GLOMAC BERHAD ( M)

Transcription

1 GLOMAC BERHAD ( M) 12th Floor, Wisma Glomac 3, Kompleks Kelana Centre Point, Jalan SS7/19, Kelana Jaya, Petaling Jaya, Selangor Darul Ehsan. Tel: Fax:

2 A N N U A L R E P O R T

3 contents 2 Corporate Information 4 Group Structure 6 Directors Profile 12 Corporate Social Responsibility & Events 14 Chairman s Statement & Penyata Pengerusi 24 Group Managing Director/CEO's Review 33 Financial Highlights 34 Corporate Governance Statement 41 Audit Committee Report 44 Statement on Internal Control 46 Financial Statements and Reports 119 List of Investment and Development Properties 121 Analysis of Shareholdings 125 Analysis of Warrant Holdings 128 Notice of 26th Annual General Meeting 132 Statement Accompanying Notice of 26th Annual General Meeting 133 Electronic Dividend Payment (edividend) Form of Proxy

4 GLOMAC DAMANSARA

5 corporate information audit and risk committee board of directors Tan Sri Dato Mohamed Mansor bin Fateh Din Group Executive Chairman Datuk Richard Fong Loong Tuck Group Executive Vice-Chairman Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor Group Managing Director / Chief Executive Officer Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir Independent Non-Executive Director Dato Haji Ikhwan Salim bin Dato Haji Sujak Independent Non-Executive Director Mr. Chong Kok Keong Independent Non-Executive Director company secretaries Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir Chairman Dato Haji Ikhwan Salim bin Dato Haji Sujak Member Mr. Chong Kok Keong Member remuneration and nomination committee Dato Haji Ikhwan Salim bin Dato Haji Sujak Chairman Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir Member Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor Member Ms. Siew Suet Wei (MAICSA ) Mr. Ong Shaw Ching (MIA 7819) auditor Deloitte KassimChan (AF 0080) Level 19, Uptown 1, 1 Jalan SS 21/58 Damansara Uptown, Petaling Jaya Selangor Darul Ehsan Tel : Fax : registered office 12th Floor, Wisma Glomac 3 Kompleks Kelana Centre Point Jalan SS 7/19, Kelana Jaya, Petaling Jaya, Selangor Darul Ehsan Tel : Fax : stock exchange listing Bursa Malaysia Securities Berhad Listed on 13 June 2000 Stock Code: 5020 share registrar Shareworks Sdn Bhd 10-1, Jalan Sri Hartamas 8 Sri Hartamas Kuala Lumpur Tel : Fax : website principal bankers AmBank Berhad Public Bank Berhad CIMB Bank Berhad Alliance Bank Malaysia Berhad Alliance Investment Bank Berhad RHB Bank Berhad HSBC Bank Malaysia Berhad MIDF Amanah Investment Bank Berhad 2 Glomac Berhad

6 GLOMAC TOWER 2010 annual report 3

7 group structure Property Development 100% Glomac Land Sdn Bhd Saujana Utama, Sg. Buloh 100% Magic Season Sdn Bhd Saujana Utama II, Sg. Buloh 100% Regency Land Sdn Bhd Saujana Utama III, Sg. Buloh 100% Glomac Sutera Sdn Bhd Sri Saujana, Kota Tinggi, Johor 100% Glomac Enterprise Sdn Bhd Sungai Buloh Country Resort, Sg. Buloh 100% Glomac Real Estate Sdn Bhd Aman Suria Damansara, Petaling Jaya 100% Glomac Alliance Sdn Bhd Lakeside Residences, Puchong 100% Glomac City Sdn Bhd Plaza Glomac, Kelana Jaya 100% Glomac Consolidated Sdn Bhd Bukit Saujana, Sg. Buloh 100% Glomac Damansara Sdn Bhd Glomac Damansara, Kuala Lumpur Property Investment & Management 100% Glomac Realty Sdn Bhd Glomac Business Centre, Kelana Jaya 100% Berapit Development Sdn Bhd Kelana Business Centre, Kelana Jaya 100% Kelana Centre Point Sdn Bhd Kompleks Kelana Centre Point, Kelana Jaya 100% Sungai Buloh Country Resort Sdn Bhd Kelab Saujana Utama, Sg. Buloh 100% Prima Sixteen Sdn Bhd Prima 16 Condominium, Phase I & II, Petaling Jaya 100% Bangi Integrated Corporation Sdn Bhd Plaza Kelana Jaya, Phase II, Kelana Jaya 45.8% VIP Glomac Pty Ltd (*) (*) As trustee for VIP Glomac Unit Trust which owns 380 Lonsdale Street, Australia 44.1% WHA Glomac Alliance Co. Ltd Investment in Warehouse in Bangkok, Thailand 29.4% Worldwide Glomac Development Sdn Bhd Worldwide Business Park, Shah Alam 4 Glomac Berhad

8 100% Glomac Jaya Sdn Bhd Glomac Cyberjaya, Cyberjaya 100% Glomac Maju Sdn Bhd Suria Residen, Cheras 100% Glomac Nusantara Sdn Bhd Dataran Glomac, Kelana Jaya 100% Glomac Rawang Sdn Bhd Saujana Rawang, Rawang 100% Glomac Regal Sdn Bhd Suria Stonor, Kuala Lumpur 100% Glomac Resources Sdn Bhd Glomac Galleria, Kuala Lumpur 100% Glomac Vantage Sdn Bhd Taman Mahkota Laksamana, Seksyen III, Melaka 100% OUG Square Sdn Bhd OUG Square, Kuala Lumpur 70% FDA Sdn Bhd Sri Bangi, Section 8, Bandar Baru Bangi 51% Glomac Al Batha Sdn Bhd Glomac Tower, Kuala Lumpur 51% Glomac Al Batha Mutiara Sdn Bhd (Proposed commercial development in Mutiara Damansara) 30% PPC Glomac Sdn Bhd Bandar Sri Permaisuri, Cheras 100% Glomac Segar Sdn Bhd (Proposed Phase 4 of Plaza Kelana Jaya) 100% Dunia Heights Sdn Bhd (Proposed residential development in Sg. Buloh) 100% Glomac Kristal Sdn Bhd (Proposed mixed development of Glomac Utama, Petaling Jaya) 100% FDM Development Sdn Bhd (Proposed mixed development of Glomac Utama, Petaling Jaya) Other Activities Project Management 100% Glomac Group Management Services Sdn Bhd Property Management 100% Glomac Property Services Sdn Bhd Construction 51% Glomac Bina Sdn Bhd 100% BH Interiors Sdn Bhd Car Park Operations/Management 60% Prominent Excel Sdn Bhd Dormant Companies 100% Elmina Equestrian Centre (Malaysia) Sdn Bhd 100% Glomac Leisure Sdn Bhd 100% Glomac Restaurants Sdn Bhd 100% Kelana Seafood Centre Sdn Bhd 100% Prisma Legacy Sdn Bhd 60% Glomac Excel Sdn Bhd Investment Holding 100% Glomac Australia Pty Ltd 90% Glomac Thailand Sdn Bhd 85.7% Glomac Power Sdn Bhd 60% Glomac Utama Sdn Bhd 30% Irama Teguh Sdn Bhd 2010 annual report 5

9 directors profile Tan Sri Dato Mohamed Mansor bin Fateh Din PSM, DPMS, AMP, PJK, JP Group Executive Chairman Malaysian, aged 70 Tan Sri Dato Mohamed Mansor bin Fateh Din or better known as FD Mansor was first appointed to the Board on 1 April Before he founded the Glomac Group, he was employed with Utusan Malaysia Berhad as the Group Personnel Director. Tan Sri Dato Mohamed Mansor has extensive experience in the property development business through his involvement in the industry for the past 25 years. He was the Honorary Secretary of the Malay Chamber of Commerce and Industry, Selangor from 1987 to 1995 and was awarded the Selangor Entrepreneur of the Year 1995 by the Dewan Perniagaan Melayu Malaysia Negeri Selangor in recognition of his contributions to the state. In September 2005, he was awarded the prestigious Property Man of the Year by FIABCI Malaysia. He was presented the award of Anugerah Usahasama Tulen by the Malay Chamber of Commerce, Malaysia in June Tan Sri Dato Mohamed Mansor bin Fateh Din attended all Board Meetings held during the financial year ended 30 April Datuk Richard Fong Loong Tuck DMSM Group Executive Vice-Chairman Malaysian, aged 59 Datuk Fong was first appointed to the Board on 4 April He graduated with a Bachelor of Science (Hons) in Civil Engineering from University of London, UK. Datuk Fong began his career in Mudajaya Construction Sdn Bhd and IJM Corporation Berhad before founding Glomac in He has more than 30 years of experience in the field of property development, building construction and engineering. He served as the Secretary General of FIABCI (International Real Estate Federation) Malaysian Chapter for the term Datuk Fong was appointed President of FIABCI Malaysia from August 2006 to As the President of FIABCI, he was instrumental in the formation of Malaysia Property Incorporated (MPI). MPI is set-up by the Economic Planning Unit to promote Malaysian properties as the preferred destination for international property investors. Datuk Fong served as the Chairman of the Board of Directors of MPI from February 2008 to June Datuk Fong is a much sought after speaker at seminars and has given talks on property market in Malaysia both locally and internationally. Datuk Fong attended all Board Meetings held during the financial year ended 30 April Glomac Berhad

10 Tan Sri Dato Mohamed Mansor bin Fateh Din Datuk Richard Fong Loong Tuck 2010 annual report 7

11 directors profile Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir 8 Glomac Berhad

12 Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir PJN Independent Non-Executive Director Malaysian, aged 61 Datuk Ali was appointed to the Board on 20 February He is the Chairman of the Audit and Risk Committee of Glomac Berhad as well as a member of Glomac s Remuneration and Nomination Committee. Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor DSIS, SSA Group Managing Director/Chief Executive Officer Malaysian, aged 42 Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor joined the Glomac Group of Companies in 1991 and was appointed to the Board on 5 February Dato Iskandar was the Group Executive Director from 1997 up to October 2004 when he assumed the position of Group Managing Director of Glomac Berhad. Subsequently, on 24 March 2009, he was appointed as Chief Executive Officer of Glomac Berhad. Dato Fateh Iskandar attended the Malay College Kuala Kangsar and later obtained a law degree from the University of Queensland, Australia and an MBA. Dato Fateh Iskandar is currently the Deputy President for REHDA Malaysia and Immediate Past Chairman for REHDA Selangor. He is also Director of Malaysia Property Incorporated, a body that promotes property investments among foreigners in Malaysia. Dato Fateh Iskandar is also the Vice Chairman of the Malaysian Australian Business Council. Over the years, Dato Iskandar has given many talks and seminars both locally and internationally on the property market in Malaysia. Dato Iskandar is also a Board Member of Axis Reit Managers Berhad, the first REITs company to be listed on Bursa Malaysia. In 2008, he was appointed as Chairman of Gagasan Badan Ekonomi Melayu (GABEM) Selangor, a body that promotes entrepreneurship in the country. Dato Iskandar is a member of Glomac Berhad s Remuneration and Nomination Committee. Dato Iskandar also sits on the Board of Media Prima Berhad and The New Straits Times Press (Malaysia) Berhad. Dato Iskandar attended all Board Meetings held during the financial year ended 30 April He is currently a Trustee of the Labuan Offshore Financial Services Authority, the Yayasan Kadir & Fatimah and the Yayasan Amal Bukit Bintang. He is an honorary Advisor to the Institute of Chartered Accountants In England & Wales (Malaysian Chapter), honorary Fellow of ICSA (UK) and the Malaysian Institute of Directors. He is currently an Adjunct Professor with University Malaya. Datuk Ali was appointed by the Minister of Finance as the Chairman of the Securities Commission (SC) of Malaysia on 1 March During his tenure, he launched the Capital Market Masterplan (CMMP), a strategic blueprint that charts the longterm development of the capital market and chaired the Capital Market Advisory Council, which is responsible for overseeing the implementation of the CMMP. Datuk Ali was a member of a number of national committees including the Foreign Investment Committee (FIC), the Oversight Committee of the National Asset Management Company (Danaharta) and was also a trustee of the Financial Reporting Foundation. Datuk Ali was also actively involved in international regulatory circles. During his tenure in the SC, he was a member of the Executive Committee of the International Organisation of Securities Commissions (IOSCO), Chairman of IOSCO s Asia- Pacific Regional Committee and chaired the Islamic Capital Market Task Force. In addition, Datuk Ali was also a Trustee of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). He was the Consultant to the Sri Lanka Securities and Exchange Commission in 2006 for their Capital Market Strategic Plan. Datuk Ali is a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW) and a Malaysian CPA. He was the Executive Chairman and Partner of Ernst & Young and its predecessor firms from and Senior Advisor from March He was also former President of the Malaysian Association of Certified Public Accountants (MICPA, now known as the Malaysian Institute of Certified Public Accountants), and chaired the MICPA s Executive Committee and the Insolvency Practices Committee. He also co-chaired the Company Law Forum and was the CEO of Dubai Investment Group (Asia) from Datuk Ali is also the Chairman of Jobstreet Corporation Berhad, Milux Corporation Berhad, Microlink Solutions Berhad and Privasia Technology Berhad. Datuk Ali attended four out of five Board Meetings held during the financial year ended 30 April annual report 9

13 directors profile Dato Haji Ikhwan Salim bin Dato Haji Sujak DSIS, KMN, PJK Independent Non-Executive Director Malaysian, aged 54 Senator Dato Haji Ikhwan Salim bin Dato Haji Sujak was first appointed to the Board on 9 February Dato Haji Ikhwan Salim holds a Bachelor s degree in Economics/Accounting from Queen s University, Belfast, UK. He began his career as an Auditor with Coopers & Lybrand, UK and joined Nestle (M) Sdn Bhd in In 1980, he moved on to be the Group Financial Planning Manager of Kumpulan Low Keng Huat Sdn Bhd. In 1982, he became the Managing Director of Jaya Holdings Sdn Bhd, an investment holding company. Dato Haji Ikhwan Salim is the Division Head of Petaling Jaya Utara Division of UMNO. In 1999, Dato Haji Ikhwan Salim was appointed Executive Chairman of Konsortium Jaringan Selangor Snd Bhd. He is also a Board Member of Malaysia Steel Works (KL) Berhad and Land and General Berhad. Dato Haji Ikhwan Salim is a member of the Audit and Risk Committee of Glomac Berhad and the Chairman of Glomac s Nomination and Remuneration Committee. Dato Haji Ikhwan Salim attended all Board Meetings held during the financial year ended 30 April Mr. Chong Kok Keong Independent Non-Executive Director Malaysian, aged 61 Mr. Chong Kok Keong was first appointed to the Board on 21 September 2000 and holds a Bachelor of Engineering (Hons) from Universiti Malaya. He began his career with Malayawata Steel Bhd as a trainee engineer and later joined Tractors Malaysia Berhad in In 1977, he was seconded to Kubota Agricultural Machinery Sdn Bhd to set up the Engines and Power Tiller production and assembly plant. In 1980, he returned to Tractors Malaysia Berhad and was appointed Manager in Charge of Engines Division of Tractors Malaysia Bhd. Mr. Chong was one of the pioneers of Pilecon Engineering Berhad where he set up the Plant Division and was part of the team which invented and patented the Triple Piling System. He was the Managing Director of Pilecon from 1992 to Mr. Chong has extensive experience in both the Property and Construction sectors having been involved as an advisor to various projects since Mr. Chong is a member of the Audit and Risk Committee of Glomac Berhad. He is also a Director and Member of the Audit Committeee of LCL Corporation Berhad. Mr. Chong attended all Board Meetings held during the financial year ended 30 April Glomac Berhad

14 Dato Haji Ikhwan Salim bin Dato Haji Sujak Mr. Chong Kok Keong Notes: 1. None of the Directors has any family relationship with any Director and/or Major Shareholder of the Company save for Tan Sri Dato Mohamed Mansor bin Fateh Din and Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor who are father and son respectively. 2. Other than permitted related party transactions, none of the Directors has any conflict of interest with the Company. 3. None of the Directors has been convicted for any offences other than traffic offences within the past 10 years annual report 11

15 corporate social responsibility & calendar of events News Straits Times School Sponsorship Programme. As a caring corporate citizen, Glomac Berhad s principal in doing business has always been giving back to the community. Hence, Glomac participated in the New Straits Times School Sponsorship Programme for the 4th year in a row by providing newspapers to two schools each in Bandar Saujana Utama. This programme is a good way to encourage students to improve their proficiency in English. The Edge Bursa Malaysia ~ KL Rat Race For the 9th year, Glomac once again supported the Edge-Bursa Malaysia Kuala Lumpur Rat Race by sending a team to participate in the event. This annual charity event is a platform for Corporate Malaysia like Glomac to come together to help the needy in a noble way. Participating since 2001, Glomac sent in teams for the open category and CEO race. Breaking Fast With The Orpahanages Of Rumah Aman. Glomac continued with its tradition and commitment to its social responsibilities by having its annual Breaking Fast with orphanages of Rumah Aman. The children were treated to a sumptuous dinner, and were given personalised t-shirt and green packets. Contribution was also given to Rumah Aman. Contribution To Badan Amal & Kasih Negeri Selangor (Kasih). Glomac participated in contributing towards society by giving a donation to Badan Amal & Kasih Negeri Selangor. KASIH is a charity body that provides help to the Malaysian community and care to the needy. Donation To Yayasan Darul Hanan. As a corporate body s interest towards commitment to society, Glomac made a monetary contribution to Yayasan Darul Aman in conjunction with Majlis Pelancaran Buku Dato Dasuki Ahmad Dari Pondok ke Parlimen. Glomac 21st Anniversary Campaign. Glomac Berhad celebrated 21 inspirational years and organised Glomac 21st Anniversary Property Campaign. This property campaign encompassed Glomac s broad spectrum of properties from residential to commercial developments under the celebration of its 21st Anniversary while offering a complete range of 21 incentives for its purchasers. 12 Glomac Berhad

16 Lion Dance In conjunction with the Chinese New Year Celebration, Glomac Berhad organised a Lion Dance performance by Chung Wu Tai Chi Society at the Glomac Lobby. Directors, staffs as well as public were in attendance to witness this tradition event with fantastic display of gravity-defying feats by the lion dance group. 25th Annual General Meeting. Held at Multi-Purpose Hall in Kelana Centre Point, the AGM was well attended by over 200 shareholders and was followed by a media press conference in Glomac s Show Gallery. Glomac s AGM was held to provide its shareholders with the Group s financial performance and the latest corporate and property developments of the Group. Signing Of Sale & Purchase Agreement For The Sale Of Block B Of Glomac Business Centre To SEKATARAKYAT. Glomac entered into Sale and Purchase Agreement with Koperasi Kakitangan Bank Rakyat Berhad (SEKATARAKYAT) for the sale of Block B, Glomac Business Centre for a consideration of RM22.6million. Signing Of Sale & Purchase Agreement For The Acquisition Of Land From PPKKS. Glomac Consolidated Sdn Bhd, a wholly owned subsidiary of Glomac Berhad entered into a Sale and Purchase Agreement with Persatuan Peladang Kawasan Kuala Selangor (PPKKS) for the acquisition of 43 acres of land in Mukim Ijok, Daerah Kuala Selangor for a consideration of RM9.0million. Signing Of Sale & Purchase Agreement With Motif Bakti Sdn Bhd/ Puncak Dana Development Sdn Bhd For The Acquisition Of Land In Pekan Kayu Ara, Daerah Petaling, Selangor Darul Ehsan. Glomac entered into Sale and Purchase Agreement for the acquisition of 7.6 acres of land in Pekan Kayu Ara for a consideration of RM31.2million. Signing Of Sale & Purchase Agreement With Lembaga Tabung Haji. Glomac Damansara Sdn Bhd, a wholly owned subsidiary of Glomac Berhad entered into a Sale and Purchase Agreement with Lembaga Tabung Haji for the sale of a 25-storey office tower in the development known as Glomac Damansara for a consideration of RM170.7million annual report 13

17 chairman s statement penyata pengerusi GLOMAC GALLERIA SURIA STONOR 14 Glomac Berhad

18 Dear Valued Shareholders, On behalf of the Board of Directors, it is my great pleasure to present the Group s Annual Report and Financial Statements for the financial year ended 30 April Para Pemegang Saham Yang Dihargai, Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Kumpulan bagi tahun kewangan berakhir pada 30 April PLAZA GLOMAC BANDAR SAUJANA UTAMA 2010 annual report 15

19 chairman s statement penyata pengerusi In a period where both the domestic and the global economies were just emerging from the turbulence of the US banking and financial crisis, I am pleased to report that Glomac performed creditably on all fronts. We registered improvements in both project sales and financial profits, and at the same time crystallised asset sales to improve our financial position. For the financial year in review, the Group s profit before tax rose 33.3% year-on-year to RM74.9 million while net profit increased 27.8% to RM40.9 million from RM32.0 million. DIVIDEND Your Board has proposed a final gross dividend of 4.5 sen per share less 25% tax for the financial year ended 30 April 2010, subject to approval from shareholders. Including the interim dividend of 4 sen per share less 25% tax paid in June 2010, total dividend for the year amounts to 8.5 sen per share. This compares well to the total dividend of 7 sen per share for financial year ended 2009, of which 4.5 sen was subjected to a 25% tax while 2.5 sen was tax exempt. Gross Dividend Per Share (sen) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 It is the Company s practice to reward our shareholders through dividend payments. In this respect, I am happy to also report that Glomac has continued to sustain an uninterrupted dividend stream since the Company s public listing in June OPERATING ENVIRONMENT The fallout from the global financial crisis in 2008 extended into the early half of In that respect, the Malaysian government s swift execution of two fiscal stimulus packages totalling RM67 billion proved successful in cushioning the contraction in economic activities. Coupled with decisive cuts in domestic interest rates and concerted efforts by developed nations to jumpstart the global economy through the infusion of liquidity into financial markets, clear signs of an economic recovery in Malaysia emerged in the second half of From a contraction of 6.2% in the first quarter, Malaysia s Gross Domestic Product ( GDP ) improved sequentially in the subsequent quarters to a growth of 4.5% in the fourth quarter, resulting in a mild GDP contraction of 1.7% for the full year The pace of recovery gathered momentum in the first quarter of 2010 with the GDP expanding by 10.1%, where we saw broad based growth in our external trades, domestic consumer spending as well as public investments. The performance of the property market in 2009 tracked that of the broader economy, where the number of transactions was lower in the first half of the year, but gradually increased towards the latter half of Overall, the number of real estate transactions moderated by 0.7% to 337,859 in 2009, from 340,240 a year earlier. In value terms, total transactions fell to RM81.0 billion in 2009 from RM88.3 billion in the previous year. 16 Glomac Berhad

20 Ketika ekonomi negara dan dunia baharu sahaja keluar daripada kemelut perbankan AS dan krisis kewangan, saya dengan sukacitanya melaporkan bahawa Glomac secara keseluruhannya mencatatkan prestasi yang menggalakkan. Kemajuan lebih baik telah kami catatkan dalam jualan projek dan keuntungan kewangan selain jualan aset dilaksanakan untuk menambah baik kedudukan kewangan kami. Bagi tahun kewangan dalam kajian, keuntungan sebelum cukai Kumpulan meningkat 33.3% kepada RM74.9 juta dalam perbandingan tahun-ke-tahun manakala keuntungan bersih naik sebanyak 27.8% kepada RM40.9 juta daripada RM32.0 juta. DIVIDEN Pihak Lembaga Pengarah telah mencadangkan dividen kasar terakhir sebanyak 4.5 sen sesaham ditolak 25% cukai bagi tahun kewangan berakhir pada 30 April 2010, tertakluk kepada kelulusan para pemegang saham. Jika diambil kira dividen interim sebanyak 4 sen sesaham ditolak cukai 25% dibayar pada bulan Jun 2010, jumlah Dividen Kasar Sesaham (sen) dividen bagi tahun kewangan adalah 8.5 sen sesaham. Pencapaian ini adalah lebih baik berbanding jumlah dividen sebanyak 7 sen sesaham untuk tahun kewangan berakhir pada 2009 yang mana 4.5 sen adalah ditolak cukai sebanyak 25% manakala 2.5 sen lagi dikecualikan cukai. Sudah menjadi amalan Syarikat untuk memberikan ganjaran kepada para pemegang sahamnya melalui pembayaran dividen. Sehubungan itu, saya dengan gembiranya ingin juga melaporkan bahawa Glomac tidak pernah gagal membuat pembayaran dividen secara berterusan sejak menjadi syarikat tersenarai awam pada bulan Jun PERSEKITARAN OPERASI Krisis kewangan global pada 2008 menyaksikan kesannya berlanjutan sehingga awal setengah pertama tahun Berikutan itu, kerajaan Malaysia telah melaksanakan segera dua pakej rangsangan fiskal berjumlah RM67 bilion yang terbukti berjaya menampan berlakunya pengecutan dalam aktiviti-aktiviti ekonomi. Dengan langkah tegas yang diambil untuk mengurangkan kadar faedah di dalam negara dan kesepakatan negara-negara maju untuk merangsang ekonomi dengan menyuntik kecairan ke dalam pasaran kewangan, Malaysia telah mengalami pemulihan ekonomi Malaysia lebih jelas pada setengah pertama Daripada pengecutan sebanyak 6.2% dalam suku tahun pertama, Keluaran Dalam Negara Kasar (KDNK) bertambah baik pada suku tahun berikutnya untuk mencatatkan pertumbuhan sebanyak 4.5% dalam suku keempat, mengakibatkan pengecutan KDNK yang sederhana sebanyak 1.7% bagi tempoh setahun penuh TK01 TK02 TK03 TK04 TK05 TK06 TK07 TK08 TK09 TK annual report 17

21 chairman s statement penyata pengerusi This decline in property transaction was modest due mainly to a number of factors that bolstered sentiments. Other than the fiscal stimulus packages introduced by the government and the easing of monetary policy, competitive mortgage packages and sales incentives from property developers also served to shore up property sales. Further, we believe that the recovery in the local bourse, with the FBM KLCI having risen 45.2% in 2009, resulted in an overall improvement in consumer confidence. PROSPECTS The worst seems to have passed, but the potential withdrawal of fiscal stimulus by respective governments and the sovereign debt crisis in Europe continue to present risks to the economic recovery. Closer to home, China s tightening measures to curb a potentially overheating economy may also serve to hinder the pace of economic activities, especially in the Asia region. SURIA STONOR PLAZA GLOMAC 18 Glomac Berhad

22 Kadar pemulihan memperlihatkan momentumnya pada suku pertama 2010 dengan KDNK berkembang sebanyak 10.1% apabila pertumbuhan yang menyeluruh dapat dilihat di dalam perdagangan luar negara, perbelanjaan konsumer domestik dan juga pelaburan awam. Prestasi sektor hartanah pada tahun 2009 boleh diikuti berdasarkan keadaan keseluruhan ekonomi apabila jumlah transaksi adalah rendah pada setengah pertama tahun kewangan tetapi beransur-ansur meningkat menjelang setengah kedua tahun Secara keseluruhannya, transaksi hartanah bertanah adalah sederhana sebanyak 0.7% kepada 337,859 pada tahun 2009 daripada 340,240 setahun lalu. Daripada segi nilai, jumlah transaksi jatuh kepada RM81.0 bilion pada tahun 2009 daripada RM88.3 bilion pada tahun sebelumnya. Kejatuhan yang berlaku dalam transaksi hartanah adalah sederhana terutamanya disebabkan oleh sejumlah faktor yang mengukuhkan sentimen. Selain pakej rangsangan fiskal yang diperkenalkan kerajaan dan dasar monetari yang longgar, pakej gadai janji yang berdaya saing dan insentif jualan ditawarkan oleh para pemaju hartanah juga meningkatkan jualan hartanah. Selain itu, kami percaya bahawa pemulihan dalam bursa tempatan dengan FBM KLCI meningkat 45.2% pada tahun 2009, secara keseluruhannya memperlihatkan keyakinan konsumer yang bertambah baik. PROSPEK Keadaan ekonomi yang terburuk pernah berlaku dilihat seperti telah berlalu tetapi potensi penarikan balik rangsangan fiskal oleh kerajaan-kerajaan yang terbabit dan krisis hutang kedaulatan di Eropah masih terus mempunyai risikonya terhadap pemulihan ekonomi. Dalam perkembangan yang lebih dekat dengan Malaysia, langkah-langkah ketat yang diambil oleh China untuk mengekang ekonominya berkembang terlalu cepat sehingga mampu mengundang masalah, mungkin akan menjejaskan kadar perkembangan aktiviti-aktiviti ekonomi terutamanya di rantau Asia. Walaupun berlaku ketidaktentuan ekonomi sejagat, tinjauan ekonomi Malaysia kekal menggalakkan. Bank Negara dalam Laporan Tahunan 2009, telah meramalkan pertumbuhan ekonomi antara 4.5% - 5.5% dipacu oleh pengukuhan permintaan domestik dan persekitaran luar yang bertambah baik. Ketika Bank Pusat mulai mengembalikan kadar faedah secara beransur-ansur kepada paras yang sepatutnya, kami teruja dengan komitmen yang ditunjukkan untuk mengekalkan persekitaran monetari yang menggalakkan pelaburan dan perbelanjaan sektor swasta. Bagi Glomac, kami optimistik tentang prospek di dalam tahun kewangan semasa, seperti mana diperlihatkan melalui usaha-usaha Kumpulan pada tahun-tahun sebelumnya untuk mengukuhkan bidang-bidang utama operasi yang penting kepada pertumbuhan iaitu kedudukan kewangan dan modal kerja serta projek-projek yang sedang dirancang untuk masa depan. Kami sedang memasuki fasa pertumbuhan yang menarik. Ia bukan hanya kerana jumlah jualan yang belum dibilkan meningkat sehingga mencapai paras rekod yang tinggi sebanyak RM588 juta, tetapi kami pada masa yang sama turut merancang dan memajukan sejumlah projek berimpak tinggi. Projek-projek ini besar juga saiznya dan terletak di lokasi-lokasi utama di Lembah Kelang. Glomac Damansara, projek utama kami yang terbaharu, akan menjadi 2010 annual report 19

23 chairman s statement penyata pengerusi Notwithstanding such global uncertainties, Malaysia s economic outlook remains favourable. Bank Negara, in its 2009 Annual Report, has forecast economic growth to range from 4.5%-5.5%, driven by strengthening domestic demand and an improving external environment. While the central bank has started to gradually normalise interest rates, we are encouraged that it is committed to maintain a supportive monetary environment to foster private sector investment and expenditure. Where Glomac is concerned, we are optimistic about our prospects in the current financial year, underscored by the Group s efforts in the past years to strengthen key areas of our operations crucial to growth, namely our financial and working capital position and our pipeline of future projects. We are entering an exciting growth phase. Not only is the Group s unbilled sales at a record high of RM588 million, but we are simultaneously developing and planning a number of high impact projects. These new projects are sizeable and located in prime locations within the Klang Valley. Glomac Damansara, our latest flagship project, will be a vibrant landmark in Damansara and Taman Tun Dr. Ismail. We expect our 25-storey Grade A office tower, which has been sold on an enbloc basis to Lembaga Tabung Haji, to set the standard for commercial space in that locality. As for new projects which are in various stages of planning and slated for launch in the near future, we are confident that Glomac Al Batha Mutiara, Glomac Utama and Kelana Jaya Phase 4, with a combined estimated Gross Development Value of more than RM900 million, will each become choice real estate in their own right when fully developed. Through these projects, I am confident that Glomac s brand equity in the marketplace will become even more valuable and all shareholders will enjoy the financial rewards generated in the years to come. CORPORATE SOCIAL RESPONSIBILITIES Glomac s commitment and dedication as a property developer to build communities for our homeowners remains steadfast. Guided by our values as a responsible corporate citizen, the Group has continued to actively devote itself to charitable programmes and activities in doing our part to improve and enrich society as a whole. Education is the cornerstone of a community. With this in mind, Glomac participated for the fourth consecutive year in the New Straits Times School Sponsorship Programme where we provided two schools in Bandar Saujana Utama, our successful and thriving township, with English newspapers as a means to help students improve their command of the language. In Glomac, we also believe that children are the seeds of tomorrow s community. For years, Glomac s heart has been with the Anak Yatim of Rumah Aman orphanage. Last year was no exception. We organized our annual breaking fast with the children where they were treated to a sumptuous dinner, as well as received a personalised T-shirt each and green packets. Glomac also supports Rumah Aman through monetary contributions. To assist the less fortunate in the Selangor state, Glomac made donations to Badan Amal & Kasih Negeri Selangor. KASIH is a charity body that lends a hand to the Malaysian community in need. Similarly, the Group also contributed 20 Glomac Berhad

24 mercu tanda di Damansara dan Taman Tun Dr. Ismail. Kami menjangkakan menara pejabat gred `A setinggi 25 tingkat yang dijual secara keseluruhannya (en-bloc) kepada Lembaga Tabung Haji, akan menjadi piawaian kepada ruang komersial di kawasan sekitarnya. Bagi projek-projek baharu yang berada di dalam pelbagai peringkat perancangan dan untuk pelancaran pada masa depan, kami yakin Glomac Al Batha Mutiara, Glomac Utama dan Fasa 4 Kelana Jaya dengan nilai pembangunan kasar yang disatukan berjumlah lebih RM900 juta, masing-masing akan menjadi hartanah bertanah pilihan yang tersendiri apabila dimajukan sepenuhnya. Melalui projek-projek berkenaan, saya berkeyakinan bahawa jenama ekuiti Glomac di dalam pasaran akan menjadi lebih berharga dan para pemegang sahamnya akan menikmati ganjaran kewangan pada tahuntahun yang mendatang. TANGGUNGJAWAB SOSIAL KORPORAT Komitmen dan dedikasi Glomac sebagai pemaju hartanah untuk membina komuniti kepada pemilik-pemilik kediaman kami tetap kekal teguh. Dengan berpandukan kepada nilai-nilai kami sebagai warga korporat yang bertanggungjawab, Kumpulan terus aktif di dalam program dan kegiatan kebajikan yang menyaksikan kami turut berperanan, secara keseluruhannya meningkatkan dan memperkayakan masyarakat. Pendidikan merupakan asas kepada sesebuah komuniti. Menyedari hakikat itu, Glomac sejak empat tahun berturut-turut telah menyertai Program Tajaan Sekolah New Straits Times yang menyaksikan kami membekalkan akhbar bahasa Inggeris kepada dua buah sekolah di Bandar Saujana Utama, sebuah perbandaran yang dibangunkan kami, untuk membantu para pelajar mereka memantapkan penguasaan di dalam bahasa berkenaan. Di Glomac, kami juga mempercayai bahawa kanak-kanak adalah `benih bagi membina komuniti hari esok. Seperti tahun-tahun sebelumnya, Anak Yatim Rumah Aman sentiasa berada dalam perhatian Glomac. Begitu juga pada tahun lalu. Kami meneruskan tradisi yang menjadi acara tahunan kami iaitu menganjurkan majlis berbuka puasa bersamasama kanak-kanak berkenaan di mana mereka dijamu dengan pelbagai hidangan dan juga dihadiahkan baju-t dan duit raya. Glomac juga membantu Rumah Aman dengan memberikan sumbangan kewangan. Dalam usaha untuk membantu mereka yang kurang bernasib baik di Selangor, Glomac telah menyampaikan sumbangannya kepada Badan Amal & Kasih Negeri Selangor. KASIH adalah sebuah badan amal yang membantu masyarakat di Malaysia yang memerlukan bantuan. Dalam perkembangan yang sama, Kumpulan juga menyumbang kepada Yayasan Darul Aman sempena Majlis Pelancaran - Buku Dato Dasuki Ahmad Dari Pondok ke Parlimen. Perlumbaan Rat Race anjuran The Edge- Bursa Malaysia Kuala Lumpur adalah acara yang paling sesuai untuk menyemai semangat berpasukan yang kukuh dalam dunia korporat sambil turut membantu pelbagai organisasi kebajikan. Sejak tempoh selama sembilan tahun berturut-turut, Glomac tidak pernah ketinggalan untuk menghantar pasukannya menyertai acara itu yang menyaksikan ketua pegawai eksekutif syarikat-syarikat dan eksekutifnya berlumba lari di laluanlaluan merentasi daerah perniagaan di Kuala Lumpur. Glomac telah menyertai perlumbaan berkenaan bagi kategori terbuka dan CEO sejak tahun annual report 21

25 chairman s statement penyata pengerusi to Yayasan Darul Aman in conjunction with Majlis Pelancaran Buku Dato Dasuki Ahmad Dari Pondok ke Parlimen. The Edge-Bursa Malaysia Kuala Lumpur Rat Race is an ideal event to cultivate strong corporate team spirit and lend support to various charitable organisations. For the 9th year in a row, Glomac sent a team to participate in the event where CEOs and executives would run a race stretching through the business district of Kuala Lumpur. Glomac has been participating in the open category and CEO race since ACKNOWLEDGEMENT Glomac s achievements in the financial year ended April 2010 have been commendable, and I believe the Group is well poised to deliver further improvements in both our sales and financial performance. On behalf of the Board of Directors, I take this opportunity to thank our management team and all our employees for your untiring efforts and dedication in accelerating the Group s progress and success. Our deepest appreciation also goes out to all our valued customers, business associates, bankers, contractors, customers, members of the media and investment community, and governing authorities for all your invaluable support and assistance. I am confident that with the collective strength and commitment of all, we will continue to excel and add to Glomac s value and significance as a reputable and substantial property developer in Malaysia. SURIA STONOR Tan Sri Dato F.D. Mansor Group Executive Chairman August 12, Glomac Berhad

26 PENGHARGAAN Pencapaian Glomac dalam tahun kewangan berakhir pada bulan April 2010 adalah membanggakan dan saya percaya bahawa Kumpulan kini bersedia untuk mencatatkan kemajuan yang seterusnya di dalam jualan pembangunan dan prestasi kewangan. Bagi pihak Lembaga Pengarah, saya ingin mengambil peluang ini untuk mengucapkan terima kasih kepada pasukan pengurusan dan pekerja-pekerja kami di atas usaha yang tidak mengenal penat lelah serta penuh berdedikasi dalam memacu kemajuan dan kejayaan Kumpulan. Setinggi-tinggi penghargaan juga diberikan kepada kesemua pelanggan, rakan perniagaan, pengusaha bank, kontraktor, media massa dan komuniti pelaburan serta pihak berkuasa kerajaan di atas sokongan dan bantuan yang tidak ternilai. Saya berkeyakinan bahawa melalui kekuatan bersama dan komitmen semua, kami akan terus cemerlang dan membina nilai serta kepentingan Glomac sebagai pemaju hartanah senaraian awam yang mempunyai reputasi baik dan utama. Tan Sri Dato F.D. Mansor Pengerusi Eksekutif Kumpulan Ogos 12, 2010 PLAZA KELANA JAYA 2010 annual report 23

27 group managing director/ceo s review of operations It has been a rewarding year for the Group. In the financial year ended 30 April 2010, Glomac delivered improved financial performance and registered robust sales across our development projects. From a capital management perspective, we have successfully divested some of our investment properties and channelled the sale proceeds into working capital for our development activities. This, we believe, will help improve the returns and profitability of the Group. In October 2009, we placed out our stock of Treasury Shares to various institutional investors, and the RM20.3 million raised has also been set aside mainly for working capital requirements. 24 Glomac Berhad

28 BANDAR SAUJANA UTAMA PLAZA KELANA JAYA SAUJANA RAWANG 2010 annual report 25

29 group managing director/ceo s review of operations FINANCIAL REVIEW For the financial year ended 30 April 2010, the Group achieved revenue of RM316.8 million compared to RM345.3 million in the previous financial year. The lower figure is mainly due to the completion of Suria Stonor, Glomac s first high-end residential condominium in the vicinity of the Kuala Lumpur City Centre (KLCC). Furthermore, our new projects such as Glomac Damansara and Glomac Cyberjaya are only in their initial stages of development, and the full impact of these projects on our topline will only be felt from the current financial year. Nonetheless, profit performance for the year was strong, driven by contributions from Glomac Tower, our Grade A commercial project in the prime KLCC business district, and Bandar Saujana Utama, Glomac s premier township development in Sungai Buloh. The Group s profit before tax rose 33.3% to RM74.9 million from RM56.2 million previously. The reported figure includes a fair value gain of RM9.1 million arising from the Group s investment properties, namely Kelana Business Centre and Glomac Business Centre. This was mostly offset by a final impairment loss provisioning of RM1.9 million for our Collaterised Loan Obligation ( CLO ) subbonds and provisioning for foreseeable losses on low-cost apartments of RM6.9 million. As mentioned previously, these provisionings are consistent with our prudent stance towards financial reporting. In the event that the actual loss is lower than provided for, we will have the opportunity to write back some of these provisionings in our financial statements in the future. The Group s profit after tax attributable to shareholders increased +27.8% to RM40.9 million from RM32.0 million achieved in financial year Our bottomline grew at a more modest pace due to the higher minority interest arising from the Glomac Tower project, in which we have a 51% equity interest. This translates into earnings per share of 14.2 sen, based on a weighted average capital base of million shares. In comparison, we registered an earnings per share of 11.4 sen last year, based on a weighted average share base of million. Glomac s balance sheet remains healthy. Having successfully completed the sale of two of our investment properties and the placement of our Treasury shares during the year, the Group has cash and cash equivalents of RM154.2 million, and a very manageable net gearing of 11.5%. This gives us the flexibility to further gear for landbank acquisitions when opportunities arise. HIGHLIGHTS FOR THE FINANCIAL YEAR ENDED 30 APRIL RM mil /- (%) Revenue Pre-tax Profit Net Profit EPS (sen)* * Based on weighted average share base of 288.8m for FY10 and 281.3m FY09 26 Glomac Berhad

30 Disposal Of Assets We disposed off two investment properties in Kelana Jaya during the year. In February 2009, we announced the sale of Wisma Glomac 3, located in Kompleks Kelana Centre Point, to Perbadanan Nasional Berhad. The disposal, valued at RM50 million, was completed during the financial year under review. Block B in Glomac Business Centre was also disposed off during the year to Koperasi Kakitangan Bank Rakyat Berhad for RM22.6 million cash. Proceeds raised from the two divestments, amounting to RM72.6 million, have improved the Group s financial position and been deployed as additional working capital for our core activity in property development. The more efficient use of our capital will help improve returns for the Group and our shareholders. AMAN SURIA SURIA RESIDEN 2010 annual report 27

31 group managing director/ceo s review of operations REVIEW OF OPERATIONS Property Development Our strategy of focusing on property development in the Klang Valley continues to yield favourable results. Against a backdrop of a strong economic recovery and a favourable interest rate environment, Glomac was able to capitalise on the upturn in buyers confidence through our comprehensive suite of products available for sale. The timely launch of two new projects during the year Glomac Damansara and Glomac Cyberjaya was extremely well-received by the market and contributed significantly to the Group s sales momentum during the year. Our current flagship development Glomac Damansara received a boost when on 17 November 2009, we signed an agreement to sell a 25-storey Grade A office tower within this project to Lembaga Tabung Haji on an enbloc basis for a total consideration of RM170.7 million. Including this transaction, the Group generated new sales of RM508 million across our ten ongoing projects, substantially higher than the new sales of RM172 million we chalked up in the previous financial year. Consequently, our unbilled sales is at a new record high of RM588 million as at 30 April 2010, and this will underpin our financial performance for the next few years. BANDAR SAUJANA UTAMA GLOMAC TOWER 28 Glomac Berhad

32 Glomac Tower The 36-storey Grade A Glomac Tower was sold en-bloc for RM577 million, setting a new benchmark price RM1,120 per square foot for commercial properties in Kuala Lumpur. This prime commercial development in the city s prestigious KLCC business district is progressing on schedule. Having completed the sub-structure works last year, we are well into the construction of the super structure and full completion and handover is envisaged for Thus far we have collected 50% of the total sale consideration, with a further 10% due by the end of This project contributed significantly to our Group earnings in the financial year 2010, and is expected to remain a key earnings contributor for the current 2011 financial year. Bandar Saujana Utama This growing township, with a thriving population numbering more than 30,000, continues to be the address of choice in the Sungai Buloh district. Demand for the township s mediumend residential and commercial properties is steady, underpinned by sustained interest from the broad market segments, including civil servants. Thus far, we have achieved property sales in excess of RM1 billion within this township. During the year, we generated new sales of RM118 million at Bandar Saujana Utama, comprising mainly double-storey terrace houses and shop lots. Products that did particularly well included Rafflesia a phase comprising 208 Courtyard and 4 Semi-Detached houses with a total GDV of RM56 million. Launched in February of 2010, these properties were fully sold within 3 months of launch. Our products continue to appeal to buyers as we are continuously implementing upgrades and improvements to the layout and design of our homes. In the current financial year, we are launching Sapphire, comprising of 262 units of double-storey terrace houses with an estimated total GDV of RM82 million. I am happy to report that the June 2010 launch of the first phase is already full taken up. GLOMAC CYBERJAYA Glomac Cyberjaya Our maiden project in Cyberjaya has proven to be a success. Targeting a segment of the market that was previously not available in Cyberjaya commercial shop offices the project has seen brisk sales. The 63 shop offices, launched in 2 phases during the year, are around 80% sold. This quick turnaround project carries healthy margins, and earnings from the shop-offices will make its full impact in the current financial year annual report 29

33 group managing director/ceo s review of operations With the strong response to our shop-offices, we are now in a stronger position to extract better value for the final phase of this project a proposed 15-storey office block. Currently, negotiations are ongoing to either sell this on an en-bloc basis, or to build and on-lease it on a long-term basis to multi-national corporations that are operating in Cyberjaya. We are continuing our efforts to seek out more landbank in Cyberjaya to expand our presence in the area. Glomac Damansara Our latest project, Glomac Damansara boasts a prime Kuala Lumpur freehold address in the affluent Damansara / Taman Tun Dr Ismail neighbourhoods. Located along Jalan Damansara, the mixed development comprises office towers, shop offices, serviced apartments, a retail mall and office suites, all of which allows for the creation of a perfect harmony of live-work-play lifestyle components. The project has a projected GDV of RM800 million to be developed over the next five years. New Projects And Landbank As a long term player committed to escalating our presence in the real estate market in the Klang Valley, we are continuously planning and designing new projects for our existing landbank, and evaluating new landbank opportunities. During the year, we acquired two pieces of adjoining leasehold land measuring 7.62 acres in Petaling Jaya for RM31.2 million or about RM94 per square feet. This new landbank is strategically located adjacent to Bandar Utama and serviced by major roads and expressways, namely the North Klang Valley Exprssway (NKVE), Lebuhraya Damansara Puchong (LDP) and SPRINT. This latest acquisition, known as Glomac Utama, is targeted for mixed residential and commercial development, and we believe a GDV of RM400 million is achievable when the project is ready for launch in Financial Year The first phase was officially launched in March 2009, comprising of 12 blocks of 5 & 8 storey shop offices worth RM54 million. These units have been fully taken up, and we are readying ourselves for the launch of the retail mall and serviced apartments. Collectively, these components of the project carry a combined GDV of RM385 million. As with most of our developments where we have been the price leader in the locality, we strongly believe that Glomac Damansara will keep with the trend. The en-bloc sale of the 25-storey office tower to Lembaga Tabung Haji, which was concluded earlier this year, has firmly positioned Glomac Damansara as a new integrated commercial and residential hub in the area. GLOMAC UTAMA 30 Glomac Berhad

34 Glomac Al Batha Mutiara, which was initially planned for a mixed commercial development, has been redesigned as serviced apartments to cater to the likely shortage of apartment / condominium space for professionals in the area. The project, to be built on a 1.3 acre of freehold land in Mutiara Damansara, will have an estimated GDV of RM250 million. Surrounded by established landmarks like IKEA, Tesco and the Curve, and sited on elevated land fronting the Damansara Puchong Highway and Kerinchi Link, the project will be a visible and prominent landmark in Mutiara Damansara when it is launched in Financial Year To further capitalise on the success of our Plaza Kelana Jaya development, which has been highly commended as one of the best retail development in Malaysia by the Asia Pacific Commercial Property Awards, we are also planning to launch Plaza Kelana Jaya Phase 4. The development, to be sited on a 3.2 acre freehold land adjacent to Plaza Kelana Jaya and its signature lakeside promenade, will comprise of an office block, a neighbourhood shopping mall and office suites, with an estimated total GDV of RM280 million. The project is targeted for launch in Financial Year 2012, but we are also currently exploring potential en-bloc sale of the project in its entirety. In addition, the Group is also managing about 5 million square feet of both strata and landed residential and commercial properties. Our Construction Division under Glomac Bina Sdn Bhd returned to the black for the year under review. In view of pressures from intermittent shortages and price fluctuations in building materials, the management maintains its cautious view on the construction industry. Glomac Bina will continue to consolidate its resources and focus on supporting the Group s own property development projects, providing a valuable pricing benchmark for evaluation of third party tenders, and ensuring quality and timely delivery of our projects. OTHER DIVISIONS Glomac Property Services Sdn Bhd oversees the Group s property investment and management division. Following the disposal of some of the Group s properties as highlighted in the preceding sections, the Group continues to own about 158,000 square feet of commercial real estate and this is presently 85% tenanted. We will continue with our discipline of regular maintenance and improvement to these properties to sustain their market value. This will provide us with the flexibility of capitalising on any divestment opportunities in the future. PLAZA KELANA JAYA 2010 annual report 31

35 group managing director/ceo s review of operations The Car Park Management Division spearheaded by Prominent Excel Sdn Bhd (Excel Parking) has continued to experience growth and is currently handling more than 9,000 vehicles daily within the Klang Valley. Our experience in managing carparks ranges from office buildings, retail cum commercial centres, hotels and to open-site car parks. The outlook for the carpark management industry is bright with the continuous development of new office buildings and commercial centres. Moving forward, armed with our handson experience, we will continue to explore opportunities beyond the Klang Valley and the neighbouring countries. STRATEGY & OUTLOOK Property development remains the core focus of the Group. We will continue to deliver innovative and quality development products, and strengthen our brand equity as a reputable developer. Although domestic interest rates are off their recent lows, we believe that further improvements in both the economy and consumer confidence will continue to drive property demand. With adequate capital resources for working capital and a favourable mix of development products which are primarily focused within the Klang Valley, we remain confident that our sales growth momentum will sustain at a healthy pace to drive our financial performance well into the medium term. Dato F.D. Iskandar Bin Tan Sri Dato F.D. Mansor Group Managing Director / Chief Executive Officer August 12, 2010 Glomac is strongly positioned for further growth, driven by four key ongoing projects that are Glomac Tower, Glomac Damansara, Glomac Cyberjaya and Bandar Saujana Utama, our premium township in Sungai Buloh. Our record unbilled sales of RM588 million will continue to drive earnings performance. The Group has a strong pipeline of prime projects worth close to RM2.5 billion for launch, of which at least RM621 million is planned for this current financial year. If it is timely and advantageous to do so, we could also consider accelerating the launch of such new projects as the RM250 million Glomac Al Batha Mutiara and the RM400 million Glomac Utama, which are both currently planned for Financial Year Glomac Berhad

36 financial highlights results for the year ended 30 april RM 000 RM 000 RM 000 RM 000 RM 000 Revenue 316, , , , ,478 Profit Before Tax and Exceptional Item 74,893 56,240 50,193 50,675 57,693 Exceptional Item Profit Before Tax 74,893 56,240 50,193 50,675 57,693 Taxation (17,614) (17,430) (15,582) (17,315) (18,420) Profit For The Year 57,279 38,810 34,611 33,360 39,273 Profit Attributable to: Equity holders of the Company 40,854 31,977 35,145 32,191 38,124 Minority Interest 16,425 6,833 (534) 1,169 1,149 52,279 38,810 34,611 33,360 39,273 ASSETS AND SHAREHOLDERS FUNDS Total Assets Employed 1,154,027 1,132,076 1,270,403 1,007, ,081 Paid-up share Capital 297, , , , ,891 Shareholders Funds 553, , , , ,132 Return On Shareholders Funds Attributable To Equity Holders of the Company 7.4% 6.2% 7.0% 8.1% 10.1% Return On Total Assets 3.5% 2.8% 2.8% 3.2% 5.0% SHARE INFORMATION Basic Earnings Per Share (Sen) Net Assets Per Share (RM) Net Dividend Per Share (Sen) Notes: (i) The comparative figures have been restated arising from the mandatory adoption of FRSs. (ii) The earnings per share and net assets per share for 2004 to 2007 have been restated to take into account the effect of rights issue in financial year ended 30 April annual report 33

37 corporate governance statement The Board of Directors of Glomac Berhad appreciates and is committed to the maintenance of high standards of corporate governance by implementing the principles and best practices set out in Part 1 and 2 of the Malaysian Code of Corporate Governance ( Code ). This statement sets out how the Group has applied the principles of the Code and its compliance with best practices in the Code throughout the financial year ended 30 April A. BOARD OF DIRECTORS 1. The Board The Company is led and controlled by the Board which assumes overall responsibility for corporate governance, strategic direction and investments made by the Company. 2. Board Meetings Board meetings for the ensuing year are scheduled in advance before the commencement of a new financial year to enable Directors to plan ahead and fit the year s Board Meetings into their respective schedules. The Board meets at least four (4) times each year with additional meetings being convened as and when necessary. During the financial year under review, the Board met five (5) times and the attendance record for each Director is as follows: Total meetings Percentage of Name of Director attended attendance (%) Tan Sri Dato Mohamed Mansor bin Fateh Din 5/5 100 Datuk Richard Fong Loong Tuck 5/5 100 Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor 5/5 100 Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir 4/5 80 Dato Haji Ikhwan Salim bin Dato Haji Sujak 5/5 100 Chong Kok Keong 5/5 100 All the Directors have complied with the minimum 50% attendance requirement in respect of Board meetings as stipulated by the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ). In the periods between the Board meetings, Board approvals are sought via circular resolutions which are attached with sufficient information required to make an informed decision. Where a potential of conflict involving director s interest in the Group s investments, projects or any transactions, such director is required to declare his interest and abstain from further discussion and the decision making process. 34 Glomac Berhad

38 3. Board Balance The Board consists of six (6) members, comprising three (3) Executive Directors and three (3) Independent Non-Executive Directors which is in compliance with paragraph of the Main Market Listing Requirements of Bursa Securities in respect of the board composition. The profiles of each Director are presented on pages 6 to 11 of this Annual Report. The Board comprises Directors from different professional backgrounds and collectively bring with them depth and diversity in experience and expertise to the Group s operations. The Executive Directors are responsible for implementing policies of the Board, overseeing the Group s operations and developing the Group s business strategies. The role of the Independent Non- Executive Directors is to provide independent view, advice and judgment to ensure a balanced and unbiased decision making process. There is a clear division of responsibilities between the Executive Chairman and the Group Managing Director/Chief Executive Officer to ensure a balance of power and authority. The Executive Chairman is responsible for ensuring Board effectiveness and standard of conduct while the management of the Group s businesses and implementation of policies and day-to-day running of the businesses are handled by the Group Managing Director/Chief Executive Officer. The Independent Non-Executive Directors provide independent views to safeguard the interests of shareholders. 4. Supply of Information All Board Meetings held during the year were preceded by a notice issued by the Company Secretary. Prior to the Board meeting, all directors receive the agenda together with relevant reports and Board papers containing information relevant to the business of the meeting. The directors are also given sufficient time to obtain further information or explanation on matters presented in the Board papers. In addition to the Board papers, the Board is notified of any corporate announcements released to Bursa Securities and is also kept informed of the requirements and updates issued by the various regulatory authorities. In furtherance of their duties, directors have access to all information within the Group and to the advice and services of the officers of the Company, the Company Secretary and are allowed to call on or procure all necessary external professional advice at the Company s expense. Where necessary, the Board whether as a full Board or in their individual capacities, may engage independent professionals at the Company s expense to advise on issues of concerns to facilitate the proper discharge of their statutory and fiduciary duties. 5. Appointment and Re-Election to the Board In accordance with the Company s Articles of Association, at least one third of the Directors shall retire from office every year provided always that all Directors shall retire from office at least once in every three (3) years but shall be eligible for re-election in the Annual General Meeting. Appointments to the Board shall be made based on the recommendations of the Nomination Committee which was established on 23 March The Nomination Committee comprise of the following members: - Dato Haji Ikhwan Salim bin Dato Haji Sujak, Chairman - Adjunct Professor Datuk Ali Bin Tan Sri Abdul Kadir, Member - Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor, Member The terms of reference of the Nomination Committee are: - to consider, in making its recommendations to the Board, candidates for all directorships/board committees including the position of Independent Non-Executive Director, in respect of their skills, knowledge, expertise, experience, professionalism and integrity; and in the case of Independent Non-Executive Directors, their abilities to discharge such responsibilities/ functions as expected from an Independent Non-Executive Director; - to assist the Board in reviewing on an annual basis the required mix of skills and experience of the Directors of the Board/ Board Committees; - to recommend the appropriate Board balance and size of non-executive participation; and - to establish procedures and processes towards an annual assessment of the effectiveness of the Board as a whole and contribution of each individual Director and Board Committee member including Independent Non-Executive Directors as well as the Group Managing Director/Chief Executive Officer annual report 35

39 corporate governance statement 6. Directors Training The Directors continue to attend relevant training programs to keep abreast with developments on a continuous basis in compliance with Chapter of the Main Market Listing Requirements of Bursa Securities. During the financial year ended 30 April 2010, the Directors attended various training programs, forums, seminars and conventions to equip themselves with the knowledge to discharge their duties more effectively. Some of the Directors were also invited as speakers and presented lectures at various conferences and seminars. The following is the list of activities undertaken by the Directors during the financial period: Tan Sri Dato Mohamed Mansor Bin Fateh Din - 6th International Halal Forum (MIHAS) by Matrade Datuk Richard Fong Loong Tuck - Luxury Property Smart Investment in Property Seminar VIII National Property & Housing Summit Investing in Property, Construction, Hospitality Sectors in the Gulf Countries & Malaysia, What s Hot, What s Next? - Invest Malaysia Suncity Livable City Series - Competitiveness of Malaysian Properties in the Global Market Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor - The Property Investor Show, London - Chennai 2010 Summit Trade Forum - CLSA Asean Access Day, Hong Kong - Invest Malaysia Rehda Property Forum 2010 Adjunct Professor Datuk Ali bin Tan Sri Abdul Kadir - Ministry of Women, Family and Community Development The 3rd Age Conference - LOFSA Forum in Labuan & Kuala Lumpur : OECD s Designation of Labuan - Demutualisation of the Malaysian Bourse - The Whys and Wherefores - 3rd International Islamic Capital Market Forum - World Capital Markets Symposium - The National Accountants Conference - 3rd IFSB Public Lecture on Financial Policy & Stability - Bank Negara Malaysia Hi-Level Conference on Financial Stability - IASB Round Table on Fair Value Measurements - Labuan Lecture Series Nazrin on Developments in Islamic Financial Markets - National Accounting Students Convention Dato Haji Ikhwan Salim bin Dato Haji Sujak - Updates on Regulatory Framework, Directors Duties & Effective Governance Conference Tax Audit & Investigation Workshop 2009 Chong Kok Keong - Equity Market Swot Analysis - Tea Talk on Buyer Psychology - Public Rulings for Property Development & Construction Companies - Industrialised Building Systems : The Way Forward - Related Parties Transactions - Tax Implications & Planning - Tax Audit & Investigation Workshop REHDA Property Leader Forum Glomac Berhad

40 7. Board Committees The Board has delegated certain responsibilities to Board Committees which operate within defined terms of reference. The Board Committees include the Audit and Risk Committee, Nomination Committee and Remuneration Committee. The respective Committees report to the Board on matters considered and their recommendations thereon. The ultimate responsibility for the final decision on all matters, however, lies with the Board. B. DIRECTORS REMUNERATION The Executive Directors remunerations comprise basic salary, allowances, bonuses and other customary benefits to the Group made available as appropriate. The Non-Executive Directors remunerations comprise fees and allowances. The details of the Directors remunerations are disclosed in page 80 of this Annual Report. The Board had established a Remuneration Committee on 23 March 2009 which comprises of the following members: - Dato Haji Ikhwan Salim bin Dato Haji Sujak, Chairman - Adjunct Professor Datuk Ali Bin Tan Sri Abdul Kadir, Member - Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor, Member The terms of reference of the Remuneration Committee are: - to review the annual remuneration packages of each individual Director (both Executive and Non-Executive) such that the levels of remuneration are sufficient to attract and retain the Directors needed to run the Company successfully; and - to recommend to the Board the remuneration packages of the Directors (both Executive and Non-Executive) of the Company. Individual Directors do not participate in the decisions regarding their individual remuneration. C. RELATIONSHIP WITH SHAREHOLDERS AND INVESTOR RELATIONS The Company s Annual General Meeting remains the principal forum for dialogue with shareholders. Shareholders are encouraged to participate in the proceedings and discussions on the resolutions being proposed and the operations of the Group. In addition to various announcements made during the year, the timely release of annual reports, circulars to shareholders, press releases and financial results on a quarterly basis provides shareholders with an overview of the Group s performance and operations. The Company also actively responds to requests for discussions with institutional shareholders and analysts to give them a better understanding of the businesses of the Group as well as conducting analysts briefings in conjunction with the release of the Group s quarterly financial results. The Group takes a proactive approach in reaching out to the investing community via visits to project sites, small group meetings, luncheons and participating in roadshows and investors conferences organised by stockbroking companies in Malaysia and abroad to raise the Group s profile among local and foreign investors. Such activities are usually spearheaded by the Executive Directors. The Company s website, is accessible for the shareholders, investors and members of the public to obtain information on the Company s announcements, corporate information, operational activities and financial performance annual report 37

41 corporate governance statement D. ACCOUNTABILITY AND AUDIT Financial Reporting In presenting the annual financial statements and quarterly announcement to shareholders, the Board aim to present a balanced and understandable assessment of the Company s position and prospects. The Group s quarterly and annual financial statements are reviewed by the Audit Committee and approved by the Board of Directors prior to submission to Bursa Securities. Internal Control The Statement on Internal Control set out on pages 44 and 45 of this Annual Report provides an overview of the state of internal controls within the Group. Relationship with Auditors The Board via the Audit Committee, maintains a formal and transparent professional relationship with the Group s auditors, both internal and external. The role of the Audit Committee is described in the Audit Committee Report set out on pages 41 to 43 of this Annual Report. Directors Responsibility Statement The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs of the Group and Company at the end of the financial year and of the results and cash flows of the Group and Company for the financial year. The Directors are satisfied that in preparing the financial statements of the Group and of the Company for the financial year ended 30 April 2010, the Group has used the appropriate accounting policies and applied them consistently. The Directors are also of the view that relevant approved accounting standards have been followed in the preparation of these financial statements. 38 Glomac Berhad

42 ADDITIONAL COMPLIANCE INFORMATION 1. Utilisation of Proceeds The Company did not implement any fund raising corporate exercise during the financial year ended 30 April Share Buy-Back During the financial year, the Company repurchased 4,043,600 of its own shares from the open market of Bursa Securities for a total consideration of RM5,164,747. The shares are being held as treasury shares. During the financial year, the Company also resold 18,513,600 shares held as treasury shares for a total consideration of RM20,110,290. Details of the shares repurchased/resold during the financial year are as follows: No of Highest Price Lowest Price Average Price Total shares bought paid/(sold) paid/(sold) paid (received) consideration Month back/(resold) RM RM RM RM 2009 May June 30, ,044 July 100, ,577 Aug 251, ,862 Sept 216, ,369 (18,513,600) (1.20) (1.09) (1.09) 20,110,290 Oct Nov 446, ,661 Dec 818, ,027, Jan 362, ,183 Feb 317, ,029 March 477, ,733 April 1,023, ,425, Options or convertible securities During the financial year, the Company did not exercise any options or convertible securities. 4. Depository Receipt programme During the year under review, the Company did not sponsor any Depository Receipt programme. 5. Sanctions and/or penalties There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies. 6. Non-audit fees There were no non-audit fees paid to external auditors for the financial year except for the review of the Statement on Internal Control. 7. Variation in results There is no variance between the results for the financial year and the unaudited results previously announced. 8. Profit guarantee No profit guarantee was given by the Company in respect of the financial year annual report 39

43 corporate governance statement 9. Material contracts There were no material contracts entered into by the Company and its subsidiaries involving Directors and major shareholders interests. 10. Recurrent related party transactions At the 25th Annual General Meeting of the Company held on 30 September 2009, the Company had obtained the approval for the renewal of the shareholders mandate to enter into recurrent related party transactions of a revenue or trading nature ( RRPT ), which are necessary for its day-to day operations and in the ordinary course of its business with related parties. The said mandate takes effect on 30 September 2009 until the conclusion of the forthcoming Annual General Meeting of the Company. Details of the RRPT conducted during the financial year 2010 pursuant to the said shareholders are as follows: Value of Transacting Related Transaction Nature of Transactions Party Parties Relationship (RM) Construction contracts Glomac Bina TSFDM (1) TSFDM is a Director & Major 137,400,000 awarded by Glomac Group Sdn Bhd Shareholder of Glomac Bina Sdn Bhd Interested Directors (3) Interested Directors are Directors & Major Shareholders of Glomac Berhad Project Management fees FDA Sdn Bhd DFDI (2) DFDI is a Director & Major 332,366 Shareholder of FDA Sdn Bhd Interested Directors (3) Interested Directors are Directors & Major Shareholders of Glomac Berhad Notes: (1) TSFDM - Tan Sri Dato Mohamed Mansor bin Fateh Din (2) DFDI - Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor (3) Interested Directors - Tan Sri Dato Mohamed Mansor bin Fateh Din, Datuk Fong Loong Tuck and Dato Fateh Iskandar bin Tan Sri Dato Mohamed Mansor collectively 11. Revaluation Policy The revaluation policy of the Group in relation to its investment properties is set out on page 120 of this Annual Report. STATEMENT OF COMPLIANCE WITH THE PRINCIPLES AND BEST PRACTICES OF THE CODE The Group has not complied with the following Principle and Best Practice of the Code set out below during the financial year. The reasons for non-compliance are specified accordingly: a) Code B.111 Disclosure Of Details Of The Remuneration Of Each Director. The Board has considered this Principle against the backdrop of compliance with a related disclosure required under the Main Market Listing Requirements of Bursa Securities, i.e. that of disclosure of an analysis of Directors Remuneration by applicable bands of RM50,000 and is of the view that the transparency and accountability aspects of corporate governance as applicable to Directors Remuneration are appropriately served by the band disclosure made. b) Code Aa.V11 Nomination Of A Senior Independent Non-Executive Director To Whom Concerns May Be Conveyed Given the current composition of the Board, in particular the strong independent element, the Board does not consider it necessary to nominate a recognised Senior Independent Non-Executive Director. This Statement is made in accordance with a resolution of the Board of Directors dated 12 August Glomac Berhad

44 audit committee report (A) MEMBERS The Audit Committee comprises 3 Directors, all of whom are Independent Non-Executive Directors: Adjunct Professor Datuk Ali Bin Tan Sri Abdul Kadir (Chairman/Independent Non-Executive Director) Dato Haji Ikhwan Salim bin Dato Haji Sujak (Independent Non-Executive Director) Chong Kok Keong (Independent Non-Executive Director) (B) TERMS OF REFERENCE (1) Composition (a) The Audit Committee shall consist of not less than three (3) members, all of whom shall be Non-Executive Directors, with a majority being Independent Directors. (b) At least of one (1) member of the Audit Committee: (i) must be a member of the Malaysian Institute of Accountants; or (ii) if he is not member of the Malaysian Institute of Accountants, he must have at least 3 years working experience and (aa) he must have passed the examinations specified in Part I if the 1st Schedule of the Accountants Act 1967; or (bb) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; (iii) fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad ( Bursa Securities ). (c) The Chairman of the Audit Committee shall be an Independent Director. (d) No alternate director shall be appointed as a member of the Audit Committee. (e) In the event of any vacancy in the Audit Committee resulting in the non-compliance of the Listing Requirements of Bursa Securities pertaining the composition of the audit committee, the Board of Directors shall, within three (3) months of that event, fill the vacancy. (2) Meetings and Quorum During the financial year ended 30 April 2010, the Committee held five (5) meetings. The details of the attendance of each Committee member are as follows: (i) Adjunct Professor Datuk Ali Bin Tan Sri Abdul Kadir [4/5] (ii) Dato Haji Ikhwan Salim bin Dato Haji Sujak [5/5] (iii) Chong Kok Keong [5/5] The Audit Committee shall meet at least four (4) times a year, with additional meetings convened as and when necessary and attended by the Department Head charged with the responsibility of the Group s financial reporting. Attendance of other Directors and employees at any particular Audit Committee Meeting will be at the invitation of the Audit Committee. The presence of the Group Internal and External Auditor for a meeting will be requested if required. The quorum for any meeting shall be two (2) members of which the majority must be independent directors annual report 41

45 audit committee report (3) Secretary to Audit Committee and Minutes The Company Secretary shall be the secretary of the Committee and as a reporting procedure; the minutes shall be circulated to all members of the Board. (4) Authority The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee for the purpose of discharging its functions and responsibilities. The Committee is also authorised to obtain legal or other independent professional advice and to ensure the attendance of outsiders with relevant experience and expertise if it considers this necessary. (5) Duties and Responsibilities The duties and responsibilities of the Audit Committee shall be: (i) To review the Company s and the Group s Quarterly and Annual financial statements before submission to the Board. The review shall focus on: - any changes in accounting policies and practices - major judgmental areas - significant and unusual events - the going concern assumption - compliance with accounting standards and other legal requirements - compliance with Bursa Securities Listing Requirements (ii) To review with the external auditors their audit plan, scope and nature of audit for the Company and the Group. (iii) To assess the adequacy and effectiveness of the systems of internal control and accounting control procedures of the Company and the Group by reviewing the external auditors management letters and management response. (iv) To hear from the external auditors problems and reservations arising from their interim and final audits. (v) To review the internal audit plan, consider the major findings of internal audit, fraud investigations and actions and steps taken by management in response to audit findings and to review the adequacy of the competency of the internal audit function. (vi) To review any related party transactions that may arise within the Company or the Group. (vii) To consider the appointment of the external auditors, the terms of reference of their appointment and any question of resignation or dismissal. (viii) To undertake such other responsibilities as may be agreed to by the Committee and the Board. (ix) To report to the Board its activities, significant results and findings. 42 Glomac Berhad

46 (C) SUMMARY OF AUDIT COMMITTEE ACTIVITIES In line with the terms of reference of the Committee, activities carried out by the Committee during the financial year ended 30 April 2010 in the discharge of its duties and responsibilities included the following: Reviewing with the external auditors on: - the scope of work and audit plan of the Company and of the Group for the financial year ended 30 April 2010; - significant issues and concerns arising from the audit Reviewing the audited financial statements for financial year ended 30 April 2010 Reviewing the unaudited quarterly financial results announcements of the Group prior to the Board of Directors approval with particular focus on: - compliance with accounting standards and regulatory requirements; and - the Group s accounting policies and practices Reviewing Related Party Transactions entered into by the Company and the Group and the draft proposal to seek shareholders mandate for the Company and the Group to enter into recurrent related party transactions of a revenue or trading nature Reviewing with the internal auditors on: - the scope of work and audit plan of the Company and of the Group for the financial year ended 30 April 2010; - significant issues and concerns arising from the audit - accessing the internal auditor s findings and the management s responses thereto and thereafter, making the necessary recommendations or changes to the Board of Directors Considered and recommended to the Board for approval of the audit fees payable to the External Auditors and Internal Auditors Reviewing and assessing the scope of risks of the Enterprise Risk Management (ERM). Assessing and understanding the Group s requirements in compliance with the new FRS 139 and FRS 7 Standards of the Malaysian Accounting Standards Board (D) INTERNAL AUDIT FUNCTION AND SUMMARY OF ACTIVITIES The Company has yet to set up a formal internal audit department. However, it recognizes that an internal audit department would complement the review of the effectiveness of the Group s systems of internal control and is an essential and integral part of the risk management process. Therefore, the Board has outsourced the internal audit function in order to review and improve its existing processes for identifying and managing the Group s risks and the control procedures to manage those risks. The internal audit function is outsourced to an independent professional firm, namely KPMG Business Advisory Sdn Bhd, whose main role is to independently assess the system of internal control established by Management, the adequacy and integrity of such system of internal control vis-a-vis the objectives served and to make appropriate recommendations for Management s implementation. The Internal Auditor reports directly to the Audit Committee. During the financial year ended 30 April 2010, the Internal Auditor carried out 3 internal audit projects/cycles, covering financial, operational and compliance controls on the operations of the Group. The internal audit projects/cycles also included follow-up on previous internal audit recommendations. The professional fees incurred for the internal audit function in respect of financial year ended 30 April 2010 amounted to approximately RM70, annual report 43

47 statement on internal control Directors of listed companies are required to disclose in their annual reports on the state of internal control of the listed company as a group in accordance with the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa ). The Statement of Internal Control - Guidance for Directors of Public Listed Companies ( Guidance ), a publication of Bursa, provides guidance for compliance with this requirement. Board Responsibility The Board recognises the importance of sound internal controls and risk management practices for good corporate governance. The Board acknowledges its overall responsibility for the Group s system of internal control as well as reviewing the adequacy and integrity of such internal control system. The Group s system of internal control is designed to manage the principal business risks that may impede the Group from achieving its business objectives. The system, by its nature, can only provide reasonable but not absolute assurance against any material misstatement or loss occurrence. Risk Management The Board firmly believes that risk management is critical to the Group s continued profitability and the enhancement of shareholder value. Thus, the Board appointed an independent professional firm to facilitate with the implementation of an enterprise risk management ( ERM ) framework for its core business division, i.e. the Property Development Division in The development of the ERM framework largely entailed: formalisation of a structured process on risk identification, evaluation and controls, and risk reporting for adoption across the Group; and the development of risk management policy and guidelines for adoption by the Board. A Risk Management Committee, chaired by the Group Managing Director/ Chief Executive Officer, was formed to oversee the following: communicate the Board s vision, strategy, policy, responsibilities, and reporting lines to all personnel across the Group; identify and communicate to the Board, critical risks (present or potential) the Group faces, their changes, and Management s action plans to manage the risks; perform risk oversight and review risk profile and organisational performance; aggregating the Group s risk position and half yearly reporting to the Board on the risk situation/ status; set performance measures for the Group; and provide guidance to the business units and departments on the Group s risk appetite and capacity, and other criteria which, when exceeded, trigger an obligation to report upward to the Board. The results of the ERM framework, i.e. the internal controls to address key risks identified, were used as the basis to develop risk-based internal audit plan for the financial year ended 30 April 2010, which was approved by the Audit Committee. Systems of Internal Control The following key processes have been established by the Board in reviewing the adequacy and integrity of the Group s system of internal controls: Clear lines of accountability and reporting within the organisation Key responsibilities and accountability in the organisational structure are clearly defined, with clear reporting lines up to the Board and its Committees. Established delegation of authority sets out the appropriate authority levels for decision-making, including matters requiring Board approval. 44 Glomac Berhad

48 Strategic business planning processes Appropriate business plans are established where the Group s business objectives, strategies and targets are articulated. Business planning and budgeting are undertaken annually, to establish plans and targets against which performance is monitored on an ongoing basis. ISO 9001:2000 Accreditation The Property Development and Construction Division of the Group have been accorded full ISO 9001:2000 accreditation in line with the Group s quest in consistently improving the strength of its internal controls. Formalised and Documented Policies and Procedures Internal policies and procedures, which are set out in a series of clearly documented standard operating manuals covering a majority of areas within the Group, are maintained and subject to review as and when necessary. Performance Monitoring & Reporting The Group s management team monitors and reviews financial and operational results, including monitoring and reporting of performance against the operating plans. The management team formulates and communicates action plans to address areas of concern. Financial Performance The preparation of periodic and annual results and the state of affairs of the Group are reviewed and approved by the Board before their release to the regulators whilst the full year financial statements are audited by the external auditors before their issuance to the regulators and shareholders. Quality Control The Group takes continuous efforts in maintaining the quality of products and services. The Directors ensure that safety and health regulations, environmental requirements and relevant legislations affecting the Group s operations are considered and complied with, as appropriate. The Internal Audit Function Regular internal audits are carried out by an independent professional firm to review the adequacy and integrity of the internal control systems of the business units (operational and non-operational) within the Group. The internal audit function reports directly to the Audit Committee on improvement measures pertaining to internal controls, including a follow-up on the status of Management s implementation of recommendation by the Internal Audit function. Internal audit reports are submitted to the Audit Committee, who reviews the findings with Management at its quarterly meetings. In addition, the External Auditors management letters and management s responsiveness to the control recommendations on deficiencies noted during financial audits provide added assurance that control procedures on matters of finance are in place, and are being followed. In assessing the adequacy and effectiveness of the system of internal controls and accounting control procedures of the Group, the Audit Committee reports to the Board its activities, significant results, findings and the necessary recommendations or changes. Conclusion The Board is of the view that there was no breakdown or weaknesses in the system of internal control of the Group for the financial year ended 30 April 2010 that resulted in a significant loss to the Group. The Board continues to take the necessary measures to ensure that the system of internal control is in place and functioning effectively annual report 45

49 financial statements & reports 47 Directors Report 52 Independent Auditors Report 54 Income Statements 55 Balance Sheets 57 Statements of Changes in Equity 59 Cash Flow Statements 62 Notes to the Financial Statements 118 Statement by Directors 118 Declaration by the Officer Primarily Responsible for the Financial Management of the Company