director)
Board of Directors... >page 05 Highlights of 2007... >page 23 YBhg Datuk Rajandram s/o Chellappah
(Executive Deputy Chairman)
Rating Committee... >page 06 Products & Services... >page 24
Mr Suresh Menon
(Executive Director)
Board of Directors of Subsidiaries... >page 06 Training Calendar... >page 25
Mr Wong Fook Wah
(Executive Director)
Our People... >page 07 Financial Statement 2007... >page 29
REGISTERED OFFICE
Operational Review for RAM Holdings... >page 18 Proxy Form... No. 19-G, The Boulevard
Mid Valley City
Operational Review for RAM Ratings... >page 20 Lingkaran Syed Putra
59200 Kuala Lumpur
Tel: 603 7628 1000
Fax: 603 7628 1700
Message from the Chairman COMPANY NUMBER

We believe that a transparent and competitive rating 208095-U
industry will ultimately benefit all... >more on page 11 COMPANY SECRETARY
Nazela Ahmad
From the Desk of the Executive Deputy Chairman AUDITORS

Elsewhere, RAM has also been invited to establish its PricewaterhouseCoopers
Level 10, 1 Sentral
footprint in other emerging markets such as... >more on page 17 Jalan Travers
Kuala Lumpur Sentral
P.O Box 10192
50706 Kuala Lumpur
03 RAM ANNUAL REPORT 2007
pg >
NOTICE IS HEREBY GIVEN that the Seventeenth Annual General 8. To transact any other ordinary business of the Company for which due
Meeting of RAM Holdings Berhad (formerly known as Rating Agency notice has been given.
Malaysia Berhad) will be held at the Kuala Lumpur Hilton Hotel,
Jalan Stesen Sentral, Kuala Lumpur, Malaysia on Thursday, 8
RAM HOLDINGS BERHAD May 2008 at 11.00 a.m. for the following purposes: By Order of the Board
NOTICE OF 1. To receive and adopt the Directors’ Report and the Audited Financial
Statements for the year ended 31 December 2007, and the Auditors’
Nazela Ahmad
Company Secretary
ANNUAL
Report thereon.
(Resolution 1) Kuala Lumpur
17 April 2008
2. To approve the payment of a first and final dividend of 7% (7 sen per
GENERAL
ordinary share), less 26% income tax. Note:
A member of the Company entitled to attend and vote at this meeting may appoint a proxy
to attend and vote in his stead. A proxy need not be a member of the Company. A proxy form
The dividend, if approved, will be paid on Friday, 6 June 2008 to holders
is enclosed herewith and should be deposited at the Registered Office of the Company not
MEETING
of ordinary shares registered in the Company’s Register of Members as at less than 48 hours before the time fixed for the meeting.
Thursday, 8 May 2008 in proportion to their respective shareholding in the
Company.
(Resolution 2)
3. To re-elect as Director, YBhg Datuk Zainal Aznam bin Mohd Yusof who
retires by rotation pursuant to Article 19.13 of the Company’s Articles of
Association.
(Resolution 3)
4. To re-appoint as Director, YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob
who retires pursuant to Article 19.10 of the Company’s Articles of Association.
(Resolution 4)
5. To re-appoint as Director, YBhg Dato’ Syed Md Amin bin Syed Jan Aljeffri
who retires pursuant to Article 19.10 of the Company’s Articles of Association.
(Resolution 5)
6. To approve the fees of RM73,770 to the Non-Executive Directors for the

year ended 31 December 2007.
(Resolution 6)
7. To re-appoint PricewaterhouseCoopers as Auditors and to authorise the

Directors to fix their remuneration.
(Resolution 7)
RAM ANNUAL REPORT 2007
> pg 04
DENGAN INI DIMAKLUMKAN bahawa Mesyuarat Agung Tahunan 7. Untuk melantik semula PricewaterhouseCoopers sebagai Juruaudit dan
RAM Holdings Berhad (dahulunya dikenali sebagai Rating Agency Malaysia untuk memberi kuasa kepada para Pengarah menetapkan bayaran mereka.
Berhad) yang Ketujuh belas akan diadakan di Hotel Hilton Kuala (Resolusi 7)
Lumpur, Jalan Stesen Sentral, Kuala Lumpur, Malaysia pada hari
Khamis, 8 Mei 2008 jam 11.00 pagi untuk tujuan-tujuan berikut: 8. Untuk menjalankan sebarang urusan biasa Syarikat dimana notis yang
sewajarnya telah diberikan.
1. Untuk menerima dan meluluskan Laporan Pengarah dan Penyata
Kewangan yang telah diaudit bagi tahun kewangan berakhir 31 Disember
2007, serta Laporan Juruaudit mengenainya. Dengan Perintah Lembaga Pengarah
(Resolusi 1)
Nazela Ahmad
2. Untuk meluluskan bayaran dividen pertama dan terakhir sebanyak 7% Setiausaha Syarikat
(7 sen sesaham biasa), ditolak cukai pendapatan sebanyak 26%.
Kuala Lumpur
Dividen tersebut, jika diluluskan, akan dibayar pada hari Jumaat, 6 Jun 17 April 2008
2008 kepada pemegang-pemegang saham biasa yang berdaftar di dalam
Buku Daftar Ahli Syarikat pada hari Khamis, 8 Mei 2008 mengikut pegangan Nota:
saham mereka masing-masing dalam Syarikat. Seseorang ahli Syarikat yang berhak hadir dan mengundi pada mesyuarat ini boleh
melantik seorang proksi untuk hadir dan mengundi bagi pihaknya. Seorang proksi tidak
(Resolusi 2) semestinya seorang ahli Syarikat. Borang proksi ada disertakan bersama-sama ini dan
hendaklah diserahkan kepada Pejabat Berdaftar Syarikat tidak kurang dari 48 jam sebelum
3. Untuk memilih semula sebagai Pengarah, YBhg Datuk Zainal Aznam bin waktu yang ditetapkan untuk bermesyuarat.
Mohd Yusof yang bersara mengikut giliran menurut Artikel 19.13 Tataurusan
NOTIS
Penubuhan Syarikat..
(Resolusi 3)
MESYUARAT
4. Untuk melantik semula sebagai Pengarah, YBhg Tan Sri Dato’ Seri Siti
Norma binti Yaakob yang bersara menurut Artikel 19.10 Tataurusan
Penubuhan Syarikat.
AGUNG
(Resolusi 4)
5. Untuk melantik semula sebagai Pengarah, YBhg Dato’ Syed Md Amin
TAHUNAN
bin Syed Jan Aljeffri yang bersara menurut Artikel 19.10 Tataurusan
Penubuhan Syarikat.
(Resolusi 5)
6. Untuk meluluskan yuran sebanyak RM 73,770 kepada Pengarah Bukan

RAM HOLDINGS BERHAD -Eksekutif bagi tahun berakhir 31 Disember 2007.
(Resolusi 6)
pg >
The Right Composition is about constantly inventing and

innovating ourselves to move up the value chain; our stakeholders
are always involved in the company’s moves and key decisions.
>> From left:
Mr Suresh Menon YBhg Datuk Rajandram YBhg Tan Sri Dato’ Seri YBhg Dato’ Syed Md. Amin Mr Wong Fook Wah YBhg Datuk Zainal Aznam
Executive Director s/o Chellappah Siti Norma binti Yaakob bin Syed Jan Aljeffri Executive Director bin Mohd Yusof
Executive Deputy Chairman Chairman
> pg 06
RATING
COMMITTEE
BOARD OF DIRECTORS C R E AT I N G VA LU E
RAM Rating RAM Consultancy RAM Ratings

Services Berhad Services Sdn Bhd (Lanka) Limited
YBhg Tan Sri Dato’ Seri YBhg Datuk Zainal Aznam YBhg Tan Sri Dato’ Seri
Siti Norma binti Yaakob bin Mohd Yusof Siti Norma binti Yaakob
YBhg Datuk Rajandram YBhg Dato’ Syed Md. Amin YBhg Datuk Rajandram
s/o Chellappah bin Syed Jan Aljeffri s/o Chellappah YBhg Datuk Rajandram
s/o Chellappah
Mr Wong Fook Wah Dr Yeah Kim Leng YBhg Datuk Zainal Aznam
bin Mohd Yusof
Mr Chris Lee Wai Kit
(CEO) Mr Suresh Menon
Dr Yeah Kim Leng
Mr Suresh Menon Mr Wong Fook Wah

pg >
OUR PEOPLE
Strength in diversity is about transforming the organisation
and focusing on direction and vision, strategic thinking and planning,
setting objectives and targets, meeting goals and performing a task
to the desired standard.
FORWARD THINKING
>>
Datuk C Rajandram Suresh Menon Dr Yeah Kim Leng

Executive Deputy Chairman Executive Director Chief Economist
Nazela Ahmad Teow Wai Yen Padthma Subbiah

General Manager, Group Accounts General Manager, General Manager, Group Corporate
& Administration Group IT Support Communications & Training
> pg 08
>>
Esther Lai Chris Lee Wai Kit

Head, Investment Chief Executive Officer
& Strategic Development
Joyce Chen Awang Za'aba Julie Ng
Group Editor Head, Strategic Business Consulting Head, Risk Management
pg >
>>
Wong Fook Wah Liza Mohd Noor Chong Kwee Siong

Managing Director/Chief Executive Officer Chief Operating Officer General Manager, Structured Finance Ratings
Real Estate & Construction Ratings
Foo Su Yin Denise Thean Khoo Boo Hock
General Manager, Institutional & Public Finance Ratings General Manager Head, Infrastructure &
Industrial Products & Services Ratings (on external assignment) Utilities Ratings
Consumer Products & Service Ratings
> pg 10
Promod Dass Siew Suet Ming Hafiza Abdul Rashid

Head, Financial Institutions & Head, Structured Finance Ratings Head, Consumer Products &
State Government Ratings Services Ratings
Kevin Lim Shahina Azura Halip Chin Jo Sie
Head, Industrial Products & Head, Real Estate & Client Relationship Management
Services Ratings Construction Ratings
MESSAGE FROM THE
CHAIRMAN
EVOLU TION
The possibilities are endless - it is not

just about lifting the bottom line. It requires
continuous improvement, monitoring and
fine-tuning of approaches to meet the needs
of consumers.
> pg 12
Given RAM’s sterling track record vis-ă-vis financial performance and its Contrary to the trends in developed financial markets, the Malaysian primary
unparallelled contributions to the development of the Malaysian corporate bond market hit another record in 2007, as gross bond issuance vaulted 117%
bond market since its incorporation in 1990, I am deeply honoured to to RM66.5 billion (2006: RM30.7 billion). A combination of robust economic
assume the chairmanship of the company from my predecessor, YBhg Tan Sri growth, accommodative market conditions and strong private-investment
Dato’ Dr Abdul Khalid bin Sahan. Together financing needs had helped propel bond
with several long-serving non-executive and “On behalf of RAM Holdings Berhad’s issuance to this unequalled height.
independent directors who retired in May
2007, Tan Sri Khalid had set a very high per- (“RAM”) Board of Directors, I am pleased On a broader note, the Malaysian economy
formance benchmark that will be difficult to to present our 17th annual report for the expanded by 6.3% in 2007; the growth
emulate. Nonetheless, I am confident that momentum of private investment accelerated
the company’s strong foundation will en- financial year ended 31 December 2007.” to 12.3% (2006: 7.0%), with positive spillover
able the new Board members to rise to the effects on the bond market as more firms from
challenges posed by the constantly changing and increasingly competitive assorted industries sought external debt-financing to expand capacity, refinance
environment. existing debts and acquire new businesses. According to Bank Negara Malaysia,
proceeds from 48% of the new corporate bond issues in 2007 had been
On this note of appreciation, I am proud to announce that RAM recorded its channelled towards new investments, with another 34% used to refinance debts
16th consecutive year of profitability in 2007; we achieved a pre-tax profit of and 12% for mergers and acquisitions (“M&As”).
RM11.45 million, on the back of RM38.22 million of revenue. Although the
adage a rising tide lifts all boats - as mirrored by the domestic economy’s strong RAM Rating Services Berhad ("RAM Ratings") completed 121 new ratings
performance last year - may aptly describe our performance, the unprecedented in 2007, with a total proposed gross issuance value of RM134.2 billion; this
volume of debt issues in 2007 highlights the broadening appeal of the ringgit was 159% higher than the previous year’s RM49.1 billion. Excluding Cagamas
bond market to both issuers and investors. More importantly, it reflects market Berhad, RAM Ratings rated RM67.2 billion of proposed corporate debt issues
participants’ growing confidence in the integrity, efficacy and soundness of our in 2007. The significant advancement in bond issuance can be attributable to
policies and regulatory framework, institutional capacity and infrastructure, as Malaysia's still-low and stable interest rates, which had encouraged private
well as intermediaries that have contributed to the smooth functioning of the firms to tap the ringgit bond market with a view to financing large-scale, long-
Malaysian corporate bond market. term projects. Of equal importance had been the appeal of Islamic bonds and
the attractiveness of the Malaysian market to global players vis-à-vis engaging
in Islamic-based financing and investment activities. Last but not least, corporates
SURGE IN PRIMARY MARKET ACTIVITIES had also turned to the domestic bond market to take advantage of the ample
Last year was a tumultuous one for the global financial markets, rocked as they liquidity, raising sizeable funds for M&As and even substituting conventional
were by the contagion effects of the United States’ (“US”) sub-prime credit instruments with Islamic ones in trying to meet investors' evolving demands.
crisis and housing-market bubble that had started unraveling in 3Q 2007.
Despite such unprecedented events in the world’s most developed capital
markets, the Malaysian financial system – the banking, equity and bond CHALLENGES AHEAD
markets - proved resilient against these external shocks, particularly the ensuing A potentially far-reaching implication of the American sub-prime crisis and
global credit crunch and re-pricing of credit risk that enveloped the American consequent global credit tightening is closer scrutiny by regulators on the
and certain European markets in the final months of 2007.
pg >
roles and activities of internationally renowned rating agencies. The authorities RAM, members of the Rating Committee and the other members of the
concerned would thus delve deeper into these agencies' contributions to the present Board of Directors.
explosive growth in the issuance of collaterised bond obligations, credit
derivatives and other synthetic credit-based investment products originating I would also like to convey our appreciation to the regulatory authorities for
from the US. their strong support and tireless efforts in strengthening the domestic rating
industry and their ongoing interaction with market participants, including
Although the Malaysian rating industry has not been significantly affected by rating agencies, to further promote the broadening and deepening of the
this turn of events, we welcome greater interaction with the regulators on Malaysian bond market.
such issues. It is hoped that closer communication will, in turn, help foster
measures that will further enhance market transparency, integrity and efficiency. Finally, I would like to convey the Board’s appreciation to all the market
We believe that a transparent and competitive rating industry will ultimately participants who have consistently placed their confidence in RAM’s ratings
benefit all market participants, be they issuers, investors, intermediaries or and given their full support to our continuing endeavours to enhance the
regulators - all of whom have a stake in the sustainability and strength of the accuracy, timeliness and overall quality of our rating, research, training and
domestic bond market. A healthy and vibrant bond market will lead to greater advisory services.
financing efficiency and resilience against external shocks.
Given our strong underlying fundamentals such as a high savings rate, a large TAN SRI DATO’ SERI SITI NORMA BINTI YAAKOB
current-account surplus, the robust banking system and bond market, as well Chairman
as a diversified and balanced economic structure, Malaysia is expected to be March 2008
able to withstand a deceleration in either the American or global economy –
a looming spectre in 2008. With the development of the Asian region increasingly
driven by rising trade and investment flows with the Chinese, Indian and Middle
Eastern economies, Malaysia’s growth momentum and prospects remain
upbeat. The Government’s projection of 5%-6% GDP growth for 2008 is
within our expectations. This would be even more laudable amid the current
adverse external environment. We are cautiously optimistic that large-scale
project-financing and longer-term corporate investments in Malaysia will
continue to be based on the “through-the-cycle” approach. We are therefore
hopeful of a sustained level of origination, rating, underwriting and placement
activities for the domestic bond market in 2008.
ACKNOWLEDGEMENT
Having acknowledged the vast contributions of the previous Chairman and
directors who retired in 2007, I wish to reiterate that RAM’s success would not
have been possible without the dedication and commitment of all the staff of
> pg 14
"Bagi pihak Lembaga Pengarah RAM Holdings Berhad pasaran modal yang paling maju di dunia dikejut dengan peristiwa yang
tidak pernah berlaku dahulu, sistem kewangan Malaysia – perbankan, pasaran
(“RAM”), saya dengan sukacitanya membentangkan modal dan bon – nyata berupaya mengatasi kejutan luaran ini, terutamanya
laporan tahunan kami yang ke-17 bagi tahun berakhir berlaku kesempitan kredit global berikutnya dan penilaian semula risiko
kredit yang menyelubungi pasaran Amerika dan sebahagian Eropah pada
31 Disember 2007."
bulan-bulan terakhir 2007.
Berlawanan dengan trend pasaran kewangan maju, pasaran bon utama

Memandangkan rekod prestasi RAM yang unggul melalui pencapaian
Malaysia mencatat rekod baru pada 2007, yang mana jumlah terbitan bon
kewangan dan sumbangan kepada pembangunan pasaran bon korporat
kasar melonjak 117% kepada RM66.5 bilion (2006: RM30.7 bilion).
Malaysia sejak perbadanannya pada 1990, saya dengan penuh takzim
Kombinasi pertumbuhan ekonomi yang teguh, keadaan pasaran yang
menerima jawatan pengerusi syarikat daripada penjawat terdahulu, YBhg
mudah berurusan dan keperluan pembiayaan pelaburan peribadi yang
Tan Sri Dato’ Dr Abdul Khalid bin Sahan. Bersama dengan beberapa pengarah
kukuh turut membantu menggerakkan penerbitan bon kepada jumlah yang
bukan eksekutif dan bebas yang lama berkhidmat dan telah bersara pada Mei
tertinggi.
2007, Tan Sri Khalid telah menjana satu tanda aras pencapaian yang sangat
tinggi dan sukar ditandingi. Bagaimanapun, saya yakin bahawa asas syarikat
PERUTUSAN DARI
Secara keseluruhannya, ekonomi Malaysia berkembang sebanyak 6.3% pada
yang kukuh membolehkan para ahli lembaga pengarah yang baru berupaya
2007; momentum pertumbuhan pelaburan swasta memecut kepada 12.3%
menghadapi cabaran persekitaran yang sentiasa berubah dan semakin
(2006: 7.0%), membawa kesan limpahan yang positif kepada pasaran bon
PENGERUSI
meningkat serta lebih kompetitif.
yang mana terdapat lebih banyak firma daripada pelbagai industri mencari
pembiayaan hutang luaran untuk memperkembangkan kapasiti, membiayai
Bersandarkan penghargaan ini, saya berbesar hati mengumumkan pencapaian
semula hutang sedia ada dan mendapat perniagaan baru. Menurut Bank Negara
RAM pada 2007 mencatat keuntungan berturutan selama 16 tahun; kami
Malaysia, perolehan daripada 48% terbitan bon korporat baru bagi 2007
beroleh keuntungan sebelum cukai sebanyak RM11.45 juta, dengan jumlah
disalurkan kepada pelaburan baru, 34% pula diguna untuk pembiayaan semula
pendapatan sebanyak RM38.22 juta. Walaupun pencapaian kami merupakan
EVOLUSI susulan dari prestasi ekonomi dalam negeri yang kukuh pada tahun lepas –
hutang dan 12% untuk penggabungan dan pengambilalihan (“M&As”).
ibarat air pasang melimpah rezeki untuk semua – jumlah terbitan hutang yang
RAM Rating Services Berhad (“RAM Ratings”) menyelesaikan 121 pengkadaran
tertinggi pada 2007 menonjolkan penerimaan meluas bagi pasaran bon ringgit
baru pada 2007, dengan jumlah nilai cadangan penerbitan kasar sebanyak
oleh para penerbit dan juga pelabur. Lebih penting lagi, ia mencerminkan
RM134.2 bilion; ini adalah 159% lebih tinggi daripada tahun sebelumnya
peningkatan keyakinan para peserta pasaran terhadap integriti, keberkesanan
yang berjumlah RM49.1 bilion. Tidak termasuk kiraan Cagamas Berhad, RAM
dan kemantapan dasar dan rangka kawalselia negara, kapasiti dan infrastruktur
Ratings mengkadar RM67.2 bilion cadangan terbitan hutang korporat pada
institusi, juga perantara yang telah menyumbang kepada perjalanan pasaran
2007. Peningkatan kemajuan dalam penerbitan bon boleh dikaitkan dengan
bon korporat Malaysia yang lancar
kadar faedah di Malaysia yang masih rendah dan stabil, ini telah meransang firma
swasta mencungkil pasaran bon ringgit untuk membiayai projek berskala besar,
bertempoh jangka panjang. Turut berperanan penting adalah pengaruh bon
PERTAMBAHAN DALAM KEGIATAN PASARAN UTAMA
Islam dan penarikan pasaran Malaysia kepada para peserta global apabila
Pada tahun lepas pasaran kewangan global mengalamai kegawatan, digegar berhadapan dengan penglibatan dalam aktiviti pembiayaan berasaskan Islam.
dengan jangkitan krisis kredit ‘sub-prime’ dan pasaran perumahan yang susut di Juga tidak kurang pentingnya adalah korporat telah berubah pilihan kepada
Amerika Syarikat (“AS”) yang mula menular pada suku ketiga 2007. Meskipun
pg >
pasaran bon dalam negeri untuk mengambil kebaikan kecairan yang mencukupi, momentum pertumbuhan dan prospek Malaysia kekal cerah. Unjuran
mendapatkan dana bernilai besar untuk M&As serta menukar instrumen kerajaan bagi pertumbuhan KNK sebanyak 5%-6% bagi tahun 2008 adalah
konvensional kepada berbentuk Islam bagi memenuhi kehendak semasa para bertepatan dengan jangkaan kami. Pencapaian prestasi sedemikian tentu sekali
pelabur. mengembirakan memandangkan persekitaran luaran semasa yang lembab.
Kami berwaspada serta berkeyakinan bahawa pembiayaan projek berskala
besar di Malaysia akan berasaskan penilaian projek yang dapat mengharungi
CABARAN MASA HADAPAN pusingan perniagaan. Oleh yang demikian, kami menaruh keyakinan pasaran
Implikasi dari krisis ‘sub-prime’ di Amerika dan susulan kesempitan kredit bon dalam negeri bagi tahun 2008 dapat terus mengekalkan tahap aktiviti
global berpotensi menjangkau lebih jauh yang mana pengawalselia akan originasi, pengkadaran, penajaan jamin dan penempatan.,
memberi penelitian yang lebih rapi terhadap peranan dan aktiviti agensi
pengkadaran antarabangsa yang terkemuka. Pihak berkuasa berkenaan tentu
PENGHARGAAN
akan menyelidiki dengan lebih rapi peranan agensi-agensi tersebut terhadap
pertumbuhan mendadak dalam penerbitan obligasi bon sandaran, derivatif Dengan merakamkan penghargaan ke atas sumbangan luas oleh Pengerusi
kredit dan produk pelaburan berasaskan kredit buatan lain yang berasal dari dan para pengarah terdahulu yang bersara pada 2007, saya ingin mengulangi
AS. bahawa kejayaan RAM tidak mungkin tercapai tanpa dedikasi dan komitmen
semua kakitangan RAM, ahli Jawatankuasa Pengkadaran dan ahli lembaga
Walaupun industri pengkadaran di Malaysia tidak menerima kesan secara pengarah kini yang lain.
teruk akibat munculnya peristiwa ini, kami menyambut baik interaksi yang
lebih rapi dengan pengawalselia berhubung isu berkenaan. Adalah diharapkan, Juga saya ingin menghulur penghargaan kepada pihak berkuasa pengawalselia
perhubungan yang lebih akrab akan disusuli dengan tindakan-tindakan yang ke atas sokongan kuat dan usaha tanpa mengenal penat mereka dalam
akan merangsang ketelusan, integriti dan kecekapan pasaran. Kami percaya memperkukuhkan industri perkadaran dalam negeri dan usaha mereka yang
bahawa industri pengkadaran yang telus dan kompetitif akan memberi manfaat berterusan mengadakan interaksi dengan peserta pasaran, termasuk agensi
kepada kesemua peserta pasaran, sama ada para pelabur, perantara atau pengkadaran, bagi menggalakkan perluasan dan penggunaan jauh lebih
pengawalselia – kesemuanya mempunyai peranan bagi mengekalkan mendalam pasaran bon Malaysia.
keutuhan dan kekuatan pasaran bon dalam negeri. Pasaran bon yang cergas
dan bersemangat boleh membawa kepada kecekapan pembiayaan dan Akhir sekali, saya ingin memberi ucapan terima kasih Lembaga Pegarah
membina keupayaan ketahanan bagi menghadapi kejutan luaran. kepada kesemua peserta pasaran yang secara konsisten memberi kepercayaan
mereka kepada pengkadaran RAM dan memberi sokongan sepenuhnya ke
Wujudnya asas ekonomi negara yang kukuh seperti kadar simpanan yang atas usaha gigih kami bagi meningkatkan ketepatan fakta dan masa, dan kualiti
tinggi, lebihan besar dalam akaun semasa, sistem perbankan dan pasaran keseluruhanya bagi perkhidmatan kami dalam pengkadaran, penyelidikan
bon yang teguh, struktur ekonomi yang kepelbagaian dan seimbang, Malaysia dan nasihat.
dijangka dapat bertahan berhadapan dengan keadaan nyahpecutan ekonomi
Amerika atau global – suasana malap bagi tahun 2008. Dengan perkembangan TAN SRI DATO' SERI SITI NORMA BINTI YAAKOB
rantau Asia yang sentiasa didorong oleh peningkatan dagangan dan aliran Pengerusi
pelaburan dengan ekonomi negara-negara Cina, India dan Timur Tengah, Mac 2008
> pg 14
RAM Lead Manager Awards Islamic 2007 RAM Lead Manager Awards 2007 RAM Awards of Distinction 2007
Issue Value Issue Value BluePrint Awards
First place First place New Structured Finance Benchmark Deal

CIMB Investment Bank Berhad CIMB Investment Bank Berhad RM600 Million Synthetic Securitisation of SME Loans
Issuer: Cagamas SME Berhad
Second place Second place
Lead Managers: Aseambankers Malaysia Berhad
AmInvestment Bank Berhad AmInvestment Bank Berhad
Citibank Berhad
Third place Third place
Aseambankers Malaysia Berhad Aseambankers Malaysia Berhad Most Innovative Deal of the Year
RM6.2 Billion Senior - & RM1.7 Billion Non-Convertible
RAM Lead Manager Awards Islamic 2007 RAM Lead Manager Awards 2007 Junior Sukuk Musyarakah
Number of Deals Number of Deals Issuer: Malakoff Corporation Berhad
Lead Manager: CIMB Investment Bank Berhad
First place First place
CIMB Investment Bank Berhad CIMB Investment Bank Berhad Outstanding Deal of the Year
RM19 Billion Senior- & RM3.02 Billion Non-Convertible Junior
Second place Second place Sukuk Musyarakah
AmInvestment Bank Berhad Aseambankers Malaysia Berhad Issuer: Binariang GSM Sdn Bhd
Aseambankers Malaysia Berhad Third place
Third place AmInvestment Bank Berhad Lead Managers for RM19 Billion Senior Sukuk Musyarakah
HSBC Amanah ABN AMRO Bank Berhad
RAM Awards of Distinction 2007 AmInvestment Bank Berhad
WHO'S
Special League Achievement Award Aseambankers Bank Berhad
RAM Awards of Distinction 2007
CIMB Investment Bank Berhad
Special Merit Awards
Kuwait Finance House (Malaysia) Berhad RHB Investment Bank Berhad
WHO IN THE
Malaysian Top Lead Manager OCBC Bank (Malaysia) Berhad
Corporate Sukuk Market RAM Awards of Distinction 2007 Lead Manager for RM3.02 Billion Non-Convertible
MALAYSIAN
CIMB Investment Bank Berhad Industry Recognition Award Junior Sukuk Musyarakah
Malaysian Top Lead Manager CIMB Investment Bank Berhad
Corporate Bond Market Aseambankers Malaysia Berhad
CIMB Investment Bank Berhad
DEBT MARKET
pg >
Leading through innovation is about

opening people's minds and changing
their mindsets to a new way of thinking
and working, which will lead to new ideas
and growth opportunities.
FROM THE DESK OF THE

EXECUTIVE DEPUTY
CHAIRMAN
> pg 18
OPERATIONAL REVIEW FOR RAM HOLDINGS RAM’s public workshops accounted for about 80% of its training revenue,
as underlined by the number of such programmes carried out in 2007. In
THE BIG PICTURE
total, almost 70 public courses were conducted within the year. Interest
On 1 July 2007, Rating Agency Malaysia Berhad (better known as “RAM”) remained strong in programmes related to the bond market, corporate
concluded its corporate reorganisation and was renamed as RAM Holdings finance and financial modelling.
Berhad (“RAM Holdings”). Our restructuring is in line with the Securities
Commission’s (“SC”) Practice Note on Recognition of Credit Rating Agencies by the Meanwhile, there was a notable increase in the number of training programmes
Securities Commission for the Purpose of Rating Bond Issues (issued on 25 January run in 2007, which led to a 40% spike in revenue for the year. This can be
2006), which requires credit-rating services to be independently operated attributed to the market’s appreciation for the superior quality of RAM’s
from a company’s other business operations. workshops as well as the financial fraternity’s growing awareness about the
importance of high-calibre training programmes.
In conjunction with the reorganisation, our credit-rating operations have
been transferred to RAM Ratings, a wholly owned subsidiary. RAM Holdings, In consonance with RAM’s commitment to providing quality, customised
meanwhile, has assumed all of RAM’s assets, liabilities, intellectual property training that fulfils our clients’ requirements, our in-house training
and patents, while maintaining our affiliation with internationally renowned programmes augmented by about 20% in 2007. Our concerted marketing efforts
Standard & Poor’s. We have also retained all the other businesses of RAM that in offering tailor-made solutions to large institutions have attracted prominent
are not related to credit rating, such as consultancy services, training and new clients such as Khazanah Nasional and the Petronas Group, which have
international ventures, not to mention our associate stake in Bondweb Malaysia outsourced some of their training requirements to RAM. In the meantime,
Sdn Bhd ("Bondweb")– the country’s first bond-pricing agency sanctioned by several in-house programmes for directors were also conducted last year. This,
the SC. to some extent, highlights that Bursa Malaysia’s drive to promote continuous
education for corporates is gradually being embraced by listed entities.
Regardless of the structural changes, the RAM Group remains firmly committed
to the same principles of quality, integrity, credibility and transparency that In 2007, RAM launched Globalisation Chapters - an annual convention that
we have been associated with since our inception in 1990. We have continued aims to encourage lively discussion of pertinent issues affecting the global
marching forward in all business spheres with even greater enthusiasm, and capital markets. The inaugural conference was held in Singapore and focused
are proud to report healthy advancements across the board. on capital controls; we had the honour of welcoming illustrious speakers such
as Professor Barry Eichengreen and Professor Joseph Stiglitz. The event was a
resounding success, with positive feedback from the participants.
OPERATIONAL REVIEW
On the whole, RAM’s training business is envisaged to continue thriving,
TRAINING ACTIVITIES
eventually becoming one of our principal components. This would in turn
True to trend, our training business started off with only a few programmes further enhance RAM’s reputation, not just in the field of credit rating, but also
conducted in the first 2 months of 2007. This had been largely due to the multiple in training and related areas, as we strive to cultivate a conducive educational
festive and holiday seasons carried over from the end of the previous year. environment on the global platform.
Nonetheless, the momentum picked up in March, with the upswing continuing
through to the end of the year.
pg >
BONDWEB MALAYSIA SDN BHD and ethics combined with local insights and perspectives. In 2008, we will signing of the MOU signals the collaboration between RAM and RFCA JSC
be organising a series of marketing programmes, media workshops, investor in developing a national rating agency for Kazakhstan. There has been
Bondweb, Malaysia’s first bond-pricing agency briefings, media interviews and sectoral reports - to raise the profile of RAM numerous dialogues between RAM and RFCA JSC to establish a platform
(“BPA”), has continued cementing its position Ratings Lanka and to enhance the market’s understanding and acceptance for technical transfer, which will ultimately lead to RAM’s rating methodologies
as the leading source of information and of bonds. and architecture being the foundation for the development of the Kazakh
valuation data for ringgit-denominated bonds. bond market.
It is currently the only registered BPA in RAM Ratings Lanka augmented its rating portfolio to more than 30 cases in
Malaysia, and meets the strict standards of the 2007, from 20 the previous year. In addition, the company had made great Elsewhere, RAM has also been invited to establish its footprint in other
SC. strides in securing new mandates from the insurance industry. RAM Ratings emerging markets such as Vietnam and Oman. We believe that the development
Lanka has also been designated an External Credit Assessment Institution of a domestic bond market in such economies will support their vast
From only 11 institutional clients a year earlier, Bondweb’s customer base had for Basel II vis-a-vis assigning ratings to corporate entities. While the agency funding requirements, especially for infrastructure development. Given
augmented to 64 as at end-2007, encompassing the biggest names in banking, currently concentrates on the finance and insurance sectors, we expect it to RAM’s contributions to the development of the Malaysian bond market, we are
asset management, mutual funds, insurance and corporates. This signals gradually establish a presence in corporate ratings. confident that we have the necessary experience that will benefit other emerging
robust demand for the bond-pricing services offered by Bondweb. Additionally, markets. While these initiatives are still at the exploratory phase, we are
Bondweb has forged alliances with overseas data providers for global delivery In tandem with RAM Ratings Lanka’s growing market presence, there has optimistic that it will not be too long before the RAM name becomes
of its services, thereby helping to promote the Malaysian bond market to a been a marked improvement in its financials. The company posted its maiden synonymous with the capital markets of countries other than Malaysia and
worldwide audience. operating profit in 2007 despite the deteriorating economic fundamentals of Sri Lanka.
Sri Lanka. Although amortisation, foreign-exchange losses and provisions had
Looking ahead, Bondweb not only intends to reinforce its position as reined in its performance, the deficit in its bottom line actually narrowed last
a specialist in bond valuation, but also aims to develop new products such year. RAM Ratings Lanka reported a net loss of Rs1.6 million in fiscal 2007, MOVING FORWARD
as the Reference Pricing Service, Bond Index, Market-Implied Rating and in contrast to Rs5.3 million for the 9-month period ended 31 December 2006.
Custom Data Sales, which will be launched throughout 2008. These products As the premier credit-rating agency in Malaysia, RAM has proven its merit
Looking ahead, RAM Ratings Lanka may require further parental support in the and expertise in the domestic market. Having played a defining and consistent
will help our clients acclimatise to the increasingly sophisticated marketplace immediate tem, amid efforts to establish its market position.
and also meet tighter regulatory requirements. role in the development of credit rating and the promotion of investor education,
we have indeed forged a strong presence in the local arena.
The cornerstone of Bondweb remains its commitment to the development of RAM’s INTERNATIONAL FOOTPRINT
its human capital, constant innovation, and transparency as well as accountability From a global viewpoint, we will seek even greater diversity by pursuing
to the market. Having proven itself as Malaysia’s premier rating agency while contributing more international opportunities and tapping the vast potential of synergistic
to the development of the domestic bond market, RAM has been invited to business realms. To this end, we will focus more energy and resources on
share its pioneering experience in developing the capital market in Kazakhstan. sharing our pioneering experience with other developing economies, especially
RAM RATINGS (LANKA) LIMITED The Kazakh bond market is currently in a similar position as the Malaysian those wishing to establish their own domestic bond markets. In response
Following the reorganisation of RAM in July 2007, Lanka Rating Agency market when credit rating had first been introduced. to invitations from such nations that have recognised the success of RAM’s
Limited – wholly owned by RAM Holdings - has been renamed as RAM business model, we have been augmenting our role in helping to advance
Ratings (Lanka) Ltd (“RAM Ratings Lanka”). This rebranding emphasises In conjunction with the above, RAM signed a Memorandum of Understanding these budding bond markets. Apart from assuming a more universal mantle,
RAM’s franchise as the most influential domestic rating agency in the ASEAN (“MOU”) with the Regional Financial Centre of Almaty Joint Stock Company our continuing efforts will also keep broadening RAM’s revenue base, thereby
region. We believe that the rebranding will enable RAM Ratings Lanka to (“RFCA JSC”) on 7 September 2007. RFCA JSC is a Kazakh company that enhancing both our franchise and shareholders’ value.
provide the Sri Lankan market with a unique blend of international standards has been established to implement projects designed to develop the regional
financial centre of Almaty, a financial hub recently set up in Kazakhstan. The
> pg 20
OPERATIONAL REVIEW FOR RAM RATINGS RATING ACTIVITIES AND MARKET POSITION 2007. The implementation of BASEL II is, without doubt, a critical turning
point for the banking industry and it is a privilege to be part of this exercise. As
In 2007, RAM Ratings completed the ratings of 121 new corporate bond
BOND MARKET REVIEW a nationally recognised ECAI, credit ratings provided by RAM Ratings can be
programmes, with an aggregate gross issuance value of RM134.22 billion.
used to determine the risk weights for credit exposures of banking institutions.
The domestic bond market demonstrated resilience in 2007, amid market Our 2007 rating portfolio includes some of the market’s larger bond issuers,
On a related note, it was also gratifying to note that BNM’s rating-mapping
volatility and turbulence arising from external economic factors and global such as Cagamas MBS Berhad, Projek Lebuhraya Utara-Selatan Berhad
process for all domestic rating agencies had partly been based on data from our
financial chaos. The Malaysian market’s sturdiness had been partly due to (more commonly known as PLUS), Malakoff Corporation Berhad (previously
regular default studies. Indeed, this is a compliment to our proven track record
our strong macroeconomic fundamentals, continued economic expansion known as Nucleus Avenue (M) Berhad), Binariang GSM Sdn Bhd, Astro All
for quality, dependable and timely credit-risk assessments.
supported by sustained private-sector-led growth, ample domestic liquidity, and Asia Networks plc, HSBC Bank Malaysia Berhad and RHB Bank Berhad. It
relatively low and stable interest rates. Market confidence had been broadly is heartening to note that RAM Ratings has remained the service provider of
sustained given the anticipation of several projects pursuant to the Ninth choice for prominent financial institutions, corporations and Government-
CLIENT RELATIONSHIP AND CORPORATE BRANDING
Malaysia Plan (“9MP”) and the development of various economic corridors. linked companies, and for transactions that are not only sizeable but are also
Announcements of these development plans had been supplemented by perceived as innovations in the bond and sukuk markets. Meanwhile, RAM RAM Ratings has continued expending considerable efforts into building
more relaxed guidelines on foreigners’ property purchases, the exemption Ratings had completed the review of 326 bond issues and the ratings of 37 our reputation and influence in the credit market. In addition to our annual
of the real property gains tax, and further liberalisation of capital-account financial institutions as at end-2007. signature events – the RAM League Awards and Rest & Relax with RAM – we
transactions as well as the Government’s promise of a faster approval process. have hosted several dialogue sessions with local investment banks, corporates,
The issued bonds within RAM Ratings’ universe summed up to RM49.34 billion foreign investment delegates and study groups, as well as discourses with
Reflecting the optimistic local sentiments, the Malaysian corporate bond in 2007. These constituted about 80% of the total rated ringgit-denominated investors. We have also taken part as speakers at high-level conferences.
market remained active in 2007. Based on our database, RM61.52 billion corporate bonds issued as at end-2007, which grossed RM61.52 billion
(2006: RM36.54 billion) of corporate debt papers (excluding unrated and self- (excluding unrated and self-managed bond issues). In the meantime, we also At the same time, we have maintained our emphasis on the Islamic finance
managed bonds) were issued - the highest quantum raised from the bond topped the Malaysian sukuk market with a 90% share in 2007. In addition, we segment, particularly the sukuk market. In this regard, the thrust of our 2007
market to date. Sukuk issuance, in particular, surged 68% year-on-year in retained our leadership in the rating of financial institutions, with a 90%-share action plan had been to solidify our market standing in Islamic finance,
2007, hitting an all-time high with RM39.60 billion (2006: RM23.69 of this segment. Supported by this encouraging landscape, RAM Ratings posted strengthen our interface with Shariah scholars and key practitioners in the
billion) of proceeds; this accounted for 64% of the total funds raised from a record RM32.70 million of revenue in fiscal 2007. Islamic capital market, and enhance our own skill sets and knowledge. In
the Malaysian bond market. A large portion of the PDS proceeds had been 2007, our activities in this area included participation in the Sukuk Workshop:
channelled towards new investment activities as well as to finance a slew Looking ahead, RAM Ratings is set to expand, albeit at a measured pace, its
of listed companies’ privatisation exercises and leveraged buy-out schemes repertoire of rating services following its recognition as an External Credit
– the dominant theme of the Malaysian corporate scene in 2007. Assessment Institution (“ECAI”) by Bank Negara Malaysia (“BNM”) in March
pg >
Structuring Innovative Sukuk, Indonesia - organised by the Labuan Offshore Credit demand is envisaged to be fairly robust in 2008, given the projected
Financial Services Authority (or LOFSA) and Bank Indonesia (the Central private investments in the services, construction, and infrastructure- and
Bank of Indonesia); and the Islamic Finance & Investment Conference, which utilities-related sectors. Also, the anticipated rise in the number of foreign
we co-organised with Standard & Poor’s and Islamic Banking and Finance issues and ever-increasing interest in the sukuk market will remain a boon
Institute Malaysia Sdn Bhd (more commonly known as IBFIM). to the domestic bond market. This year, we expect the volume of new
corporate bonds to hit RM40 billion. Financing conditions are seen to remain
Closer to home, we have continued with the quarterly releases of the Islamic conducive in 2008, although rising inflationary pressures may lead to a slight
Finance Bulletin. The Bulletin, which remains the only home-grown publication rise at the longer end of the yield curve.
of its kind, continues to enjoy the market’s support. Apart from our own
research papers that cover various topics from the perspective of Islamic Operationally, we expect our key challenges to manifest in the form of
ratings, the Islamic Finance Bulletin also incorporates articles on Islamic constant changes arising from global macroeconomic factors, the interlocking
finance from third parties - to enhance the value of its contents. of the equity, banking and bond markets and the vicious-cycle impact they
may have on the overall creditworthiness of corporates, banks and consumers.
Perhaps what may be considered as signs of our growing repute in this fast- Hence, keeping vigilant, maintaining close surveillance and timely rating
expanding market segment is the fact that we are singled out by national and actions will remain the order of the day.
international organisations, including those from the Gulf States and East
Asian countries, to provide high-level commentaries and technical expertise Business-wise, we will continue to face increasing competitive pressure. Less
in the area of sukuk ratings. discerning investors who either cannot or choose not to appreciate the
differences in the quality of credit opinions, rampant rating shopping by
bond issuers and unremitting price-cutting will keep testing us. Furthermore,
OUTLOOK AND CHALLENGES the risk-averse attitude that is prevalent among institutional investors and
We envisage 2008 to be a challenging year for both Malaysia and the global the consequent narrowing of the domestic bond market’s credit spectrum
economy, against the backdrop of a decelerating American economy. The will remain constraints against growth.
importance of domestic demand and intra-regional trade, therefore, becomes
a central theme in supporting the domestic economy this year. On the home In view of the continually morphing environment and mounting competition,
front, the probable pick-up in the implementation of 9MP projects and the we cannot underestimate the challenges ahead. To preserve our relevance
various development corridors is envisaged to underscore domestic demand and influence in the credit market, however, we remain firmly committed
and partially shield our economy from the anticipated global slowdown. We to not just the company’s growth and reputation, but also that of the rating
have maintained our GDP growth forecast for Malaysia at 5.9% in 2008, profession and to strengthening our branding. We plan to achieve this by
followed by 5.8% in 2009. upholding our core values of independence, credibility and integrity – 3
fundamental principles that have always shaped the way we conduct our
business and earned us the market’s trust and confidence.
> pg 22
RAM RATING SERVICES BERHAD RAM CONSULTANCY SERVICES SDN BHD RAM RATINGS (LANKA) LIMITED
RAM Rating Services Berhad (“RAM Ratings”) is Malaysia’s premier credit- RAM Consultancy Services Sdn Bhd (“RAM Consultancy”) is a wholly Wholly owned by RAM Holdings Berhad, RAM Ratings (Lanka) Limited
rating agency. Wholly owned by RAM Holdings Berhad, it was recognised as owned subsidiary of RAM Holdings Berhad. Established in 2000, RAM (“RAM Ratings Lanka”) is an independent establishment–with no affiliation
one of the top domestic rating agencies in the region by the Asian Development Consultancy has carved a reputation in risk management, strategic business with any regulator or organisation in Sri Lanka.
Bank as early as April 1997. consultancy and project-advisory services.
RAM Ratings Lanka’s operations are based on the same principles as its parent
Since its inception in 1990, RAM Ratings has played an instrumental role in RAM Consultancy helps companies navigate through the complex and rapidly company. It is fully committed to providing accurate, independent and timely
guiding corporations, financial institutions and investors towards the right evolving financial landscape. Through in-depth research and assessment, rating opinions, based on the most stringent codes of ethics endorsed by the
decisions by providing rating services that are objective, independent and potential risks are identified and opportunities are unlocked to help power International Organisation of Securities Commissions.
accurate. up its clients’ businesses.
Positioned in a nascent bond market, RAM Ratings Lanka is poised to take
As a result, RAM Ratings has become a trusted name in the financial market The team behind RAM Consultancy consists of credit and financial analysts on the role that RAM had assumed in the early 1990s. It is equally dedicated
and investment fraternity. Its resume includes more than two-thirds of the rated as well as corporate-advisory specialists who are dedicated to managing risk, to the growth of the capital market as well as investor education, as a means of
issues in the Malaysian corporate bond market and also the most number of maximising growth and creating value for its clients. They specialise in developing the bond market in Sri Lanka.
financial institution ratings. In addition, the ratings and credit opinions issued delivering innovative business ideas and solutions that are backed by sound
by RAM Ratings are habitually used as benchmarks and points of reference by experience, solid research capabilities and objective assessment. Backed by the vast collective experience of the RAM Group, RAM Ratings
capital-market participants, particularly in the banking and bond markets. Lanka has been steadily gaining recognition for its independent and balanced
views among many of the most influential investors, corporates and financial
RAM Ratings’ main areas of specialisation are sukuk ratings, conventional institutions in Sri Lanka. In fact, RAM Ratings Lanka is accountable for more
corporate debt ratings, financial institutions’ ratings, claims-paying-ability than two-thirds of the finance and insurance companies in Sri Lanka, and has
ratings, mortgage-backed and asset-backed securities’ ratings, and project- rated corporates, specialised banks, merchant banks and leasing companies.
finance ratings.
Together with its parent’s Malaysian experience and its own local insights,
RAM Ratings Lanka provides a unique blend of efficiency, international
standards and ethics as well as homegrown perspective in its rating actions.
SUBSIDIARIES
pg >
>> JANUARY >> MAY >> SEPTEMBER

> RAM wins award in Best Islamic Banks Poll 2006 > RAM's Annual General Meeting > Signing of the Memorandum of Understanding with Regional Financial
> RAM releases Property Evaluation Criteria Paper for Hotels and Retail Malls Centre of Almaty Joint Stock Company (RFCA JSC) to set up a credit
>> FEBRUARY rating agency in Kazakhstan
> "Cutting Carbon to Increase Profits Conference" organised on behalf of the >> JUNE > RAM Ratings rates domestic market's first Bank - Originated Residential
British High Commission > RAM participates in LOFSA's Sukuk Workshop in Jakarta Mortgage-Backed Securities
> RAM publishes Rating Methodology on Equity Credit for Corporate Hybrid > RAM hosts delegation from Kazakhstan > RAM Ratings publishes Methodology for Rating Malaysian Residential
Securities Mortgage - Backed Securities
> RAM Ratings' presentation at the Seminar on Usage of Credit Rating for >> JULY > RAM releases Malaysia's Economic Outlook : Review and Update
Cross Border Investment, Bangkok, organised by Nomura Research Institute > Restructuring of Rating Agency Malaysia Berhad and establishment of RAM
Holdings Berhad & RAM Rating Services Berhad as a new subsidiary >> OCTOBER
>> MARCH > Unveiling of the new RAM logo and the architecture of RAM Holdings > RAM hosts delegation from the Vietnam
> Seminar on Managing Credit Risk and the Impact of Basel II on Banks and SMEs > Islamic Finance & Investment Conference organised jointly with Banks' Association
by Professor Edward Altman, New York University Standard & Poor's and IBFIM
> CEO Circle Talk by Professor Edward Altman on "Credit Risk in a Benign
Environment: Don't Let Down Your Guard"
>> HIGHLIGHTS OF ‘07

> Participated in the Exhibition on Global Islamic Finance >> AUGUST >> NOVEMBER
Forum organised by Bank Negara Malaysia > "Globalisation Chapters: Conference on Free Capital Flows - > RAM Economic Series 1: Looking Through the Cycle at Structural Issues
> RAM publishes Guide on Analytical Adjustments to What's in store for Asia?" held in Singapore and Risks in Malaysia
Financial Statements > CEO Circle Talk on “Decoupling the Train? Spillovers and Cycles in > RAM's R & R at Hilton KL Sentral
the Global Economy” by Dr Ayhan Kose, IMF.
>> APRIL > The RAM Bond School held in Tanjung Rhu Resort, Langkawi >> DECEMBER
> 4th RAM League Awards at Hilton KL Sentral > RAM hosts a delegation from the Egypt Financial Services > Appointment of YBhg Tan Sri Dato' Seri Siti Norma Yaakob as the new Chairman of
> Investor Briefing at Hilton KL Sentral > RAM participates in the Equity Advisory Group Malaysia Task Force RAM Holdings Berhad & YBhg Datuk Zainal Aznam Yusof and YBhg Dato'
>RAM enters into Technical Agreement with CSRL of Pakistan Meeting for Institute of International Finance: “Corporate Governance in Syed Amin Aljeffri as new Directors to the Board of RAM Holdings
> RAM publishes the 2007 Banking Bulletin Malaysia - An Investor Perspective”, published in August 2007. > RAM Economic Series 2: Financial and Banking Crises, Contagion Effects and
> RAM publishes the 2006 Corporate Default & Rating Transition Study Implications for Economic Forecasting & Credit Analysis
> pg 24
1 Rating Services 2 Training Services 3 Products

> Corporate Credit Ratings > Public Programmes / Workshops > Rating Rationale
> Corporate Debt Ratings > Conferences > Bond Newsletter
> Structured Finance Ratings > CEP seminars > Rating Summary
> Project Finance Ratings > Customised Training Programmes > Quarterly Commentary
> Financial Institution Ratings > Credit Commentary
> Public Finance Ratings > Corporate Default Study
> Sukuk Ratings > CreditPulse
> Claims Paying Ability Ratings > Banking Bulletin
> Islamic Finance Bulletin
> Rating Criteria & Methodology
PRODUCTS &
SERVICES
TRAINING CALENDAR
pg >
WHERE KNOWLEDGE COMES ALIVE
Proposed Course Level SIDC CPE Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Tick for
Points Brochure
CAPITAL MARKETS
Yield Curve Analysis 1 10 14 - 16
Malaysian Capital Market: A Primer for Investment Bankers 1 10 21 - 22 23 - 24
How Bankers or Arrangers Secure Mandates in The 1 10 18 - 20 28 - 30
Malaysian Bond Market
REITs - All You Ever Wanted to Know 1 10 5-7 9 - 11 22 - 24
Capital Adequacy Requirement: The Impact of Basel II 1 10 27 - 28 28 - 29 13 - 14
Introduction to Capital Markets for Lawyers 1 17
How Issuers Get a Deal Done in The Malaysian Bond Market: 1 10 28 - 30 11 - 13
An Issuer's Perspective
RAM Training Calendar 2008

Hedging Techniques & Strategies: Integrating Swaps into
Structured Finance - Application from a Corporate's Perspective 1 10 21 - 23 20 - 22
Convertible Debt Securities: Value & Applications 2 10 17 - 18
Bond Trading, Hedging & Analysis 2 10 3-5
Making Money from Bond Futures and Repos:
Arbitrage & Relative Value Trading 2 10 6-7
The Mechanics of Bond & Fixed Income Markets 2 10 31 - 3 19 - 22 17 - 20
Interest Rate Swaps Pricing & Hedging (with Exotic Swaps) 2 10 21 - 23
Asset & Liability Management 2 26 - 27
Bond & Yield Curve Modelling Using Excel 2 10 11 - 13
Interest Rate Risk Management 2 10 23 - 25
Modelling Risk for Interest Rate Securities Using Excel 3 10 28 - 30
DERIVATIVE MARKETS
Understanding Derivatives - Products and Applications 1 10 21 - 23 3-5
Equity Derivatives 2 10 10 - 11
Option Trading, Analysis & Risk Management Strategies 2 10 8 - 10 1-3
Accounting for Derivatives Including IAS 2 2-3
Level: 1 - Introductory / Base Course 2 - Intermediate 3 - Advanced

> pg 20
www.ram.com.my
Points Brochure
FOREX Options & Derivatives Pricing, Risk Management
and Applications 2 10 16 - 18
Advanced Option Market Making & Risk Management 3 21 - 23

STRUCTURED FINANCE & PRODUCTS
Practical Asset-Backed Securitisation 1 10 3-4 14 -15 20 - 21
PDS, ABS & Synthetic Structures: Application to the
Malaysian Market 1 10 12 - 14 15 -17
Structured Products: Sales, Value & Applications 2 10 14 - 16

Structured Products: Trading, Pricing & Risk Management 2 10 23 - 25 20 - 22
Securitisation - Advanced Modelling 3 14 - 15

CREDIT
Corporate Credit Analysis 1 10 20 - 22 21 - 23
The Art of Writing Credit Reports 1 7-8 29 - 30
Credit Modelling 1 10 - 12
CORPORATE FINANCE
Valuation Analytics & Methodologies 1 10 29 - 31 25 - 27
Corporate Finance Engineering 1 10 17 - 19 8 - 10
Equity Valuation 1 10 21 - 23 3-5
Driving Successful Mergers and Acquisitions 1 10 9 - 11 7-9
Valuation and Modelling Techniques for Corporates 2 10 15 - 16
RISK MANAGEMENT
Introduction to Risk Management 1 10 25 - 26 22 - 23
Treasury Risk Management 2 10 14
Liquidity Risk Management 2 28 - 29
Market Risk & VaR 2 4-5

TRAINING CALENDAR WHERE KNOWLEDGE COMES ALIVE www.ram.com.my
Points Brochure
FINANCE AND FINANCIAL MARKETS
Understanding Finance for Non-Accountants 1 16 - 17 22 - 23
Excel Auditing 2 13
Financial Modelling In Excel 1 10 26 - 29 1-4 4-7
Reading and Analysing the Annual Report 1 10 3-4 14 - 15
'Detecting Creative Accounting'. Minimising Risks of Creative 1 10 2-4 17 - 19
Accounting in Financial Reports
Portfolio Management: Asset Selection Techniques 1 21 - 22
Financial Skills for Personal Assistants and Secretaries 1 24 - 25 11 - 12
Successful Business Planning Process & Budgeting 1 26 - 27 4-5

Cash Flow Management Strategies 1 9 - 10 24 - 25
Project Financing 1 7-8
Psychology of Trading Strategies 1 28 - 29
GENERAL / CLIENT MANAGEMENT SKILLS
Memory Training, Mind Mapping
& Speed Reading 24 - 26 25 - 27 10 - 12
Transforming Technically Competent Managers into
Excellent Team Leaders 7-9
Managing the Expectations of Your Bosses:
A Must for Personals Assistants & Secretaries 9 - 10
Speaking without Fear: A Powerful Workshop for
People Who Hate Presenting 5-6
MASTERING THE ENGLISH LANGUAGE

Effective Business Communication 18 - 19 9 - 10

FINANCIAL
STATEMENTS
Directors’ Report... >page 29
Income Statements... >page 32
Balance Sheets... >page 34
Consolidated Statement of Changes In Equity... >page 36
Company Statement of Changes In Equity... >page 37
Cash Flow Statements... >page 38
Notes to the Financial Statements... >page 41
Statement by Directors... >page 84
Declaration... >page 84
Report of the Auditors... >page 85
> pg
RAM HOLDINGS BERHAD FINANCIAL RESULTS

(formerly known as Rating Agency Malaysia Berhad)
Group Company
(Incorporated in Malaysia)
RM RM
STATUTORY FINANCIAL STATEMENTS Profit for the financial year 8,223,932 5,032,311
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

DIVIDENDS
DIRECTORS’ REPORT Dividends paid, declared or proposed since 31 December 2006 are as follows:
The Directors are pleased to submit their annual report to the members together with the RM
audited financial statements of the Group and of the Company for the financial year ended In respect of the financial year ended 31 December 2006 as shown in the
31 December 2007. Directors’ Report for that year:
– First and final dividend of 7 sen gross per share on 10,000,000 ordinary
PRINCIPAL ACTIVITY
shares, less income tax at 27% paid on 8 June 2007 511,000
The Company is principally involved in the offering of independent opinions on the potential
default risk of debt securities, fixed income and other financial obligations of companies, including
In respect of the financial year ended 31 December 2007:
financial institutions. However, effective from 1 July 2007 the rating operations were transferred
to its newly incorporated wholly owned subsidiary RAM Rating Services Berhad. Consequently,
– Proposed first and final dividend of 7 sen gross per share on 10,000,000
the principal activity of the Company is now to conduct training and seminars, to provide
ordinary shares, less income tax at 26%. 518,000
economic consultancy services and management services. Apart from this change, there has been
no significant change in activities during the year.
The principal activities of the Group consist of provision of approved credit rating services, RESERVES AND PROVISIONS
provision of economic, strategic and management consultancy services, information services
and provision of bond pricing and internet based bond information services. There has been no All material transfers to or from reserves and provisions during the financial year are shown in the
significant change in the Group’s activities during the year. financial statements.
> pg 30
DIRECTORS statements) by reason of a contract made by the Company or a related corporation with the
Director or with a firm of which the Director is a member, or with a company in which he has a
The Directors who have held office during the financial period since the date of the last report substantial financial interest.
are:
YBhg Datuk Rajandram s/o Chellappah DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES
Wong Fook Wah
According to the register of Directors’ shareholdings, none of the Directors in office at the end
Suresh Menon
of the financial year held any interest in shares in, or debentures of, the Company and its related
YBhg Datuk Zainal Aznam bin Mohd Yusof (appointed on 4.4.2007)
corporatious.
YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob (appointed on 1.11.2007)
YBhg Dato’ Syed Md Amin bin Syed Jan Aljeffri (appointed on 1.11.2007)
YBhg Tan Sri Dato’ Zaki bin Tun Azmi (resigned on 4.9.2007) STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
YBhg Tan Sri Dato‘ Dr. Abdul Khalid bin Sahan (retired on 9.5.2007)
YBhg Gen (R) Tan Sri Yaacob bin Mohd Zain (retired on 9.5.2007) Before the income statements and balance sheets were made out, the Directors took reasonable
YBhg Datuk Abu Hassan bin Kendut (retired on 9.5.2007) steps:
Chin Yoong Chong (retired on 9.5.2007) (a) to ascertain that proper action had been taken in relation to the writing off of bad debts and
the making of allowances for doubtful debts and satisfied themselves that all known bad
In accordance with Article 19.13 of the Company’s Articles of Association, YBhg Datuk Zainal
debts had been written off and that adequate allowances had been made for doubtful debts;
Aznam bin Mohd Yusof retires at the forthcoming Annual General Meeting and, being eligible,
and
offers himself for re-election.
(b) to ensure that any current assets, other than debts, which were unlikely to realise in the
YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob and YBhg Dato’ Syed Md Amin bin Syed ordinary course of business their values as shown in the accounting records of the Group
Jan Aljeffri who were appointed in November 2007 shall hold office until the next Annual and of the Company had been written down to an amount which they might be expected
General Meeting of the Company in accordance with Article 19.10 of the Company’s Articles so to realise.
of Association.
At the date of this report, the Directors are not aware of any circumstances:
DIRECTORS’ BENEFITS
(a) which would render the amounts written off for bad debts or the amount of the allowances
During and at the end of the financial year, no arrangements subsisted to which the Group and for doubtful debts in the financial statements of the Group and of the Company inadequate
the Company is a party, with the object or objects of enabling Directors of the Group and of to any substantial extent; or
the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the (b) which would render the values attributed to current assets in the financial statements of the
Group and of the Company or any other body corporate. Group and of the Company misleading; or
Since the end of the previous financial year, no Director has received or become entitled to (c) which have arisen which render adherence to the existing method of valuation of assets or
receive any benefit (other than the directors’ remuneration as disclosed in Note 7 to the financial liabilities of the Group and of the Company misleading or inappropriate.
> pg
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (Contd) AUDITORS
No contingent or other liability has become enforceable or is likely to become enforceable The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in
within the period of twelve months after the end of the financial year which, in the opinion of the office.
Directors, will or may substantially affect the ability of the Group and of the Company to meet
their obligations when they fall due. Signed on behalf of the Board of Directors in accordance with their resolution dated
26 March 2008.
At the date of this report, there does not exist:
(a) 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 liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of
the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt YBHG TAN SRI DATO’ SERI SITI NORMA BINTI YAAKOB
with in this report or the financial statements which would render any amount stated in the DIRECTOR
financial statements misleading.
In the opinion of the Directors:
(a) the results of the Group and of the Company’s operations during the financial year were
not substantially affected by any item, transaction or event of a material and unusual nature
except for the transfer of rating services business of the Company to its newly incorporated
wholly owned subsidiary as disclosed in the financial statements; and
YBHG DATUK RAJANDRAM S/O CHELLAPPAH
(b) there has not arisen in the interval between the end of the financial year and the date of DIRECTOR
this report any item, transaction or event of a material and unusual nature likely to affect
substantially the results of the operations of the Group and of the Company for the financial
year in which this report is made.
> pg 32
INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

Group Company
Note 2007 2006 2007 2006
RM RM RM RM
Revenue 4 38,217,657 31,193,507 24,021,980 28,740,901
Other operating income 4,408,892 3,524,511 3,972,030 3,517,500

Staff costs 5 (19,694,584) (15,891,327) (11,364,488) (13,900,466)
Consultant’s cost (111,793) (217,296) (63,779) –
Depreciation of property, plant and equipment (598,411) (604,759) (483,799) (566,514)
Depreciation of investment properties (151,987) – (235,170) –
Amortisation of intangible assets (52,635) – – –
Impairment losses – subsidiary – – – (1,122,130)
Utilities and fuel (379,796) (377,195) (272,509) (316,832)
Upkeep, repairs and maintenance of assets (875,131) (868,811) (822,154) (799,634)
Telecommunication expenses (423,596) (355,506) (357,534) (316,582)
Training expenses (504,034) (476,742) (303,542) (457,302)
Travelling expenses (188,677) (130,798) (136,838) (105,904)
Rental of building (17,833) (17,971) – –
Advertisement expenses (72,481) (31,861) (64,128) (23,047)
Directors’ retirement gratuity (2,500,000) – (2,500,000) –
Seminars and publications expenses (2,809,043) (2,306,630) (2,809,044) (2,306,630)
Other operating expenses (2,885,227) (3,112,710) (1,891,375) (2,611,200)
11,361,321 10,326,412 6,689,650 9,732,160
> pg
INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 (Contd)
Group Company
Note 2007 2006 2007 2006
RM RM RM RM
Finance cost – interest (73,526) (87,505) (59,450) (71,666)

Share of results in associated companies (3,897) (1,783,239) – –
Profit before tax 6 11,283,898 8,455,668 6,630,200 9,660,494

Tax expense 8 (3,059,966) (2,989,266) (1,597,889) (2,968,736)
Net profit for the financial year 8,223,932 5,466,402 5,032,311 6,691,758
Earnings per share (sen) 9 82 54

> pg 34
BALANCE SHEETS AS AT 31 DECEMBER 2007

Group Company
Note 2007 2006 2007 2006
RM RM RM RM
NON CURRENT ASSETS
Property, plant and equipment 10 10,896,857 17,340,823 7,239,696 17,180,184
Investment properties 11 6,383,472 – 9,877,145 –
Intangible assets 12 210,542 – – –
Investments 13 25,145,148 26,545,177 24,310,398 25,710,427
Investment in subsidiaries 14 – – 10,956,581 623,426
Investment in associated companies 15 4,598,747 4,602,644 4,449,293 4,449,293
Amount due from associated company 16 365,000 365,000 – –
Staff loans 17 4,605,511 4,368,035 4,576,782 4,368,035
Deferred tax assets 18 128,894 106,048 – 86,108
52,334,171 53,327,727 61,409,895 52,417,473
CURRENT ASSETS
Tax recoverable 1,027,584 92,051 685,797 –
Receivables, deposits and prepayments 19 11,699,390 7,474,783 1,516,926 6,437,742
Amounts due from subsidiaries 20 – – 5,779,510 1,136,476
Short term investments 21 175,206 152,154 – –
Deposits, cash and bank balances 22 18,023,816 9,689,146 5,131,559 9,139,928
30,925,996 17,408,134 13,113,792 16,714,146

> pg
BALANCE SHEETS AS AT 31 DECEMBER 2007 (Contd)

Group Company
Note 2007 2006 2007 2006
RM RM RM RM
CURRENT LIABILITIES
Payables 23 6,594,564 2,396,132 3,504,060 2,038,012
Borrowings 24 94,469 89,375 94,469 89,375
Hire purchase payable 25 90,813 60,804 30,009 –
Taxation 1,280,133 504,124 – 504,124
8,059,979 3,050,435 3,628,538 2,631,511
NET CURRENT ASSETS 22,866,017 14,357,699 9,485,254 14,082,635
NON CURRENT LIABILITIES

Borrowings 24 869,166 1,132,013 869,166 1,132,013
Hire purchase payable 25 149,332 90,145 119,991 –
Provision for gratuity 26 61,214 57,679 – –
Deferred tax liabilities 18 16,586 – 16,586 –
74,103,890 66,405,589 69,889,406 65,368,095
CAPITAL AND RESERVES
Share capital 27 10,000,000 10,000,000 10,000,000 10,000,000

Retained earnings 64,071,959 56,359,027 59,889,406 55,368,095
Exchange reserves 31,931 46,562 – –
Shareholders’ equity 74,103,890 66,405,589 69,889,406 65,368,095

> pg 36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Attributable to equity holders of the Company
Issued and fully
paid-up ordinary
shares of RM1 each
Number Nominal Exchange Retained
Note of shares value reserves earnings Total
RM RM RM RM
At 1 January 2007 10,000,000 10,000,000 46,562 56,359,027 66,405,589

Currency translation differences – – (14,631) – (14,631)
Net profit for the financial year – – – 8,223,932 8,223,932
First and final dividend for financial year ended
31 December 2006 29 – – – (511,000) (511,000)
At 31 December 2007 10,000,000 10,000,000 31,931 64,071,959 74,103,890
At 1 January 2006 10,000,000 10,000,000 74,836 51,396,625 61,471,461

Currency translation differences – – (28,274) – (28,274)
Net profit for the financial year – – – 5,466,402 5,466,402
First and final dividend for financial year
ended 31 December 2005 – – – (504,000) (504,000)
At 31 December 2006 10,000,000 10,000,000 46,562 56,359,027 66,405,589

> pg
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Issued and fully paid-up
ordinary shares of RM1 each Distributable
Nominal Retained
Number value earnings Total
Note of shares RM RM RM
At 1 January 2007 10,000,000 10,000,000 55,368,095 65,368,095

Net profit for the financial year – – 5,032,311 5,032,311
31 December 2006 29 – – (511,000) (511,000)
At 31 December 2007 10,000,000 10,000,000 59,889,406 69,889,406
At 1 January 2006 10,000,000 10,000,000 49,180,337 59,180,337

Net profit for the financial year – – 6,691,758 6,691,758
31 December 2005 – – (504,000) (504,000)
At 31 December 2006 10,000,000 10,000,000 55,368,095 65,368,095

> pg 38
CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Group Company
Note 2007 2006 2007 2006
RM RM RM RM
CASH FLOWS FROM OPERATING ACTIVITIES
Profit after tax 8,223,932 5,466,402 5,032,311 6,691,758
Adjustments for:
Taxation 3,059,966 2,989,266 1,597,889 2,968,736
Depreciation of property, plant and equipment 598,411 604,759 483,799 566,514
Depreciation of investment properties 151,987 – 235,170 –
Amortisation of intangible assets 52,635 – – –
Interest expense 73,526 87,505 59,450 71,666
Allowance for doubtful debts 555,402 394,160 258,701 394,160
Bad debts recovered (41,477) (308,344) (41,477) (308,344)
(Gain)/loss on disposal of investments (39,525) 213,148 (39,525) 213,148
Dividend income (803,743) (209,366) (30,743) (116,866)
Dividend recalled by an associated company 50,000 – 50,000 –
Gain on disposal of property, plant and equipment – (137,457) – (100,846)
Interest income (1,590,478) (1,358,184) (1,346,934) (1,341,243)
Impairment losses – subsidiary – – – 1,122,130
Diminution in value of investments written back (567,176) (507,068) (567,176) (507,068)
Provision for staff gratuity 7,728 17,955 – –
Goodwill written off – 446,109 – –
Diminution in value of club membership – 292,000 – 292,000
Share of results in associated companies 3,897 1,783,239 – –
9,735,085 9,774,124 5,691,465 9,945,745

> pg
CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 (Contd)
Group Company
Note 2007 2006 2007 2006
RM RM RM RM
CASH FLOWS FROM OPERATING ACTIVITIES (Contd)

Changes in working capital:
Decrease/(increase) in receivables 4,198,436 3,254,744 (342,527) 2,931,524
(Decrease)/increase in payables (4,966,038) 185,488 1,466,047 458,624
Cash generated from operations 8,967,483 13,214,356 6,814,985 13,335,893

Income tax paid (3,012,672) (3,215,432) (2,685,116) (2,998,211)
Net cash flow from operating activities 5,954,811 9,998,924 4,129,869 10,337,682
CASH FLOWS FROM INVESTING ACTIVITIES

Increase in investments in subsidiaries – – (10,333,155) (299,200)
Net purchase of investments (30,278) (14,079,526) – (14,079,526)
Purchase of property, plant and equipment (691,216) (259,623) (655,626) (231,031)
Purchase of intangible assets (263,177) – – –
Proceeds from disposal of property, plant and equipment – 222,450 – 161,450
Proceeds from sale of investments 2,734,490 10,334,996 2,734,490 10,239,762
Interest received 852,746 530,176 614,063 492,572
Dividends received 586,732 112,368 30,743 63,550
Dividend recalled by an associated company (50,000) – (50,000) –
Payment from subsidiaries – – 199,450 127,899
Net cash flow from investing activities 3,139,297 (3,139,159) (7,460,035) (3,524,524)
> pg 40
CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 (Contd)
Group Company
Note 2007 2006 2007 2006
RM RM RM RM
CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of borrowings (257,753) (235,234) (257,753) (235,234)
Additions/(repayment) of hire purchase instalments 89,196 (60,425) 150,000 –
Dividends paid (511,000) (504,000) (511,000) (504,000)
Interest expense (73,526) (87,126) (59,450) (71,666)
Increase in fixed deposits held under lien (116,938) (7,000) (118,938) –
Net cash flow from financing activities (870,021) (893,785) (797,141) (810,900)
NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENTS 8,224,087 5,965,980 (4,127,307) 6,002,258
CASH AND CASH EQUIVALENTS AT BEGINNING

OF YEAR 9,680,146 3,714,166 9,139,928 3,137,670
CURRENCY TRANSLATION DIFFERENCE (6,355) – – –
CASH AND CASH EQUIVALENTS AT END OF YEAR 22 17,897,878 9,680,146 5,012,621 9,139,928
> pg
NOTES TO THE FINANCIAL STATEMENTS FOR THE (a) Basis of preparation

FINANCIAL YEAR ENDED 31 DECEMBER 2007 The financial statements of the Group and Company have been prepared in
accordance with the provisions of the Companies Act 1965 and Financial Reporting
1 GENERAL INFORMATION Standards, the MASB Approved Accounting Standards in Malaysia for Entities
Other than Private Entities.
The Company is principally involved in the offering of independent opinions on the
potential default risk of debt securities, fixed income and other financial obligations of The financial statements have been prepared under the historical cost convention,
companies, including financial institutions. However, effective from 1 July 2007 the unless otherwise indicated in this summary of significant accounting policies.
rating operations were transferred to its newly incorporated wholly owned subsidiary
RAM Rating Services Berhad. Consequently, the principal activity of the Company is The preparation of financial statements in conformity with Financial Reporting
now to conduct training and seminars, to provide economic consultancy services and Standards requires the use of certain critical accounting estimates and assumptions
management services. Apart from this change, there has been no significant change in that effect the reported amounts of assets and liabilities and disclosure of contingent
activities during the year. assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reported financial year. It also requires Directors
The principal activities of the Group consist of provision of approved credit rating services, to exercise their judgment in the process of applying the Group’s accounting policies.
provision of economic, strategic and management consultancy services, information services Although these estimates and judgment are based on the Directors’ best knowledge
and provision of bond pricing and internet based bond information services. There has been of current events and actions, actual results may differ.
no significant change in the Group’s activities during the year.
These estimates and judgments are continually evaluated by the Directors and are
The Company is a limited liability company, incorporated and domiciled in Malaysia. based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The Directors do
The address of the registered office and principal place of business of the Company is as not foresee that the estimates and assumptions used will have any significant risk of
follows: causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year.
No. 19-G, The Boulevard
Mid Valley City, Lingkaran Syed Putra (i) Standards and amendments to published standards that are effective and
59200 Kuala Lumpur applicable
The new accounting standards and amendments to published standards

2 SIGNIFICANT ACCOUNTING POLICIES
effective and applicable for the Group’s financial year ended 31 December
The following accounting policies have been used consistently in dealing with items which 2007 are as follows:
are considered material in relation to the financial statements. These policies have been
consistently applied to all the years presented, unless otherwise stated.
> pg 42
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) The Group will apply these standards from financial year beginning
1 January 2008.
(a) Basis of preparation (Contd)
• FRS 139 Financial Instruments : Recognition and Measurement
(i) Standards and amendments to published standards that are effective and (effective date yet to be determined by the Malaysian Accounting
applicable (Contd) Standards Board). The Company will apply this standard when effective.
The Group has applied the transitional provision in FRS 139 which
• FRS 117 Leases exempts entities from disclosing the possible impact arising from the
• FRS 124 Related party disclosures initial application of this standard on the financial statements of the
• Amendments to FRS 119 Employee Benefits – Actuarial Gains and Group.
Losses, Group Plans and Disclosures
(iii) Standards, amendments to published standards and interpretations to existing
All changes in accounting policies have been made in accordance with the standards that are not yet effective and are not relevant to the Group
transition provisions in the respective standards and amendments to published
standards. All standards have been applied retrospectively. • Amendment to FRS 121 The Effects of Changes in Foreign Exchange
Rates – Net Investment in a Foreign Operation (effective for accounting
The adoption of the FRS and amendments to the FRS above did not have periods beginning on or after 1 July 2007).
significant impact on the financial statements of the Group and merely affects
the presentation and disclosure. • FRS 112 Income Taxes (effective for accounting periods beginning on
or after 1 July 2007).
(ii) Standards and amendments to published standards that are applicable but not
yet effective • FRS 120 Accounting for Government Grants and Disclosure of
Government Assistance (effective for accounting periods beginning on
The new and revised standards, amendments to published standards that are or after 1 July 2007).
applicable, but which the Group has not early adopted, are as follows:
• IC Interpretation 1 Changes in Existing Decommissioning, Restoration
• Revised standards (effective for accounting periods beginning on or after and Similar Liabilities (effective for accounting periods beginning on or
1 July 2007) that have no significant changes compared to the original after 1 July 2007).
standards:
• IC Interpretation 2 Members’ Shares in Co-operative Entities and
– FRS 107 Cash Flow Statements Similar Instruments (effective for accounting periods beginning on or
– FRS 118 Revenue after 1 July 2007).
– FRS 137 Provisions, Contingent Liabilities and Contingent
Assets
> pg
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) the date on which control is transferred to the Group and are de-consolidated
from the date that control ceases. The cost of an acquisition is measured
(a) Basis of preparation (Contd) as fair value of the assets given, equity instruments issued and liabilities
(iii) Standards, amendments to published standards and interpretations to existing incurred or assumed at the date of exchange, plus costs directly attributable
standards that are not yet effective and are not relevant to the Group (Contd) to the acquisition. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
• IC Interpretation 5 Rights to Interests arising from Decommission, fair values at the acquisition date, irrespective of the extent of any minority
Restoration and Environmental Rehabilitation Funds (effective for interest. The excess of the cost of acquisition over the fair value of the
accounting periods beginning on or after 1 July 2007). Group’s share of the identifiable net assets acquired at the date of acquisition
is reflected as goodwill. See the accounting policy Note 2 (c) on goodwill. If
• IC Interpretation 6 Liabilities arising from Participating in a Specific the cost of acquisition is less than fair value of the net assets of the subsidiary
Market – Waste Electrical and Electronic Equipment (effective for acquired, the difference is recognised directly in the consolidated income
accounting periods beginning on or after 1 July 2007). statement.
• IC Interpretation 7 Applying the Restatement Approach under Intragroup transactions, balances and unrealised gains on transactions
FRS 129 Financial Reporting in Hyperinflationary Economies (effective between Group companies are eliminated; realised losses are also eliminated
for accounting periods beginning on or after 1 July 2007). but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure
• IC Interpretation 8 Scope of FRS 2 (effective for accounting periods consistency with the policies adopted by the Group.
beginning on or after 1 July 2007).
The gain or loss on disposal of a subsidiary is the difference between net
(b) Economic entities in the Group disposal proceeds and the Group’s share of its net assets as of the date of
disposal including the cumulative amount of any exchange differences
(i) Subsidiaries that relate to the subsidiary is recognised in the consolidated income
statement.
Subsidiaries are those companies in which the Group has power to exercise
control over the financial and operating policies so as to obtain benefits from (ii) Associates
their activities.
Associates are those companies in which the Group exercises significant
Investments in subsidiaries are shown at cost. Where impairment exists, the
influence, but which it does not control, generally accompanying a shareholding
carrying amount of the investment is assessed and written down immediately
of between 20% and 50% of the voting rights. Significant influence is the power
to its recoverable amount.
to participate in the financial and operating policy decisions of the associates
Subsidiaries are consolidated using the purchase method of accounting. Under but not power to exercise control over those policies.
the purchase method of accounting, subsidiaries are fully consolidated from
> pg 44
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) Goodwill on acquisition of subsidiaries are included in the balance sheet as intangible
assets. Goodwill is tested annually for impairment and carried at cost less accumulated
(b) Economic entities in the Group (Contd)
impairment losses. Impairment losses on goodwill are not reversed. Gains and losses
(ii) Associates (Contd) on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
Investments in associates are accounted for using the equity method of
accounting and are initially recognised at cost. The Group’s investment in Goodwill is allocated to cash-generating units for the purpose of impairment
associates includes goodwill identified on acquisition, net of any accumulated testing. The allocation is made to those cash-generating units or groups of cash-
impairment loss. generating units that are expected to benefit from the synergies of the business
combination in which the goodwill arose. See accounting policy Note 2(h) on
The Group’s share of its associates’ post acquisition profits or losses is recognised impairment of assets.
in the income statement, and its share of post-acquisition movements in
reserves is recognised in reserves. The cumulative post-acquisition movements (d) Investments
are adjusted against the carrying amount of the investment. When the Group’s
share of losses in an associate equals or exceeds its interest in the associate, Investments in subsidiaries and associates are shown at cost. Where an indication
including any other unsecured receivables, the Group’s interest is reduced to of impairment exists, the carrying amount of the investment is assessed and written
nil and recognition of further losses is discontinued except to the extent that down immediately to its recoverable amount. See accounting policy Note 2(h) on
the Group has incurred legal or constructive obligations or made payments on impairment of assets.
behalf of the associate.
Investments in other non-current investments are shown at cost and an
Unrealised gains on transactions between the Group and its associates are allowance for diminution in value is made where, in the opinion of the Directors,
eliminated to the extent of the Group’s interest in the associates; unrealised there is a decline other than temporary in the value of such investments. Where
losses are also eliminated unless the transaction provides evidence on there has been a decline other than temporary in the value of such investments,
impairment of the asset transferred. Where necessary, in applying the equity such a decline is recognised as an expense in the financial year in which the decline
method, adjustments are made to the financial statements of associates to is identified.
ensure consistency of accounting policies with those of the Group.
Marketable securities (within current assets) are carried at the lower of cost and
Dilution gains and losses in associates are recognised in the income market value, determined on an aggregate portfolio basis by category of investment.
statement. Cost is derived on the weighted average basis. Market value is calculated by reference
to stock exchange quoted selling prices at the close of business on the balance sheet
(c) Goodwill date. Increase or decreases in the carrying amount of marketable securities are
credited or charged to the income statements.
Goodwill represents the excess of the cost of acquisition of subsidiaries and
associates over the fair value of the Group’s share of identifiable net assets at the date On disposal of an investment, the difference between net disposal proceeds and its
of acquisition. carrying amount is charged or credited to the income statements.
> pg
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) Gains and losses on disposal of property, plant and equipment are determined by
reference of the proceeds to their carrying amount and are taken into account in
(e) Property, plant and equipment determining profit from operations.
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Cost includes expenditure that is directly attributable to the (f) Intangible assets
acquisition of the items.
Costs associated with developing or maintaining computer software programmes
Subsequent costs are included in the asset’s carrying amount or recognised as a are recognised as an expense when incurred. Costs that are directly associated with
separate asset, as appropriate, only when it is probable that future economic benefits identifiable and unique software products controlled by the Group and will probably
associated with the item will flow to the Group and the cost of the item can be generate economic benefits exceeding costs beyond one year are recognised as
measured reliably. The carrying amount of the replaced part is derecognised. All intangible assets. Direct costs include staff costs of the software development team
other repairs and maintenance are charged to the income statement during the and an appropriate portion of relevant overheads.
period in which they are incurred. Expenditure which enhances or extends the performance of computer software
programmes beyond their original specifications is recognised as a capital
Depreciation is charged on a straight line basis to write off the cost of property, plant
improvement and added to the original cost of the software.
and equipment to their residual values over their estimated useful lives, summarised
as follows: Computer software development costs recognised as assets are amortised using
the straight line method over their estimated useful lives, not exceeding a period of
Furniture and fittings, office equipment 6 years
5 years.
Motor vehicles 5 years
Computer hardware 3 to 5 years At each balance sheet date, the Group assesses whether there is any indication of
Buildings 50 years impairment. If such indications exist, an analysis is performed to assess whether the
Renovation 5 years carrying amount of the asset is fully recoverable. A write down is made if the carrying
amount exceeds the recoverable amount. See accounting policy Note 2(h) on
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at impairment of assets.
each balance sheet date.
At each balance sheet date, the Group assesses whether there is any indication of (g) Investment properties
impairment. If such indications exist, an analysis is performed to assess whether the
Investment properties, comprising principally office buildings, are held for long term
carrying amount of the asset is fully recoverable. A write down is made if the carrying
rental yields or for capital appreciation or both, and are not substantially occupied
amount exceeds the recoverable amount. See accounting policy Note 2(h) on
by the Group and Company. The portion of office building held for long term rental
impairment of assets.
yields or for capital appreciation or both is determined based on the floor area rented
out by the Group and Company.
> pg 46
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) (j) Revenue
(g) Investment properties (Contd) Revenue comprises the fair value of the consideration received or receivable for
the sale of goods and rendering of services in the ordinary course of the Group’s
Investment properties are stated at cost less any accumulated depreciation and activities.
impairment losses. Investment properties are depreciated on the straight line basis
to write off the cost of the assets to their residual values over their estimated useful The Group recognises revenue when the amount of revenue can be reliably measured,
life of 50 years. it is probable that future economic benefits will flow to the entity and specific criteria
have been met. The amount of revenue is not considered to be reliably measurable
On disposal of an investment property, or when it is permanently withdrawn from until all contingencies relating to the sale have been resolved. The Group bases its
use and no future economic benefits are expected from its disposal, in shall be estimates on historical results, taking into consideration the type of customer, the
derecognised. The difference between the net disposal proceeds and the carrying type of transaction and the specifics of each arrangement.
amount is recognised in profit or loss in the period of the retirement or disposal.
Rental, interest income and management fees are recognised on the accruals basis.
(h) Impairment of assets
Revenue from consultancy services provided is recognised as follows:
Assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment. Assets that are subject to amortisation are reviewed for When the outcome of a consultancy contract can be estimated reliably, contract
impairment whenever events or changes in circumstances indicate that the carrying revenue and contract costs are recognised over the period of the contract as revenue
amount may not be recoverable. An impairment loss is recognised for the amount and expenses respectively. For fixed price contracts, the Group uses the percentage
by which the carrying amount of the asset exceeds its recoverable amount. The of completion method to determine the appropriate amount of revenue and costs to
recoverable amount is the higher of an asset’s fair value less costs to sell and value recognise in a given financial year. The stage of completion is measured by reference
in use. For the purposes of assessing impairment, assets are grouped at the lowest to the proportion that contract costs incurred for work performed to date bear to the
levels for which there is separately identifiable cash flows (cash-generating units). estimated total costs for the contract.
Non-financial assets other than goodwill that suffered an impairment are reviewed
for possible reversal of the impairment at each reporting date. When the outcome of a consultancy contract cannot be estimated reliably, contract
revenue is recognised only to the extent of contract costs incurred that it is probable
The impairment loss is charged to the income statement. Impairment losses on will be recoverable. Contract costs are recognised when incurred.
goodwill are not reversed. In respect of other assets, any subsequent increase in
recoverable amount is recognised in the income statement. When it is probable that total contract costs will exceed total contract revenue, the
expected loss is recognised as an expense immediately.
(i) Cash and cash equivalents
The aggregate of the costs incurred and the profit/loss recognised on each contract
Cash comprises cash in hand, bank balances and demand deposits. Cash equivalents is compared against the progress billings up to the period end. Where costs incurred
are short term, highly liquid investments with original maturities of three months or and recognised profits (less recognised losses) exceed progress billings, the balance is
less and bank overdrafts. shown as amounts due from customers on consultancy contracts under receivables,
deposits and prepayments. Where progress billings exceed costs incurred plus
> pg
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) • income and expenses for each income statement are translated at average
exchange rates (unless this average is not a reasonable approximation of
(j) Revenue (Contd) the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the rate on the dates of
recognised profits (less recognised losses), the balance is shown as amounts due to the transactions); and
customers on consultancy contracts under payables.
• all resulting exchange differences are recognised as a separate component
Contract cost comprise direct labour cost and sub-consultant’s costs. of equity
(k) Foreign currencies On consolidation, exchange differences arising from the translation of the
net investment in foreign operations are taken to shareholders’ equity. When
(i) Functional and presentation currency a foreign operation is partially disposed of or sold, exchange differences that
were recorded in equity are recognised in the income statement as part of the
Items included in the financial statements of each of the Group’s entities are
gain or loss on sale.
measured using the currency of the primary economic environment in which
the entity operates (the “functional currency”). The financial statements are Goodwill and fair value adjustments arising on the acquisition of a foreign
presented in Ringgit Malaysia, which is the Group and Company’s functional entity are treated as assets and liabilities of the foreign entity and translated at
and presentation currency. the closing rate.
(ii) Transactions and balances (l) Leases
Foreign currency transactions are translated into the functional currency using Accounting by lessee
the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from Finance leases
the translation at year-end exchange rates of monetary assets and liabilities
Leases of property, plant and equipment where the Group assumes substantially all
denominated in foreign currencies are recognised in the income statements.
the benefits and risks of ownership are classified as finance leases.
(iii) Group companies Finance leases are capitalised at the inception of the lease at the lower of the fair
value of the leased asset and the present value of the minimum lease payments. Each
The results and financial position of all the group entities (none of which has
lease payment is allocated between the liability and finance charges so as to achieve
the currency of a hyperinflationary economy) that have a functional currency
a periodic constant rate of interest on the balance outstanding. The corresponding
different from the presentation currency are translated into the presentation
rental obligations, net of finance charges, are included in borrowings. The interest
currency as follows:
element of the finance charge is charged to the income statement over the lease
• assets and liabilities for each balance sheet presented are translated at the period so as to produce a constant periodic rate of interest on the remaining balance
closing rate at the date of that balance sheet; of the liability for each financial year.
> pg 48
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) Deferred tax is determined using tax rates (and tax laws) that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when the
(l) Leases (Contd) related deferred tax asset is realised or the deferred tax liability is settled.
Accounting by lessee (Contd) (n) Trade receivables
Finance leases (Contd) Trade receivables are carried at invoice amount less an allowance of doubtful debts.
Specific allowance is made for known doubtful debts. The allowance is established
Property, plant and equipment acquired under finance leases is depreciated over the when there is objective evidence that the Group will not be able to collect all amounts
shorter of the estimated useful life of the asset and the lease term. due according to the original terms of receivables.
Operating leases Bad debts are written off when it is established that they are not recoverable.
Leases of assets where a significant portion of the risks and rewards of ownership (o) Employee benefits
are retained by the lessor are classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor) are charged to the (i) Short term employee benefits
income statement on the straight line basis over the lease period. Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary
benefits are accrued in the financial year in which the associated services are
(m) Income taxes
rendered by employees of the Group.
Current tax expenses are determined according to the taxation laws of Malaysia and (ii) Post-employment benefits
include all taxes based upon the taxable profits.
The Group contributes to the Employees Provident Fund (“EPF”), the national
Deferred tax is recognised in full, using the liability method, on temporary differences defined contribution plan. The Group’s contributions to the EPF are charged
arising between the amounts attributed to assets and liabilities for tax purposes and to the income statement in the financial year to which they relate. Once the
their carrying amounts in the financial statements. contributions have been paid, the Group has no further payment obligations.
Deferred tax assets are recognised to the extent that it is probable that taxable profit In addition, all employees of the Sri Lanka subsidiary are entitled to a gratuity as
will be available against which the deductible temporary differences or unused tax and when they complete 5 years of service as provided by the Sri Lanka statute
losses can be utilised. and is payable upon retirement. In order to meet this liability, a provision is carried
forward in the balance sheet, based on a month’s salary of the last month of the
Deferred tax is recognised on temporary differences arising on investments in financial year of all employees for each completed year of service, commencing
subsidiaries and associates except where the timing of the reversal of the temporary from the first year of service. The resulting difference between brought forward
difference can be controlled and it is probable that the temporary difference will not provision at the beginning of a financial year and the carried forward provision
reverse in the foreseeable future. at the end of a financial year is dealt with in the income statement. The gratuity
liability is not externally funded or actuarially valued.
> pg
2 SIGNIFICANT ACCOUNTING POLICIES (Contd) Financial instruments carried on the balance sheet include cash and bank
balances, receivables, payables and borrowings. The particular recognition
(p) Contingent liability methods adopted are disclosed in the individual policy statements associated
with each item.
The Group does not recognise a contingent liability but discloses its existence in the
financial statements. A contingent liability is a possible obligation that arises from (ii) Fair value estimation for disclosure purposes
past events whose existence will be confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the control of the Group or a present The carrying values for financial assets and liabilities with maturities of less than
obligation that is not recognised because it is not probable that an outflow of one year are assumed to approximate their fair values.
resources will be required to settle the obligation. A contingent liability also arises in
the extremely rare circumstance where there is a liability that cannot be recognised For long term financial assets and liabilities, fair value is estimated by discounting
because it cannot be measured reliably. the future contractual cash flows at the current market interest rate available to
the Group for similar financial instruments.
When a change in the probability of an outflow of economic resources occurs, so that
outflow is probable, it will then be recognised as a provision.
3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(q) Financial instruments
The Group’s activities expose it to a variety of financial risks, including foreign currency
(i) Description exchange risk, interest rate risk, credit risk, liquidity and cash flow risk. The Group’s overall
financial risk management objective is to safeguard its shareholders’ investment and the
A financial instrument is any contract that gives rise to both a financial asset Group’s assets and reputation.
of one enterprise and a financial liability or equity instrument of another
enterprise. Foreign currency exchange risk
A financial asset is any asset that is cash, a contractual right to receive cash or The Group is exposed to minimal transactional currency exposures.
another financial asset from another enterprise, a contractual right to exchange
financial instruments with another enterprise under conditions that are Interest rate risk
potentially favourable, or an equity instrument of another enterprise.
The Group’s income and operating cash flows are substantially independent of changes
A financial liability is any liability that is a contractual obligation to deliver in market interest rates. Interest rate exposure arises from the Group’s borrowings and
cash or another financial asset to another enterprise, or to exchange financial deposits, and is managed through the use of fixed and floating rate debt.
instruments with another enterprise under conditions that are potentially
unfavourable.
> pg 50
3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Contd)

Credit risk
The Group seeks to invest cash assets safely and profitably. Cash deposits and trade receivables may give rise to credit risk, which requires the loss to be recognised if a counter party fails to
perform as contracted. It is the Group’s policy to monitor the financial standing of these counter parties on an on-going basis to ensure that the Group is exposed to minimal credit risk.
Liquidity and cash flow risk
Prudent liquidity risk management is via maintaining sufficient cash and marketable securities.
4 REVENUE
Group Company
2007 2006 2007 2006
RM RM RM RM
Rating and surveillance fees 32,993,832 25,954,676 14,897,300 25,762,394

Consultancy fees 1,022,367 2,260,324 298,086 –
Seminars and publications 4,201,458 2,978,507 4,201,458 2,978,507
Management fees from subsidiary companies – – 4,625,136 –
38,217,657 31,193,507 24,021,980 28,740,901
5 STAFF COSTS
Group Company
2007 2006 2007 2006
RM RM RM RM
Wages, salaries and bonus 14,802,170 11,820,538 8,537,034 10,296,910

Defined contribution retirement plan 2,444,923 1,934,137 1,374,179 1,671,773
Other employee benefits 2,447,491 2,136,652 1,453,275 1,931,783
19,694,584 15,891,327 11,364,488 13,900,466

> pg
6 PROFIT BEFORE TAX
Group Company
2007 2006 2007 2006
RM RM RM RM
Profit before tax is arrived after charging/(crediting):

Auditors’ remuneration
– statutory audit by Group auditors 101,000 73,000 33,000 38,000
– statutory audit by other auditors 3,577 3,512 – –
– underprovision in prior year 46,082 – 46,082 –
Allowance for doubtful debts 555,402 394,160 258,701 394,160
Diminution in value of club membership – 292,000 – 292,000
Goodwill written off – 446,109 – –
Diminution in value of investment written back (567,176) (507,068) (567,176) (507,068)
Bad debts recovered (41,477) (308,344) (41,477) (308,344)
Dividend income (803,743) (209,366) (30,743) (116,866)
Dividend recalled by an associated company 50,000 – 50,000 –
Interest income (1,590,478) (1,358,184) (1,346,934) (1,341,243)
(Gain)/loss on disposal of investments (39,525) 213,148 (39,525) 213,148
Rental income (839,902) (722,932) (1,505,260) (883,260)
Realised foreign exchange gain (4,026) – – –
Gain on disposal of property, plant and equipment – (137,457) – (100,846)
> pg 52
7 DIRECTORS’ REMUNERATION
The Directors of the Company in office during the financial year were as follows:
Non-executive Directors
YBhg Datuk Zainal Aznam bin Mohd Yusof (appointed on 4.4.2007)
YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob (appointed on 1.11.2007)
YBhg Dato’ Syed Md Amin bin Syed Jan Aljeffri (appointed on 1.11.2007)
YBhg Tan Sri Dato’ Zaki bin Tun Azmi (resigned on 4.9.2007)
YBhg Tan Sri Dato’ Dr. Abdul Khalid bin Sahan (retired on 9.5.2007)
YBhg Gen (R) Tan Sri Yaacob bin Mohd Zain (retired on 9.5.2007)
YBhg Datuk Abu Hassan bin Kendut (retired on 9.5.2007)
Chin Yoong Chong (retired on 9.5.2007)
Executive Directors
YBhg Datuk Rajandram s/o Chellappah
Wong Fook Wah
Suresh Menon
The aggregate amount of emoluments received/receivable by Directors of the Company during the financial year was as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM
Non-executive Directors:
– fees 113,137 208,000 73,770 158,000
– other benefits 50,675 56,875 43,175 50,875
– retirement gratuity 2,250,000 – 2,250,000 –
Executive Directors:
– salaries and bonus 2,611,200 2,322,000 2,502,750 2,047,950
– estimated money value of benefits in-kind 73,550 90,950 73,550 73,550
– defined contribution retirement plan 283,055 272,004 263,160 218,760
– other benefits 246,262 206,885 244,122 193,545
5,627,879 3,156,714 5,450,527 2,742,680

> pg
8 TAX EXPENSE
Group Company
2007 2006 2007 2006
RM RM RM RM
Current tax
Current year (3,171,400) (3,068,557) (1,600,369) (3,037,037)

Over accrual in prior years 105,174 126,246 105,174 116,552
(3,066,226) (2,942,311) (1,495,195) (2,920,485)
Deferred tax
Origination and reversal of temporary differences (Note 18) 6,260 (46,955) (102,694) (48,251)
Tax expense (3,059,966) (2,989,266) (1,597,889) (2,968,736)

> pg 54
8 TAX EXPENSE (Contd)
The explanation of the relationship between tax expense and profit before tax is as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM
Profit before tax 11,283,898 8,455,668 6,630,200 9,660,494
Tax calculated at the Malaysian tax rate of 27% (2006: 28%) 3,046,652 2,367,587 1,790,154 2,704,938
Tax effects of:

– reduced tax rate (20%) for small and medium enterprise – (1,133) – –
– different tax rates in other countries (1,288) (348) – –
– income not subject to tax (345,087) (320,559) (272,855) (290,062)
– expenses not deductible for tax purposes 328,312 482,716 185,764 670,412
– over accrual in prior years (105,174) (126,246) (105,174) (116,552)
– unused tax losses – 87,942 – –
– deferred tax asset on share of associated companies’ losses
not recognised 1,052 499,307 – –
– temporary differences not recognised 115,559 – – –
– reversal of deferred tax assets 19,940 – – –
Tax expense 3,059,966 2,989,266 1,597,889 2,968,736
The Company has sufficient tax credits under Section 108 of the Income Tax Act, 1967, to frank all of its retained earnings as at 31 December 2007, if paid out as dividend.
> pg
9 EARNINGS PER SHARE
Earnings per share is calculated by dividing the Group’s net profit attributable to shareholders by the number of ordinary shares in issue.
Group
2007 2006
Net profit attributable to shareholders (RM) 8,223,932 5,466,402

Number of ordinary shares in issue 10,000,000 10,000,000
Earnings per share (sen) 82 54
> pg 56
10 PROPERTY, PLANT AND EQUIPMENT
Furniture Office Motor Computer Office

& fittings equipment vehicles hardware building Renovation Total
RM RM RM RM RM RM RM
Group
2007
Cost
At 1 January 709,259 451,736 1,829,373 2,157,035 18,669,110 4,820,308 28,636,821
Additions 27,452 32,493 165,625 413,651 – 51,995 691,216
Transfer to investment properties
(Note 11) – – – – (7,599,371) – (7,599,371)
Currency translation differences (2,871) (171) (151) (3,326) – – (6,519)
At 31 December 733,840 484,058 1,994,847 2,567,360 11,069,739 4,872,303 21,722,147
Accumulated depreciation
At 1 January 609,244 385,513 819,557 2,059,328 2,613,674 4,808,682 11,295,998
Charge for the year 42,761 22,181 110,718 179,334 221,395 22,022 598,411
(Note 11) – – – – (1,063,912) – (1,063,912)
At 31 December 650,281 407,636 930,215 2,235,297 1,771,157 4,830,704 10,825,290
Net book value

At 31 December 83,559 76,422 1,064,632 332,063 9,298,582 41,599 10,896,857
> pg
10 PROPERTY, PLANT AND EQUIPMENT (Contd)

Group
2006
Cost
At 1 January 669,110 402,401 2,242,380 2,102,732 18,669,110 4,820,308 28,906,041
Additions 44,663 49,453 – 165,507 – – 259,623
Disposals – – (412,731) (105,689) – – (518,420)
At 31 December 709,259 451,736 1,829,373 2,157,035 18,669,110 4,820,308 28,636,821
At 1 January 570,212 368,568 1,053,489 2,102,732 2,240,292 4,797,058 11,132,351
Disposals – – (327,738) (105,689) – – (433,427)
At 31 December 609,244 385,513 819,557 2,059,328 2,613,674 4,808,682 11,295,998
Net book value

At 31 December 100,015 66,223 1,009,816 97,707 16,055,436 11,626 17,340,823
The net book value of motor vehicle under hire purchase included in the category of motor vehicles of the Group amounted to RM279,388 (2006: RM135,960).
> pg 58

Company
2007
Cost
At 1 January 657,186 421,720 1,410,072 2,002,718 18,669,110 4,820,308 27,981,114
Additions 26,750 26,909 165,625 384,347 – 51,995 655,626
(Note 11) – – – – (11,758,506) – (11,758,506)
At 31 December 683,936 448,629 1,575,697 2,387,065 6,910,604 4,872,303 16,878,234
At 1 January 576,700 360,813 537,620 1,903,441 2,613,674 4,808,682 10,800,930
(Note 11) – – – – (1,646,191) – (1,646,191)
At 31 December 610,818 380,764 642,626 2,067,931 1,105,695 4,830,704 9,638,538
Net book value

At 31 December 73,118 67,865 933,071 319,134 5,804,909 41,599 7,239,696
> pg

Company
2006
Cost
At 1 January 618,197 377,157 1,700,857 1,960,928 18,669,110 4,820,308 28,146,557
Additions 38,989 44,563 – 147,479 – – 231,031
Disposals – – (290,785) (105,689) – – (396,474)
At 31 December 657,186 421,720 1,410,072 2,002,718 18,669,110 4,820,308 27,981,114
At 1 January 546,985 345,335 679,688 1,960,928 2,240,292 4,797,058 10,570,286
Disposals – – (230,181) (105,689) – – (335,870)
At 31 December 576,700 360,813 537,620 1,903,441 2,613,674 4,808,682 10,800,930
Net book value

At 31 December 80,486 60,907 872,452 99,277 16,055,436 11,626 17,180,184
Title for the office building has not been issued as at the end of the financial year.
> pg 60
11 INVESTMENT PROPERTIES
Group Company
2007 2006 2007 2006
RM RM RM RM
Cost
At 1 January – – – –
Transfer from property, plant and equipment (Note 10) 7,599,371 – 11,758,506 –
At 31 December 7,599,371 – 11,758,506 –
At 1 January – – – –
Charge for the year 151,987 – 235,170 –
Transfer from property, plant and equipment (Note 10) 1,063,912 – 1,646,191 –
At 31 December 1,215,899 – 1,881,361 –
Net book value

At 31 December 6,383,472 – 9,877,145 –
Title for office building has not been issued as at the end of the financial year.
The fair value of the properties based on valuation by an independent professionally qualified valuer was RM15,642,000 for the Group and RM23,907,000 for the Company. Valuations were
based on current prices in an active market for all properties.
> pg
12 INTANGIBLE ASSETS
Group
Computer
software Total
RM RM
2007
Cost
At 1 January – –
Additions 263,177 263,177
At 31 December 263,177 263,177
Accumulated amortisation
At 1 January – –
Amortisation for the year 52,635 52,635
At 31 December 52,635 52,635
Net book value

At 31 December 210,542 210,542
> pg 62
13 INVESTMENTS
Group Company
2007 2006 2007 2006
RM RM RM RM
Portfolio investments:
– quoted shares and securities at cost less allowance of
RM813,373 (2006: RM1,380,548) 18,994,670 20,395,623 18,994,670 20,395,623
– deposits with financial institutions 1,733 809 1,733 809
18,996,403 20,396,432 18,996,403 20,396,432

Other investments:
– quoted shares and securities at cost less allowance of
RM14,400 (2006: RM14,400) 5,124,995 5,124,995 5,124,995 5,124,995
– unquoted shares 1,023,750 1,023,750 189,000 189,000
25,145,148 26,545,177 24,310,398 25,710,427
Fair value of portfolio investments:

– quoted shares and securities 18,994,670 20,395,623 18,994,670 20,395,623
– deposits with financial institutions 1,733 809 1,733 809
Fair value of quoted shares in other investments: 5,124,995 5,124,995 5,124,995 5,124,995
Fair value of unquoted shares in other investments: 1,398,602 1,431,751 209,617 149,397
25,520,000 26,953,178 24,331,015 25,670,824

> pg
14 INVESTMENT IN SUBSIDIARIES
Company
2007 2006
RM RM
Unquoted shares, at cost 12,078,711 1,745,556

Less: Accumulated impairment losses (1,122,130) (1,122,130)
10,956,581 623,426
Details of the subsidiaries are as follows:
Group’s direct interest

Subsidiary companies 2007 2006 Principal activities
% %
RAM Consultancy Services Sdn. Bhd.+ 100 100 The principal activity of the company is to carry on business as advisors and consultants to
(Incorporated in Malaysia) Government and semi-government bodies, business, commerce and industries through the
provision of economic, strategic and management consultancy services
RAM Ratings (Lanka) Limited 100 100 Credit rating agency

(Formerly known as Lanka Rating Agency Limited) #
(Incorporated in Sri Lanka)
RAM Rating Services Berhad +,++ 100 – Credit rating agency

+ Audited by PricewaterhouseCoopers, Malaysia

# Audited by a firm other than Pricewaterhouse Coopers, Malaysia
++ On 22 February 2007 and 17 September 2007, the Company paid RM2 and RM9,999,998 respectively in cash to subscribe for 100% equity interest in this newly incorporated
company
> pg 64
14 INVESTMENT IN SUBSIDIARIES (Contd)
The effect of the newly incorporated subsidiary on the financial results of the Group during the financial year is shown below:
Financial period
from 22.2.2007 (date
of incorporation of
subsidiary) to
31.12.2007
RM
Revenue 17,806,525
Other operating income 279,445
Expenses excluding tax (12,608,682)
Profit before tax 5,477,288

Tax expense (1,509,938)
Net profit 3,967,350
The effect of this newly incorporated subsidiary on the Group’s financial position at the year end was as follows:
2007
RM
Non current assets 562,952

Current assets 22,293,302
Current liabilities (8,888,904)
Net assets 13,967,350
Group share of net assets 13,967,350

> pg
15 INVESTMENT IN ASSOCIATED COMPANIES
Group Company
2007 2006 2007 2006
RM RM RM RM
Non-current assets
Unquoted shares, at cost 2,546,250 2,546,250 796,250 796,250

Share of results (including deemed gain on dilution of interest in
jointly controlled entity) (1,947,503) (1,943,606) – –
Accumulated impairment losses – – (346,957) (346,957)
598,747 602,644 449,293 449,293

Unquoted Redeemable Convertible Cumulative
Preference Shares (“RCCPS”) 4,000,000 4,000,000 4,000,000 4,000,000
4,598,747 4,602,644 4,449,293 4,449,293

> pg 66
15 INVESTMENT IN ASSOCIATED COMPANIES (Contd)
Group
2007 2006
RM RM
Share of net assets of associated companies 598,747 602,644
The details of the associates are as follows:
Group’s interest
Associated companies 2007 2006 Principal activities
% %
RAM-DP Information Services Sdn. Bhd.
20 20 The principal activity of the company is to provide information services
BondWeb Malaysia Sdn Bhd. 22.5 25.7 To provide bond pricing and internet based bond information services.
16 AMOUNT DUE FROM ASSOCIATED COMPANY
Amount due from an associated company is unsecured, interest-free and is not repayable within the next 12 months and is denominated in Ringgit Malaysia.
The fair value of amount due from associated company at balance sheet date is RM296,850 (2006: RM284,830).
> pg
17 STAFF LOANS
Group Company
2007 2006 2007 2006
RM RM RM RM
Repayable:
– within 1 year (Note 19) 476,617 763,478 469,342 763,478
– after 1 year 4,605,511 4,368,035 4,576,782 4,368,035
5,082,128 5,131,513 5,046,124 5,131,513
Housing and car loans are given to confirmed staff and are repayable over terms ranging from 1 to 25 years and 1 to 6 years respectively, bearing interest rates of 3% (2006: 3%) and 3.5% (2006:
3.5%) per annum respectively. The Group obtains security over the financed assets.
The fair value of staff loans which are repayable after 1 year, at balance sheet date is RM3,010,333 (2006: RM2,762,950).
Staff loans are denominated in Ringgit Malaysia
18 DEFERRED TAX
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when deferred taxes relate to the same tax
authority.
The following amounts, determined after appropriate offsetting, are shown in the balance sheet.
Group Company
2007 2006 2007 2006
RM RM RM RM
Subject to income tax

Deferred tax assets 128,894 106,048 – 86,108
Deferred tax liabilities (16,586) – (16,586) –
112,308 106,048 (16,586) 86,108

> pg 68
18 DEFERRED TAX (Contd)
The movements during the financial year relating to deferred taxes are as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM
At 1 January 106,048 153,003 86,108 134,359

Credited/(Charged) to income statement (Note 8)
– property, plant and equipment (75,272) (51,204) (78,984) (58,192)
– accruals 58,123 4,249 (23,710) 9,941
– trade receivables 23,409 – – –
6,260 (46,955) (102,694) (48,251)
At 31 December 112,308 106,048 (16,586) 86,108
Deferred tax assets/(liabilities)

– property, plant and equipment (51,324) 23,948 (53,778) 25,206
– accruals 140,223 82,100 37,192 60,902
112,308 106,048 (16,586) 86,108

> pg
18 DEFERRED TAX (Contd)
Group Company
2007 2006 2007 2006
RM RM RM RM
Deferred tax assets (before offsetting)

– property, plant and equipment 73,177 51,838 7,694 50,258
– accruals 140,223 82,100 37,192 60,902
236,809 133,938 44,886 111,160

Offsetting (107,915) (27,890) (44,886) (25,052)
Deferred tax assets (after offsetting) 128,894 106,048 – 86,108
Deferred tax liabilities (before offsetting)

– property, plant and equipment (124,501) (27,890) (61,472) (25,052)
Offsetting 107,915 27,890 44,886 25,052
Deferred tax liabilities (after offsetting) (16,586) – (16,586) –
The amount of deductible temporary differences and unused tax losses (which has no expiry date) for which no deferred tax asset is recognised in the balance sheet are as follows:-
Group
2007 2006
RM RM
Deductible temporary differences 32,110 –

Tax losses 772,325 139,528
> pg 70
19 RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company
2007 2006 2007 2006
RM RM RM RM
Trade receivables 11,453,896 6,370,644 1,473,800 5,968,609

Less: Allowance for doubtful debts (1,296,446) (838,521) (968,083) (806,859)
10,157,450 5,532,123 505,717 5,161,750
Staff loans (Note 17) 476,617 763,478 469,342 763,478

Staff advances 45,374 38,169 41,707 38,169
Other receivables 88,866 78,154 48,676 65,303
Deposits 361,267 344,182 361,268 344,182
Prepayments 157,696 76,496 90,216 64,860
Amounts due from customers on contracts (Note 28) 412,120 642,181 – –
11,699,390 7,474,783 1,516,926 6,437,742
Credit terms of trade receivables range from 30 days to 60 days (2006: 30 days to 60 days).
The currency exposure profile of receivables, deposits and prepayments are as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM
Ringgit Malaysia 11,604,424 7,438,730 1,516,926 6,437,742

Sri Lanka Rupees 94,966 36,053 – –
11,699,390 7,474,783 1,516,926 6,437,742

> pg
20 AMOUNTS DUE FROM SUBSIDIARIES

Company
2007 2006
RM RM
Amounts due from subsidiaries 5,779,510 1,136,476
Amounts due from subsidiaries are unsecured, interest-free and have no fixed terms of repayment.
The currency exposure profile of amounts due from subsidiaries are as follows:
Ringgit Malaysia 5,642,557 1,136,476

Sri Lanka Rupees 136,953 –
5,779,510 1,136,476
21 SHORT TERM INVESTMENTS
Group
2007 2006
RM RM
Treasury bills and bonds 143,785 133,334

Promissory notes – 18,820
Commercial papers 31,421 –
175,206 152,154
Treasury bills, bonds and promissory notes are denominated in Sri Lanka Rupees.
> pg 72
22 CASH AND CASH EQUIVALENTS
Group Company
2007 2006 2007 2006
RM RM RM RM
Deposits with licensed banks 12,919,333 9,459,520 2,835,638 8,953,797

Cash and bank balances 5,104,483 229,626 2,295,921 186,131
18,023,816 9,689,146 5,131,559 9,139,928

Less: Deposits held under lien (125,938) (9,000) (118,938) –
17,897,878 9,680,146 5,012,621 9,139,928
Deposits of the Group and Company have an average maturity of 78 days (2006: 45 days). Bank balances are deposits held at call with banks.
The weighted average interest rates of deposits with licensed banks that were effective as at balance sheet date were as follows:
Group Company
2007 2006 2007 2006
% % % %
Deposits with licensed banks 3.47 3.30 3.39 3.30
As at balance sheet date, deposits of the Group amounting to RM125,938 (2006: RM9,000) was placed with licensed banks and held under lien for two (2) bank guarantees issued to
Tenaga Nasional Berhad. The expiry dates of the bank guarantees are 31 December 2007 and 27 May 2008.
> pg
22 CASH AND CASH EQUIVALENTS (Contd)
The currency exposure profile of cash and cash equivalents are as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM

Sri Lanka Rupees 139,265 249,410 17,981 33,458
18,023,816 9,689,146 5,131,559 9,139,928
23 PAYABLES
Group Company
2007 2006 2007 2006
RM RM RM RM
Accruals 1,807,486 1,453,746 1,137,895 1,256,064

Other payables 4,787,078 942,386 2,366,165 781,948
6,594,564 2,396,132 3,504,060 2,038,012
Credit terms of other payables granted to the Group vary from 14 days to 30 days. (2006: 14 days to 30 days).
> pg 74
23 PAYABLES (Contd)
The currency exposure profile of payables is as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM

Sri Lanka Rupees 22,529 14,605 – –
6,594,564 2,396,132 3,504,060 2,038,012
24 BORROWINGS
Group and Company
2007 2006
RM RM
Cagamas Loan (Back to back):
Repayable within 1 year 94,469 89,375

Repayable after 1 year 869,166 1,132,013
Total borrowings 963,635 1,221,388

> pg
24 BORROWINGS (Contd)
The Cagamas back to back loan is repayable in 84 equal monthly instalments commencing September 2002. The Cagamas back to back loan bears interest at 5.20% per annum. The Cagamas
back to back loan is with recourse as follows:
(i) repurchase of the staff housing loans by the Company or
(ii) transfer of all legal rights in the staff housing loans to the intermediary bank.
Group and Company

2007 2006
RM RM
Weighted average effective interest rates:

Cagamas back to back loan 5.20 5.20
Estimated fair value
The fair value of borrowings at balance sheet date is as follows:
Cagamas back to back loan 865,147 1,034,871
The Cagamas back to back loan is denominated in Ringgit Malaysia.

> pg 76
25 HIRE PURCHASE PAYABLE
Group Company
2007 2006 2007 2006
RM RM RM RM
Current 90,813 60,804 30,009 –

Non current 149,332 90,145 119,991 –
240,145 150,949 150,000 –
Repayment:
Not later than 1 year 108,264 75,159 33,384 –
Later than 1 year and not later than 5 years 170,317 111,427 133,491 –
Less: future finance charges (38,436) (35,637) (16,875) –
240,145 150,949 150,000 –
The fair value of hire purchase payable at balance sheet date for the Group is RM241,341 (2006: RM141,309) and for the Company is RM156,179 (2006: Nil).
> pg
26 PROVISION FOR GRATUITY
Group
2007 2006
RM RM
Non–current
At 1 January 57,679 46,148

Charged to income statement 7,728 17,955
Currency translation differences (4,193) (6,424)
At 31 December 61,214 57,679
The provision for gratuity is denominated in Sri Lanka Rupees. The details of the provision are in accounting policy Note 2 (o) (ii).
27 SHARE CAPITAL
Group and Company

2007 2006
RM RM
Authorised:
Ordinary shares of RM1.00 each 20,000,000 20,000,000
Issued and fully paid:

Ordinary shares of RM1.00 each 10,000,000 10,000,000
> pg 78
28 CONSULTANCY WORK-IN-PROGRESS
Group
2007 2006
RM RM
Cost incurred to date 343,700 555,500
Add: Profit recognised to date 285,420 346,205

Less: Progress billings (217,000) (259,524)
Amounts due from customers on contracts

(Note 19) 412,120 642,181
> pg
29 DIVIDENDS
Dividends paid in respect of ordinary shares were as follows:

Group and Company
2007 2006
Amount of Amount of
Gross dividend Gross dividend
per share net of tax per share net of tax
RM RM RM RM
Final dividend – proposed

tax at 26% (2006: 27%) 0.07 518,000 0.07 511,000
Dividend per share recognised as distribution to ordinary equity

holders of the Company 0.07 511,000 0.07 504,000
30 OPERATING LEASE COMMITMENTS

Group and Company
2007 2006
RM RM
Analysis of the non-cancellable operating lease rental

commitments are as follows:
Payable no later than one year 42,020 49,020

Payable later than one year, not later than two years 34,455 42,020
Payable later than two years, not later than five years 21,600 56,055
98,075 147,095
The lease commitments are in respect of rental of office equipment.

> pg 80
31 CAPITAL COMMITMENTS
Capital expenditure not provided for in the financial statements in respect of the next financial year are as follows:
Group and Company

2007 2006
RM RM
Authorised but not contracted for 5,589,750 1,463,000
Analysed as follows:
– Property, plant and equipment 5,589,750 1,463,000
32 FAIR VALUES
The carrying amounts of financial assets and financial liabilities of the Group and the Company at the balance sheet date approximated their fair values except as disclosed elsewhere in the notes
to the financial statements.
33 CONTINGENT LIABILITY
A debtor of RAM Holdings Berhad (formerly known as Rating Agency Malaysia Berhad) has filed a claim against the Company for general damages in defamation and negligence. At the date of
the financial statements, no specific amount has been sought against the Company. A defence by the Company has been filed together with an application to strike out the Plaintiff’s matter which
was allowed by the Senior Assistant Registrar on 14 November 2007. The Plaintiff had filed an appeal against the decision. If the appeal is allowed, the High Court suit will be reinstated.
No provision has been recognised in the financial statements as the Directors are of the view that the debtor’s claim has a remote chance of success and would not have a significant impact to
the financial results of the Company.
> pg
34 COMPARATIVES
Certain comparative figures have been reclassified to conform with current year’s presentation.
As previously
reported Reclassification As restated
RM RM RM
At 31 December 2006
Company
Revenue 25,762,394 2,978,507 28,740,901

Other operating income 6,496,007 (2,978,507) 3,517,500
Other operating expenses (4,917,830) 2,306,630 (2,611,200)
Seminars and publication expenses – (2,306,630) (2,306,630)
Group
Revenue 28,215,000 2,978,507 31,193,507

Other operating income 6,503,018 (2,978,507) 3,524,511
Other operating expenses (5,419,340) 2,306,630 (3,112,710)
Seminars and publication expenses – (2,306,630) (2,306,630)
Receivables, deposits and prepayments 7,839,783 (365,000) 7,474,783
Amount due from associated company – 365,000 365,000
> pg 82
35 SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions:
Company
2007 2006
RM RM
RAM Rating Services Berhad

– office rental received 523,770 –
– management fees received 4,625,136 –
BondWeb Malaysia Sdn. Bhd

– office rental received 60,963 60,963
– staff secondment fees 204,000 51,000
RAM Consultancy Services Sdn. Bhd

– office rental received 141,588 160,328
– consultancy fees charged – (152,693)
Remuneration of key management personnel (including Executive Directors) for the financial year are as follows:
Group Company
2007 2006 2007 2006
RM RM RM RM
Salaries and bonus 8,752,368 7,055,485 5,014,550 6,000,155

Defined contribution retirement plan 1,478,957 1,204,682 768,267 996,111
Other employee benefits 1,096,599 1,058,433 673,455 931,872
Estimared money value of benefits-in-kind 98,950 101,450 85,550 73,550
11,426,874 9,420,050 6,541,822 8,001,688

> pg
36 SUBSEQUENT EVENT
On 30 August 2007, the Board of Directors approved a further investment of 31.0%, increasing the present shareholding of 20.0% to 51.0%, in RAM-DP Information Services Sdn Bhd via
subscription of new issues of 2,518,750 ordinary shares of RM1.00 each. Upon completion of the above acquisition, RAM-DP Information Services Sdn Bhd will become a 51.0% owned
subsidiary of the Company.
The acquisition was completed on 17 January 2008.
37 APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 26 March 2008
> pg 84
STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob and YBhg Datuk Rajandram s/o Chellappah, two of the Directors of RAM Holdings Berhad (formerly known as Rating Agency Malaysia
Berhad), state that, in the opinion of the Directors, the financial statements set out on pages 32 to 83 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the
Company as at 31 December 2007 and of the results and cash flows of the Group and of the Company for the year ended on that date in accordance with provisions of the Companies Act, 1965 and
the MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities.
Signed on behalf of the Board of Directors in accordance with their resolution dated 26 March 2008.
YBHG TAN SRI DATO’ SERI SITI NORMA BINTI YAAKOB YBHG DATUK RAJANDRAM S/O CHELLAPPAH
DIRECTOR DIRECTOR
DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, Suresh Menon, the Director primarily responsible for the financial management of RAM Holdings Berhad (formerly known as Rating Agency Malaysia Berhad), do solemnly and sincerely declare
that the financial statements set out on pages 32 to 83 are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of
the Statutory Declarations Act, 1960.
SURESH MENON
Subscribed and solemnly declared by the abovenamed Suresh Menon at Kuala Lumpur in Malaysia on 26 March 2008 , before me.
COMMISSIONER FOR OATHS

> pg
REPORT OF THE AUDITORS TO THE MEMBERS OF RAM HOLDINGS BERHAD

(Company No. 208095 U)
We have audited the financial statements set out on pages 32 to 83. These financial statements are the responsibility of the Company’s Directors. It is our responsibility to form an independent
opinion, based on our audit, on these financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purposes. We do
not assume responsibility to any other person for the content of this report.
We conducted our audit in accordance with approved auditing standards 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 financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion:
(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and MASB Approved Accounting Standards in Malaysia for Entities Other than
Private Entities so as to give a true and fair view of:
(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(ii) the state of affairs of the Group and of the Company as at 31 December 2007 and of the results and cash flows of the Group and of the Company for the year ended on that date;
and
> pg 86
REPORT OF THE AUDITORS TO THE MEMBERS OF RAM HOLDINGS BERHAD (Contd)

(Company No. 208095 U)
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiaries of which we have acted as auditors have been properly kept in
accordance with the provisions of the Act.
The name of the subsidiary that we have not acted as auditors is indicated in Note 14 to the financial statements. We have considered the financial statements of the subsidiary company and the
auditor’s report thereon.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes
of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection 3 of section 174 of the Act.
PRICEWATERHOUSECOOPERS THAYAPARAN A/L S. SANGARAPILLAI

(No. AF: 1146) (No. 2085/09/08 (J))
Chartered Accountants Partner of the firm
Kuala Lumpur
26 March 2008
RAM HOLDINGS BERHAD
(Company No. 208095 - U)
(Incorporated in Malaysia under the Companies Act, 1965)
PROXY FORM HOLDINGS
I/We
(BLOCK LETTERS)
of
being a member/members of RAM HOLDINGS BERHAD, hereby appoint
or, failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us and on my/our behalf at the Seventeenth Annual General Meeting of the
Company to be held in Kuala Lumpur on Thursday, 8 May 2008 at 11.00 a.m. and at any adjournment thereof, and vote as indicated below:
NO. RESOLUTION FOR AGAINST

1. To receive and adopt the Directors’ Report and the Audited Financial Statements for the financial year ended 31 December
2007, and the Auditors’ Report thereon
2. To approve the payment of a first and final dividend of 7% (7 sen per RM1.00 share), less 26% Malaysian income tax
3. To re-elect YBhg Datuk Zainal Aznam bin Mohd Yusof as Director
4. To re-appoint YBhg Tan Sri Dato’ Seri Siti Norma binti Yaakob as Director
5. To re-appoint YBhg Dato’ Syed Md Amin bin Syed Jan Aljeffri as Director
6. To approve payment of Directors’ fee
7. To re-appoint PricewaterhouseCoopers as Auditors and to authorise the Directors to fix their remuneration
Number of Shares
Date 2008 Signature/Common Seal
Notes:-
1. This proxy form must be deposited at the Registered Office of the Company not less than 48 hours before the time appointed for the meeting.
2. A corporation must complete the proxy form under its common seal or under the hand of a duly authorised officer or attorney. A proxy need not be a member of the Company. The instrument
appointing a proxy shall be deemed to confer authority to demand, or join in demanding a poll.
3. Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he deems fit.
Fold here
affix
postage
here
RAM HOLDINGS BERHAD

No.19-G, The Boulevard
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
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RAM Annual Report 2007

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RAM Annual Report 2007

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The RAM group of companies works towards a common goal – to provide

direction to our stakeholders in all that we undertake.

PROVIDING Our challenge – is about constantly seeking innovative and refreshing

Providing Direction is therefore about endless possibilities, having the

Message from the Chairman COMPANY NUMBER

From the Desk of the Executive Deputy Chairman AUDITORS

6. To approve the fees of RM73,770 to the Non-Executive Directors for the

7. To re-appoint PricewaterhouseCoopers as Auditors and to authorise the

5. Untuk melantik semula sebagai Pengarah, YBhg Dato’ Syed Md Amin

6. Untuk meluluskan yuran sebanyak RM 73,770 kepada Pengarah Bukan

The Right Composition is about constantly inventing and

>> From left:

RAM Rating RAM Consultancy RAM Ratings

Mr Suresh Menon Mr Wong Fook Wah

Datuk C Rajandram Suresh Menon Dr Yeah Kim Leng

Nazela Ahmad Teow Wai Yen Padthma Subbiah

Esther Lai Chris Lee Wai Kit

Wong Fook Wah Liza Mohd Noor Chong Kwee Siong

Promod Dass Siew Suet Ming Hafiza Abdul Rashid

The possibilities are endless - it is not

Berlawanan dengan trend pasaran kewangan maju, pasaran bon utama

First place First place New Structured Finance Benchmark Deal

Leading through innovation is about

FROM THE DESK OF THE

>> JANUARY >> MAY >> SEPTEMBER

>> HIGHLIGHTS OF ‘07

1 Rating Services 2 Training Services 3 Products

WHERE KNOWLEDGE COMES ALIVE

RAM Training Calendar 2008

Level: 1 - Introductory / Base Course 2 - Intermediate 3 - Advanced

Advanced Option Market Making & Risk Management 3 21 - 23

Structured Products: Sales, Value & Applications 2 10 14 - 16

RAM Training Calendar 2008

Level: 1 - Introductory / Base Course 2 - Intermediate 3 - Advanced

RAM Training Calendar 2008

MASTERING THE ENGLISH LANGUAGE

Level: 1 - Introductory / Base Course 2 - Intermediate 3 - Advanced

RAM HOLDINGS BERHAD FINANCIAL RESULTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (Contd) AUDITORS

In the opinion of the Directors:

INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

Revenue 4 38,217,657 31,193,507 24,021,980 28,740,901

Other operating income 4,408,892 3,524,511 3,972,030 3,517,500

Finance cost – interest (73,526) (87,505) (59,450) (71,666)

Profit before tax 6 11,283,898 8,455,668 6,630,200 9,660,494

Earnings per share (sen) 9 82 54

BALANCE SHEETS AS AT 31 DECEMBER 2007

52,334,171 53,327,727 61,409,895 52,417,473

30,925,996 17,408,134 13,113,792 16,714,146

BALANCE SHEETS AS AT 31 DECEMBER 2007 (Contd)

8,059,979 3,050,435 3,628,538 2,631,511

NET CURRENT ASSETS 22,866,017 14,357,699 9,485,254 14,082,635

NON CURRENT LIABILITIES

74,103,890 66,405,589 69,889,406 65,368,095

CAPITAL AND RESERVES

Share capital 27 10,000,000 10,000,000 10,000,000 10,000,000

Shareholders’ equity 74,103,890 66,405,589 69,889,406 65,368,095

At 1 January 2007 10,000,000 10,000,000 46,562 56,359,027 66,405,589

At 31 December 2007 10,000,000 10,000,000 31,931 64,071,959 74,103,890

At 1 January 2006 10,000,000 10,000,000 74,836 51,396,625 61,471,461

At 31 December 2006 10,000,000 10,000,000 46,562 56,359,027 66,405,589

At 1 January 2007 10,000,000 10,000,000 55,368,095 65,368,095

At 31 December 2007 10,000,000 10,000,000 59,889,406 69,889,406