UNITED MALAYAN LAND BHD (Incorporated in Malaysia)

Transcription

1 DIRECTORS REPORT AND FINANCIAL STATEMENTS 0985A1/nad

2 DIRECTORS' REPORT The Directors hereby submit to the members their annual report and the audited financial statements of the Group and Company for the financial year ended 31 December PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and the provision of management services. The principal activity of the subsidiary companies is property development. Other activities include property investment, investment holding and leasing of lands. There were no significant changes in the nature of these activities during the financial year. FINANCIAL RESULTS The financial results of the Group and Company for the financial year ended 31 December 2010 are as follows: Group Company RM 000 RM 000 Profit for the financial year 57,736 89,293 Profit attributable to: Owners of the Company 51,570 89,293 Non-controlling interests 6,166-57,736 89,293 DIVIDENDS The dividends paid by the Company since 31 December 2009 were as follows: In respect of the financial year ended 31 December 2009: RM interim dividend of 2.50 sen gross per ordinary share, less income tax of 25%, paid on 10 February ,525 - final dividend of 4.06 sen gross per ordinary share, less income tax of 25% and 0.70 sen gross per ordinary share, tax-exempt, paid on 7 September ,037 In respect of the financial year ended 31 December 2010: - interim dividend of 2.50 sen gross per ordinary share, tax-exempt, paid on 22 February ,032 19,594 1

3 DIRECTORS' REPORT (continued) DIVIDENDS (continued) The Directors now recommend the payment of a final dividend of 0.60 sen gross per ordinary share, less income tax of 25% and 4.55 sen per ordinary share, single-tier, on 241,303,433 ordinary shares (which is net of 401,800 treasury shares), in respect of the financial year ended 31 December This final net dividend amounting to RM12,065,172 is subject to the approval of the members at the forthcoming Annual General Meeting of the Company. RESERVES AND PROVISIONS There were no material transfers to or from reserves and provisions during the financial year other than as disclosed in the financial statements. EMPLOYEES SHARE OPTION SCHEME ( ESOS ) At an Extraordinary General Meeting held on 23 June 2010, the shareholders approved the establishment of an Employees Share Option Scheme ( ESOS ) of not more than 15% of the issued and paid-up share capital (excluding treasury shares) of the Company to its eligible employees and Directors of the Group. There was no option granted during the financial year. TREASURY SHARES As at 31 December 2010, the Company held as treasury shares of 401,800 of its 241,705,233 issued ordinary shares. The treasury shares are held at a carrying amount of RM463,068 and further relevant details are disclosed in Note 24 to the financial statements. 2

4 DIRECTORS' REPORT (continued) DIRECTORS The Directors who have held office during the period since the date of the last report are as follows: Alternate Director YABhg Tun Musa Hitam Dato Ng Eng Tee Datuk Syed Ahmad Khalid bin Syed Mohammed Datuk Nur Jazlan bin Tan Sri Mohamed Ng Eng Soon Syed Azmin bin Mohd Syed Nor Pakhruddin bin Sulaiman Chan Say Yeong Lim Wie Shan (Resigned on 1 March 2011) (Resigned on 24 June 2010) Lim Chee Ming (Appointed on 24 June 2010 and resigned on 1 March 2011) Hazel Chew Siew Cheng Lim Wie Shan (Resigned on 23 June 2010) (Resigned on 23 June 2010) Ee Chee Hong Quah Lay Cheng (Appointed on 24 June 2010 and (Appointed on 24 June 2010 and resigned on 1 March 2011) resigned on 1 March 2011) In accordance with Article 94 of Company's Articles of Association, Ng Eng Soon and Pakhruddin bin Sulaiman retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election. In compliance with Section 129(2) of Companies Act, 1965, YABhg Tun Musa Hitam, being over seventy years of age, retires at the forthcoming Annual General Meeting and offers himself for reappointment as Director in accordance with Section 129(6) of Companies Act, DIRECTORS' BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than the Directors remuneration as disclosed in Note 7 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except as disclosed in Note 29 to the financial statements. 3

5 DIRECTORS' REPORT (continued) DIRECTORS' INTERESTS IN SHARES AND DEBENTURES According to the Register of Directors' Shareholdings, particulars of interests of Directors who held office at the end of the financial year in the shares of the Company are as follows: Shareholdings in the name of the Director Number of ordinary shares of RM1.00 each As at As at Acquired Disposed Dato Ng Eng Tee 6, ,525 Ng Eng Soon 7, ,151 Datuk Syed Ahmad Khalid bin Syed Mohammed Shareholdings in which the Director is deemed to have an interest Dato Ng Eng Tee 28, ,317 Ng Eng Soon 17, ,829 Dato Ng Eng Tee and Ng Eng Soon by virtue of their direct and indirect interests in the Company, are deemed to have an interest in the shares of the subsidiary companies to the extent the Company has an interest. Other than as disclosed above, according to the Register of Directors Shareholdings, the Directors in office at the end of the financial year did not hold any interest in shares, options over ordinary shares or debentures in the Company and its related corporations during the financial year. STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS Before the statements of comprehensive income and statements of financial position were made out, the Directors took reasonable steps: (a) (b) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Group and Company had been written down to an amount which they might be expected so to realise. 4

6 DIRECTORS' REPORT (continued) STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued) At the date of this report, the Directors are not aware of any circumstances: (a) (b) (c) (d) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and Company inadequate to any substantial extent; or which would render the values attributed to current assets in the financial statements of the Group and Company misleading; or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and Company misleading or inappropriate; or not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading. No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group or Company to meet their obligations when they fall due. At the date of this report, there does not exist: (a) (b) any charge on the assets of the Group or Company which has arisen since the end of the financial year which secures the liability of any other person; or any contingent liability of the Group or Company which has arisen since the end of the financial year. In the opinion of the Directors: (a) (b) the results of the operations of the Group and Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and there has not arisen in the interval between the end of the financial year and the date of 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 Company for the financial year in which this report is made. 5

7 DIRECTORS' REPORT (continued) AUDITORS The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with their resolution dated 22 April DATO NG ENG TEE DIRECTOR PAKHRUDDIN BIN SULAIMAN DIRECTOR 6

8 STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF COMPANIES ACT, 1965 We, Dato Ng Eng Tee and Pakhruddin bin Sulaiman, two of the Directors of United Malayan Land Bhd, state that, in the opinion of the Directors, the financial statements set out on pages 11 to 97 are drawn up so as to give a true and fair view of the state of affairs of the Group and Company as at 31 December 2010 and of the results and cash flows of the Group and Company for the financial year ended on that date in accordance with Malaysian Accounting Standards Board ( MASB ) Approved Accounting Standards in Malaysia for Entities Other than Private Entities and the provisions of Companies Act, The information set out in Note 34 on page 98 have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants. Signed on behalf of the Board of Directors in accordance with their resolution dated 22 April DATO NG ENG TEE DIRECTOR PAKHRUDDIN BIN SULAIMAN DIRECTOR Kuala Lumpur STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF COMPANIES ACT, 1965 I, Gan Teong Hock, the Officer primarily responsible for the financial management of United Malayan Land Bhd, do solemnly and sincerely declare that the financial statements set out on pages 11 to 97 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of Statutory Declarations Act, GAN TEONG HOCK Subscribed and solemnly declared by the abovenamed Gan Teong Hock at Kuala Lumpur, Malaysia on 22 April Before me, COMMISSIONER FOR OATHS 7

9 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF (Company No. ) REPORT ON THE FINANCIAL STATEMENTS We have audited the financial statements of United Malayan Land Bhd, which comprise the statements of financial position as at 31 December 2010, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 11 to 97. Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities and Companies Act, 1965, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Group s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. PricewaterhouseCoopers (AF 1146), Chartered Accountants, Level 10, 1 Sentral, Jalan Travers, Kuala Lumpur Sentral, P.O. Box 10192, Kuala Lumpur, Malaysia T: +60 (3) , F: +60 (3) , 8

10 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF (CONTINUED) (Company No. ) REPORT ON THE FINANCIAL STATEMENTS (CONTINUED) Opinion In our opinion, the financial statements have been properly drawn up in accordance with MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities and Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and Company as of 31 December 2010 and of its financial performance and cash flows for the financial year then ended. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) (b) (c) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. OTHER REPORTING RESPONSIBILITIES The supplementary information set out in Note 34 on page 98 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. 9

11 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF (CONTINUED) (Company No. ) OTHER MATTERS This report is made solely to the members of the Company, as a body, in accordance with Section 174 of Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. PRICEWATERHOUSECOOPERS (No. AF: 1146) Chartered Accountants LEE TUCK HENG (No. 2092/09/12 (J)) Chartered Accountant Kuala Lumpur 22 April

12 STATEMENTS OF COMPREHENSIVE INCOME Group Company Note RM 000 RM 000 RM 000 RM 000 Revenue 5 316, , ,924 80,095 Finance income Other operating income 18,744 41, Development costs recognised as expenses (197,451) (135,929) - - Advertising and marketing expenses (12,069) (3,271) (39) (129) Depreciation of property, plant and equipment and investment properties (1,698) (1,483) (356) (439) Employee benefits expenses 6 (20,819) (18,009) (7,496) (6,514) Impairment of investments in subsidiary companies - - (86) - Impairment of available-for-sale financial assets - (3,099) - (3,099) Impairment of trade and other receivables (1,907) (1,712) - - Management fees 30 (120) - - Professional consultancy fees (9,021) (5,749) (719) (1,153) Rental of premises (908) (1,153) (816) (797) Reversal of impairment of trade and other receivables 4,317 5, Upkeep, repairs and maintenance of assets (5,627) (3,303) (202) (167) Other operating expenses (10,218) (11,427) (1,448) (1,403) Finance costs 8 (7,117) (8,618) (4,721) (4,906) Share of results of jointly controlled entities 539 1, Profit before tax 9 74,337 62, ,055 61,488 Income tax expense 10 (16,601) (5,449) (12,762) (13,590) Profit for the financial year c/f 57,736 57,468 89,293 47,898 11

13 STATEMENTS OF COMPREHENSIVE INCOME (continued) Group Company Note RM 000 RM 000 RM 000 RM 000 Profit for the financial year b/f 57,736 57,468 89,293 47,898 Other comprehensive income Total comprehensive income for the financial year 57,736 57,468 89,293 47,898 Profit attributable to: Owners of the Company 51,570 55,035 89,293 47,898 Non-controlling interests 6,166 2, Profit for the financial year 57,736 57,468 89,293 47,898 Total comprehensive income attributable to: Owners of the Company 51,570 55,035 89,293 47,898 Non-controlling interests 6,166 2, Total comprehensive income for the financial year 57,736 57,468 89,293 47,898 Earnings per share attributable to owners of the Company (sen) - basic and diluted

14 STATEMENTS OF FINANCIAL POSITION As at 31 December 2010 ASSETS Group Company (Restated) (Restated) Note RM 000 RM 000 RM 000 RM 000 Non-current assets Property, plant and equipment , ,390 1,113 1,432 Investment properties 14 56,297 56, Investments in subsidiary companies , ,792 Investments in jointly controlled entities 16 31,041 20,502 30,000 20,000 Available-for-sale financial assets Land held for property development , , Deferred tax assets 19 19,304 17, Trade and other receivables 22 21,123 15,392 17,839 10, , , , ,345 Current assets Completed properties 20 37,542 48, Property development costs , , Tax recoverable 478 2, ,772 Trade and other receivables , , , ,296 Deposits, bank and cash balances 23 71,950 62, , , , , ,800 Total assets 1,179,409 1,197, , ,145 13

15 STATEMENTS OF FINANCIAL POSITION (continued) As at 31 December 2010 Group Company (Restated) (Restated) Note RM 000 RM 000 RM 000 RM 000 EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital , , , ,705 Reserves , , , , , , , ,460 Non-controlling interests 55,469 66, Total equity 933, , , ,460 Non-current liabilities Deferred tax liabilities 19 10,486 10, Trade and other payables 26 7,032 7, Borrowings 27 67,512 81,761 40,063 40,292 Provisions 28 4, , ,105 40,063 40,292 Current liabilities Trade and other payables 26 71,902 51,223 35,210 6,596 Borrowings - bank overdrafts 27 6,927 9, others 27 55,975 95,488 21,229 43,272 Provisions 28 12,675 9, Current tax liabilities 2,814 1, Dividend payable 12 6,032 4,525 6,032 4, , ,266 63,098 54,393 Total liabilities 245, , ,161 94,685 Total equity and liabilities 1,179,409 1,197, , ,145 14

16 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Attributable to owners of the Company Non- Share Share Revaluation Capital Treasury Retained Revaluation controlling Total Note capital premium reserves reserves shares earnings reserves* Total interests equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 As at 1 January 2010 (as previously stated) 241,705 63, ,421 (41,625) (463) 278, , ,849 66, ,769 Effects of changes in accounting policy - FRS As at 1 January 2010 (restated) 241,705 63, ,421 (41,625) (463) 278, , ,029 66, ,956 Profit for the financial year ,570-51,570 6,166 57,736 Other comprehensive income - Realisation of revaluation reserves - - (3,202) , Total comprehensive income for the financial year - - (3,202) ,970 2,802 51,570 6,166 57,736 15

17 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Transactions with owners Attributable to owners of the Company Non- Share Share Revaluation Capital Treasury Retained Revaluation controlling Total Note capital premium reserves reserves shares earnings reserves* Total interests equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM Final dividend paid for the financial year ended 31 December (9,037) - (9,037) (2,925) (11,962) - Interim dividends paid and payable for the financial year ended 31 December (6,032) - (6,032) (10,499) (16,531) - Special dividend paid for the financial year ended 31 December (2,100) (2,100) Redemption of preference shares in a subsidiary company (70) - - (2,100) (2,100) Acquisition of non-controlling interest (16,000) - (16,000) - (16,000) As at 31 December ,705 63, ,219 (41,555) (463) 299, , ,530 55, ,999 * This represents the accumulated revaluation reserves which have already been realised. 16

18 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Attributable to owners of the Company Non- Share Share Revaluation Capital Treasury Retained Revaluation controlling Total Note capital premium reserves reserves shares earnings reserves* Total interests equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 As at 1 January ,705 63, ,018 (41,625) (463) 236,681 73, ,388 84, ,450 Profit for the financial year ,035-55,035 2,433 57,468 Other comprehensive income - Realisation of revaluation reserves - - (33,597) , Total comprehensive income for the financial year - - (33,597) ,035 33,597 55,035 2,433 57,468 Transactions with owners - Final dividend paid for the financial year ended 31 December (4,525) - (4,525) (450) (4,975) - Interim dividends paid for the financial year ended 31 December (9,049) - (9,049) (19,125) (28,174) As at 31 December ,705 63, ,421 (41,625) (463) 278, , ,849 66, ,769 * This represents the accumulated revaluation reserves which have already been realised. 17

19 COMPANY STATEMENT OF CHANGES IN EQUITY Non-distributable Distributable Share Share Merger Treasury Retained Revaluation Note capital premium reserve shares earnings reserves* Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 As at 1 January ,705 63, ,375 (463) 87,616 15, ,460 Total comprehensive income for the financial year ,293-89,293 Final dividend paid for the financial year ended 31 December (9,037) - (9,037) Interim dividend payable for the financial year ended 31 December (6,032) - (6,032) As at 31 December ,705 63, ,375 (463) 161,840 15, ,684 * This represents the accumulated revaluation reserves which have already been realised. 18

20 COMPANY STATEMENT OF CHANGES IN EQUITY (continued) Non-distributable Distributable Share Share Merger Treasury Retained Revaluation Note capital premium reserve shares earnings reserves* Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 As at 1 January ,705 63, ,375 (463) 53,292 15, ,136 Total comprehensive income for the financial year ,898-47,898 Final dividend paid for the financial year ended 31 December (4,525) - (4,525) Interim dividends paid for the financial year ended 31 December (9,049) - (9,049) As at 31 December ,705 63, ,375 (463) 87,616 15, ,460 * This represents the accumulated revaluation reserves which have already been realised. 19

21 STATEMENTS OF CASH FLOWS CASH FLOW FROM OPERATING ACTIVITIES Group Company RM 000 RM 000 RM 000 RM 000 Profit before tax 74,337 62, ,055 61,488 Adjustments for: Depreciation of property, plant and equipment and investment properties 1,698 1, Finance costs 7,117 8,618 4,721 4,906 Finance income (1,301) (681) (12,795) (6,755) Gain on disposal of property, plant and equipment (5) (36,459) - - Gross dividend income from subsidiary companies - - (98,972) (65,695) Impairment of investments in subsidiary companies Impairment of available-for-sale financial assets - 3,099-3,099 Impairment of trade and other receivables 1,907 1, Loss on disposal of property, plant and equipment Property, plant and equipment written off Provision 7, Reversal of impairment of trade and other receivables (4,317) (5,134) - - Share of results of jointly controlled entities (539) (1,158) - - Write-down of inventories ,930 35,036 (4,549) (2,419) Decrease in land held for property development, completed properties and property development costs 41,724 40, Decrease/(increase) in receivables 16,438 (59,512) (53,884) 79,651 Increase/(decrease) in payables 3,070 (27,206) 24,513 (369) Net cash flow from operations 147,162 (11,637) (33,920) 76,863 Interest paid (8,257) (10,526) (4,620) (4,921) Interest received 2,075 1, ,159 Tax (paid)/refunded (15,239) (7,386) 911 (183) Net cash flow from operating activities 125,741 (27,960) (37,148) 74,918 20

22 STATEMENTS OF CASH FLOWS (continued) CASH FLOW FROM INVESTING ACTIVITIES Group Company RM 000 RM 000 RM 000 RM 000 Acquisition of non-controlling interest (12,000) Additions in investment properties (3) (227) - - Dividend received from a jointly controlled entity Investment in subsidiary companies - - (12,000) (83,262) Investment in a jointly controlled entity (10,000) - (10,000) - Net dividend income from subsidiary companies ,713 46,969 Proceeds from disposal of available-for-sale financial assets Proceeds from disposal of property, plant and equipment 5 85, Purchase of property, plant and equipment (7,164) (2,414) (37) (45) Redemption of preference shares in a subsidiary company - - 4,900 - Net cash flow from investing activities (29,162) 83,313 69,576 (36,236) CASH FLOW FROM FINANCING ACTIVITIES Dividends paid to owners of the Company (13,562) (9,049) (13,562) (9,049) Dividends paid to non-controlling interests (15,524) (19,575) - - Finance lease principal payments (272) (260) (272) (260) Net repayment of borrowings (53,490) (81,826) (22,000) (22,500) Redemption of preference shares in a subsidiary company by a non-controlling interest (2,100) Net cash flow from financing activities (84,948) (110,710) (35,834) (31,809) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 11,631 (55,357) (3,406) 6,873 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 53, ,749 3,732 (3,141) CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 65,023 53, ,732 21

23 STATEMENTS OF CASH FLOWS (continued) Cash and cash equivalents comprise: Group Company RM 000 RM 000 RM 000 RM 000 Bank and cash balances (Note 23) 2,686 3, Bank balances under Housing Development Accounts ( HDA ) (Note 23) 56,281 15, Bank balances under sinking fund (Note 23) 1,397 1, Fixed deposits (Note 23) 5,286 24, Short term money market deposits (Note 23) 6,300 17,350-3,000 Bank overdrafts (Note 27) (6,927) (9,550) ,023 53, ,732 22

24 NOTES TO THE FINANCIAL STATEMENTS 1 CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad. The address of the registered office of the Company is as follows: Suite 1.1, 1st Floor Kompleks Antarabangsa Jalan Sultan Ismail Kuala Lumpur Malaysia Telephone : (603) Fax : (603) Website : http: The principal activities of the Company are investment holding and the provision of management services. The principal activitiy of the subsidiary companies is property development. Other activities include property investment, investment holding and leasing of lands. There were no significant changes in the nature of these activities during the financial year. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These accounting policies have been consistently applied to all the financial years presented in dealing with items which are considered material in relation to the financial statements, unless otherwise stated. 2.1 Basis of preparation The financial statements of the Group and Company have been prepared under the historical cost convention (as modified to include the revaluation of certain property, plant and equipment), unless otherwise indicated in this summary of significant accounting policies. The financial statements of the Group and Company have been prepared in accordance with Financial Reporting Standards ( FRSs ), the MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities and the provisions of Companies Act,

25 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) The preparation of the financial statements in conformity with FRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported financial year. Although these estimates and judgments are based on the Directors best knowledge of current events and actions, actual results may differ from these estimates. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. (i) Standards, amendments to published standards and interpretations to existing standards that are effective The Group and Company adopted the following standards, amendments to published standards and interpretations to existing standards that are mandatory for financial periods beginning on or after 1 January 2010: Amendment to FRS 2 Share-based Payment - Vesting Conditions and Cancellations Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations FRS 7 Financial Instruments: Disclosures and Amendment to FRS 7 FRS 8 Operating Segments and Amendment to FRS 8 Revised FRS 101 Presentation of Financial Statements Amendment to FRS 107 Statement of Cash Flows Amendment to FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors Amendment to FRS 110 Events after the Balance Sheet Date Amendment to FRS 116 Property, Plant and Equipment Amendment to FRS 117 Leases Amendment to FRS 118 Revenue Amendment to FRS 119 Employee Benefits FRS 123 Borrowing Costs and Amendment to FRS 123 Amendment to FRS 127 Consolidated and Separate Financial Statements Amendment to FRS 128 Investments in Associates Amendments to FRS 128 and FRS 131 "Interests in Joint Ventures (consequential amendments to FRS 132 Financial instruments: Presentation and FRS 7) Amendment to FRS 132 Financial Instruments: Presentation Amendment to FRS 134 Interim Financial Reporting Amendment to FRS 136 Impairment of Assets Amendment to FRS 138 Intangible Assets FRS 139 Financial Instruments: Recognition and Measurement and Amendment to FRS 139 Amendment to FRS 140 Investment Property 24

26 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (i) Standards, amendments to published standards and interpretations to existing standards that are effective (continued) IC Interpretation 9 Reassessment of Embedded Derivatives IC Interpretation 10 Interim Financial Reporting and Impairment IC Interpretation 11 FRS 2 Group and Treasury Share Transactions The adoption of the above standards, amendments to published standards and IC interpretations do not have a material impact on the financial statements of the Group and Company except for the adoption of the following standards as set out below: FRS 7 Financial Instruments: Disclosures and Amendment to FRS 7 This standard provides information to users of financial statements about an entity s exposure to risks and how the entity manages those risks. The improvement to FRS 7 clarifies that entities must not present total interest income and expense as a net amount within finance costs on the face of the statement of comprehensive income. The Group and Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. Revised FRS 101 Presentation of Financial Statements This revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised standard separates owner and nonowner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented as a single line. The standard also introduces the statement of comprehensive income, with all items of income and expense recognis ed in profit or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and Company have elected to present the statement of comprehensive income as a single statement. FRS 139 Financial Instruments: Recognition and Measurement and Amendment to FRS 139 The standard establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The amendment to FRS 139 provides further guidance on eligible hedge items. Receivables, which were previously measured at invoiced amounts and subject to impairment, are now classified as loans and receivables, initially measured at fair value plus transaction costs and subsequently, at amortised cost using the effective interest method. 25

27 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (i) Standards, amendments to published standards and interpretations to existing standards that are effective (continued) FRS 139 Financial Instruments: Recognition and Measurement and Amendment to FRS 139 (continued) When loans and receivables are impaired, the carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. Impairment loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the asset s original effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised in profit or loss. Payables, which were previously measured at invoiced amounts, are now classified as other financial liabilities, initially measured at fair value plus transaction costs and subsequently, at amortised cost using the effective interest method. The Group has applied the new policies in relation to the financial instruments above in accordance with the transitional provisions in FRS 139 by recognising and re-measuring all financial assets and financial liabilities as at 1 January 2010 as appropriate. The related adjustments to the previous carrying amounts are made to the opening retained earnings as disclosed in the statements of changes in equity. Comparatives are not restated. The impact from the adoption of FRS 139 is disclosed as follows: a) Impact on the Group s Statement of Financial Position Balance Balance as at FRS 139 as at impact RM 000 RM 000 RM 000 Retained earnings 278, ,322 Non-controlling interests 66, ,927 Trade and other receivables 169,851 (704) 169,147 Trade and other payables 58,696 (891) 57,805 The adoption of FRS 139 has resulted in a decrease to the following items in the Group s statement of financial position as at 31 December 2010: Decrease by RM 000 Trade and other receivables 771 Trade and other payables 1,113 26

28 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (i) Standards, amendments to published standards and interpretations to existing standards that are effective (continued) FRS 139 Financial Instruments: Recognition and Measurement and Amendment to FRS 139 (continued) b) Impact on the Group s Statement of Comprehensive Income The adoption of FRS 139 has no impact on the Group s statement of comprehensive income for the financial year ended 31 December The adoption of FRS 139 has resulted in an increase to the following items in the Group s statement of comprehensive income: Increased by RM 000 Finance income 766 Finance costs 528 The adoption of FRS 139 has no impact on the Company s statement of financial position and statement of comprehensive income. (ii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have been early adopted The revised FRS 3 Business Combinations and FRS 127 Consolidated and Separate Financial Statements are applicable for the financial period beginning on or after 1 July As of 1 January 2010, the Group had early adopted both revised standards at the same time in accordance to their transitional provisions. Revised FRS 3 Business Combinations This revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the profit or loss. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest s proportionate share of the acquiree s net assets. All acquisition-related costs should be expensed. According to its transitional provisions, the revised FRS 3 has been applied prospectively. Assets and liabilities that arose from business combinations whose acquisition dates are before 1 January 2010 are not adjusted. 27

29 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (ii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have been early adopted (continued) Revised FRS 127 Consolidated and Separate Financial Statements This revised standard requires the effects of all transactions with noncontrolling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in the profit or loss. According to its transitional provisions, the revised FRS 127 has been applied prospectively, and does not impact the Group s consolidated financial statements in respect of transactions with non-controlling interest, attribution of losses to non-controlling interest, and disposal of subsidiary companies before 1 January The changes will affect future transactions with noncontrolling interest. The effects of the early adoption of the revised FRS 127 on the Group s consolidated financial statements, relating to the acquisition of additional 29% equity interest in Exquisite Skyline Sdn Bhd from its non-controlling interest are disclosed in Note 15. (iii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have not been early adopted Amendment to FRS 2 Share-based Payment (effective for financial periods beginning on or after 1 July 2010). This amendment clarifies that contributions of a business on formation of a joint venture and common control transactions are outside the scope of FRS 2. Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations (effective for financial periods beginning on or after 1 July 2010). This amendment clarifies that all of a subsidiary's assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control. Relevant disclosure should be made for this subsidiary if the definition of a discontinued operation is met. Amendment to FRS 138 Intangible Assets (effective for financial periods beginning on or after 1 July 2010). This amendment clarifies that a group of complementary intangible assets acquired in a business combination is recognised as a single asset if the individual asset has similar useful lives. 28

30 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (iii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have not been early adopted (continued) Amendment to IC Interpretation 9 Reassessment of Embedded Derivatives (effective for financial periods beginning on or after 1 July 2010). This amendment clarifies that this interpretation does not apply to embedded derivatives in contracts acquired in a business combination, businesses under common control or the formation of a joint venture. IC Interpretation 12 Service Concession Arrangements (effective for financial periods beginning on or after 1 July 2010). This interpretation applies to contractual arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services. Depending on the contractual terms, this interpretation requires the operator to recognise a financial asset if it has an unconditional contractual right to receive cash or an intangible asset if it receives a right (license) to charge users of the public service. Some contractual terms may give rise to both a financial asset and an intangible asset. IC Interpretation 15 Agreements for the Construction of Real Estate (effective for financial periods beginning on or after 1 January 2012). This interpretation provides guidance on whether FRS 118 "Revenue" or FRS 111 "Construction Contracts" should be applied to particular transactions. It is likely to result in FRS 118 being applied to a wider range of transactions. Management is evaluating the implications of this interpretation and retrospective adjustments may be required to reverse development profits recognised for both completed and ongoing projects. IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation (effective for financial periods beginning on or after 1 July 2010). This interpretation clarifies the accounting treatment in respect of net investment hedging. This includes the fact that net investment hedging relates to differences in functional currency not presentation currency, and hedging instruments may be held by any entity in the group. The requirements of FRS 121 "The Effects of Changes in Foreign Exchange Rates" do apply to the hedged item. 29

31 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (iii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have not been early adopted (continued) IC Interpretation 17 Distributions of Non-cash Assets to Owners (effective for financial periods beginning on or after 1 July 2010). This interpretation provides guidance on accounting for arrangements whereby an entity distributes noncash assets to shareholders either as a distribution of reserves or as dividends. FRS 5 has also been amended to require that assets are classified as held for distribution only when they are available for distribution in their present condition and the distribution is highly probable. Amendment to FRS 132: Classification of Rights Issue (effective for financial periods beginning on or after 1 March 2010). This amendment addresses accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such rights issues are now classified as equity instruments instead of as derivative liabilities, regardless of the currency in which the exercise price is denominated. Currently, these issues are accounted for as derivative liabilities. Amendment to FRS 2 Share-based Payment: Group Cash-settled Sharebased Payment Transactions (effective for financial periods beginning on or after 1 January 2011). This amendment clarifies that an entity that receives goods or services in a share-based payment arrangement must account for those goods or services no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash. This amendment also incorporates guidance previously included in IC Interpretation 8 Scope of FRS 2 and IC Interpretaion 11 FRS 2 Group and Treasury Share Transactions, which shall be withdrawn upon application of this amendment. Amendment to FRS 3 Business Combinations (effective for financial periods beginning on or after 1 January 2011) clarifies that the choice of measuring non-controlling interests at fair value or at the proportionate share of the acquiree s net assets applies only to instruments that represent present ownership interests and entitle their holders to a proportionate share of the net assets in the event of liquidation. All other components of non-controlling interest are measured at fair value unless another measurement basis is required by FRS. This amendment also clarifies that the amendments to FRS 7, FRS 132 and FRS 139 that eliminate the exemption of contingent consideration do not apply to contingent consideration that arose from business combinations whose acquisition dates precede the application of FRS 3 (2010). Those contingent consideration arrangements are to be accounted for in accordance with the guidance in FRS 3 (2005). 30

32 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (iii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have not been early adopted (continued) Amendment to FRS 7: Improving Disclosures about Financial Instruments (effective for financial periods beginning on or after 1 January 2011). This amendment requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level of a fair value measurement hierarchy. Amendment to FRS 101 Presentation of Financial Statements (effective for financial periods beginning on or after 1 January 2011). This amendment clarifies that an entity shall present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements. IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments (effective for financial periods beginning on or after 1 July 2011). This interpretation provides clarification when an entity renegotiates the terms of a financial liability with its creditor and the creditor agrees to accept the entity s shares or other equity instruments to settle the financial liability fully or partially. A gain or loss, being the difference between the carrying value of the financial liability and the fair value of the equity instruments issued, shall be recognised in profit or loss. Entities are no longer permitted to reclassify the carrying value of the existing financial liability into equity with no gain or loss recognised in profit or loss. The Group has applied the transitional provision which exempts entities from disclosing the possible impact arising from the initial application of IC Interpretation 12 on the financial statements of the Group and Company. With the exception of IC Interpretation 15 and the new disclosures required under Amendments to FRS 7, the Group and Company do not anticipate the above standards, amendments to published standards and interpretations to existing standards to have any significant impact on the financial statements of the Group and Company. The Group and Company will apply the above standards, amendments to published standards and interpretations to existing standards from financial periods beginning on 1 January

33 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.2 Basis of consolidation (i) Subsidiary companies The consolidated financial statements include the financial statements of the Company and all its subsidiary companies made up to the end of the financial year. Subsidiary companies are those entities (including special purpose entities) in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiary companies are consolidated from the date control is transferred to the Group and are no longer consolidated from the date that control ceases. Subsidiary companies are consolidated using the acquisition method of accounting except for a subsidiary company (as disclosed in Note 15 to the financial statements) which was accounted for using the merger method of accounting. The subsidiary was consolidated prior to 1 January 2002 in accordance with Malaysian Accounting Standard No. 2 "Accounting for Acquisitions and Mergers", the generally accepted accounting principle prevailing at that time. The Group has used the exemption provided by FRS Business Combinations and FRS 3 to apply these Standards prospectively. Accordingly, business combinations entered into prior to the respective effective dates have not been restated to comply with these Standards. Under the acquisition method of accounting, the consideration transferred for the acquisition of a subsidiary company is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group s share of the indentifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary company acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive income. See accounting policy 2.5 on goodwill. For each individual business combination, the Group recognises any noncontrolling interest in the acquiree either at fair value or at the non-controlling interest s proportionate share of the acquiree s net assets. At the end of reporting period, non-controlling interest consists of amount calculated on the date of combinations and its share of changes in the subsidiary s equity since the date of combination. 32