DutaLand Berhad

Transcription

1 Annual Report 2011

2 CONTENTS 2 Corporate Information 3 Operational and Financial Highlights 4 Chairman s Statement 9 Corporate Social Responsibility 11 Profile of Directors 15 Corporate Governance Statement 21 Additional Compliance Information 24 Statement on Internal Control 25 Audit Committee Report 31 Directors Report and Audited Financial Statements 122 Properties Held by the Group 124 Distribution Schedule of Equity Securities 133 Notice of Annual General Meeting 136 Statement Accompanying Notice of Annual General Meeting Form of Proxy

3 CORPORATE INFORMATION BOARD OF DIRECTORS YAM Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Chairman YBhg Tan Sri Dato Yap Yong Seong Group Managing Director Mr Yap Wee Chun Executive Director YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus Independent Director YBhg Dato Yap Wee Keat Non-Independent Director Mr Cheong Wong Sang Independent Director Encik Hazli bin Ibrahim Independent Director COMPANY SECRETARIES Ms Yap Siew Khim MAICSA No Ms Lim Yoke Si MAICSA No Ms Pang Siok Tieng MAICSA No DATE AND PLACE OF INCORPORATION 26 July 1967, Malaysia COMPANY NUMBER REGISTERED OFFICE Level 23, Menara Olympia No. 8, Jalan Raja Chulan, Kuala Lumpur Tel : Fax : dutaland@dutaland.com.my SHARE REGISTRAR (Place where all registers of securities are kept) Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra Kuala Lumpur Tel : Fax : Website: STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad AUDITORS Messrs Ernst & Young (AF : 0039) Chartered Accountants Level 23A, Menara Milenium Jalan Damanlela Pusat Bandar Damansara Kuala Lumpur PRINCIPAL BANKERS Asian Finance Bank Berhad Alliance Investment Bank Berhad AmBank (M) Berhad OSK Investment Bank Berhad RHB Bank Berhad 7296-V WEBSITE 2 Annual Report 2011 DutaLand Berhad (7296-V)

4 OPERATIONAL AND FINANCIAL HIGHLIGHTS Year Ended Year Ended Year Ended Year Ended Year Ended 30 June June June June 2007 RM Million RM Million RM Million RM Million RM Million INCOME STATEMENT Revenue * 101.9* Profit before taxation * 349.4* Profit attributable to owners of the parent STATEMENT OF FINANCIAL POSITION Issued and paid-up capital Shareholders equity Total assets 1, , , , ,257.5 PER SHARE DATA Gross profit per share (sen) 1** 3** 14** ** Net profit per share (sen) 0.1** 1** 16** 7 226** Net tangible assets per share (sen) * These figures are derived from the continuing and discontinued operations of the Group ** Based on weighted average number of shares issued during the year Revenue (RM Million) Total Assets (RM Million) 1, Year Year Shareholders Equity (RM Million) Profit Before Taxation (RM Million) Year Year Annual Report 2011 DutaLand Berhad (7296-V) 3

5 CHAIRMAN S STATEMENT On behalf of the board of directors of DutaLand, I am pleased to present the annual report and audited financial statements for the financial year ended ( FY 2011 ). 4 Annual Report 2011 DutaLand Berhad (7296-V)

6 CHAIRMAN S STATEMENT (CONT D) Economic Review Global economic conditions during the first half of the year under review were somewhat mixed with most emerging Asian economies having recovered and stabilized while advanced Western economies and Japan continued with their deleveraging efforts to contain their financially strapped economies from further deteriorating. This was especially evident in the developing economies of China and India which registered annual growth rates in their gross domestic product ( GDP ) of between 6.5% and 7.5% which are healthy growths by any standard in comparison with the advanced economies like the US, Eurozone and Japan which posted either negligible growth or contractions in their economies. While the US continued to attempt various stimulus measures to spur its flagging economy via a second round of quantitative easing, the sovereign debt crisis in the Eurozone deepened further and threatened to spread to more nations. The second half of the year under review was marked by events of equally calamitous proportions which came in the form of the massive earthquake / tsunami and the subsequent nuclear fallout which hit Japan in March this year and virtually put a halt on the beleaguered nation s faltering economic recovery. The huge magnitude of the disaster disrupted global supply chains and threatened to derail the recovery process of the developing economies which are mostly dependent on the Japanese market. The situation was exacerbated by rising geo-political tensions in the Middle East during the year under review which led to persistently high oil prices. Following the turbulence in the global economy, Malaysia s economic growth moderated to 4.0% for the second quarter ended June 2011 as compared to 8.9% for the previous year s quarter. Nevertheless, overall growth continued to be sustained by the services sector being the main contributor to the economic growth and registered a growth of 7.3% in the second quarter. This was further supported by strong exports of commodities and resource-based products. In the palm oil sector, global demand for raw commodities like palm oil continued to chart rising trends with strong demand recorded from China and India. Average CPO prices recorded for the year under review ranged between RM2,500 to RM3,800 per metric tone ( MT ) as compared with an average CPO price of RM2,400 per MT for the previous comparative period. The domestic property market also proved to be quite resilient in the face of global economic uncertainties. Despite borrowing restrictions imposed by the Government in the previous year to prevent overheating, the demand for medium to high cost segments continued to see healthy take-up rates especially for landed properties in good locations as evidenced by recent property launches. Like many other developing economies currently, inflationary fears have prompted the Malaysian government to gradually raise interest rates in an effort to contain the adverse effects of inflation on purchasing power and in turn domestic consumption. Bank Negara Malaysia has raised its overnight policy rate ( OPR ) twice during the year under review from 2.5% to 3.0%. However, the recent succession of events which culminated in August this year following the unprecedented downgrading of US debt, erupted in a severe loss of investor confidence and led to the recent rout on the global equity markets. Coupled with the imminent threat of default by debt-ridden countries in the Eurozone, global markets reacted in the extreme with the resultant volatility now witnessed in the financial and commodities markets. Arising from this latest turn of events which are still unfolding in the world arena, there are already widespread expectations of a prolonged global economic slowdown in the immediate future. Financial Performance For the financial year ended ( FY2011 ), the Group registered total revenue of RM115.5 million which is lower by RM5.6 million or 4.6% from RM121.1 million for the previous FY2010. The decrease was mainly due to lower contribution from the property division. Annual Report 2011 DutaLand Berhad (7296-V) 5

7 CHAIRMAN S STATEMENT (CONT D) Revenue from the property division declined by RM28.8 million from RM88.2 million in FY2010 to RM59.4 million in FY2011 attributed mainly to lower sales resulting from the completion of the first phase of its ongoing property development project in Sri Hartamas / Mont Kiara, Kuala Lumpur ( the Kenny Heights project ) which is undertaken on a 58:42 joint venture basis with sister company, Olympia Industries Berhad. Meanwhile, for the plantation division, revenue showed an increase of RM24.9 million from RM31.1 million for FY2010 to RM56.0 million for FY2011. The significantly higher revenue was due to higher production volume, coupled with higher average selling prices of fresh fruit bunches ( FFB ). At the Group level, a pretax profit of RM3.5 million was recorded for the current financial year as compared to RM16.6 million reported in the previous year. The shortfall of RM13.2 million was mainly due to the previous year s gain on disposal of investment property of RM12.9 million and write back of provision for impairment loss on land of RM6.3 million as well as provision for impairment loss on land of RM8.8 million in the current year. This was mitigated by higher profit of RM18.6 million recorded by the plantation division for FY2011. Operational Review Property Development For the year under review, there were mixed indications from the domestic property market. This was reflected from the high take up rate of newly-launched condominiums with more than 60% sold just a few months after launching. However, on the rental market, leasing has been less active and rental rates have not increased much. During the year under review, prices in strategic locations such as the Kuala Lumpur City Centre ( KLCC ) and Mont Kiara have remained relatively steady since the 2008 global financial crisis with average asking prices of RM800 psf and above. Nevertheless, luxury high-rise residences in KLCC and Mont Kiara localities are expected to face a challenging market in view of ample supply and weak rental demand. The Group s maiden phase of the Kenny Heights project, namely the Kenny Heights Estate, which was launched in November 2008, was completed and handed over in April The development is spearheaded by DutaLand s subsubsidiary, KH Land Sdn Bhd. Kenny Heights Estate comprised the development of 49 town villas on a land area of 3.7 acres. The 4-storey luxury villas are equipped with individual private lift, swimming pool, underground driveway and garage. Residents will have the use of a club house and concierge services. With the completion of Kenny Heights Estate, the Group has commenced earthwork on the second phase of the project known as Kenny Heights Sanctuary. This project will entail the construction of 4 tower blocks of 709 units of high rise condominiums built on 9 acres of land. The gross development value for the second phase is estimated at RM1.5 billion. Envisioned as a lush and green environment equipped with world class amenities, the construction of Kenny Heights Sanctuary is expected to be completed by end of The Group s mixed development project in Seremban (undertaken by its wholly-owned subsidiary, Oakland Holdings Sdn Bhd) also sold about RM3.3 million worth of shophouses during the year under review. In May 2011, a new phase has been launched to develop 38 units of shop offices. Todate, the project has achieved 86% take up rate with total sales value of approximately RM12.0 million. The physical works on the site commenced in September 2011 and construction is expected to be completed by end of With the successful launch and sales of these shop offices, the Group will be launching the next phase in due course, which comprises another 37 units of shop offices. With the first phase completed and mostly sold, revenue contributed by the Kenny Heights project was lower and coupled with impairment loss of RM8.8 million, the property division registered an operating loss of RM2.1 million for the year under review as compared to last year s operating profit of RM22.8 million. 6 Annual Report 2011 DutaLand Berhad (7296-V)

8 CHAIRMAN S STATEMENT (CONT D) The higher revenue was, however, partially offset by higher operating costs incurred due to rehabilitation work during the year under review. Consequently the operating profit of the division rose from RM9.0 million for FY2010 to RM27.6 million for FY2011 which is an increase of RM18.6 million for the year under review. Significant Corporate Developments During the year under review, DutaLand further reduced its debt obligations with the settlement of approximately RM75.2 million nominal value of various financial instruments comprising RM11.8 million of 2007/2013 Restructured Term Loans, USD18.4 million (equivalent to RM55.9 million) of 2007/2013 Redeemable Secured Bonds, USD0.5 million (equivalent to RM1.7 million) of 2007/2013 Irredeemable Exchangeable Bonds, RM5.6 million of 2007/2013 Redeemable Unsecured Loan Stocks and RM0.2 million of 2007/2013 Irredeemable Convertible Bonds ( ICB ). Furthermore, approximately RM460,200 of 2007/2013 Irredeemable Convertible Unsecured Loan Stocks ( ICULS ) were converted into 390,000 new ordinary shares during the year under review. The reduction in financial instruments as well as conversion of ICULS has significantly lowered the Group s financial commitment in terms of principal repayment and interest payment. Plantations The Group s plantation assets are held under its wholly owned sub-subsidiary, Pertama Land & Development Sdn Bhd ( Pertama Land ) which owns about 12,000 hectares of oil palm lands in the districts of Labuk-Sugut and Tongod, Sabah. For the financial year under review, the plantation division recorded an increase of RM24.9 million or 80% in revenue to RM56.0 million as compared to RM31.1 million for the previous year. The significantly improved performance was due to higher production volume of 88,139 metric tones ( MT ) which is a rise of 24% over the previous year and higher average selling price of FFB of RM635 per MT, which was 45% higher than the previous year s average selling price of RM439 per MT. The better selling price was attributed to the higher CPO prices which held steady at above RM3,000 per MT since end of 2010 as a result of the continuing global demand from traditional markets like Pakistan, China, India, US and European Union. On 28 July 2011, Pertama Land entered into a Sale and Purchase Agreement with Sri Mayvin Plantation Sdn Bhd ( Sri Mayvin ) for the proposed disposal of its plantation assets with a combined land area of 11, hectares, located in the Districts of Labuk-Sugut and Tongod, Sabah for a total cash consideration of RM830 million. Sri Mayvin is a whollyowned subsidiary of Mayvin (Sabah) Sdn Bhd, which in turn is a wholly-owned subsidiary of IOI Corporation Bhd. Todate the shareholders of DutaLand have approved the proposed disposal of the plantation assets at the Extraordinary General Meeting of DutaLand held on 11 October 2011 and the transaction is pending completion by end of Future Outlook With the current turmoil in the global financial markets and expectations of an imminent world economic slowdown, emerging Asian economies led by China are gearing up to face lower growth prospects. Amidst the serious structural problems besetting the US and Eurozone which shall require long term solutions, it is not expected that developing economies will be able to effectively disengage from the advanced Western economies. Arising from these factors, the general consensus is that the Malaysian economy will likely record a slightly Annual Report 2011 DutaLand Berhad (7296-V) 7

9 CHAIRMAN S STATEMENT (CONT D) lower GDP this year of between 4% to 5% declining from 7.2% previously. The main drivers for the Malaysian economy are expected to come from exports of commodities and resourcebased products, domestic private investments and the various infrastructure projects to be implemented pursuant to the government-led Economic Transformation Programme ( ETP ). The Group will maintain its core business activity in property development with particular focus on the Kenny Heights project. This long-term venture is envisaged to be developed over a period of 10 to 15 years with an estimated GDV of about RM20.0 billion. Riding on the Group s successful completion and sale of the first phase of the project, the Group has recently embarked on the construction of the second phase which will be on a much larger scale than the first phase. Development of the remaining phases of the project will be undertaken in stages in accordance with prevailing market conditions. With the sale of the plantation assets held under Pertama Land, the future prospects for the Group moving forward is considerably improved in view of the significant cash proceeds receivable. While a portion of the sale proceeds will be partially utilized to redeem about RM5.6 million nominal value of 2007/2013 ICB which were issued to the original scheme creditors under the Company s restructuring scheme in 2007, the bulk of the remaining sale proceeds are targeted to prepay and further reduce its debts as deemed necessary as well as to fund the Group s ongoing business operations including the Kenny Heights project and future investment in new businesses or assets which have yet to be identified as at the date of this report. Appreciation The Board of DutaLand would like to record our appreciation to YAM Tengku Abdullah Ibni Almarhum Sultan Abu Bakar, the former Chairman of DutaLand who had retired at the Forty-Third Annual General Meeting of DutaLand. His service, experience and expertise were indeed highly valued by the Board. My sincere appreciation goes to my fellow Board members for their support throughout a challenging FY2011. I also wish to express my heartfelt thanks to DutaLand s management team and employees for their relentless hard work, commitment and dedication during this difficult time. I also wish to thank all our customers, business partners, government authorities and shareholders for their continued guidance, advice and strong support. YAM TENGKU DATUK SERI AHMAD SHAH IBNI ALMARHUM SULTAN SALAHUDDIN ABDUL AZIZ SHAH Chairman 8 Annual Report 2011 DutaLand Berhad (7296-V)

10 CORPORATE SOCIAL RESPONSIBILITY General CSR Practice As a responsible corporate citizen, the Group will continuously ensure that all pertinent activities relating to corporate social responsibility are considered and supported in its operations for the wellbeing of stakeholders, community and environment. Our employees are the heart of the Group and the key to the competitive success in the marketplace. As a policy, we do not discriminate against any race, gender, age and minorities. The employees are also provided adequate medical benefits as well as hospitalisation and personal accident insurance coverage. We believe that employees involvement is vital to the success of the Group. As part of efforts towards the preservation of environment, the Group will ensure there are sufficient measures at all construction sites and work places to prevent any adverse impact on the environment. We strive to improve occupational health, safety and a comfortable work environment for our employees. Kenny Heights Community Outreach Programme The Kenny Heights Community Outreach Programme is the primary CSR initiative of the Group, which has adopted Rumah KIDS and Sekolah Kebangsaan Sri Hartamas as beneficiaries. Several initiatives have been completed, including the provision of furniture and fittings for the new Rumah KIDs home for underprivileged children in Subang Jaya, and the Project Bumi Hijau for the primary school s environmental education activities. OCBC Cycle Malaysia s Kenny Heights Ultimate City Race KH Land Sdn Bhd participated in the inaugural OCBC Cycle Malaysia 2011 by presenting the Kenny Heights Ultimate City Race, an exclusive by-invitation-only ride category featuring 100 top National Cyclists who powered through the 1.2km circuit to complete the most number of laps within 90 minutes. This elite criterium was sanctioned by the Malaysian National Cycling Federation, which had changed the venue for the 5th circuit of the National Cycling Grand Prix from Sabah to Kuala Lumpur in conjunction with the Kenny Heights Ultimate City Race. Many of these national cyclists also used the race as part of their preparation for the upcoming South-East Asian (SEA) Games, due to be held in Palembang, Indonesia in November. Annual Report 2011 DutaLand Berhad (7296-V) 9

11 CORPORATE SOCIAL RESPONSIBILITY (CONT D) Kenny Heights Ultimate City Race was flagged off at Dataran Merdeka by YBhg Dato Jeff Yap, Executive Director of Kenny Heights together with YBhg Datuk Naim Mohamad, Vice President of the Malaysian National Cycling Federation; Mr Jeffrey Chew, Managing Director & CEO of OCBC Bank Malaysia; and Mr Chris Robb, Managing Director of Spectrum Worldwide, the event owner and organizer. Mohd Harrif Saleh, of the Terengganu Pro-Asia Cycling Team, won the Kenny Heights Yellow Jersey by finishing ahead of teammates, second-placed by Mohd Zamri Saleh and Anuar Manan, who finished in third place. Prior to the event, a celebrative atmosphere surrounded the Cycling and Lifestyle Village at Avenue K, the official venue, which was packed with hundreds of participants collecting their Cycle Packs, with spectators, and onlookers joining in on the fun. The participants were then treated to a special meet-and-greet session with Anuar Manan and the Terengganu Pro-Asia cycling team, who autographed jerseys, T-shirts, and posters at the Kenny Heights pavilion. Minister of Youth & Sports, YB Dato Seri Ahmad Shabery Cheek, himself, together with Mr. Jeffrey Chew and Dato Jeff Yap participated in the community rides, along with 80 others from the Ministry of Youth and Sports. Other notable participants included the 400-strong contingent from OCBC Bank (Malaysia) Berhad, DJ Blink, and journalists from major media houses as well as employees of the Dutaland and Olympia Industries Group. To be associated with a landmark event such as OCBC Cycle Malaysia augurs well with the Group s corporate values and complements Kenny Heights vision of midtown lifestyles in a five-star integrated neighbourhood that is adjacent to the new Istana Negara. OCBC Cycle Malaysia 2011 kicked off from 14th to 16th Oct, spanning an action-packed weekend with five cycling categories including The Challenge (52km), The Community Ride (21km), Mighty Savers Kids Rides (4km), the Tricycle Ride (100m), the Polygon Foldies Community Ride (21km), and the by-invitation-only, Kenny Heights Ultimate City Race The three-day OCBC Cycle Malaysia cycling extravaganza, supported by the Ministry of Youth & Sports, Malaysia was a cycling platform that catered to cyclists of all skill levels, to encourage a wholesome and healthier lifestyle through cycling. To be the first cycling event on closed roads in Kuala Lumpur allowing cyclists to ride freely without having to worry about traffic was a unique privilege. With more than 3,500 participants, it was the largest mass-participation cycling event on closed roads in Malaysia, which offers something for everyone from beginner to national rider. 10 Annual Report 2011 DutaLand Berhad (7296-V)

12 PROFILE OF DIRECTORS YAM TENGKU DATUK SERI AHMAD SHAH IBNI ALMARHUM SULTAN SALAHUDDIN ABDUL AZIZ SHAH Age 56, Malaysian, Chairman YAM Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah was appointed to the Board on 25 February 2009 as an Independent Non-Executive Director and was subsequently re-designated as Chairman of DutaLand Berhad on 23 November YAM Tengku Datuk Seri Ahmad Shah completed his Diploma in Business Administration from Universiti Teknologi MARA in He started his career in Charles Bradburne (1930) Sdn Bhd as a broker from 1974 to He was a Director of TTDI Development Sdn Bhd from 1978 to 2000 and a Director of Sime UEP Berhad from 1983 to In 1987, he was appointed as Chairman of Sime Darby Medical Centre Subang Jaya Sdn Bhd, a position which he still holds until now. Presently, YAM Tengku Datuk Seri Ahmad Shah is also a Director of Equine Capital Berhad, Melewar Industrial Group Berhad and Wawasan TKH Holdings Berhad, all of which are listed on Bursa Malaysia Securities Berhad. He is also a Director of Sime Darby Property Berhad and Sime Darby Healthcare Sdn Bhd. He is also involved in welfare organizations and is a member of the Board of Trustees of the Cancer Research Initiatives Foundation (CARIF). YAM Tengku Datuk Seri Ahmad Shah has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years other than traffic offences. YAM Tengku Datuk Seri Ahmad Shah attended all the 4 Board Meetings of DutaLand Berhad held in the financial year ended. YBHG TAN SRI DATO YAP YONG SEONG Age 70, Malaysian, Group Managing Director YBhg Tan Sri Dato Yap Yong Seong was appointed to the Board of DutaLand Berhad on 16 February 1993 and is a member of the Remuneration Committee of DutaLand Berhad. YBhg Tan Sri Dato Yap first ventured into the property business in the early 70 s under the Duta Group which was a pioneer in embarking on a reclamation project at the fore shore lands in Malacca which now stood the new business centre known as Melaka Raya. YBhg Tan Sri Dato Yap also sits on the Board of Olympia Industries Berhad as the Group Managing Director and on the Board of several companies within the DutaLand Berhad and Olympia Industries Berhad Groups. He is the father of YBhg Dato Yap Wee Keat and Mr Yap Wee Chun. He is also the spouse of YBhg Puan Sri Datin Leong Li Nar, a major shareholder of DutaLand Berhad. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of DutaLand Berhad and its subsidiaries for which YBhg Tan Sri Dato Yap is deemed to be interested as disclosed on pages 106 and 107 of this Annual Report, there are no other business arrangements with DutaLand Berhad in which he has personal interests. He has no conviction for any offences within the past 10 years. YBhg Tan Sri Dato Yap attended all the 4 Board Meetings of DutaLand Berhad held in the financial year ended. Annual Report 2011 DutaLand Berhad (7296-V) 11

13 PROFILE OF DIRECTORS (CONT D) MR YAP WEE CHUN Age 41, Malaysian, Executive Director Mr Yap Wee Chun was appointed to the Board of DutaLand Berhad on 5 September He graduated in 1990 with a Bachelor of Arts, majoring in Business Administration and Economics from Richmond University of London. Mr Yap began his career as an Officer with D & C Sakura Merchant Bank Bhd (now known as RHB Investment Bank Berhad) in Mr Yap sits on the Board of several companies within the DutaLand Berhad Group and a subsidiary in Olympia Industries Berhad Group. He is the son of YBhg Tan Sri Dato Yap Yong Seong, the Group Managing Director of DutaLand Berhad and YBhg Puan Sri Datin Leong Li Nar, a major shareholder of DutaLand Berhad as well as the brother of YBhg Dato Yap Wee Keat. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of DutaLand Berhad and its subsidiaries for which Mr Yap is deemed to be interested as disclosed on pages 106 and 107 of this Annual Report, there are no other business arrangements with DutaLand Berhad in which he has personal interests. He has no conviction for any offences within the past 10 years other than traffic offences. Mr Yap attended 3 out of the 4 Board Meetings of DutaLand Berhad held in the financial year ended. YBHG TAN SRI DATO HAJI LAMIN BIN HAJI MOHD YUNUS Age 76, Malaysian, Independent Director YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus was appointed to the Board of DutaLand Berhad on 28 December He is the Chairman of the Audit, Nomination and Remuneration Committees of DutaLand Berhad. YBhg Tan Sri Dato Haji Lamin obtained his LLB (Honours) from the University of Singapore in 1963 and a post-graduate Diploma in Socio-Legal Studies from the University College of Wales, Cardiff, United Kingdom. Upon graduation from the University of Singapore in 1963, YBhg Tan Sri Dato Haji Lamin was admitted into the Diplomatic Service and served both locally and overseas namely, Ministry of Foreign Affairs, Malaysia and the Malaysian Embassy in Bangkok. In 1967, he began his illustrious working career in the Legal and Judicial service when he joined the Malaysian Judicial and Legal Service. He first served as Deputy Public Prosecutor in the Attorney General s Chambers, Kuala Lumpur and was later appointed Magistrate also in Kuala Lumpur. He served briefly as Acting President of the Sessions Court, Seremban before his appointment as Federal Counsel with the Ministry of Defence, Kuala Lumpur. In 1972, he was appointed Senior Assistant Registrar, High Court, Kuala Lumpur and later Deputy Public Prosecutor, Perak. In 1973, he assumed the post of Senior Federal Counsel in the Prosecution Division in the Attorney General s Chambers, Kuala Lumpur. He was appointed State Legal Advisor, Pahang in 1977 and was appointed Deputy Head of Prosecution Division, AG Chambers, Kuala Lumpur in In 1982, he returned to Pahang as Pahang State Legal Advisor and simultaneously, he was also the Judge Advocate General in the Ministry of Defence, Kuala Lumpur. In 1983, he was appointed to Solicitor General and later in 1988, he was promoted to Judge of the High Court Malaya, Pahang. In 1994, he was promoted to the position of Judge of the Federal Court. He was the first President of the Court of Appeal of Malaysia, a position that he held for almost seven years until his retirement in March 2001 after having served the six months extension as provided for under article 125 (1) of the Federal Constitution. On 24 August 2005, YBhg Tan Sri Dato Haji Lamin was elected as ad litem Judge of the International Criminal Tribunal for the former Republic of Yugoslavia (ICTY) at the 59 th session of the United Nations General Assembly for a term of four years. YBhg Tan Sri Dato Haji Lamin is also a Director of Golden Plus Holdings Berhad ( GPHB ) and Taman TAR Development Sdn Bhd. YBhg Tan Sri Dato Haji Lamin has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years other than traffic offences. YBhg Tan Sri Dato Haji Lamin attended all the 4 Board Meetings of DutaLand Berhad held in the financial year ended. 12 Annual Report 2011 DutaLand Berhad (7296-V)

14 PROFILE OF DIRECTORS (CONT D) YBHG DATO YAP WEE KEAT Age 43, Malaysian, Non-Independent Director YBhg Dato Yap Wee Keat was appointed to the Board on 25 March 1992 and was instrumental in the property development activities of the DutaLand Berhad Group. He is also currently an Executive Director of Olympia Industries Berhad and has been responsible for the business operations of the Olympia Industries Berhad Group. He is also the Chief Executive Officer of KH Land Sdn Bhd, the developer of Kenny Heights, DutaLand Berhad s property investment in the Group s joint venture with Olympia Industries Berhad. YBhg Dato Yap obtained his LLB (Honours) degree from The London School of Economics And Political Science, United Kingdom in With the Group s investment in Automobili Lamborghini, he was appointed deputy chairman of Automobili Lamborghini from YBhg Dato Yap is also one of the founding trustees for Malaysian Tsunami Aid Foundation, Force of Nature Aid Foundation, which was established in 2005, where he sits on the Board of Trustees. YBhg Dato Yap is the eldest son of YBhg Tan Sri Dato Yap Yong Seong, the Group Managing Director and YBhg Puan Sri Datin Leong Li Nar, both are major shareholders of DutaLand Berhad. He is the eldest brother to Mr Yap Wee Chun, the Executive Director and a major shareholder of DutaLand Berhad. YBhg Dato Yap also serves on the Board of several other private companies within Olympia Industries Berhad and DutaLand Berhad. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of DutaLand Berhad and its subsidiaries for which YBhg Dato Yap is deemed to be interested as disclosed on pages 106 and 107 of this Annual Report, there are no other business arrangements with DutaLand Berhad in which he has personal interests. He has no conviction for any offences within the past 10 years other than traffic offences. YBhg Dato Yap attended 3 out of the 4 Board Meetings of DutaLand Berhad held in the financial year ended. MR CHEONG WONG SANG Age 54, Malaysian, Independent Director Mr Cheong Wong Sang was appointed to the Board of DutaLand Berhad on 28 December 2001 and is a member of the Audit Committee, Nomination Committee and Remuneration Committee of DutaLand Berhad. A Certified Public Accountant (CPA) and a Certified Management Accountant (CMA) by profession, Mr Cheong has varied and extensive direct hands-on specialised business experiences, both in Malaysia and overseas. He started his early articleship training with an international accounting firm and simultaneously graduated as a Chartered Management Accountant. He specialises in turn-around situations, portfolio management, divestment exercise, Mergers & Acquisitions activities and high level negotiations involving privatisation of national projects. Prior to that, he has worked and participated as a professional manager in various senior executive positions including as director and adviser to the Board of various business entrepreneurial organisations including public listed entities in the Asia-Pacific region. Mr Cheong has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years other than traffic offences. Mr Cheong attended all the 4 Board Meetings of DutaLand Berhad held in the financial year ended. Annual Report 2011 DutaLand Berhad (7296-V) 13

15 PROFILE OF DIRECTORS (CONT D) ENCIK HAZLI BIN IBRAHIM Age 48, Malaysian, Independent Director Encik Hazli bin Ibrahim was appointed to the Board of DutaLand Berhad on 2 January 2008 and is a member of the Audit Committee and Nomination Committee of DutaLand Berhad. Encik Hazli graduated with a Bachelor of Finance with Accounting from the University of East London in 1986 and is a fellow of the Association of Chartered Certified Accountants (ACCA). He obtained his Master of Business Administration (MBA) in 1993 from Cass Business School in London. Encik Hazli started his career in London with several chartered accountants firms. Upon his return to Malaysia in August 1994, he joined the Aseambankers Malaysia Berhad, the investment banking arm of Maybank Berhad as Manager in the Corporate Finance Division. Subsequently in November 1996, he moved to Amanah Merchant Bank Berhad (now known as Alliance Investment Bank Berhad) as Assistant General Manager. He left Amanah Group in September 1998 to join Pengurusan Danaharta Nasional Berhad ( Danaharta ), a national asset management company of Malaysia as the Head of Corporate Planning, Corporate Services Division. Encik Hazli left Danaharta in October 2002 to set up Haz-iq Capital Sdn Bhd, a consultancy firm, specializing in corporate finance works, where he is currently the Managing Director. His key areas of expertise include taking companies for listing on Bursa Malaysia Securities Berhad, corporate and debt restructuring and fund raising exercise. He is currently an Independent Non-Executive Director of Mentiga Corporation Berhad and Lebtech Berhad (formerly known as Lebar Daun Berhad). He is also a Director of several private companies. Encik Hazli has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years other than traffic offences. Encik Hazli attended all the 4 Board Meetings of DutaLand Berhad held in the financial year ended. 14 Annual Report 2011 DutaLand Berhad (7296-V)

16 CORPORATE GOVERNANCE STATEMENT The Board of DutaLand Berhad ( Board ) recognises the importance of good corporate governance and is committed in adopting the principles and best practices of corporate governance throughout the Group in the manner prescribed by the following: - Malaysian Code on Corporate Governance (Revised 2007) ( Code ); Bursa Malaysia Securities Berhad s ( Bursa Securities ) Main Market Listing Requirements and Corporate Governance Guide: Towards Boardroom Excellence (CG Guide). The statement below sets out how the DutaLand Group has applied the principles and best practices of good corporate governance based on the Code for the financial year ended. BOARD OF DIRECTORS Board Composition and Balance The Board consists of seven (7) members in total, four (4) of whom are Independent Non-Executive Directors. The Chairman of the Company is an Independent Non-Executive Director which provides effective oversight over Management and reflects the Company s commitment to uphold corporate governance. The Board is satisfied that the current composition, with at least one third are independent directors, does fairly represent the investment of the majority and minority shareholders in the Company. The roles of the Chairman and the Group Managing Director are distinct and separate so as to ensure balance of power and authority. The Chairman is primarily responsible for the orderly conduct of Meetings of the Board and to facilitate matters between the Board and its investors. The Group Managing Director is responsible for the development and implementation of strategy, and managing the day-to-day operations of the Group. No member of the Board is identified as Senior Independent Non-Executive Director to assist on any concerns from shareholders as the Board is of the view that any such concerns can be easily brought to the attention of the Board via the Company Secretaries. The current Board brings with it a broad range of business, financial, technical and public service background. This balance enables the Board to provide clear and effective leadership to the Group and bring informed and independent judgement to many aspects of the Group s strategy and performance. The Board views its composition as a balance mix of executive and non-executive members. Furthermore, the current number of Board members is conducive for efficient deliberations at Board Meetings and effective conduct of Board decision making. The profile of the Board members are set out on pages 11 to 14 of this Annual Report. Duties and Responsibilities of the Board The Board leads the Group and is responsible for, amongst others, formulating and reviewing the overall strategic plan, key policies, control and operations of the Group, identifying risks and ensuring the existence of adequate internal controls and management systems to measure and manage risks. The presence of Independent Non-Executive Directors helps in providing an independent and constructive views, advice and opinions to the benefit of the investors, customers and other stakeholders. Annual Report 2011 DutaLand Berhad (7296-V) 15

17 CORPORATE GOVERNANCE STATEMENT (CONT D) BOARD OF DIRECTORS (CONT D) Board Meetings and Supply of Information During the financial year ended, the Board had met four (4) times whereby all the Directors have complied with the requirements in respect of Board Meeting attendance which are as follows:- Number of Board Meetings Directors Held (during tenure) Attended YAM Tengku Datuk Seri Ahmad Shah Ibni 4 4 Almarhum Sultan Salahuddin Abdul Aziz Shah (Redesignated as Chairman on 23 November 2010) YBhg Tan Sri Dato Yap Yong Seong 4 4 Mr Yap Wee Chun 4 3 YBhg Dato Yap Wee Keat 4 3 YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus 4 4 Encik Hazli bin Ibrahim 4 4 Mr Cheong Wong Sang 4 4 Board Meetings are scheduled to be held regularly, at least four times in a financial year with sufficient notice for all Board Meetings of issues to be discussed. The dates for Board Meetings for the ensuing financial year are scheduled well in advance. All issues discussed and all decisions made during the Board Meetings will be properly recorded by the Company Secretaries and reviewed by the Board for completeness and accuracy. Senior Management staff usually attends Board Meetings for purposes of briefing the Board of various matters submitted for their consideration. Additional Board Meetings may be called as and when significant issues arise and which require the Board s decision. In between Board Meetings, approvals on matters requiring the sanction of the Board are sought by way of circular resolutions enclosing all relevant information to enable the Board to make informed decisions. All circular resolutions approved by the Board will be tabled for notation and confirmation at the next Board Meeting. Notices of meetings setting out the agenda and the relevant Board papers are provided to all Directors for their review in a timely manner prior to meetings. Financial and relevant information are also promptly supplied by Senior Management to the Board at each meeting for purposes of discharging their duties and responsibilities. More details affecting business units ground operations, strategies and performances are usually presented and discussed at the Management Executive Committee Meetings level held prior to the Board Meetings. Specific matters that are reserved for the full Board s decision are key corporate strategies and plan involving acquisitions and disposals of material assets, major investment decisions affecting the Group s direction and policies and approvals of all financial results and announcements. The Chairman of the Audit Committee would inform the Directors at Board Meetings, of any salient matters raised at the Audit Committee Meetings and which require the Board s notice or direction. The Board is regularly updated and kept informed by the Company Secretaries and the Management of the requirements such as restriction in dealing with the securities of the Company and updates as issued by the various regulatory authorities including the latest developments in the legislations and regulatory framework affecting the Group. The Board has unrestricted and constant access to and interaction with the Senior Management of the Company. Each Board member also has full access to all information within the Company as well as the advice and services of the full time Company Secretaries. Where necessary, the Directors may, whether collectively as a Board or in their individual capacities, seek external and independent professional advice from experts on any matter in furtherance of their duties as they may deem necessary and appropriate at the Company s expense. Board Committees The Board has also delegated specific responsibilities to the Board Committees, namely the Audit Committee, Nomination Committee and Remuneration Committee, all of which operate within defined terms of reference. All these Board Committees do not have executive power but report to the Board on all matters they have considered and recommended thereon. 16 Annual Report 2011 DutaLand Berhad (7296-V)

18 CORPORATE GOVERNANCE STATEMENT (CONT D) BOARD OF DIRECTORS (CONT D) Board Committees (Cont d) A summary of the various Board Committees at DutaLand and their compositions are as follows:- Audit Remuneration Nomination Name of Director Committee Committee Committee YAM Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah (Redesignated as Chairman on 23 November 2010) YBhg Tan Sri Dato Yap Yong Seong Member Mr Yap Wee Chun YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus Chairman Chairman Chairman YBhg Dato Yap Wee Keat Mr Cheong Wong Sang Member Member Member Encik Hazli bin Ibrahim Member Member Notes: - 1. the Audit Committee is comprised exclusively of Independent Directors (compliance with Paragraph of the Main Market Listing Requirements of Bursa Securities) 2. the Remuneration Committee is comprised mainly of Non-Executive Directors (as recommended in the Code) 3. the Nomination Committee is comprised entirely of Independent Directors (as recommended in the Code) The Company also convenes regular Management Executive Committee Meetings which are attended by Executive Directors and Senior Management personnel at least once quarterly to review and monitor the performance of the Group s business units in meeting with its financial budgets and business targets. The Audit Committee takes on the role of reviewing the adequacy and integrity of the internal control system and management information system of the Company and Group. More details are provided under the Audit Committee Report. The Nomination and Remuneration Committees roles are as described below. Appointment of Directors The Nomination Committee of the Board, with its defined terms of reference is fully entrusted with the role of proposing and recommending new nominees to the Board. The decision as to who shall be nominated remains the responsibility of the full Board after considering the recommendations of the Committee. The Board, through the Nomination Committee, will review the suitability of an individual to be appointed taking into account the skills, expertise, background and experience. Following appointment, new Directors will be duly briefed via an orientation familiarisation programme, the Company and Group s businesses, operations and management level to facilitate better understanding overall. The Board, through the Nomination Committee, will assess on a yearly basis the effectiveness of the full Board, the committees of the Board and the contribution of each individual Director. Re-appointment and Re-election of Directors Pursuant to Section 129(2) of the Companies Act, 1965, Directors who have attained the age of 70 years shall retire at every annual general meeting and may offer themselves for re-appointment to hold office until the next annual general meeting. The Company s Articles of Association provide for all Directors to retire from office at least once every three (3) years at each annual general meeting in compliance with the Main Market Listing Requirements of Bursa Securities. Each retiring Director is eligible for re-election. In addition, one third (1/3) of the Board, including the Group Managing Director, shall retire by rotation and shall be eligible for re-election at each annual general meeting. The Articles of Association also provide that a Director appointed by the Board during the financial year shall also be subject to re-election at the forthcoming annual general meeting after his appointment. Annual Report 2011 DutaLand Berhad (7296-V) 17

19 CORPORATE GOVERNANCE STATEMENT (CONT D) BOARD OF DIRECTORS (CONT D) Re-appointment and Re-election of Directors (Cont d) The Board does not fix a maximum tenure limit for Directors as the Board is of the view that there are significant advantages to be gained from the long-serving Directors who possess tremendous insight and knowledge of the Company s affairs. Furthermore, the Board is of the view that there is no need to set a time-frame on how long an Independent Director should serve on the Board in view of the ability of a Director to serve effectively as an Independent Director is very much a function of his calibre, qualification, experience and personal qualities, particularly of his integrity and objectivity, and has no compelling relationship to his tenure as an Independent Director. Directors Training All members of the Board have attended the Mandatory Accreditation Programme organised by Bursa Securities. The Directors are aware and are encouraged to attend continuing education programmes, seminars and conferences to keep themselves abreast of the current developments and business environment affecting their roles and responsibilities to the Group. The Company Secretaries facilitates Directors attendances at external programmes, and keeps a complete record of the training received or attended by the Directors. For the financial year ended, all Directors had collectively or individually attended the following seminars/programmes/forums: Sharpening the Corporate Planning Framework for Effective Performance Monitoring Sustainability Programme for Corporate Malaysia ½ day Directors Session on Sustainability - Sector : Plantation, Construction, Property & Hotel The Board s Responsibility for Corporate Culture Selected Governance Concerns and Tools for Addressing Corporate Culture and Board Performance The Global Economic Slowdown of 2007/2008 Present : Its Impact on Malaysia Transforming Malaysia : Challenges to Becoming a High-Income Nation The Board views the aforementioned seminars/programmes/forums attended and/or participated by the Directors, and the updates provided to the Directors from time to time as sufficient to meet the skills and knowledge required to carry out their duties as Directors. DIRECTORS REMUNERATION Remuneration, Procedure and Disclosure As in accordance with the Code, the Remuneration Committee of the Company comprised mainly of Non- Executive Directors who are responsible for developing the remuneration framework policy and recommending the remuneration packages for Executive Directors to the Board. Executive Directors remuneration packages are based on overall individual responsibilities taking into account the corporate performance of the Company and Group. The Board, as a whole, determines the remuneration of the Non-Executive Directors. Individual Directors shall abstain from discussing and voting on their own remuneration at the Board and Remuneration Committee Meetings. The Directors fees recommended for Independent Directors reflect the experience and responsibilities levels of the Directors concerned. Directors fees payable to Independent Directors are subject to the approval of the shareholders of the Company at annual general meeting held yearly. Independent Directors are also paid meeting allowances for each Board and Audit Committee Meetings that they attend. 18 Annual Report 2011 DutaLand Berhad (7296-V)